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4SCRI Research Report

Innovation in Construction

A Project Life Cycle Approach

Beliz Ozorhon,

Carl Abbott,

Ghassan Aouad,

James Powell

May 2010

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Innovation in construction


SCRI Research Report

ii

4Dr Beliz Ozorhon

Dr Beliz Ozorhon is a civil

engineer. Her PhD work

ocused on modelling the

perormance o international

joint ventures in construction.

She joined Salord Centre or

Research & Innovation in July

2008 as a Research Fellow

to investigate the ways howinnovation occurs in the

construction industry. Her

research interests mainly

include innovation, knowl-

edge management, strategic

collaborations, international

construction, and project man-

agement.

Mr Carl Abbott

Mr Carl Abbott is a Senior

Research Fellow at the

University o Salord and

Manager o Salord Centre or

Research & Innovation. Since

he joined the University o

Salord in 1999, he has

worked closely with

industry in the region, helping toestablish the Centre or

Construction Innovation and

working as the Constructing

Excellence Regional Innovation

Director. He is joint co-ordina-

tor o the recently established

CIB task group on Recognising

Innovation in Construction.

His current research interests

include innovation, osite

manuacture, benchmarking,

and ICT.

Professor GhassanAouad

Proessor Ghassan Aouad is

the Pro-Vice-Chancellor or

Research and Innovation at

the University. Ghassan is

also Co-Director o the 5m

EPSRC unded Salord Centre

or Research & Innovation in

the Built & Human Environ-ment, a visiting proessor at

Universiti Teknologi Malaysia

(UTM), and Fellow o the CIOB.

Ghassan has spent the last 20

years teaching and researching

subjects related to the areas

o Inormation Modelling and

Visualisation, nD simulation,

and process mapping.

Professor James Powell

Proessor James Powell is

the Director o UPBEAT &

Smart City Futures. His

research areas include space

and resource utilisation,

design methods, the product

introductory process, tech-

nology and knowledge

transer, multi-media orproessional communica-

tions, partnering, cultural

change, action learning, the

inormation superhighway and

simulation, including virtual

reality.

Contacting SCRII you would like to fnd out more o this project please contact any o the ollowing team members:

Salford Centre for Research and Innovation in the built and human environment (SCRI)

University o Salord, 4th Floor, Maxwell Building, Salord M5 4WT, United KingdomTel: +44 (0) 161 295 2649 Fax : +44 (0) 161 295 4587 Web: www.scri.salord.ac.uk

Beliz Ozorhon

Research Fellow

[email protected]

Carl Abbott

SCRI Manager

[email protected]

Ghassan Aouad

Pro Vice Chancellor

[email protected]

James Powell

UPBEAT

[email protected]

Pam Allen

SCRI Administrator

[email protected]

Printing copyrightDesign and Print Group,University o Salord, Maxwell 100,

Salord, M5 4WT, England.

Beliz Ozorhon, Carl Abbott, Ghassan Aouad, James Powell 2010

All rights reserved; no part o this publication may be reproduced, stored in a retrieval system, or transmitted in anyorm or by any means, electronic, mechanical, photopying, recording, or otherwise without prior written permission

o the copyright owner. However, there is no restriction on the onward circulation o this report in electronic ormprovided it is transmitted in its entirety.

First published 2010

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iii

Acknowledgements

We are grateul to those who contributed in our research in dierent stages.

Our research partner Centre or Construction Innovation (CCI) Northwest deserves special thanks.They provided the contacts or our survey and case studies.

We thank all organisations and interviewees that contributed to our below case studies:

nCleveleys Sea Deence and Promenade SchemeBirse Coastal (Caroline Mottram and Dave Fazakerley) and Wyre Borough Council (Carl Green)

nThe Castlefelds Estate Regeneration ProjectCruden Construction (Stephen Morris and Dave Woodward) and Plus Dane Group (Inger Leach)

nLancaster University County and Grizedale Eco-ResidencesUniversity Partnerships Programme (Bob Giles) and GWP Architecture (John Wybor and Chris Guyatt)

nCheetham Hill Tesco Eco-StoreVinci (Andrew Besant-Roberts)

We also thank the Engineering and Physical Sciences Research Council (EPSRC) or the fnancial supportthat they provided or this project.

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iv

4Executive summary

The construction industry has long been criticised or its conservatism and lack o innovation. But is this characterisa-

tion air? Much o the innovation in the sector occurs at the project level and tends to be process and organization based.

According to ofcial statistics construction companies invest comparatively little in ormal R&D, but rather adopt new

technology and develop new ideas to improve their operations. Such innovations are difcult to capture with standard

indicators which tend to be more suitable or technology intensive sectors. Consequently, more research is required to develop

appropriate metrics or the dierent types o innovative activities that are carried out throughout the liecycle o construction projects.

This report investigates the ways that construction innovation occurs and tries to address the difculties in measuring this. Firstly, it

introduces the basic concepts related to innovation and emphasizes the importance o systemic innovation metrics that reect the

breadth o the sector. It provides a list o indicators currently used to measure construction innovation based on a literature review

and discusses the adequacy o these metrics. Then, it proposes a ramework that analyses the innovation value chain (IVC) through

the investigation o components o the innovation process including the drivers, inputs, enablers, barriers, tools, and outcomes.

The IVC view considers three stages o innovation: idea generation, conversion, and diusion. A questionnaire was designed based

on this ramework and a survey was administered to investigate the innovative activities o construction companies. The fndings

o the survey suggest that the contractors largely innovate to improve their processes and services; their innovations are mainly

organization-based and incremental and driven by their clients. Although they are successul at generating ideas, they struggle to

diuse these ideas and convert them into products and services at the same level.

The project level has been largely ignored in analysis so ar; however it is the key to improving innovation perormance. The

report extends the IVC analysis at the project level, by adopting a multi-stakeholder approach, through the production o our case

studies. These case studies have been selected among award winning projects at the North West Regional Construction Awards

2009. Interviews have been conducted with the key actors to track the collaborative ways in which the successul innovations have

been generated and to investigate the consequent benefts o innovation at the project and company level. The reported cases are

all examples o collaborative partnership among project teams and demonstrate a number o technical and organisational innova-

tions and good practices. These are grouped under our categories namely, strategic partnership, Modern Methods o Construction,

lean construction, and community engagement. The innovative practices not only led to a number o project level benefts such

as reduction in duration and cost, improved quality and environmental perormance but also wider benefts such as enhanced

corporate image, knowledge transer to inorm uture decisions, client and end-user satisaction, and improved quality o lie.

The fndings o this survey are expected to illuminate urther studies that will investigate the dynamics between project and frm level

innovation that will help understand the role o dierent actors in acilitating innovation throughout the liecycle o a construction

project. The key lessons rom this report are as ollows:

nTo present a uller picture o construction innovation, a wider built environment perspective should be adopted.

nMuch R&D activity is taking place that is not registered ofcially. More should be done to raise awareness o the R&D Tax Credit

scheme to construction companies.

nA representative range o measures or construction innovation needs to be created. In this regard, the Innovation Value Chain

approach to the measurement o innovation provides a exible and simple system that can useully be adopted alongside

measures that consider the economic, social and environmental impacts o innovation.

nMore research is required to better understand the complex relationship between regulation, innovation and business need to

inorm uture policies.

nThe benefts o innovation can only be realised by ully understanding the components o the whole innovation process that is

based on knowledge acquisition, transormation, and diusion. Our understanding o innovation and how it occurs in the sector

can be enriched urther by detailed work that brings together dierent theoretical perspectives on innovation that will enable the

development o context sensitive ways o recognising and measuring innovation.

