Mace: Innovating in an industry with low margins
Matt Gough, director of innovation and work winning at Mace, sat down with Nicola Byrne to talk about the construction group’s 2022 strategy and how the firm is innovating in a sector deemed to be behind agriculture in digitisation.
NB: What are Mace’s priorities this year?
MG: We have recently reset our mid-to-long term business plan so that we have a 2022 strategy. A key priority is innovation to drive service excellence, it’s right at the top of our agenda here as a business and will continue to be for the future years.
We’ve got three core areas that we’re trying to tackle across the group:
- One is a digital transformation piece, how do we rapidly accelerate the application of digital technology to improve how we operate the business
- The second is a construction to production strategy. We have some ambitious plans around our role, as both consultant and contractor, for transforming how we design, manufacture, assemble and operate the built environment.
- The third is the development of a service excellence strategy. We’re looking to improve our client focus and put the customer at the forefront of how the business ticks, which is in part afforded by digital.
What does Mace’s strategy look like? How are you innovating?
Over the past year we’ve made some big internal bets on how we can structure ourselves better for this. In the last year we appointed Stephen Jeffery as CTO, chief technical officer, and Michelle Barkess as the new CIO, chief information officer. Michelle was brought in from a different background, a retail background, to really challenge ourselves about how we accelerate our digital adoption and transformation.
Within both of their appointments, we’re trying to double down on our technical ability and our opportunity to build the capability and capacity that we need to accelerate and to drive this change at pace. Our industry is often referred to as slow to transform, least digitised other than agriculture, productivity’s not been going anywhere and it’s quite easy to get caught in that rut of how the construction industry traditionally thinks and operates. We’ve been making some big internal changes to really try and, and accelerate and disrupt that, but the proof will be in the pudding. The group is committed to doing things differently and that plays back to our mission statement, pursuit of a better way.
Last year we won the AEC Excellence Award the Autodesk awards for global large construction projects. We beat a lot of great Chinese, American, European and UK projects in terms of our application of BIM technology in the process of construction.
Mace won the award for the firm’s work on Facebook’s data centre in Ireland. To keep the project on track the company used BIM 360, a platform which predicts safety hazards, manages quality, and automates tasks to reduce rework, control costs and stay on schedule. Read more about the project here
Our challenge for 2019 is how do we take that pinnacle and make that business as usual for all of our construction projects. How do we use BIM out on site? We can get some really good productivity gains from that; managers being 35% more productive, operatives being 30% more productive, and then starting to try and deploy more new techniques and tools in the field. We’re exploring the use of drones, labour scanning and surveying to compare what’s been built versus the model, and wearables to help track operatives and ensure their safety.
Are you developing these technologies yourself or are you working with startups?
We work with partners, we’re clear that we’re not a software business. There are people out there with better skills and probably better focus than us and we’re keen to ensure that we have the right people doing the right roles. It’s a bit like any of our delivery jobs, but we’re fielding increasingly strategic partnerships both with enterprise level software providers like an Autodesk, but also the startup community. It’s really interesting the amount of money that is flowing into the sector from venture capital, and we want to play a big part in helping to again enable and accelerate that transformation.
What startups are you working with?
There’s a company called Disperse which is an AI-enabled progress monitoring tool, they use 360 degree cameras to capture 2D images which then go into the cloud and has some clever AI applied to report back the progress on site. That leads back into our construction programmes, so we’re able to then use the progress reporting to re-plan how the work is going to be done.
We’re doing some really clever work with a company called SenSat, who essentially are a drone company with a platform, which enables us to quantify and measure some of our big consultancy projects, such as the Heathrow runway extension as an example.
We also work with Glider for more BIM-related projects. We’re not unique in our use of them in the industry, but they’re one of the companies that are helping real pain points like the collation and handover of operations and maintenance data, and trying to really move from a BIM model to an assets information model.
It’s not always plain sailing, I think there is always a fear of big companies almost squashing startups and limiting growth in some respect because you end up pulling them from pillar to post, but we’re open to proving that wrong.
Our innovation process is finding the right way for the business to be able to articulate what these companies can do; how ready they are to scale and also these companies to identify what Mace is really trying to achieve and how we can help and support them.
We’re continuously investigating, developing or embedding new technology across a number of stages. Some are only suitable for trial on a project; some are ready to scale up to multiple projects; and some we just want to make our core business-as-usual model, and you need to help those companies through that gateway.
How is the innovation process structured within the company?
At Mace we say innovation is everybody’s job. The people that we hire need to really be thinking, challenging the norm and innovating, that’s how we built our brand as a company and that’s how we’ll continue to differentiate ourselves.
Within that, what the Innovation Team does is help to provide structure and some governance around the traditional business. We now have a number of technical directors in each of the business units, they’re our main point of interface for working with these new technologies, and they’re helping the business again to really accelerate and drive up the adoption of new ways of working.
