The digital transformation that the construction industry is now going through is affecting how we design, how we build and how we operate our built assets. Often called Construction 4.0, this transformation is enabling greater connectivity between technology and people, and better use of data and analytics. Because digital advancements are disrupting the sector, construction businesses have to adapt.
The effective management of organisational digital change is critical for survival and success, but this requires enhanced leadership and managerial approaches. To navigate this, firms must implement appropriate digital transformation strategies, develop the appropriate technological acumen, and use adept organisational management.
Against this backdrop of Construction 4.0 disruption, the critical issue of developing enhanced digital leadership capabilities takes centre stage. A team of researchers at Northumbria University and Leeds Beckett University delved into the concept of digital leadership within construction organisations by interviewing industry experts to explore what digital leadership in construction firms is, why it is necessary, and what considerations it involves. In our research article, Digital leadership framework to support firm-level digital transformations for Construction 4.0, we explain:
- what digital leadership is;
- how construction leaders can embed skills to drive digital transformations;
- what the essential digital skills for construction businesses are; and
- how leaders can attempt to evaluate the value of digital technology for their business practices.
“Digital leaders can expect some resistance to change from employees accustomed to traditional processes and tools.”
Dr Barry Gledson
Clearer definitions
While digital transformation helps firms improve how they do what they do, by better managing data and information, digital leadership is instead about steering organisations to seize the advantages presented by digital innovations and digital transformation.
It retains some traditional leadership aspects – of vision, formulating strategy and communicating it, and delivering benefits, etc – and is similar to ‘transformational leadership’, which is about getting people to want to change and improve.
We initially defined digital leadership as “the action of leading a group of people or an organisation involving the use of computer technology”. However, one of our interviewees advanced this definition by recognising that it is not always smooth sailing when they described digital leaders as “… the right people in the organisation to lead the transformation of digital while promoting its benefits, but also dealing with challenges that come along with that transformation”.
Embedding skills to drive digital transformations
Digital leaders can expect some resistance to change from employees accustomed to traditional processes and tools. One way of addressing this is to communicate the benefits of any digital changes to the firm, but in recognising that people can often be self-serving, it is also important to emphasise particularly how digital changes will improve the work experience or product of the staff themselves.
Regarding any lack of digital skills or limited expertise among existing staff in using advanced digital technologies, leaders can consider hiring new talent with the necessary digital skills. However, because that is not as easy as it sounds, investing in training programmes to upskill current employees is probably the better way to go. Here, the digital leaders interviewed respected the ‘law of marginal gains’ in discussing how developing their existing employees is more realistic than having a magic bullet of finding ‘unicorn’ new staff.
One interviewee told us: “We look at everybody’s individual roles, and where they can enhance their skills with some digital aspects. For some people, that might simply be, have they thought of doing their records on a [tablet] screen, rather than doing it on paper? It’s about taking everybody across the business and building another 10% onto their skillset.”
Training access and relevancy
Other important findings about training in this research are about training access, the timeliness and relevancy of the training offered to staff, as well as the need to aim for good staff engagement in training.
Also, away from training, it is useful for leaders to build buddy systems between staff through office seating arrangements, or using mentors or even reverse mentors to cross-pollinate construction knowledge and digital skills between staff with differing levels of knowledge, skills and experience.
“There are a lot of people who are incredibly experienced, have a huge wealth of construction knowledge, but are not as IT literate as the youth coming through,” said one interviewee. “On the other side, we also have a lot of younger, junior staff who don’t have the construction experience, but have IT skills. When we build teams, we put them together to buddy them up to get transfer of knowledge … we’ve had some incredible successes. We manufacture a situation where it will happen naturally, eventually. Apprenticeships work both ways. It’s a pair sharing knowledge.”
“The ability to think and work in a model-based way is also now considered essential by digital leaders.”
Dr Barry Gledson
Essential digital skills
When discussing the necessary digital competencies, the leaders interviewed identified that individuals need to have an appreciation of, and skill in, data storage, access, and usage. “A skillset widely underrepresented within construction is just basic data science management,” one interviewee told us.
Closely related to this is the importance of competence in information management. Another interviewee emphasised the importance of data/information when working collaboratively “in a common data environment, which is absolutely essential for sharing information in the right format, in the right way, as one [single] source of truth”.
The ability to think and work in a model-based way is also now considered essential by digital leaders.
In addition to technical skills, traditional ‘soft’ interpersonal skills and emotional intelligence are also essential in navigating Construction 4.0. For example, good interpersonal skills help with effective communication and collaboration, with managing clients and stakeholder relationships, and with change management.
Emotional intelligence
Emotional intelligence (EQ) is equally important. Adaptability, along with digital literacy, have both been identified as key skills for success in digital workplaces. Construction projects can be high-pressure environments at the best of times, so effective stress management (or ‘self-regulation’ if using EQ terms) is important for maintaining wellbeing and making good decisions.
In Construction 4.0, the adoption of new technologies can be also stressful, so professionals with high EQ tend to be better at managing this stress more effectively. Similarly, having good empathy facilitates understanding of team members’ challenges during digital transitions, which again can help foster a more supportive and collaborative work environment.
In the face of the rapid technological changes that Construction 4.0 brings, individuals with high emotional intelligence are also often more adaptable, open to change, and resilient in the face of technological advancements. Being adaptable gives people the confidence to try new things.
“Technology changes so rapidly that you can be trained on one piece of software one day and it can be obsolete by next year, so what you really need is the confidence to be able to self-learn and not be afraid of technology [and] not afraid to try out new things,” an interviewee told us.
“In Construction 4.0, the adoption of new technologies can be also stressful, so professionals with high EQ tend to be better at managing this stress more effectively.”
Dr Barry Gledson
Evaluating the value of digital
Unsurprisingly, business leaders evaluate the benefits of digital solutions through quantification exercises. One interviewee said: “Have we made more money from it, or have we reduced costs?” Some leaders focus more on skills/capacity building and process improvements (for example, “will it save them X number of hours/days per week?” as another interviewee said), but recalling that benefits are measurable, most interviewees tended to focus on actual or hypothesized gains or losses in either financial or productivity terms.
Other examples included discussions of profit margins, work-winning track records and repeat business received from clients as further evaluation metrics. How their firms use comparator and subjective metrics, e.g. fewer numbers of RFIs or clashes than expected as encountered on previous similar projects, were also discussed by digital leaders interviewed.
One example provided in our research paper reveals how, by undertaking site-based digital quality assurance (QA) processes, one digital leader interviewed believed they had saved their company 1.8 person-years, or nearly £60,000, for a spend of just £30,000.
You can find out more about this, along with what digital leadership in construction firms is, why it is necessary, and what considerations it involves in the full research article. Our research includes a digital leadership considerations framework for construction firms.
Gledson, B; Zulu, S L; Saad, A M; and Ponton, H (2024). Digital leadership framework to support firm-level digital transformations for Construction 4.0, Construction Innovation: Information, Process, Management. 24(1), pp341-364.
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