Performance-based building and
innovation: Balancing client and industry
needs
Sexton, MG and Barrett, PS
http://dx.doi.org/10.1080/0961321042000323789
Title Performance-based building and innovation: Balancing client and industry
needs
Authors Sexton, MG and Barrett, PS
Publication title Building Research and Information
Publisher Routledge Taylor Francis
Type Article
USIR URL This version is available at: http://usir.salford.ac.uk/id/eprint/646/
Published Date 2005
USIR is a digital collection of the research output of the University of Salford. Where copyright
permits, full text material held in the repository is made freely available online and can be read,
downloaded and copied for non-commercial private study or research purposes. Please check the
manuscript for any further copyright restrictions.
For more information, including our policy and submission procedure, please
contact the Repository Team at: library-research@salford.ac.uk.
Downloaded By: [Ingenta Content Distribution] At: 10:42 8 November 2007
P erformance-based building and
inno vation : balancing client and
in dus try needs
Martin Sexton and Peter Barrett
Research Institute for the Built and Human Environment, School of Construction and Property
Management, Bridgewater Building, University of Salford,Greater Manchester M71NU, UK
E-mails: m.g.sexton@salford.ac.uk, p.s.barrett@salford.ac.uk
One reason for the interest in performance-based building is that it is commonly advocated as a powerful way of enhancing
innovation performance by articulating building performance outcomes, and by offering relevant procurement actors the
discretion to innovate to meet these performance requirements more effectively and/or efficiently. The paper argues that
the current approach to performance-based building assumes that relevant actors have the capacity, ability and
motivation to innovate from a business perspective. It is proposed that the prevailing conceptualization of PBB is too
restrictive and should be broadened explicitly to accommodate the required business logic that must be in place
before actors will innovate. The relevant performance-based building and innovation literature is synthesized to
support the assertion. The paper concludes with an innovation-focused definition of performance-based building.
Keywords: building performance, business logic, innovation, performance-based building, procurement
L’une des raisons de l’inte
´
re
ˆ
t manifeste
´
pour les ba
ˆ
timents base
´
s sur la performance re
´
side dans le fait qu’ils sont
couramment pre
´
sente
´
s comme un moyen puissant d’ame
´
lioration des performances et de l’innovation en organisant
les re
´
sultats des performances des ba
ˆ
timents et en offrant aux intervenants charge
´
s des approvisionnements la liberte
´
d’innover pour satisfaire de fac¸on plus efficace les exigences de performance. Pour l’auteur, la me
´
thode actuelle
concernant les ba
ˆ
timents base
´
s sur la performance suppose que les acteurs en jeu ont la capacite
´
, l’aptitude et la
motivation ne
´
cessaires pour innover dans une perspective commerciale. L’auteur estime que la conceptualisation qui
pre
´
vaut en matie
`
re de ba
ˆ
timents base
´
s sur la performance est trop restrictive et devrait e
ˆ
tre e
´
largie, en particulier
pour tenir compte de la logique commerciale requise qui doit e
ˆ
tre mise en place avant que les acteurs puissent
innover. L’auteur fait la synthe
`
se des documents parus consacre
´
s aux ba
ˆ
timents base
´
s sur la performance et a
`
l’innovation pour e
´
tayer ses affirmations. Il conclut avec une de
´
finition axe
´
e sur l’innovation des ba
ˆ
timents base
´
s sur
la performance.
Mots cle´s: performance des ba
ˆ
timents, logique commerciale, innovation, ba
ˆ
timents base
´
s sur la performance,
approvisionnement
Introduction
Performance-based building (PBB) is very much inter-
twined with the present interest in, and momentum
toward, PBB codes and standards (e.g. Foster, 1972;
Loeszkiewicz, 1997; Foliente, 1998a,b; CRISP, 2001;
Fairclough, 2002). The key driver for this trend is the
view that traditional prescriptive approaches act as a
barrier to innovation in that ‘improved and/or
cheaper products may be developed, yet their use
might not be allowed if construction is governed by
prescriptive codes and standards’ (Foliente, 2000,
p. 12). Innovation, however, does not occur in a
vacuum; rather, it is embedded and nourished in
specific building, organization and industry contexts.
