Loading summary
Transcript31 lines
- [00:03]
A
Welcome back to the Construction Leaders podcast, where we explore the people, ideas and trends shaping the built environment. I'm Carly Trout, joined by my co host, Evan Hendershot. How are you today, Evan?
- [00:15]
B
I'm great. Happy to be here, Carly.
- [00:18]
A
So today we're diving into why most digital transformations fail, and more importantly, how to fix them. From new project platforms to data driven decision making and the use of AI, companies are investing heavily in technology. But all too often those investments fall short of expectations, not necessarily because of the tools themselves, but because of how they're adopted and aligned, or maybe misaligned with business goals. Today we're joined by AJ Waters, who brings deep expertise helping organizations navigate digital change in construction. In this episode, we'll explore where digital transformations go wrong, the common pitfalls leaders overlook, and the practical strategies that can turn technology investments into real operational success. So let's dig right in. Welcome, A.J. thank you so much for being here today.
- [01:14]
C
Thank you for having me. I'm excited for this.
- [01:17]
A
So we usually start off and have our speaker introduce themselves to our listeners. So why don't you go ahead and just tell us a little bit about your background in your current role.
- [01:26]
C
Sure thing. So, as mentioned, my name is AJ Waters. My background, I started out in construction as a structural engineer at Keywit. And on my second day on the job, I was handed our one license of On Screen Takeoff and told to learn the system and see if it was good enough to buy new licenses for everyone else. So that was my foray into digital software because it didn't take long to realize that On Screen Takeoff was better than a digitizer sitting next to me. But we rolled that out, and as my career progressed, Keyword underwent a major transformation of tech. And I volunteered for that project. In the early 2010s that spun out a company called Innate, that became Kiewit Software, but a software for the whole industry. And then in 2019, Google called and said, hey, will you help us run a digital transformation for Google data centers? So we did that, and now I'm at Kahua and I lean into all that experience for the last 15 years worth of mistakes, if you will, and use that to help our customers not run into some of the same pitfalls.
- [02:38]
A
Great. Sounds like you have some great experience to share and some lessons learned. And that's one thing we do try to talk about on this podcast is lessons learned. So I'm excited for this conversation. So I've heard a quote before that 4 out of 5 digital transformations fail from your time and leading the efforts that you've talked about a little bit, what does that failure typically look like?
- [03:02]
C
It's interesting because it's not like a big bomb going off, right? It happens slowly. And a lot of times you don't see it because what ends up happening is people will stop logging in or the workarounds will start creeping in, right? They'll start exporting back to Excel, or they'll start going back to email or whatever it might be. And all of that happens slowly in the background and over time. And so you don't have this big like, aha moment that the system has failed. You just get to the point where the data starts to look a little wonky or efficiencies aren't getting there or people are complaining and you might be looking at a completed rollout, but at that particular time, behavior hasn't really changed, right? And so it's difficult because it's not something that you can truly point at one massive event as the failure, you just see it over time start to take shape and the logins will drop and the spreadsheets will rise.
- [04:06]
B
You mentioned in your intro that you made the leap from Kiewit to Google contractor to owner. What did that contrast teach you about how the industry struggles? Why the industry struggles with tech adoption in a way that other industries just don't?
- [04:22]
C
That's a really good question. So there's actually a fundamental difference between the way those two entities look at construction, right? Contractors look at everything on a project by project basis. In fact, every project runs almost like its own company, right? It's got its own profit loss, its own leadership structure. Every single project could be a two to three to five year company, if you will. Whereas an owner looks at programs, looks at portfolios, looks at the holistic picture. And a lot of times they're robbing money from Peter to pay Paul, right? They're moving things around, they're adjusting priorities. Contractors very specifically set up these walls around their projects so that they can't share resources and money and things that will mess with their financial reporting or how they bill the owner, right? There's a lot of compliance and regulatory issues that'll pop up if you let those walls come down. And so that's the first thing that I found interesting is that the two look at the world very differently. The other thing is the maturity level, right? Contractors historically have been very mature with their systems where a lot of owners are still catching up when it comes to using systems. Many of them are still on spreadsheets or older processes. Or even older tech, because for the most part, they didn't need to improve. There wasn't the need for an increase in better processes or more detailed tracking. So they look at things at a higher level and could get by with less maturity around data. Now that is shifting drastically over the last few years as data has become the new oil that everybody needs to run their AI engine. Right? And so that shift has taken place in the last few years since I first jumped over to Google. But it was an interesting. Like, at the time, Google was running more data center construction than Kiewit had revenue, and yet they were doing it in spreadsheets. That was just crazy to me.