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v

Table o Contents

ACKNOWLEDGMENTS...............................................................................................................................................................iii

EXECUTIVE SUMMARY...............................................................................................................................................................iv

TABLE OF CONTENTS...................................................................................................................................................................v

LIST OF TABLES...........................................................................................................................................................................vi

LIST OF FIGURES.........................................................................................................................................................................vi

1. INTRODUCTION...................................................................................................................................................1

2. WHAT IS INNOVATION?.......................................................................................................................................2

3. MEASURING CONSTRUCTION INNOVATION........................................................................................................3

3.1 Measuring Innovation as a System............................................................................................................4

3.2 Indicators for Measuring Construction Innovation..................................................................................4

4. A SURVEY OF CONSTRUCTION INNOVATION AT THE FIRM LEVEL....................................................................7

4.1 The Innovation Value Chain.......................................................................................................................7

4.2 Innovation Framework for Construction...................................................................................................8

4.3 The Research Methodology........................................................................................................................9

4.4 Findings of the Survey................................................................................................................................9

5. CASE STUDIES ILLUSTRATING A PROJECT LIFE CYCLE APPROACH TO CONSTRUCTION

INNOVATION.......................................................................................................................................................15

5.1 The Research Methodology......................................................................................................................17

5.2 Case Study 1: Cleveleys Coastal Defence and Promenade Enhancement Schemme...........................17

5.3 Case Study 2: The Castleelds Estate Regeneration Project................................................................23

5.4 Case Study 3: Lancaster University Eco-Residences Project...................................................................28

5.5 Case Study 4: Cheetham Hill Tesco Environmental Format Store..........................................................33

5.6 Cross-case Analysis...................................................................................................................................38

6. DISCUSSIONS & CONCLUSIONS.........................................................................................................................41

6.1 Measurement of Construction Innovation..............................................................................................41

6.2 How Innovative is Construction? ............................................................................................................41

6.3 The Results of Innovation.........................................................................................................................42

6.4 Clients Driving Innovation........................................................................................................................42

6.5 Summary....................................................................................................................................................43

7. REFERENCES.......................................................................................................................................................44

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vi

4List o tables

Table 1: Measures of innovation at rm level.................................................................................................................5

Table 2: The innovation value chain at rm-level...........................................................................................................7

Table 3: Drivers of innovation..........................................................................................................................................9

Table 4a: Internal inputs of innovation............................................................................................................................10

Table 4b: External knowledge sources of innovation.....................................................................................................10

Table 5: Enablers of innovation......................................................................................................................................11

Table 6: Barriers to innovation.......................................................................................................................................11

Table 7: Innovative practices..........................................................................................................................................12

Table 8: Innovators within construction sector.............................................................................................................12Table 9: Innovation benets/impacts.............................................................................................................................13

Table 10: The innovation register for Case Study 1........................................................................................................22




Table 14: The combined innovation register...................................................................................................................39

List o fgures

Figure 1: Framework for analysing innovation in construction.......................................................................................8

Figure 2: Innovation value chain in a construction project............................................................................................16

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1

Innovation is a complex and multidimensionalprocess that has received the attention o

researchers in all felds due to its contribution toeconomic growth, competitiveness and quality o lie.Innovation in general terms is the creation and adoption

o new knowledge to improve the value o products,processes, and services. Innovation in constructionservices has been recognized as a source o competitive

advantage by the policy makers as well as industrypractitioners.

The construction industry has always been amongthe driving orces o the economy, however it hasalso long been criticised or its lack o efciency incomparison to other industries and its unwillingness

to innovate. The perormance o the UK constructionindustry was analysed in the Rethinking Constructionreport (Egan, 1998). In addition to creating a Movement or

Innovation the report described how the UKconstruction industry, at its best, displayedexcellence and delivered the most difcult and

innovative projects. It is now over 10 years sincethe Egan report and the image o the industry as

lacking innovation still persists, but is this image air?This report aims to shed light on this basic question.

The report attempts to provide answers to this question

through three approaches:

1) Through an analysis o existing measures o

innovation in construction, the report investigateswhether the measures currently used capture the ullextent o innovative activities in construction.

2) The results o a frm level analysis o innovation inconstruction are presented to better understand

companies perceptions o innovation. The analysis is

based upon a survey o entrants into the NorthwestRegional Constructional Awards and investigates

company perceptions o innovation via an InnovationValue Chain approach.

3) The fndings o this survey were used to guide

the next stage o the research that involved adeeper analysis o innovation and its associatedprocesses through the production o case studies and

interviews with key parties in selected projects. Four detailed case studies taken rom winning projectsorm the Northwest Construction Awards are present-

ed. The case studies extend the Innovation Value Chainapproach to a multi-stakeholder project level. Throughthe case studies a comparison o standard measures

and perceptions against the reality o innovation as itoccurs at the project level can be made.

1 Introduction

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2

4This section o the report provides a brie overview

o inn ovation, its importance to companies and theeconomy in general, and the various types andclassifcations o innovation. Innovation is regarded as one

o the key actors contributing to national economic growth,competitiveness, and higher living standards and is atthe heart o the knowledge-based economy (OECDand Eurostat, 2005). However, there is not a single and

complete defnition o innovation. The UKs Departmento Trade and Industry (DTI) states that innovation is the

successul exploitation o new ideas and that it isthe key business process to compete eectively in theincreasingly competitive global environment (DTI, 2007).

There are many attempts to classiy dierent typeso innovation. For example, Henderson and Clark(1900) classiy innovation as incremental, modular,

architectural and radical depending on the degree oproduct/architectural knowledge required to implement.In the UK the DTI (2007) state that innovation can take

several orms including product innovation (changes in theproducts/services) which an organisation oers; processinnovation (changes in the ways in which they are

created and delivered); position innovation(changes in the context in which the products/services areintroduced); paradigm innovation (changes in the

underlying mental models which rame what theorganisation does). Phillips (1997) distinguishesbetween technological innovation and non-technolog-

ical (including organizational and marketing) innova-tion. Technological innovations comprise implementedtechnologically new products and processes and

signifcant technological improvements in products andprocesses. Organisational innovation in the frm includessignifcant changes in organisational structures; the

implementation o advanced management techniques;and the implementation o new or substantially changed

corporate strategic orientations. Marketing innovation,on the other hand, is the implementation o a newmarketing method involving signifcant changes inproduct, price, and promotion strategy (OECD and

Eurostat, 2005).Innovation diers in every sector and patterns oinnovation in manuacturing dier rom those in

services (DTI, 2007). Organisational change oten drivesinnovation in services (NESTA, 2008). InnovationNation White Paper (DIUS, 2008) presents a broad vision o

innovation and its importance not only to manuacturingbut also or services, the creative industries, the publicsector and the third sector.

The White Paper explicitly recognies

the importance o orms o innovationbeyond the invention o new (technological)products and points out the changing ace o innovation

that includes services, business processes and models,marketing and enabling technologies (DIUS,2008). Research and development is not a good

indicator o innovation or knowledge generation in manyservices sectors; high levels o innovation activity areoten not based on R&D expenditures (NESTA, 2008)

unlike the case in manuacturing. Construction is partlymanuacturing and partly services, so constructioninnovation needs to be investigated taking into account

its unique nature.

Construction is a very diverse sector and there is not

one single way in which innovation occurs. It willvary throughout the supply chain and project stages,and just as innovation will mean dierent things to

dierent economies, so it is equally important to realisethat the challenge and meaning o innovation or a smallspecialist sub-contractor will almost certainly be very

dierent rom that o a multinational constructioncontractor (Abbott et al., 2008). As Blayse andManley (2004) stated, building and construction is partly

manuacturing (materials, components, equipment)and partly services (engineering, design, surveying,consulting, and management) industry. Thereore, the

organisational context o construction innovationsdiers signifcantly rom a great portion omanuacturing innovations (Slaughter, 1998).

2 What is Innovation?

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3

The construction industry consistently scores poorly

against standard measures o innovation. (NESTA, 2006).This is one o the reasons or the negative perceptiono innovation in construction. But do these measures

reect the real situation? This section o the reportexamines the need to take a systemic view oinnovation or measurement purposes and shows that iwe are to be able to better understand innovation in con-

struction, appropriate measures that reect the reality oinnovation in construction are necessary.

