Blog 003 - Specialist Contractor Darwinism

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”

The above quote is regularly misquoted as being the wisdom of Charles Darwin, which it is not. I am unclear as who really made the statement, but that is irrelevant, what matters is, how will this apply the Specialist Contracting sector over the next few years as we navigate the storm that is the post Coronavirus UK construction market.

There is a lot to be said for being adaptable in this changing market, but when it comes to survival, what will be most important, strength or versatility? Lets consider each:

Strength – Whether this refers to the calibre of the Managers & Tradesman or cash in the bank, there is a lot to be said for strength when it comes to surviving difficult times. Cash in the bank allows you to take projects that have lower margins or protracted payment terms. It gives you the ability to deal with the inevitable late payments or getting “knocked” by the Contractor. Financial strength with also give your clients the re-assurance of your stability to undertake the project without risk of insolvency and also open additional doors within your own supply chain in terms of lines of credit and the like. Strength in the personnel gives you the ability to know that you will not be out of your depth when taking on projects, this usually gives you better certainty on time and cost (only in so far as it can be affected by your own performance, sometimes there is no accounting for the Contractor’s management of the rest of the project).

Versatility (adaptable to change) – The phrase we hear so regularly in the Coronavirus impacted world is “the new normal”. What is this, to be honest, I am not sure anyone knows at this stage. This has been a true acid test of those Specialists who are adaptable to change. For so many years, construction was about face to face and “walking the site”. Outside influences completely prevented this for many months, in my own option, we are now working in an industry that is dealing with bureaucracy in a more efficient manner. Meetings have moved online; this is saving considerable efforts in travelling and waiting for people to arrive. The flip side of this, is the loss of “in person” that comes with physically visiting site, the Specialist Contractors that are able to produce new (but still efficient) procedures for managing these variables from a distance will turn out to be the companies that have the lower overheads, the higher performance reputations and be best placed for winning future bids. This is a changing industry, not just from Coronavirus and social distancing measures, but also pre-fabrications, accelerated construction programmes and builds that need to be constantly under review by developers based on sales demand.

It is hard to say if the opening quote applies to the Specialist Contracting sector as a definitive rule. Needless to say, undercapitalised Specialists will truly struggle in the coming years, even the well capitalised will be hit hard by any late or missed payments by a Contractor. The ability to change to the market, the likely down grading of specifications and increase in volume in the residential sector and the probable move to mass school, hospital and train station building that will come in the public sector will be essential to survival. Specialists will need to carefully assess any diversification of their businesses, whilst it may open new revenue streams, it may require upfront investment or increased overhead to get moving, increasing your ability to change but negatively impacting “strength”.

What is certain is that these are set to be difficult times for the Specialists and finding the right balance between strength and adaptability to change is going to be the key to survival and future success. If you want to discuss more or want to understand ways in which I might be able to help you navigate these times, drop me an email.