Global Capital Projects Outlook: Why It May Be Time to Burn the Ships
July 06, 2023
“The greatest solutions on the planet are useless without the desire to change.”
–– Dan Hicks, InEight
The InEight Global Capital Projects Outlook (GCPO) 2023 is out. Within the Outlook’s many findings, the positive power of connectedness, collaboration and communication comes through time and time again across all markets and all organizations.
But with economic stagnation, supply chain worries and cost inflation still weighing on us all, whether that positivity carries over into next year’s Outlook will rely heavily on how the industry comes together to make that connectedness a reality. While some say we still need to build up to it, others are advocating for a bolder approach known as “burning the ships.” But who is right?
The company’s third such report to date, the Outlook is based on a survey of 300 large-enterprise and construction professionals. The survey included 26 questions designed to gauge general confidence and optimism levels across the industry, and assess track records, plans and attitudes towards digital transformation.
Of the 300 respondents, 100 participants each were drawn from the regions of North America, Europe and APAC, giving each equal weighting in the report. Globally, 67% of respondents are project owners, and 33% are contractors.
To uncover some of the key communication takeaways this year, we sat down with Dan Hicks, President and COO at InEight, to get his take on this year’s report implications for the future of global capital projects, the industry itself, and its growing awareness that it may indeed be time for a new approach.
The Growing Attention to Connected Communication
There were definite differences between the GCPOs of 2022 and 2023. While a consistently positive trend exists with construction industry optimism remaining high for a third year in a row (92% in 2021, 96% in 2022 and 94% in 2023), unlike last year, contractors are significantly more positive than owners (99% vs. 91%).
Many in the industry believe this difference is due to the significant backlog of construction work despite potential slowdowns in new projects. With this strong backlog of work and external forces such as labor and supply chain challenges still evident, the need for greater owner-contractor collaboration and shared risk models is expected to grow steadily.
“That means project delivery models with the greatest opportunities for collaboration will become more prominent,” Hicks points out. The Outlook’s data backs this up, reporting that the use of Integrated Project Delivery (IPD) is expected to see the biggest increase in adoption over the next three-to-five years with a 9% rise in use, while use of the traditional Design-Bid-Build model will decline by the same proportion.
“And that will put the spotlight on clear, reliable communication more than ever before,” he explains.
But he also feels that the prominence of such models — and their success — will rest largely on the industry’s ability to successfully handle the required change.
“For example, creating an integrated change management plan and sustained communications effort can keep people securely and confidently connected and onboard throughout their journey,” he says.
Yet while no one is challenging the industry’s need for better communication and collaboration, the how of it all is up for debate. Hicks feels that a little “tough love” is in order.
Boldly Managing Resistance to Change
As stated, the industry remains positive overall about the future. Yet in the middle of this cautious optimism in an ever-changing operating environment, respondents called out unmanaged or unexpected risk as the most influential factor for whether a project will be completed on time and on budget.
Hicks admits that though thriving in the face of adversity is an industry strength, a change in thinking is still needed to deal with constraint realities where communication is concerned.
“Typically, I advocate for a phased approach to digital transformation — adopt one tool in one department, get comfortable with that solution, then choose one more and continue that process until you have everything on board,” Hicks says. “But sometimes, organizations get stuck in that process. They’re too big, have too many stakeholders, or simply get trapped in analysis paralysis.”
His advice? “It’s time to burn the ships.”
Burning the ships refers to an aggressive approach to transformation where an organization turns off the old tools and places team members directly into their new solutions. It’s then up to each individual to get up to speed.
“This all-in approach works best for enterprise organizations with strong leadership and enough flexibility to let their teams onboard over time,” Hicks says. “By leaving teams with no other option, this approach gets everyone into the tools faster but can also create tension among workers that were hesitant to adapt.” The solution? Hicks suggests a runway approach.
“Burning the ships works best with a running start. This means letting your teams know that the change is coming. Let them prepare, back up what they need, and make sure they are mentally onboard with the plans,” he explains. “It’s a bold move that I’ve seen pay off a thousand times over in accelerating the transformation process.”
But is it too bold? Per the Outlook, perhaps not. It’s clear that technology adoption and maturity are finally picking up significant pace in construction, and it’s also clear that those who have adopted technology are pulling ahead. Sixty-nine percent of leading organizations that complete their projects on or ahead of schedule are using project controls software, versus the industry average of 58%. Those that do not ramp up their adoption of tech risk being left behind.
Maturing Outlooks and Celebrating Wins
While it’s accepted that regions across the globe gather digitalization speed differently, Outlook respondents seem to be seeing the reality of what’s involved in a true digital transformation with fresh eyes. They are acknowledging that success requires a change in organizational processes with everything from management of subcontractors to the construction methods used on-site. Hicks advises caution here.
“Different changes demand different expectations,” he says. “A technological change and a cultural change come with very different emotional investments. Likewise, a process change versus a leadership change will carry very different fallouts.”
But, throughout all those processes, the ability to consistently communicate the why of that change can be the difference between success and failure. And along the way, Hicks believes celebrating your milestones can yield a well-spring of positive energy toward your goals.
“Successful pilots, implementations, and onboardings — those victories can be the momentum you need to push through some of the lowest points in the transformation process. Not only that, but recognizing those wins allows you to shift focus away from the distance you’ve yet to go, and instead remind yourself of just how far you’ve come.”
Why celebrate early? “Because transformation is just too grueling to wait until the end.”
Summing things up, Hicks sees the answer to successfully continuing the industry’s digital journey as lying within its own behavior.
“Your initial plan may not come to fruition exactly as you intended,” he reminds us, “but if you consistently communicate those hardships and stay in front of any potential waves, then the downsides become far easier to navigate. Ultimately, consistency helps you maintain focus on your end goal.”
And that end goal has taken on new importance as the separation between the tech “have and have nots” grows wider each year. As the results of this year’s Outlook report emphasize, the way forward must be digitalized not only to succeed, but now, to merely stay competitive. Therefore, if your boats need to be burned, burn them. We’re at a tipping point.
The time for boldness is now.
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