Innovation management in the construction industry: Innovation performance indicators for AECOO organizations

Organizations need to innovate to remain competitive in the industry. Many studies have reckoned that the architecture, engineering, construction, owners, and operators (AECOO) organizations lag behind other industries in adopting innovation. The densely populated metropolitan environment, extensive utilization of information technology, the rapid advancement of wireless communication, the internet of things, augmented reality and many new technologies require AECOO organizations to innovate and keep pace with the rapid development of the society. To challenge the status quo, AECOO organizations need to establish an efficient management approach for innovations. Innovation performance measures serve as a basis for organizations to embrace innovations. Yet, our survey reveals that the construction industry lacks consistent innovation performance measurements, making it challenging for AECOO organizations to manage and quantify the benefits of innovations.The core of this dissertation is to structure an innovation performance evaluation framework and the associated issues. To provide a consistent understanding of innovation in this research, innovation is modified from the definition of Schumpeter (2003) and defined as: a new or improved product, service, process or organizational change that brings value in a new context; in addition to inventions and new scientific discoveries.The study starts by compiling a set of innovation performance indicators (IPIs) customized for the construction industry. On the basis of the set of IPI, I establish an innovation performance evaluation framework for the systematic assessment of innovation performance of AECOO organizations.To establish the set of IPI, I first explore the current research body on innovation performance measures. The systematic literature review (SLR) approach is adopted to compile 66 candidate indicators relating to the construction industry. I then implement a triangulation approach by formulating a two-stage consultation process to solicit the opinions of 22 professionals in the industry and integrate with the SLR process. A set of IPI is finalized, which served as a basis for benchmarking and comparison amongst various stakeholders in the industry, that is between designers, constructors, operators, and owners.Next, I determine the relative importance of the IPIs by collecting the judgment of the 164 professionals in the construction industry by pairwise comparison approach. This elicitation of weightings illustrates the indicators’ differential importance for setting up the evaluation framework. I collected responses from the U.S. and China, to provide insights on the weightings of the indicators. The fuzzy analytical hierarchy process is adopted to compute the weightings and provide insights on the differential attention of the respondents from the two regions and among the stakeholder groups. This process is chosen for its great cognitive representation of respondents on the topic through pairwise comparisons. An evaluation framework on innovation performance is established, based on the simple multiattribute rating technique, integrating with the weighted indicators and metrics measurement. Subsequently, I study the innovation process, particularly the innovation attention of the management and the transformation process of the innovation within AECOO organizations by referring to the relative importance of the indicators. I propose seven propositions on how different stakeholder group views innovation and where they focus their attention. Innovations initiated will need to transform to the next phase because of the changing environment. I conceptualize a model to illustrate the transformation process of innovations in an AECOO organization. This research contributes to three areas of knowledge in the field: (i) providing a useful set of innovation performance indicators and the corresponding measurement metrics for AECOO organizations (9 indicators; 21 metrics); (ii) computing the relative importance of the key indicators via fuzzy AHP, and developing an innovation performance index for the construction industry; and (iii) illustrating and explaining the differential attention among regions and stakeholder groups with respect to the findings, based on the attention- and innovation-based view theory. From a practical perspective, the innovation index developed can assist organizations’ internal management in understanding the health of their organization, in particular organization development, and provide insights to evaluate and project the organization’s future competitive edge. By referencing the performance index, these stakeholders will be able to benchmark and compare, identifying strengths and weaknesses, determining areas for improvement. Understanding the differences in perspective also supports mutual understanding among multiple stakeholder groups and facilitates improved collaboration between parties.Building upon this research, future study of innovation performance measurement in the construction industry can be conducted to further understand the difference incur by organization size, conglomerates, organizations specified in particular project types, etc. These factors may affect the perspectives of AECOO organizations on innovation; thus, approaching it in different ways. Further study on these factors help investigate innovation in the construction industry and how to manage them based on further categorization if needed.