Applying ‘marginal gains’ to improve efficiency and profitability in construction

For construction leaders, driving digital adoption is key to their ability to manage and maintain growth more successfully. And marginal gains can offer a more impactful way to do it. So, how?

 
Business improvement vs digital transformation in construction
 
A survey carried out by the contechreport.com, the annual construction technology report from JB Knowledge, revealed that the most limiting factor in adopting new technology in the workplace is employees—with 35.4% of the team and 27.8% of management hesitant about trying new processes.⁷ In construction, this is a particular issue. Technical-sounding terms like ‘construction robotics’, ‘building information modeling’, and ‘digital transformation’ can alienate a workforce being asked to adopt new digital tools. If construction leaders begin calling initiatives like this ‘business improvement’, they avoid the connotations of wholesale change associated with ‘transformation’. A small change in the way ideas are presented can minimize worker resistance, and boost the efficiency and productivity of these initiatives; a simple ‘marginal gain’ that can result in sizeable benefits to their organization.  
 
Process change and governance
 
Any new process in construction is only as good as the governance introduced and enforced by construction leaders to ensure its adoption and consistent use. Yet when it comes to digital transformation, a recent EY survey of the industry revealed that only 25% of responding Engineering & Construction firms report a clear strategy, even though 98% agree that digital solutions will be critical to the future viability of their company.
 
There’s also an added problem when it comes to process change and governance in the construction industry. Project deliveries often involve a combination of permanent employees and third-party contractors, with their own processes and ways of doing things. That means, implementing digital solutions across a project requires extra coordination effort. 
 
In this case, however, the marginal gains theory tells us that one small change is likely to filter down to every worker on a project. Here, it’s leadership buy-in and support. In fact, the same EY survey noted that the efficacy of digital transformation is “directly tied to strong transformational leadership” and its ability to create “a strong culture of change.”  A small change to the attitudes and investments of construction leaders can incite a larger, meaningful change in the attitudes and practices of their workforce.
 
Keep it simple, keep it relevant
 
Perhaps the most critical part in achieving any marginal gains is ensuring the things you’re changing, and expecting people to adopt, can be easily understood and applied to specific day-to-day tasks. The construction industry, as McKinsey pointed out recently, has been guilty of simply “installing IT solutions, rather than fixing pain points.”⁸ For this reason, construction’s top leaders can increase the likelihood that digital technology will make a positive difference by first identifying operational changes to improve performance. After that, defining digital use cases will help enable those operational changes.
 
In other words, construction leaders should look to keep their digital transformation efforts simple and relevant—just as the marginal gains theory dictates. One contractor recently developed an app, for example, allowing supervisors to sign completion certificates digitally. Not only was this a simple and relevant change, but it opened the door to further transformation in a more manageable way. After the app was developed, the team defined a new use case to push safety briefings and alerts through the app so supervisors could disseminate them to teams.⁹ 70% of digital transformation across all sectors and organizations don’t achieve their goals.¹⁰ But perhaps, by adopting a more incremental approach, construction leaders can ensure their initiatives fall within the successful 30%.