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Chad and Matt dive right into the question of the day: Why is growth necessary for construction companies? Growth means many different things, and they start by clarifying that growth doesn’t always mean higher revenues—sometimes, it means developing process and adding stability. Meanwhile, other times, it has everything to do with increasing revenue and profits. Either way, central to the need for growth is the fact that great people want to have something to strive toward; with grow comes opportunity. In the X vs. Y section, Matt and Chad argue about whether you should show your team your org. chart. We hope you enjoy and learn how to grow your business effectively through this month’s episode. Subscribe to be notified when new episodes are released on Spotify, YouTube, Apple Podcasts, or LinkedIn. If you’re looking for more ways to engage with the wider construction community, check out our affiliate podcast, The Morning Huddle Construction Show, hosted by Chad Prinkey, Well Built Construction Consulting and Stacey Holsinger from Steel Toe Communications. Tune in every Tuesday morning at 9 A.M. EST on LinkedIn Live for discussions with A/E/C experts, advancing the construction community. 0:00 What is the "Well-Built" series? 2:00 Check-Ins! 8:55 How do you get started into creating growth for the long term? 16:15 Why is it important to maintain growth? 20:46 How does revenue growth tie into growth for other parts of the business? 28:30 Should we share our future organization chart with our staff? 39:05 What are we reading and what are our biggest takeaways? 42:25: Check us out at Well-Built Consulting.com! Thank you to our sponsors! Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit: http://www.themorninghuddleconstructionshow.com/ Follow us on LinkedIn: https://www.linkedin.com/company/82318299/admin/dashboard/ Subscribe to our weekly e-newsletter for the latest updates: https://lp.constantcontactpages.com/sl/Ro2QrVt/Themorninghuddlepodcast?__cf_chl_tk=9S8PSaN6zCOUNBhPtHXE.qk8HWtzxNNluBDlsEYhZkg-1726511898-0.0.1.1-8361

In this episode, we’re joined by Scott Arias, CEO of ACE Consulting, and guest host Tom Hughes, VP of Construction Operations at Genesis AEC, to tackle the vital topic of construction scheduling. Scott breaks down the essentials of time impact analysis (TIA), explains the importance of "frag nets," and dives into how the critical path influences scheduling. With real-world examples and actionable advice, Scott makes it easy to understand how accurate scheduling drives productivity and protects your business. 6:57 Introduction Scott Arias 8:25 What is Time Impact Analysis? 12:00 When to Submit Change Order for a Contract Extension 12:45 Example of Contract Extension 14:56 Retrospective Claim Analysis 16:52 As-Built Schedule 17:12 Modeling Perspective: Design Change 18:20 Firm Impact of Overall Project 21:15 What is a “Frag Net?” 23:10 Who has the financial impact and owns the responsibility? 25:19 Need a Basic Understanding to Negotiate a Change Order 28:35 Keep Proper Project Documentation 30:16 A Dozer Costs Money if Its Sitting 34:13 AI Impacting Scheduling 33:30 Tools Used for Time Impact Analysis 36:36 Concept of 3D 37:39 Integration between Primavera and Procore 40:45 Baseline the Schedule 43:40 The Navy Used the Critical Path Method to Construct Submarines 45:30 Marking Up the Schedule Thank You to Our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/s...

In this episode, we’re thrilled to welcome Dr. Estelle-Marie Montgomery, Executive Director of the FH Faunteroy Community Enrichment Center. Over the past four years, Dr. Montgomery and guest host Mark Drury have collaborated on workforce development initiatives, and today, she shares her inspiring journey to Deanwood along with her vision for Washington DC’s first Resilience Hub. We’ll dive into how resilient communities benefit employers seeking talent, the importance of candidate vetting in construction bootcamps, and how the construction community can support this exciting project. Don’t miss this insightful conversation! 0:36 Meet Our Sponsors 2:22: Introduction of Guest Host, Mark Drury. 3:45 Mark’s role in the DC Students Construction Trade Foundation 5:15: Introduction of Guest, Dr. Estelle Marie Montgomery Executive Director, F.H. Faunteroy Community Enrichment Center 10:16 What is a Resilience Hub? 11:36 How does building a stronger community help fill our pipeline? How do we find people to fill our First Source Agreement? 16:49 Success with Construction Bootcamps and Investing in People Upfront 22:40 How Construction Companies Can Support Local Communities 23:33 Workforce Development Plans and Cohorts for Candidates 25:53 Next Steps for Faunteroy Center and How Construction Industry Can Assist 25:44 Current Funders 32:04 Ward 7 Flooding Issues and Mitigation Projects 35:45 Parting Words on Workforce Development and Careers in Construction Thank You to Our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/s...

Whether you are a minority contractor or not, this episode delves into what new opportunities exist within the electric vehicle industry and infrastructure. Specifically, our guest, Larry Bullock from the US Minority Contractors Association discusses how minority contractors can capitalize on the growing EV industry, and what partnership opportunities may exist for non-minority contractors. 00:46 The Morning Huddle Construction Show Sponsors 2:12 Catching Up with Stacey and Chad, Return of the Show Season 7, Episode 1. 4:00 Well Built- Chad's New Book 6:42 Steel Toe Communications discusses launch of Instagram and TikTok @CHAT_CTE 7:35 Introduction of Guest, Larry Bullock 12:57 The Economic Boom of the Transportation Industry. 15:10: 1/3 of where we need to be in fulfilling the 500,000 Station Promise, and half way through funding. Lots of opportunity. 15:53 The Joint Office for Energy and Transportation, www.driveelectric.gov/contact 17:12 Justice40: Goal is 40% of every dollar spent under the $5B operation should be spent in disadvantaged communities. 23:50 Which Non-MBE firms are partners with MBE firms. 28:00 Become Bid Ready 30:58 What kind of trades will be involved in installing and maintaining EV. 33:41 17 Electric Car Business Ideas: You Get in Where You Fit In 46:49 Closing Thank You to our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=google&utm_medium=ppc&utm_term=ntl&utm_content=resilience&utm_campaign=ntl-brand-awareness-mma&gad_source=1&gclid=CjwKCAjw3P-2BhAEEiwA3yPhwBStkU82B0UALO_Ro1GKvn_sfhRJaY7TaEfwisj92ciDKSpYt52NwhoCPAcQAvD_BwE Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/sl/Ro2QrVt/Themorninghuddlepodcast?__cf_chl_tk=9S8PSaN6zCOUNBhPtHXE.qk8HWtzxNNluBDlsEYhZkg-1726511898-0.0.1.1-8361

The Well Built Series is a special podcast designed for decision-makers in the construction industry, as well as those aspiring to be leaders. Hosted by Chad Prinkey and Matt Verderamo, this series delves into the best practices perfected by successful contractors. Join us as we explore the “Do’s” and “Don’ts” that transform good companies into truly “Well Built” organizations. Whether you’re an industry veteran or just starting out, this podcast offers valuable insights to enhance your construction journey.

AI and automation are reshaping the construction landscape. Technology enhances efficiency, safety, and cost-effectiveness by optimizing equipment usage, predicting maintenance needs, and streamlining processes. Companies that stay at the forefront of technological advancements position themselves strategically, ensuring they are well-prepared to address the evolving needs of future owners. Tune in to this engaging conversation with Adam Stark, CEO of Jet.Build, where we discuss how a top-down approach driven by construction owners, combined with contractor readiness, can shape the future of sustainable construction.

In this episode, we delve into the private side of the public-private discussion. We're joined by Neal Rackleff, Attorney at Law at Rackleff LLP, to uncover the challenges faced by professionals dealing with government entities. We’ll explore process-oriented reasons behind the distinct behaviors of government employees versus their private sector counterparts. Neal dispels common notions about the public and private sectors, sharing his unique experiences. Tune in to understand Neal’s impactful journey—from private roles to federal government positions and back again.

Join us on The Morning Huddle as Jeremie Harrison, Senior Project Manager at Leebcor Services, LLC, and guest host Tom Hughes, Vice President of Genesis AEC, delve into the pressing need for proficient Project Managers (PMs) in construction. Discover how the Project Management Professional (PMP) program provides a transformative solution, equipping PMs with vital expertise in contract language, project scheduling, and construction sequencing. Tune in to explore the impact of skilled PMs on project completion, efficiency, and innovation in the industry.

Join The Morning Huddle for an insightful conversation with Jennifer Todd, President of LMS General Contractors, as she explores the nuances of unconscious bias and its impact on the construction industry. Drawing from her experiences, Jennifer reveals how these underlying attitudes shape the industry, potentially impeding efforts toward inclusivity and diversity. Discover strategies for cultivating a more equitable future in construction as Jennifer uncovers the effects of unconscious bias and shares her insights.

In this episode, Pat McGettigan, Vice President of Excellerate Manufacturing, joins us to share his unique insights into modular construction. From UPS data centers to driving innovation in off-site manufacturing, Pat's expertise sheds light on the pivotal role of modular solutions amid labor shortages. Throughout the discussion our guest host, Tom Hughes, Vice President of Genesis AEC, also shares his valuable knowledge, enriching the conversation on the convergence of manufacturing and construction.

In this episode, join Chuck Rakich, Superintendent Safety Manager at Henley Construction Co., Inc., as he reveals the keys to running projects that meet OSHA standards and cultivate a culture of safety excellence. Chuck passionately emphasizes the transformative power of viewing OSHA inspections as collaborative partnerships rather than dreaded encounters. Tune in as Chuck shares invaluable strategies for establishing a robust safety culture from the highest echelons of management down to the frontline workers, setting your job sites up for unparalleled success. Don't miss out on this episode packed with essential insights that will empower you to navigate OSHA inspections seamlessly and turn them into catalysts for improvement and collaboration.

Mike Henderson has served the construction industry as a part of the Associated Builders and Contractors for over 30 years. In his role as the President of ABC Baltimore, his sights have turned to positively impacting the minority contracting community as well. Chad and Mike will discuss an innovative approach they're both working on in the city of Baltimore to create profitable growth for the minority contracting community and the good of the overall construction industry.

In this episode, we explore the evolving landscape of social media strategies and transformative tactics in the commercial contracting sector. We'll examine the strategic collaboration where marketing, sales, and business development should converge, making "collaboration" a vital force in content creation. Our guests, Matt Graves, founder of Construction Yeti, and Jonathan Cor, founder of Customer Growth, share unique insights and uncover out-of-the-box approaches for securing optimal coverage and selecting the most impactful social channels. Join the conversation as we dive into innovative strategies to up your game in the competitive commercial contracting world.

In this episode of The Morning Huddle, explore the role of schedulers, debunk misconceptions, and delve into the necessity of schedules for all projects. Gain insights into software preferences, critical paths, and the complexities of delayed claims. Discover the evolving trend of a proactive scheduling model focused on efficiency, execution, and the challenges subcontractors face with CPM schedules. Uncover the value of a two-week look ahead and pull planning in this concise discussion on construction scheduling intricacies.

In this episode, we dive into the captivating world of Employee Stock Ownership Plans (ESOPs) with our guest, Ben Nichols, President of Harkins Builders, Inc. With over two decades of experience, Ben sheds light on the inner workings of Harkins' ESOP, dispelling myths and highlighting its role as a robust accountability and culture-shaping tool in the construction industry. We explore the tax benefits, recruitment strategies, and value-maximization tactics employed by Harkins, showcasing how being an ESOP isn't just a retirement plan but a key to empowering employees and building lasting wealth. Tune in for an engaging conversation as Ben passionately advocates for broader adoption of the ESOP model and shares Harkins Builders' success story beyond traditional retirement planning.

As governments and school districts recognize the massive need for employees in the construction industry and the phenomenal opportunity that need presents to their students and constituents, many are finally investing time, money, and energy in developing successful CTE programs. Our guest, Catherine Schoenenberger, joins us to share a time-tested and proven methodology she has been overseeing for years.

Sadly, too many construction projects fail to meet schedule and budget expectations and more than a few come completely off the rails in every mark in every year. Owners, architects, general contractors, and subcontractors alike retreat to their corners and focus only on protecting their selfish interests. In this episode, construction attorney Michael Wagner joins us to explore what happens to cause a project to become derailed, what behaviors worsen the situation, and what to do if it happens to you.

A significant number of our field employees do not speak English as their first language. This language barrier has contributed to thousands of injuries and even deaths each year. In this episode, two-time Morning Huddle guest, Oscar Garcia, joins us to discuss how he is using artificial intelligence to breakdown language barriers and create safer job sites for Hispanic workers.

While Artificial Intelligence (AI) has been a part of our lives and work for many years now, the release of ChatGPT in 2022 has brought the possibilities of this advancing field to the forefront. People like Morning Huddle guest, Stjepan Mikulić dedicate themselves to researching the latest advancements and exploring the most viable technologies AEC firms can implement in the near term. He joins us to simplify the topic and help our audience understand how they might apply AI in their construction businesses.

Most construction companies recognize opportunities to improve their business. Few have a track record of capitalizing on those opportunities and driving positive change. In the fast-paced environment of designing and building, companies become accustomed to their problems and focus on getting their work done instead.

In a first for The Morning Huddle, host Chad Prinkey will become a guest and share his experience driving organizational change as a consultant for the construction industry over the past 15 years. We’ll discuss why companies get stuck and what employees and executives can do to get better today.

The spaces we occupy for our work can make a world of difference in profitability. Our guest, Nitin Govila, is the head of Sales and Marketing for global textile manufacturer Serge Ferrari. Their materials are integral to a wide array of construction products, ranging from acoustical panels to PT concrete. He’ll share insights on constructing workplaces with sustainability and profitability in mind from the start.

Virtual design and construction (VDC) as a tool for building better spaces is quickly becoming the norm, but our guest for The Morning Huddle's 47th episode, Darren Young, believes in taking things a step further.

What if your VDC efforts were aimed at reducing waste, creating scalable and resilient technical frameworks, increasing data quality, and leveraging opportunities to generate new revenue?

Join us as we discuss aligning proven VDC technology with compelling business goals to build a better future!

Ryan Lanser, the Dirt Jedi, joins our podcast to talk about how his company has applied GPS and Drone technology to revolutionize how site work contractors estimate and plan their projects. We'll talk about how it works, what value it adds, and the future of this exciting tech.

Advances in construction materials and methods are allowing us to achieve amazing levels of sustainable building. Passive house design is one of the latest advances toward net zero and net positive buildings. In this episode, we’ll speak with Trey Farmer, architect and owner of a passive house himself! He’ll walk us through the passive house design approach and demonstrate how it is more attainable than we may realize for residential and commercial applications.

Transcript:

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00:11
Speaker 1
All right, it's morning huddle time. Good morning. I'm not saying it works. I wish you'd not speed Godspeed with all of that. I think that's really nice. You know, I'm not sure what kind of success you're gonna have with that today, because the world, my friend, has changed, Right?

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00:27
Speaker 2
A Latin American construction workers, they have different needs. They.

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00:32
Speaker 3
These awards have a huge, like, criteria that you have to fill out. And they usually have a community service or community relations portion, you know, the most productive with a high performance value. And, you know, sometimes it's 11 o' clock at night.

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00:50
Speaker 1
Funny, isn't? Yeah, not for me. Not for me. At 11 o', clock, I am guaranteed to be snoring. So, so foreign. Good morning. It is morning huddle time. We have Trey Farmer with us and of course, Stacy, my co host stadium. How are you today?

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01:14
Speaker 3
I'm a little depressed about the Eagles, you know, lost, but I will recover.

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01:20
Speaker 1
I am depressed for you. I know. I know how it feels to have your team lose in the championship game. Better than 30 other teams in the NFL, but not better than the one that was off. Man. That was. How about the holding call? Was it a call? Was it a hold or was it not a hold?

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01:42
Speaker 3
I don't know.

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01:43
Speaker 1
The player said it was a hold. He called himself out. He goes, it was a hold. It was. I, I didn't think it was a hold when it happened, but I respected the player afterwards in the locker room saying, like, no, no, I, I held him. I grabbed. That's what happened. So it was cool. But, you know, yeah, it's a, That's a tough one. I'm on this group text with a group of friends, all from Philadelphia, and yesterday it was like total crickets until about noon, and one guy just texted, and I'm talking like 15 people, and one guy just texted. I'm so depressed. Like, no motivation at all today, you know, kind of thing. And it is, it's.

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02:24
Speaker 2
It's.

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02:25
Speaker 1
It's tough, you know, it's hard to. Hey, next year. There's always next year. It's hard to rally it up.

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02:31
Speaker 3
Yeah.

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02:34
Speaker 1
Are you a football fan? Do you have, do you have a team?

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02:36
Speaker 2
I. I am a Patriots fan. So, you know, we've just.

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02:42
Speaker 1
Many years of relentless celebration followed by the inevitable, like, being okay as opposed to.

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02:48
Speaker 2
Yeah, well, it's, you know, like being from New England. Right. It was like were kind of on the other side of it with the Yankees for so long that then you know, it's kind of. It was good, but you could also empathize with the haters, so.

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03:01
Speaker 1
Totally. Yeah, totally. Like, yeah, I know what it feels like to feel like there's a team that just has an unfair advantage. Yeah. Yeah. Well, cool. So. So Trey joins us from Forgecraft Architecture in Texas in Austin, Texas. I've had the good fortune of having some exposure to their work in my work in Texas. And I, I haven't worked with Trey directly, but I was talking to one of his colleagues about interesting topics and he said, you know, what would be an interesting topic is passive house design. And I said, well, I don't know what that is, so you're going to have to tell me whether that's interesting or not.

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03:44
Speaker 1
And it turns out that Trey not only is Passive House certified and we'll get into what all that means, but also actually lives in a certified Passive house himself and can actually speak to it not just as a design professional, but can speak to it as a homeowner. And so Stacy asked this question right out of the gate, right? Like, is this only for houses? So, you know, we're going to get into that and many more questions. Stacy, I'm confident that the audience, through the course of our conversation, we'll have some interesting questions that pop up, as you always do. I'll leave you to stoke the interesting discussion and we'll bring you back here to get some, you know, audience questions before we wrap up.

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04:29
Speaker 3
All right, sounds good.

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04:30
Speaker 1
Thanks, Stacy. All right, so. So let's start from scratch. Assume our audience knows as much as I knew, which is absolutely nothing. Whenever we first talked. What is passive house design? Just a simple description.

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04:48
Speaker 2
Yeah, it is. So it's a third party certification and it's an above code building code, basically that's looking primarily at energy use. So it's basically the most aggressive above code building certification. So it's Passive House Institute. US is partnered with the US Department of Energy. So they're sort of like Energy Star zero, Energy ready, Home Net zero. And then Passive House is kind of the highest tier of energy efficiency. And so it, depending on your climate, it'll drop your energy bills by 40 to 80%. So the analogy we use a lot is a yeti. Yeti cooler. If you think about those old school coolers versus a yeti cooler, it's more insulation. The main thing though is that it's airtight. Like that airtightness really holds the energy really well. So you get a better building, it's more resilient.

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05:43
Speaker 2
When the power goes out, it'll hold your heat in the winter, hold your cool in the summer. And then also you're controlling where all of your fresh air is coming from in your house. So there's no leaks, nooks and crannies, no air sneaking in through the holes in the wall where the cockroaches live. It's all getting filtered through a port and mechanically brought in. So there's all these knock on benefits for health and, you know, no dust, no pests, all that sort of stuff. Really quiet. You know, we live pretty close to a highway and before we renovated, we could hear cars going over the expansion joints. We could hear trains whenever they went by and now nothing. Which is really great.

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06:20
Speaker 1
It is great. I live relatively close to a main road as well. And I'm. I was right after our conversation last week, I started like googling how do I go through a passive house renovation? Because just for the sound benefits I like, hey, you know, nice to save money too. But so okay, I've got, I'll start. I'm going to, I'm going to set you up with two questions relatively quickly. I can't decide which one I want to know. First one is what is the, I guess the what are the differences between net zero and passive house? And like, what are some things that make passive house design the most aggressive? What are the things that make it sor of, you know, unique?