BUILDING RESEARCH &INFORMATION (MARCH–APRIL 2005) 33(2), 142–148
Building Research & Information ISSN 0961-3218 print ⁄ISSN 1466-4321 online # 2005 Taylor & Francis Group Ltd
http: ⁄ ⁄www.tandf.co.uk ⁄journals
DOI: 10.1080/0961321042000323789
Downloaded By: [Ingenta Content Distribution] At: 10:42 8 November 2007
The espoused, generic benefits of PBB over prescriptive
approaches do not automatically equate to their mean-
ingful adoption and development within specific situ-
ations. The relationship between PBB and the
creation, management and exploitation of innovation
within and between firms is dynamic and has received
little explicit treatment in the literature. This paper will
take a correspondingly dynamic approach and will
move back and forth between the PBB and innovation
literatures, with each shift in perspective providing
additive insights. The literature-based approach of
this paper is predicated on the assumption that litera-
ture is a secondary source of data (Strauss and
Corbin, 1990) and forms a basis for theory building
(Lewis and Grimes, 1999). From this methodological
standpoint, the present paper provides a broad over-
view of the relevant literature (Clarke, 1991, pp.
245–251), but with a particular endeavour to identify
gaps and assumptions within and between the different
bodies of literature (Zikmund, 1997) and, in so doing,
unearth research questions (Strauss and Corbin, 1990).
This will culminate in a synthesis that will identify key
issues and propositions to stimulate the development
of the innovation aspects of the blossoming PBB
research agenda. The paper addresses, in part, this
gap in understanding and practice, and is structured
as follows:
.
Concept of PBB will be defined, and the advantages
and disadvantages of the approach discussed. This
reveals key assumptions in the PBB approach that
relevant actors (defined as parties with a direct
involvement in the procurement process) have the
capacity, capability and motivation to innovate.
.
The assumptions are then explored through the
prism of the relevant innovation literature. The dis-
cussion offers a number of insights that usher in a
dynamic, contingency-based view on the relation-
ship between PBB and innovation activity.
.
Implications of this dynamic, contingency-based
view on the connections between performance
objectives and innovation activities are articulated
and synthesized.
.
Key issues and propositions are identified.
Background to performance-based building
The performance-based approach is defined in broad
terms as: ‘the practice of thinking and working in
terms of ends’ (Gibson, 1982, p. 4) through the
quantification of the level of performance which
a building material, assembly, system, com-
ponent, design factor, or construction method
must satisfy in order that the building meet all
the goals established by society and the client.
(Averill, 1998, p. 18)
The focus on normative, holistic performance out-
comes is a departure from the traditional approach of
developing prescriptive, analytical codes and stan-
dards. Gibson (1982, p. 4) articulates that the perform-
ance approach
is concerned with what a building or building
product is required to do, rather than prescribing
how it is to be constructed.
Hattis (1996)
offers a fruitful distinction between the prescriptive
and performance approaches through the conceptual-
ization of a building as a matrix of parts and attributes.
In the prescriptive approach (Figure 1), the building
parts are described, specified and procured, resulting
in a building with an implicit set of attributes.
In the performance approach (Figure 2), the criteria
that define the level of performance required of the
building attributes are defined, described or specified,
and many combinations of different building parts
can be innovatively created and/or procured for
which it can be demonstrated that the specified attri-
butes will satisfy the required level of performance.
Advocates of PBB claim that the motivation for this
shift in thinking and practice is to overcome the
inherent barriers within current prescriptive codes
and standards that erode the willingness, scale and
scope of actors to create and exploit technological
and organizational innovation. Haberecht and
Bennett (1999, p. 4), for example, argue that:
performance-based building codes offer the
opportunity for superior building quality. This
is because the end-user of the product, through
the designer, can specify from a larger range of
approved materials, building systems, or innova-
tive approaches with fewer restrictions.
