Once, TV, radio, cable, and print business community observers called online content "new media."
Now, it's just media.
Once, businesses fueled by data, transmitters, microprocessors, and sensors got termed as part of a new economy. Now, they are simply part of the economy.
Now, advanced technology-driven robotics, artificial intelligence, augmented and virtual reality, and machine learning, continue to get tagged as new or emerging technologies, but very soon, the words new and emerging will fall away, and they'll be part of the everyday fabric of those businesses they're a part of.
Why does this matter in the world of home building?
Well, it matters because home building in the United States consists almost entirely of "incumbent" established companies whose primary expense bases--land, labor, materials, and the cost of money--are always in flux, and nearly always in a state of constraint.
They're almost inevitably bound to get shaken by a "discontinuity" event, whereby a new player enters the market, perhaps from its fringes, and applies its technologies to serving unmet needs in the marketplace that incumbents may believe are too expensive to serve.
Yes, our economy and the advance of science and technology have been producing more bounty for more people. At the same time, the economy and those same technologies have produced a larger spread between a relatively few with lots of means, and the majority of folks who have to do with a lot less.
So who's going to do the housing, not necessarily subsidized supportive housing, but market-rate for-sale and for-rent homes and neighborhoods for those whom the "spread" has left out of the current consideration set for homes they value, and prefer, and love?
How, honestly, will that housing happen in a business with notoriously tight and risk-filled margins, swelling labor costs, regulatory overreach, and now, possibly, materials cost inflation that could get ugly if you start slapping border taxes on all the stuff that comes in from outside the country?
Builders have become, if nothing more, masters of managing risk, whether it's along a critical path to a home completion, or a critical chain of multiple workflow systems that must go well individually and collectively for an organization to be successful.
Most people think that disrupters to home builders will be ones who transform business models by making things cheaper to do. Put those microprocessors, transmitters, sensors, data points, and algorithmic patterns into construction workflows, and the amount of time to build--with precision--will come down significantly.
But what if risk to cost is a misleading or partial goal, rather than the goal most people think it is? What if greater efficiency is less the endgame, and more a byproduct of your efforts to innovate? What if technology allows you to change yours and others' jobs to focus on where humans generate more value, even as machines play a bigger role as well.
This Harvard Business Review piece, "How to Win with Automation (Hint: It’s Not Chasing Efficiency)," by author and consultant Greg Satell explores a theme builders would do well to embrace. Satell writes:
"The first challenge for business leaders facing a new age of automation is not try to simply to cut costs, but to identify the next big area of value creation. How can we use technology to extend the skills of humans in ways that aren’t immediately clear, but will seem obvious a decade from now? Whoever identifies those areas of value first will have a leg up on the competition."
Remember, sooner than we'd all like to think, this "new age of automation" will simply be the age of automation, and then, maybe the age of automation will become so normal, that we'll call something else "new" about it.
Exciting.