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07:08
Speaker 1
And then, and then the second question right on the back of that is talk about, you know, just your application and where you are in the world and, you know, what the renovation actually consisted of. And then I'll take exhaustive notes and try to figure out a budget.

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07:27
Speaker 2
Perfect. Yeah. So you can have a net zero passive house. They're kind of, you know, net zero is like you use about the same amount of energy over the course of a year as you produce, usually with PV on a single family home. Anyway, passive house is probably the best way to get there. So the idea is you're pulling some of that money out of your PV or out of your utility bill and putting it into your mechanical system and your envelope. So more insulation, more better windows, more durable weather barrier, airtightness is probably the biggest lift, I guess, at least in our climate. And so the whole thing is cost optimized. Right. So it's like we don't want to throw so much insulation at your walls that you're getting these diminishing returns and just burning money. Right.

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08:19
Speaker 2
And also, you know, from an environmental standpoint, there's embodied energy insulation. And so we don't want to be trying to reduce our operational carbon. Right. The amount of, you know, fossil fuels getting burned to heat and cool your house by putting too much into your walls. It's all about kind of finding the sweet spot and trying to make a more sustainable house that's also healthier and lasts but, you know, does better in outages. So. So like, for our house, right. We're. We're in Austin, so relatively mild climate, you know, compared to the coasts and New England. So what that looked like for us, our walls are about double code. Our code minimum wall is an R13 wall. So that's a 2x4 with fiberglass batts here. So we have two by six walls and then we use the zip R6, which is.

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09:12
Speaker 2
So zip sheathing is pretty ubiquitous down here. It's like the sheathing with an integrated weather barrier, the green sheathing you see around a lot.

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09:19
Speaker 1
Yep.

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09:20
Speaker 2
And so they make a version of that has poly ISO on the backside of it. And you can get that in various thicknesses so you get your continuous insulation. But you only have to make one trip around the building. So we did that because it was like a little easier and more normal, you know, down here.

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09:37
Speaker 1
So this is. I'm going to pause here just for a second as I wrap my head around.

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09:39
Speaker 2
Yeah, the.

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09:41
Speaker 1
So. So this is an existing structure. It sounds like you're. You're, you know, pulling off the skin of the building to, you know, so that basically gets stripped down on both sides because you also have to go from 2 by 4 to 2 by 6. When you go to 2 by 6, you just fur out of 2 by 4 wall or do you literally, you know, replace all your studs?

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10:06
Speaker 2
We. So our house was 105 years old when we renovated it. And were intending to keep the two by four studs and do more. Do a thicker zip system, you know, thicker continuous insulation.

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10:20
Speaker 1
Okay, got it. So you would have just done it on the outside.

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10:23
Speaker 2
Yeah. And we looked at doing it on the inside and it was just, you know, very expensive and then. But our wall, it was like there were no jack studs, we had no headers. It was all balloon frame down below the floor. The floor was an inch and a half out of level. So we ended up redoing most of the framing. Like there's very little. It's a renovation, but there's very little of the existing wood that was in the house. You know, we thought were going to Be able to keep a lot more of it than we could. It's kind of like peeling away the onion and it's every layer you get to is rotten. So. So were lucky enough to be able to switch to two by six walls which is like, you know, gives us a little bit stouter frame.

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11:02
Speaker 1
Sure.

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11:02
Speaker 2
We didn't mind losing the X. We didn't mind losing the two inches of the interior, you know, footprint. And then were able to back off of that continuous insulation a little bit. Which also, you know, kind of saved us some money in our window detailing as well.

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11:16
Speaker 1
Okay, got it. So we've got the insulation. Now go to the windows. What did you do window wise?

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11:22
Speaker 2
So we used Marvin windows and they're triple pane. And we used a mix of. So were like the first shipment of Marvin Modern which is this line that they put out a couple years ago that are very sleek looking, high performing windows. And then we use some of their Fibrex windows, which is the ultimate. And then we use their wood clad windows because it's a historic preservation. So we tried to match the kind of historic facade with new triple pane casement windows but they have sort of a check rail on them so they look like double hung windows from the outside. We're in a protected historic neighborhood.

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12:03
Speaker 1
Got it.

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12:03
Speaker 2
So we wanted to kind of. So we, you know, redid the detailing, redid the brackets and the roof detailing and used siding that matched the profile and window casing and trim that match what was there before. But now they're new triple pane windows that look kind of like double hung unless you come up really close to them and inspect them.

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12:22
Speaker 1
Awesome. Awesome. All right, cool. Anything else that you did to finish yours?

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12:29
Speaker 2
I'd say so then. Yeah. So airtightness is a bit, you know, going for here code,irtightness is 5 air changes per hour. Right. So that's sort of the leakiness of your building. And we had to be at 0.5 so 10x code which is quite tight. And so when you get to that level of airtightness, then your mechanical system, you know, we have a ventilator. So we're constantly bringing fresh air in with an erv, which is basically a box that allows you to constantly bring fresh air and without paying the energy penalty. So it's like pushing stale air out and the heat and moisture energy kind of come to equilibrium in that box. So you're not basically. So it's. You're not paying the same energy penalty if you're just like Open a window for all day long.

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13:14
Speaker 3
All.

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13:14
Speaker 1
All in.

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13:15
Speaker 2
If.

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13:15
Speaker 1
Can I ask roughly budget wise, what this, you know, square footage and roughly what it costs.

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13:22
Speaker 2
So our house is 2100 square feet. And then I'm in a loft right now. So one of the things that's kind of cool is we moved the insulation from the ceiling up to the roo and we got a nice little bonus space. It's my office now, but we also were able to carve into that like in the kitchen. We can post some photos later, have this big, like sort of splayed light. Well, and then our bathrooms have some skylights. So you kind of steal back some of that space, which was just kind of dumb hot space with our AC in it. It's kind of crazy that we run our air conditioner through, you know, the hottest space that's even hotter than outside, you know, so.

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14:00
Speaker 2
So yeah, as far as price, you know, I think a typical, you know, like this was a custom home, right. So it's not the cheapest home you could possibly build. It wasn't, you know, ultra luxury either. But were able, we'd say probably like 5%, you know, somewhere in that like 5 to 8% range. Also, like, were learning a lot. We hustled a lot of materials from friends. So, you know, I think 5% is a good target. And what we're seeing in multifamily is you can actually get down to cost parity with this really, with passive house. Because, you know, as you think about like multifamily building a unit only, you know, might only have insulation on two sides right.

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14:44
Speaker 2
On the exterior walls, but then it's got all these shared walls and then there's this economy of scale, you know, in your, you're repeating everything so many times. So. Yeah. And then as the markets mature, you know, we see a lot more passive. House in Seattle, Portland, Vancouver, and then sort of like New York, Chicago, Philly are definitely like ahead of the adoption curve. We're still kind of new at it down here, so we're still learning, our trades are still learning, we're still getting our supply chains up and running. But what we've seen in those other markets is that the costs come down pretty quickly when people start doing it all over the place.

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15:21
Speaker 1
So now we're getting to that question, which is, you know, it's obviously not only for single family homes. Talk about some applications where this is, you know, currently working in the United States and elsewhere.

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15:33
Speaker 2
Yeah. So were talking before we jumped on the first Passive House certified hospital just finished its certification in Frankfurt, Germany. So I think that's about a 30 million euro project. Pretty cool though. You know, like it's a big benefit of this is the healthy air and the comfort and so having hospital is like probably the first place you'd think of. There's New York, there's some, you know, 40, 50 story condo and apartment buildings going up that are passive house certified. There's schools, museums, you know, it's really all, it runs the gamut, you know, single family homes. It kind of started with single family homes and then affordable housing and really like Europe, Pacific Northwest and the Northeast are where things have taken off over the last 10, 15 years.

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16:31
Speaker 1
But that's awesome to hear that there are so many applications and I particularly like, as I think about comfort and you know, you think about, you know, health. There's the, to me, a really natural and relatively hot, relatively, you know, hot market in the US right now is senior living. Are senior living projects looking at this?

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16:59
Speaker 2
I would think so. We, we do a lot of like affordable and workforce housing. We did one senior living project maybe like five or six years ago, but it's not something that we're, our firm is focused on. I would be pretty surprised if there wasn't senior living. Looking at it, I know of a couple projects like in Maine and Massachusetts that are doing it. But yeah, totally makes a lot of sense. Senior living anything that's, especially with like legacy owners, you know, where if you've got like a senior living facility that's going to be owning it for 10 years, then you know, you're going to pay back the first cost and then after that it's all just gravy. You know, you're getting all of the health benefits and durability benefits and significantly reduced utility bills.

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17:44
Speaker 1
Yeah, it's, it does seem a no brainer particularly if you're getting close to cost parity in, you know, in the construction phase. That, that's usually the thing that causes everybody, you know, all the deals to break down this way is like, yeah, well be nice to do.

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18:00
Speaker 2
Yeah, exactly. You know, that's, we work with a lot of like supportive housing provider and so they're going to own the project for 50 or 100 years. So it's like why not get out in front of it? And you know, and it's also, it's starting to become code. A lot of areas are setting it up as a reach code. Massachusetts just set it up as a reach code for multifamily, where cities and municipalities can opt into it. And so I think there's five or six municipalities in Massachusetts that are going to start requiring it for anything over six units, which is pretty exciting. So then that'll help that cost curve come down, too.

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18:38
Speaker 1
Yeah, it does. I mean, there's always the initial pushback and frustration and, you know, I'm sure plenty of contractors and plenty of developers are, you know, will be throwing their hands up. But, but as you, if it really fundamentally does, you know, bring the cost curve, you know, if the cost is close.

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19:01
Speaker 2
Yeah.

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19:01
Speaker 1
Unless you're literally building to sell, you're going to benefit from it if you're the owner.

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19:08
Speaker 2
Right. And then there's code is there also to help the end user and protect people and things like that. So it's, I mean, the ROI question is like, it makes sense, Right. As a first thing to think about, but it really is, you know, it's just the first cost of the building. And what about the overall cost of the building over 50 or 100 years is going to be in use? And then that's not even considering, like, the health costs of, you know, childhood asthma and things like that, you know?

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19:37
Speaker 1
Yeah, if we're going to put dollars on something like that.

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19:41
Speaker 2
Right, exactly.

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19:42
Speaker 1
Which does have a financial aspect, but it's also bigger than that. What would you pay to keep your kids, you know, healthy?

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19:47
Speaker 2
Yeah, yeah, exactly. What's the, what's the return on investment on granite countertops versus your kids?

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19:55
Speaker 1
I have a formula. I'll run past you.

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19:59
Speaker 2
We'll figure it out.

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20:04
Speaker 1
So how do contractors react to this type of building standard and how does this actually impact. The majority of our audience are contractors, general contractors, specialty contractors. How do they react to this type of standard and, you know, how can they help or hurt?

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20:24
Speaker 2
Yeah, I think it runs the gamut. You know, like, some contractors are really excited about this and will jump at the chance to get involved. You know, like early adopters or people really trying to, like, push the boundaries of what they're doing and then some, you know, we get a lot of groaning as well. So, you know, it kind of similar to how our firm had worked with you on these projects in Houston was like, we want to create a, like a team that's collaborating around the project. So, like, everybody's involved. You know, if it becomes antagonistic thing where it's like we're forcing this down the contractors throw, then that's not going to work.

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21:03
Speaker 3
Right?

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21:03
Speaker 2
It's not going to be a successful thing. We all need to be on the same page about it. We all need to want to be doing it for the same reasons. And sometimes that means educating contractor, sometimes that means incentivizing the contractor. Sometimes that means working with a different contractor. You know, really, we want to. We want to work with contractors who want to work on the project and are excited about this kind of like, you know, pushing things forward or whatever you call it.

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21:30
Speaker 1
Yeah, it's a mindset. It's a mindset. And I. And you know, as I think about it's this case for all. I don't care what standard we're building to or what code we're building to. It's always the case that your specialty contractors need to become good partners for each other out in the field, thinking about the guy that comes before him and the guy that comes after him and taking care of each other through the course of it. But when you're building to this type of standard, especially when it's new, what are the things that contractors would do that, you know, maybe it's cutting corners, but how does a contractor accidentally, or maybe not so accidentally undermine, you know, hitting this type of standard?

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22:16
Speaker 2
Yeah, I mean, airtightness is really the tricky one, especially in our market where, like, our existing codes are pretty loose. And so it's not really. There's not a lot of, you know, buffers. Like, there aren't requirements around airtightness testing necessarily that are getting followed. And then just the code minimum is pretty loose. You know, adding more insulation, that's in your spec, that's very easy to price. Right. It's easy to detail. That's kind of, you know, no biggie. The mechanical system, same thing, right. Like, it might cost a little bit more, but the mechanical engineer is kind of dealing with the design and the installer is able to, you know, handle the install and execute. Airtightness is tricky because it's like there's so many trades, right?

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23:02
Speaker 2
You've got your electrician, your plumber, your H Vac guy, you know, random, you know, subs who are coming out. And so it's like you've gotta that and that's where it really is on the contractor and where it's tricky and where I have a lot of empathy for the GC because this is a thing where they're. They're already having to, you know, kind of babysit a lot, right? And like, you know, keep an eye on everybody and make sure Everything's happening the way it should be and the way it's drawn and working well. And now they also have to make sure that nobody's poking any holes in the building without air sealing it or that they're. You know, it's like when you're running electrical conduit, you know, it's one whole, one thing, right. With, with air sealing.

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23:45
Speaker 2
Because if you bundle all your conduit, put it through one big hole, it's really hard to air seal that. But if you just poke one wire through, you can seal it really well. So just like some different ways of thinking about stuff, some different ways of training. It's really about communication at the fundamental level. Like, like the doing is not too tricky. It's the communicating and making sure everybody's on the same page and everybody understands why we're doing this.

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24:09
Speaker 1
Yeah. As the designer on the project, are you actually out there doing any training, you know, helping, or are you training the GC how to train or how does that work?

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24:18
Speaker 2
Yeah, we do especially on like the single family stuff. We're a little more involved, you know, on the ground, like with our house, I mean part like as our house too. But we really wanted it to be a kind of like open source case study. Right. Like were have the opportunity to do this thing that was a little new. We were working with a builder who has a friend and who was really into it. And so we hosted, I don't know, probably like 15 sort of open houses where we had Huber come and do a zip install showing how to air seal and detail around windows. We had Marvin do a install. We did a bunch of blower door tests.

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24:55
Speaker 2
We rented a fog machine from Rock and Roll Rentals and filled the house up with smoke and then positively pressurized it so you could see where all the air leakage was because there was smoke pouring out.

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25:04
Speaker 1
Oh, that's fascinating.

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25:05
Speaker 2
It's really fun. And just like bought a lot of beer and barbecue and invited everybody we knew over to see it. So trying to show that it wasn't, it's not too weird or too crazy. But yeah, again, like a lot of collaboration with our builder and with our trades, which was really, it's really fun. You know, as long as everybody is like into it and on the same page, it's like, it's super rewarding for me because I learned a ton from the trades and our GC about how the things are actually getting installed, the sequencing and that helps me be a better designer. And then that all kind of comes full circle.

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25:42
Speaker 1
Yeah, that makes total sense. I think so Brought in Stacy. I know we have some questions that we want to get to, but I just want to say before we do that I think you've done a really great job of taking this thing that like a lot of these things, Trey, it's like it's new. It feels a little green or annoying to some people. Right. Like, you know, like if you're not on the, if you're not like thinking sustainably, it can sound just sort of like, oh God, you know, like we're doing more. Yeah, but I think you've done a really nice job of making it easy to understand. And, and like you said, like, you know, making it not weird or scary. You know, like it's. This is not that strange.

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26:34
Speaker 2
It's.

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26:34
Speaker 1
There are just a handful of things that we're doing here to focus on. I love the yeti cooler analogy. Air tightness and recognizing that if we can focus on that, we can dramatically reduce our energy consumption, which has just that. Who doesn't win? Aside from utility companies when we do that? You know, that's a, you know.

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26:57
Speaker 2
They, they win too though, because it's. Then the house kind of acts as a battery and so they're not their peak. You know, it's really expensive for them to have this like really variable load. And so we can kind of squish those peaks with more of these buildings because you can pre cool them or preheat them and then at those times when they'd have to.

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27:14
Speaker 1
Great point.

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27:14
Speaker 2
Plants that are super expensive. So we see a lot of utilities buying in or some utilities. Some utilities that are a little more forward thinking than others. But yeah, we love it. Our firm is now only doing passive houses for custom homes and we're using it as kind of a sandbox. Those have a little bit more customization and wiggle room, but we can learn a lot from them. And then we can track those lessons learned up to our multifamily and commercial projects and see, okay, we know we can do this easily. We know it's not going to cost a lot. Let's track that up and start getting contractor buy in on the bigger stuff.

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27:46
Speaker 1
I can't, I can't wait to start seeing it on some of the bigger stuff that I'm involved in. And you know, if anybody's watching, thinking about, you know, a strong multifamily quality architect, that's the space that I've worked with these guys I've Never personally experienced a more participatory and, you know, stronger partnering mindset from an architect. Just really going out of their way to make it easy for construction to occur and, you know, communicating openly and often. So they're a great pick if anybody's looking for one. So, Stacy, what do we have for questions? I want to try to get at least a couple in here before we wrap up.

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28:33
Speaker 3
Sure. Dennis has a great question. How does the design work with the new Covid Air requirements? Most builds are going to more air movement and air changes.

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28:46
Speaker 2
Yeah. And Chad, thank you so much. I was getting goosebumps there. You know, we really strive for that and try to. And we've loved working with you and your team and that the whole idea of, you know, like a high trust relationship and everybody being in it for the project has really changed how we think about it, so.

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29:03
Speaker 1
Oh, thanks, man. That's great to hear.

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29:05
Speaker 2
Appreciate your work. Yeah. So it's essentially like it's perfect with COVID requirements because we know how much we're ventilating. You know, most homes don't actually bring in fresh air. They're just. The analogy I've heard is kind of when you flush a toilet and the water just swirls around. Right. So. So we're actually bringing in fresh air 24 7, meeting our ASHRAE 622 requirements, filtering all that air with. We have a MERV 16 filter box and then MERV 13 filters on our dehumidifier and our ERV. So you're catching all those virus particulate and controlling your fresh air. So your CO2 stays down, you're breathing well, you're sleeping well. So it really pairs well with all the COVID error requirements.

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29:55
Speaker 3
Thank you. So what is Source zero? How can you explain that?

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30:01
Speaker 2
So Source zero is kind of an add on to the Passive House certification where. So we're doing an energy model, like a 3D, you know, pretty robust energy model that Phius, the Passive House Institute US is vetting through many rounds of review. And within that energy model, if you have more production than use, then you know, and then you execute that in the actual project. Then you get this Source zero tag. So it's basically saying that the project. And so that's. Sorry, it produces as much as your house. And then there's a. Essentially depending on your utility, there's a metric for like how much transmission loss you're getting. So that's why it's Source zero instead of site zero. That makes sense.

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30:47
Speaker 1
Got it. Got It, I think, you know, I'm glad that there are people like you and obviously, I'm sure lots of colleagues out there who are, you know, really working to take these, you know, high minded concepts about reducing our carbon footprint and creating more sustainability and you know, reducing overall energy consumption and really turning them into practical application and asking yourself, how do we get it to actually happen? And, and I love hearing that as a firm you're only doing this type of design. And, and you know, that's awesome. I mean that's, you know, with single family. I heard that part of it too. But with single family, this is the only type of, you know, custom single family design that you're doing.

