Exploring Digital Innovation in the Construction Industry : The case of consultancy firms

Abstract: The Architecture, Engineering and Construction (AEC) industry is passive in employing innovative technologies and conducting change efforts. As a result, numerous companies in the AEC industry do not exploit many of the benefits, which otherwise can be achieved with digital innovations. When engaging with digital innovations, it is suggested to understand and verify the organizational capabilities of implementing new technologies instead of merely the capacity of the latest technologies considered. It is essential for organizations that go digital, to recognize a need for digital change while identifying the organizational obstacles that potentially can obstruct their change attempts. Hence, activities related to promoting and adopting new, innovative technologies are in practice concerned with change efforts, and challenges regarding how to implement and influence individuals to embrace them, thus making the best use of a considered digital tool. This research thesis explores how consultancy companies in the AEC industry are coping with the adoption and implemention of digital innovations. By taking the consultancy firm’s perspective, the thesis identifies, analyzes and addresses the main organizational obstacles that hinder digital adoption within the AEC industry. Methodologically, this research thesis builds on a qualitative single case study approach, seeking to achieve an understanding and analytical capability instead of a generalization. The qualitative means used involve 13 semi-structured interviews with employees at a Case Company as well as external experts working with digitalization and change management. Besides, through a literature review, the thesis compares and analyzes the findings from the interviews and how they are interrelated to existing literature regarding implementing digital innovations. The empirical results indicate that a main obstacle for implementing digital innovations at consultancy firms in the AEC industry is related to an inadequately articulated and mediated vision regarding the digital transformation process and the change required. The results show that the initiated and planned change projects are not systematically shared and communicated among the Case Company’s teams, and individuals alike. So, the practices for how the employees appropriately can proceed with an idea related to digital innovation are not widely understood nor shared. Accordingly, there is a lack of knowledge among managers and employees on why they should engage in digital change projects and how this can be done appropriately. Lastly, there is also a lack of time as well as financial and personal incentives allocated towards working with digital change. This research thesis emphasizes that an organizational vision, strategy, and procedures must be realized and mediated to all teams and individuals who are involved or affected by a digital change to address these obstacles. Managers and leaders need to foster the creation of change readiness required for the digital transformation process. This involves providing coworkers with sufficient prerequisites, mediating the change process and helping them to embrace it. For example, a) by explaining the benefits and the need for change, b) communicating and systematically informing the teams and individuals with the opportunities to develop necessary competences, and c) by offering guidance and managerial support. Still, it is essential to continuously evaluate change efforts to ensure that their outcome is valuable, instead of merely convincing individuals about the necessity of conducting a change.