Figure 1 Prescriptive approach to linking building attributes
and parts
Performance-based building and innovation
143
Downloaded By: [Ingenta Content Distribution] At: 10:42 8 November 2007
Similarly, Bowen and Thomas (1997, p. 3) stress that
performance-based codes enables designers and
contractors
...the freedom to choose one of several possible
means to achieve the required performance and
therefore provides for flexibility and innovation.
The performance-based approach, for example, is evi-
denced in the UK building regulations, where it is
argued that they
...are underpinned by a set of Approved Docu-
ments providing non-prescriptive and increas-
ingly performance based design guidance that is
open to interpretation and encourages the
uptake of innovation.
(Fairclough, 2002, p. 18)
There are concerns, however, that the adverse external-
ities of PBB approaches often outweigh any potential
benefits in certain situations. Bowen and Thomas
(1997, p. 3) stress, for example, that for ‘routine’
designs:
...there are real and perceived costs to [perform-
ance-based codes]. For many, prescriptive codes
provide a simple ‘cook-book’ approach and for
the majority of construction projects ... they
provide the least costly method of ensuring that
an acceptable level of health and safety etc. –
are achieved without placing an undue burden
of proof upon the contractor for meeting the
required performance.
In contrast, Baark (2001, p. 13) notes the high cost of
managing risk intrinsic to novel solutions with the
argument that:
...considerable obstacles in pushing forward
innovations related to construction projects arise
from the existence and interpretation of [per-
formance-based] building codes and regulations.
When a new technology is proposed for a con-
struction project, getting government approval
turns out to be decisive ... [and] that many
engineering consultants regard the efforts
required to provide justifications for innovative
solutions as excessive. The money and time
involved in such endeavours can certainly be a
discouraging factor for the engineers during
their thinking process.
These opposing arguments challenge a number of pre-
requisite conditions for PBB that are generally and
unreflectively assumed by the proponents of the
approach, i.e. that relevant actors have the capacity,
capability and motivation to innovate individually
and collectively across the supply chain. The impli-
cations of these prerequisite conditions not being in
place are significant and transparent; actors will, at
worst, resist PBB, or, at best, will engage the approach
in a passive, minimalist fashion. The authors argue,
therefore, that the potential benefits of PBB, with
respect to innovation, can only be envisaged and devel-
oped if the design and implementation of the approach
is appropriately embedded in the business logic and
organizational management of innovation activity;
rather than be superficially bolted on to it.
The next section introduces relevant ideas from the
innovation literature that will provide pointers to the
development of appropriate meshing between PBB
and innovation activity.
Insights from the innovation literature
Performance-based building as a form of regulation
The capability of PBB approaches to deliver improved
innovation is supported by the regulation strands of the
innovation literature. The traditional prescriptive
building approach can be useful viewed as procedural,
rule-centred ‘regulation’, which brings about a culture
that stifles innovation (Eisenhardt, 1989). In effect,
prescribing the solution and imposing decisions
increase stakeholder resistance and reduce the quality
of design and implementation decisions (Guth and
Macmillan, 1986). Such prescriptive approaches nega-
tively affect the depositions of actors (Van Meter and
Van Horn, 1975), who then engage in routine and
mechanical implementation (Fidler and Johnson,
1984). PBB offers a more flexible approach that
allows relevant actors to move beyond compliance to
identification and internalization (Kelman, 1961).
When those who implement requirements play an
active role in their design, the results are better. Rel-
evant actors to an activity, given greater flexibility
have greater knowledge of contradictory demands
and conflicting imperatives at the delivery point
(Thomas, 1979). Drawing upon the general regulation
literature, therefore, the difference between PBB and
prescriptive approaches can be discerned as ‘...the
Figure 2 Performance approach to linking building attributes
and parts
Sexton and Barrett
144
Downloaded By: [Ingenta Content Distribution] At: 10:42 8 November 2007
extent to which the regulations set challenging goals
and grant firms compliance discretion’ (Majumdar
and Marcus, 2001, p. 178). One recurring rationale
for the PBB approach is the improvement of innovation
performance and, thus, building performance. But
what is innovation? This obvious question is often
overlooked, but an answer is crucial if PBB is to have
an appropriate focus. The term ‘innovation’, therefore,
will be explicitly discussed below.