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31:40
Speaker 1
And I, I think, you know, that's how you know that there is momentum behind a thing and that the thing isn't so pie sky, you know, cost prohibitive, painful that it won't ever get legs. So I'm sure there are hurdles. I'm sure there are going to be still projects for which this doesn't make sense and where, you know, people push pause and say, yeah, we're not going to be shooting for passive house certification here. It just doesn't make sense for, but if overall it moves the needle in the right direction, I think that's, you know, that's when again, it's a win for everybody.

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32:21
Speaker 2
Yeah, for us it was like, you know, we did a handful of them and having lived in one. And then Scott, one of the founders of our firm, lives in a very close to passive house home that he built from his family. And it's just like, okay, this is, there's no other way to do this. It's just got to be our best practice. And so if we just plant a flag then we're, you know, we're hoping that people will come to us who want to do this and really, you know, it's like the energy, we kind of came at it from the energy efficiency and the sustainability side, but after having lived in them and feeling like the health benefits and the comfort benefits, like, that's really where it's at.

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32:58
Speaker 2
You know, I think we do it for these reasons, regardless of the other stuff.

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33:03
Speaker 1
Yeah, yeah, no, that, and that was, that's exactly what I said. You know, it's like to everybody's benefit, probably most of all to the occupants of the space, which is, that's how, you know, it's a really, you know, it's not just to meet some code requirement, you know, goal there's, it's just fundamentally better. So it's great stuff. Last question. Do you do. Where will you take on projects? Are you only designing in Texas?

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33:30
Speaker 2
No, we do. We do work all over the country. We're primarily in Texas, Austin, Houston, Dallas, San Antonio. But we have done projects in California and Pennsylvania, Colorado, New England. So we'll go anywhere. We love it. I mean, it's all, it's a new challenge everywhere. Working in new climate, new space, and that's the fun thing for us. And then I saw the tax credit question in the chat. So with the Inflation Reduction act, you get tax credits now for Energy Star and Zero Energy Ready Home. So it's, you know, the Zero Energy home is a higher tier. So if you certify with Passive House Institute us, that's safe harbor for both of those. So you automatically get Zero Energy Ready Home, epa, Indoor Air Quality plus and watersense certifications when you certify with vs. Nice.

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34:23
Speaker 2
So you're, you can get those tax credits which can really add up, especially in a multifamily or a common lot. Right. Like $5,000 a unit can. Can add up.

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34:31
Speaker 1
That adds up fast. No doubt. That's. That's great to know. Very cool. All right, good. Stacy, anything else on your mind?

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34:39
Speaker 3
I was just curious, do you have any videos you could share? I'd love to include like a visual for our follow up email to our viewers.

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34:48
Speaker 2
Sure, yeah, we can, I'm sure we can dig something up.

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34:51
Speaker 1
All right, awesome. Yeah, send it. Maybe post it in the chat here even and you know, send it to Stacy. That way, you know, regardless whether you're so. You know what though? Darn it. People need to be on our mailing list, so please email us to be added to our weekly mailing list. Email Stacy H. Steeltocom.com and we'll get that stuff over to you. The tray shares.

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35:18
Speaker 2
Awesome. Yeah, we did a few videos with the build show during construction that I can share. Was pretty fun.

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35:24
Speaker 3
Awesome.

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35:25
Speaker 2
Nice.

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35:26
Speaker 1
All right, cool. Any parting comments, Trey, before we wrap it up?

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35:30
Speaker 2
No, just thank you guys for doing this and for having these conversations. I've really enjoyed getting into your podcast over the last couple months. And also, you know, big shout out to Chad if anyone's doing a multi family project, bring him in on the team. Been a huge asset to us.

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35:47
Speaker 1
They are not my customer and I'm not paying. Trey. It's. I don't know, I don't know what else. I was brought in by the developer and you know, I've been pretty hard on their guys, but they're, I mean, really, I'm hard on everybody on the project. But, but the project is this team is that we're working on together is really clicking. And, and it's anyway, lots of.

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36:08
Speaker 2
Thank you.

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36:08
Speaker 1
I appreciate that. Clearly I don't know how to take a compliment. I'll. Trey, we'll have to catch up again soon. I'll be, I'll be in touch next time I run down to Austin.

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36:21
Speaker 2
Way great. Appreciate it and be fun. Take care.

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36:26
Speaker 1
All right, Stacy, let's do a little housekeeping and talk about next week. So next week, same time, same channel for episode number 41 with Tim Klimchock. Tim is a, I don't know, maybe 25 year or 30 year accountant. He was a partner at an accounting firm for many of those years. Fantastic book of business, all serving the AEC community. And he recently left and started a really his own little consulting gig helping to work, you know, just on the consulting end of getting contracting companies, financial houses in order, which has been, I work with Tim on some of my client engagements. He's doing an awesome job and I really wanted to pull him into this discussion. He's going to talk about the type of relationship that the contractor should strive to have with their accounting firms.

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37:25
Speaker 1
And I think there's an opportunity in there to, for business owners, for CFOs and controllers as well as our, you know, obviously anybody else in our regular audience to learn. But this might be one where you drag somebody in the CFO suite or you know, the controller suite into this show and have them listen in because, you know, Tim built an amazing book of business really based on the principles he's going to share with us, which is going to be cool. So, so there's that for next week. Obviously we're always asking you to join our mailing list and be sure to catch us on all of our platforms, obviously live on LinkedIn, YouTube, Facebook, but then be sure to check out our recorded shows on Apple podcasts, Spotify and YouTube. Every week we get those uploaded right away.

‍ ‍

38:16
Speaker 1
So if you missed the show, you will catch it later on same day. Stacy, anything else that I'm forgetting from a housekeeping standpoint?

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38:25
Speaker 3
I don't know if we can announce it yet, but we will be attending one A conference soon live. So maybe next week we can see if we can get permission for that announcement, I think.

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38:40
Speaker 1
Yeah. Okay, we'll wait till next week. We'll wait till next week. But, yeah, we are gonna do our first roadshow. We're gonna we're gonna be live at a conference this May in the D.C. area. And we look forward to that experience and getting it under our belt and then maybe kind of making a thing of it, doing it on a regular basis and checking out where some of the coolest conversations are happening in the industry and going and joining those conferences for a live show. So I look forward to that. That's a great point, Stacy. And we'll have more to share as those details become formal. So. Awesome. Anything else?

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39:15
Speaker 3
That's it. Have a great day.

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39:17
Speaker 1
Have a great day. We'll talk to everybody soon. Please tune in next week.

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39:22
Speaker 3
See y.

‍ ‍

Lean stands for reducing inefficiencies and removing waste wherever Lean principles are applied. Lean has been a buzzword around the construction industry for decades, and while some segments of the industry have fully embraced it, others have only a vague sense of what Lean is all about. Regardless of where you fall on that spectrum, this episode will invite you into the discussion in an approachable way.

Tom Hughes is a Lean practitioner who came up as a mechanical contractor, and his experience with Lean practices has led to outstanding results. He'll share stories to help us see how and why we can use Lean principles in practical ways to create better project outcomes.

We've had on a few guests with leading views about integrating more manufacturing practices with construction. It seems like a relatively new trend to most, but to people like our guest Gerry McCaughey, offsite construction is how things have been for a long time.

Gerry has been building offsite for over 30 years between Europe and the US, and he joins the show to tell us why any other method is a mistake. Join us to hear from a true veteran in a construction space that is gaining traction.

Transcript:

‍ ‍

00:01
Speaker 1
All right, morning huddle time.

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00:02
Speaker 2
Good morning.

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00:03
Speaker 1
I'm not saying it works. I wish you Godspeed with all of that. I think that's really nice. You know, I'm not sure what kind of success you're gonna have with that today because the world, my friend, has changed. Right.

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00:17
Speaker 2
A lot of American construction workers, they have different needs. They have completely different needs.

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00:22
Speaker 3
These awards have a huge like, criteria that you have to fill out. And they usually have a community service or community.

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00:32
Speaker 2
You know, the most productive.

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00:34
Speaker 3
With a high performance value. And you know, sometimes it's 11 o' clock at night.

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00:40
Speaker 1
Funny, isn't that? Yeah, not for me.

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00:43
Speaker 3
Not for me.

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00:44
Speaker 1
At 11 o' clock, I am guaranteed to be snoring.

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00:47
Speaker 2
So.

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00:48
Speaker 3
So.

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00:57
Speaker 1
Good morning. Morning huddle time. I'm Chad Prinkley here with Stacy Holzinger and our guest, Jerry McCaughey with Off Site tech. Jerry, thank you so much for joining us this morning.

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01:09
Speaker 2
Thank you very much. Although when you said the morning huddle, I didn't realize that you meant this early in the morning. Right.

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01:15
Speaker 1
So when we invited Jerry, we said, hey, it starts at nine. He said, perfect. And we said on the east coast. And he was already signed up. There was no kicking out.

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01:25
Speaker 2
Early start this morning, boys. Early smart. I already start.

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01:28
Speaker 1
You're joining us from California by way of Ireland.

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01:32
Speaker 2
That is correct. Well, and it's raining outside in California, which they told me it never rains in Southern California, but not today.

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01:40
Speaker 1
Feels like. Yeah, so it's, it's election day here in the, you know, November 8th. My kids schools are closed. I never had off when I was a kid either. During election Day, my kids can't vote. So I'm not sure why they're off. But you know, it's, hey, get out and vote if you haven't done it already. If you're watching us live, make sure that you get out and vote. Use, use the opportunity to do that. So today we're going to be having a conversation about the, you know, about off site construction.

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02:22
Speaker 1
We're going to be having a, you know, we've had that conversation, I think in two different ways as I look at past episodes and in both of those conversations, really interesting, but in both those conversations were talking about it really from the standpoint of people who aren't, haven't done it, you know, personally and lived in it over the course of time. There were some, you know, people who've been consulting in it, some people who are, you know, in their engineers or think, you know, who are trying to influence more off site construction. But Jerry's lived it and not just recently. Jerry's lived it over the long haul. And that's something that I really want to hear from Jerry about is not only, you know, offsite construction. Okay, we've heard it, we've been talking about it. It's a pretty hot topic right now.

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03:20
Speaker 1
But, but you've got a long history with this. Not just like, you know, trying it in the past 10 years. What's it like, you know, to really run an offsite construction based company? And so that's going to be the nature of our conversation. Stacey, make sure that we get really cool questions from the audience and we'll bring you back here toward the end of the show. Good?

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03:45
Speaker 3
Yep, sounds good.

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03:46
Speaker 1
See you in a bit. So. So Jerry, I want to start off by just kind of hearing your story. We say you're in California now by way of Ireland, but kind of weave it together for us. What, what's the, what's your story in the construction industry?

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04:01
Speaker 2
Well, I mean, you're right. I mean my history in off site construction spans close on 40 years. But my family's involvement in offsite construction literally goes back 60 years. So when people talk about it here, they sort of not talk about, but when people get the impression that it's something that's relatively new, it's far from it, especially on the other side of the world. But there's an interesting story about the connects up the dots between Ireland, the United States and my involvement in offsite construction, which was that my dad was originally a carpenter. And back in the late 50s he left Ireland to emigrate to the US took a boat from Cork and ended up in New York. And that's where he first discovered homes built, you know, houses being built out of wood frame.

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04:49
Speaker 2
Because in those days everything in Ireland was built out of concrete blocks one block on top of another. But he was a carpenter primarily. He was actually a roofer and a finished carpenter. That's what he did. So he goes to America and he discovers these guys building homes out of wood. And as a carpenter, he thought, oh, this is a great idea. And so a couple of years later he emigrated back to Ireland and decided this is what he wanted to do. But it never dawned on him when he went back to stick frame, although that's what he learned. Now don't ask me why I never asked him.

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05:24
Speaker 2
He passed away two years ago why that was the reason Maybe it was the weather, but I think it was more to do with the cultural upbringing of a European is that you would automatically think that if you're going to manufacture or build anything, you'll try and do it indoors under factory controlled conditions. So when he went back, he literally rented a small building and started making wall panels and plywood gusseted roof trusses and designing homes, little single story buildings and going out at the weekend with his brothers and his friends and erecting these. And that effectively became Ireland's and pretty much Ireland and the UK's first off site construction company. And that went on to become very successful in his time.

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06:09
Speaker 2
By 1985 I think he was the largest because he sort of, when you say started a company at that point in time he really started an industry and so other people entered it. And by 1985 he was doing relatively well. I think he had three or four hundred employees and he was the largest offset manufacturer in Britain and Ireland. And I was in college at that point in time doing a marketing degree and I had to write various different reports to get my degree. And I picked the off site industry not because of any particular interest in it, but because, hey, my dad worked on it and I knew you could access the information relatively easy, right? And so I wrote a number of these reports.

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06:53
Speaker 2
I wrote my first report in 1982 and when I went to University College Dublin, I wrote a report which was basically how to set up a international B or an Irish based international off site construction company is as strange as that sounds, and handed it in, got my degree. Apparently I got first in the class for that report, but I mean I had access to colossal amount of information. I went off at that point in time to live in California after I graduated. And unknown to me, my dad was, and I spent a couple of years here. My dad sold out of his business in Ireland and he had been out of it for a couple of years and I think he got bored.

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07:37
Speaker 2
And one day I got a phone call from him saying, would you remember that report you wrote when you were in college about building an international offset company out of Ireland? Did you believe it? And I can remember saying to my dad, I can't barely remember writing the report, let alone what was in it. I was more interested in chasing girls around California at that point in time than remembering what I'd written in college. And anyway, he said, I'm going to send it to you. So he sent it to me and he said, you read it and if you think it's true, Come back here. Those exact words were, put your money where your mouth is and let's have a go at this. And three months later, I got on a plane on December 8, December 9, 1989, and flew back to Ireland.

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08:19
Speaker 2
And myself and my brother and my dad and another guy by the Name of Jim McBride set up a small company in Monaghan town, which is 6,000 population, 6,000 people in 80 miles north of Dublin. We set up a company called Century Homes out of a building that was 5,000 square feet and proud to say 15 years later, that was the largest offset company in Europe. And we had five factories, three in Ireland, two in the uk. We were shipping as far away as Japan and we had 650 to 700 employees. And we had done the world's first six story wood frame building. We had done the UK's first zero carbon, not zero net energy, way past that, we did zero carbon. So we basically pushed the limits of engineering and we pushed the limits of thermal performance in buildings.

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09:04
Speaker 2
And that sort of took up to 2005. And in 2005 we sold that business to Kingspan, which is a large buildings material company based out of Ireland. And I stayed on a CEO in that till 2008 and then I moved to the US and that point in time, 2008, the world was in free fall, the financial markets were in crisis and basically the housing market was in devastation. And housing had gone from 2.2 million at its peak at that point in time down to about 550,000. But I kept looking at how Americans were building homes basically the same way as my dad had seen it pretty much 40, 50, 60 years ago and going, this is crazy, there has to be a better not, there has to be a better way. There is a better way.

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09:52
Speaker 2
And then waited for the market to turn around. And when the market turned around and went out and pulled together a team of people that had worked with in Ireland before and set up a company in California called Entecra. And we raised 45 million from Louisiana Pacific and set that business up and then got it up to a significant scale. And I mean I've been traveling up and down from Northern California, Southern California for five, six years, said, no, it's time for me to step back from that role. And then now, I then went into consultancy, basically helping, because now I think we help to light the fire under people to look at offsite as being a serious alternative to traditional construction methods.

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10:33
Speaker 2
And now I'm helping companies to transition to the offsite Industry, but not in the, not on answer is not in the sense of the way people here think of component manufacturers. My, that's never been my view of life. Off site companies and component manufacturers are two different entities. And also in that sense, I'm also pretty much at the technological side of things. I like to push technology and that's the way I've always done it. So everything that we do is digital and it's a high tech on the manufacturer from the manufacturing perspective. So that sort of brought us up to today. So that's how I got here. I love it.

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11:09
Speaker 1
That's great. That's, it's a fascinating, impressive story and I think it's got to be loaded with lessons and that's what. Oh, God.

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11:25
Speaker 2
Right.

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11:26
Speaker 1
An immense amount of lessons.

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11:27
Speaker 2
Right.

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11:28
Speaker 1
And so I think I want to explore one thing briefly before we get into lessons, and that is you talked about not being a component manufacturer in our very first conversation several months back. What really jumped out to. One of the things that jumped out to me in that discussion was that you were sort of saying, you know, look, there are a lot of people who claim to be doing off site and they're not really, they're just bringing one piece to the table and that might be a good choice for their little piece of the puzzle, but it's not actually correct, you know, solving the, the problems that true off site can solve. So talk a little bit about, you know, the differentiation.

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12:15
Speaker 2
Yeah, this is an important point because it actually does go to why off site, as a European understands off site, why it hasn't taken off up to now to the extent that it has in say, other parts of the world. But there is. So when I let me just start again, clearly says a component manufacturing company is not an off site company. That's absolutely. And actually by definition just anybody there go on Google the word component and you'll see that it's an element, a part of something. But on the other hand, off site is a system by definition. A component is part of a system, but the system is a totality of it. I mean, and as you know, Aristotle said 3,000 years ago, the whole is greater than the sum of the parts. And that's the problem. That's not to criticize component manufacturers.

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13:13
Speaker 2
That's their business. The problem that I have with it is when they go around masquerading as if they are an off site company. They're not, but they do a service for People who want that particular service. But true, offsite is technologically driven. It's a holistic view of the building where you take full responsibility of the building and that includes getting invol with the concrete slab, getting involved with the plumbers, with the electricians, with all the trades. You're effectively trying to coordinate because you're trying to coordinate with everybody that actually touches off or connects us to that connects to that frame with. Your objective is to make that building help that building. And it's not so not one component of it. The whole building get built as efficiently as possible. And so the key words in off site construction are process improvement and process optimization.

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14:04
Speaker 2
And that really does involve a granular level of input into the totality of the building, not one item. So what you have with component manufacturers or with framers who use component manufacturers going around and they buy the wall panels off this guy and they might buy the floor, either the floor trusses or the I joists off another guy and then maybe the roof trusses off somebody else if they happen to get them cheaper. So it's all about driving down the cost. And in the process of doing that, they end up with these bits and parts that have not come from one supplier, where one supplier has total responsibility for focusing on the total efficiency of the building.

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14:46
Speaker 2
And I mean, I'd take far greater amount of time to explain this in detail, but if you looked at an offset company and you looked at the technology that's employed, and the fact that a good starting point is I would look and say if you don't start with a full 3D model of the whole building, then you're not an off site company. Because what you do with that is we take the drawings in and assume that the drawings are incorrect, that the building has been designed wrong, and we go back to first principles and start to rebuild it with the whole purpose of process optimization and process improvement. And then only after we've done that do we start to look at the elements. But then when we start to look at those elements, I mean it's a total view of the building.

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15:29
Speaker 2
And again, when it comes to component manufacturers, Chad, one important point I want to say is that there's a lot of guys in the United States. I mean, I get this thing said back to me, oh, I've used wall panels before and they don't work. And I really want, I mean my head starts to explode when I hear that. I mean, I really, I mean I want to grab them and shake them and go like, what the heck has that got to do with me? What is a wall panel got to do with what I'm talking about? Because it's nothing to do with it. Because using a wall panel on a job, substituting a wall panel for six framing walls, all really means is that you're running fast to stand still.

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16:05
Speaker 2
Because what happens when you get to your floor and you're back to loose joisting again? Loose joisting it again. Whereas true offset companies would prefabricate the walls, the floors, on the roof or the roof. If the roof's a flat roof, they'll use trusses. If it's, if it's a regular picture, but it's a totality. Prefabricated stairs, everything's been designed to fit and to work as fast as possible to get that building up. And so when people talk about components and they say, oh, that proves offsite doesn't work. It doesn't, it bears no relationship, no relation to it. It's like going out to buy the engine of a car and then sitting in your front yard saying, like, I can't get the car to go. Yeah, because you don't have the rest of it. You know, it's not, there's off site is a complete solution.

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16:47
Speaker 2
It's not a part solution.