As a signifcant economic variable, the measuremento innovation has attracted a lot o attention. However,due to the complexities inherent in the whole process,

measuring innovation is not an easy task. Aneconomys rate o innovation depends on a range oactivities and the links between them. Companies may take

the lead, but do not innovate in isolation. Most innovationsinvolve a multitude o organizations. This is especiallythe case or the most knowledge-intensive, complex

technologies (Milbergs and Vonortas, 2004).

Innovative activities and eects o innovation

depend extensively on the why innovation takes place(drivers) and who innovates (actors) as well as the externalenvironment the innovation takes place. Proper

indicators are necessary to link the outputs oinnovation at frm level to the impacts at national level.Innovation measurement tended to ocus on products

and related production systems that is based on measur-ing inputs to innovation (R&D expenditures, educationexpenditures, capital investment) and intermediate outputs

(publications, patents, workorce size and experience,innovative products) (Milbergs and Vonortas, 2004).Although extensively used, these indicators are not

sufcient to measure the innovation process as a wholeand especially that in construction. As NESTA (2006)

stated, traditional indicators o innovation perormanceare heavily biased toward investments in scientifc andtechnological invention and so do not captureinnovation in non-research intensive industries and

there is a gap between actual innovative activity and theconventional measures that are intended to represent it.

Much literature has ocussed on how innovation

could be implemented in construction projects (Tatum,1987; Slaughter, 1998, 2000; Winch, 2003) and howconstruction companies manage the innovation

process based on some conceptual models (Seaden andManseau, 2001; Dikmen et al., 2005), and some casestudies (Slaughter, 1993; 1998; Veshosky, 1998; Koskela

and Vrijhoe, 2001; Sexton and Barrett, 2003; Cleas-by, 2004). Seaden and Manseau (2001) developed a

conceptual model or the analysis o innovation in

construction to describe the linkages between thebusiness environment, business strategy, innovativepractices and business outcomes. Dikmen et al. (2005)

developed a conceptual ramework to investigate valueinnovations within construction companies in the Turk-ish construction industry, where the elements o the

model are objectives, strategies, environmental barri-ers/drivers, and organizational actors. Yitmens (2007)study ocused on the investigation o the challenge o

change or innovation in the North Cyprus constructionindustry. These studies typically ocus on how innovation ismanaged within one frm and there is a lack o ocus

on the specifc project stages o innovation as wellas a lack o specifc ocus on dierent constructionsectors. Only a small minority o the research articles

have considered innovation at a specifc stage o theproject liecycle or rom the point o view o the projectliecycle in general (Dickinson et al., 2005). Moreover,

none o these studies discussed the accurate measure-ment and proper indicators or construction innovation.

The problem o developing appropriate measures orconstruction innovation is compounded by the actthat construction is a very diverse sector and there isnot one single way in which innovation occurs. The

organizational context o construction innovationsdiers signifcantly rom much o traditionalmanuacturing innovations (Slaughter, 1998).

Building and construction is increasingly conceivedas partly manuacturing (materials, components,equipment) and partly as a services industry (engineer-

ing, design, surveying, consulting, and management see Blayse and Manley, 2004). In general terms, how-ever, innovation can be observed at three dierent levels:

namely the sector-level, business-level and projectlevel.

As a project-based and ragmented industry, much othe innovation in construction is co-developed at theproject level and thereore remains hidden (NESTA, 2006;

Barrett et al., 2007).This means the constructionindustry is a sector within which traditional measures do notreect the true extent o the innovative activity that is

taking place (NESTA, 2006; Barrett et al., 2007). As mucho this innovation is process and organization-basedand thereore hidden at the project level, construction

companies tend to invest less in R&D and rarely createnew patents (NESTA, 2007; BERR, 2008). Sound policyanalysis and business level decision-making requires

relevant indicators in order to remove this gap andcapture the hidden innovation in construction (Barrettet al., 2007).

3 Measuring Construction Innovation

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43.1 Measuring innovation as a

system

Systemic innovation metrics are necessary to capture

the context in which organizations orm and matchexpectations and capabilities to innovate. Besidesmeasuring the inputs and outputs o innovation, theprocess and contextual variables should be investigat-

ed as well as the impacts in order to ully realize thebenefts o innovation. Besides measuring the inputs and

outputs o innovation, the process and contextualvariables should be investigated as well as the impactsin order to ully capture the extent o innovation activity.

The systems o innovation approach (Edquist, 1997,2001, 2005) argues that innovation should be seenas an evolutionary, non-linear and interactive process,

requiring intensive communication and collaborationbetween dierent actors. Howells (1999) identifes atleast our overlaid innovation system sub-regional,

regional, national and international level. The linksbetween sub-regional, regional, national andinternational systems o innovations imply that analyses

should include actors and institutions at all our levels.

Initially, the concept o innovation system has been

applied to the national level (Lundvall, 1992; Nelson,1993; Niosi et al., 1993; OECD, 1999). The nationalsystems o innovation (NSI) studies innovating frms in

the context o the external institutions, governmentpolicies, competitors, suppliers, customers, valuesystems, and social and cultural practices that

aect their operation (OECD and Eurostat, 2005). NSIprovides a ramework in which the whole innovationprocess can be analyzed in detail that has become an

appealing ramework or policy makers. The concepto a NSI comprises the variables related to innovation

processes within and among frms, and to theinnovation inrastructure surrounding and enablinginnovations by frms that represent the structuraldimensions o the NIS concept (Faber and

Hesen, 2004). The literature on NSI emphasizes theimportance o strong linkages among these various insti-tutions in improving national innovative and competitiveperormance, and this emphasis applies in

particular to universities within national innovation systems(Nelson, 1993). The exchange o knowledge, cross-sectoralcollaborations and interdisciplinary research have been

shown to be essential to the innovation process in all thecase studies. Networks require links not only between

sectors, departments and institutions but also withinthem (NESTA, 2009).

Milbergs (2004) proposed a ramework to analyse

innovation at the national level, where the majorcomponents o innovation are defned as the inputs,implementation (processes/activities), outputs,

and impact. According to Milbergs (2004), ourcontextual domains are distinguished that inuencethe rate and direction o innovative activity. These in-clude the macro-economic conditions such as fscal/

monetary environment, interest rates, global economicgrowth rates, demographics; public policy conditions

such as R&D unding policy, taxes, intellectual property,regulations, standards and market access policies;innovation inrastructure conditions such as universityresearch inrastructure, ederal labs, capital markets,

power and transportation systems, regional clusters;and national mindset such as public attitudes to science,cultural actors, and political issues related innovation.

3.2 Indicators for measuringconstruction innovation

The preceding sections have identifed the need or

innovation metrics to take account o the varied waysin which innovation can happen in less technologi-cally ocussed sectors and the level o analysis. This is

particularly true or construction as modern construc-tion companies largely unction and innovate by thequality o their processes, the people operating them

and the way in which they change and adapt to suitthe changing business environment. Much construc-tion innovation is project-based and unrelated to ormal

R&D expenditure and many innovations, particularlyorganizational or process innovations are neitherpatented nor trademarked (Slaughter, 1993). There-

ore, traditional indicators poorly reect the true level oinnovative activity in construction. This gul between

practice and measurement is the real innovation gap(NESTA, 2006).

Based on the analysis o construction innovation

literature by Dickinson et al. (2005), studies onconstruction innovation so ar lack specifc ocus onlevel o analysis, stage o liecycle, and sector. The levels

o analysis they suggested involved the product, proj-ect, frm, industry and national levels. The constructionfrm level has received most attention in the analysed

literature; this might be because the principal drivers orinnovation are oten created at the frm level (Seadenand Manseau, 2001). Innovation could be investigatedin dierent stages o the liecycle including the design,

preparation, construction, and maintenance. As Winch(2003) argues, most product innovation in construction

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is excluded rom the analyses in industry-based surveys.Architectural and engineering consulting frms that carry

out most o the design work in construction, typicallythe most innovation in construction, are also excludedrom the standard construction industry innovation

classifcations. This point is developed urther byBarrett et al. (2007) who point out that the standarddefnition o construction does not include much o the

innovation rich and value-adding constructionactivity such as manuacturing, architectural and

technical consultancy, business services, and realestate activities. The built environment cluster analysisprovides a wider approach to analyse the operations andunctions o the construction sector within the overalleconomy o a country (Carassus et al., 2006).

