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1. (Advance) planning: short- & long-term strategies

Return to December 2020 Update

Includes the following three subcategories:

Length: 9 min read;  1,951 words.

Note: The following paragraphs summarize the category of (Advance) planning: short- & long-term strategies observed in December. More information about the specific category from December (and previous months) can be found in the downloaded report(s).The number in square brackets (e.g., [X]) refers to a reference where the reader can find more infomation about a specific statement.  The references can be found in the References list below, Systematized References page or in the dowloaded report.

 

In December the interest in this topic is at its lowest level since April (26.3% vs. 27.1% in September) and we do not expect this topic ever to reach the number one position from June 2020. Strategic planning remains among the three most discussed topics in December, mostly due to a higher interest in leadership and self-improvement strategies for Individuals (12% representativeness in the selected references). The two remaining subcategories (Sustainability/ Green future – opportunity to address climate change and Businesses (economy sectors)) have been at the lowest point since April.

a) Businesses (economy sectors) / projects

The current pandemic is the most dramatic and powerful shift in the business environment. Companies that seemed to be doing well before the pandemic are gasping for air while those who have made their digital transformation before COVID-19 have been prospering. Other accelerators such as rapidly emerging technological innovations, the growing power of social media to influence customer behavior, and the rapid flow of private capital into aggressive upstarts; all require business leaders to adapt very quickly. The traditional approach to business strategy is not well suited to accelerated pace of change. To help any business adapt more quickly and effectively, experts suggest 5 strategies:1) envision the most powerful external forces that could upend your business;  2) understand how current and potential customers' priorities are changing; 3) generate deep insights into incumbent and fast-growing upstart CEOs' strategic mindsets; 4) reimagine your business strategy to turn headwinds into tailwinds while winning on emerging customer priorities; 5) empower your people to set performance metrics tied to the reimagined strategy and hold them accountable. [272] Word “pivot” was the 2020 theme, while “thrive” is the word for 2021, a “stabilization” year. The first half of ‘21 will be a slog for sure, but during that time the business models that will stick, and the ones that are never coming back will become clearer. The second half will be a race to dominate the new models and the suppliers to them. Fix any weaknesses in your business, your systems and be ready to run, because the race is coming. Exponential growth is expected as e-commerce accelerates. The commercial space will see a surge in the next few years as tenants return to work and retail will be reinvented to better fit our future needs. [271]

December brings results of business strategies taken in the previous months, such as acquisitions and mergers. In July we identified that acquisitions [273] and collaborative contracts are on the rise in AEC [274]. Reference examples from December are WSP, Jacobs, Skanska, STO announce deals, acquisitions [275] and The 8 Most Important Acquisitions of 2020. [88] the 8 most important acquisition examples outside the AEC industry include: Visa → Plaid, Intuit → Credit Karma, Verizon → BlueJeans, Facebook → Giphy, Amazon → Zoox, Uber → Postmates, Adobe → Workfront, and Facebook → Kustomer. In 2020 reviews resilience and trust continue to be the most important words of 2020. New normal requires building a new culture. [276] Use design thinking as a business strategy: focus on customers, start small, build buy-in, collaborate across functions, test assumptions. Three strategic objectives: exceptional teams, diversified markets, and transformational innovation. Every innovation starts with leadership; process to take innovation on your ideas in multi-source innovation. Lessons learned: 1) Culture begins with leadership and commitment and support; 2) Communicate, communicate, communicate!!! 3) Engage legal / risk team earlier for IP management; 4) Identify potential gaps in company support structure for innovation – building internal partnerships; 50 develop a clear funding / resource line of sight from individual up to company level; 6) External partnerships are critical to deliver innovation; 7) Empower team members through education vs. training; 8) Innovation must start with a prioritized business problem  for the innovation process to work; 9) Innovation does not equate to technology!; 10) Innovation is a long-term strategy, not a short term fix! Create sustainability around innovation: process and people are the most important – technology supports. [277]

Accelerated digital transformation is changing the industry from a highly complex, fragmented, and project-based industry to a more standardized, consolidated, integrated and product-based one. The bulk of short- and long-term pandemic-driven construction industry issues will be solved with technology. McKinsey suggests potential paths that an investor might take, focusing either on distinctive point solutions or investments that help build or scale the adoption of construction tech platforms. For distinctive point solutions: a) capitalize on continued growth and penetration of mature solutions; b) scale early major disruptive solutions such as robotics; c) scale the underlying tech infrastructure; d) digitize payments. For platform solutions: a) scale platforms with a specific angle; b) develop solutions enabling broader connection in the built environment; c) invest in building a data-analytics engine. [237]

b) Individuals

The Dive’s People of the Year award goes to essential construction workers: Despite the risks to themselves and their families, they found ways to keep working even as other businesses shut down. They scrambled for protective gear like N95 masks and gloves, committed to frequent handwashing and tool disinfection, and quickly got up to speed on the importance of social distancing and staggered work shifts. [278]

