Create a Construction Management Innovation Program (5 min)

Get Started with Construction Management Innovation

A program is an sequence of interrelated projects. You run a project business, so this digital innovation stuff should be like riding a bicycle, right? Maybe not, especially when your projects operate more like independent business units than part of a unified firm.

Almost all businesses are already using a wide variety of software, so you not entirely new to digital. But your digital connections and data flow between the field and HQ is likely slim or none or ineffective. And as we’ve discussed elsewhere, the field/HQ divide is about more than technology — it’s about the diversity of construction projects and the culture of its workforce. So if you are going to outperform your competitors, you must digitally unite the firm, no matter where the work is performed, field or HQ. In this article we discuss how to get started:

1. Decide who’s in charge and accountable for results.
2. Define an Innovation Process: How the team will manage all innovation projects and measure their results.
3. Set Project Goals and Roles: Establish clear objectives and KPIs for the innovation project and assign team members with specific roles and responsibilities.
4. Announce the program and sell it throughout your firm, update everyone at least annually.
5. Wash, rinse, repeat — Measure results and update everyone regularly.

Determine your top level goals 

The leaders you choose and the projects you fund will depend on your primary goal. Examples:

• Profit — Return more $$ to shareholders, workers
• Productivity — More building with less labor (example here)
• Efficiency — Reduce workflow friction and roadblocks, BIM
• Technology — Integrate and unite key information systems
• Customer Relationship Management — Digital communications & platforms
• Culture — Digital thinking and measurement in the field
• Strategic – 3/5/10 yr plans related to enterprise value

Initially, your corporate executive team should decide on the first year or two of goals and then choose an appropriate leader. In subsequent years, when the innovation program is reviewed, the goals should be reviewed as well, and new leaders chosen as appropriate.

Create a Digital Innovation Leadership Role

Who should be the program manager leading all your Innovation projects? Because the scope of the program is company wide, it needs to be someone either within the corporate leadership team, or reporting to it. You need to show commitment to digital results to everyone in the organization. Your leader needs be at the Cxx level, or report thereto.

Larger firms may be able to budget a dedicated full time position. But more likely, the position will be a role assigned to an existing manager. Your choice of innovation lead will depend on the business outcomes you want from the program. For example,

• CFO, or head of Finance, if the primary goal is a financial metric such as profitability.
• COO, or head of Field Operations, if the innovation you need is primarily in the field.
• CIO, or head of IT, if the innovation you need is in digital products and services.
• Head of HR, if the innovation goal is primarily cultural.
• Head of Safety
• Or the CEO, especially at smaller firms, who may be the only manager with company-wide authority and scope.

Key to Construction Management Innovation: Try, Try Again

No one person will be with you forever, so be prepared to shift responsibility over time as conditions change. As we’ve written about elsewhere, digital transformation is a journey, never one and done. In the management literature, it has more similarities with continuous improvement methods in Six Sigma manufacturing, Lean manufacturing, the Learning organization, Kanban boards, and Agile software development. But most important is the iteration principal– a commitment to keep trying to improve by repeating priority projects until they reach their goals or other projects overtake them in priority. The way to find new and better ways of operating is simply to keep trying.

Start small — the first program project is often just assembling the leader and team to decide what’s most important. Then add one or two projects targeting low hanging fruit or immediate crises. As it says on the shampoo bottles, “Wash, rinse, repeat.” There are no silver bullet solutions to any of the thousands of construction management challenges.

Departmental Goal Examples

While the scope of the program is company wide, individual projects will likely have more limited goals. Examples:

• Improve Project Bidding — Better design, estimating & bidding
• Reduce Project Execution Costs — Direct and Overhead costs
• Reduce HQ Costs — General Overhead costs
• Increase Product Utilization — Get all projects on the same project management software, e.g.
• Customer Satisfaction — Transparent project data, reporting, communications
• Reduce Project Risk — Fewer schedule slips, unreimbursed tasks, incidents, accidents, claims
• Improve Safety — Lower overhead, incidents, accidents, claims, fines
• Subcontractor Management — Efficient management of subs
• Management Development – Prep next generation leadership candidates
• Workforce development — Retain and develop workforce
• Test process models – Lean, Six Sigma, Agile, etc.
• Test business or contractual models – Design/Build, Self insure, etc.

The program manager will use these project specific goals will decide on the best project manager. You also can’t manage what you can’t measure, so always specify KPI’s for measurable outcomes ($$s or schedule or other metrics) or OKR (tangible objectives & key results). And if you don’t measure and record project results, your ability to learn from results walks home everyday and may never come back. Treat each innovation project with at least as much concern as you would a billable project.

Consider hiring an innovation consultant

Consultants are a mechanism to learn from other success stories and failures to better improve your odds of success. When in-house personnel are not inclined towards innovation, or just find the whole idea overwhelming, it makes sense to bring on outside help. Choose a consultant with construction industry experience, not just other industries. Have the consultant interview your resources and suggest techniques, or to lead specific projects, if not the entire program.

Some consultants specialize in the cultural aspects of digital transformation. HQ resources are typically far more digital native than the field. By drawing in influential personnel from the field early on in the program, you will both begin to unify HQ/Field goals, and get the conversations going essential to successful field technology implementation. You need to confront the HQ vs Field divide squarely. New training methodologies are available that help win long-term workforce adoption. For example:

• Missteps to avoid when introducing new construction technology.
• How empathy and problem recognition pay dividends during implementation of new technology.
• Advise to help you better meet workflow and safety objectives, etc.
• Create a cross functional team to promote innovation within the field

Create an Innovation Group or a Center of Excellence 

To help publicize the innovation program, and draw in personnel from many levels throughout the firm, assemble an innovation group to share ideas and best practices. You will want HQ and Field members from all business functions — not just technology. The size of the team should be small enough to be nimble and effective, but also able to tap into a wide range of creative minds from across the organization.

This team will naturally become a resource pool for staffing all subsequent projects. Modern technology like Microsoft Teams makes getting such groups easy to form even across wide geographies. The group should meet regularly and have a set agenda to advise on innovation projects, KPIs, new technologies, vendor presentations, etc. Such groups are also a great way to encourage use of online resources such as webinars and courseware.

When building the team, consider several types of membership:

• Want to become members because of their interest in innovation — volunteers with energy and enthusiasm
• Must have membership because of essential expertise — e.g., a member from IT, or finance for ROI calculations
• Should have membership because of influence — e.g., a jobsite supervisor, project manager or safety manager
• Naysayers — e.g., persons resistant to change based on their personal experience
• Contributors to help with admin — e.g., schedule meetings, vendor presentations, reading assignments

Estimate Innovation project costs and prioritize

Nothing will communicate how serious you are than budgeting for your innovation project — or not. If you don’t put your money where your mouth is, don’t bother starting, because your staff will quickly sense your lack of commitment. Innovation projects are usually not billable except when performed as part of a largish project where you were able to bid excess overhead, or pass on innovation costs directly. So for every innovation program project, create a budget and measure the costs, not just the outcomes:

1. Enterprise G&A and overhead,
2. A large project’s overhead, 
3. The billable aspects of a large project.
4. External or vendor funding
5. Capital budget
6. etc.

In a future post, we’ll share an actual innovation program plan template you can use. But all this seems overwhelming, just do step one: Decide who’s in charge and accountable for results. Have him or her get going on the rest.

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