Adopting a built environment view helps analyse the majoreconomic activities o manuacturing, production, assetmanagement, project management, distribution, and

services. A similar approach was adopted in one o thestudies (Reichstein et al., 2005) that included all frmsin traditional construction as well as the frms involved

in architectural activities, urban planning and landscapedesign, quantity surveying and engineering consultancyand design activities in the variable broad construction

sector.

It is possible to apply the basis o Milbergss (2004)

ramework and investigate the innovation process inconstruction at the business level. Based on an extensiveliterature review, Table 1 presents a list o metrics or

inputs, contextual variables, implementation, outputs,and impacts o innovation at the construction frm level.

Table 1: Measures o innovation at frm level (Ozorhon et al., 2009)

Inputs

Contextual (institutional)

variables

Implementation

(processes/activities)

Outputs

Impacts

R&D spending

Number o R&D projects

Number o ideas or concepts

Number o people actively devoted to innovation

Sources o inormation (internal and external)

Capital (investment in ICT, purchase o sotware and equipment)

Networks (technology alliances)

Organizational actors (company structure, culture, organizational learning, resources)

Country related actors (political, economic, regulations, public policies, socio-cultural conditions)

Industry-related actors (ragmentation, competitiveness, technological advancement,

project-based, lack o an agenda, no o parties, legal issues )

Tools, techniques, strategies (knowledge management, human resources, IT and R&D, design,

marketing, distribution, business process reengineering)

Number o new products introduced/commercialized/exportedNumber o new processes/services introduced

Intellectual property (patents, trademarks, designs)

Revenue growth due to new products or services

Short and long-term proftability

Increase in organizational eectiveness

Increase in technical capability

Improvement o service/product quality/processes

Improvement o organizational structure

Improvement o human resources

Market penetration and growth

Better company image

Innovation collaborations

Improvement o client satisaction

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6

4This section has shown that measuring constructionnnovation is an important yet difcult task. There are

available indicators; however they are not really su-fcient to capture the reality o the process particularlywith regard to the co-developed multi-actor hidden

innovation that occurs at the project level. One othe main objectives o this research is to shed morelight on this matter through the ollowing analysis and

subsequent case studies. In this respect, the nextsection presents the fndings o a questionnaire survey

that investigated dierent components o innovation atthe frm level that is ollowed by case studies that dealtwith the project level activities.

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4. A Survey o Construction Innovation at the Firm-Level

In order to develop measures or innovation that areappropriate to particular sectors it is necessary to

understand the sectors own view o the signifcanceo innovation and how and why it does (or does not)occur. To this end, this section o the report presents

an analysis o innovation at the frm level that is theresult o a survey o entrants or the 2009 NorthwestRegional Construction Awards. The entrants or the

awards provide and interesting sample or analysis as,by defnition, they believe themselves to be at the ore-

ront o current practice. The survey itsel used an Inno-vation Value Chain (Hansen and Birkinshaw, 2007) ap-proach so that although the survey considers innovationrom a frm-level it considers all stages in the process odeveloping new ideas, putting these ideas into practice

and diusing successul practice to the wider organisation.

4.1 The innovation value chain

The stages o innovation have been classifed invarious ways by dierent authors. Rogers (2003)oers fve stages namely, knowledge, persuasion,

decision, implementation and confrmation. Wole (1994)suggests ten stages including idea conception,awareness, matching, appraisal, persuasion, adoption

decision, implementation, confrmation, routinization,and inusion.

Tangkar and Arditi (2000) proposed asix-phase labyrinth o innovation, where the ow osuccessul innovation comprises need, creation,

invention, innovation, diusion, and adoption.Hansen and Birkinshaw (2007) on the other hand presentsinnovation as a sequential, three-phase process that

involves idea generation, idea development, and thediusion o developed concepts that includes sixcritical tasks namely, internal sourcing, cross-unit sourcing,

external sourcing, selection, development, and

companywide spread o the idea. In their classifcation,the whole process is reerred as the IVC. The frst phase

is to generate ideas that can happen inside a unit, acrossunits in a company, or outside the frm; the second phaseis to convert or select ideas or unding and developing

them into products or practices; and the third is to di-use those products and practices. Similarly, Roper et al.(2008) model IVC as a recursive process that has three

main links such as knowledge sourcing to assembleknowledge necessary or innovation, knowledge trans-ormation to translate knowledge into physical innova-

tion, and fnally knowledge exploitation to improve theenterprise perormance. The IVC oers a tailored and

systematic approach to assessing frm-level innovationperormance (Hansen and Birkinshaw, 2007). It is pos-sible to apply the basis o the IVC ramework and inves-tigate the innovation process at the project level as well

as the frm level. Table 1 shows the links o value chainand key questions to measure each link.

Table 2: The innovation value chain at frm-level (Hansen and Birkinshaw, 2007)

IDEA GENERATION

In-house

Creationwithin a unit

Do people in

our unit creategood ideas on

their own?

Key

questions

Cross-pollination

Collaborationacross units

Do we creategood ideas by

working acrossthe company?

Selection

Screening and

initial unding

Are we good at

screening and

unding new

ideas?

External

Collaboration

with parties

outside the frm

Do we source

enough good

ideas rom outside

the frm?

Development

Movement rom

idea to frst result

Are we good at

turning ideas into

viable products,

businesses, and

best practices?

Spread

Dissemination

across the

organisation

Are we good at

diusing

developed ideas

across the

company?

CONVERSION DIFFUSION

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44.2 Innovation framework for

construction

Figure 1 shows the proposed innovation ramework, this

paper has adopted, where the stages o innovation aredetermined as ideas, conversion, and diusion based onthe IVC by Hansen and Birkinshaw (2007). In this model,based on the level o innovation capacity, ideas are gen-

erated through the acquisition o necessary knowledgeand investment; these ideas are converted into product/

process/service innovations within the company; fnallythese innovations are exploited to achieve perormancebenefts and impacts.

An innovation event, in the orm o a new product orprocess, represents the end o a series o knowledgesourcing and translation activities and also the begin-

ning o a process o value creation which may result inan improvement in the perormance o the innovatingbusiness (Roper et al., 2008). The organisations employ

a number o tools, techniques and strategies through-out the whole process and external actors such as driv-ers, barriers and enablers determine the eectiveness o

creation and diusion o innovation. In this respect, it

can be stated that Milbergss (2004) ramework at thenational level is adapted or the construction industry

to analyse frm level innovation process. The overall in-novation perormance is determined by the success othe IVC together with the benefts and impacts achieved

through the innovations.

Figure 1: Framework for analysing innovation in construction

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4.3 The research methodology

One o the major objectives o this report is toprovide insights as to how innovation is transormedrom knowledge production, transerred into the

construction industry and is diused and embedded intothe normal processes o construction companies. To thisend, a ramework or analysis has been developed based

on the innovation value chain (IVC) approach wherecomponents o the innovation process are defned

which clearly ocus on the internal and external determi-nants and outcomes o construction innovation. In thiscontext, in collaboration with the Centre or Con-struction Innovation (CCI) Northwest, a survey was

administered to the applicants o the 2009 North WestRegional Construction Awards that constituted a samplesize o 47. The awards entrants were chosen as they all

believe that they are at the leading edge o construc-tion in the region and were willing to share their innova-tions, and so the sample should provide an insight into

perceived best practice. A total o 30 completedquestionnaires were returned resulting in a 64%response rate. The ollowing questions aimed to

measure the dierent components o innovation at thefrm level using a Likert Scale (1-5) or each question:

nTo what extent do the ollowing actors create theneed or your organisation to innovate?

nTo what extent do the ollowing actors acilitate

innovation within your organisation?

nTo what extent does your organisation utilize theollowing external sources o innovation?

nTo what extent do the ollowing actors help promoteinnovation within your organisation?

nTo what extent do the ollowing actors impede the

uptake o innovation within your organisation?nTo what extent does your organisation excel at the

ollowing innovative practices?nTo what extent do you think the ollowing actors drive

innovation within the construction sector?

nTo what extent does your organisation derive theollowing outcomes o innovation?

nTo what extent is your organisation good at the threedierent stages o the IVC?

nDoes your organisation have an innovation policy/

strategy?

nDoes your organisation have a procedure to monitorthe success o innovation?