- [06:33]
A
So let's talk a little bit more about that shift. And there's been a stigma around construction and being behind in digital transformation. In fact, you've talked about a time where an executive said, hey, we need this really cool app, or we need more apps, but then couldn't really expand on that. So is that mentality still common in construction? And what does it tell you about why so many transformations start out on the wrong foot?
- [07:00]
C
That's an interesting, interesting conundrum because I would argue at this point, the perception has always been construction's behind on tech. Go visit a job site and tell me they're behind on tech. Right? There's drones flying around, there's backpacks with scanners. There is technology everywhere in construction. The problem is it's disconnected, right? Most of those things are point solutions. They're not talking to each other. And we can't get a real, complete picture of what's going on. That's the historical issue with construction. And yet there was a point in time where we were sitting down with an executive and he was like, we need apps. And you're like, okay, what do you want the apps to do? I don't know, but we need apps because we got these new people and they're young and they want apps like, great, that doesn't really help us. What problem are you trying to solve? Right? And what's funny is that mentality has gone away. Everybody's to the point where they got mobile apps, but it's been replaced because now everybody's, we need AI. We need AI. But, okay, but why? What do you want to do with it? And that whole looking for a solution first before trying to find the problem that you're fixing. You get the cart before the horse and you're going to run into issues.
- [08:16]
B
So what does a good transformation team actually look like? And why is it so hard to protect those people from getting pulled back into the field.
- [08:27]
C
Ah, this is a good one. Because this was something that we did wrong the first time and we paid for it. Because what a lot of people will do when it comes to digital transformation and trying to put together a team is they'll be like, all right, so. And so is sitting around doing nothing. And so is sitting around doing nothing. So we're going to send them to go do the digital transformation. Let's take a step back for a minute. They're sitting around and doing nothing for a reason because you don't want them on your project. You don't have them out executing your best work because you don't want them doing that. So why would you send them to the digital transformation where they're going to redefine processes and evaluate software if maybe you don't trust them to run the work in the first place? So that was something that we did wrong and had to learn from. And you've got to take a step back and you want to put your best people forward when it comes to the digital transformation. So to the second half of your question, then it's about how do we protect them? Because what do you do when you have a part time job or a side project? What's the first thing that gets ignored? That side project. Right. And so you go right back into fighting the fires. And so you have to give them the space to step away. And that's going to hurt a little bit because you're talking about taking your best people off of the job to make this work. But if your transformation team is part time, so will your results. They'll be part time too. And you've got to really make a cognizant effort to take them off of the work and let them get involved in, oh, by the way, bonus points if they have a little bit of influence with their peers because that'll pay dividends down the line too.
- [10:12]
A
So speaking about the people that you want on your projects, you advocate for putting sort of the people before the process and the process before the technology. That may seem counterintuitive when we're talking about a technology implementation or digital transformation, but how do you make the case to the leadership team that are like really excited about the technology piece of it and help them to focus on the people?
- [10:36]
C
Yeah, that's a really good point. The people process technology framework has been around for a long time, but a lot of times people forget that order. The order of operations matters, right? It's like back to algebra you gotta do things in that order. You gotta get your people first, then understand your processes, then decide the tech it's going back to that we need apps or we need AI. Comment of if you pick the tech first and get excited about the tech first, you don't know what problem you're trying to solve. And first and foremost you get that team figured out. And when you've got the right people and you've got the right voices in the room, then you can start to identify the real problems in I saw a stat, I think I saw it on LinkedIn today maybe, and it was like the iceberg, right? And executives know 4% of the problems and at the bottom the frontline workers know 100% of the problems. Right. If you're the executive that's excited about the fancy tech, you don't really understand how it's going to impact the person that's pushing the buttons at the other end. Right. Like we, we digitized paper forms at one point and the first iterations of that, the person went from handwriting into a couple of cells on a timesheet to having to manually punch into all of these required fields. And by the time they did all the punching, it took them four times as long as just writing down a couple of numbers. Right. And so we had to iterate on that. You don't see that if you don't have the people first and you don't look at the process first. If you just jump to the tech, you have no idea how it impacts the person at the other end.
