The housing sector is under pressure to modernise its construction practices, but we are on the cusp of an exciting technological revolution.
We are seeing rapid growth in innovative digital systems and, through off-site manufacturing, a lot more visible ambition in the sector’s industrialisation. And, I welcome the possibilities this offers to drive positive change in productivity, design, quality, scale, consumer-choice and social impact.
What do I mean by visible ambition? A number of national builders are investing in their own off-site capability. We have seen a wave of new market entrants backed by the private capital community and institutional investors (who in themselves have also instilled confidence in entrepreneurs and corporate leaders with wide ranging backgrounds and stories). To add further dynamism to the sector, 2019 also saw a market-first JV that brought together: proven overseas expert + government agency + leading national developer. This shows clear signs of market readiness, a sector (and government) that is open to global technology-transfer and real action.
People & Positioning
As someone with a vested interest in leadership within the sector and interests in organisational culture, I do often wonder what businesses will look like through these lenses if ‘Off-Site’ truly takes off.
From one angle, the topic starts to become interesting because of the varying positions being adopted or maintained by companies. Through my conversations with leaders and shareholders, two distinct responses often stand out for me:
-‘We are a technology story’
-‘First and foremost, we are a developer’
You might assume that either position could elicit very different organisational cultures, despite each company striving to deliver similar outcomes for customers. Equally, to what extent might each position lead to a greater prioritisation and investment in certain skills over others – say… software development first and development management secondary or vice versa? What key positions will make up the executive committee and where will they come from? Could we see a whole new face of leadership from high-technology or manufacturing, leading national house builders of the future?
Irrespective of the position adopted, there is a certainty. Everyone in this space will need to bring about a great convergence of skills to achieve both Mastery and Scale. Best-in-class systems development and manufacturing will need a capable industrial and technological workforce. Executing go-to-market, the right partnerships and successful on-site delivery will certainly benefit from existing house building know-how. And, a world-class business of any kind will require all of its key operating functions to be empowered and work together seamlessly.
Whatever the strategy and positioning, companies that are taking off-site manufacturing seriously shouldn’t underestimate the challenges involved in finding, retaining and harmonising different skills from very different industries. The competition for talent will only intensify, as businesses compete for skills within the existing housing value chain as well as a much broader ecosystem of high-productivity industries. Responding with a story, purpose, adaptability and real co-creation will make a difference.
Adam Mahmood is a Partner at McLean Partnership, a member of the Board Practice and our Cities Lead. For any enquiries, feel free to contact Adam on +44 (0)20 3597 6422 or AM@mcleanpartnership.com.