construction transformation infographic v2/media/mckinsey/industries...construction transformation...
TRANSCRIPT
Engineering andconstruction companiessuffer from low marginsand relatively lowproductivity
Fewer than 15% of E&C firms had double-digit growth and margins from 2005-2015, but
they could achieve 20-30% operating
margins if they design operations differently.
But they can overcome the challenges and do better if they:
The industry faces internal and external challenges
Labor productivity¹
130Index: 100 = 1995
Germany
120
110
01995 2014
United Kingdom
1 Gross value added per hour worked, constant prices based on 2010 pricesSource: Organization for Economic Co-operation and Development
Other industries
Construction
Articulate a clearset of values andtargets
Fragmented value chains
Extensive subcontracting
Complex portfolios
Competitive pressure
Coping with complexity
1 Make projectdelivery teamsmore accountable5
Build a developmentprogram for projectmanagers2 Standardize
systems andpractices6
Create anintegrateddata system3 Create an integrated
and transparent performancemanagement system7
Encourage speedyrisk mitigation anddecision making4 Minimize the
number ofchanges8$
$$
Shortfalls in accountability
Talent management
Reinventing the wheel
Failure to adapt to newtechnology
Problems utilizingresources