Reaping Rewards From Continuous Innovation

Innovation is a feat often aspired to in any organization, but few manage to make it a consistent reality. Recognizing that innovation is not a singular destination but a continuous journey of exploration and adaptation, Gamuda harnesses technological breakthroughs as a strategic advantage.

Breaking the mold of tradition is never easy, especially in an industry such as construction. But for Gamuda Berhad, innovation is baked into its DNA, an outcome proven by its growth over the last decades. As of 6 June 2024, Gamuda has a market capitalization of RM17 billion (US$3.6 billion). As of 31 July 2023, Gamuda posted full-year profit before tax of RM2 billion (US$423 million), boosted by a one-off RM1 billion (US$211 million) on divestment of highways, on the back of full-year revenue of RM9.1 billion (US$1.9 billion).

“For many, innovation may be a cliché, but for us, it truly has been a strategic differentiator since our inception in 1976. We have stayed ahead of our competition precisely because of our ability to continuously innovate and differentiate ourselves,”

To date, Gamuda has successfully delivered some of the most iconic infrastructure mega projects in Malaysia, including the SMART Tunnel, the world’s first dual-purpose tunnel for stormwater and traffic management in 2007 and the construction of Mass Rapid Transit (MRT) Kajang Line and MRT Putrajaya Line in 2017 and 2023, respectively.

Overseas, Gamuda is now building sections of the MRT Cross Island Line (Phase 1 and Phase 2) for Singapore’s Land Transport Authority. It is also involved in the construction of Sydney’s Metro West Western Tunnelling Package in Australia.

Gamuda’s success lies in its ability to create advanced solutions and technological innovations to the challenges encountered in all its projects. For example, the SMART Tunnel project is the world’s first infrastructure concept to solve two critical urban challenges: traffic congestion and flooding. It is an early example of critical climate mitigation infrastructure hailed as CNN’s top 10 tunnels in the world.

In boring underground tunnels for Malaysia’s MRTs, Gamuda developed the world’s first autonomous tunnel boring machine (A-TBM), utilizing in-house artificial intelligence (AI) algorithms to accurately pilot the TBM with minimal human input. This marked a pivot from construction innovation to establishing Gamuda’s capabilities as a software innovation house. This follows the world’s first Variable Density TBM used for the MRT Kajang Line.

Gamuda remains at the forefront of construction by pioneering the use of technology on its job sites and was one of the earliest advanced adopters of Building Information Modeling (BIM) and Autodesk Construction Cloud (ACC). These technologies drive digital collaboration across the entire supply chain, starting with 3D design, which then relates to issues, plans and cost management down to the site progress forms.

It also has a BIM Augmented Reality digital application platform developed in-house, which overlays the virtual design and construction elements in real-time onto the live worksite.

Complementing all this is its next-generation digital Industrialized Building System (IBS), an innovative solution and ecosystem that leverages today’s digital design tools and robotic construction. The digital IBS can quickly and flexibly design and manufacture high-quality construction elements off-site for quick assembly later on actual construction sites, whether for commercial or residential purposes.

“Our mantra has always been to identify engineering challenges, come up with innovative solutions and differentiate our capabilities to stay ahead of our competitors. This has been the key to our success,” says Chin.

“Our focus is on revolutionizing construction methods such as our advanced precast facility. Our digital ecosystem, which is cloud-based, streamlines our entire process, ensuring speed and quality from design to completion,” he adds.

Looking Five Years Ahead

Gamuda’s achievements are attributed to the business strategy employed by its senior management.

“We encourage our senior leaders to think long-term, and we always ask ourselves, ‘Where do we need to be in five years?’ rather than take a project-to-project view. Once we have our five-year targets set in our business plan, we empower our business leaders to develop their respective business strategies to get us there,” says Chin.

One direct result of such a philosophy is the establishment of the Gamuda Excellence Transformation (GET) team in 2021, tasked with building and deploying disruptive technology into daily operations. GET brings a software engineering mindset to the construction industry by inculcating key software concepts like scalability, data architecture, cloud and AI into daily work.

“So much of the construction world today is about data, be it in design, operations, scheduling, bill of quantities, payments, risk or compliance. But most of this data is siloed. The key is to not only digitize the data but to make it intelligent, actionable and easily accessible for all to use. GET is Gamuda’s innovation hub,” says John Lim, Chief Digital Officer at Gamuda.

Gamuda’s digitalization efforts from the GET have reaped immediate benefits. Coupled with its digital IBS technology, Gamuda was able to construct a data center for Malaysia’s AIMS Group in a mere eight months instead of the typical duration of a year and a half for such a project.

“Other players couldn’t commit to this timeline, but Gamuda could, thanks to our end-to-end digital construction workflows. It is this digital edge that has helped us win more projects from our data center clients and other contracts in Singapore and Australia,” says Lim.

“These wins were based on the strength of our digital offerings and our tried-and-tested construction technology, not solely on the most competitive pricing. We would not be able to do this without the two melding together. This has been a true differentiator for us,” he adds.

Promoting Young Talent

Teams like GET represent a shift in the industry as they bring entirely new skillsets in software engineering, AI and cloud. Gamuda’s success is due to its approach of providing alternative career paths to its young engineers, who have now forged a new value-adding segment to the business.

This is further bolstered through its culture of retaining the best talent and promoting those who have proven themselves by offering differentiated remuneration for high performers. Gamuda promotes its people based on talent rather than age, resulting in an all-round younger leadership team that even extends to the board of directors.

“I genuinely believe our culture has been a key retention mechanism as we always do our best to reward our top performers and promote from within. This way, senior employees remain loyal to us and get a chance to work on the most challenging projects, while junior staff have a shorter corporate ladder to climb,” says Chin.

“Gamuda’s scholarship program helps us filter top young talent and hire a dynamic workforce from good universities. We ensure they are paired with good mentors for their personal development and assign them to exciting workfronts right at the start of their careers. This has been a big bet for us, but certainly one that has paid for itself manyfold.”

This article originally appeared in Forbes.