A large-scale study published in the International Journal of Business Innovation and Research has looked at what factors lead to sustained gains in the construction industry. The team looked at 226 nationally registered firms and found that operational efficiency and collaboration, long seen as the sector’s primary remedies for underperformance, are insufficient on their own to lead to sustained gains. Instead, the decisive factor is whether companies fundamentally rethink how they create, deliver, and capture value.
The research used a statistical tool known as Partial Least Squares Structural Equation Modelling to analyse information from the 226 companies and to look for any relationships between various organisational factors. The approach allowed them to look at how lean construction practices and strategic partnerships affect performance. It was also possible to discern whether business model innovation acts as a bridge between these strategies and measurable outcomes such as profitability, operational efficiency and competitive position.
Lean construction is a systematic project management approach designed to eliminate waste and maximise value throughout a project’s lifecycle. Waste includes excess materials, redundant labour, delays, reworking, and poor coordination between contractors. Unlike simple cost-cutting, lean methods emphasise continuous improvement, integrated workflows, and delivering greater value to clients.
The study confirms that those companies that adopt lean practices do tend to perform better. However, the most significant improvements did not stem solely from streamlining their processes. Instead, lean thinking proved most powerful when it also prompted broader strategic change.
That broader shift is captured in the concept of business model innovation. A business model defines how a company creates value for customers, how it delivers that value, and how it generates revenue. Innovation in this context involves reconfiguring those core elements. For example, this might include moving from one-off, project-based contracts to long-term integrated service models, adopting digital coordination platforms, redesigning revenue structures, and embedding sustainability into what the company offers to clients.
Business model innovation was found to have a strong and direct positive effect on performance. More importantly, it amplified the impact of lean construction. When lean methods were embedded within a redesigned business model, performance gains were significantly greater than when lean was treated as a stand-alone efficiency tool. The research found that partnerships boosted performance only when it allowed companies to innovate in their business models. Access to shared knowledge, resources, and trust-based relationships yielded gains only if companies used them to reconfigure how they compete and deliver value.
Arifin, J., Prabowo, H., Hamsal, M. and Elidjen, E. (2026) ‘Innovating for performance: the role of lean construction and strategic partnerships in construction firms’, Int. J. Business Innovation and Research, Vol. 39, No. 6, pp.1–25.
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