Why sustainability matters

Sustainability is on everyone's lips; it affects all areas of life and business. In addition to environment and social commitment, the economic pillar of sustainability plays an essential role in corporate responsibility and development. Against the backdrop of an increasingly interconnected economy, global markets and the influence of various megatrends, companies need to dedicate their efforts to develop a targeted program that is scalable and sustainable over time.

While much has been written about technologies such as BIM, making the transformation sustainable is hard given the fragmented structure of the industry, and the rather conservative mindset and age structure. However, for companies that get it right, the pioneering advantage is strong.

The construction industry is undoubtedly one of the most successful and significant sectors of the economy but is suffering from stagnating productivity. Exploiting the opportunities of modern technology and successfully implementing new ways of working at scale will help to get rid of transparency and communication issues as some of the key drivers of low productivity, and therefore, boost the sector.

Key factors for a sustainable transformation

Experiences and best practices from actual transformations along with first-hand insights from practitioners illustrate the three key factors of innovation, scaling and sustaining change.

1. Innovation

Sustainable results are only possible if a clear objective and scope for innovation have been defined beforehand by top management with the involvement of all key stakeholder groups. A significant proportion of a company's innovative activities will be driven by developments in the competitive environment, the technologies available and customer expectations. The construction sector is now emulating many of the digital possibilities, such as 3D planning or real-time-based KPI control, that other industries like the automotive industry have already exemplified. Internal ideas from the workforce are also a valuable source: following the Design Thinking approach users often know much better where the everyday pain points are, which often translate directly into productivity losses or quality risks. It is central that the impulses and ideas are channeled, tested and controlled by an internal company function or department.

An essential component of the innovation process is the capability map which defines the roadmap of the company from its current key capabilities towards the capabilities needed in the future. For a more execution-oriented company, this will be different than for project developers. The map should entail a prioritization of future capabilities and a reasonable sequence to acquire them. For example, 5D BIM skills can be meaningfully acquired only after at least a transition from 2D drawings to 3D models has been achieved. The capability strands must then be formulated as initiatives and backed up with clearly described goals and respective business cases.

The implementation follows a structured project management system along the phases of research, development, testing and application. At the beginning, the comprehensive project task is broken down into smaller, controllable individual parts so that these can be distributed to the project participants. Development is understood as the completion of the work packages formed in the research and delegated to project participants. Testing should be carried out on a real project. The resulting added values should be noticeable in day-to-day business and, above all, be achieved independently by the employees. However, during the application phase, it should still be possible to further optimize completed developments in the sense of the continuous improvement process.1

2. Scaling

For many companies, scalability is a key question due to changing teams, changing sub-contractors and/or short-term thinking and incentive structures. A rough distinction must be made between organizational structures that are more unit-oriented and those that are more project-oriented. If a company is characterized more by clear units, functional or geographical, it is even more essential to introduce and/or adapt the corresponding control mechanisms, key figures and evaluation systems 

For more project-based units, it is central to ensure knowledge transfer for the selected initiatives. Some companies have taken the approach of forming a spearhead team per initiative to develop the new capability (e.g., BIM library) on a suitable pilot project and then roll it out to other projects later. In line with the GEMBA approach, the problems and corresponding process improvements should be worked out directly at the site of the event, i.e., directly at the service-producing processes on the projects. Suitable pilot projects must have an appropriate size and remaining duration to enable the development of the new capabilities, including possible trial-and-error rounds. In addition, the core management and user team on the pilot project should be suitably open to new methods.

As soon as the new capability has been developed on the pilot project and its effectiveness has been sufficiently proven, the initiative team will move to the next project for further roll-out. Thus, if parts of the team also perform certain functions in day-to-day business (e.g., construction management), they must be removed from their respective roles and deployed accordingly on the further roll-out projects, regardless of standard rotation plans.

3. Sustaining the change

To ensure the sustainability of the newly developed capabilities, a comprehensive change management program is necessary, as well as a safeguarding of the new tools and processes via the instruments of intellectual property rights. 

Leadership needs to constantly role-model and communicate the change. The focus should not be on the shiny tools, but rather on the vision of the new way of working. Key roles must be filled with senior leaders who have the standing and respect of large parts of the organization. Roll-out of the capabilities to the next projects should be accompanied by change agents who were already involved in the development of the new processes or tools on the pilot projects. In addition to the previously mentioned introduction or conversion of the measurement figures and evaluation systems, it is essential that all users receive appropriate training for the new ways of working in an ongoing academy program. Only then can the long-term success of the new way of working be ensured. Also, from a Human Resources perspective, new role descriptions are required and need to be sourced for, e.g., customer success managers, data engineers, design thinkers, etc.

Finally, it is also important to consider how the new skills and the corresponding investment for their acquisition can be protected from competition. Here, the full register of tools in intellectual property protection should be examined and implemented where appropriate. From confidentiality declarations for employees to trademark applications for new tools to design protection and patents for new process flows and adapted software solutions.

Outlook

As explained at the beginning, the construction industry is dealing with a variety of challenges in order to implement transformations successfully and, above all, sustainable in their organizations. It is important to build up the three elements (innovation, scaling, sustaining the change) that are necessary for this in the organization. Certainly, for some companies this will not be an ad hoc process and will take time. But it is worth taking the time and investing the appropriate resources to keep transforming the industry and enable new levels of productivity and output.