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16:50
Speaker 1
How many, how many companies in the US Right now? And you may not have this data, but you know, if you, if you don't wonder if you have a guess, but how many companies in the US Right now do you think fit the definition? You've laid it out?

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17:05
Speaker 2
Yeah. Less than 10. Wow. Less than 10. I have done that analysis myself.

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17:12
Speaker 1
And so you mentioned that you're consulting right now. Right. You're, you're helping companies to make the transition. So what's first off? What's motivating people to want to make the move?

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17:29
Speaker 2
Well, I think at the, I mean, there's probably been a lot of false starts in the United States over the last 30, 40, 50 years. You hear this. Well, you'll hear people say, oh, it was tried before and it didn't work. But again, it was tried when with components, they're misunderstanding what they're saying. But this time it is different. And I think this time it's the labor issue that's the primary driver this time. Because I think previous times, the way the US residential housing industry has worked up to now is you needed to build more houses. You just brought more people across the border. Sure. Simple as that. I mean, even let's call a spade. That's how it worked.

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18:12
Speaker 2
And in many cases a lot of those people were undocumented and maybe not have been treated all that well and they were willing to work for, for very low wages and. But that's how it was done.

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18:21
Speaker 1
Yeah. And that's, and depending on what era we're talking about, depends on what border and from where.

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18:29
Speaker 2
Yeah, yeah, that's correct.

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18:30
Speaker 1
I mean we've been doing it forever.

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18:31
Speaker 2
Yeah, the Irish were part of that too.

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18:33
Speaker 1
That's exactly right.

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18:34
Speaker 2
They were coming over and doing, and I'm talking about as early, like as late as the 1980s and coming over and doing it. So. But that's the way.

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18:43
Speaker 1
Canadians are coming over and doing it. I mean it's.

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18:45
Speaker 2
Yeah, that's the way it has been done. But I think the realization is now occurring that's no longer really possible and it's not going to happen. So you're now looking at, I think current estimates are that there's a 400,000 thousand person shortage in the construction industry of people. So there's 400 more thousand more jobs than there are people available. Then add to that the rate of attrition is for every one person who joins the industry, five are leaving. Right. So when you put those two things together and people think there's a labor crisis, there isn't. This is only the beginning. Literally, this is only the beginning. If were to fast forward 10 years from now, this problem is going to be an awful lot greater than it is currently.

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19:35
Speaker 2
And I think some of the more far seeing companies are actually starting to see that and say we need to prepare for this. I mean I am and I am working for numbers of companies who actually that's what they're doing. They're saying we've got to take a longer view of this. This is not going away. And even if it was going away, you have to overlay the other fact on this is, and if you look at the last McKinsey report on the U.S. residential construction industry, over the last 60 years, U.S. residential construction productivity has been flat at best to declining at worst. Now that's a shocking indictment of an industry.

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20:14
Speaker 2
When you think of the technology that has been brought into existence in the last 60 years and you think of the productivity gains that have, say occurred in agriculture which is up 1,750%, or manufacturing which is up 400% and construction is flat to Negative. And then people wonder why there's a housing affordability issue and why there's a housing crisis in terms of a shortage. The answers are clearly there. If you're not increasing your productivity in the 21st century and you're not using technology, then costs are going to increase. The number of homes getting built is not going to match the demand, and people are not going to be able for them. And you end up then with a social crisis that will occur, which you could argue we probably are seeing that with all the homelessness in the, That.

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21:40
Speaker 3
It.

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21:56
Speaker 2
Okay, I believe we lost. Chad. I'll ask that question that somebody's asked there about do we see multifamily as being the biggest opportunity to grow off site? And I would say absolutely. I mean, I think it's the biggest opportunity, but it's not the only opportunity. But I think it's the biggest opportunity because it's the easiest one to. Not that the economics don't work on single family and in hospitality and other types of construction, but in multifamily, it's very easy to make the, it's very easy to prove the economics behind off site construction. Particularly when you look at that, you can, on average, you can take the framing time down by over 50%. I would actually say that when it's properly organized, you can actually reduce the framing time by about 66% back. Chad.

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22:54
Speaker 1
Oh, my Lord. My power got knocked out. We had a big gust and all of a sudden I heard sirens outside. I don't know what happened, but guessing that there was some issue that affected my whole area. I apologize for that. If there was anybody that I'm confident could carry the conversation, it's an Irishman. Jerry.

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23:15
Speaker 2
I was trying to, there, Chad. I was trying to, I was trying.

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23:17
Speaker 1
To go on and do it for you to help.

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23:21
Speaker 3
I was struggling.

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23:22
Speaker 1
I'm sorry. Yeah. Hey, you know what? I can't believe it hasn't happened before now.

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23:28
Speaker 2
It would happen with me. Yeah.

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23:30
Speaker 1
Gary, I appreciate your, your, your help moving us through it. So, so here's the biggest question. I'm sorry to interrupt you. I, I want to, but I, I, I, if you've already gotten to it, skip it. But the biggest question that I have is what is the, the mindset shift and the real business challenges? What are those two things that we really have to confront if we're making the jump from running a more traditional, you know, building company to an off site company?

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24:02
Speaker 2
Well, it depends. I Mean, are you asking me from the perspective of the builder who's going to use the system or are you asking me from the perspective of somebody who wants to set up an off site company to manufacture and provide the off site solution?

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24:16
Speaker 1
See, you know what, you should talk about that to our group.

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24:20
Speaker 2
Right.

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24:21
Speaker 1
Just by itself. So the builder is the, in this case, the, you know, general contractor, if you will, that's driving the project. The off site construction company is going to be the system manufacturer.

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24:36
Speaker 2
Correct.

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24:37
Speaker 1
That does the entire structure is what you're saying?

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24:39
Speaker 2
Yes, yes.

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24:40
Speaker 1
So start with the, start with a builder. What's the biggest shift the building.

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24:45
Speaker 2
Okay, great question. The biggest mindset shift is to get the builder to understand that first cost is not irrelevant. But I don't know if you're familiar with, there's a gentleman there over in the east coast called Scott cdam, he runs a company called True North Consulting. And Scott's an absolute expert in this whole area. But Scott has a great expression that says if you only ever look at first cost, you'll never know your total cost. And one of the problems that, that you face with production homebuilders in particular is the fact that they only ever look at first cost. And the way they're set up is only ever to look at first cost.

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25:26
Speaker 2
So if you put a buyer in that role and that person is out to decide, you know, the various different products that they're going to buy to build that particular home, they're basically, they're motivated, they're incentivized to buy whatever widget they use at a half a cent cheaper this year than they bought it last year. That's their drive, that's their motivation, but they really don't have an incentive to look at, well, maybe it's going to cost me a cent more to actually install that. Because they're only incentivized to look at the first cost of what is the purchase of that particular item. And this is where with off site construction it comes into.

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26:00
Speaker 2
There's a bit, there's a bit of an issue because if you take it that cycle time on a job site is a critical element and there's a value associated with time. And we've all grown up being told time is money. So it's been in us from our little kids, your parents tell you time is money. Yet when it comes to looking at the value of cycle time reduction on a job site, the buyer who's not incentivized to look at it. So I'm not Saying it's their fault, the buyer does not consider cycle time or the cost of it. And in most cases, when you ask that buyer, what is the value, what is every day on site costing your company, they can't tell you. How can you make a purchase decision if you don't know what every day on site is costing you?

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26:54
Speaker 2
So in other words, if the focus from a builder was on reducing cycle time, that was their primary objective, as opposed to let me reduce the cost of the item, because you can actually have the opposite around. You can reduce the cost of the item and increase the cycle time because it takes longer to install, but you bought it cheaper, whereas it should be. You need to look at it holistically and say, if my objective was to increase, was to decrease cycle time, how much is every day on site going to save me in terms of costs? And that's where offset.

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27:24
Speaker 2
So if you go along and you're an offset company and you say it's going to cost $40,000 to frame that particular building, stick framing it, but it's going to cost $42,000 to frame it from off site and say, oh no, I'm not going to use the off site solution, it's $2,000 more expensive. But if the off site solution is saving you 10, 12 days on site, what are those 1012 days worth? I mean, are they worth $200 a day, $500 a day, $600 a day, what are they worth? They don't know. So but by anybody's estimate, and we've done a lot of research on this, even in the relatively lower cost areas, you're looking at around between 4 and $500 per day of site cost each day. So if you take it that you save 10 days, there's $4,000 there alone.

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28:15
Speaker 2
So it means that $2,000 that they're saying are more expensive, you are actually $2,000 cheaper than it. But the buyer doesn't care because the buyer is not incentivized to look at that. The buyers just said, no, you've got a quote at first cost is 42,000 versus first cost at 40,000. Buy the 40,000. It actually costs the builder money. So there's a problem in a mindset change that needs to occur. The first thing builders should do is make sure that every single one of their buyers understands what the cost of a day on site is worth. And then what they should do is make sure that they involve their operations team on the purchase decision when it comes to framing. Not Just the buyer.

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29:00
Speaker 2
Because in many cases the buyer has never actually even worked on a job site, but the operations people are doing it every single day. The other thing that they don't even consider in first cost versus total cost is if you look at the amount of dumpsters that are on a site with off site construction, you're gonna, you're gonna at least save two dumpsters on that job site. So there's a whole load of other things that just don't get included in the cost. So it's back to this thing of you need to look at total cost, but everything here is set up for first cost. And I think that is of a reflection on the fact that everything was basically set up for sick framing in the first place. So it was never really a consideration.

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29:39
Speaker 2
But if you're looking at maximum efficiency, you should be actually using cycle time reduction as being one of the qualitative decisions that you look at when you're quality of the items that you look at when you're making a purchase decision with regard to framing. So that's one part of it that's.

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29:58
Speaker 1
A major mindset shift and it's not complicated, but definitely shifting the focus from first cost total cost.

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30:08
Speaker 2
Yeah. Let me give you an example. I mean, somebody asked me questions in. These are multifamily distance. So I'm going to give you a real world situation. Now it's multi family because it's easier to shorten this. But it's, this is, these are real numbers from a real builder on a real job site that has been completed. So we price the job, a multi family job of 270 units in Northern California. And the stick framer who had framed for this developer previously on his previous multifamily development came in at $100,000 cheaper than the off site solution. Okay. So the developer said, listen guys, I love the technology, I love what you're doing. I love the fact that you're 3D modeling this. I love that I can see the problems.

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30:55
Speaker 2
I love the fact that there's going to be reduced waste on site and there's going to reduce manpower on site. Just, I love the whole concept. But you're $100,000 more expensive. Yeah, I just, I can't go there. And went back to this discussion of first cost versus total cost. So we asked them. Now this was again the difference of the attitude of the person you're talking to because I mean, I love this expression that an Irish newspaper says that you Know, before you make up your mind, open it. So you know, come into an, come into the discussion with an open mind. So the builder said, or the developer said, we said to him, so how long is it going to take your stick framer to frame this?

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31:31
Speaker 2
So he went off and he got the framer to give him a commitment as to how long it was going to take, which was 46 weeks. And we said, okay, our view is we can do this in 14. That's 46 weeks versus 14. Then we said to him, how much is that reduction worth to you? I said, because if we're going to talk about this, we need to know this. And he went off again and he came back. It was about 10 days later he came back and he said, and I think it was actually more than this, but this is what he said. He came back and said he reckons that there's $600,000 of savings if he can bring that job in 14 weeks as opposed to 46.

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32:14
Speaker 2
So we put a proposal to him which was, tell you what, if you award us the job and we bring it in 14 weeks, let's split the $600,000, you keep $300,000 of the savings and you write us a check for $300,000, which means you're going to pay us $200,000 more than we had originally bid. But you're up $300,000.

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32:36
Speaker 1
So just like your dad asked you to do back in the 80s, you put your money where the money.

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32:41
Speaker 2
Right? Yeah. So the developer agreed and the developer wrote the check. Fact, not made up fact.

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32:53
Speaker 1
Bet you never writes that check again.

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32:55
Speaker 2
Well, actually. So the second part of that project, which was 170 units was awarded and it was never competitively bid, right?

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33:05
Speaker 1
Yeah. Well, because the proof.

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33:10
Speaker 2
That is the proof was there. He did not need any more than that. Right. So that's what I mean about cycle time and understanding and being opening your mind to understandings. In many ways, the way things are priced and the way construction operates in the United States is at such a simplistic level. I mean, yeah, oh yeah, give me the price for that widget and then nobody considers anything else. Why are the operations people not involved in that decision making process? Do you think, do you think that the buyer knows better than the guys who actually operate on the job site of what really goes on and what the real costs are? Because at the end of the day they know about all the extra over costs that have to occur. They know about the injuries that occur in the site.

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33:54
Speaker 2
They know about the delays that occur in the site. They know about the quality issues, that delay in the site.

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33:59
Speaker 1
Absolutely.

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34:00
Speaker 2
The buyer doesn't. But, but that buyer is getting that, getting the right to make the final decision on what actually happens. But again, it starts with the fact that if you don't know what your daily cost is on site, you can't make an informed purchase decision. That's a fact. That's a simple economic fact. I mean, if you explain that to a four year old, they'll get it. They will, they will get it.

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34:28
Speaker 1
I'm gonna go bring you a three year old. You think it'll work on the third hour? All right, so. So because of time here, and I want to make sure that we hit on some of the stuff that the audience may be coming up with. Stacy, what questions do you have that we can funnel to Jerry before we have to jump?

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34:51
Speaker 3
All right, let's start with Bill Wilson. He has two questions for you. I think you were answering the first one when we got cut off here, to reiterate. So he said, do you see multifamily construction as the biggest opportunity to grow off site?

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35:08
Speaker 2
Any other markets, it is the lowest hanging fruit. And because again, that example that I gave you of that particular development developer, because I think especially specialist multifamily developers, they actually do understand the time value of money. There is a major distinction between production home builders, even the production home builders who do multifamily, and dedicated multifamily developers. Dedicated multifamily developers really know the time value of money. And so they are, they're a better target market initially. But also I think that multifamily itself, by its nature and regardless of who you're selling it to, it's. They, it's much clearer where the benefits are. But the benefits are equally. The benefits are clear with single family, but with multifamily, because you get such large buildings, you can see the speed and the benefit and the cleanliness on the site.

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35:59
Speaker 2
Much easier than you can with maybe with single family.

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36:02
Speaker 3
But.

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36:03
Speaker 2
So yes, the answer is multifamily is definitely an easier target.

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36:06
Speaker 3
Okay, and then how does the design community embrace this off site construction?

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36:13
Speaker 2
Remarkably well. I mean, there was a lot of talk at the very beginning when we came into this market that, oh, the architects and the engineers won't buy into this. That's actually not been the case. In fact, I'd go as far as to say is that again, I'm speaking more now from Northern California, some of the largest architectural companies in Businesses in Northern California are fully embracing this and actually are now sitting down with their clients in advance and actually saying to them, do you think that you might be using offset? And are actually contacting the offset companies and looking for insights and in advance of them completing the design.

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36:49
Speaker 2
So I think there's a much more willingness among the architectural and design community to look at new ways of doing this because in many ways the off site company is a, which is a facilitator or an additional arm for that, for the, for the design community because they work together. But the off site company does an awful lot of work that maybe would not have done until later that maybe the design community would have had to suck up. But when you bring in the offset company into it, they do it for them and particularly down to 3D modeling the building. So I think there's a lot of opportunity there. And actually we've certainly had very positive interactions with the design community. So it hasn't been a pushback, it has been the other way around.

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37:39
Speaker 3
Nice. Mark asked, what do you think about transforming high school tech school construction malls into off site construction manufacturing facilities?

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37:52
Speaker 2
I love this question. I mean, I think this is where there's a lot of, where there's a lot of misunderstanding but a lot of opportunity. And I'll say you hear at the moment lots of discussions about our reasons given for the fact that the reason why we don't have more young people coming into the construction industry is because we don't have shop classes in schools anymore. Right. I want to say quite clearly that is false. The reason why we don't have shop classes is because young people don't want to go to them. The reason why we don't have people in the construction is not because there aren't shop classes, it's because they don't want to come into the industry. And there's more and more research and proof of that in existence. So people saying that don't know what they're talking about.

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38:44
Speaker 2
The reflection of the fact that there's no tech schools is because people don't want to go to them. Because if you look at a young person coming out of school now and they figure that they're getting paid 15, 16, 70, 18, $90 an hour on a job site and they can go and work in an air conditioned building for Amazon, that's where they're going. And they can get to push buttons on computers and so forth and so on. That's where they're going and they can go to the same location rather than have to drive around all different places knowing where their next job is. That's why they're going there. If you want to bring young people into the construction industry, then you need to modernize the construction industry. Bring it into the 21st century.

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39:23
Speaker 2
I mean, I put a post up yesterday said we're now, the world is now in the fourth industrial revolution. That's a fact that's been agreed by the World Economic Forum. We're now in the fourth industrial revolution. Stick framing is still in the first industrial. It actually has even been through, it hasn't even been through the first industrial revolution. And you're looking at kids that are using iPads in one hand and an iPhone in the other coming home and watching flat screen TVs, going into their high tech cars, so forth and so on. And then you want them to go onto a job site and do stuff that hasn't changed in 200 years. In reality, in their heads they're going, how does this even, how do I even relate to this?

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40:09
Speaker 2
So, you know, if you want to attract, think about this, think about your own kids. If you want to attract young people into the construction industry, then you need to modernize the construction industry. It's, I mean it's, this is, it's not rocket science. Every single other thing that we have used or buy or produce or touch is, has dramatically changed because of technology in the last 10 years. And yet we want young people, and I keep emphasizing the word young people, to go onto a job site to basically say technology doesn't exist. Yeah, it doesn't make sense. So training people and that question, that person's question, I think that's so true. Start moving it towards technology and construction. Let's move it forward. Let's increase the productivity of the industry through the use of modern technology.

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41:08
Speaker 2
That's what every other developed nation, by the way, on the planet is doing. That is what every other, like I'm going off on a trip that's been organized now by various different US government departments in December to the UK to look at the technology that's being applied there and at the training programs that are being put in place to actually bring the industry into the 21st century. That's what we need to do. Stop resisting change. That's what young people want. They want to do things in a modern way, the things that they can relate to.

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41:44
Speaker 3
So to piggyback off what you're just saying. And Sean made a comment about, he's seeing a lot of the drywall companies move to this type of model. Is there other trades that you see are on the forefront like electrical, mechanical, that are really trying to embrace this over other terms?

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42:03
Speaker 2
Yes. And there are lots of technologies out there that are being designed for those industries. I mean, whether it's. I mean if you even take the modular industry and you look at the way they do their wiring and the wiring looms that are now available. I mean there's technology moving on to improve wiring. You look at even from H VAC systems. There's technology has been improved there. You look at the plumbers now using 3D modeling of the plumbing systems before they ever go into the building and then been able to prefabricate many of those items before they ever go out to the job site. There's a whole load of things that are actually out there and some very good companies are actually trying to push that thing forward and hopefully they will benefit in the long run because they're pioneering the way.

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42:47
Speaker 2
But the problem is you have so much resistance from other people who still, you know that expression that says the seven most dangerous words in the English language are that's the way we've always done it. Where do you hear that most? The construction industry. That's the way we've always done it. So. But there are opportunities there and there are companies who are actually certainly starting to push that envelope.

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43:07
Speaker 1
I'll say one quick thing on this. Where I've been, it seems to me that to reach the maximum value off site across different systems manufacturers.

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43:25
Speaker 2
Right.

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43:25
Speaker 1
Not just component manufacturers, but different systems manufacturers. There, there has got to be. Soon as you talk about H Vac, you talk about plumbing, you talk about the other folks that have opportunities to. To be doing this type off site construction. Seems to me the maximum value is going to be those entities working together off site and finding ways to, you know, eliminate the possibility of rework.

