1 1 Change Is Coming! “Because the recession is so severe, and because of the unique way in which it happened, we can be sure that it will change the world in several big, long lasting ways.” Geoff Colvin, The Upside of the Downturn

2 2 How to Thrive Coming Out of the Recession Ted Garrison New Construction Strategies

3 3 Self-Inflicted Wound “In many industries, what some call hyper competition is a self-inflicted wound.” Michael Porter

4 4 The New Reality! “For business, it’s no longer enough to create a product that’s reasonably priced and adequately functional.” Daniel Pink A Whole New Mind

5 5 Too Many People In the Construction Business Are Insane! ● Albert Einstein defines insanity as: “Doing the same thing over and over and expecting to get different results.” ● What’s needed is a superior strategy!

6 6 Blue Ocean Contracting Blue Ocean Contracting creates a new or redefines the construction industry Blue Ocean Contractors &Vendors typically redefine the market Blue Ocean Contractors out-think the competition Blue Ocean Contractors create new demand instead of fighting over existing demand Blue Ocean Contracting is the responsible way to maximize opportunity & minimize risk

Schools of Thought Agile Operational – improve operations & processes Strategic – seizing on new opportunities or markets Toughen up for battle Lower costs Build a war chest of funds to ride it out Protect the core 3 rd Option – Combination Be tough without sacrificing agility Manage the trade-offs Think agile

Critical Business Practices 1.Effective leadership 2.Strategic thinking 3.Value-based construction 4.Continuous innovation 5.360° collaboration 6.Systems based 7.Effective risk management 8.Lean operations 9.Better use of technology 10.Measurement

9 9 Avoid Subjective Decisions! Avoid Subjective Decisions! Event - Project Initial conditions Final conditions Time The more info we have before the event, the easier it is to predict the final outcome The less info we have before the event, the harder it is to predict the final outcome However, the lack of info will never change the final outcome Probability occurs when people don’t understand Must think proactively – not reactively

10 Effective Leadership Leadership is not about control Leadership is about the ability to perceive, in essence to look ahead, then allocate the resources (human & capital) in the best possible way. Jim Collins referred to this as “Getting the right people on the bus in the right seats.” “Leadership is the capacity to engage people & groups outside one’s formal control & inspire them to work toward common goals – despite differences in convictions, cultural values, and operating norms.” H. Ibarra & M. Hansen

11 Strategic Thinking Effective planning – whether a company’s strategic plan, project planning, or solving a problem – requires Strategic Thinking Effective Strategic Thinking requires leadership and a process 5 – Step Strategic Thinking process Get the right people involved Define the problem Develop possible solutions Identify the right options Execute the strategy

12 Value-based Construction Upstream activities (sourcing, production, & logistics) are being commoditized, while downstream activities that reduce customer’s costs or risks are becoming the drivers of value creation & a competitive advantage Need to focus on pre-construction activities Need to focus on life-cycle costs

13 Continuous Innovation “Tomorrow’s victories will go to the masters of innovation! Period!” Tom Peters What’s the purpose of outsourcing? Innovation! Focus on desired outcomes – not fixing a problem Keys to innovation Continuous learning Continuous improvement Empowering everyone

° Collaboration The more complex a system the greater the need for collaboration Involve the people who must do it IPD/Design-build works because it embraces collaboration between all supply chain members What’s the most important task for PM’s and superintendents? Identifying client problems

15 Questions?

16 Final Thoughts Challenge conventional wisdom Throw away the box! Think big – not small Stop thinking as a contractor – think like someone out to find solutions Accept that change is coming to the contracting business – like it or not – or you will lose the battle! Is it easy? Absolutely not, but it’s better than doing the same old things!

17 How to Thrive Coming Out of the Recession Ted Garrison New Construction Strategies