Good leaders are more important than good tech
By James Pope
In last month’s edition of Global Cement Magazine, James Pope explored the role of good leadership teams in the success or failure of a company’s digital transformation. Find out what he had to say on the topic…
It is no secret that the construction industry is lagging behind in terms of productivity. Global labour-productivity growth in the sector has averaged only 1% a year over the past two decades, versus a growth of 2.8% for the total world economy. For an industry that accounts for 9% of the EU’s GDP and employs 18 million people, the statistics make for grim reading. However, it’s not all bad news. Data from construction tech investor, Foundamental, suggests the construction sector is poised for a digital revolution, with the construction technology market recently crossing $10B in investment after just 3.5 years. And with such rapid advancements predicted for the industry, we’re likely to see more and more tech solutions that improve productivity, increase profitability, and help to streamline the work of traditional built environment organisations. One of the biggest challenges companies will be faced with in the coming years is how they implement an effective digital transformation strategy. Whilst innovative technology will, of course, play a central role in this, innovative leaders will ultimately determine company success or failure. Let’s explore how leaders can effectively prepare their organisation for successful digital transformation and long-term success.
1. Review your current position
Before committing to a digital transformation strategy, it’s important to understand why it’s needed and what value it will add to your organisation. With neighbouring industries repositioning and revolutionising, it can be easy to fall into the trap of adopting new tech solutions just for the sake of it. Companies that take a data-driven approach are the ones who will successfully innovate the building materials sector and accelerate business results, and that is where effective leadership comes into play. Understanding your company pain points and areas for improvement is key to successful transformation. Senior staff must take the time to review any available company data or insights that will give an indication of the company’s current performance both internally and externally.
Start by exploring opportunities for improved cohesion between your operational technology (OT) used by plant floor staff, and information technology (IT) typically utilised for supply chain management, enterprise resource planning, HR, CRM platforms and more. This is a great way to not only gain insights into the effectiveness of your production line and plant floor performance, but to also better understand the needs of your staff, stakeholders, and customers. By reviewing your current output, as well as challenges facing your staff and consumers, you will successfully be able to highlight where digital solutions can improve cohesion across the entire company structure, and where customer experience can be improved. IT/OT convergence is accelerating at a rapid rate, and can help to reduce capital and operational expenses, support application scalability, and optimise both human and technological performance.
2. Set a clear long-term vision
So you’ve conducted an extensive review of your company position. You’ve analysed performance, engaged with staff, and taken onboard the needs of your stakeholders and customers. The biggest task now facing senior leaders is what to do with this information. These insights needs to be actionable to have long-term value. Work across all levels of the organisation to identify clear targets and end goals. If you’re considering digital solutions to help enhance company processes, set clear parameters for success. Highlighting exactly what transformation you want to see will help you to evaluate what solution(s) fits your organisation best. It’s also vitally important to understand how you track progress and showcase a return on your investment. What isn’t measured, isn’t managed. Identifying key metrics of success that can be consistently tracked will help you to fine-tune company progress and growth, whilst showcasing the value of your digital solutions to your staff and external partners.
3. Promote cultural change
For an effective digital transformation, companies need to ensure there is strong staff buy-in and adoption of new practices. Without the full backing of your workforce, digital solutions may quickly become redundant or ineffective. A staggering 70% of initial digital transformations fail, and a lack of company-wide integration and adoption is a central factor behind why. A recent Gallup global meta-analysis of 62,965 businesses found that employee engagement significantly improves when there is strong communication from senior-level staff. Factors such as clear expectations from management, the right resources to help staff complete their jobs, and a clear mission and vision for employees to work towards were some of the most effective factors for improving employee engagement and increasing productivity across a company.
For a successful digital transformation, highly engaged managers are essential for creating cohesion across the company, helping people to see how their role connects to a bigger purpose and mission. Ensuring staff feel valued, respected, and considered is vital for improving employee engagement and ensuring a successful cultural change that greater aligns to a digital future. Staff need to understand the ‘why’ behind any digital transformation, with clear information on where they fit into this journey and why this will benefit them. To achieve this, highlight authentic leaders at each level of the organisation that can take an active role in championing change. This is an effective way to align your company culture across all departments and encourage staff to embrace innovation.
Transformation is only successful with active and authentic leadership. Digital adoption can help to modernise and revolutionise your company processes, improve productivity, and streamline delivery. However, without leadership teams driving behavioural change and setting a clear long-term vision for growth, digital solutions will ultimately underperform. For an effective transformation, focus should be on innovative leadership first, innovative technology second.
*Originally publish in Global Cement Magazine, October 2021*