Enhancing and Expanding Innovation in the Engineering & Construction Industry

RT-243 Topic Summary
RT 243


Innovation is an extremely important and essential ingredient for growth and sustainability in the global EPC industry. Currently, there is a deep concern and problem that innovation is lacking in the industry. Through years of research, interviews, and actual case studies RT-243 identifies the problems causing lack of innovation and provide solutions to these problems. The study goes further in giving actual computer based tools to assess the current innovation in a company including an economic model showing the long term value and benefits to begin innovation. Finally, case studies are shown on how the implementation of the given tools and proposed solutions have successfully worked in real life. The call of action is that far too often companies look at the short-term and forget the bigger long-term picture on the importance of continuing to develop innovation which is essential for their survival. 

Today‘s volatile and global markets, today‘s ever increasingly complex capital projects, and tomorrow‘s workforce will no longer allow EPC organizations to ignore opportunities for innovation. CII members who continue to focus solely on achieving short-term project goals at the expense of developing long-term capabilities to manage innovation and change will find themselves following the same path of the U.S. shipbuilding industry: decreasing productivity, decreasing profit margins, and decreasing market share. 

Note: This research was co-sponsored and conducted in collaboration with the Charles Pankow Foundation. 

Key Findings and Implementation Tools

1 : Innovation Perception

We have a problem with innovation in the EPC industry. The data analysis and research compiled show survey results in five areas: (RS243-1, p. 11)

  • Innovation Perception
  • Innovation Actions
  • Innovation Processes
  • Innovation Funding
  • Innovation Drivers 
The research shows survey results in several areas, including:

Perception of how innovative the EPC industry is currently. 

Perception of how innovative the respondent’s organization is in comparison to the EPC industry. 

Where innovation is most needed in the organization.      
Reference: (RS243-1)

2 : Enablers of Innovation

The research provides five key enablers for innovation. (RS243-1, p. 21)

  1. Innovation is a foundation of the organization culture.
  2. Budget allocations must be made to support innovation.
  3. Resource allocations must be made to support innovation.
  4. Processes must support innovation.
  5. A new risk perspective should be adopted.
Reference: (RS243-1)

3 : Innovation Maturity Model

The research provides a model to assist organizaitons in determing their status as innovators. The following eight attributes are found to lead to successful identification, adoption, and diffusion of innovation in the EPC industry. (RS243-1, p. 23)

  • Culture
  • Resources
  • Risk perspective
  • Customer focus
  • Learning
  • Collaboration
  • Leadership
  • Processes

See Implementation Tools for further details.

Reference: (RS243-1)

4 : Economic Model

This model was developed to communicate why and how organization should change their perspective on innovation investment and return. The key to enhancing innovation in the EPC industry is to provide the decision maker with a reasonable level of confidence that investment in innovation will not lead to unreasonable risk. (RS243-1, p. 27)

See Implementation Tools for further details.
Reference: (RS243-1)

5 : Case Study Findings

The case studies provided concluding effectiveness of the innovation tools and recommendations for improved innovation. 

  • The IMM data from the four organizations included in this report reveal there is a great level of consistency in the strengths and weaknesses among the case study firms.
  • The common areas requiring greater focus are the areas of Resources and Risk Perspective.
  • Similarly, the common areas of strength found in the organizations are in the areas of Culture and Learning.

The concluding solutions is that five sets of strategic actions should be aggressively pursued in order to enhance innovation within the EPC organization. (RS243-1a, pp. 27, 29)

  1. Build a learning culture.
  2. Focus on the customer.
  3. Establish processes.
  4. Change the persepective on risk.
  5. Focus on specific initiative.
Reference: (RS243-1a)

6 : Implementation Tool #1

IR243-2, Enhancing Innovation in the EPC Industry

The Innovation Maturity Model (IMM) is an evaluation tool that measures the current state of an organization’s innovation and provides recommendations for advancing innovation.
Reference: (IR243-2)

7 : Implementation Tool #2

RS243-1, Economic Model

Supports the recommendations of the IMM by illustrating and communicating the long-term benefits of innovation investment. (RS243-1, p. 27)
Reference: (RS243-1)

Key Performance Indicators

Improved performance/achieved success, Increased competitive advantage, increased value for the client, increased shareholder value

Research Publications

Enhancing Innovation in the EPC Industry, Version 1.2 - IR243-2

Publication Date: 02/2012 Type: Implementation Resource Pages: 13 Status: Tool

Enhancing Innovation in the EPC Industry - RR243-11

Publication Date: 10/2011 Type: Research Report Pages: 123 Status: Reference

Enhancing Innovation in the EPC Industry: Industry Implementation Studies - RS243-1a

Publication Date: 12/2010 Type: Research Summary Pages: 31 Status: Supporting Product

Enhancing Innovation in the EPC Industry - RS243-1

Publication Date: 12/2010 Type: Research Summary Pages: 36 Status: Supporting Product

Presentations from CII Events

Plenary Session - Enhancing Innovation in Construction

Publication Date: 06/2009 Presenter: Number of Slides: 17 Event Code: AC09

Implementation Session - Enhancing Innovation in Construction

Publication Date: 06/2009 Presenter: Paul Chinowsky Number of Slides: 41 Event Code: AC09

Plenary Session - Enhancing Innovation in Construction

Publication Date: 06/2008 Presenter: Number of Slides: 15 Event Code: AC08