IDB as Disruptive Technology

Posted on September 1, 2010

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Integrated Design-Build (IDB) is a disruptive technology.  Let me explain.

Clayton Christensen is known in the business world for perpetuating the concept of a disruptive technology, defined as a new type of good or service that eventually displaces the dominant market leader. It does this by appealing to a small market that has basic needs, not the needs of the general public. Then as the concept catches on and gains market share, the new good or service improves enough for mass appeal and, in the process, clearly rivals and outperforms what is the current industry leader.

The disruption occurs because the new idea is so foreign in its formulation that the existing market leader is powerless to overcome its appeal. The primary reason for this is because the disruptive technology has a totally different business model which cannot easily be replicated by the incumbent provider, and thus the once-dominant force dies off, leaving the disruptive product as the new leader.

Integrated Design-Build is that disruptive technology. It is a growing model for a new way of designing, engineering and constructing (based on the very old master builder concept) because it assumes the most risk, buries the unpleasantries of a very unappealing process, and simplifies projects for the owner. IDB is more vertically-integrated and collaborative, with a greater degree of control because the former A/E component is part of the machinery. IDB offers greater cost control, flexibility and speed.

Perhaps the most shocking thing is that existing industry leaders of the Design-Bid-Build (DBB) model will not survive. It may take years, it may take decades. The paradigm will shift away from this way of project delivery that is too slow, litigious, expensive, siloed and narrowly focused on singular expertise. Why? Because compared to DBB, IDB is an entirely different worldview with a distinct business model. IDB more closely approaches the ideal of a competitive construction market where firms should compete on efficiency through a single-source.

Let’s face it: business models are, as Mr. Christensen put it, self-sustaining:  they are designed to do the same thing over and over with marginal improvement. The DBB model is not something that can morph itself into Integrated Design-Build because the barriers are too high.

Design-Bid-Builders cannot flip a switch on their methods of information sharing.  They cannot immediately trust more deeply in their fellow consultants to do what is best for the project each time. They cannot overhaul their design schedules, overlap with other processes and quickly break drawings into multiple packages. They cannot immediately increase their company risk tolerances to accept jobs with more undetermined parts.

IDB is gaining momentum and its rise as a disruptive technology grows. There are too many things wrong with construction as we know it to maintain status quo. The future is integration.

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Posted in: Design-Build