Analysis

We need to look outside the box to find digital leaders

8 May 2018 | By George Dobbins

George Dobbins, a built environment leadership specialist at Berwick Partners, discusses the management skills needed to drive digital transformation.

Driven by digital transformation and continued innovation, the face of the UK’s construction sector is constantly evolving. The likes of BIM and offsite manufacturing techniques are changing how the sector designs and delivers infrastructure, as well as creating efficiencies in project lifecycles.

Yet, as the sector continues to embrace digital technologies, there are potential new entrants that possess the disruptive capabilities to change the dynamics of the industry.

Tech giants including Intel and Google are already investing in and leading on the construction of their own facilities such as staff accommodation blocks, data sites and manufacturing plants. While these may be internal projects, it could only be a matter of time before these heavyweights look to capitalise on the low barriers to entry in the UK construction sector.

As new advancements continue to emerge and competition ramps up across the sector, change is inevitable. Forward-thinking businesses must therefore focus on developing and securing the right mix of leadership to achieve success.

Business acumen

For a sector once dominated by engineers and the technically-minded, business acumen has risen up the rankings to become a top priority for leadership roles in construction.

Organisations that can combine specialist knowledge within their firm with leadership that can drive change and business benefits from market changes will have a winning mix. Therefore, at all levels, the industry needs to upskill and attract senior talent with business and commercial abilities. 

With the right mix of technical and business leadership, organisations can also support entrepreneurs and innovators. Aecom, for example, is working closely with SMEs and university start-ups to develop ideas, products and services that confront a range of industry challenges.

Through providing entrepreneurs with the expertise, market entry and investment, Aecom is able to drive innovation and revolutionise its delivery. While there is some element of risk, the possible payback from any successful output is huge.

Another example is Mott Macdonald, which has set up “Mott Macdonald Digital” to invest in highly innovative businesses and provide them with routes to market and leadership support.

But, ensuring a pipeline of long-term business acumen also relies on supporting future talent. Ambitious individuals, from young graduates to middle management, need to understand how to make a strong business case for their ideas.

Firms such as Jacobs and Skanska are delivering this bottom-up approach to training business acumen and skills, starting with graduates.

Agility ability

In light of the anticipated pace of technology advancement, organisations will need to be more agile to adapt to new market conditions.

Historically, consultancy practices within the built environment have based their business models on their employees’ time, similar to law firms or any other consultancy-based service. However, technologies such as automation and artificial intelligence are capable of quickly carrying out labour-intensive tasks – risking huge revenue losses across the sector.

At a more strategic level, systemic profitability issues are causing organisations to think differently about delivery models. Specialist contractors are beginning to increase their delivery capabilities and replace main contractors on projects.

As a result, larger firms such as Murphy Group are committing to complete self-delivery which allows innovation and higher margins, but at a much higher risk. 

These changes open up new opportunities for leadership. The sector must look to increase the intellectual agility at the top table or attract talent capable of manoeuvring organisations through this evolving competitive arena.

In some cases, this calls for a change in leadership recruitment, placing more focus on the competencies and behaviours of an individual rather than their direct experience. A thorough examination of how previous roles, fresh perspectives and results could be applied to the built environment will help firms to unlock new means of delivery and drive results.

This is working for Bjorn Conway, chief executive of Ilke Homes. As the former practice lead and partner within the government practice for accounting giant EY, Conway is applying his professional services experience to a fast growing and highly innovative start-up. His adaptive leadership style and agile approach is allowing him to offer a fresh perspective to drive change.

‘Been there, done that’

The built environment sector is a late adopter of digital transformation, but many other industries have made significant progress in adapting to technological change and have a track record of using it generate business benefits.

Construction firms on the hunt for leadership talent should look to industries such as manufacturing, logistics and data analytics for individuals that have the skills and track record of integrating technology. In 2013, for example, Laing O’Rourke recruited the manufacturing and digital expert Graham Herries from Rolls Royce to integrate his data analytics and manufacturing expertise with construction.

Casting the leadership net wider than the built environment sector will open up a range of new opportunities to develop a diverse leadership team with individuals that complement each other.

Market disruption presents an unprecedented opportunity for the built environment industry to reinvent itself and become a highly effective, productive and profitable sector. Those that wait for change will be left behind, and organisations that focus on building a business-led, brave and innovative leadership team will realise their future potential.

George Dobbins is a built environment leadership specialist at Berwick Partners who recently launched The Evolution of Leadership in Construction, a report detailing 40 in-depth interviews with senior leaders in the industry.

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Organisations that can combine specialist knowledge within their firm with leadership that can drive change and business benefits from market changes will have a winning mix.– George Dobbins