Summary
Optimizing your processes—that’s good and necessary. But real growth lies in transforming how you deliver value to customers—sometimes in ways they didn’t know they needed or wanted. New technologies make it possible.
In this article, explore examples of transformation and learn how:
- A global construction services company is offering infrastructure-as-a-service.
- An automotive design consultancy is filling a niche for high performance custom cars.
- A leading toy manufacturer is offering unique action figures, each featuring the 3D-printed head of a customer.
- Global companies in architecture, engineering, and construction are spinning off new entities.
Beyond optimization
We’re all transforming on a regular basis these days—as individuals and companies, as industries and communities. “It’s not a question of if your company should take on digital transformation, but how,” Oliver Lepinoy points out in his AU class.
But transformation can mean many things. It can mean looking for ways to design and make more efficiently, more quickly, or in ways that open new creative pathways—such as the ways that Decathlon is using generative design to create the next generation of athletic products. It can mean automating the configuration and cost/price/quote process, as racking solutions provider Nucor did, to accelerate bidding and reduce the time needed to spec out each potential solution.
But it can also mean something more foundational—transforming entire business models. This can mean adding new revenue streams or modifying existing ones. Fundamentally, it means looking for new ways to deliver value to customers.
Pipelines to platforms
These transformations, large and small, are largely driven by the opportunities created by new technologies, whether you’re talking about AI and machine learning, new types of sensors, mobile technologies, reality capture, VR and AR, or new fabrication processes, individually or in combination.
But perhaps no technology is so fundamental to transformation as the cloud. That’s because the cloud provides access to nearly unlimited computing power and storage on demand. And that’s key for almost all AI and machine learning today, because those functions take a lot of processing power. And who wants a supercomputer under their desk?
Just as importantly, the cloud lets us break down data silos and share project data in a more flexible and granular way. Ultimately, it enables us to move from pipeline business models to platform models, as Marc Sleegers points out in his AU 2022 class, Compete Through Business Model Innovation to Become an Invincible Company.
“Pipeline business models are characterized by a linear value chain with a well-directed value flow from supplier to customers,” Sleegers says. “In comparison, platforms are intermediaries that bring two or more sides of a market together. They provide the infrastructure and rules that facilitate transactions between the respective sides.”
If you’re wondering how your company could transform and deliver new value, Sleegers’ class provides an excellent introduction to the factors to consider and processes you can follow.
A number of speakers have led recent classes at AU showcasing how they and others have launched new companies and new divisions that transform their business models.
Infrastructure-as-a-service with Transportation System Bögl
Max Bögl is a global construction company that has long placed a high priority on research and development. It started as a family business of bricklayers in Germany in the 1920s, then began manufacturing bricks for construction. In the 1930s, they started manufacturing cinderblocks, and in the 1960s they started to make precast concrete forms for construction, even as they continued to offer standard construction and engineering services. Each of those was a minor transformation in its own right, a new way to serve the market.
Since 2010, they’ve been developing a new offering called Transportation System Bögl (TSB), a maglev train system for public transit and moving cargo. Maglev (short for “magnetic levitation”) trains are frictionless and vibration-free, enabling them to go extremely fast—some maglev trains go more than 200 miles per hour. While still fast, speed isn’t the main goal for TSB—it uses maglev tech to be quiet, sustainable, and safe, even in dense urban environments.
Creating the TSB system has required Max Bögl to expand their core competencies.
First, they are designing and making both the trains and the tracks, capabilities that come from the world of manufacturing. They plan each unique train system, bringing them into the realms of civil engineering and city planning. Then they build and install it—that’s construction, something they’ve done for a century. Finally, because TSB is designed to be an automated, driverless system, they also offer system operation. Think of it as “infrastructure-as-a-service.”
It’s a service that no other construction company can offer. And that’s because Bögl is no longer just a construction company. They have transformed their business model, fundamentally shifting how they deliver value. Instead of the pipeline model, in which they would build and deliver a train system, they have created a platform that customers will, in essence, subscribe to for the life of the system.
Learn more in the AU 2021 class led by Bögl’s own Mantas Smidtas and Claudia Zeh, in which they show how they worked with Autodesk Consulting to create 3D visualizations of the TSB system.
Custom cars for a new millennium
The first cars were custom creations—bespoke products for those who could afford them. Henry Ford changed the industry by turning to mass production. His assembly lines could produce thousands of identical Model Ts at a price point that made them accessible to far more people.
