Some Changes Are Invisible to the Eyes: Transformation of Business Models, Organizations, and Cultures

Abstract

This chapter explores the underlying and invisible mechanisms of digital transformation in the architecture, engineering, and construction (AEC) industry. Technological advancements in the sector have broader impacts than simply productivity improvements, and businesses need to consider other key aspects: business model transformation, sustainability, as well as organizational and cultural reinventions. While most AEC firms look at platform business models with envy, building a portfolio of diverse business models is a long journey that requires new capabilities, and large long-term investments. Not all AEC businesses are approaching digital transformation in the same way, and the range of different approaches taken across the sector is examined. The AEC business model playbook, a tool to explore new business models in relation to the United Nations Sustainability Development Goals, is presented in detail. It is an answer to the need to embed sustainability into corporate strategic initiatives, in order to drive measurable sustainable outcomes. The chapter also analyzes the sector-wide cultural shift crucial to overcome the significant challenges that all AEC businesses face: digitalization, sustainability, innovation, and market differentiation. How organizations need to address both their strategic and cultural transformations in tandem to truly transform their businesses is explicated. Finally, a horizon scan of some of the likely outcomes that these shifts will have is conducted: the impact on traditional value chains, the organizational relationships, and the emergence of new and non-traditional disruptive sector players, and what this means for the future of the AEC sector.

Giso van der Heide and Carolyn Moore are independent contributors.