18 Feb CURT-CII 2022: Three Themes of the New Construction Industry
After six months of changes and challenges, the Construction Users Roundtable (CURT) and the Construction Industry Institute (CII) joined forces once again to host another conference, answering the question “Now what?”
Throughout the event, many thought leaders took the stage and provided their insights on what the new construction industry looks like with a focus on three themes: Sustainability, Workforce, and Innovation.
Here’s what they had to say:
It’s clear that sustainability will continue to be a top priority within the construction industry, which accounted for 38% of global energy-related CO2 emissions in 2019. While the industry has made steps to incorporate more environmentally-friendly practices, there’s still a lot of progress to be made.
The conversation continued throughout the event with Jim Ellis, Corporate Vice President of Global Construction for Microsoft, participating in a breakout session and panel over the next two days.
In the sustainability realm, Microsoft has committed to reaching significant goals over the next few decades. By 2030, the company plans to be carbon negative. And by 2050, the company plans to offset all of its carbon emissions since its founding in 1975.
Right now, in its construction projects, Microsoft is using the Embodied Carbon in Construction Calculator, or EC3, to collect carbon emissions data in building materials. In fact, Microsoft requires its contractors to also measure their carbon emissions and find material alternatives when needed.
This ties back to a point Jim made in the ESG panel – sustainability is not a one-person, one-company effort. All panelists agreed that sustainable practices need to be taken down the supply chain. Laura Wanless, Partner at Aon and ESG panelist, said it’s a growing trend to require contractors to stand by ESG. If they don’t, there’s no work. Cost and schedule are short-term pain, but sustainability is the long-term.
“Creating a Sustainable Future in Project Delivery”
Jim Ellis, Corporate Vice President: Global Construction, Microsoft
Chris Dummermuth, Site Program Director-MSD Biotech Dublin Expansion, Merck & Co., Inc.
Brad Sparks, Sr. Manager, Sustainability Strategy – Americans, SABIC
“The Journey to Environmental Social Governance and Risk Mitigation and Business Resilience”
Jim Ellis, Corporate Vice President: Global Construction, Microsoft
Angela Skow, AVP Regional Leader, CNA
Patty Errico, Global ESG Practice Lead, Natural Resources, Aon
Laura Wanless, Partner, Aon
Another presentation at CURT-CII 2022 provided one solution to help reduce construction’s impact on the environment. Three speakers from Nucor, North America’s largest recycler and steel producer, introduced its efforts (and successes) for reducing greenhouse gas emissions.
Currently, Nucor operates 24 steel mills and 300+ facilities, which allows the company to take 20 million tons of scrap and recycle it into new steel annually. According to the presenters, if all steel producers operated the way Nucor does, 2 billion tons of greenhouse gas emissions would be eliminated every year.
Right now, the majority of global steel production (70%) is accomplished with a basic oxygen furnace which runs on coal and electricity, posing significant environmental hazards. Only 30% of steel production is accomplished with an electric arc furnace which runs on electricity and allows for up to 90+% recycled content.
The average carbon intensity for a basic oxygen furnace is 2.15 tons GHG/ton, while an electric arc furnace is .48 tons GHG/ton.
“Where Your Steel Comes from and Why It Matters”
Buddy Burks, National Accounts Specialist, Nucor
Dennis Pilarczyk, Manager of Building Solutions, Nucor
Rolly Sauls, Sustainability Engineer, Nucor
The “green economy” is still being built on steel, the presenters noted. So, it matters where that steel comes from and how it’s built to move toward a sustainable future in construction.
In her 2022 Owner Study presentation, Gretchen Gagel, President & CEO of Greatness Consulting, cited “people” as a critical issue facing the construction industry today. The labor shortage is taking its toll on many industries, but its impact on construction is magnified with its already-aging workforce. Companies need younger generations to step in as the future of construction, but it’s a challenge.
One quote from an AEC participant in Gretchen’s study was, “People can work at Walmart for 25 dollars an hour. Why would they want to come work for us?” One owner said, “When it comes to attracting people, we are third from the bottom.”
CURT-CII 2022’s kick-off session with the Construction Brothers even touched on this urgent need for people. While some companies are seeking out new technology to answer the industry’s problems, the brothers emphasize the need for people.
“Who Are the Construction Brothers?”
