Engineering andconstruction companiessuffer from low marginsand relatively lowproductivity

Fewer than 15% of E&C firms had double-digit growth and margins from 2005-2015, but

they could achieve 20-30% operating

margins if they design operations differently.

But they can overcome the challenges and do better if they:

The industry faces internal and external challenges

Labor productivity¹

130Index: 100 = 1995

Germany

120

110

01995 2014

United Kingdom

1 Gross value added per hour worked, constant prices based on 2010 pricesSource: Organization for Economic Co-operation and Development

Other industries

Construction

Articulate a clearset of values andtargets

Fragmented value chains

Extensive subcontracting

Complex portfolios

Competitive pressure

Coping with complexity

1 Make projectdelivery teamsmore accountable5

Build a developmentprogram for projectmanagers2 Standardize

systems andpractices6

Create anintegrateddata system3 Create an integrated

and transparent performancemanagement system7

Encourage speedyrisk mitigation anddecision making4 Minimize the

number ofchanges8$

$$

Shortfalls in accountability

Talent management

Reinventing the wheel

Failure to adapt to newtechnology

Problems utilizingresources