Construction’s Great Innovation Dilemma: Balancing Risk with Reward

Construction success today is all about balancing multiple priorities and expectations.

You need to maintain tight margins and control costs without compromising quality. At the same time, it’s also important to innovate. Yet, innovation must be carried out judiciously, striking a balance between embracing change and not taking excessive risks.

All this is to say that staying ahead in the construction industry requires adaptability, leadership, and courage.

Recently, during a fireside chat at the Associated General Contractors of America (AGC) annual conference, I had the pleasure of discussing all this with Atul Khanzode, Chief Technology Officer at DPR Construction. We discussed how construction firms can innovate while managing costs and promoting project predictability.

Read on to see some of the top insights from our discussion.

The innovation imperative in construction

The construction sector can't afford not to innovate. With shrinking margins, timelines, and labor forces, firms should be more forward-thinking and leverage technology to solve their biggest challenges.

The good news is that construction industry players, including tech providers and firms, are stepping up to meet these challenges head-on.

We are increasingly seeing modern innovations reshaping the sector. Virtual design and construction tools continue to enable more precise and controlled project planning and execution. In addition, AI and data analytics are helping organizations augment their workforce and make smarter decisions.

Innovation continues to accelerate. Billions of venture capital dollars are going into construction tech startups. But venturing into the unknown comes with inherent risk, including financial, operational, and reputational risks.

Atul says it best during our fireside chat: "It is a balancing act because you want to be innovative. You want to find new ways to be predictable, safe, and sustainable. But simultaneously, you must deliver projects on time and within budget."

As such, organizations must be mindful of these risks while still recognizing the opportunities that come with innovation.

It's a tricky balance. Fortunately, there are steps you can take to manage risk and ensure that you stay innovative while delivering on client expectations.

Strategies for evaluating and mitigating risks when adopting new technologies

How does DPR strike the balance? According to Atul, it's all about having a disciplined approach to innovation and systematically evaluating and integrating new ideas.

Fostering a culture that encourages ideas and smart risk-taking

Creating an environment that cultivates innovation and strategic initiatives is crucial to successful business operations. Atul says that at DPR, they field ideas from multiple offices globally and develop systems to share them across the entire organization.

Doing so, he says, streamlines collaboration and maximizes resource use.

"Surfacing ideas that have been tried out provides a mechanism where teams don't have to fight the project budget."

Working with owners and clients

Another critical component of DPR's strategy is engaging stakeholders in the innovation process. Atul also mentions their customers' involvement, saying they play a big part in helping DPR innovate.

He says, “Another aspect is what an owner or customer considers innovative. That is also very much tied to what we are trying to do. So we prompt people and say, 'Can we get a customer to help us here?'"

Encouraging early involvement

One of the best ways to decrease risk is to identify issues early, ideally during preconstruction. By ensuring accurate design planning upfront, you can significantly reduce issues later when the project is being built in the field.

Atul agrees that thorough planning and design validation early on help ensure execution excellence.

 "Execution of quality work is essentially our biggest risk. We mitigate that by utilizing virtual design infrastructure as much as possible."

Early involvement is also about bringing in the right stakeholders sooner rather than later. As Atul puts it, "We understand and have experienced the benefits of involving the experts in this room early in the project and utilizing their expertise alongside our design partners."

Leveraging methods like industrialized construction

Regarding the actual building process, nontraditional methods like industrialized construction (IC) can streamline and enhance productivity.

At Autodesk, we see industrialized construction as the intersection of manufacturing and construction. It's about implementing manufacturing-like methods to increase project delivery, including approaches like prefab, offsite modular construction, and robotics.

IC can reduce safety risks and enable firms to navigate the ever-present labor shortage. Industrialized construction helps you achieve more with less, so you can focus on innovating and improving project outcomes without getting bogged down with increased risks or lack of resources.

Making use of AI and data analytics

We're continuing to see greater momentum and interest from the industry as firms begin to understand and take advantage of AI-driven technologies. When it comes to risk management, AI can be leveraged in many ways. It can be used to analyze historical project data and identify potential issues for current and future projects.

For example, a European customer uses Autodesk's AI capabilities to analyze previous project information and identify potential water penetration risks.

AI can also automate tedious tasks and free up your team's time for high-level activities. Automatic symbol detection and photo tagging are just a few examples of how AI can streamline project documentation processes.

Forging the right partnerships

I cannot overstate the importance of partnerships. Innovating and thriving in today's modern construction landscape isn't something we can do alone. For us to innovate, we must partner closely with all of you.

At Autodesk, we collaborate with customers in various capacities. First and foremost, we learn directly from you. We want to know your workflow challenges and the best solutions.

I can tell you that the answer to these things is outside the Autodesk office. We have to be out there with all of you.

We're also excited to see Autodesk customers developing their own technologies. We see you innovate in your own ways, and we encourage you to integrate and enhance those innovations with Autodesk tools. We want to ensure we're partnering with the best and brightest, and we learn about many of those from all of you.

Innovation, a worthwhile risk

Innovation is a necessity for any construction firm that wants to stay ahead. Embracing new technologies and methodologies will enable you to achieve greater efficiency, safety, and quality.

Does innovation come with risk? Yes. But an even bigger risk is staying stagnant. So, strive to implement reasonable innovation by fostering a forward-thinking culture, assessing new technologies, and partnering with the right people and organizations.

Jim Lynch

Jim Lynch is senior vice president and general manager of construction at Autodesk. He leads Autodesk’s efforts to create and deliver products and services which provide the foundation for a digital construction workflow. In his more than 20-year tenure with Autodesk, Jim has held a variety of leadership roles and was a key player in the successful scaling of Revit, a flagship Autodesk product, and the establishment of BIM as an industry standard. In his role leading ACS, Jim oversees the vision and strategy of Autodesk’s construction portfolio, including product design and development, marketing, sales, and customer success. Jim and his team are focused on delivering innovative, cloud-based solutions to help the global construction industry reduce risk and increase margins using Autodesk construction solutions. A respected voice within the construction industry, Jim has recently been featured in Forbes, Fortune, and construction industry leading publications including ENR, Construction Dive, and Construction Business Owner. As a 30-year veteran of the CAD industry, Jim has served in a variety of senior management roles in the AEC, manufacturing, and electronic design automation industries. He holds a Bachelor of Science in Computer Science from Fitchburg State College.