What is innovation?
Successful innovation is defined as ‘the effective gener-
ation and implementation of a new idea, which
enhances overall organisational performance’ (Barrett
and Sexton, 1998, p. 5). The following assumptions
in this definition are emphasized and illustrated
(Barrett and Sexton, 1998; Sexton and Barrett, 2003):
.
Idea: ideas are taken to mean the starting point for
innovation. They can be administrative in nature
(e.g. the organizational restructure and process
changes to support partnering) and technical in
character (e.g. the computerization of quantity sur-
veying computation and report generating tasks).
.
New: not all ideas are recognized as innovations
and it is accepted that newness is a key distinguish-
ing feature. The idea only has to be new to a given
firm rather than new to the ‘world’. Further, the
newness aspect differentiates innovation from
change. All innovation implies change, but not all
change involves innovation. For a contractor, for
example, a change in a materials supplier is not
necessarily an innovation but a change in
the relationship between the contractor and the
supplier from a project-to-project open tender
situation to a long-term ’partnering’ type of
relationship would constitute an innovation for
the two organizations concerned.
.
Effective generation and implementation: inno-
vation requires not only the generation of an idea
(or transfer of a ‘new’ idea from outside the
company), but also its successful implementation.
The implementation aspect differentiates inno-
vation from invention.
.
Overall organizational performance: innovation
must improve organizational performance, either
individually or collectively through the supply chain.
Innovations that improve some isolated aspect at the
expense of overall performance are undesirable.
Innovation in the design phase, for example, might
result in unanticipated buildability problems during
the construction phase, i.e. the impact of the design
innovation might adversely affect overall perform-
ance, from the perspective of the client, due to
increased construction costs and/or time.
The key implication of this definition of innovation
is that not all innovation per se is beneficial, rather,
appropriate innovation is beneficial. To iterate the
earlier proposition, appropriate innovation must
balance and integrate the owners and users of the
building and the business needs of other actors in the
supply chain. This dynamic tension is discussed below.
Performance-based building and the need to improve
overall organisational performance
Linking building and business performance
The PBB approach, as discussed in the second section,
is dedicated to enhancing innovation at the building
level. The second section also highlighted that there
was concern by a number of commentators that the
business implications of PBB have not been adequately
appreciated. The argument of this paper is that PBB
approaches must positively link building and business
innovation. This challenge is explicit in the definition
of innovation set out below, i.e. innovation must
improve overall organizational performance. PBB-
driven innovations that improve some isolated aspect
of building performance at the expense of overall
performance are undesirable.
Appropriability conditions
Appropriability conditions determine companies’
ability to profit from their innovation by protecting
their innovations from imitators. The degree of protec-
tion depends on the degree to which the core knowl-
edge in a given innovation can be understood and
replicated by competitors, and the level of legal protec-
tion, be it in the form of intellectual property rights,
copyrights or patents. The appropriability conditions
in which actors operate in have a significant influence
on the motivation to make the necessary investment
to generate PBB-driven innovation. The appropriabil-
ity process is where a stakeholder’s rewards for inno-
vating are adequately protected to reflect the required
investment incurred by the organization. The most
suitable appropriability conditions for construction
innovation are unclear. If the appropriability con-
ditions are too weak (i.e. the economic benefit cannot
be adequately captured and protected by the innovat-
ing firm), there is insufficient incentive for firms to
innovate. In contrast, too strong appropriability con-
ditions by one stakeholder at the expense of others
will erode the ability of supply chains as a whole to
innovate.
Teece (1986) argues that the capacity of the firm to
appropriate the benefits of its investment in innovation
depends on two factors: (1) the firm’s capacity to trans-
late its organizational and technological advantage
into commercially viable products and processes; and
(2) the firm’s capacity to defend these advantages
against imitators. From a business perspective, for
Performance-based building and innovation
145