- [12:21]
B
How often would you say something like that happens where the leadership team just jumps to the tech and skips those other important steps that you just mentioned?
- [12:31]
C
Unfortunately, more often than not. And that goes back to that four out of five digital transformations fail, right. One of the primary reasons is because there's no buy in at the other end. The adoption never got there. What's funny is we expect, and especially in the world of AI, we expect technology to fix the problem. In all reality, technology doesn't fix a broken process, it just amplifies it. And all of a sudden your chaos is louder and you're wrong faster. Right? Those things are amplifiers, they're not super fix it. So you've got to take a step back and you've got to get that process aligned before you get the tech thrown in there. Otherwise you're just going to be amplifying everything you're doing wrong in the first place.
- [13:19]
A
So that's actually a perfect segue to one of the other questions that we had for you today was for you to talk about the difference between technology as an enabler versus a technology as a savior. And where do you see vendors in the construction tech space getting this wrong?
- [13:36]
C
I love this question because a lot of times people look at tech and they think that it's going to replace individuals. And we should never look at technology as a way to replace people, but a way to enable people. If a vendor is coming to you and selling you that their tech is going to solve all your problems and be the savior of your, your productivity and your efficiency, that should be a red flag right out of the gate, because number one, they don't know how you do business. So if they're walking in and saying, we're going to say your company, how do you even know if you're the right solution for the problem I'm trying to solve? We've got to sit down and have this analysis first. But also you've got to take a step back and understand that at the end of the day, until the robots come and take over the job site, this is a people business and people are going to be needed to swing the hammers, set the forms, pour the concrete. So if we oversimplify integration and adoption, or we ignore change management and what it means to the individual at the other end, we're going to totally miss the mark and derail our transformation right out of the gate. It's all about what we can do to make our people better, to make their job easier, safer, move quicker. Those are enabling type things. They're not replacement things.
- [15:03]
B
Yeah, and let's keep talking about people as it's an important part of this industry and every industry. How do you get people to question what they've been doing for 20 years, especially when those people were often more experienced than you in the field? How do you work on that, especially when it comes to technology?
- [15:22]
C
That was a real struggle and something that we really had to learn on the fly because you're walking in and at the time I was a pretty young engineer still trying to walk in and say, we're going to change everything that you've learned how to do, and we're going to make it different because it's better. And they're like, no, I've been doing this for 20 years. What do you think you're doing? So step one in that whole methodology is empathy. Help me understand, why do you do it this way? Right. If you come in honoring what they do and the process that they've learned and grown up with that honor first gets you some credibility and then you can take a step back and you can talk about the constraints have changed or the risk has changed or the scale is different. And this is how we are adjusting based on how those things have changed. But what's interesting, one of the things that I like to challenge people with now is let's take a look at the technology that we've been using for the last 15 to 20 years. Some of the big platforms out there have been around for a little bit, but we haven't seen any gains in productivity. Right. The productivity line remains flat. So if they're truly making us more efficient, why aren't we seeing those gains? And the question is, did we actually challenge the way we were doing work before, or did we just digitize bad processes that were limited by paper to begin with and instead of challenging the process, we just reduplicated what we were doing with paper? Only with a digital form, right? Is it time to totally reconsider the submittal process or totally reconsider the concept of an RFI instead of just making it a digital form? You know what I mean? What ends up happening is most bad processes or most overweight or bloated processes were good ideas once and they just never were iterated on. Right? And so now's maybe the time to start challenging some of the status quo in how your systems work or how your processes work and see if there are ways that you can configure something that's leaner, that's better, or that with AI avoids it altogether.
- [17:47]
A
So we need to focus more on the transformation part instead of the digital part of the digital transformation.
