Have you read “The New New Thing?” It’s a book by Michael Lewis, author of “Moneyball,” “The Big Short” and “The Undoing Project,” all of which will open your eyes to new ways of approaching the world around you, whether it’s baseball, financial markets or understanding human biases.
The construction industry doesn’t follow fads and that makes it entirely different from other industries
“The New New Thing,” though, is a book about the culture of Silicon Valley, mostly focused on the activities of serial entrepreneur and investor James H. Clark, founder of Netscape and several other notable companies. The premise of the book is how the Silicon Valley culture encourages the pursuit of the next big idea, the new new thing. The desperate need to identify and capture the next great idea that will upend an industry or transform consumers’ lives is at the heart of Silicon Valley.
Construction is Different
Can you imagine any culture more different from construction? We work in an industry that is actually resistant to change. And for good reason. Adoption of new techniques and products can be risky because, unlike an iPhone, which has an average life span of four to five years, the building you’re constructing is expected to last 100 years. And when an iPhone fails, the consequences are small, but if a building fails, it is catastrophic and potentially can cost people’s lives.
You don’t want to reach just anybody; you want to reach the right person, the person who can make the decision and buy millions of dollars of your product or construction service.
Given that risk level and increased liability, a slow and steady course of change is responsible and desirable.
There are other major differences as well. On the marketing side, if you try to land a construction job or sell a building product, you can’t approach it like you’re talking to consumers. The numbers game you play is entirely different. Apple spreads a marketing net as wide as possible focusing on big numbers that provide smaller, incremental sales. They expect a purchaser to spend hundreds of dollars. On the construction side, the net has to be narrowly focused. You don’t want to reach just anybody; you want to reach the right person, the person who can make the decision and buy millions of dollars of your product or construction service.
Getting someone to switch from an iPhone to a Galaxy is relatively easy compared to getting a contractor to shift brands on a metal building system or insulation or even fasteners. Those changes can have significant consequences. But when you gain that confidence and the contractor makes the shift, they are far less likely to move on at the drop of a hat. For the most part, people in the construction industry are more loyal than other industries. (I say that without any evidence, but just a solid belief in knowing so many in this industry.)
Even in the hiring environment, the attitude is completely different. We all understand the difficulty of finding craftspeople, which is a problem that has been around for a couple of decades. We’re fighting the culture of the new new thing. Young people especially are attracted to that kind of shiny object Silicon Valley and other industries provide. Like it or not, the construction industry doesn’t provide a lot of shiny objects.
It provides a lot of satisfaction, and wonderful opportunities, but for someone interested in fast-paced, changing environments, this can be a tough industry to come into.
Change is Coming
There is, though, change coming and it could be massive. The last 18 months of the pandemic have caused major shifts in attitudes about how much we need office spaces, dorm rooms, lecture halls, retail stores, restaurants, etc. Ken Simonson, chief economist for Associated General Contractors of America, spoke at METALCON last month, and addressed the changing markets in the industry. Comparing the first six months of 2020 to the first six months of this year, higher education construction is down 16%, retail 15% and lodging 31%. Office space construction is down 10%, but Simonson cautions the decline is actually larger because the Census Bureau lumps in data centers in office construction.
Going forward, Simonson says, “There will be less demand than in pre-crisis for retail, offices, higher education, lodging and travel-related construction.”
Are you ready for that change? If that’s where you make your money, are you ready to face increased competition for fewer jobs and tighter margins? And if you’re in warehouse construction, which is expected to boom, are you prepared for other contractors to move into that arena as they flee markets that aren’t building?
A building isn’t an iPhone, and the construction industry isn’t Silicon Valley, and people in our industry who think they are in a consumer-based industry struggle. But there are attitudes we can learn from Silicon Valley, and one is to expect and embrace change because it’s coming whether we want it to or not.
