Navgating the Challenges and Innovations in Mega Construction Projects: Building Competent Leadership and Embracing Technological Trends

I have focused on the construction ofvery large corporate campus mega projects for the past ten years, first with Apple Park in Cupertino and now on Walmart’s New Home Office in Bentonville. 

These efforts are not just scaled up, standard construction projects. They have exposures related to their extended timeframes, very large price tags, extremely high-powered stakeholders, and high demand on supply chains and labor markets.This creates a highly networked contractual and non-contractual system which requires constant, small, local adjustments by experienced leadership to maintain.

The fact that most owners will build only one very large campus-like project makes amassing institutional knowledge within the parent firm unusual. This results in a severely limited cohort of experienced leadership on the owner’s side.

The owner leadership organization must be developed to mitigate information differences between themselves and the numerous agents.These information differences introduce three significant, systemic risks; adverse selection, moral hazard, and hold up. Deep competence on the owner’s side is essential to mitigating this risk and something that must not be undervalued when contemplating the execution of a mega project.

Mega projects are becoming more common so successful execution becomes an economic necessity; failures are hard to shake off.

What are some of the major challenges and trends that have been impacting the construction industry lately?

a. Sufficient and qualified construction professionals

1. Tradecraft – the growth in the skilled trade ranks has not kept pace with the growth in demand.

2. We need to invest in correcting the perception that has been trade work is something less, a compromise or consolation prize for people who do not attend college.

3. The intentional bias of our secondary education system away from technical/vocational skills and toward college prep has had real impact.

4. We have seen college cost and student loan burden increase which, in many cases, outpaces the earning potential of the resulting careers.

a. On the Construction Project Management side, our industry needs to focus on developing strong, fundamental skills derived from deep exposure to the trades, field environments, digital fluency, contract knowledge, accountancy and aggressive customer service.

1. These are threshold skills, blocking and tackling, which require broad exposure to the various facets of the project lifecycle.

2. We need to value and replicate the real workers. Think of the people you would give difficult tasks to because you know they will be successful. I call this kind of professional “The Garbage Man or Woman”.

3. Usually, these people are kept at an operational level within organizations because they are too valuable to advance into a non-billable executive role.

4. Their internal soft skills may need work and they are likely not on a 40 under 40 list.  However, one thing is certain, their clients love them and, maybe, if firms propagated their attributes and cultivated the corporate culture to incentivize these behaviors, the company would gain work, develop more competent staff, and make more money more effectively from happier clients.

5. Leadership must celebrate competency and work hard to coach and train. Set high expectations and build people to reach them.  Some people will bow out, but many will thrive. 

What keeps you up at night when it comes to some of the major predicaments in the Construction business industry?

a. Talent pool is #1.

b. Capacity of the operational pool.  There are insufficient numbers of competentconstruction professionals to meet the increasing demand.

i. Factors I see impacting and exacerbating this condition are.

1. The recent shift in population across the US

a. People are moving to, and putting infrastructure and services demands on, previously less populated areas

b. The existing construction systems cannot keep up as they were attuned to the previous supply/demand pressures.

1. The continuation and acceleration of the expansion of the domestic industrial plant and infrastructure

a. Private industry, supplemented by government policy, is working to offset the reduction in foreign sourced raw, intermediate, and finished products.

i. Potential mitigation strategies

1. Develop programs in high schools across the country which promotes other types of intelligence outside standardized testing.  Hyper focus on college prep ignores the fact that success in high school is domain specific, not a true indicator of success or happiness in follow on life.  Let’s use coursework in the trades to remedy this predicament.

a. Accurate cost/schedule/benefit delivery forecasting on mega projects is difficult.

i. Political bias in its various forms can force staff to take an inside view which assumes that the project will face only known unknowns. 

ii. We must adopt an outside view that looks at other similar projects and incorporates allowances for the impacts those projects endured.  Though the causes may vary, the lesson is that there are going to be unknown unknowns and we must forecast accordingly.

iii. Budget uplifts and the use of reference class forecasting are proven ways to better align early forecast expectations with ultimate results.

Can you tell us about your latest project that you have been working on and what are some of the technological and process elements that you are leveraging to make the project successful?

a. One common project management platform

i. This is an essential tool as it democratizes information across the project.  Differences in information between parties, asymmetric information risk, is at the root of the three major project risks; adverse selection, moral hazard and hold up.

ii. Centralized plan storage and access.

iii. Allows for the tracking of any issue from conception to resolution with a clear status and responsible party at any point. Nothing gets lost in the shuffle, so to speak.

a. A detailed and complete BIM Execution Plan and a central federated BIM model managed by an agent of the owner.

i. All parties feed into the model, while retaining the quality control responsibilities

ii. Ensures the many and various models on the project tie off at the edges

iii. Amasses all information on the build and can serve as a detailed starting point for a functional digital twin. This tool can be leveraged by those operating the campus post-handover for maintenance, energy modeling, as-builts, etc.

a. Aerial photographic capture

i. Provides historic and broad view of progress and site conditions which can help mitigate opportunistic behavior. It helps keep folks honest by providing a single truth.

What are some of the technological trends which excite you for the future of the construction industry?

a. Modularization – “Find your lego” Bent Flyvberg

b. Autonomous scanning and photo capture of projects to validate progress, billings and quality as well as serving as an additional reference source for the digital twin and facilities teams for day-two work and beyond.

c. essential that we do not overvalue technological advancement as a panacea. Development of competent field and office professionals is paramount with tech advances supplementing.

i. A fool with a tool is still a fool…