Organizations and the Natural Environment (ONE)

Synopsis

Julie Phillips, president and partner of Flat Iron Building Group (Flat Iron), was assessing the strategic opportunity presented by the emerging market for low-carbon commercial construction. This sector was under increasing pressure to adopt more sustainable practices to reduce emissions from the manufacturing and disposal of construction materials and building heating and cooling. Low-carbon retrofitting of older buildings offered the promise of increased value and reduced operating costs. As a design–build firm primarily active in Toronto, Canada, Flat Iron had a history of successfully competing against larger, less-nimble companies, and the nascent low-carbon retrofit market could offer the chance to do so again. The firm’s expiring 10-year corporate headquarters lease presented a rare opportunity to retrofit a former industrial building. Such a move could further develop the firm’s expertise in low-carbon materials and construction techniques—albeit at a premium—as well as serve as a unique marketing tool for prospective clients. However, the firm’s previous experience of retrofitting smaller projects had revealed significant challenges during the design process, knowledge gaps among construction workers, longer construction time horizons, and undeveloped supply chains for recycled materials. To what degree was this low-carbon retrofit market aligned with Flat Iron’s strategy and capabilities? Should the firm enter this market now or postpone until slow-moving and frequently changing regulations stabilized? And if Flat Iron pursued this market, should it develop an in-house team or pursue a partnership with a specialist firm to do so?

This case considers three broad aspects related to operations strategy and encourages students to explore the connections between strategy and capabilities, particularly considering a new market opportunity that emphasizes sustainability-related criteria. In contrast to competitors, Flat Iron was involved in the entire project life cycle of developing a new commercial building or retrofitting an older one (i.e., from initial concept and planning through to final construction and completion). As a result, the firm had significant influence on the design, site selection, and determination of materials and construction techniques.

https://www.iveypublishing.ca/s/product/flat-iron-building-group-decarbonizing-the-construction-sector/01tOF00000BDVyvYAH