Construction Reconstructed: Crossing Over to ConTech
Now that we’ve learned a little about ConTech and the history of labor’s intersection with technological innovation, we can offer our traditional trades a “How To” lesson on making the cross over to operate an efficient construction business. The industry is changing – and so we must choose between leveling up or being leveled out. In Part 3 of a series on Labor in the Era of ConTech, industry advisor, Adam Sgrenci, lays out strategic steps that today’s traditional builders and developers should be considering as they look into the future.
As a reminder, ConTech is not construction technology in the literal sense.
Technology In Construction Is Not New
After all, we’ve had construction technology since the beginning. At one point, steel framing was considered technological innovation. Then we had gyp board, batt insulation, flat roof membranes, house wrap, etc. There is an endless amount of content online evaluating the best or newest tech solutions for builders. And there are new spins on old technology, too. Project management software is now being marketed as protection from lawsuits.
Still, some of the best products on the market are being delivered by manufacturers that have been around for decades. For example:
1. Prosoco, the company that makes one of the industry’s best air and water barriers, R-Guard, just celebrated their 80th year in business.
2. The Zip System, a roof and wall panel product that’s being used by some of the most forward-thinking builders today, including some ConTech companies, is produced by Huber, which was founded in 1883.
To be clear, when we speak of the industry’s recent ascent of ConTech, we aren’t speaking about the innumerable technology tools for builders that float about in the fragmented supply chain of our industry. Despite the high quality of their building products, Prosoco and Huber have no control over how their product is being used on the jobsite. The result is that we still have experienced builders making silly mistakes with installation. It’s not uncommon for an inspector to find leaking windows due to the fact that they were flashed with incompatible products. Can you blame the builder? Not really. Maybe they were just following the specification of the architect’s plan. But we shouldn’t attribute blame to the architect either.
It’s quite possible that for this specific project, the architect and builder are working together for the first time. Their organizations aren’t aligned in culture, ethics, product, or vision.
And no amount of technology will change that. ConTech is teaching us to take control of our value chain. To bring it all in-house where everyone from the architect, to the engineer, to the laborer is bought-in to the same vision.
The cross over to ConTech begins with People.
"Geek-Out" On Performance Management
Most traditional builders measure the performance of their staff against the progress or budget targets of a specific project. After decades of flat productivity growth, we know there has to be another way. And there is: we must apply metrics to every task a staff member or team performs.
But how do we do that?
Construction is chaos. There are so many things that happen on a job outside of our control. But ConTech doesn’t see it that way. We can put a KPI (Key Performance Indicator) on almost everything our teams do.
Let’s use an example that’s almost entirely dependent on external drivers. A service dispatch team operates as a “reactive” body within a traditional construction organization. Their mission is to respond to requests as quickly as possible and keep service teams operating at full capacity. If the service division is turning a profit, the builder might think they are operating efficiently and that there can’t possibly be a more productive approach.
The ConTech approach would measure the time it takes to move a request from “intake” to “scheduling.” The organization would apply limits or targets that get tracked. Then staff would be monitored by managers and determine if a team or individual is “underperforming,” “hitting targets,” or “exceeding targets.” If the latter, this wouldn’t just mean the team gets a “pat on the back.” It means there isn’t enough demand. And so the demand generation team would adjust the demand channels to achieve optimal performance and full capacity. And of course, “full capacity” is determined by the growth team.
Some might write this off as “micro-management.” But ConTech would argue that we are giving our employees clear daily, weekly and monthly targets. As an employee, it’s empowering to know exactly what you need to do to succeed. In addition, it’s gameable, which makes the employee feel in control of their job, and ultimately, happier at work.
ConTech is “geeking out” integrating the value chain, and the possibilities are limitless.
The Productization of Projects
Now imagine how this approach could be applied to the rest of the business. As builders, we must recognize the innate problem of seeing our product as a Project (ie. new home project, a strip mall project, a remodeling project, repair project, etc.). A project has an exit, and it’s typically a bumpy one. No matter if the job was completed on time or on budget, the builder is usually trying to race off the jobsite to the next project, and the building owner is exhausted from the emotional roller coaster ride they’ve experienced. A project is a race to completion with an anticlimactic finish.
Products have embedded in themselves Client Experience, Recurring Revenue, Demand/Supply Acquisition/Retention, and Proprietary IP. Productization is what Henry Ford did for the auto industry.
It’s what the industrial revolution did for manufacturing. Agriculture has done it, too. Our time has come.
So if you’re a builder, cross over. If you’re an industry professional, help your employer make the needed changes. If you want to learn more, research what the ConTech companies in your city are doing, or request a Cross Over Workshop from your local construction industry futurist.