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43:59
Speaker 2
You touch on another very important point. Chad is as crazy as this sounds, the lowest level of digitization in any industry in the United States is in the construction industry.

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44:10
Speaker 1
Yeah.

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44:11
Speaker 2
Which is probably the one you would think would have the most.

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44:15
Speaker 1
But it has the, has one of the greatest needs for it.

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44:17
Speaker 2
This is correct. But now just to take your point, you said is, can you imagine now if everybody was digitized and was actually properly using technology that's out there so that you could actually coordinate in advance with the plumber, the electrician, the hitch fact, the off site company that everybody was actually using the same model and could interact with each other before you ever got to the job site to figure out how much money you would save. Yeah. How much more efficiency you would have. I mean, it's a very simple thing to do, but nobody does it. Nobody. I mean, try getting drawings from a, from the average plumber electrician in advance of them. Going on the job site is what's going to happen. Can't get them, don't.

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44:58
Speaker 1
I, I, and man, I would love to continue this conversation. We're Now a full 15 minutes past and I, so I should, I should draw it to a close. But I want to say that I think I'm hopeful coming away from this conversation. And I'm hopeful because I, I think what you have shared with us today is a story that to some extent is kind of, you know, if you build it, you know, they will come in, you know, type of thing. So, so if you're someone right now that is, you know, doesn't, I mean, there, I'm sure, limitations. Right.

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45:34
Speaker 1
But if you're running a construction company today and you have your, you're in a space that has the potential to, to have an off site system, to manufacture an off site system, there's evidence that the market has a willingness to take this on. And if you have the proof that in your ability to beat traditional methods of manufacturing and installation, then you, I mean, that's, you'll not only benefit from, you know, being on the leading edge of it, but you'll, you know, help to usher in, you know, positive change, which is, you know, Jerry, the decision you've made, right. Which is to be in this role now of coaching and leading other companies into embracing this change.

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46:30
Speaker 1
So I've got to ask you if people want to contact you and if somebody's, you know, watching or listening to this, if somebody wants to contact you and get help, how do they do that?

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46:41
Speaker 2
Well, they can get me on my office, on my website, offsitetech.com or it's very easy. Just email. It's very easy. My email is just Jerry with a.

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46:48
Speaker 1
G@Offsitetech.Com it's just T E K. Correct.

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46:54
Speaker 2
Yeah, TK that's correct. But I also want to say, Chad, I think there's an important point. I'm not, and you said this at the very beginning, but I said I'm not speaking from a point of, it's hypothetical. Right. I've been at this. All of my life, my family has built successful offset companies. I can give you a list offset companies around Europe that are doing this. And I've been doing this for 30, 40, 50 years. This works. You just have to approach it the correct way.

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47:29
Speaker 1
Love it. All right, thank you so much for joining us, Jerry. I'm sorry for the mishap in the middle of the show, but it's. I. I was amazed to come back and find that you were still here and that everything was still rolling. Hanging my head.

‍ ‍

47:46
Speaker 2
Maybe. Maybe I missed my. Maybe I missed my calling in life. Maybe I should be a. A podcast host or something.

‍ ‍

47:52
Speaker 1
Well, you are a hell of a storyteller, my friend.

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47:55
Speaker 3
Yeah.

‍ ‍

47:55
Speaker 1
And, you know, it's been. It's been a lot of fun having.

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47:59
Speaker 2
Thank you very much. Thank you very much. Even though you got me up in, you know, the middle of the night, but I returned the favor. Someday I'll have one.

‍ ‍

48:07
Speaker 1
I look forward to it. Yeah, I look forward to it. Yeah, you'll have me on at midnight Eastern.

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48:12
Speaker 3
Yeah.

‍ ‍

48:14
Speaker 1
Jerry, thank you so much. Stacy, let's wrap up a couple loose ends here.

‍ ‍

48:17
Speaker 2
So.

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48:19
Speaker 1
So next week we have our 36th episode, and we've got Tom Hughes coming on who's going to be talking about practical applications of lean in construction, which is probably something that, you know, Jerry could talk about as well, you know, in. In taking Apple, you know, concepts from the manufacturing, you know, space and applying it to the construction space. Although I think Jerry would argue that construction is by definition, manufacturing, which I think is, you know, a really, a valid way of thinking. So I look forward to that. Stacy, do you have a marketing tip of the week for us from Steeltoe Communications?

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49:02
Speaker 3
Yeah. So real quick, when you're doing your marketing, try to think about your customer and their pain points and use the word you or your instead of me and I. And we'll keep it short because this was a long episode. Great episode.

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49:18
Speaker 2
It was. Yeah.

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49:20
Speaker 1
Thank you. That's. It's. Customers care about them, not you. Yeah, I think. I think that's right. People like to hear about themselves, so. So good advice. All right, folks, as always, we thank you for joining us. Please spread the word, do us a favor, and just this week, try to find somebody that you know and tell them about the morning huddle and encourage them to check it out, whether that's live or whether it's however you get your podcasts or on YouTube, however you want to engage. And then lastly, if you or anybody that you know is creating positive change in the construction industry. Please join us. Be a part of our platform and spread the word.

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50:01
Speaker 2
Thank you.

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50:01
Speaker 3
Have a great day.

‍ ‍

50:03
Speaker 1
Thanks. ACU too.

‍ ‍

For companies and project teams that have embraced prefabrication and other concepts from manufacturing, the results are undeniable. To bring these ideas home to more contractors, we at the Huddle want to showcase more stories!

The Queen of Prefab, Amy Marks joins The Morning Huddle to continue her mission of advancing industrialized construction. Her role at Autodesk puts her in a position to meet and interview some of the industry's most successful leaders in Design for Manufacture and Assembly (DfMA).

We get to hear her real-world stories of Prefab in action and hold a Q&A for practical tips for our audience.

Transcript:

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00:00
Speaker 1
Sam, it.

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00:57
Speaker 2
Good morning. It's morning huddle time. Hello, Stacy and Amy. How are you two today?

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01:04
Speaker 3
Doing great. How are you?

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01:06
Speaker 1
I'm great. Good morning.

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01:08
Speaker 2
Good morning. Good morning. So Amy is joining us from San Francisco, but correct me if I'm wrong, you live in Jersey, so when we initially booked this, weren't thinking. We were asking you to join at 6am but here we are.

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01:22
Speaker 1
Yeah, well, all the construction workers are up anyway at the job site, so I figure it's really not that early, to be honest.

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01:26
Speaker 2
Well, that's true. Yeah. 6:00am is kind of not. Not an abnormal time in our industry. Yeah, no question. Well, good. So. So what are you. Give us a little bit of background, Amy, Sort of. Obviously, we know you as the queen of prefab. We know you as the creator of all this amazing content on, across all social media platforms. I only use LinkedIn. I'm trying to catch up, but I've seen you all over the place. Stacy and I have talked about you for quite a while and were super excited when you agreed to come and join us on the show. But talk a little bit about, you know, sort of who you are, what your background is, that type of stuff.

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02:04
Speaker 1
Sure. I work at Autodesk. I'm actually the vice president of industrialized construction now at Autodesk. But before that, I really, I grew up in construction and owned a couple different companies that were anything from one of the largest manufacturers of steel and concrete volumetric mods and assemblies like bathroom pods, to you know, then opening up a consultancy that was optimizing industrialized construction around the world for governments and big customers. And then really, you know, Autodesk found me and it's such a great opportunity for me to come here and work with some of, you know, the largest customers around the world and, you know, helping Autodesk with the way we are looking at things and the way customers are looking at things every day.

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02:50
Speaker 1
So I get to, I get to do what I love to do with some of the coolest people around and the smartest people around, which is great.

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02:58
Speaker 2
That is great. I mean, I think, you know, were talking about just sort of this dream job for somebody like Stacy or I who are just kind of nerds and love learning and being around, exposed to what all these sort of leading companies are doing and how people are doing things differently and better all over the country. You get an opportunity to do this at a really high level, which is. Which is amazing.

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03:21
Speaker 1
I do. Good morning, Mark Jury. I see some friends out in the audience. That's great. Hope you guys are going to join up this morning. It is. It's really a great job. You know, I think a lot of what we do is it has to. We have to be seen, right? People need to see other people that look like them, that talk like them, that are talking about things they're interested in. So it's one of the reasons why I rarely say no, you know, to people, because I want to make sure that, like, everyone has the opportunity to see other people that look like them, not just every day on the job site. And I think social media is such a great way to get that across, aside from the work that, you know, to talk about the real work that we're doing.

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04:00
Speaker 2
Yeah, agreed. So. All right, well, let's. Let's kind of orient ourselves a little bit with our objective today. I think we talk about prefabrication. What it really all kind of fits into, I think, is something that you and I were talking about is, you know, calling it the industrialized revolution in the construction industry. And, and it's. It really is a different way of thinking about looking at construction and how are we doing something that, you know, pulls in best practices from other industries and innovates and takes, you know, really, construction to a whole new level of productivity of, you know, creativity and, you know, effectiveness, safety, so on and so forth. So I. I'd like to, I guess, get a little bit of an orientation from you on this idea of what is the industrialized revolution, you know, in. In the building industry. What?

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05:08
Speaker 2
Describe that. A little bit.

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05:11
Speaker 1
Well, I think first we have to recognize that, you know, there are a lot of industries, individual industries out there doing great things. We're not really one industry. I think the first thing we have to recognize is that we're an ecosystem of, you know, 17, 20 different industries all trying to get a building out the door. And, you know, typically the way that we've worked historically is it's been a real cash for chaos type environment where people made money off of the misinformation or lack of information, you know, out in the job sites. And by the time it got there, you know, my dad used to say, walking around job sites, those guys over there looking in the ceiling, like, we're either making money right now or we're losing money. I can't tell which. But something's going on, like.

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05:50
Speaker 1
And I think that's one of the reasons we're seeing a little bit of a change now that, you know, it's not going to be we can't be just an industry can be disrupted from the bottom up, as you know, Clayton Christensen said. But we're an ecosystem that needs connection at the very top levels as well. And that's what's really been missing, that it's not just about the outcome of getting a wall panel on the job site. It starts much earlier in things like, you know, how we're thinking about conceptualizing these buildings and reuse of these building components and, you know, what we're doing that will result in an outcome of having industrialized construction out on your job site. But it's so much more than the physicality. It's about the data. It's about, you know, connection of the information. It's about the cloud.

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06:35
Speaker 1
It's about, you know, things like turning the eye and building information modeling into more intelligence so that we have things like manufacturing informed design now as a category of information that needs to be influencing our buildings. So it's just so much more than what I think meets the eye. And that's. That's part of what people have to get over in the beginning, that it's not just about.

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06:56
Speaker 2
I love that way of describing it. We're not just our own industry. We're not on an island. We're not sitting over here, you know, by ourselves. I think, you know, when. When I look at other industries, when I look at. When I look outside of what many of my clients, right, who are awesome, middle market, for the most part, general and subcontractors, some larger. But, you know, we're in a little bit of a bubble, right? We're in a little bit of a bubble. When we look outside of that bubble, what will we find? What will we find? What's happening? That is so exciting, I think.

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07:40
Speaker 1
Well, first of all, I gotta. I gotta answer, Henry, who, like, is out there saying, like, it's been a long time since I've had to introduce myself. But Henry, the point is that I want to introduce you to new people, new faces, new young people that are out doing podcasts and not the same old. You know, I think. I think what's different out there right now, it's a really different time, right? Like, it's not that we're in a place that things are happening that are so great. I think, look, change happens when there's first dissatisfaction with the way things are. And when you see that there's a potential vision that you want to reach, but you just aren't there yet.

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08:12
Speaker 1
So I think we're seeing that now in the world that, like, there's not enough housing, there's not enough hospitals, there's not enough digital infrastructure. And, you know, we also don't have the same labor that we used to have. And we have to make sure that we're capturing a lot of that craftsmanship and knowledge in things like technology and people so that we can pass that along to future generations. But it's a time of great pressure. And I would say, look, it's been at emergency levels for the fact that, you know, I don't know, 10 years ago, people would say, like, don't talk about this prefabrication stuff where you're taking jobs away. And I'm like, okay. Two years later, they're like, no one's applying for these jobs.

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08:47
Speaker 2
Right.

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08:48
Speaker 1
And it's not going to be the great resignation that people are talking about that is happening. It's stuff like, you know, Gary Vee, I'm a fan of Gary vee actually on TikTok and things is that people are not going to apply for these jobs like they are. Young people are thinking about where do I want to work, where I can get known and see what's going on and people can see what I'm doing and they're used to an expected experience of life that we're not offering. They're used to being digital natives. They're used to being able to portray their lives and see other people in their businesses. And, you know, were talking earlier, you said 3% of people are providing content on LinkedIn.

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09:22
Speaker 1
Okay, well, if you're under 25, that number is much higher on things like, you know, TikTok and Instagram, it's like everyone creates content. And you know, look at, even on TikTok, there's 6 billion hashtags about welding right now. And yet there's, I can guarantee you there aren't a lot of companies that have social media accounts on TikTok looking for welders, but we need to, you know, we do.

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09:44
Speaker 2
I, I, okay, so you, you touched on something that I, I always key in on. I can't help it. It's one of my most favorite discussion points is just this idea that any time we stand in the way of progress for fear of what that might do to, you know, people's jobs or what that might do to this person's income bracket or what that might do anytime we stand in the way of progress, it, number one, it delays the inevitable because it's coming. You're not going to actually stop it. So you're just gonna, you're just putting yourself on the wrong side of history.

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10:25
Speaker 1
Right.

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10:26
Speaker 2
But, but then number two, if you know, if you learn actually to embrace it, you not only do you, okay, from on a company by company standpoint, do you put yourself in a potential possibility to, you know, to be a, a market leader. But that aside for the industry, if we learn to embrace it, you actually create more opportunity. It never ceases to amaze me. People freak out about self driving cars. What about all the truck driving jobs? They will find other jobs, right? Other things will show up. There will be. We innovate. That's what we do. When the horseless carriage disappeared, everybody freaked out. They did, you know. I'm sorry. When the horse drawn carriage that is disappeared, everybody freaked out.

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11:10
Speaker 2
It was, there were, you know, hundreds of thousands of jobs cleaning up horse crap in cities all across the United States and everybody was like, what are we going to do? What are we going to do? All these people, they're going to be out of jobs. They find a new. We innovate, we create better things. What are the things that people are. And I'm not asking you to call out anybody who's, you're standing in the way of it, but what's the progress that's actually being impeded right now? Is there anything that you're seeing that people are actually trying to slow down in the construction industry?

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11:39
Speaker 1
And if, I mean, look, I've been known to call people out, so that's fine, I don't mind, you know, like I, I'm an equal opportunity offender and I think that's important. First of all, I say that because you have to have agents for change around this world, right? If you don't have an agent for change in your company that you know, is asking the hard questions, making you think differently, that's constantly thinking how you're going to go out of business. You probably are missing somebody on your senior leadership team. So I think sitting with the same people and talking about the same things and then one day waking up and realizing all the things you were doing to keep people working have now eliminated your company and got rid of all these great jobs.

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12:15
Speaker 1
I mean, look, I have a real love for the trades and I believe in the trade contractor. I believe in the fact that we are creating work for families. And if you're not thinking about how to protect these families by evolving your business and evolving what you're doing, you're actually putting them more at risk and I can prove that and say that, you know, think about the future state of the expected experience, right? Like, and what I mean by that is like, I could go on my Apple watch right now, I could order a pizza, customize it on my watch, figure out when it was going in the oven. They would give me transparency as to when it was leaving. I would see the license plate of the car and the make and model and a picture of the face of the driver.

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12:55
Speaker 1
And on my, you know, ring doorbell. I would see them walking up so I could come to the door before they would ring the doorbell, right? That is my expected experience in life from for anything totally down to ordering a pizza. Yet in our space, the only certainty 95% of people have on job sites is to call somebody to see if their equipment is going to show up. Who has to call somebody else? Who has to call somebody else? Who has to call somebody. Like, even though the technology exists because you have it for pizzas and we have, you know, geolocators and you can, you don't even have to scan things anymore to know where they are if they got on the ship. Like, I have lots of friends, you know, that have different technology, but not enough of them, right?

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13:32
Speaker 1
Like I was with somebody the other day and they were pulling up on their phone where their equipment was on the ship, and he's like 1.001% of my, the world that I know that's tracking equipment on his phone, right? Like, he doesn't have to call anybody. But the expected experiences is that one day you'll be able to know about things on the job site, design things, if you're an architect, to find things online and be able to incorporate them into your design without having to understand how that thing is made. Because the tools are not allowing you to do that right now anyway. So it's like we have very static data and listen, like, there's no secret. We have margin on top of margin on top of margin that is created because of this disconnected waste.

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14:17
Speaker 1
How many $14 trillion ecosystems still exist in the world that somebody doesn't want to disrupt and wipe those people off the face of the earth and take that margin over combining those things. I think, I wouldn't say there's anyone necessarily stopping it right now. It's more that they're turning a blind eye to that it's happening. So if you don't realize that is happening and you don't know your future value in that new future state of the expected experience, you probably want to step back. Like I had a guy recently as were talking and he was like, you know, I talked about the fact, you know, conducting things online and architects the vision of being able to see in real time things that are available to them where they can understand the sustainability outcomes at a touch of a button.

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15:01
Speaker 1
Just like I do when I order anything on prime, right where I set my own parameters, I could find the products available. I can even do bundling on there I go, oh, you should buy this shoe, these shoes, this shirt and the socks. Why don't I have. You should buy this assembly designed for this, for these outcomes when you're looking for them. We don't have that option. And a gentleman who was in his, I would say 70s, 60s, who is the owner of a big mechanical contracting firm said, well that'll never happen to my Craftsman. Like you'll never buy a pipe spool online.

‍ ‍

15:29
Speaker 1
And I was like, wait, you do realize like in 2019, Amazon had 145,000 different private label products under 45 different brands that I was like, listen, I put in my mouth and on my skin and hair and in my baby's mouth, skin and hair. Like you think your pipes full is so special that one day somebody's not going to be able to configure a pipe in your. And again, like we are. You are kidding yourself if you think that, you know, if you can't provide value that you won't exist. And that's what I think is really happening.

‍ ‍

16:03
Speaker 2
Okay, so that, and like you just said exactly what I, I was just writing furiously as you were talking, so I didn't forget. I, I think what occurs to me is if you're afraid of innovation hurting your business, then get better. Right? Bring more value. That would be the answer. You know, I, I was one time I was talking to an insurance agent who was really freaking out about, you know, what self driving cars were going to do to his industry. I mean, what value is a broker going to have if self driving cars never crash? You know, oh my God. And I, and I immediately responded by saying like, look, if your only value is connecting people to car insurance, you should go away. I'm sorry.

‍ ‍

16:47
Speaker 1
Right, right.

‍ ‍

16:47
Speaker 2
Like that's, that you're not adding value. So if, you know, if you're worried, do something, better, bring more value to the market. And what you're saying is, look around the ecosystem that we're in. I think I'm getting, you know, if I'm getting you right, assess what innovations, what's happening in your space that's relevant to you and start proactively trying to figure out how to make your company better today rather than turning a blind eye to it, rather than saying it'll never happen.

‍ ‍

17:22
Speaker 1
Right.

‍ ‍

17:22
Speaker 2
You know, there's lots and lots of examples of companies that turn blind eyes that, you know, went away. Right. Blockbuster and I mean, we could make a list.

‍ ‍

17:34
Speaker 1
There's no one left on the, you know, top 500 companies from like 20 years ago. So I think if you think about it like that. And again, it's not, I don't like fear for fear's sake. I like fear for a motivator. It's that dissatisfaction that makes. Look, if you don't have money in your pocket and you're growing up and you need to eat like, you will figure out a way to make some money. You know what I mean? Like right now, your family's families are not going to eat like that you employ. And that fear drives me to better. Like, it drives me to understand where the value of what my core capabilities are.

