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In this edition of Voices on Infrastructure, we focus on the engineering and construction (E&C) sector. Although the prospects for the industry are promising, given forecasts for future spending, there are also many challenges. 

Among the issues: falling commodity prices, declining productivity, delays, cost overruns, a surge in competition, and a failure to adapt to new technologies. In addition, there is the uncertainty created by the “Brexit” vote, the US elections, and other geopolitical events, as well as the increased size and complexity of many projects. At the same time, the market is demanding that E&C firms master new delivery models, increase project accountability, and improve budget and on-time performance. 

In this edition of Voices, we offer expert thinking on how E&C firms can do better. Operational transformation is a key theme. Two articles feature recent McKinsey research on how to improve productivity and profit margins. In one, three McKinsey colleagues examine five practical and relevant digital trends that will shape future capital projects. And in the other, together with Mauricio Janauskas, we suggest specific actions E&C companies can take to strengthen their operations. 

Other contributions represent the views of leading external practitioners (these may not be consistent with those of McKinsey & Company). Jacqueline Hinman, the Chairman and CEO of CH2M Hill, describes how E&C firms can overcome short-term challenges while preparing themselves for the future. Jorge Quijano, CEO of the Panama Canal Authority, details the lessons learned from the recently completed expansion of the iconic waterway. Bechtel’s Craig Albert (President of Infrastructure) and Tam Nguyen (Head of Sustainability) share examples of how one of the world’s largest infrastructure companies is facing the challenge of sustainability. 

E&C firms are big; they do not find it easy to change. Indeed, the transformations discussed in Voices are as much cultural as operational—and these are the most difficult of all to undertake. Companies that embrace change, however, will be best prepared for the years ahead. 

We want Voices to be part of the conversation about the future of infrastructure—and invite you to join us. 

—Jose Luis Blanco
Associate Partner, McKinsey & Company

—Maria Joao Ribeirinho
Partner, McKinsey & Company

More Articles

Article

Tony Hansen, Global Infrastructure Initiative

Article

Lessons from the expansion of the Panama Canal.

Jorge L. Quijano, Panama Canal Authority

Article

Engineering and construction firms suffer from low margins and relatively low productivity. Here is how to do better.

Jose Luis Blanco, Mauricio Janauskas, and Maria Joao Ribeirinho, McKinsey & Company

Article

The best projects provide, connect, and produce sustainable outcomes.

Craig Albert and Tam Nguyen, Bechtel Corporation

Article

An interview with Jacqueline Hinman.

Tony Hansen, McKinsey & Company, and Jacqueline Hinman, CH2M Hill

Videos & Podcasts

Video

Senior executives from Bechtel and AECOM discuss their companies' adoption of disruptive technologies.

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