Going Off-Site: Disrupt or be Disrupted

By Mark Konchar

On his deathbed, George Washington is rumored to have cautioned, “Beware of innovation in politics.” 

The construction industry is equally skeptical of anything that disrupts the status quo. And for good reason. From thin margins and schedule pressures to cost overruns and human safety, builders face critical risks that make them averse to exploring the unknown. 

New construction methods are poised to help reduce these risks while making the industry more attractive to top talent. One of the most transformative is off-site manufacturing. In today’s digital age, job seekers choose employers based off core values like innovation, creativity and accountability. People want to be part of an organization that is breaking boundaries and investing in new solutions. 

To improve the speed, quality and safety of our projects, Balfour Beatty has committed to reducing on-site construction activities 25% by 2025 across our global operations. This is an incredibly exciting yet disruptive goal within the construction industry as we know it. Before we explore why off-site construction goes against the grain, let’s first examine the concept of a “disruptive innovation.” 

Clayton Christensen and Joseph Bower originally coined the term in a 1995 paper published in the Harvard Business Review. They defined disruptive innovation as a process in which a smaller company can unseat an established business by targeting segments of the market that the incumbent has overlooked. By leveraging new processes or technologies that deliver needed products or services, often at a better price, start-ups can gain a foothold.

Off-site isn’t a new concept, but applying it holistically to an entire building structure very much is. Few contractors have taken the leap from prefabricating smaller building components like bathroom pods or HVAC distribution racks, because it requires them to completely rethink the way projects are conceived, designed, sequenced and constructed. That’s certainly disruptive! 

Many contractors are content to let another business do the homework and iron out the kinks. A lot of owners feel the same. The Fails Management Institute (FMI) found that just 38% of owner organizations have a high acceptance level of off-site construction. 

But in today’s rapidly changing construction marketplace, plagued by labor and productivity challenges, contractors that aren’t daring to explore a better way risk getting left in the dust. “Disrupt or be disrupted,” as venture capitalist Josh Linkner warns in his book, “The Road to Reinvention.” 

In the US, Balfour Beatty is seizing the opportunity to become an off-site pioneer by partnering with modular construction firm, Prescient. The company specializes in precision manufacturing technology, including robotics and laser cutting systems. Our first project together is the Osprey, a mixed-use, multifamily development located in Atlanta, GA. 

By utilizing Prescient’s off-site manufacturing platform to build the project’s entire 13-story tower structure, our team will be able to turn units several months faster than a typical post-tensioned concrete or other load-bearing structural frame option. Developed by Toll Brothers Apartment Living, the Osprey will be among the first projects using the Prescient solution to go vertical in Atlanta.

One of the primary concerns about structural prefabrication is ensuring successor trades can keep pace. If Prescient blasts their way to the top of the Osprey, but sheathing and MEP trades lag behind, it will prevent us from achieving the owner’s desired pro forma. 

Early alignment is just one of the ways the Osprey team has worked diligently to prevent this outcome. During the design and preconstruction phases, the team toured both of Prescient’s manufacturing facilities and walked two completed Prescient structures in Denver, CO.

To help our partners better understand the Prescient product and required speed of execution, we invited MEP, fire protection and drywall trades as well as representatives from Toll Brothers to Denver where they had the opportunity to ask questions and make recommendations in an inclusive setting. 

The entire team participated in a pull planning session covering a typical floor from the start of the structure through gypcrete installation. Through this process, the team discovered opportunities to accelerate pre-dry MEP and fire protection rough-ins; identified locations for temporary dry-in floors based on work available; clarified inspection details; and developed a lean site logistics plan. 

One of the most important yet frequently overlooked principles of lean construction is developing relationships based on mutual trust and effective communication with trade partners. When a trade is asked to travel thousands of miles away from home to provide input on a job that hasn’t even started, that represents a fundamental shift in how we engage the supply chain. It’s disruptive innovation in action. 

In many ways, the Osprey is no different than any other construction project. We want it to finish on time and be profitable, and we want it to be a rewarding experience for every team member. But we also expect it to create a first mover advantage within the marketplace and fuel the appetite for disruptive innovation among our teammates. To make a bold prediction, it could even become a catalyst for changing the way we pursue, win and execute work safely and reliably—and the way we serve our clients. 

Construction may continue to be an industry that approaches change carefully and methodically. But builders willing to break the mold with confidence in their people and conviction in their ideas will play a vital role in transforming it into a more sustainable model.