4.4 Findings of the survey

The major aim o this survey was to provide insights oncurrent innovation practices and perormance o theindustry that would inorm the case studies that

were produced in the next stage o the research. Thequestions ocussed each construction frm on thedrivers; internal inputs and external knowledge sources;

enablers; barriers; innovative practices; benefts/outputs;actors; and innovation perormance.

Drivers o innovation: In order to understand whatdrives an organisation to innovate the question wasasked: To what extent do the ollowing actors create

the need or your organisation to innovate? (1-5)

Drivers Mean

Perormance (cost reduction,

productivity, eectiveness) 4.8

Environment/sustainability 4.7

End-user requirements 4.6

Technological developments 4.3

Competition 4.1

Regulation and legislation 4.0

Aesthetics/design trends 4.0

The results are intended to shed light on the main

drivers or innovation at the frm level. Unsurprisingly

the results show that the main driver is perormanceimprovement. Nevertheless, it is interesting to note that the

environment/sustainability, and meeting end-userrequirements are close behind. This indicates thatalthough there is a recognition that successul

innovation ought to bring improvement in its own rightbut even so it is oten something that has to be doneto meet external actors such as environmental actors

or client/user requirements. These fndings are similarto those ound in other studies (e.g., Slaughter, 1993;1998; Gann, 2000; BERR, 2008).

Table 3: Drivers o innovation

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4Internal inputs and external knowledge sources oinnovation:The IVC begins with the generation o new ideas. The

ollowing two questions were designed to better under-stand the actions/processes that organisations take togenerate new ideas and the sources o the new ideasthemselves.

Inputs Mean

Inormation 4.2

Investment in training and education 4.1

Number o ideas or concepts 4.0

Establishment o networks

(technology alliances) 3.8

Investment in ICT, purchase o sotware

and equipment 3.8

Number o people actively devoted

to innovation 3.6

R&D spending 3.0

Number o R&D projects 3.0

The respondents indicated that provision o inormation,training and education, and generation o ideas and orconcepts are the main actors in ostering innovation. It

is interesting to note that R&D spending and projects arenot regarded as an important input as also suggested by

NESTA (2006).

Sources Mean

Clients 4.3

Partners 4.2

End-users 4.1

Suppliers/manuacturers 4.0

Contractors 3.9

Designers 3.9

Consultants 3.8

Conerences, workshops 3.8

Research institutes/universities 3.7

Best practice clubs 3.7

Construction Skills 3.6

Competitors 3.6Fairs, exhibitions 3.6

Government 3.5

Proessional bodies 3.4

Companies rom other industries 3.2

Facility managers 3.3

Business Link 3.1

Financial advisors 2.6

Table 4a indicates that inormation and the generationo new ideas are the key actors in ostering innova-

tion. Table 4b above examines the relative importance othe various sources o knowledge towards innovation.Signifcantly the top 7 sources o knowledge are all rom

within the construction supply-chain, with the mostsignifcant knowledge sources listed as clients,partners, and end-users ollowed by suppliers. This tends to

indicate that the pull or innovation in order to meetdemand is more signifcant than the push towardsinnovation in the orm o new products/materials rom

suppliers or new concepts/models rom external sourc-es. This mirrors fndings by Dikmen et al. (2005), whoshowed that clients, consultants, and suppliers were the

major sources o knowledge that supported innovations.These fndings points out the signifcance o the knowl-edge application and exploitation subsystem that is pro-

posed in regional innovation systems (Autio, 1998).

Table 4a: Internal inputs o innovation

Table 4b: External knowledge sources o innovation

To what extent does your organisation utilize the ollowing

external sources o innovation (1-5)?

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Enablers o innovation:This question was intended to help understand the

actors that are seen as signifcant in enabling innovationwithin an organisation.

Enablers MeanLeadership 4.6

Supportive work environment 4.4

Collaboration with partners 4.4

Deep understanding o the customer 4.3

Education & training policy 4.1

Knowledge management practices 4.1

Encouraging sta to get involved with

external networks 3.9

Use o problem solving techniques 3.7

Awards, grants, unds 3.6

Government schemes 3.5

Reward schemes 3.3

Emphasis on research & development 3.2

The top two actors are seen to be leadership and asupportive work environment. These outweigh the other

more ormal enablers which tends to indicate that whereschemes are put in place without the surrounding cul-tural actors o leadership and supportive environment

they are not likely to ourish. The next most signifcantactors are collaboration with partners, and deep under-standing o the customer which reinorces the fndings

o the previous questions and strengthens the impres-sion that innovative solutions are oten co-developed atthe project level rom within the supply chain. This is also

suggested by Tatum (1987) who has shown that leader-ship, supportive organisational structure, collaboration,and customer orientation are the main enablers o in-

novation within the organisation. On the other hand,reward schemes and emphasis on R&D do not appearto be seen as signifcant enablers o innovation. In the

case o reward schemes this may be because it is a spe-

cifc type o scheme that may only be used in certainorganisations, nevertheless the low ranking o R&D asan enabler o innovation again appears to confrm the

fndings o the previous questions.

Barriers to innovation:This question was intended to elicit rom therespondents the main barriers to innovation or their

frms.

Barriers MeanEconomic conditions 3.9

Availability o fnancial resources 3.6

Fragmented nature o construction business 3.4

Unwillingness to change 3.3

Lack o government role model 3.3

Inappropriate legislation 3.3

Risk in commercialising innovations 3.2

Temporary nature o construction projects 3.2

Extensive inter-organisational change required 3.1

Lack o awareness 3.0

Lack o qualifed sta 3.0

Lack o end-user involvement 3.0

Lack o innovative investments /procedures

/ practices (R&D, training and education) 3.0

Adversarial approaches within the

supply chain 2.9

Lack o clear benefts 2.9

Belie that the industry is doing well

without innovation 2.8

The two top barriers to innovation are clearly seen tobe economic conditions and availability o fnancialresources. It is interesting to note that fnancial con-

cerns can both act as a driver and a barrier; there is aparadox in the sense that the companies surveyed claimto innovate in order to increase their proftability but

believe that they cannot innovate unless economicsallow. These two actors are ollowed by a group o actorsled by the ragmented nature o construction ollowed by

unwillingness to change, lack o government supporand inappropriate legislation.

Table 5: Enablers o innovation

To what extent do the ollowing actors help promote innovation

within your organisation (1-5)?

Table 6: Barriers to innovation

To what extent do the ollowing actors impede the uptake o

innovation within your organisation (1-5)?

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4Adoption o advanced practices:Having asked questions relating to the generalconditions or and against innovation this questionwas intended to provide evidence as to which practices

contractors believe they excel, as an understanding othis will help inorm the types o innovation that theymight be expected to introduce.

Practices Mean

Collaborative practices 4.3

Contract management/client relations 4.3

Waste management 4.1

Energy efciency/carbon reduction 4.0

Knowledge management 3.9

Design solutions (virtual/collaborative

design, modelling and simulation tools, BIM) 3.8

Web-based project management/extranets 3.8

O-site manuacturing, modern methods o

construction 3.7

Business process reengineering 3.7

Marketing strategies 3.7

Inormation and communication

technologies (ICT) 3.6

Advanced materials (composite,

high perormance) 3.3

On-site IT applications (GIS, GPS, RFID) 3.3

Automation o processes 3.2

Based on the responses (Table 6), it is observed thatcontractors believe that they are good at organisation-al innovations such as collaborative practices, contractmanagement/client relations. In terms o technological

innovations they practices mirror the second most sig-nifcant driver or innovation (environment/sustainability)with contractors now believing that they excel at waste

management and energy efciency/carbon reduction.

