About nine months ago, I had the opportunity to participate on a panel with several esteemed colleagues from government, philanthropy and banking to provide different perspectives about diversity and inclusion in our workforces. As we all shared our thoughts, I noticed that one of my employees, Zachariah Babington-Johnson, was having an animated conversation with a middle-aged, white man at their table.
Upon the conclusion of the panel’s comments, I made my way over to Zachariah to debrief on what had induced his spirited discussion. His response: “The guy at my table rhetorically asked aloud, ‘Who invited the construction guy?’” in reference to the breadth and depth of my comments on the panel, and what amounted to a surprising reflection that such quality comments could from such a source.
This immediate response is not unusual in my industry. People often think of employees in the construction industry as “alternatively educated,” physically hard-working and blue collar, and the businesses they represent as low-bid commodities that are only destined to keep costs down, schedules compressed and risks warranted so that the real creative engines of the economy can provide innovative products and services that consumers and businesses demand. The construction guy is usually only considered for initial cost management or to fix a problem at a later point when operations are inconvenienced.
Unfortunately, thinking of us in this manner is a bit antiquated and may cause really bright and strategic business owners, developers and long-term holders of real estate to miss an opportunity for enhanced competitive differentiation and social, environmental and economic returns.
Did you know that buildings account for 39 percent of total CO2 emissions and consume 70 percent of the electricity load in the United States, according to the U.S. Green Building Council? In addition, you may have also overlooked the fact that people spend 87 percent of their time indoors, according to a 2011 survey conducted by the EPA. (I assume that statistic is well over 90 percent for Minnesotans, considering our winters!) These types of statistics reinforce how important design and construction people are to our community and economic development models.
Furthermore, in 2015, Joseph Allen, director of the healthy buildings program at the Harvard Center for health and global environment, published a ground-breaking study looking at what some refer to as “Green+” buildings. That’s where sustainable “green” buildings optimize employee productivity and health through more informed design and operating practices, such as improved indoor air quality.
Allen’s study found cognitive performance scores for the participants who worked in green+ environments were, on average, double those of participants who worked in conventional environments; scores for those working in green environments were 61 percent higher. Measuring nine cognitive function domains, researchers found the largest improvements occurred in the areas of:
Wait a minute! Significant improvements in crisis response, strategy and information usage tied to the design, construction and programming of the building? You mean to tell me that solutions in those industries and sectors are not just about initial costs or LEED points or utility bills? That’s right, this is about people. If demographic shifts and talent shortages are two of our most important social, political and economic challenges to solve, then it sure seems like design and construction professionals need to be consulted with more often.
We seem to have been ignoring the 90 percent of time people are spending indoors. If the cost/benefits of real estate are associated with its occupants, then we need to reshape our thinking about my entire industry.
Owners, developers and facilities managers can no longer simply focus on initial costs. Designers, contractors and programmers must invest in research and development of new means, methods, technologies and systems that will have the greatest impact on human activity. Big data and advanced analytics must be deployed to establish even greater causality to people outcomes, such as physical health, comfort and even innovation.
Ultimately, the next frontier is proving to employers that their indoor environmental quality (systems and programming) truly improves talent attraction, development and, most importantly, retention. In the age of acceleration and talent shortages, this will create the required economic incentive to get the attention of the CEOs.
Within this emerging paradigm, the savvy CEO will ensure that the facilities manager, chief financial officer and human resources department all have an ongoing, integrated discussion about the real estate portfolio and its impacts on people. In addition, that facilities manager will need to embrace designers and contractors that are investing in innovation and vertically integrating new systems, sensors and software into the design specification, installation and programming processes within their buildings.
“Who invited the construction guy?” My formal response: the savvy CEO seeking disruptive innovation and sustainable returns.
I’m looking forward to further discussions with such CEOs. In the meantime, take care of yourself and each other!
Ravi Norman (RNorman@ThorCon.net) is the CEO of Thor Cos., a holding company for development, design, construction and consulting businesses. He holds degrees in economics, business management and finance from the University of Minnesota.