How Construction Companies Can Begin Capitalizing on Innovation

construction technologyAs technological innovations continue to surface and present new opportunities, some construction companies might not know where they should focus first. Perhaps that is why, generally speaking, the construction industry lags behind many others on the technology adoption curve.

The thing is, even the smallest of construction companies can leverage some combination of today’s technologies to make impactful gains in their businesses. They just need the right focus and strategic plan.

“Venture capital is already investing nearly $1 billion in technologies related to project and task management, robotics, design, building/project information, data and analytics, inventory and supply chain, financial management and equipment share,” says Gregg Schoppman, a principal with FMI Corporation. “That doesn’t mean you need to make a billion dollar investment in your company alone. But you should look at investing in some innovations that will best suit your company. You can’t just stick your head in the sand and wait to see which ones will still be there a few months from now. Construction leaders have to challenge conventions themselves.”

Innovation is the Antidote to Workforce Challenges

Many of today’s innovations can help a construction company improve efficiency, safety, decision making and profitability. According to Schoppman, innovations can also become the nucleus for addressing the construction industry’s ongoing labor issues.

If leveraged correctly, several innovations could actually attract better talent to the industry and help drive workforce performance:

  • Autonomous equipment and vehicles
  • Drones
  • Building Information Modeling (BIM)
  • Use of tablets for augmented reality
  • Real-time data to provide true analytics and decision-making capability
  • Telemetry on wearable devices to improve productivity, efficiency and safety
  • QR codes on equipment and helmets to retrieve data like engine hours, when oil change is due, whether an employee went through certain safety training, etc.
  • RFID tags welded into sections of steel to track material from fabricator to jobsite
  • Non-traditional talent development like online learning and virtual reality

“These are all things that will help reshape the construction business,” Schoppman says. “And hopefully, they will also allow this business to continue to be great.”

Overcoming a Culture of Complacency

As industries evolve, companies must evolve with them. The biggest obstacle to embracing innovation is complacency.

“Complacency is an attitude while evolution is an action,” Schoppman says. “Furthermore, evolution isn’t just changing for the sake of change. Evolution is about adapting to a new environment, and with that adaptation comes the opportunity for improvement.”

As Schoppman points out, evolution and innovation really come down to a single word: accountability. When both leadership and employees are accountable for finding new, innovative ways to conduct business, evolution can occur. At the same time, there needs to be accountability with the implementation.

“It’s not good enough to think you’ll just try it and see what happens,” Schoppman cautions. “It’s important to challenge people to come up with new ideas and approaches. But people need the right training on how to make the right decisions. Then you can hold them accountable.”

Innovation Doesn’t Have To Be Huge and Disruptive

In the quest to continue moving a construction business forward, Schoppman talks about four key strategies:

  • Executing the same way in the same market (this is complacency)
  • Executing the same way in a new market (likely requires innovation)
  • Executing a new way in the same market (requires innovation)
  • Executing a new way in a new market (requires lots of innovation)

For many construction companies, the innovative pursuit of new approaches and markets must be preceded by something Schoppman refers to as “company hygiene.” He uses a baseball metaphor to explain. “You can’t go up there and try to hit home runs when you haven’t even mastered how to hit singles and doubles,” Schoppman relates. “It can be dangerous to think that the only route to innovation and prosperity is new execution in a new market.”

In other words, innovation and prosperity can also reside in something as straightforward as your daily playbook, i.e. systems and standard operating procedures.

“The best construction firms have a solid playbook that everyone in the company follows,” Schoppman says. “We’re talking about change orders, equipment management … everything. Innovation doesn’t always have to be this big, disruptive, game-changing thing. Sometimes innovation that is still sustaining is about small, incremental change. Sometimes innovation merely happens at the project or individual level, like coming up with a better way to report time. Then it can become part of the companywide playbook. This is the essence of sustainable innovation.”

For example, Schoppman tells of a tilt contractor he once consulted with. After digging into the numbers, concrete snot on doorframes was costing the company several thousand dollars a year. After challenging employees to come up with an innovative solution, ideas were all over the board. One was to simply begin adding a few thousand dollars to each bid to help recover this cost. Not ideal. Then a very simple, yet “innovative” idea was brought to the table: use blue painter’s tape and Visqueen to cover up the doorframes. That became standard work and went right into the company playbook.

“The point is, I can almost guarantee that there is an item on any construction company’s punch list that routinely pops up every single time,” Schoppman says. “The question is, have you come to the point where you’ve said, ‘enough is enough!’ You can try to find an incredibly innovative robot that can clean the snot off of doorframes. Or, true leadership will search for good solutions to the symptoms of problems.”

That is innovation, and that kind of innovation puts a construction company on a path toward evolution and continued prosperity in a changing environment.

This article is based on a presentation given by Gregg Schoppman at CONEXPO-CON/AGG 2020. Schoppman is a principal at FMI Corporation, a management consulting firm that works exclusively with the construction industry.

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