Q&A: What is the secret to successful digital transformation?

Rick Robinson, leader of Arup’s digital property and cities business The first step is to start. And there has never been a better time to do it. Given that five of the world’s 10 most valuable companies earn a significant chunk of their revenues monetising online transactions, it’s hardly provocative to declare that society and our economy is undergoing a digital transformation. Challenger companies have destabilised the property sector globally, bringing new models that are data-driven, secure better returns on capital and, ultimately, help deliver a better experience for the end user. Take WeWork’s new position as central London’s biggest private office occupier as case in point. We’re also seeing enormous amounts of venture capital flow into proptech, with technology infrastructure finally being incorporated into the valuation of property and business models in a significant way, which we’ve not seen before. At the same time, the interconnection of computing devices embedded in everyday objects has opened up vast new sources of data on how people and organisations use the built environment, how the services, systems and assets that support it operate – and we now have the tools to act on this meaningfully. All of this is forcing property investors, developers, owners and managers to change – and in fact, the boundaries between those sectors are starting to blur; and incumbent organisations are starting to respond and defend their territory. They’re recognising that technology has to be placed at the centre of the value proposition – not just used to supplement operations. From what we can see, organisations are taking one of three approaches in response to this disruption: Strategic – a radical self-disruption of the entire business, from the board down to frontline staff, with allocated responsibility for driving digital change. Experimental – the less severe option which involves trialling new technologies in certain areas and monitoring success or failure, with a view to upscaling or rolling out across other business functions. Denial – more characteristic of the construction industry, where there is refusal to change, either through unwillingness, through an organisational inability to assess and manage new forms of risk, or the belief that “data” is just a hype-cycle that will pass. But there’s no silver bullet. Each approach comes with its own set of merits and drawbacks. Any considerable shift in mindset and operating model requires a commitment to meaningful change. As a starting point, organisations should review their appetite for meaningful change across four main areas. The first is strong leadership. Simple and straightforward, but any transformation programme will fail without it. Then there is the right skills mix, and companies will have to fight for the talent of tomorrow. They require people that really know tech – the data scientists, the experience designers, the first-class coders – but these are in demand across all industries. The third area is scalability. Any experimentation with data, sensors or new tech must be done in a way that can be scaled quickly and easily. Otherwise, any competitive edge will be lost along with the agility to respond to further change. And finally, companies need to consider risk management. It is clear that the digital transformation of property is underway but it is not clear what the ultimate shape of the sector will be, nor the role of any individual organisation within it. It is therefore necessary to invest in new approaches with outcomes that cannot be 100% predicted. To be successful, organisations need to assess and continually manage this new risk, quickly curtailing failing initiatives and increasing investment in those that succeed. As painful as this may be to work through, avoiding it altogether is an option that’s all but evaporated. New data and technology result in new models and services – which in turn, elevate user expectations. The longer organisations wait, the wider the gap between what they can provide and what buyers expect them to deliver. Organisations that don’t explore digital transformation or defend their traditional territory now will struggle to make up this ground.