The Next Big Threat/Opportunity

Geoff Smith Portrait

BY Geoff Smith

POSTED ON NOVEMBER 8, 2011

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The construction industry is going to consolidate. It has to. How can it not? It is one of the most fragmented industries on the planet. It has been kept that way for decades by local barriers to entry, a lack of innovation and efficiency, a general resistance to change, and an unenlightened focus on price competition by our clients and ourselves which kept the industry weak. None of that can last much longer.

The important question isn't whether consolidation will happen, or when, but rather how. Everybody I talk to assumes that 'bigness' is the key. The big balance sheets will eat the small ones. And there is no question as to that threat: If a company can design, finance and build and absorb large losses, how do the small or midsized companies compete?

EllisDon is not 'big' in the global market. We are midsized. But if we keep performing we will be big soon enough. But I don't buy this 'big wins' argument.

Brains win. If they are combined with speed and agility. And if all that is combined with courage and conviction. And I.T., of course, is the potential nuclear weapon. It is the great equalizer.

Years ago when EllisDon was weak, I was terrified of industry consolidation. I was worried that we would be left out entirely. Now, as it nears, it is an invigorating challenge to put it mildly. We aren't yet big enough, but we are smart enough. And we are pretty agile. The question is are we gutsy enough? (I think so.)

And: If we can hit a company wide homerun on I.T. and collaboration (econstruction.com), can we trigger profound industry change ourselves?