Constructive 2020: Building Sector Resilience

We recently kicked off our annual Constructive Forum, New Zealand’s leading pan-industry event. This year we have taken Constructive virtual, with four virtual events in August and September. 

Our first event, Shaping a Resilient Commercial Construction Future, brought together a great mix of sector leaders from across the supply chain. We were delighted to see so many clients from across the public and private sectors as well as contractors attending. This mix is important as we believe a collaborative approach between the client and contractor is crucial to ensuring behavioural change across the sector. 

Vertical integration – a key to delivering sector change

A key focus for this year’s discussion is the opportunities facing the sector, particularly those provided by COVID-19. NZ Living, Managing Director, Shane Brealey started this discussion with a call for the sector to rethink its current fragmented structure, and move to vertically integrated teams.

“One of the biggest constraints for New Zealand is us – our low productivity is holding us [the sector] back from achieving success,” says Shane. “Our current design and consenting process typically takes longer than the actual build itself”

“In the late 80’s-90’s, as a sector we dropped the ball, we didn’t keep up as the industry became more complex, and instead operated in a more fragmented structure. This created a disconnect between the client and builder and far more people focused on the process rather than the project – and this is where we are still at today.”

Peter Fehl, who recently retired as Director Property Services, University of Auckland, agrees, stating the best projects are those where a strong team is established at the start and continues throughout the build and beyond. This team must include the client as well as all contractors. 

As the country invests in infrastructure and property following the COVID -19 pandemic, the opportunities have never been stronger. It is up to us to get this right.

An end to competitive tendering 
The panel also called for an end to competitive tendering. This has been an issue raised at Constructive each year, and one which the new Government Procurement Guidelines is seeking to address. 

“We are fixated on the tendering process and finding the lowest price,” commented Shane. “In my experience, pursuing the tender process means you will find the lowest price for the most inefficient form of delivery. Rather than paying a fair price for the most efficient form of delivery.”

In the private sector, we are seeing successful clients saying, they are going to use the same contractors repeatedly because they trust them. By working together, they invest in the same goals, want to mutually succeed, and get the best result for the project. This is more of a challenge for the public sector, but it can be overcome. 

Collaboration and sharing ideas
A more collaborative approach allows for a greater education and learning exchange, and this is where we will see the dial shift in how we manage the big issues facing our sector, such as sustainability and climate change. 
The panel shared ideas for how we could do things differently. This included the Construction Sector Accord’s Rapid Mobilisation Playbook, which provides insights into how to plan and procure more efficiently, as well as reducing inefficiencies in the design phase of the project. 

We were pleased to have had such a positive and practical discussion, and one which highlighted the opportunities facing us as a sector today. Across the country we are seeing people wanting to invest in property – it is something solid and they understand it. As a country we are also investing in our infrastructure. Shane put it well when he commented “there is abundance of work in our sector and it is really on us to step up and meet the challenge of our country.” 

I want to say a big thank you to our panellists, Shane Brealey, Peter Fehl, as well as Karen Mitchell, Managing Principal Consultant, Advisian, and Chris Hunter, Managing Director, NZ Strong. I would also like to thank everyone who joined in online. 

Further discussions for a resilient sector
This month we will be hosting a further three events: Building Residential Sector Resilience; Opportunities for Reinvention and Transformation: The Political Agenda for the Sector’s Future; and Managing the Shocks: Ensuring Business Resilience. I am looking forward to hearing from more industry leaders, and from government on how we can shape a resilient building and construction sector that is fit for the future. 

Please join us if you can. The sessions are every Thursday afternoon at 4.00pm until 17 September. They will also be recorded and will be available on the Constructive website. 

David Kelly