OK so the holiday season is over, we’ve wrapped up 2007 as a very strong year for buildings, though a confusing one as far as what the future holds. It seems some questions are on every body’s minds…

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1. How do we improve the bottom line
2. Where can we get skilled resources
3. What to do with the climate change / green / sustainability trend
4. Where is technology headed, what should we use and how will it effect our business?

If you recognize none of these questions, I suggest you stop reading, if some of the questions resonate with you, read on. If all of the questions are keeping you awake at night, welcome to one of the most significant changing times in the world of buildings; you should print this piece and distribute to all your staff, colleagues, suppliers and anyone else who your future is impacted by.

In between running events, during summer and winter time (events are generally in the spring and fall), I try to spend as much time as possible traveling and talking with people in the buildings industry as well as “futurists” in key trends that are likely to affect building systems. The questions above are not just made up, but a summary of what I hear over and over again in my recent trips, mainly in the US though to some degree in major markets around the world.

The questions are in order, number one on people’s mind is simply business. Not necessarily how to get more business, that seems not to be a challenge – most who I talk to have too much work and even turning down projects. The challenge is how to make the projects more profitable, less risky, easier, and of course quicker to complete.

To a large degree this first question relates also to number two, and is a consistent worldwide. From Los Angeles to Dubai and Singapore to Johannesburg, the shortage of skilled work force is hampering growth of building systems business, and not just in leading edge technology areas. Skill shortages exist in fundamental “trades” of buildings from temperature control, lighting, security to more sophisticated areas like integration, IT, energy management, and especially so in high-level sales activities at the financial and business levels.

The third question should now be familiar to us all, the west and especially the U.S. has now really woken up to the impending threat of climate change. We see the “green” subject on Oprah, in Wal-Mart, on daily news bulletins, weekly business magazines, and generally in our everyday lives. While most of us feel we emotionally understand this, most cannot quite yet figure out what this means for our business. The numbers are staggering, especially as it relates to buildings. Simply put, buildings represent around 40% of energy usage and carbon emission – larger than ANY other segment of industry, larger than transportation, industrial or food production. Building systems--especially control systems--are at the heart of solving this, yet most in the buildings systems industry do not know how to go about it. This is simply the largest and potentially most rewarding business opportunity for building systems players, and I don’t see many doing much with it. Those who understand this are probably not reading this article since they are so busy!

We all know now that technology for its own sake does us no good; we’ve gone through the open systems promise, the integration vision, the adoption of IP and a whole bunch of techno developments that many techies get real excited about. Similar to the green subject, we know technology is needed, but really find it hard to get past the techno speak and discuss how best to use the most appropriate technologies to solve question number one above.

So, my view is that these questions need to be combined, not answered independently, but reviewed as a holistic set of interrelated industry challenges that can only be addressed in a similar holistic view. They are in essence one question: How does this industry move forward into the 21^st century?

2008 is, in my opinion, a unique and key time for buildings. The problems (outlined above) seem to be consistent throughout the industry. The fundamental economic and social climate (mainly around energy and climate change) is providing a foundation for value creation for building systems industry and at the same time pretty much all of the enabling technologies exist today in a most mature manner. There is simply nothing missing other than the will and understanding of the industry to create for itself an unparalleled proposition – if it wanted to. But for this, the industry itself has to change and recreate itself, something easier for me to write than for the industry to orchestrate.

So, let’s discuss what we can do to move forward and answer the above questions (albeit in a holistic and not discrete manner).

[an error occurred while processing this directive] 1) Accept that the industry is changing

Sixty-five million years ago, the dinosaurs must have watched with wonder as meteorites hurtled across space toward the earth; it must truly have been a wonderful sight to see fireballs streak across the skies. My guess is that most dinosaurs watched in wonder and once the show was over went back to foraging for food to feed their hungry bodies with little understanding that the end of their reign would soon be over.

