This morning an article from McKinsey Quarterly on the construction industry caught my eye.

The bulk of the article focused on the state of construction, primarily in Chin a and how it compares to the est of the world and the lack of adoption of new technologies and ways of working. In some cases we seem to have gone backwards ” … today a skyscraper can take five years or more to complete. When the Empire State Building was constructed, it only took about 13 months.” Zhang Yue

While this is interesting the stand out exchange in the Q&A could be applied to almost any sector when thinking about how to stimulate or deprecate innovation.

McKinsey: Why do you think technological innovation has failed to permeate the industry?

Zhang Yue: There are two reasons. One, rapid urbanization in China is driving significant investments in infrastructure development. At the same time, innovative financing and investment products are also pouring money into the industry. When demand is strong and the market is good, people do not have much enthusiasm for new technology. They are not motivated to innovate because the profits are there.

Two, excessive regulation of the industry and its supply chain can hinder innovation. In China, there are so many regulations that they do not encourage innovative technology or even thinking. For instance, in construction design, regulations can be so detailed that they specify which types of materials to use and what standard of thickness the materials should be. So, in China the industry falls back on what we call “standard.” Because regulations emphasize standard, builders pursue it at the expense of creativity, efficiency, safety, and ultimately responsibility. As long as a builder does not violate standard, he or she does not bear responsibility for any issues.

Personally I would go so far as to suggest other negative factors such as an aversion to risk – behaviours we see in sectors adverse as public service delivery to Hollywood films – and blame culture are equally dangerous when it comes to stifling an innovation culture in an organisation or sector.

It always comes down to the soft squishy bit in a company or machine that makes a success or failure. People are both the instigator of change, innovation and social value; and the brakes.

Published: June 10, 2014. Categories: Robert's Blog.