There is a real talent shortage in the Indian construction industry

By associating real estate with infrastructure, the Modi government has helped the sector secure easier sources of finance, says Jordan Cram, CEO and Founder, Enstoa.

What are your focus areas in the real estate sector? Which consultancies are you involved with?
It’s early days for us. We have launched our operations in India last year. We said, let’s not get the cart before the horse. Let’s create a world-class delivery capability. So we have built that team and we are continuing to expand that team with quite an aggressive hiring programme. Now, more recently, we have been bringing on the sales, marketing and expertise. So we have a worldwide delivery model. We are able to use those resources and get them up to speed on Enstoa’s way of doing things, acclimatise them to Enstoa’s culture, and make sure that they are connected with everything we are doing elsewhere around the world, because we can’t fail when we get out of the gate here. We need to succeed, so we can’t get too far ahead of ourselves and right now we are focusing very heavily on building the capabilities.

Can you give us some specifics in terms of the number of players you are involved with in the Indian market today? Give us a sense of the spread of the segments in India which you are looking at, and where you are in the Indian topography…
I mentioned sectors like ‘private’ and ‘public’, but we have to recognise the private ones faster. We can’t wait to develop that pipeline on the public side. As far as geography is concerned, we don’t want to be everywhere. We would like to focus selfishly around the Bangalore area, pick a second city like Mumbai; don’t get spread too thin in too many states and too many cities.

How do you look at affordable housing from a technological perspective, as in the available resources to make cheaper homes? How can we get here?
I was reading a study put up by Ernst & Young that was looking at leaders in the mega projects area. Surprisingly, they cited two challenges – one is securing the finances and the next is delivery. So the Modi government, by making that association of real estate with infrastructure, has significantly helped the former. They made securing financing easier and that is a huge and important part of the infrastructure challenges

On the real estate side again, I just wanted to understand your game plan…
I would like to be hand-in-glove with organisations that are investing internally heavily during the downturn. I think we are missing something because there isn’t an industry profile that matches our strategy and how we go happily ever after. The kind of organisations that benefit most from our services that makes a great world-class client for us is one where there is similar vision. We have been talking about the poor performance in capital projects today, the low levels of productivity… that it has been flat for decades. I will add one more is the high levels of dissatisfied workers in Indian construction today. I was reading the Gallop study which says 7 per cent people in construction in India actually like their job and 44 per cent actively dislike or are disengaged… that’s a big problem.

Could you sight which study this was?
It’s a Gallop poll. It’s a super-important one. We want organisations whose leadership structure recognises that kind of thing as important and they understand that technology is not an optional investment; they also understand that technology investment on its own doesn’t get them there. They have to get the process part done, and they have to have the people part.

What are the imperatives for the realty sector?
This (sector) wouldn’t need a policy change to turn around. I think if you ask people in their 20s here which of you are queued up to work in the construction industry, it’s not a long one. There is a real talent shortage, and people are just not interested in working in the industry.

I don’t necessarily mean the masons, I would include them there, but I don’t mean just individuals like that. Without talent, the gap cannot be closed.

How do you harness this talent then? This gap that exists; how do you bridge this?
This is the simplification; ‘what do people want’? They want to have impact in their work. They want to operate in collaborative, communicative environments. They want transparency in the work that they do. An organisation that is delivering this large infrastructure, if they provide that, they are going to have a huge influx of talent. These are the kind of organisations that we are looking for. We provide the tools, the technology and the processes. That’s the win-winà When those leaders find us, and we find those leaders, they are going to perform significantly because the war on talent is a global one. If a leader isn’t on top of their list, they can’t win.

What I am trying to get across is that we are looking out for a particular type of buyer.
A buyer that has vision, and I guess what I am saying is in line with our values and our culture. It is about people and talent. Actually I am quite optimistic that we are going to find that in surplus here in India.

So it’s a targeted search if I may put it that way for the right talent… and the industry has to get that process…
Yes, that’s right. It’s not like how many areas we shoot. It’s that we have to just hit the right target with the few that we shoot.

On the real estate sector, since that is the core area, are you working with any of the international projects here?
It’s too early for me to provide any comments. Maybe in four months, we will be able to close on that…

Coming to conventional forms of energy, there is high reliance on coal. What specialised processes do you advise the sector to make coal-based power generation itself more optimised?
We just kind of think of these two sides, it’s the strategic planning, what projects do we want to do; we want to do the right projects and then we want to do the projects right. You have to get the first part. If you miss that part, it doesn’t matter how you are executing it. You can execute the wrong project effectively and let’s say coal and clean initiatives, it isn’t just the new plant, it’s how you are going to retrofit your existing plant. You probably got 200 projects to choose from; so are you taking the right ones.

So we would have capability, methodologies and the tools to help that part. Again as I said, we have to get that part right, and that has to be a data-driven decision.

Leaders have to be so smart so they can decide from their gut.

Now having selected the right set of projects in the portfolio, you have to execute that. So it’s kind of answering the question that it’s not just the big projects that you have to get, you have to get all the little ones right. Getting all the aggregate success on the improvements can actually yield a greater return than the one big plant.

There is a huge western refinery, the biggest refinery plant that’s going to be. More than two-three public sector utilities will enjoin their efforts. There is no distinction between upstream and downstream. How would you look at it?
Take our business models. We are purposefully a specialist, a specialist in a specialised industry. So I tell people that we are a niche provider in a niche sector. It gives us laser focus and 100 years ago there were a lot of generalist play. We are moving fast into a specialist market. That said, can a generalist strategy work? I don’t know. Do I want to presume? I don’t. You can be highly competitive; you can manage your risk better with a laser specialisation. In fact, this is how we beat our competitors, our competitors are generalists. We are faster, we are cheaper, and we have got higher levels of quality and as a result of that specialisation. I think generalists are quite dangerous strategically.

Is there really that sense coming about cleaner energy, about efficiencies like you said, systematic integration of all operations? Is that a focus area today?
This is a generalisation so excuse that… but you could kind of see two types of, two buckets or organisations of oil & gas; those that are unsure of the oil prices and they are going to wait. The other buckets are those that are working like crazy in the down market to improve their capabilities and operations so that they can reap the rewards on recovery. So it’s the latter type of company that is going to find Enstoa and who we are going to partner up with.

What is the one big lesson for the oil & gas segment here from processes that have evolved over a longer period of time in the West?
From experience with oil & gas, it’s just too old. It’s been around for too long. It has too many legacy processes, too many legacy systems… but I do think Indian companies are less burdened by those legacies, and that certainly would be advantageous to them. But they are needed to the extent they can; they have to get into a start-up mindset. They have to think of themselves like a new business once they arrive at that future state, then you just have to bridge the gap to where we are today.