Train for resilience! McKinsey & Co: Businesses should foster employee resilience by developing initiatives to support employees’ physical and emotional health and well-being, especially in the context of COVID-19. This requires supporting operations and planning, ensuring adequate support resources, offering trainings, promoting communication and transparency, and building a culture of recognition and support. Place employees’ mental health at the center of business strategy. To gain buy-in from leadership, experts suggest reflecting on the value of employees working with a manager that is resilient compared to one that is not. People don't quit jobs, they quit managers. [279] Building a team culture to match your passion and creativity includes: 1) Keep your teams and infrastructure small; 2) Incent the team to speak their mind and take risks; 3) Reward ideas with peer recognition and praise; 4) Promote team passion by pitching a strong purpose; 5) Extend trust to allow people to call their own shots; 6) Sponsor experiments, and celebrate the learning;  7) Create and capitalize on a diverse team culture. [280] Being a great leader requires deliberate practice, every single day; choose the skill you want to improve on and be mindful and consistent. [281] Top-notch leaders have these 4 qualities: 1) remember that humility trumps arrogance; 2) go out of your way to soak up the wisdom of others; 3) practice patience - then practice it some more; and 4) always choose integrity; over and over and over. [282]

Diversity and inclusion initiatives, such as Papa John’s supplier diversity program, starts with the leaders, namely, getting the CEO's blessing in writing is a key element in successful supplier diversification. [283] The U.S. Supreme Court heard oral arguments mid-December on whether Nestlé USA and Cargill can be held accountable for child slavery on farms in Africa where they source cocoa. The justices seemed unlikely to stop lawsuits against American companies over these allegations. [284] Turner Construction received The Dive Award for 2020: Leadership in crisis and Company of the Year. The company stepped up to fight hate and discrimination while others quietly shirked leadership. Turner’s moves to quickly shut down multiple high-profile megaprojects in response to racist incidents set the tone for how the industry should respond. Mandatory antibias training was conducted. As Construction Dive reports, experts believe their leadership on these issues will even provide a competitive advantage for future project bids. [248][285]

The end of the “difficult” pandemic year brings countless publications about self-reflection and self-improvement, such as 25 habits to pick up right away if you want to be a millionaire before age 35 (in summary, you one should drastically reduce his/her expenses and drastically increase income) [286]. To stay relevant when over 40 continue to learn things, meet people, and apply for jobs. [287] 2021 could be the best year to start your own business because 1) the consumption of online content is higher than ever, making it a great time to start a company; 2) more time spent being introspective has helped us home in on our unique gifts and strengths; and 3) a recession can expand the available workforce. [288] Have morning routine like successful CEOs, such as work out for at least one hour a day and go for a walk at least five times a week; and devote one hour each morning to practicing mindfulness--reading, praying, journaling--and write down three things you are grateful for each day. When judged, persevere, keep your head up, and know in your heart that you can make a difference. [289] Five simple habits to stay focused all day: 1) take care of your physical needs; 2) plan for your "escape behaviors."; 3) plan regular breaks; 4) give binaural beats a try; 5) forgive yourself for losing focus. [290] 8 signs to immediately recognize someone with the gift of leadership (the fitting acronym "Selfless"): Strength, enthusiasm, love, flexibility, long-term orientation, emotional intelligence, systems intelligence, and spiritual intelligence. [291]

c) Sustainability; Green future – opportunity to address climate change

COVID-19 lockdowns are likely to result in just a 0.01℃ reduction in global warming by 2050. However, green investment under government stimulus packages could cut up to 25% off emissions predicted in 2030. [214] Overall global carbon dioxide emissions dropped about 7% in 2020 compared to 2019 which is insufficient to stop global warming. “If we really want to get pollution down, it might take more than just stay-at-home orders.” The data paints an entirely new picture of the scale and effort required to shift the needle in terms of carbon emissions. [216][217] There is increased environmental awareness and sustainability globally. [218] Various countries and companies are pledging net-zero emissions by 2040 or 2060. For example, Balfour Beatty, Lendlease announce carbon-cutting initiatives [220]; GE All-in to Fight Climate Change, Urges Accelerated Replacement of Coal Power [221], Nestlé to convert operations to 100% renewable energy in $3.6B emissions-reduction plan [292], Unilever intends to meet new emissions-reduction goals by favoring suppliers that have set science-based targets for cutting carbon in line with the Paris Agreement (awarded as a Sustainability Plan of the Year) [293]; and China’s Backsliding on achieving zero emissions by 2060 Could Break the Planet [222]. In parallel deforestation in Brazilian Amazon surged to 12-year high [226] and Elon Musk argues that electric cars will double global electricity demand in the next 20 years. [227]

