Challenges
Stage 2 of the 2008 Constructions Future Leaders competition involves a series of challenges. These are based on the business/industry challenges that CEOs from within Construction face over the coming year.
Sustainability and the Skills Shortage are two issues that currently pervade the industry as a whole and therefore these themes make up the two challenges that must be answered by all entrants.These obligatory challenges are detailed below.
In addition to the obligatory challenges, a series of four weekly challenges will be emailed to entrants. Of these four, entrants must choose two to answer. These challenges will also feature on this page as they are announced. In total each entrant should answer four challenges during the month period, (two obligatory challenges and two chosen weekly challenges).
All answers to all challenges should be no more than 200 words. Once completed, please email your submissions complete with your username to futureleaders@emap.com for collation.
Obligatory Challenges
Graduate attraction & retention
In the last few years the construction industry has enjoyed a period of continued growth. The investment from both the public and private sectors has made the construction sector form 8.1% of UK GDP.
At face value, the future outlook appears bright for the built environment with high profile and prestigious projects on the horizon such as, the Olympic and Commonwealth Games, the redevelopment of major cities, Crossrail, huge housing plans and almost every football and rugby club in the land seemingly requiring a new home. It would appear an industry in full bloom. Delivering these projects requires a continuing and ever increasing stream of talented young professionals.
Why then does the industry struggle to capture and retain talented graduates? Maybe it's a question of wages although many pan-industry reports would argue otherwise. Maybe it's a question of perception - the construction industry is not one that graduates deem glamorous especially with the bright lights and allure of "city jobs" catching their collective eye. Maybe it's a lack of marketing - graduates are not aware of the lucrative and fulfilling careers on offer in the industry. You decide.
Future leaders will need a future workforce so here's the challenge:
As the leader of your company how would you address the issue of attracting and retaining graduates in your business? What can the industry collectively do to improve its reach and appeal to graduates?
The Sustainability of Sustainability
The term sustainability is used with ever-increasing regularity. Yet it can mean different things to different people.
The general theory is that sustainability refers to the maintenance and protection of our environment as a whole and the impact our current practices have on its wellbeing. If we don't change the way we work we will not be able to sustain our environment. So it is clearly something that construction is duty bound to take a lead in through its design and building practices. We build for the future.
Construction clients, both public and private sectors, are increasingly putting sustainability high on their agendas. They require companies to be sustainable in all areas - from the way they design and build to the way they source and select products. Sustainability even encompasses the way organisations behave. It is a commercial reality - without following these steps businesses are in danger of losing work.
However, creating a organisation that is fully sustainable may entail reviewing & overhauling working practices, installing new IT systems, employing new staff, retraining existing staff, engaging new suppliers. It is clear that the changes required come at considerable cost both culturally and financially. This begs the question - is sustainability in design and construction a necessity for all businesses to adhere to at any cost?
As the leader of your organisation how do you balance the need to be fully sustainable throughout your business against the commercial realities of making a profit and maintaining competitive advantage? How would you communicate this message externally and internally?
Construction Weekly Challenge 1
Construction remains on shaky ground
The Construction industry is a dangerous place to work - the latest HSE figures show that in 2007 there were 77 fatal injuries to workers. This represents 32% of all worker fatalities across all UK industries, worse still - construction worker fatalities rose by 24% between 2006 and 2007. The popular view remains that construction is both dirty and dangerous and it is statistics such as these that do nothing to dispel those thoughts and make the industry a less attractive place to work.
Whilst there are a huge number of construction companies that go beyond the required legislation and constantly endeavour to guard against fatalities occuring, all too often the media focuses on the above statistics and individual cases where fatalities occur.
You are the leader of a construction firm who has just learned that three of your workers have been fatally injured on one of your sites. The project manager has given assurances that all Health and Safety legislation was being adhered to on site, you trust him/her but the fact remains that if risk is handled correctly and if H&S legislation is being strictly followed, no fatalities should occur.
As the leader of this company what would be your response to address the current situation in the short term and to make sure this never happens again in the long term? The media want a statement - how wo\uld you approach this PR minefield?
Construction Weekly Challenge 2
This week saw the most severe stock market falls since the attacks of 9/11. The value of blue chip shares plummeted £70 billion in just one day. This has sent business leaders, government and economic forecasters into a tail spin. While a US recession seems inevitable should we, in the UK, also be preparing for the tidal wave from across the pond?
Outline, with reasons, whether you think there is cause for concern, and what steps, if any, you would take to protect your business?
Construction Weekly Challenge 3
Retention
"The issue of retentions is a running sore that refuses to go away. Any sane subcontractor hates the system and the way it works but the argument in its favour is this: what is the alternative?
The National Specialist Contractors Council reckons it has one. The idea of a bonds scheme has been around a while now but the NSCC has come up with a version that contains a little more substance than just words.
It has linked up with insurance companies to help it find an alternative to retentions. Chief executive Suzannah Nichol is keen to stress the idea that the bonds system is an alternative only.
She said recently: "We're not saying 'get rid of retentions' because we know a lot of the industry wants to retain them."
The Specialist Engineering Contractors' Group is less accommodating and wants rid of them completely. It wants project bank accounts to be set up whereby everyone gets together from the client down and money stays in a group bank account rather than, say, a contractor's.
This idea has also been kicking around for a while now. But here is the rub for both groups - neither option has been fully embraced by the industry. To put it another way, they have been quietly overlooked by main contractors.
Specialist groups are pinning their hopes on the public sector and the Government in particular. They hope it can lead the way on the issue and that their stance will encourage others to follow.
Not every subcontractor does a good job and firms need some sort of insurance to make sure they fix anything they've mucked up. And the best form of insurance is hard cash.
Yet surely there has to be an alternative to retentions. Firms have got better things to do than chase their own cash, and the money tied up could be invested in better training and new recruits.
The current system simply encourages bickering and outright hostility between firms, and seems to sum up the less forward-thinking part of the industry."
Challenge: As the leader of a main contractor business, what practices would you put in place to calm subcontractors' fears over retentions? Outline any alternatives to the retention system that you would support and explain why?
Construction Weekly Challenge 4
Managing Risk & Increase Margins
How would you increase margins from their standard 2% to nearer double figures without increasing your firm's risk?
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