‍ ‍

18:07
Speaker 1
Like you should start asking yourself, how many things do you do that you get paid on because of some upstream wasteful process like redrawing things that have already been drawn, re estimating things, value engineering things, you know, designing things that have already been designed, pricing things to people that will never win the jobs transactionally. The transactional waste of a project is now at about 40% and it's. The answer is not only going to be about, well, go to an IPD contract. I see some of my friends from the Lean Congress that were with me last week. That's not the only situation. Right. Like, we have to start thinking about different measurements of success. Right. And we have to start thinking about where value is going to exist today.

‍ ‍

18:49
Speaker 1
Where it exists today and where it's going to exist and what matches up with what you know how to do. Like, I love the trades because I think they have a lot of make information. But they're not the only people that know how to make things. The building product manufacturing side knows about products already. They know about how to productize things. They know how to inform design with the actual productization that we talk about for construction. We have like some people are really in the infancy in construction trying to get into a place where we have products that can inform design so we have some certainty. Well, there's a whole category of groups that already know how to do that think about a skid. When a skid is made industrialized construction. Think about all the manufactured piece parts that are on there.

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19:28
Speaker 1
They're not being made by subcontractors, they're being aggregated by subcontractors and maybe the skid is being fabricated. So you're the guy that makes all those really complicated things that's on that skid, and yet you're even further downstream than these guys. Isn't it in your best interest to start making the skid and aggregating your own manufactured products? Like, we have to recognize that's a risk to some of the guys that are assembling other manufactured products. Right. That if that's not of a real value anymore and somebody else can do that besides you, that is a risk. And we have to recognize that it's not like these, it's not like manufacturing doesn't exist outside of construction. Like we have to reinvent it. That's. That's not true.

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20:07
Speaker 2
Agreed? Yeah, agreed. So here's a question, really direct one. Are we going to see considerable consolidation over the next 10 years in the building industry? Are we going to see companies, you know, are we going to see that the number of companies dwindle and potentially the size of companies grow?

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20:30
Speaker 3
Yeah.

‍ ‍

20:30
Speaker 1
Let me ask you this. Have you already seen it upstream with the owners? Aren't you seeing more serial owners, guys that, and women that don't own one building, they own 40 or data centers that aren't one data center, it's now 50 data centers. Or this hospital that's aggregated into this system, like we already see it happening. Do you think that those people that have now aggregated the information and certainty, programmatic certainty is more important to them than savings because they don't make the money on the building, they're making it on the services in the building, whether that's pharmaceutical or manufacturing or data. Do you think they're going to want to keep doing business in the fragmented, disconnected way now that they have consolidated upstream?

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21:10
Speaker 1
I can't imagine that it doesn't happen like that because it's more important for them to know what they're doing than it is. And the certainty around that, it's just so much more important now because everything else is connected in the expected experience that I think we have to recognize that it's coming. So think about this. I know guys that are doing contracts now, owners that want to name multiple partners from like, you know, a three building contract. So they're looking for the price to go down over that time, but they want named people in the Contract that are come coming from project to project because they don't want to relearn everything over and over again. That's happening already around the world. So I think you'll see some people that'll actually get consolidated.

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21:52
Speaker 1
But I also think there'll be some categories where if you're not providing any value, that entire category of types of businesses will be wiped off the face of the earth. It just won't exist anymore. You know, think about the people that you.

‍ ‍

22:03
Speaker 2
Any predictions? Any predictions on which categories?

‍ ‍

22:05
Speaker 1
Yeah, I mean I've had this conversation in the past. Like most of my contractors will say, and this is not me saying it, this is them, if they don't figure out how to become more like systems integrators. My dad used to say, as a contractor, just take great meeting minutes, Amy, and like make sure we get the best prices from subs. Okay, well those days are over. So like unless you can figure out like what value brings. If you're just getting. If you're just the middleman now for something, I think you've got to be really scared. I think on the other side of the business, if you are just distributing things and you're not actually, I mean, look, distributors these days are so far downstream, but they are providing some credit and financing and logistics. I don't know.

‍ ‍

22:45
Speaker 1
There are big companies on this planet that do pretty good logistics, right? They wanted to microfinance, they could.

‍ ‍

22:50
Speaker 2
That's exactly what I'm thinking. Yep. I agree.

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22:53
Speaker 1
I believe the distribution model. But here's again, I always say expect experience. When I shop on Amazon.com I see manufacturers, resellers and distributors all in the same query. They are. They figured out a way to provide some value or no one buys from them. But. But they are up there, right? Like think about what you're doing. You know what I mean?

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23:10
Speaker 2
Yep. Yeah, I think you know, if I'm. If when you talk about if you're being a middleman, right. Or middle person, you know, as a part of a value chain, that's a potential risk. If I'm a general contractor, my ears just perked up. Right. If I, if I've, you know, embrace the model of self performing absolutely nothing doing pure construction management and being that, you know, sort of logistics person. As the, as the owner gets more and more information, as the owner gets more and more power in the market, which is what will happen. It's just what does happen. General contractors models have to shift to what are we bringing to the table?

‍ ‍

23:47
Speaker 2
When an owner doesn't need us to buy subs when an owner doesn't need us to shop, when an owner doesn't need us to figure out whether their buildings are constructible, when an owner doesn't need us for V when an owner. All those different things, what do we, what do we stand for? What do we do? And I think you know what become.

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24:06
Speaker 1
What is estimating if you know the price as part of the criteria, right? Like, I mean think about these guys. Like right now, I saw Mark, I saw your question. Like we've been trying to standardize for many years. Standardization is only part of it. That's why it hasn't succeeded. I had a bathroom pod catalog. Look, my daughter's 14 before she was born, right? Like, but if you don't have a way for some, if you have to sell your standard product with your mouth or your feet these days, that's a problem. And until we connect the ecosystem with where you can place your standards in the cloud in real time and have it be updated in real time with the data backbone for your product.

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24:40
Speaker 1
And unless I can see analytics the way I do when I put something in my cart that people can market to me and they can change the price and they can see my wish list until I have that, standardization is only part of it and it won't succeed. Like you're basically a catalog in the dark. You know, if you're, if somebody is still drawing a geometric box and not being informed by those standards that you're creating. And I believe the standards will be created by the market, not necessarily one authority or you know, they'll meet code. But I don't think it's anyone's place to look at Amazon like what's what. I keep going back to expected experience. Look at Alibaba, what standards are being created by them.

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25:17
Speaker 1
It's just the data standard of being able to place your product in the, in the online catalog. Right. It's not, they're not telling me what I, how I have to make something. They're just allowing me to be there if I meet the requirements for someone to consume that data and to aggregate the data with other data. Right. Like so I always like to say yes, a revit button is amazing. You should all think about auditor's platform services to create great apps. And that's the, I think it's the beginning of the Internet right now with the way in which auditors platform services has been open to having any developers come and make the secret sauce. I like to say like look, right now there's no ways or WhatsApp on the Autodesk platform in totality, yet.

‍ ‍

25:55
Speaker 1
You could create your, take that domain expertise that's now in jeopardy and make something out of it that will be far more valuable than, you know, getting the next job. And I think we have to recognize if you're a young person in this space and you're into technology, or if you have the domain expertise, partner up, because you can literally make the next Waze, which is worth, I don't know how many billions on. And by the way, on my Apple platform lives, Waze, Google Maps, Apple Maps and probably 10 other, you know, directional capability apps. We, we have like, I don't know, 4,500 apps right now on Autodesk platform services, but they're growing at like, I don't know, 200amonth right now. So this is the beginning of the Internet.

‍ ‍

26:32
Speaker 1
If you were too young to make money at the beginning of the Internet, this is your time, right? So I think that should inspire you to want to come to this space and be an entrepreneur, because there is nothing but opportunity right now in the expected experience of how this is changing.

‍ ‍

26:48
Speaker 2
That's awesome. Wonderful. Okay, so now I have to ask a question on the counter end of this and sort of say, but how do we keep from getting totally lost in the wilderness of all that there potentially is out there? And how do I sort between. How do I sort the wheat from the chaff?

‍ ‍

27:15
Speaker 1
You know, I think, look, not. That's one of the reasons I came to Autodesk. I came here to help customers get on this journey. I think people are very good at seeing vision, right? Like, it doesn't take much to be like, an army of robot dogs is going to be on my job site one day and like, people predict that. And I go, yeah, that could happen. But let's take it step by step. In that formula of change, you have to do some first concrete steps of action. So assuming you have one robot dog, what does that dog want to eat? How do you charge it? Where does it go? Where does it stay? How do you interact with it? What data do you have? So it's like, take a first concrete step of action.

‍ ‍

27:51
Speaker 1
And for a lot of people, that's going to be digitization of what they have. Like just getting it up there to see what it is so you can use technology to sort it. You can't sort things in people's brains. You can't organize metrics. If you're not measuring things. So I would like just start to visually collect and so that you can digitize things that are only known to that one person that you are afraid if they leave your company. Right? And I think that's, that's the first concrete step of action you can take is to take an assessment of your readiness, of your culture, of your tools, of your technology.

‍ ‍

28:26
Speaker 1
Like, you know, in my Lean Friends, like do a little bit of a Shingo to like understand what assessment you need to do to see like what could be your value in the future state. What are your risks, what are your, you know, dependencies right now. Start there, take a little stock to make sure that you're ready for the future state and be really honest with yourselves. And sometimes that helps to bring in a third party to do that assessment. What's your technical health right now? What's your digitization of? What is your prefab readiness health right now? Like if this happens, there are people that can actually come and help do that, not just from my company, but others that we partner with.

‍ ‍

29:00
Speaker 1
Because look, at the end of the day I always say you can afford to potentially buy a 6 axis arm robot, but you probably shouldn't in your fab shop unless you're ready for that future state. Like it'll just get dusty or make scrap faster like my treadmill these days. You know what I mean? Like don't do it. Don't buy toys. Don't buy toys without understanding like why.

‍ ‍

29:21
Speaker 2
Yeah, I think that's brilliant advice. One, one of the biggest where I oftentimes start with my clients is let's. Before we start improving your processes, can we just write down what we do? Can we just write down how we currently do it? Just taking stock of what you currently do and actually just setting the standard for. Okay, at least we've assessed how things currently work. Now we can, now we can really prioritize what needs to be innovated, where we need to integrate technology and so on, you know, but it's not until you really take stock of what you have. So I think that assessment is a fantastic recommendation. Stacy, do you have any questions either yourself or from the audience? While we still have Amy, I want to start to wrap her up here soon.

‍ ‍

30:10
Speaker 2
I'm sure she's got plenty of other things happening today.

‍ ‍

30:13
Speaker 3
Amy, do you have any experience with, I guess giving some advice on how to establish an innovation committee within your organization like you were just talking about? You know, don't just go out there and grab a robot and then it sits in the dust because you don't have that team that can really take the time to start playing, you know, and integrating whatever virtual or technology, any technology, and kind of experimenting with it. Is there anyone out there that's doing a good job at, you know, implementing something new?

‍ ‍

30:50
Speaker 1
Interestingly enough, I was just talking to a company that's doing some 3D printing. There are a couple of young guys, right, and they were talking to me about a board seat with them. And I was like, they asked me the same question actually, Stacy. They're like, you know, they want to move from one type of the part of the business to like, they don't even really know what's out there. As an example, like what could be in 3D printing these days. And I was like, the first thing you need to do is stop asking the same people that have been in your place in your company for advice. Like, you have to go out. Anybody can create an advisory board. Like, it's not expensive. And mostly you can find people that would volunteer for the experience.

‍ ‍

31:26
Speaker 1
To be honest, there are boards that are created, that are real boards as well as, like, you know, that have paid board positions. But when you look for those people, look for people first that are going to ask the hard questions. Some of them that challenge you. And I think second, that people that have different experience from other places around the world and also that have seen things being done that maybe you haven't seen before. So it's like, you know, I often say, like, people ask questions like, well, when. If we could just do that. And I'm like, that's done every day. Like, I literally say that probably three times a week. Like the thing you're hoping for happens in this place. Like these companies are already doing that thing.

‍ ‍

32:03
Speaker 1
The fact that you don't know about it and you're trying to, you're not building on the shoulders of what information, what learning, what people know by bringing in outside perspectives. Again, I love diversity and perspective. Yes, we should all hire people that don't look like us and don't talk like us and that are creating, you know, diversity in the population. But diversity and perspective is almost even more important, right? Like I have a reverse mentor, actually, because I don't. I'm 51. I don't know what a 23 year old these days, what their true expected experience is, right? Like, you can have all the Tik Tok accounts as a 51 year old. Like I do, but you need to Actually know, like how somebody, I ask my 14 year old all the time, like, what do you, like what does that mean?

‍ ‍

32:43
Speaker 1
What's that, how you do that? And you know, it's like we need that diversity perspective so that our expected experience becomes something new. Right.

‍ ‍

32:53
Speaker 2
I love that. I think that it's so rather than looking at an internal innovation committee, look at external voices, opinions, and I think that's one of the biggest takeaways I have from this conversation. Amy, is exactly what you said. It's like what you're thinking about potentially trying to do. Somebody's doing. Yes, somebody is doing. You have to expose yourself to that information. If you were to rattle off sort of like, I don't know, top three to five resources that people should tap into to get exposure, aside from like building their own advisory board, which I think is great, but you know, whether it's publications or associations or, you know, what would you. Here's an opportunity to talk about.

‍ ‍

33:36
Speaker 1
So, I mean, look, I'm not, I'm the ambassador for the Advancing Prefabrication show for six years. It's a, it's one of the, I think it's coming to be like the largest show on not just prefabrication, but there's like seven different tracks. And, and it started really, I would say, with my personality. Like people ask hard questions even from the audience and there's workshops and there's CEO day and there's like, you know, market applications University is a great opportunity to go and find out some of those things. But I would say, you know, they're again, somewhat self serving. Like, I don't sell software and I don't sell consulting at Autodesk. But we do have an amazing customer success group that if you're buying our software, you can go and get resources for help.

‍ ‍

34:20
Speaker 1
A lot of people don't realize we're agnostic to the proprietary software you might have or competitive software. We're interested in the customer's business being successful. So you can go to like just the people you deal with at Autodesk and ask for some help. And believe me, I believe we should just ask for help. That, that's a, that's an. We should normalize that. We should normalize asking for some help.

‍ ‍

34:41
Speaker 3
Yeah.

‍ ‍

34:42
Speaker 2
Awesome.

‍ ‍

34:43
Speaker 3
Perfect.

‍ ‍

34:44
Speaker 2
All right, great. Stacy, anything else for Amy before we wrap it up today?

‍ ‍

34:50
Speaker 3
Nope, we're good.

‍ ‍

34:52
Speaker 2
Awesome. Amy.

‍ ‍

34:54
Speaker 1
I love seeing you guys, by the way. I love seeing young people. I love seeing you know, women that are out there. Doing their thing. I think it's really important for us. Expected experience. Remember, I think we want to see ourselves in places in this ecosystem. So the more you can get out there and be visible, if you have a diverse perspective, you know, whether that's quietly or even on social media, just do it, like, get out there and be seen. Be your authentic self.

‍ ‍

35:19
Speaker 3
Thanks so much for joining us. So fun.

‍ ‍

35:23
Speaker 1
Thanks for having me, you guys.

‍ ‍

35:24
Speaker 2
It was a blast. It was. You're very generous with your time this morning as well. Sorry we ran a few minutes past, but I hope that you have a wonderful day, enjoy your trip out in San Francisco, and I hope that you'll stop by and see us again soon.

‍ ‍

35:37
Speaker 1
Of course. Thank you, guys. Thanks so much.

‍ ‍

35:41
Speaker 2
So, Stacy, that was awesome. Thank you so much for, you know, being relentless and finding Amy and running all that down. I think that was. She was a joy to have on. So next. Oh, hey, what do you have for the Steeltoe Communications marketing ticket?

‍ ‍

35:59
Speaker 3
Yeah, real quick, very easy. I'm seeing this a lot with contractors when they're giving me some marketing pieces just to look over. They're always forgetting their call to action or normally. So a call to action. If you're doing a brochure, a flyer, a video, whatever it is, make sure you have an end goal. Once someone watches their video, where do you want them to go? Do you want them to email you? Do you want them to watch another video? Do you want them to go to your website call you just make sure to include that call to action with any marketing piece. It's pretty key.

‍ ‍

36:35
Speaker 2
I always forget that part. I'm sitting here like, okay, right. Reassess all marketing. Thank you yet again for a good reminder, Stacey. So, all right, so next week we have a fascinating conversation coming up. It's one that actually ties into some of the other stuff that we've talked about over time here. And we're going to be talking about human trafficking on the, on job sites. And we've got Meg Huey from Freedom Network usa. She's done some speaking for different associations around the construction industry. How I got some exposure to her and really wanted to bring Meg into the conversation about what we can do to not only spot, you know, infectious fix human trafficking as we see it in the, in the building industry, believe it or not, it's happening. It's not.

‍ ‍

37:28
Speaker 2
When we think about human trafficking, we always think about sex trafficking, which is a thing and horrible. Right? It's terrible, but it's not. It doesn't Always take that form. And it's actually happening a lot in, in the, in the building industry way more than we. Than we know. So Meg's going to help us to see that and also to maybe consider some of the conditions that we have in the industry that are contributing to it that we could, you know, kind of stop it at its source. So I'm really excited about that conversation. I hope that everybody enjoyed today. If you have any, if anybody, just as always, you know, I got toss this up on the screen.

‍ ‍

38:03
Speaker 2
If you want to get added to our weekly mailing list so that you're not reliant on getting the invites through LinkedIn mixed in with everything else that you're getting, shoot us an email. Shoot it to Stacy. Stacy h.steeltoe calm.com and Stacy will make sure that we get you added to our weekly newsletter. It's not spammy, and it's really specific to making sure that you're teed up for the show, so please do that. And then, as always, we don't say this enough.

‍ ‍

38:31
Speaker 2
If you or someone, you know, has an important story to tell about creating positive change in the industry, like the story that we just heard from Amy or stories that we're going to, you know, that we hear every single week, please let us know we're building our guest list for the winter at this point and would love to build that guest list with people that you know and that you think are doing an amazing job. So reach out to us. Stacy, anything else? Did I. Did I miss anything?

‍ ‍

39:02
Speaker 3
Go Phillies.

‍ ‍

39:04
Speaker 2
Yeah. So I'm gonna have to say go Astros.

‍ ‍

39:08
Speaker 1
I understand.

‍ ‍

39:09
Speaker 2
Yeah, I know I've got. I've got some clients down in Houston that I love dearly and who. This is like, their entire life right now. So I. But it has been for. It's, you know, the Phillies are the underdogs, right. Coming in, and I have a hard time not rooting for the underdogs, and Philly's like an underdog town, so it is hard to root against. I'm not rooting against Philly. I've just. I just want to see my friends be heavy now. Stacy, I want you to be happy.

‍ ‍

39:38
Speaker 3
You better. I'm your partner here. You better be on my side or I'm not showing up next week.

‍ ‍

39:43
Speaker 2
You guys can have game one. I. I hope. I hope that. That's tonight, right? Game one tonight?

‍ ‍

39:49
Speaker 3
No, I think it's Friday, actually. They have.

‍ ‍

39:51
Speaker 2
Why the delay? What are we. We're going to be playing baseball on, like, November 20th.

‍ ‍

39:55
Speaker 3
I know.

‍ ‍

39:55
Speaker 2
Crazy.

‍ ‍

39:56
Speaker 3
I know it is.

‍ ‍

39:58
Speaker 2
Stacy, have a wonderful week, all right, you too. See ya.

‍ ‍

40:00
Speaker 1
Byebye, guys.