My team is small, there’s three of us, with an extended reach into probably another 30, and I would say we do two things. Half of my time is encouraging everybody else to innovate, and half of my time is leading on the more leading-edge opportunities for Mace in its R+D and innovation strategy.
What’s your process for finding these new leading technologies?
I did a computer science degree back in the early 2000s, and when I left university, I was building websites and software, so I understood my way around technology. I joined Mace in 2011 to help the company to win work in the construction business, and around the same time the BIM level two mandate was coming out. The mandate required all public sector works to be BIM level 2 compliant, which involves developing building information in a collaborative 3D environment, as part of the Government’s construction strategy to push the industry to digital.
I’ve spent a number of years at Mace helping the business to understand what the Government was asking us to do, what the clients were asking us, what the strange companies that we hadn’t necessarily spoken to before were trying to sell us, and what we should be doing as a result.
We say to everybody at Mace, you’ve got the insight, you’re working on something day-to-day, nine to five, you should understand what the problems are that need to be solved, you should have the ideas, this is an entrepreneurial company.
Do you set aside a budget for R+D and innovation?
We commit currently 2.2% of our annual turnover to R+D, and that is really a demonstration of our commitment to innovation. This is an industry with famously low margins, there are many contractors struggling to hit more than 2% profit margin so actually a commitment of that scale into R+D we think is pretty significant.
What are the key issues that you’re trying to solve with innovation?
We have a productivity challenge in the industry, the first step of that has been measuring productivity. It’s been really interesting over the last two years, part of the CQA’s (Certified Quality Auditor) role has been to get a grip on actually how productive we are across each of our business sectors are that we work in. The UK average for construction is £28, £29 per hour GVA (Gross Value Added). Our average for 2018 was £66 an hour across all of our business units, so we’re doing something right.
The intention is that we can improve that 10% year on year, so that we’re a better company and have a better offer to the market than our competitors. That can be technology led, but a lot of the time it’s also product led – how do we manufacture better? How do we do more stuff off-site? The Government construction sector deal is pushing us towards doing more off-site, we recognise the benefit and we want to do more.
We face the same challenges that everybody else does in terms of skills, increasing costs of labour and materials. Safety is always paramount, how can we improve the safety, welfare and wellbeing of our operatives, and the other side of it, how do we make them more efficient? How do we apply technology, such as artificial intelligence, to improve how they operate? There’s a big push around AI and data to allow them to do a better job.
Can you comment on the recent news surrounding the Urban Splash/Sekisui/Homes England deal? Does it show a shift in attitude towards these new methods of construction?
I think it’s great news. I think we do need to continue to challenge ourselves with introducing a bit of external competition into the market is a really good way of doing that. We’re delivering some modular projects, but we aren’t in the process of becoming a modular provider ourselves because we don’t see that as our USP. However, we do have a keen eye on modern methods of construction and we’re making some really big strides in being able to deliver better than the competition, for example our ‘jump factory project’ which ended last year and used a MMC approach called High Rise Solutions.
In this project, 98% of the superstructure was prefabricated and the towers were built using a climbing mechanism that allows a new floor, including structure, cladding, horizontal and vertical service modules, bathrooms and utility cupboards, to be fully externally complete in just one week.
That was a big investment for the company, in something that has never been done before in the UK, and by building those towers with that approach we were 30% faster than our traditional method of construction. We’ve got the next iteration of that, a couple of projects are signed up and due to go to site over the next few months. That’s going to be even better, it’s going to be faster and we think that there’s a real opportunity and plenty of space in the market for all of these options.
How are you dealing with the skills shortage and employees having to learn about the digital world?
We’re really keen on helping the wider industry to transform, we’re conscious that a lot of the technology requires new skills and capability. We’ve been running a digital leadership programme here at Mace, which started off with an understanding of BIM, and how that works across everything from 3D through to 6D and operation. We also train our supply chain continuously; Mace has a business school and within that the supply chain are members. We provide varying levels of training, from MBA level to core skills training; not just in the digital technology space but across everything from commercial management, procurement, health and safety, quality control.
What makes you want to drive innovation?
The thing that everybody at Mace does, not just myself, is really linking innovation back to our broader purpose. Our vision for the company is about shaping cities and building sustainable communities. People really like to feel they’re having an impact on the world in which they are being put to work. There’s a huge amount of energy and effort, particularly around the more responsible business-led innovation that we’re doing. We’ve made a commitment to be zero carbon as part of the RE100 scheme by 2022. We’re making great progress on removing all diesel from site, researching new material technology and material science such solar renewables and batteries.
I think the construction industry is fantastic, we’re huge, we have a massive impact on the world, but we need to do what we’re going to do over the next 20, 30 years of urbanisation sustainably. We need to do better, we do need to do it faster, but we need to do it more responsibly. The thought that we, as a group of people working in industry now, will be part of that transformation, is the stuff that you get out of bed for.