Eddie Campbell, COO, ABSI
Tyler Campbell, Founder, Storybuilder
“People fix the problems. Teams fix the problems. Do not ever think that you’ll be able to take and slap some technology on something like it’s flex tape and seal the hole. It’s not the magic pill, people are.”
– Tyler Campbell, Founder, Storybuilder
So, if the problem is people (or the lack thereof), the next question is, “How do we create an intriguing work environment to obtain and retain people?” In her session, Polly LeBarre offers some suggestions based on real-life companies’ workforce successes.
According to Polly, the role of leadership is evolving. Today, workers want more control over their jobs. So, she suggests these new design rules:
- People define, design, and grow their own jobs.
- Every idea gets heard – wherever it comes from.
- Power is a product of contribution, not position.
- Values rule, peers regulate, and nobody “bosses.”
- Everyone is equipped to lead, create, and own.
- Nobody is smarter than everybody.
“A Maverick Manual for Success”
Polly LeBarre, Founding Member/Editorial Director, Fast Company/Management Innovation eXchange
For leaders moving towards those new design rules, Polly’s advice is to learn as fast as the world is changing by:
- Frequenting the fringe, which means intentionally hanging out with people whose different views will challenge your beliefs.
- Asking more questions than you give answers.
The last theme of the CURT-CII joint conference was innovation – new ideas and best practices to further enhance capital projects.
On the second day of the conference, CEO of PrairieDog Venture Partners Peter Dumont took the stage with Director of CII Stephen Mulva to present a new tool for lowering risk and improving capital efficiency, Operating System 2.0 (OS2).
The research behind this new capital projects business model involved understanding where project teams lost value (AKA sources of waste) in non-residential construction projects, then identifying how to recapture that lost value.
OS2’s focus areas are:
“OS2/PrairieDog R&D Updated: Groundbreaking Research and New Tools for Lowering Risk and Improving Capital Efficiency”
Peter Dumont, CEO, PrairieDog Venture Partners
Stephen Mulva, Director, CII
One big component of OS2 is the industry’s blockchain opportunity through smart contracts, which are self-executing computer programs that represent the commercial terms of a contract. Various project management data sources feed the smart contract, so it can serve as a shared, single source of truth – an immutable data foundation – between the owner and contractors.
Smart contracts are a win-win for all parties with many potential benefits. On the owners’ side, they will pay for only what’s received, achieve lower billing rates, minimize disputes, and more. And contractors will get paid faster, reduce overhead costs, free up working capital, and more.
The benefits of OS2 for owners, according to Peter and Stephen, include:
- 35% cost reduction
- 50% cycle time reduction
- 60% better ROI
To learn more, you can visit CII’s website to pilot OS2’s tools, join the OS2 community, and/or contribute to research: www.construction-institute.org/groups/partners/os2
Another innovative idea came from the “Project Summit” panel on Day 2 of CURT-CII 2022. The speakers introduced an entirely new way of working, challenging the traditional “design, bid, build” model of capital projects.
In this new model, the Project Summit team – which is made up of seven construction contractors – propose surpassing the conventional procurement process. Instead of each contractor bidding on a project separately, a group of contractors “team up” at the onset and bid on a project together.
In this team’s case, Air Products chose to work with Project Summit – Kwest Group, United Group Services, MetroPower, Premier Resources Group, Arizona State University, and Bradley – for its client’s facility expansion project.
“Project Summit: Construction Project Success Through Trust and Collaboration”
Kevin Sell, Chief Values Officer, United Group Services
Todd Stevens, Vice President, MetroPower
Kenn Sullivan, Professor, Arizona State University
Ryan Odendahl, President, Kwest Group
Ed Luckenbach, Manager of Field Execution, Air Products
“Quite honestly, the reason for the change was to be a little bit better than our competitors, try something a little bit different, learn something – and really, just get a competitive advantage.”
– Ed Luckenbach, Construction Manager for Air Products
The team emphasized trust as the key to making this project set-up successful. The client and team need to prioritize collaboration over competition to really make it work.
To learn more about Project Summit, you can visit MetroPower’s website: www.metropower.com/project-summit-proposes-new-model-for-industrial-market/
Access Sciences would like to thank all the industry and thought leaders at the 2022 CURT-CII Joint Conference. We believe knowledge-sharing and collaboration are key to shaping the future of construction, and we look forward to taking part in the conversations to come.
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