While this may be an over-dramatic analogy of change in buildings, it is certain that change will happen. Burying one’s head in the sand cannot lead to good business in the future regardless if you continue to do what you are doing or find some new sandbox to play in.

This is the most difficult task that I am laying out for you. The obvious thing to do since the impact of change is not hurting you (yet), is continue to do the same. I remember the story about a frog: If you take a frog and throw it into hot water, it will react and leap out immediately. If you place it into a bowl of cold water and slowly heat it, it will not notice the increase of temperature and end up dead.

At this point, I’m not sure that there will be a catastrophic event that will cause everyone to change, but change is all around us. Hints of the drivers are within the questions I presented at the beginning of this paper.

The green and sustainability agenda and IT work hand-in-hand here, one the driver for change (increased value proposition), the other a powerful enabling technology for the future of buildings. Neither has been around in this manner before today.

2) Think big picture about your future role

Around 500 B.C, Sun Tzu, the famed influential Chinese author wrote “The Art of War”, concepts about war that are still being used and quoted on by generals at the Pentagon and their counterparts around the world. Sun Tzu’s concepts work not only in military combat, but just as well it seems in business “combat”. Again, many business leaders have used the Art of War strategies in completive landscape as well as in addressing change, which is really competing with the status quo, or competing with the unknown “new guard”, depending on your perspective.

One of the most memorable thoughts that Sun Tzu wrote about is that if you are perched upon a hill and can look upon the landscape of an impending battle, it is not very difficult to determine with a great degree of accuracy who will win! Such a view is very different from the view from the ground.

The lesson here for building systems in 2008 is that the subjects are so complex and numerous that it really requires you to think carefully, from a different perspective, about what is going on. The only way to do this is to stand back (climb a hill) and take a look at the industry so that you may see how this is going to pan out.

Doing this can be scary, and does take some time, discipline and resources (time and thus money). You do need to disengage yourself from your daily life and challenges just for a while and find yourself a hill to climb to see the big picture.

Once atop a hill, it is imperative that you not just look at your piece of the puzzle, but truly understand the drivers, trends as well as actions and activities of others in the industry. Only when you can do this will you understand the landscape, which will lead you to the next question.

Clearly here, one will be able to see the eventual impact of the green movement, of technology, and of the market as well as the growth and decline of resources in different areas.

3) Decide what you need to do

With a grand view of the industry gained from the last task, it is now important for you to figure out what you anticipate as being the future for the short and medium term as well as the eventual outcome of the industry.

It is only with this information that you can decide what you should do with your business direction and strategy. In my opinion, you have two broad choices to make:

First, you could understand from the big picture that your current business may have a bright future, and that you can grow such a business with the understanding of how the product or service will play out in the years to come. At first glance this may not sound like change, but in reality it is. You know now that your business is fundamental to the future of buildings, and you will know why it is fundamental in light of other changes.

What is important at this stage is learning what you need to do to solidify your business proposition, maybe by aligning with new types of vendors or partners. You should also be able to ascertain what you need to learn in terms of new sales and business development strategies that may need to change even though the fundamental business remains essentially the same.

The second option is that you could determine that your existing business does not fit well with the future as you can see it unfold. Depending on your circumstances, it may be time to exit the business, or recreate your business based on opportunities you can see from the future of buildings.

In any event, this second option will require you to make a dramatic change. If you do not, that change is likely going to be made for you in years to come by circumstances and/or your competitors, vendors or other players from within or from outside of the industry.

Even if you are in the business of selling sensors, green and IT will change it, probably for the better since buildings in the future will need even more information on which to base their control strategies.

4) Take action!

This is probably the simplest and most obvious task that can be recommended, but if not executed well will ensure your failure in this quest to remake yourself for the future of buildings.

As Sun Tzu said, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat”.

There is one final thing once you have taken this very important step, that is to continue to accept that change is continuous and that you should revisit task number two above at some regular interval throughout the year.

Wishing you the best for 2008.

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