‍ ‍

Many construction companies develop meaningful innovations that create strategic advantages in their market in a crowded field of competitors. Perhaps they develop a tool, a fabrication method, or an operational process that gives them the upper hand only to have an employee leave and bring that information to the competition, diminishing a hard-won advantage.

When you think of Intellectual Property (IP), the industries that come to mind immediately are manufacturing and software, not construction! Greg Stone, IP Attorney with Whiteford, Taylor & Preston, joins us to see how construction companies can protect and monetize their IP.

Transcript:

‍ ‍

00:00
Speaker 1
Good morning. I'm not saying it works.

‍ ‍

00:01
Speaker 2
I wish you God speed.

‍ ‍

00:03
Speaker 1
Godspeed with all of that. I think that's really nice. You know, I'm not sure what kind of success you're gonna have with that today because the world, my friend, has changed. Right?

‍ ‍

00:14
Speaker 2
Latin American construction workers, they have different needs. They have completely different.

‍ ‍

00:20
Speaker 3
These awards have a huge, like, criteria that you have to fill out. And they usually have a community service or community relations portion, you know, the most with a high performance value. And, you know, sometimes it's 11 o' clock at night.

‍ ‍

00:38
Speaker 1
Funny, isn't that? Yeah, not for me. Not for me. At 11 o', clock, I am guaranteed to be snoring.

‍ ‍

00:45
Speaker 3
So.

‍ ‍

00:45
Speaker 2
So.

‍ ‍

00:55
Speaker 1
Hey, it's morning huddle time. For those of us, those of you who are joining us live, thank you for hanging in there. We the joys of live production. We are starting 11 minutes late and that is on. Really? Nobody? Just. It's on technology. I, I literally just had to do like, coding to get this. I, I had three panic attacks. But we're here and thank you, everybody. Thank you, Greg, for having such a. Being such a good sport about. Greg was like, so is this normal? Like, no, this is normal. I've had. I haven't had to deal with this in 30 meetings.

‍ ‍

01:31
Speaker 2
Not a problem. Not a problem.

‍ ‍

01:33
Speaker 1
You were very calm. Your calm brought a lot to the table. All right, Stacy. Greg. Thank you so much, Greg, for being here. Stacy, how are you today? What's going on in your world?

‍ ‍

01:45
Speaker 3
I'm doing good. It's fall. The leaves are looking beautiful. Maryland.

‍ ‍

01:51
Speaker 1
That it is. Yeah, it's, it's looking great. Greg, how about you? What's new in your world?

‍ ‍

01:57
Speaker 2
Same sunny, nice day for now. Cool day in Baltimore city.

‍ ‍

02:03
Speaker 1
So, yeah, we'll take it.

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02:04
Speaker 2
All good?

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02:05
Speaker 1
Yeah. So were getting like, as were killing time during the panic attack, one of the things that Greg and I were talking about was that Greg is in kind of has been a lifelong musician and has been playing out for a while. Greg, just give us the. What are you into and where are you playing?

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02:27
Speaker 2
Yeah, sure. So I actually played out in a cover band from an 80s cover band. From 2006 to 2014, I was the keyboard player for Voodoo Economics. It's a nice 80s themed name there. And just after we stopped playing, I got the bug to go out on stage. So for about the past year, I've been doing a monthly gig, just me, my keyboards, microphone at an Irish pub in Severna Park. So you Catch me there one Saturday a month in the afternoon, just playing stuff that I like to play.

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03:00
Speaker 1
That's awesome, man.

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03:01
Speaker 3
Name of the pub?

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03:02
Speaker 1
Yeah, I was just gonna say. Which club? Which pub?

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03:04
Speaker 2
Yeah, it's called Brian Baru. So, yeah, giving them a quick shout out. But one, usually one Saturday a month, you'll find me in there playing music.

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03:14
Speaker 1
Excellent. So if Greg says anything today that you either want to confront him about or you don't want to find the dude, once a month, you'll have an opportunity. Well, excellent. So Greg is an attorney at White for Taylor and Preston, is that right?

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03:35
Speaker 2
Yep.

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03:36
Speaker 1
He focuses specifically on intellectual property law. And Greg and I got into a conversation several months back just, you know, getting to know each other in a breakfast environment. And in that conversation, it came out that, like, you know, I said, well, yeah, there's no IP in construction. Right. Which naturally led Greg to be like, not so fast. That's right. Yeah, not so fast. And I started learning a ton in that conversation. Said, hey, this is a conversation we need to be having in the huddle, a conversation that the audience that we. That we work with every day, or, I'm sorry, every week would really benefit from. So we're going to get into intellectual property in the construction industry. And Stacy, assuming anybody did hang around live, please engage with those folks, you know, on the, you know, live chat.

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04:29
Speaker 1
We'll pull you back and see if we have any audience questions to, you know, approach here. With about 10 minutes to go, so I have to, like, recalibrate my brain to make sure that we land that time correctly, but we'll see you soon. So, Greg, let's start off by talking just a little bit about what intellectual property means in a legal sense. What is ip, which we, you know, intellectual property, or ip, as we call it.

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05:01
Speaker 2
Yeah, yeah. So when we're talking about intellectual property, generally that's a body of law, but fundamentally, we're talking about four different areas. Patents, trademarks, copyrights, and trade secrets. That's kind of the universe of categories of intellectual property. So patents protect new inventions, and particularly inventions that are embodied in a product, a process, a machine or a composition, some type of chemical composition. Right. And I can give examples, if you like, Chad, of how they relate.

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05:44
Speaker 1
Yeah. So what's an example of a patent in, like, what. What's something that. That we think of that. That all of us would know immediately as a patent and then maybe give us, like, the construction example.

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05:57
Speaker 2
So. So, I mean, you know, the. The first automobile engine, you Know the, the for the, an assembly line for making an automobile. I mean, you know that there are what, 12 million almost the issued patents now, you know that have issued over the last two centuries in the U.S. you know, so there are many, many and many different categories of invention, but particularly in the construction industry, it would be things like, you know, different machines. I mean Caterpillar for instance, has loads of patents for bulldozers and different machinery. You've got, you know, some of the stuff that we've done are concrete repair methods and apparatus. You've got, you've got monitoring drugs.

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06:56
Speaker 1
Yeah, I can patent a method.

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06:59
Speaker 2
Absolutely.

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07:00
Speaker 1
Okay, so that's, you're going to talk about the difference between a patent and a trade secret because in my brain I'm going wait, isn't a method kind of a trade secret? But, but I'm sure you'll, you'll paint that picture. But okay, so we got it for patents. I think I can picture that's usually it's associated with what I get inventions. That term that you said we invented this new product or new way of doing something that we are then putting a patent on and saying nobody can do that but us or nobody can use that but us.

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07:33
Speaker 2
Yeah, exactly. Yeah. And so importantly, fundamentally, the patent gives a right to block others from making, using, selling or offering for sale that new product, that new process, that new composition. But in exchange for that, you have to file a patent application that is a detailed technical description of exactly what the invention is. So you're telling the world exactly what it is that you've developed, how to go out and make it, how to go out and use it. And that's the trade off.

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08:07
Speaker 1
Yeah, the trade off is the moment that patent expires, which is how long?

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08:12
Speaker 2
It's 20 years from the time you first file the application.

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08:15
Speaker 1
The moment it expires, everybody knows how to go out and replicate your.

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08:20
Speaker 2
And the public is encouraged to why we make those documents public so that once it expires the world can use it.

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08:27
Speaker 1
Furthermore, I can, I'm publishing my patent which says, you know, use a little from column A, column B and column C. And this is exactly how you do it. If somebody's really creative and they may be able to say actually we're going to use column D and it's going to be different and we're not going to be infringing on the patent. But you know, they actually by being able to see their recipe, they just Educated me on how to do something better.

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08:50
Speaker 2
Yep. And there's a whole body of law how close you have to be infringing. You know, can you do D or can you maybe do C prime and come that close? Right. And, and still avoid the scope of the patent. And that's where you get into the big, heavy, nasty litigation.

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09:07
Speaker 1
Interesting. Fascinating. All right, so then we got trademarks. Talk to me about trademarks.

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09:11
Speaker 2
Well, if I may though, just to contrast, before we get to trademarks, I'd like to contrast patents from trade secrets. Trade secrets are really at the opposite end of the spectrum from patents.

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09:24
Speaker 3
Right.

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09:25
Speaker 2
Patents again become a public document, but they let you block anybody else from going out and making, using and selling the thing that you've invented. Right. Regardless of whether or not they know about your patent. A trade secret protects any type of information that has independent commercial value that you take reasonable measures to keep it locked up, to keep it secret. If you take those protections and you don't let the cat out of the bag, you protect the information by non disclosure agreements. You have a legal trade secret interest in that information so that if a former employee runs away with it to a competitor, if a competitor wrongfully gets access to that information, they're able to go out and use it.

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10:13
Speaker 2
If they go out and start using it, you can assert trade secret protections against them and sue them for misappropriation of the trade secret. But the key difference between trade secrets and patents are the trade secret. You, you keep it secret, you keep that information locked up and that's great. But somebody out there that independently develops whatever the thing is, that is subject to that trade secret. So let's say you've got a, an installation process that talks about how you are coding a wall to make some multi level surface on a wall. And the way that you're doing that is really a secret process. If somebody else comes in after the fact and looks at the wall and is somehow able to figure that out, reverse engineer it, you know that's fair game.

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11:06
Speaker 2
They're able to do that because it's not patented because you relied on trade secret. If somebody can reverse engineer it, that's fair game. If they wrongfully got access to your information, you can go after them for trade secret misappropriation. But if they didn't and they just figure it out, then that's fair game.

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11:24
Speaker 1
So you have to make a decision. Do I want to go for a patent? Publish how exactly I'm doing this, make that a part of the public Record and then have 20 years of making hay before everybody can come and replicate, you know, duplicate my stuff or do I want to go down the trade secret route, just, you know, put together non disclosure information, put together, you know, agreements, that is, and put together a sort of a way to make sure that if somebody does on illegitimately get their hands on this information that I have recourse.

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12:00
Speaker 2
Right.

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12:02
Speaker 1
But I'm not going to go through the whole patent process and publishing and all that type of stuff. You have to make that decision which makes more sense for my business.

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12:10
Speaker 2
Right, exactly. And people weigh it. Depending on how difficult it's going to be for somebody who has proper access to be able to reverse engineer. If it's going to be tough for them to reverse engineer, then trade secrets might be more appropriate. If it's really going to be easy for them to figure it out once they see it, patent route probably makes more sense.

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12:30
Speaker 1
Excellent. All right, that's great. So, so trademarks and then copyrights real quick.

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12:35
Speaker 2
Yep. Yeah. So trademarks protect branding that are associated with any product, any service. So that branding might be in the name of a company, it might be in a unique logo. You know, for lots of repair companies they have different logos that might have a building silhouette or a house silhouette. There's a gazillion different registrations for trademarks for logos that have those house emblems in them. But any unique design element that you use to identify as a source or identify as a brand of a product or service or any name that you associate with that product or service can serve as a trademark. And you can protect that by getting a federal trademark registration at the US Patent and Trademark.

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13:26
Speaker 1
This is, this is easy. This is the big McDonald's M. This is the Nike Swoosh. This is the right, those different types of things. And I have to make sure that I'm not putting my Nike a Nike Swoosh on my product and trying to do business off of their good name.

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13:43
Speaker 2
And the ones that you just gave examples of, Chad, are really great examples. The McDonald's M, the Golden arches. Right. When, when people see that, they immediately associate that with McDonald's burgers. The Nike Swoosh. When, when somebody sees the swoosh mark, they immediately associate it with shoes, with sneakers. Those are really fanciful original marks. Very strong brands.

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14:07
Speaker 1
Yep.

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14:07
Speaker 2
That versus Chad Prinky construction. Right, that's very, very descriptive. You can't get any trademark protection for the term construction. Your own name is a descriptive term. For you. So there's not much protection that attaches there. So when you're coming up with a name that you want to have distinction wrap around from a branding perspective, the more original you get. You know, again, that Nike Swoosh is really original. The, the golden arches are really original. So the more original or fanciful you can be in your branding, the stronger the trademark rights are going to be that attached to it.

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14:47
Speaker 1
Excellent. Okay. And in construction, we would just see that associated with construction brands. Right. We would see that with the logos that we've come to know. You can probably picture some in your mind right away as you start to think of the construction brands that you're most familiar with. And then. And so now into copyright.

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15:05
Speaker 2
And so copyrights are a really active field intellectual property field, particularly as it relates to construction. So you see lots and lots of disputes over what can different parties do with, for example, blueprints, architectural drawings, all the way from drawing phase up to a finished building, photographs of buildings, any technical design documents that get wrapped up in the. And ultimately in the finished blueprints or building information modeling models. Right. You know, any of this stuff can be protected by copyright. Copyright protects any original work of authorship that's fixed in a tangible form. So that's why I'm giving these examples of things like architectural drawings of photos of different types of software. All of these are protectable by way of copyright. And to get the strongest protection, you file an application to copyright office for copyright registration.

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16:16
Speaker 2
But really important issue is that the copyright only protects the literal expression itself. So for instance, with a blueprint, a copyright in the blueprint protects you against somebody else making copies of the blueprint and then maybe going out and holding that copy that they've made and constructing a building from that copy. It does not protect against somebody rightfully using the blueprint, building and then somebody else going in and scanning through the building, figuring out exactly how it's put together, and then building their own exactly identical building. The copyright in a blueprint only protects against making a copy or substantially similar copy of the blueprint itself, not of the building that results.

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17:11
Speaker 1
Yeah, so if I'm able to go in and sort of make my own drawings as I'm doing it, putting it into my own model, and, you know, replicate exactly what you built, that's no copyright protection there. But if I get my hands on your plans and then I build something substantially similar, now we got a problem.

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17:33
Speaker 2
Well, yeah, particularly if you've gotten my plans now, you're making copies and you're giving it to your architect and you're giving it to your construction team and that kind of stuff. And the only exception there is where it's possible that you come up with a final building design that's so incredibly, amazingly unique. Like it's a building that's shaped like a queue, like the letter Q or something like that, you know, something that's so original that the building itself is essentially a sculpture, then you could have a copyright interest in the building itself. But just, you know, a rectangular office building now it's going to be really hard to assert a copyright interest in a traditional new tower.

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18:14
Speaker 1
And what are the most common. You say this is a pretty active space. What are the most common disputes that are arising here? Well, let me pose one. You tell me if I'm off base. The picture I have in my mind is, you know, I, as the architect designed something, the, you know, who owns that design? Does the owner own it or is the architect owner?

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18:37
Speaker 2
Yeah, and it really depends ultimately. And you know, what is the original document? What's the agreement between the architect and the, and the project owner. Right. You know, if the, you know, if that doesn't spell out that the owner is going to own the copyright interest in those plans and absolutely the architect is going to own those plans. So up front in the agreement, when you're bringing in the architect, those issues have to be fully vetted. Right. And documented in that agreement to spell out, okay, I'm going to own these plans. And presumably then an architect who's jumping into that type of venture is going to price in the fact that I'm doing this development work entirely for you and I'm going to assign over my interest in the copyright. I'm doing this work, creating this work for you to own.

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19:32
Speaker 2
But absent that agreement spelled out up front, you know that with some exceptions, the architect is going to own it. And, and the owner is going to be, you know, out in the cold if he wants to go and take that to the, to his next development.

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19:48
Speaker 1
Right. That's what I was just thinking is, you know, why can't I just use these plans to do 10 more developments just like it in different cities across the country and just hire you, the architect, to be my ca. You know, you can just be my. Right. You can just do the CA work on that stuff.

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20:03
Speaker 2
But just quickly, I, I do want to do. Want to clarify that there are certain exceptions, you know, for outside Contractors like an architect, if they're specially commissioned, which is a term of art under the copyright laws to do this particular work, then there could be automatic assignment. If they're an employee of the company for copyright purposes. The, the ownership could automatically go from employee to owner. Just for copyrights doesn't relate to patents or inventions. But, but there are certain circumstances where you could have that automatic transfer. But fundamentally, because those are exceptions to the basic rule, it really dictates you deal with the issue upfront in the agreement spelling out who owns what in the end.

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20:50
Speaker 1
I love this. Okay, so thank you very much. I think that was, so we've got these four different areas of intellectual property, how they relate specifically to construction, where we can see these things actively. And I hope that the audience is starting to process through, you know, probably some light bulbs, because again, you know, I've been working with construction companies for 15 years in a consulting capacity. I've never once ended up in an IP discussion. And so, you know what I mean? So I, I, this leads down this path of like, what's the biggest issues or the biggest mistake that you're seeing made in the construction industry regarding intellectual property?

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21:30
Speaker 2
Yeah, well, I kind of alluded to it a bit so far. One of the biggest challenges, one of the biggest problems is just a lack of understanding of what I as an owner own by way of developments that are, that pop up, right? So if I have an employee, if I'm a company that's doing construction projects, but every now and then I'm coming up with a new novel improvement for, for forming patios on concrete buildings, right? Invention comes out of that process.

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22:16
Speaker 1
Right?

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22:16
Speaker 2
And the way our patent laws work and protect inventions, an employee owns that invention. With very rare exceptions, an employee owns that invention unless again, there's an agreement that assigns it over to the employer. So employer is thinking, I pay this person's salary. I have them, I've assigned them to this team to work on coming up with a solution for how we're installing a patio on an existing flat planar concrete building surface. And they come up with this great concept. So if I've paid for that effort, surely I must own it. And that's simply not the case. And so the problem is, you know, owner who thinks he owns it has gone through the patent process. If he's never gotten an assignment of the inventor's ownership interest over to the company, he simply doesn't own it.

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23:11
Speaker 2
And so he's invested all this time, money and effort in trying to obtain patent protection. And because he never went through the process of getting an assignment, you know, he's now out in the cold. His former employees, a lot of the times now own that invention, and there's nothing that he can do unless he can go chase down and give him $1,000 to now assign the vention, or more likely, you know, $100,000.

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23:41
Speaker 1
So it goes back to what I kind of alluded to now a couple of times during the. During the show, which is that, you know, the biggest issue is that they're not thinking about it. And then once they are thinking about it, they. It's too late. You know, there are. There are a series of issues that you really have to be proactive about. One of the issues in particular that you get just gave an example of is if you're an employer considering putting together some sort of, you know, statute that your employee doesn't own the invention, but the employer owns the inventions that the employee develops while there. So exactly this overall, you know, and you know me, I'm. I'm like, I just like a fight. I just like a fight. So I. I'll pick one with you here for a moment and just.

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24:34
Speaker 1
And just say, you know, all of this. I'm having a hard time squaring all of this protecting of. Of our stuff and preventing other people from using our stuff and keeping employees from being able to own their own stuff. And like, I'm having a hard time squaring all of that with this idea of, like, actually making positive strides in the building industry. You know, Stacy and I built this platform of the morning huddle, really, to showcase people who are helping to push positive change in the construction industry. So, you know, when. When I come up with some fanciful invention that changes the game for the construction industry, man, it pisses me off to think about that, you know, being something that now only I can do, nobody else can do. Right. Help me to square that in my own mind or, you know.

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25:28
Speaker 2
Yeah.

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25:29
Speaker 1
How would you respond to that?

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25:30
Speaker 2
Yeah. And so that, Chad, is a debate that is no way exclusive to the construction and really hear it a lot in the pharmaceutical industry. But look, fundamentally, our patent system is an incentive system. It incentivizes innovation. And in exchange for you going out and innovating and teaching the world about your innovation, by way of coming in and filing a patent application that becomes public, the government will give you a monopoly for a limited amount of time over that invention. But benefiting the public by giving them that knowledge, the knowledge of how to make and use your innovation once your patent expires.