It is worth mentioning that inormation and

communication technologies (ICT), advancedmaterials (composite, high perormance), on-site ITapplications (GIS, GPS, RFID), and automation o

processes are among the least adopted practices.These fndings also support previous evidence thatmuch o construction innovation is process and

organisation-based (Slaughter, 1993) and otencharacterised by the widespread adoption o newpractices as a result o advances in technological and

business processes (Lansley, 1996).

Role o actors in construction innovation:The respondents were asked to identiy the major

innovators within the construction sector. This issignifcant as it can illustrate not only rom which party

do most innovations come rom but also provide insightsas to which types o innovation are considered to besignifcant by the contractors surveyed.

Actors of innovation Mean

Suppliers/manuacturers 4.0

Design teams 3.9

Clients 3.8

Consultants 3.6

Contractors 3.5

Project managers 3.5

Subcontractors 3.4

End-users 3.3

Facility managers 3.3

Table 7: Innovative practices

To what extent does your organisation excel at the ollowinginnovative practices?

Table 8: Innovators within construction sector

To what extent do you think the ollowing actors drive

innovation within the construction sector?

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The fndings reveal that the major innovators areviewed as the suppliers, ollowed by the designers,clients (Table 7). Being in the fth place, contractorswould appear to believe, that in comparative terms,

they do not perorm well. The results support the ideathat suppliers act as key driver o technical innovationin the construction industry, since they invest ar more

in R&D than contractors or consultants and thereoremore likely to develop product innovations (Gann,1997). The result is perhaps also interesting in terms

o what it reveals about the mindsets o the contrac-tors surveyed. The previous question revealed thatcontractors believe that they are good at organisational

innovation and waste and energy reduction, yet despitethis they do not eel that they contribute to innovationas much as suppliers, designers, clients and consultants.

The question remains is this because these our typeso organisations are outperorming them in terms oinnovation or is it because the types o innovation

(product/material) rom suppliers and designers areviewed as more signifcant than the more processoriented innovation typical o a contractor. In the same

vein, it is also interesting also to note that end users

and acility managers are not viewed as signifcantactors in the innovation process despite the act that

client satisaction and improvement o services are citedin the subsequent question as two o the major beneftso innovation. This would seem to indicate a mindset

within the industry that still views innovation rom atechnology push rather than a user pullperspective despite the growing recognition in the

literature o the importance o service driven innova-tion (Barrett, 2007) and the evidence rom elsewhere inthis survey that client/end user pull is a more signifcant

driver o innovation.

The role o dierent participants in stimulating and

achieving innovation will be revisited in the ollowingcase study section.

Benefts/impacts o innovation:By obtaining a better idea o the expected beneftso innovation, we can improve our understanding owhy a company would choose to innovate and how it

might measure its success. Outputs o innovation aretraditionally measured by patent or trademarkapplications. However, modern construction companies

largely unction and innovate by the quality o theirprocesses, the people operating them and the wayin which they change and adapt to suit the changing

business environment. Developing on Henderson andClark (1990), Slaughter (1998) presented fve modelso construction innovation categorised as incremental,

modular, architectural, system and radical, which canprovide a basis upon which companies can select andimplement the innovations. Incremental innovation is a

small change, based upon current knowledge and expe-rience, whereas a radical innovation is a breakthrough inscience or technology that oten changes the character

and nature o an industry.

Outcomes of innovation Mean

Better company image 4.7

Improvement o services 4.4

Improvement o client satisaction 4.4

Improvement o product quality 4.4

Improvement o processes 4.3

Increase in technical capability 4.3

Increase in organizational eectiveness 4.2

New services 4.1

New products 4.1

New processes 4.1

Market penetration and growth 4.0

Revenue growth due to new products

or services 3.8

Short and long-term proftability 3.8

Improvement o organizational structure 3.6

Improvement o human resources 3.6

Intellectual property (patents,

trademarks, designs) 3.5

Table 9: Innovation benefts/impacts

To what extent does your organisation derive the ollowingoutcomes o innovation (1-5)?

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4The most signifcant beneft o innovation is seen tobe better company image. As Tatum (1987) suggested

reputation is the most valuable asset or a constructionfrm and is eective in sustaining long term competitiveadvantage. This is ollowed by improvement in

services, client satisaction and product quality whichare grouped together. This is a signifcant fnding whichreinorces that although innovation may be important

or contractors per se it is external actors such asimage, services and satisaction that are seen to provide

the most signifcant beneft to an organisation. The lowsignifcance o intellectual property reinorces the pointmade by NESTA (2007) and BERR (2008), whosuggested that construction companies tend to investless in R&D and rarely create new patents. Hence,

such measurements that relate to outcomes based ontraditional science based indicators o innovation do notreect the ocus o activity o contractors and conse

quently will give a poor indication o actual innovativeactivity.

Innovation perormance:Finally another key integrational point related to measur-

ing the innovative perormance o companies was to as-sess their strategies and processes. The respondents wereasked specifcally to state how good they believed thatthey were in terms o their IVC activities. Based on the

fndings, it would appear that they believe that they areslightly better at generating ideas through collaborationwithin and outside their organization (idea generation

4.2) compared to spreading developed ideas (diusion 3.9) and developing ideas into viable products, services,or businesses (conversion 3.8). The reasons behind the

slightly lower perormance levels at the conversion anddiusion o ideas compared to the generation o ideasare explored in more detail in the next section.

The respondents were also asked to state whether their

organisation has an innovation policy/strategy and aprocedure to monitor the success o innovation or

not, since these two play a signifcant role in theperormance o innovative activities (DTI, 2007). 55% o thecompanies indicated that they have an innovation

strategy, and 62% o them stated that they monitor/mea-sure their innovation processes. The case studies in theollowing section investigate uther how these strategies

and procedures are employed in the organisations. Moredetail on how these activities actually occur and the waythat strategies are implemented will be explored in the

ollowing sections.

Bringing the Survey Findings TogetherThe fndings based on the 30 responses indicate thatthe contractors largely innovate to improve theirprocesses and services. In particular their innovation isdriven by their clients and partners rom whom they learn

the most rom. The main ocus o their innovations isorganization-based and incremental rather than radicalor product based innovations. Slightly more than a hal

o the respondents have an innovation strategy and theirinnovativeness is determined largely by the eectiveness

o leadership, work environment, and collaborationswith partners. They specialize in introducing new wayso doing business more oten than adopting advancedtechnologies. Whilst they can be regarded as success-

ul at generating ideas; they believe that they are lesssuccessul at diusing these ideas and convertingthem into products and services at the same level.

Signifcant issues worthy o urther investigation includethe seeming mismatch between conventional indicators

o innovative activity such as R&D spend and patents andthe locus and nature o innovation within the variousstakeholders within construction projects. Both o these

issues will be investigated in more detail in the ollowingsection.

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5. Case Studies Illustrating a Project Lie Cycle toConstruction Innovation

Gann (2001) suggests that project-based constructionfrms oten struggle to learn between projects, wherePowell (1997) has shown that this is oten the best

time to develop lasting real changes ater reection onexisting practices. Unortunately, such frms otenhave weak internal business processes and rarely en-

gage in activities such as post occupancy evaluation sothey do not know how to continuously improve theirprocesses. Measurement o the dimensions and elements o

construction innovation at the project level should bekey to improving the innovation perormance o suchcompanies. However, analysis o innovation at the

project level shows it is typically ignored by them.Indeed the literature shows this is mostly due to thedifculties in monitoring dierent activities carried out

by dierent parties in each stage o the project (Dulaimiet al., 2002, Blayse and Manley, 2004).