- [17:53]
C
100%. It's funny because we always talk about these innovations in construction tech and it an innovation is new and changes how we've looked at things, but there's nothing new about an rfi. We've had that for decades. We just do it on an iPad versus doing it on a piece of paper.
- [18:13]
A
And since this is an audio only podcast, we'll let our listeners know that you had air quotes up when you said we're saying innovation.
- [18:21]
C
Yeah. Yes.
- [18:22]
A
So since you were talking about the teams in the field, I'm curious to know what can happen when leadership ignores the feedback from that field team and makes a decision on their own. I guess. What lessons are learned there and who should have the final say on technology decisions in your view?
- [18:41]
C
Oh, yes. This is something else we did wrong. So there was one of these transformation initiatives that I was leading and we got all the Feedback from the users. Leadership didn't like it, so they went and hired a third party consultant to review our evaluation of the users and the third party consultant gave them the same answer. Leadership still didn't like it, so they changed the weighting of the scoring matrix so that what leadership wanted won and the users ended up not getting their system. And guess what? It never got adopted. Right. So again that goes back to you have to know how it's going to impact the people that are actually pushing the buttons. This can't be a political decision or something that's based on what looks pretty to you in leadership. It has to be something that's based on enabling your people and making their lives better or simpler. And so that first and foremost is what's important. But leadership still plays a really significant role. Executive sponsorship and a digital transformation is super important. But I think people often get it wrong. Why it's important. People think it's important because the executive sponsor is going to stand on their podium and preach down to the masses that this is happening no matter what. This is the end all, be all. And yeah, that message is good. But going back to who should be on your team, it's the influential users amongst their peer group that are going to drive buy in and adoption way better than any executive leader. Preaching from a mountaintop where the executive leader is important is influencing their peers. There is nothing worse for a digital transformation than one leader in one district somewhere else. That said, yeah, we're not going to do that under their breath to their team. We don't care, we're going to do it our way. It's never going to have to be a problem here. That little side spreadsheet that's happening off in one area of the business where they're all revolting against the transformation as one is detrimental to the success as a whole. And so the executive sponsor, their biggest role is to make sure that their peers are all walking in alignment on this digital transformation and not just preaching from the ivory tower that we're all going to follow suit.
- [21:15]
B
It's been a great conversation today, but we're running short on time. So we've got one final question for you. Let's imagine a VP of operations at a mid sized general contractor is listening to this right now. We hope they are. And they're six months into a digital transformation that feels like it's going sideways. So what's the first thing you'd tell them to do?
- [21:35]
C
Stop. The first thing I would tell them to do is take pause. The Sunk cost fallacy, right? We're six months in. We just got to push through. No. If it's going sideways, let's pause for a second and let's diagnose this. We have to be okay with failing when it comes to digital transformation. And again, that goes back to the executive leadership and the people at the top making sure that their digital transformation team is safe psychologically and understands that they have the opportunity to fail, that maybe if they don't get it right, they can take a step back. But I would ask myself three specific questions. Number one, are the people actually using it? Number two, why not? Are the workflows clearly defined? Is that why they're not using it? And then number three, can we trust the outputs we're getting right now? So are the people using it? Why aren't they? And can we trust where we're at? And if you get no's on any one of those three questions, it's time for a reset, right? Most transformations don't need more effort from you. They need you to take a step back and do that reset, and that'll be what's important. If you feel like you're going sideways, just stop for a second and let's diagnose and let's maybe reset.
- [23:01]
B
All right, A.J. that was a great place to end. Some actionable advice for our listeners today, and we, we really appreciate you joining us. And if it sparked your interest in digital transformation, we encourage you to check out CMA's Technology Management Guidelines to dig deeper into the relationship between technology and construction. You can learn more about these resources and other educational opportunities. Opportunitiesmaanet.org to be sure you don't miss our next episode, please subscribe to the podcast and follow us on social media at cmaahq. And don't forget to leave us a review with your thoughts on today's episode and let us know what you would like to hear on an upcoming podcast. On behalf of cmaa, I'm Evan Hendershot with Carly Trout. Thank you for listening.