Fragmentation in the property construction value chain and the bespoke nature of much of the work kept the industry resistant to the kinds of digital transformation seen in sectors such as financial services, transport or entertainment, according to Lendlease Corporation chairman Michael Ullmer.
He was speaking during a panel discussion at the construction and property giant's Autonomous21 conference yesterday.
But while the commercial property construction sector is traditionally a digital laggard, that’s likely to change, he said.
This will expose market participants to the kinds of talent acquisition challenges that other technology-intensive sectors are confronting.
Ullmer said it is an important issue for the company’s board which strategically is now working on the assumption the industry will be digitally disrupted.
He told the conference, “It's a very interesting challenge for an organisation like Lendlease in the property business because, unlike banking where technology has been very well embedded across all aspects of the value chain, the property industry is one of the few that has not been significantly disrupted by digital and by new players.”
While there have been some changes in areas such as in building information management systems and asset management systems, the property sector has not seen the emergence of newcomers with radically different business models, he said.
Instead, he suggested Lendlease needed to get ahead of new entrants.
“Someone will crack the code on this. The smart thing to do is for us to be the ones that crack the code and in a sense, disrupt our own industry before someone [else] does it," he said.
The advantages of incumbency meant the company was well placed.
“We've got the scale, we've got the data, we've got the intellectual property. We've got the financial capacity, and we've also got the strategic drive that allows us to take this position in digital," Ullmer said.
But he acknowledged this will require different talents.
“That’s why we brought in Bill Ruh, for example, back in 2018," he said. "We knew we had to have a different way of thinking about this.”
Talent alone is not enough, however, he stressed. “[It needs] to operate in a way that collaborates across all aspects of the value chain. “
In addition to bringing in people with new skills, Lendlease also had to commit to developing their skills into new pathways and to create an attractive environment that attracts and retains talent, Ullmer said.
“One of the ways you make it attractive is you have really interesting problems to solve, you have a really interesting culture, and you have a purpose that people can align to.
"Our purpose, which is creating communities where people thrive, is something that people can really get their mind around, and they can see that they can be part of an incredible journey, which is delivering these great outcomes but in a completely different way.”