There are several reasons or this. Management oconstruction innovation is complicated by thediscontinuous nature o project-based production in

which, oten, there are broken learning and eedback

loops. Project-based frms need to manage technologi-cal innovation and uncertainty across organisational

boundaries, within networks o interdependentsuppliers, customers and regulatory bodies (Gann andSalter, 2000), but in tight time-spans and with little

eedback on what works well. On the other hand,project-based frms are always innovating at thelocal level; this is because they have to as their work is

always unique, always delivered to bespoke designs,always achieving something new (Keegan and Turner,2002). Studies by Gann and Salter (2000) point out the

need or a better conceptual understanding and newmanagement practices to link project and businessprocesses. Although some strategies are proposedin their studies, they do not address how to track

innovative activities during the liecycle o a constructionproject and how to integrate the new into traditionalways o working.

Relationships and knowledge-ows are important orinnovation at all levels o economic activity, including

internationally, nationally, inter-sectorally, sectorally,inter-frm, intra-frm, inter-project and intra-proj-ect (Manley, 2008). In a complex systems industry

such as construction, frms have to rely on thecapabilities o other frms, and oten sub-contractorswith less understanding o new ways o working, to

produce innovations where this can only be achievedby the cooperation between those concerned with thedevelopment o products, processes and designs (Blayse

and Manley, 2004). In order to understand how

innovations occur throughout the liecycle o aconstruction project, it is necessary to

understand the role o each project stakeholder bothindividually and collectively. It is increasingly accepted thatconstruction innovation encompasses a wide range o

participants within what in manuacturing would be called aproduct system (e.g. Marceau et al., 1999); thedierence in construction that operatives move through

a changing context, as the building rises rom theground, whereas in manuacturing the product movesby the operative.

To carry out the wider study o innovation we envisage, acomprehensive approach o the construction industry is

thereore necessary. One that recognises its uniqueness,but also understands construction as a manuacturingprocess and a service industry. This means speciying

the dierent kinds o frms involved in the constructionand the built environment processes and how they goabout their business. This broad view must incorporateall participants involved in the construction process,

including governments, building materials suppliers,

designers, general contractors, specialist contractors,the labour workorce, owners, proessional associations,

private capital providers, end users o public inra-structure, vendors and distributors, testing servicescompanies, educational institutions, certifcation bodies,

and others (Blayse and Manley, 2004).

From thisperspective, clients can, and do, act as a

catalyst to oster innovation by exerting key pressureon the supply chain partners to improve their overallperormance and by helping them to devise strategies to

cope with unoreseen changes (Gann and Salter, 2000);they can also demand high standards o work (Barlow,2000), and by identiying specifc novel requirements

or their project (Seaden and Manseau, 2001) absorbsome part o the accompanying risk. Knowledge andfnancial provision, eective leadership, and

dissemination o innovations are also among the keyroles which clients could play (Egbu, 2008).

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4Contractors on the other hand play a mediator role inthe interace between the institutions that develop

many o the new products and processes (materials andcomponents suppliers, specialist consultants and tradecontractors), and those which adopt such innovations

(clients, regulators and proessional institutions seeWinch, 1998). Contractors introduce dierent typeso innovations depending on their specialty areas. It

is thereore suggested that companies operating inbuilding, inrastructure, housing, industrial

construction should be investigated to understand theirinnovation potential, as well as the subsectors o

construction, including architecture, urbanplanning, surveying, consultancy, asset/acilitiesmanagement, and project maage-

ment. Such a more detailedanalysis would reveal better ways o understanding andmeasuring innovation in dierent phases including the

production, construction, and marketing.

Figure 2 shows clearly the innovation value chainpresented or a construction project. Here, theconstruction sector is viewed as a complete system,

which involves clients, contractors, sub-contractorssuppliers, consultants, and designers working togetherin harmony. The link between frm level processes and

innovation at the project level should be explored in thiscontext, to observe and then understand how dier-ent frms contribute to innovation process by develop-

ing and implementing strategies, assigning resources to

create ideas and diuse them.

Figure 2: Innovation value chain in a construction project

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5.1 The research methodology

Following on rom the questionnaire survey, thissection urther explores the need to link between frm levelprocesses through the analysis o 4 case studies. These

case studies have been produced on award winningprojects at the North West Regional Construction Awards2009. Interviews have been conducted with the key

actors to track the collaborative ways in which thesuccessul innovations have been generated and to

investigate the consequent benefts o innovation at theproject and company level. The ollowing issues wereaddressed during the interviews:

nProject inormation (type and size o theproject, parties involved)

nMain reasons/drivers to innovate (end user,

competition, perormance requirements, technology,etc.)

nMajor innovation introduced within the project (type

o innovation and stage within the project liecycle),outputs o innovation (in terms o new or improvedproduct/process/service)

nInputs o innovation (human, fnancial, technical,and non-technical resources and internal/externalknowledge sources)

nEnablers o innovation (at each level)

nBarriers to innovate (at each level)

nMajor tool/strategy employed to realize innovation

(innovation policy, measurement system, strategies atfrm and project level, solution o problems)

nRoles o each stakeholder in (stimulating/ implement-

ing) the innovation (relations, communication, andcooperation among project participants)

nMajor benefts/impacts o this innovation

(productivity, proftability, image, new markets, etc.)nLessons learned rom the innovation process

(capturing/transerring project knowledge)

The cases highlight the breadth and depth o thecompanies activities to bring innovation into projects.The active measures to drive value rom collaborative

partnerships and community/end user engagementeature as signifcant enablers o innovation. Theindings o these case studies are also published as

individual reports and can be ound atwww.innovationcasestudies.

5.2 Case study 1: CleveleysCoastal Defence andPromenade EnhancementScheme

THE CONCEPTA partnership between Wyre Borough Council, Birse

Coastal and other strategic partners was ormed inMarch 2004 ollowing an extensive, quality-based

tender process compliant with European procurement.The project was designed to improve ood protec-tion to 8700 properties in the Cleveleys area and toupgrade Cleveleys promenade. The Project is Wyre

Borough Councils largest ever civil engineering projectand the frst partnering contract it has let. The schemewith a contract value o 21m was unded by Wyre

Borough Council, DEFRA, Environment Agency, EuropeanRegional Development Fund and delivered in 30 months.The Cleveleys scheme has been delivered in accordance

with the principles o Constructing Excellence, engagedmultiple stakeholders making a real dierence to thelocal environment and the quality o lie. Demonstrating

numerous examples o innovation and best practice, itis considered or the Project o the Year award by CCINorth West.

INNOVATION JOURNEY/STORYInnovation on the ProcurementThe innovative procurement and delivery o this projectwas based on the key tenets o the Latham and EganReports. In particular much emphasis was placed onthe adoption o the partnering approach to achieve

better working relationships and deliver more efcientconstruction in terms o quality, customer satisaction,timeliness in delivery and value or money has been

well documented since publication o these reports.

Partnering provides the conditions that can enable realcost savings, eliminate waste, encourage innovation

and promote learning rom experience. To capitaliseon these benefts, and deliver best value, the Councilreplaced its old price-based competitive tendering with a

quality-driven process using the New EngineeringContract (NEC). Under this system, 26 contractorswere assessed through a 3-stage selection process that

evaluated experience, fnancial stability, commitmentto health & saety, employee skills, and reerences romclients, subcontractors and suppliers.

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4At the start o design, a partnering charter was producedthat committed all partners to deliver a quality scheme

or the public; achieve an exemplary saety record;ensure the achievement o best value or the budget atall times; communicate eectively with all those

involved or aected by the scheme; be considerate tothe community and to the environment; and deliver tothe Council and public without deects.

The client recognised that Early Contractor

Involvement (ECI) and integrated working were essential indelivering a successul scheme. The construction teaminvolved were brought together as much as a yearprior to work beginning on site and the contractors weregiven the opportunity to input into the design stage o

the project. Support was received rom the unders ateach stage o the project.

