Creating an Innovative Culture in a Construction Company
Cheri Hanes | August 2, 2024
Collaboration across an enterprise or an industry—or even across industries—is key to accelerating the development and adoption of the different ways of working, new products and services, and advancements in technologies intent on helping all businesses grow. Innovation moves everyone forward.
However, innovation is not always viewed as natural for construction companies. The industry has a reputation for being tradition bound—and it does have some great traditions! However, one of the most important is creativity. What is construction but constantly figuring out how to build something better, to realize a new idea, to find a more efficient way to do quality work?
It is true that most construction companies have been successful due to strict adherence to standard processes and procedures. Certainly, innovation is not that; it involves constant, iterative, and disruptive change. It starts with the desire to change, to disrupt, to fail fast, and to learn faster. Innovation is crucial in companies that want to remain relevant, attractive to the market and the workforce, and maybe even get a step ahead of the pack. I believe it is in the nature of the construction business to creatively figure this challenge out just like all the challenges before this.
But how to begin? As author Stephen Covey famously wrote, we must "start with the end in mind."
Alignment of Innovation with Company Strategy
To be successful, innovation must be in line with a business's overall strategy. It is critical that this effort start with a strategic direction based on the core values of the company. Not every company has an appetite for extreme innovation. Some companies want to be on the leading edge, some are more cautious, and some are only going to adopt a tech or innovation when forced to. All of those positions are okay. Each business must do what works within its own culture and aspirations. Firms may begin by identifying where they want to be on that scale, how they want to be viewed, and what problems they want to solve. This can inform an approach to innovation.
Once this factor is clarified, firms should make sure their tech and innovation department and the overall organization are in sync, or innovation may falter. If an innovation department is bleeding edge in a firm that is relatively staid, its innovation efforts will be destined for a lack of traction. That is poor alignment, which leads to a poor investment in innovation. Construction firms must begin with this alignment in mind and make a conscious effort to live their values through their innovation efforts. In other words, the first innovation project is strategic alignment!
Once the strategic basis for innovation is clear, then the path becomes much clearer. At this stage, a company can go on to the logistical considerations.
Funding and Budgeting for Innovation
One of the most essential elements to consider when developing an innovation plan is to consider how that plan aligns with the company culture and core values and then translate that commitment directly to funding and resource allocation. For example, if a company is employee-owned and/or touts autonomy and individuality as its strength, it may make sense to empower the specific business units (or even project sites) to self-fund their innovation experiments. In this way, businesses can capitalize on a robust self-starter culture.
Alternatively, a company with a strong process and procedure backbone may benefit more from a corporate overhead innovation budget and established framework, capitalizing on its strong infrastructure and corporate support for new initiatives. In either case, it is important to view technology as a future-focused asset and not just an expenditure.
Building the Team
Create the team structure. Once business alignment and funding issues have been decided, then it is time to turn to structure. The human element of innovation commitment cannot be overstated. What should an innovation and technology team look like? The answers are as varied as construction companies themselves. Considerations include how the reporting structure affects the outcomes and the remit of the team.
Where the innovation team reports can make a massive difference. There is not a right structure for all businesses, but the structure a firm chooses affects several things. If the innovation team reports to the CFO, then everything will likely be viewed through a return on investment (ROI) lens. This may seem efficient on the surface, but some important opportunities are likely to be passed over. If innovation reports to operations, everything it does will be viewed through an operational lens. Again, some innovations that may be meaningful will not be entertained if that is the case. Both approaches put constraints around innovation that may not be useful. And, surprisingly, it may be that the most egregious reporting structure scenario is when innovation reports to IT. In that scenario, it is possible that the team becomes so narrowly focused on tech that it misses the nuances of the human element—and the complexity of a construction site.
Many Fortune 500 companies have a C-suite position focused on innovation: the chief innovation officer. However, very few construction companies do. Consider how this structure could allow an innovation team to imagine and explore the future value of all potential innovation, the freedom to pursue operational improvements and ROI, and the support from the top to implement effectively.
Fostering Innovation Beyond the Core Team
If an innovation department is viewed as something separate from the organization or "someone else's job," then there is not truly a culture of innovation within that firm. For a business to have a truly innovative culture, everyone must understand their own role in innovation and the organization's commitment to it. This does not just happen; where a culture of innovation truly shines, there is structure driving communication, visibility, engagement, and the training and encouragement to bubble up and develop ideas.
One strategy is to offer—broadly—training on how to innovate. This would make a great quarterly or annual training focus, starting with how to ideate (design thinking) and then going on to strategies to develop the resulting ideas (project management). This will make all your teams better at problem-solving and may lead to new innovations that really make a difference.
If you do provide a training series focused on innovation, consider making an innovation contest the final phase of the training. Some companies report remarkable results from holding an annual innovation contest. This drives home the idea that innovation does not have to come from the innovation department. At a minimum, this will identify issues faced "on the ground" and, best case, solutions that effectively address them.
Final Thoughts
As more individuals become comfortable using technology at home and in their personal lives, they may be more inclined to adopt new ways of working too. Harnessing the power of this shift will require all our resources pulling in the same direction. We can do that by focusing on our "why," funding and building the right team, and intentionally building a culture of innovation that spreads throughout whole organizations. Not surprisingly, many innovation hurdles relate to human behavior, and efforts to support and inform the people involved allow innovation to flourish.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.