Today, the team at Briggs Automotive Company (BAC) are bringing custom cars back, creating bespoke high-performance roadsters with interiors and exteriors tailored to each customer.
Brothers Neill and Ian Briggs started BAC as a design and engineering consultancy, helping companies like Porsche and Mercedes create their more traditional, mass-produced cars—and they still provide those services. With the BAC Mono, they are filling a gap they identified in the market for high performance cars designed for leisure driving—with only room for one passenger: the driver.
Because they make only a few dozen BAC Mono cars each year, they are able to employ processes that are difficult to scale. This includes 3D printing multiple components, from the steering wheel that’s molded to the driver’s hands to the headlights, rear-light casings, and wing mirrors. And along with the car, each buyer gets a “build book” that shows the creation of the unique car every step of the way, from ideation through fabrication.
If you’re looking for a vehicle to get the kids to school, you’ll need something else. But with the BAC Mono, the Briggs brothers have developed a specialized, high touch offering that fills a unique market niche. And car lovers can’t get enough of it. Learn more about their process in their AU 2022 panel, Transforming Custom Car Design with British Supercar Manufacturer.
Transformation with additive manufacturing
The teams at BAC aren’t the only ones using additive manufacturing to transform, as Diana Verdugo of Formlabs shared in her AU 2022 Theater talk. She cites the Hasbro toy company’s new “selfie series,” which enables customers to scan their own heads, then order a unique action figure featuring their face, as one example. Commute is another—a start-up using additive processes to rapidly and cost-effectively design, prototype, and produce small runs of charging stations for e-scooters, wheelchairs, and other micro-mobility vehicles. Both of these offerings give these companies unique places in their respective markets.
New business models in AEC
Building design, engineering, and construction companies have traditionally used pipeline business models, and there will always be a need for that approach. But leading firms are incubating new divisions and spinning off new entities that are taking a data-driven platform approach, as Oliver Lepinoy showcases in his still-relevant AU 2020 class, New Business Models and Digital Platforms in Construction 4.0.
Here are just a few examples from Lepinoy’s class that showcase what’s possible in business model transformation in the evolving world of AECO:
- Vinci Construction created Sixense to support clients with engineering, monitoring, mapping, and other digital services to help them optimize infrastructure performance.
- LendLease created Podium as a tool for data and insights for the property industry, including design simulation, financial analyses, and safety assessments.
- Holcim created Oris, the first construction materials platform to help reduce environmental impact.
- Skanska collaborated with IKEA to create Boklok, a company focused on creating sustainable, affordable homes at scale.
The truth is that you can see this kind of transformation at every level of the AEC ecosystem. As Amy Marks points out her class, New Business Models of Convergence Customers and Their Need for a Platform, “Most MEP subcontractors are actually fabricating things inside of their facilities." In other words, companies who traditionally provided pipeline mechanical, electrical, and plumbing engineering and building services are now manufacturing building products. And they're being "programmatic in nature, not project-centric as they think about things," Marks says, an important shift in how they deliver.
The difference between playing offense and defense
Traditional pipeline business models will always have a place in industry, but as Lepinoy points out, "the AEC industry is changing in the very way it is structured and its services rendered. Technology is just a puzzle piece. True and sustainable innovation does not come from technology alone; it comes from new business models." And the same is true in manufacturing, as well.
We live and work in a time of transformation. None of us knows exactly how things will change, but no one expects their job or their industry to stay the same for long anymore. And while the changes aren’t under the control of any single individual, that doesn’t mean that you’re merely a passenger on the ride or a passive player. You can drive transformation, you can initiate change, and you can guide your company and your industry toward better, more intelligent ways of designing and making.
These changes present opportunities to optimize existing processes and business models—and also to transform them. And you can do both; it’s not an either-or situation. But as Marc Sleegers points out, “there is a big difference between playing defense, business as usual—working on your bottom-line agenda, like productivity improvement, cost savings, or business optimizations, and playing offense—working on your top-line agenda. When you play offense, you need to rethink your priorities and efforts. Market differentiation and radical reinvention are much more interesting for a company.” And ultimately, these are the kinds of changes that can lead to transformational, rather than incremental, growth.
Learn more about business model transformation, see the latest examples from leading companies, and join the conversation by registering now for AU 2023.