Innovation in the Community engagementVisitor experience in the promenade was primeconsideration in the design concept, which incorporates

eatures to entice the visitor along the length o theredeveloped promenade, providing ocal points o

interest, inormation, outlook and experience o thehighest quality. Extensive public consultation was heldrom the very outset o this scheme when the localcommunity were asked what they wanted rom a

seaside rontage. A design competition was undertakenor the selection o the architect/designer to prepare amaster plan. Four designs were subject to consultation

and a joint decision was made to choose the fnal designater they were reviewed by the contractor Birse Coastalor budget compliance and buildability.

To ensure that the community involvementcontinued through the lie o the project, an interest group

Cleveleys Searont Partnership was established. This

was comprised o local residents, community groupsand representatives rom retailers, leisure acilitators,

hotels, restaurants, the police and commercialbodies. Their brie was to work with Wyre BC and BirseCoastal, identiy any potential problems early-on or

resolution and continue input throughout construction.The Searont Partnership worked alongside the construc-tion team to secure additional unding/grants or public

artwork and amenity enhancement eatures tocompliment the scheme and add to the visitorsexperience.

The level o public interest and involvement in

the scheme led to it being ormally brandedas the peoples promenade. The team used avariety o communication methods to keep an open

and inormative dialogue with the public including:

nAn accessible exhibition centre eaturing displays o

the history o the promenade, the design o the newscheme, proposed works, weekly progress reports,a eedback book and an overview o the ollowing

months activities.nActivities and competitions were provided or children.

nReporting progress through video, photographs andartists impressions on a dedicated project web site and

through presentations made throughout work period.

nA visitors opinion book was made available or visitorsto record their comments. Thousands o comments

both positive and negative were assessed and a datarom the eedback book was tabled and executed bythe project board on a monthly basis.

nRegular meetings o the community and constructionteam to resolve issues and take orward good ideas.

nCommunity engagements events at construction

milestones, or example ground breaking andsectional completions.

nThe local press and radio were also engaged to update

the public on the progress and aims o the scheme.

Innovation in the Construction processBecause o the difcult working environment, anycoastal protection scheme carries inherent risks duringconstruction. The construction teams solution to the

potential risks o the project was the innovative use oprecast concrete units as a sae, cost eective, higherquality and more sustainable alternative to traditional

solutions such as rock armour or in-situ concrete. Itshould be noted that the R&D team has worked on

design issues particularly with the precast concrete units.

Precast units were manuactured using a high strengthconcrete (Tarmac Toproc C75) in a purpose-built

acility, just 5 miles away rom site. This allowed theteam to take advantage o traditional manuacturingtechniques such as just-in-time delivery and lean

construction, which resulted in less waste and higherefciency. It also allowed the team to maximise health,saety, quality and environmental benefts associated

with o-site construction, whilst the close location othe acility signifcantly reduced haulage costs o thecompleted units to site. An additional beneft othis solution was that no pollution occurred in the

sensitive coastal environment.

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As concrete is precast o-site, therewas no risk o washout rom unset

concrete and a greatly reduced number o vehiclesrequired on-site.

Peat onsite caused unstable ground conditions whichhad not been identifed by the original site survey,however, Birse were able to identiy an innovative, cost

eective and sustainable solution to stabilize the groundthat saved the project up to 1m; this was absorbed into

the main programme so did not cause a time delay.

Various low energy and renewable technologies wereused on site including wind turbines were installed toprovide power back the national grid, solar panels were

installed to provide power or heating and lighting in theshelter areas, and LED luminaires were used to provideenergy efcient lighting.

Strict zero tolerance targets were set to provide saeworking conditions. Weekly saety meetings meant that

any potential health and saety issues could be identifedand thus prevented at an early stage and responsibility

or project monitoring and continuing saety o workersand public was given to every member o the team. Thisresulted in there being no reportable incidents onsite.

It should be noted that local people were employedwhere possible in areas such as administration, securityand skilled labour. In total 75% o sta on the scheme

lived within approximately 35 miles o the site. Birse alsoendeavoured to employ local suppliers. 76% o supplierswere located within a 25 mile radius.

Innovative methods and toolsThe project included a rigorous perormance monitoring

regime both in terms o efcient delivery o the project

but also in terms o wider community impacts. To thisend, a customer quality plan o works, combined with a

Live Quality Alert System, contributed to the high qualityo the fnished project. All partners were incentivised bya pain/gain share arrangement and used an open-book

and live cost monitoring system which could be reviewedand observed by any partner at any time.

Eective knowledge sharing and then its management

are essential, not only in bringing the right ideas into aproject, but also to ensure that these ideas are knownby the entire project team and are diused to ollowing

projects. This project included a range o hard and sotmechanisms to promote and enable eective knowledgemanagement [ Give examples or clarity]. One central

developmenty in this respect was the web site cleveleys-seawall.co.uk, which was kept updated with all projectinormation, pictures, progress reports.

The diusion o the ideas and best practicethroughout the project was taken beyond the organisationsdirectly involved. The project was a registered Constructing

Excellence demonstration project (project number 2800).As such, the project team actively participated in thecollection and dissemination o key perormance

indicator (KPI) results, which are used to inorm theindustry. The team also contributed to the ConstructingExcellence case study document, providing an insight

into the innovative techniques and best practice adoptedon site.

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4INNOVATION ACHIEVEMENTSThe project is described by the project team as astunning project, the most successul ever (both Birses

and the council) having won 18 awards based aroundactors that include fnancial, saety, construction, andthe relationship side.

Project benefts:Evolving value engineering and design developmentcontinued throughout the scheme leading to:

nDevelopment o an integrated public realm and

coastal deence improvement scheme

nDevelopment o a multi-unctional team basedon trust and mutual understanding o the desiredoutcomes

nUse o robust, high-quality materials or low whole liecost eg: micro silica concrete, natural aggregates orcolour, stainless steel

nIncorporation o innovative ideas eg: ositemanuacture using precast concrete

nImproved understanding o risks and contingencies

valued at 3.8 million

n

Demonstrable savings o 1 million to datenSecuring external unding in excess o 14.5 million

nImproved health and saety through design the teamhas achieved, to date, over 352,000 hours o workswithout a reportable accident or loss in work time.

nProgrammed to meet the defned council

objectives 72 weeks ahead o target. This time saving wascalculated rom the target completion in theoriginal scoping study based on experience rom

previous schemes.

nExcellent public communication routes andconsultation developed

nUnderstanding and meeting the expectations o ourcustomers

Contribution to quality of life:The Cleveleys Searont Scheme transormed a dated anddilapidated 1920s searont into a vibrant, modern 21st

century seaside rontage, comprising coastal protectionand a new promenade accented by seating, shelters,eature lighting, new ca and extensive landscaping.

The new promenade has been developed or ullaccessibility, providing a high quality, sae environment

or the user. The scheme exploits the assets o thenatural coastal heritage, uses them to create and retain

jobs through the development o a sustainable tourismdestination. The scheme has also helped to provide a

saer, more secure environment and promote healthy

activities including walking, cycling, activities on thebeach and use o the fshing clubs.

INNOVATION VALUE CHAINIdea Generation:A principal idea that was brought into the projectwas the use o partnering and associated process

improvement as called or in the Latham and Eganreports. Although these are well established ideas, they

are not always applied successully in traditional wayso working. The project team on this innovative schemeensured that, with the partnering approach in placethrough the procurement route, steps were taken to

establish trust and drive efciency.

The project was very notable or its use o an open

innovation approach to idea generation. Openinnovation recognises that the best ideas can notnecessarily be generated in-house. In response to

this, many organisations now actively pursue strate-gies o outsourcing idea generation, developing meth-ods o bringing ideas in rom widespread, evolving

and diverse networks. The use o extensive publicconsultation should be seen in this regard. Equallyrelevant is the way that solutions such as the pre-

cast acility have been co-developed through an openapproach within the team.

Another key theme in modern inn

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