Alternative energy sources are extensively researched and gaining cost competitiveness. By 2025, the economics of low-carbon generation technologies are poised to disrupt conventional fossil fuel generation so dramatically, onshore wind could have the lowest levelized costs of electricity on average, and nuclear power could emerge as the dispatchable low-carbon technology with the lowest expected costs. [294] For example, China just turned on its “artificial sun”, a fusion reactor [234], while Exxon reportedly holds back on its carbon capture technology that could slow climate change [233]. The U.S. Senate Committee on Environment and Public Works has approved the American Nuclear Infrastructure Act of 2020 to strengthen the nuclear fuel supply chain, help incentivize commercial deployment of new reactor designs, and create a credit program to preserve existing nuclear reactors at risk of premature shutdown. The bipartisan bill is notable for a melding of national security, economic, and climate change elements. It comprises a long list of innovative proposals that could throw lifelines to at-risk existing nuclear plants, as well as incentivize licensing, and development of advanced nuclear reactors and advanced nuclear fuel. [295] A&I Power has worked to develop a generator that can provide a sustainable supply of electricity with no emissions, that requires little maintenance, and can deliver cost savings versus traditional diesel- or gas-powered systems. [296] Bill Gates, Amazon and British Airways are backing a hydrogen plane startup.[229]

(Sustainability of building under official guidelines for COVID related performance is covered in the section of Building operations.)

See September Category Summary

References

[88] C. Lagorio-Chafkin, “The 8 Most Important Acquisitions of 2020”, Inc.com, Dec. 22, 2020. (accessed Mar. 02, 2021)
[214] “The world is on track to warm by 3 degrees Celsius”, World Economic Forum. (accessed Mar. 03, 2021)
[216] “What 2020 Meant for Climate Change and the Environment”, ArchDaily, Dec. 11, 2020. (accessed Feb. 23, 2021)
[217] “Did Covid Lockdowns Really Clear the Air?”, Bloomberg.com, Dec. 21, 2020.
[218] “International Construction - December 2020”, KHL Group, Dec. 18, 2020. (accessed Feb. 07, 2021)
[221] S. Patel, “GE All-in to Fight Climate Change, Urges Accelerated Replacement of Coal Power”, POWER Magazine, Dec. 16, 2020. (accessed Feb. 17, 2021)
[222] “China’s Backsliding Could Break the Planet”, Bloomberg.com, Dec. 17, 2020.
[227] R. Staff, “Tesla CEO says electric cars will double global electricity demand”, Reuters, Dec. 01, 2020.
[233] “Exxon Holds Back on Technology That Could Slow Climate Change”, Bloomberg.com, Dec. 07, 2020.
[234] C. Delbert, “China Just Turned On Its Artificial Sun”, Popular Mechanics, Dec. 04, 2020. (accessed Mar. 01, 2021)
[272] P. Cohan, “5 Ways Business Strategy Will Change Before 2025”, Inc.com, Nov. 20, 2020. (accessed Mar. 04, 2021)
[274] “4 things to know before taking on an infrastructure project”, Construction Dive. (accessed Aug. 26, 2020)
[275] “WSP, Jacobs, Skanska, STO announce deals, acquisitions”, Construction Dive. (accessed Feb. 08, 2021)
[276] K. Burke, “Why Perks Won’t Help You Build Culture in the New Normal”, Inc.com, Dec. 09, 2020. (accessed Mar. 02, 2021)
[277] R. Trompeter, “Engineering & Construction Adoption Leaders 50 Call - Full Recording”, BuiltWorlds. (accessed Jan. 21, 2021)
[278] “People of the Year: Essential construction workers”, Construction Dive. (accessed Feb. 07, 2021)
[279] “How to train for resilience”, HR Dive. (accessed Jan. 11, 2021)
[280] M. Zwilling, “How to Build a Team Culture to Match Your Passion and Creativity”, Inc.com, Dec. 01, 2020. (accessed Feb. 28, 2021)
[281] D. Finkel, “Being a Great Leader Requires Deliberate Practice, Every Single Day”, Inc.com, Oct. 21, 2020. (accessed Mar. 02, 2021)
[282] M. Schwantes, “How Do You Know Someone Is a Top-Notch Leader? Look for These 4 Signs”, Inc.com, Aug. 15, 2018. (accessed Nov. 23, 2020)
[285] “Company of the Year: Turner Construction”, Construction Dive. (accessed Feb. 07, 2021)
[286] Quora, “25 Habits to Pick Up Right Away If You Want to Be a Millionaire Before Age 35”, Inc.com, Aug. 04, 2018. (accessed Feb. 28, 2021)
[287] L. Smith–Zapier, L. Smith–Zapier, and L. Smith–Zapier, “Tech has an ageism problem. Here are 3 things to do if you’re over 40 and want to stay relevant”, Fast Company, May 14, 2020. (accessed Feb. 28, 2021)
[288] K. Wing, “Why 2021 Could Be the Best Year For You to Start a Company”, Entrepreneur, Nov. 23, 2020. (accessed Feb. 28, 2021)
[291] M. Schwantes, “8 Signs to Immediately Recognize Someone With the Gift of Leadership”, Inc.com, May 24, 2018. (accessed Mar. 04, 2021)
[295] S. Patel, “Bipartisan Bill to Preserve Existing Nuclear Plants Clears Senate Committee”, POWER Magazine, Dec. 03, 2020. (accessed Jan. 21, 2021)
[296] D. Proctor, “New Generator Technology Cuts Emissions, Embraces Sustainability”, POWER Magazine, Dec. 21, 2020. (accessed Feb. 17, 2021)
Monthly Summary: 
AEC and Pandemic: Response and Impact - December 2020 Update