Blog: The Path to Success: Prioritising Value in Construction

22 April 2024

The concept of value in construction has evolved, now recognised as more crucial than previously thought

Value in construction remains a frequently discussed yet often overlooked topic in the sector. Despite being championed by industry leaders and recognised through prestigious awards, it is often overshadowed by traditional excuses such as “cost efficiency”, “client priorities”, and the belief that it's 'not the right time'.

Malcolm Clarke, Managing Director at Baxall Construction and SECBE Board member, shares his insight on how his business prioritises value and achieves success and growth through this approach.

Where is the value hidden?

Our industry has a reputation for the lowest cost, and we have driven down this route to the bottom, with the Grenfell case being solid evidence. However, the understanding of value has evolved, and it’s much more important now than people realised in the past.

The best value is not in the use of the cheapest design and construction but in the support of the users throughout the whole life of the building. We are not just building buildings or creating work or school environments; we are actually delivering something that helps us with our health and well-being.

Of course, we should also be looking at the energy cost and the cost of carbon reduction, and I get that. But most people who live or work in a better-designed or constructed building that is well maintained perform better. They have fewer illnesses or are able to produce more and better outputs. The building which is designed and built with the consideration of the lifetime value and optimised accordingly performs better, too.

This is where you really start to produce value.

Cost versus Value

Better value does not have to be more expensive. Moreover, creating value can save some costs. Investment in a better design can be perceived as an increase in costs, but it reduces the cost of construction and operation in the long term.

One of the things that we have recognised when we have got into value in a more detailed way is that we become more efficient as we identify better ways of doing things, cutting out waste. There is an enormous amount of waste due to late engagement of the supply chain. The earlier we are involved, the less time and cost we waste trying to get into a viable scheme. Hence, early engagement and collaboration in the procurement phase help optimise the costs and create value.

The cost of designing the project and the capital cost of building it are not the main cost of value. The main cost of value is when you start using it. And the building’s ability to change people’s habits and work habits when they are using it.

How does value help your business progress?

I am a great believer (and many learned it over the years) that if we do the same things in the same way, we will get the same results. I would even argue that by saying, the results get worse and never get better. Thinking outside the box and being more innovative is crucial to better performance. Our business gets great results and is successful because of that. There is great training for leaders in our sector, helping them be better and more innovative leaders. I am talking about the IFLP Programme, which has already helped many companies transform their leadership towards innovation and achieve fantastic results.

Is it the right time to do things differently in the time of economic challenges? 

The environment we are living in is a tough one. And those businesses that do not have a proper structure or environment for innovation, are not supporting their staff with development and training, are not supporting their supply chain in a collaborative way and are not delivering a better value in all things I have said earlier, I don’t think they are going to survive.

Unfortunately, what happens is that we go through these cycles of recession, and there are always casualties as a result of that, and it’s really, really sad. But if you look at why it happened, it’s because they have not put the right things in place earlier in their development.

There are two things that make us who we are. One is knowledge.  If you do not have the knowledge, you are restricted in your choices and decisions. If you don’t understand what is happening in the wider world beyond your close environment, you are not able to contribute to the solution and create real value. But it’s also the second thing that contributes to your success and is absolutely crucial: you should never give up.

Value is the only way to go.

The whole value of what we have done as a business that made us as successful as we are is how we create real value.

And with the challenges that we are facing now, with climate change becoming more real every day, we really need to spend more time delivering that special value.

With the whole social side of it, we have recognised that over the years of doing more and more of it, we can be so influential in supporting people in the environment. It’s about demonstrating potential careers for youngsters and showing that mental health is improved with good employment practices, training, and support. You can work in a really good environment which provides more than pounds and pence.

How to start creating value?

I think the products, such as the Value toolkit (Construction Innovation Hub) and Government playbook, are a positive step toward better procurement and value creation.

These tools are the best place to start. It will help you optimise and improve value for money through effective procurement, cost management, and project delivery.

Join Constructing Excellence network’s events in your area to learn more about the Value-driven approach and ask your burning questions to the companies that have already implemented it.

Consider including the IFLP Programme in your CPD programmes so your leaders can learn about the value approach and innovative ways of thinking and how to embed them in your organisation.

And start working smarter, collaborating with the supply chain, and becoming more efficient.
 

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