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26:15
Speaker 2
And if we didn't have that, that drive that driver for people to innovate in the first place, then why is any company going to go through the blood, sweat and tears that has to be invested in the innovative process, you know, if there's not gravy for you at the end by way of a patent. So if we're going, if we want to see new innovation coming up, really in any industry, we want to be able to reward that innovation. And that's the whole goal of the patent system, reward innovation so that people are going out and they're developing new things that are going to benefit the public. And the benefit that innovator gets is this monopoly by way of a patent for a limited amount of time.

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27:06
Speaker 1
So what you're saying is that, you know, fundamentally the protections system has competition built in, but it has monopoly built in as the incentive for a period of time. And I would also, I will concede that, you know, if we aren't that every time somebody pushes the envelope and does something amazing and is changing the way that things work, while I might not be able to replicate it will inspire similar advancements elsewhere. And, and so overall, as long as somebody is innovating the innovations, even though they may be licensed, protected, will inspire, motivate and create market demand for additional motivate or for additional innovation. Yeah, absolutely.

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28:06
Speaker 2
And that's one of the fundamental philosophies of the patent system. It's, you know, not only am I teaching the public about my great new thing, but I'm planting the seeds for everybody else to come after me and build onto it and further improve it.

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28:22
Speaker 1
1, 1 comment. I wonder how you would respond to this. As I'm reflecting on everything that we've talked about is, you know, as we talk about incentivizing innovation, you know, if it's going to be the employees themselves that you're leaning into to create, to innovate, to do something special, wouldn't it be wise to have some sort of maybe mutual incentive that says, you know, an employee is entitled to 50% of any, you know, whatever rent of revenues generated as a result of monetizing said patent or said trade secret or fill in the blank?

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29:03
Speaker 2
Absolutely. And many companies will do that. They'll actually have an internal incentive system and they vary in Structure and let's say reward level, you know, from company to company. I mean, you know, some might get a nice pen, others might get a 10% royalty, you know, ongoing for the life of the patent. I mean, it really varies, but I think generally it's a good business practice. It's smart business practice to incentivize your employees, to reward them for that innovation. It's just improving your product on the marketplace.

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29:42
Speaker 1
Yeah, I feel the same. I think, you know, as we talk about incentivizing innovation, you know, you're. You can't. You can't say, hey, anything you do here belongs to me and not you, so go be creative.

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29:55
Speaker 2
Right, right. Exactly.

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29:57
Speaker 1
Exactly. Yeah, I think. I think. All right, awesome. I want to bring Stacy back. I think we have some questions, comments, and, you know, I want to make sure that we get an opportunity to hit on some of those. Stacy, what do we got?

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30:13
Speaker 3
All right, we have two questions on copyright. So I can go through the. I can go through with a digital scanner and replicate the model and not violate a copyright question mark.

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30:29
Speaker 2
And so again, it depends. It's going to depend on the specific building. And is there really something super original about the building? But, you know, a, you know, let's say a colonial house. Somebody could absolutely go in with a digital scanner, walk through the house, take very precise dimensions, and go and build an exact replica without. And again, this is assuming it's a standard colonial house. Right. But assuming that's the case, absolutely somebody would be able to go and create an exact duplicate of that house in another neighborhood. What they would not be able to do is go to the source plans, the source blueprints, or the prints that they got originally from the builder, make copies of those and hand them to an architect or a builder to go out. And because. And that's just the way the copyright interest works.

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31:34
Speaker 3
Okay. And I think the next question probably answers it similarly, but. So school system hires architect to design an elementary school, pay for the design, decide that I want to now build six identical elementary schools with one set of drawings that I bought. Copyright.

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31:55
Speaker 2
So a copyright interest absolutely exists in those plans. And who owns it depends on what that agreement said outright between the school system and the architect. And so if it was the school's plans, to be able to take that out and use it to build a bunch of other schools, it would be wise in that scenario to up front, say that, spell it out in the agreement. The architect then has the benefit of knowing that up front they can build that into the basket of rights that they're giving the school system and say, you know, you can go out and build seven more units. You can go out and build 10 more units, whatever cap they want to put on it. Because originally the architect presumably owns those rights in those plans.

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32:43
Speaker 2
But really depend, again, it dictates dealing with this issue up front in the initial agreements between any third party and owner developer who's working a project. Awesome.

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32:59
Speaker 1
Awesome. I have one question, Greg, which is how do I know when I should be taking steps to protect ip?

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33:12
Speaker 2
Anytime that you're doing, anytime that you're being creative, you should be going. It doesn't necessarily mean you have to run out to an IP attorney, but anytime that you're doing something new, you have a new branding that you're associating with this process for installing X, right? You installed X and found that in doing it, I can improve my reinforcement by adding these elements to it. Anytime that you're doing something new, inherently there is intellectual property that's associated with that new thing. And so you need to go through, go through the mental process of, you know, does this really give me some type of economic advantage, some type of benefit that my competitors might want to use if they found out about it?

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34:04
Speaker 2
And if that's the case, then you should be looking at, okay, well, if that's the case, what kind of protections can I wrap around it? Is it a new branding that my competitors are going to want to adopt? If so, I want to go seek trademark protection. Is it, is it some type of functional improvement? If so, I want to consider the possibility of patent protection or have a strategy where I'm going to maintain trade secrecy over that information. But fundamentally, anytime you're coming up with anything new, that's giving you some benefit out in the marketplace that your competitors are interested in, there's IP there and that should be vetted.

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34:37
Speaker 1
Excellent. That's really useful. So, so, you know, you talk about financial value, it's the, the motivation to do it. What's, what's the financial incentive to do this? One of the biggest issues that I see with construction companies from my seed as a consultant, helping companies to figure out where they're trying to go over the next three years, five years, 10 years, those types of conversations, all the time I'm having lots of conversations about exits, right? About what are we planning to do when it comes to selling the business, when it comes to whether it's, you Know, creating an esop or whether it's, you know, trying to find a way to keep it in the family. But more often right now, a lot of the conversations that I'm having really do revolve around how do we get the most possible valuation for the business?

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35:25
Speaker 1
Do you see intellectual property having these types of protections in place, mattering in any meaningful way to construction company valuation?

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35:37
Speaker 2
Yeah, absolutely. And again, it's an issue that's not unique to the construction industry. It's, you know, anytime a company is looking at an exit, obviously you're looking to maximize the valuation. And so hopefully you're doing that early on, long before, five years before you're getting to a negotiation table for some type of exit, some type of MA transaction.

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36:04
Speaker 1
Right.

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36:04
Speaker 2
And so to the extent we talked about different examples of ips, they relate to construction industries. So it would really behoove somebody that's looking at an exit five years down the road to go through and say, okay, do I have some things that are sitting on a shelf that I've maybe not jumped through the hoops of seeking protection for the brands that I have out in the marketplace? Have I secured trademark registrations for them? If there are. Are issues that I've kept secret and that, you know, we've been working on and tinkering inside, can I wrap some patent protection around them? If, if you get the negotiation table and you.

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36:49
Speaker 2
And there you find that you've got these things that have been sitting on the shelf that you haven't taken the steps to protect, now your valuation's down here, whereas five years before, you've secured all this protection, you know, for the stuff and have federal protections that now attached to it, boom, your valuations way up here. So it's really a useful exercise to go through, you know, an itemization, if you will. Well, before you get to that negotiation table to see what things are. Do we have in process, what things do we have sitting on the shelf that we just haven't really acted on that could just add value to our basket of intellectual property that we can wrap protections around just to boost our valuation. And we see that a lot. And the folks that are doing it early are benefiting.

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37:40
Speaker 2
The folks that are waiting until they get to the negotiation table are realizing, oh, man, I wish I would have done that.

‍ ‍

37:48
Speaker 1
When I think of some of the most pervasive challenges, you know, or, you know, yeah. Challenges the business owners face in the construction industry, this is one of them, is Just, you know, exiting from the business is oftentimes just so unappetizing. It's just, you know, yay. I get 2x profit, you know, or, you know, 3x profit. It depends on the world that you're operating in. But I think getting a comprehensive IP strategy in place and really taking a look at what protections you can bring to the table, that's going to make a huge difference, particularly to a strategic purchaser rate. Somebody who's going to buy your company and be strategic with that. I mean, imagine a private equity firm that owns 18 different mechanical contractors.

‍ ‍

38:29
Speaker 1
You own protections on four different patentable techniques and processes that I now, not only am I going to be able to buy this company and get the value out of, but I'm actually going to be able to take this and apply it to the 18 other companies that all. Now all 19 of my companies are going to be enjoying federal protection for the next, whatever, 15 years on this very unique way of doing things. It's going to give a strategic advantage in the market.

‍ ‍

38:54
Speaker 2
Exactly.

‍ ‍

38:55
Speaker 1
Definitely worth doing. Last question. What's it cost? How do I protect all this stuff? Right. Like how much?

‍ ‍

39:00
Speaker 2
How much?

‍ ‍

39:01
Speaker 1
So, so all there might be some people who are listening and watching saying like, I gotta do this, but wait a minute, I don't want to get sucked down the rabbit hole with, you know, a bazillion dollars with attorney's fees.

‍ ‍

39:14
Speaker 2
Yeah. And costs are really all over the place for the different types of protections that we talked about for trade secret protection. That's all, that's all client based. It's building the systems internally to literally keep information locked up. Right. And having data password protected. So that's just whatever your internal infrastructure costs are.

‍ ‍

39:35
Speaker 1
So internally that's, in the scheme of things, the most affordable protections you can have are trade secret protections.

‍ ‍

39:42
Speaker 2
Right? Right. Copyrights are pretty simple process. It's a registration fee that's under $100. And attorneys, if you work with an attorney to do a copyright application, probably under $500 to do a registration. It's really a pretty simple process. Trademarks are, I say, usually between $3,500 and $4,500 from start of the process through the, through to registration, assuming there are no tremendous headaches that come out in the process. And there are headaches that could come up during the process, but Generally in that $3,500, $4,500 range is appropriate. Budget patents are oftentimes very valuable. But likewise the most pricey type of protection that you can get. So for a very simplistic application going through the entire examination, you might spend $15,000 for something that's incredibly complex. You know, maybe a new piece of software or really complex electrical control systems.

‍ ‍

40:59
Speaker 2
You know, that could be 25, 35, $40,000. It really depends on the specific technology. And there I'm talking about from the start of the process, through the multi year examination process, all the way to ultimately an issued patent.

‍ ‍

41:16
Speaker 1
Wow, that's, I mean, go ahead, Stacey. Sorry, please.

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41:19
Speaker 3
Oh, I just have a quick question. So is there a way to like, you think you have something unique and innovative and then you go through the process and pay for everything. What are the chances you're going to get denied for something? Like maybe you weren't aware that something like this is already out there.

‍ ‍

41:39
Speaker 2
Yeah. And so that does happen where you're going through the process. You filed your application 99 times out of 100. We expect we're going to get an initial rejection from the patent office and then we get into argument with the examiner to explain why we're different from what the examiner cited against us. And so, I mean, but that's really where the game is. That's the back and forth, that's the negotiation that takes place during the patent examination process. And again, that's pricey. That's part of that 15 to $40,000 budget. You know, if it sails through, it's only a little bit of interaction that's back and forth with the examiner and you get to an issued patent. However, if there's lots of back and forth, lots of fight, sometimes the examiner digs his heels in.

‍ ‍

42:34
Speaker 2
You feel that he's wrong in citing against you what he cited against you. You have to appeal. And the appellate process gets pricey. So it really varies. Sometimes the examiner is very well grounded in the rejection that, that he or she makes, and sometimes they're not. But if they're not, you have to keep fighting, you know, which just adds cost to the process.

‍ ‍

43:01
Speaker 3
Thanks.

‍ ‍

43:02
Speaker 1
Awesome. This has been a really useful conversation. It's got, it's definitely got my wheels turning and I have nothing to protect. But, but you know, I, I, I can picture having some different conversations with my clients as a result of this. So I appreciate your time just even personally and I know that our audience, you know, has probably got their creativity peaked and going to be having some interesting discussions this week and afterward as a result. So thank you so much for joining us and having the discussion, Greg.

‍ ‍

43:35
Speaker 2
Absolutely. My Pleasure. Thanks for having me.

‍ ‍

43:37
Speaker 1
Yeah, it's our pleasure. So anything that you want to say? Parting words?

‍ ‍

43:45
Speaker 2
Just the one morsel that I'll leave everyone with is you hear horror stories about people leaving value on the table. The earlier you address these issues, the better. Do it internally. Just have a sit down and brainstorm about what do we have on the shelf that we think gives us that competitive edge and is there some protection that we can wrap around it? The earlier that you do that, the better. If you wait too long, your competitors could beat you to the process.

‍ ‍

44:12
Speaker 1
Wonderful. Great advice. Thanks, Greg. Stacy, we got some housekeeping to do. Let's, let's walk people through some of the stuff that's coming up so you can see across the bottom here. Join us next week at the same time for episode 33. Amy Marks, the queen of free prefab. Freepab. Free prefab joins us to talk about all things prefab. I can't wait for that discussion. That'll be a lot of fun. She's extremely dynamic and I'm sure people will, you know, have a great time as well as learn a ton during that episode. Stacy, do we have the Steeltoe Communications marketing tip of the week?

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44:49
Speaker 3
Yes. Just a quick reminder to protect your digital footprint. Just do a scan online of your company to make sure you're managing your reputation and not waiting for a crisis to happen. So that could be looking at your reviews, making sure you're active in the community, applying for awards. You want to make sure there's positive feedback about your company and you're keeping that up to date. Don't wait for something bad to happen. And that's all people see when it comes to your digital footprint online.

‍ ‍

45:25
Speaker 1
Great advice. Love it. I want to just plug for a moment. I will be. I'm running a presentation tomorrow in conjunction sponsored by HMS Insurance down at the BWI Marriott. If that's something anybody would like to learn more about, please reach out the focus of the conversation. I'm going to be splitting time with an economist and we will be talking about economic conditions in the construction industry in 2023 and what you can be doing today to prepare your company to deal with whatever may come and capitalize on the opportunities that you show up. So if anybody again would like to hear more about that, just shoot me a message right here on LinkedIn. Stacy, I look forward to seeing you again next week. Anything you want to say before we wrap?

‍ ‍

46:12
Speaker 3
Nope. I'm looking forward to next week, too.

‍ ‍

46:14
Speaker 2
All right.

‍ ‍

46:15
Speaker 1
See you guys.

‍ ‍

For most Americans, shopping online has become the norm for so many items in their lives. I mean, can you even remember what shopping was like before Amazon? As consumers, we have the ability to check pricing across platforms, read reviews, and buy the best available options with a click. Could we be seeing the same consumer experience developing in the construction industry?

Michael Wisnefski is working to foster the evolution of commerce in commodity raw materials. His company, MaterialsXchange is a digital marketplace for lumber.

During this show, we discuss the impacts of this kind of shopping experience on the construction industry. Who is for it, who is against it, and why? Join us as we reimagine the future marketplace for raw materials and beyond.

Transcript:

‍ ‍

00:00
Speaker 1
All right, it's morning huddle time. Good morning. I'm not saying it works. I wish you God speed, Godspeed with all of that. I think that's really nice. You know, I'm not sure what kind.

‍ ‍

00:11
Speaker 2
Of success you're gonna have with that.

‍ ‍

00:12
Speaker 1
Today because the world, my friend, has changed. Right. A lot of American construction workers, they have different needs.

‍ ‍

00:20
Speaker 2
They have completely different needs.

‍ ‍

00:22
Speaker 3
These awards have a huge, like, criteria that you have to fill out. And they usually have a community service or community, the, you know, the most productive with a high performance value. And, you know, sometimes it's 11 o' clock at night.

‍ ‍

00:40
Speaker 1
Funny, isn't? Yeah, not for me.

‍ ‍

00:43
Speaker 3
Not for me.

‍ ‍

00:44
Speaker 1
At 11 o' clock, I am guaranteed to be snoring.

‍ ‍

00:47
Speaker 3
So, so.

‍ ‍

00:58
Speaker 1
Good morning. It's morning huddle time here with Stacy Holzinger. I'm Chad Prinke with our guest, Mike Wisnevsky. How's everybody this morning?

‍ ‍

01:07
Speaker 2
Very good, Doing good. Bushy tailed.

‍ ‍

01:10
Speaker 3
Yeah.

‍ ‍

01:11
Speaker 1
Sweet behind, right?

‍ ‍

01:15
Speaker 2
Yeah, it's 8 o' clock here.

‍ ‍

01:16
Speaker 1
8Am that's too early. Now. We used to do, we used to do the huddle at 8, Stacy, remember that?

‍ ‍

01:22
Speaker 3
Yeah. But then we had some people, luckily, that joined us on the west coast and they said, we want to come on live, but too early for us. It's still early for them.

‍ ‍

01:33
Speaker 1
It is still early for the West Coasters. But I, do I, you know, more people are toughing it out on the west coast joining us live, which is cool. So, so Mike Wisniewski is joining us from Materials Exchange. It is an online marketplace for raw materials. He's going to tell us a lot more about that, Mike. Tell us just a little bit about where you are in the world and your business. Just give us a, I guess, you know, 32nd overview.

‍ ‍

02:02
Speaker 2
Well, I'm in downtown Chicago and yeah.

‍ ‍

02:05
Speaker 1
I actually have a picture. I'm going to overlay this while you talk. Yeah, go ahead.

‍ ‍

02:08
Speaker 2
And what we've created here is a, a digital marketplace that has the look and feel and functionality of a financial marketplace or a financial exchange. The important factor there is it allows for price discovery. And as everyone knows, I would assume lumber and material prices can be very volatile. And, you know, the idea of volatility prior to what we experienced for the last two years was substantial. And then the last two years have obviously, you know, blown the lid off this and shown what's really possible.

‍ ‍

02:46
Speaker 1
Yeah.

‍ ‍

02:47
Speaker 2
So, yeah, it's really important in my opinion, to have a medium or a Platform where the, you know, people, the users, the people in the market can get together and figure out what's going on. What's. What are the prices today, man?

‍ ‍

03:04
Speaker 1
And, and, you know, it's always been this way to some extent. What you've alluded to. Price has always changed a little bit day to day, but. But a little bit, you know, is nothing compared to what we've been experiencing with price fluctuations day to day over the past couple of years in particular, probably the past, well, I guess depends on the market that you're in. But, you know, throw inflation on top of COVID and we got a whole. Got a whole storm right with price wise. And so in that picture, were seeing that this is the view from your office, right? This is Michigan, huh?

‍ ‍

03:36
Speaker 2
We're looking east. We're in the Chicago Board of Trade building, the iconic birth. Birthplace of the futures markets.

‍ ‍

03:43
Speaker 1
Awesome.

‍ ‍

03:44
Speaker 2
So this is looking east. And I think the fun part of this picture is if you look on the right side, that beige building that has all the skinny little windows. Yeah. Most people don't realize that's a federal prison and it's in downtown Chicago. I mean, we are. The Sears Tower is just behind us. So, yeah, this is the beautiful view I get every morning. I look out at the lake, and then I glance over and I remember to always walk the righteous path.

‍ ‍

04:13
Speaker 1
Yeah, no doubt. You got a constant sort of reminder that, you know, do the right thing. Do the right thing.

‍ ‍

04:20
Speaker 2
Exactly. That's great.

‍ ‍

04:22
Speaker 1
That's awesome. All right, well, good. So we've got a lot to talk about. I want to dig into sort of why you're doing what you're doing, and, you know, how that whole experience has gone. Stacy, I'm guessing there's going to be a fair amount of conversation, you know, on the chat. Please keep that fired up, and I will bring you back here with 5, 10 minutes left, something along those lines, and we'll hear from the audience.

‍ ‍

04:45
Speaker 3
Yeah, yeah, sounds good.

‍ ‍

04:47
Speaker 1
Sounds good. All right. So, Mike, paint a picture of just, you know, you start talking about, you know, creating this digital marketplace, a place to connect buyers and sellers, a place where people can be more informed. Paint a picture a little bit of, I don't know, 10 years from now or 15 years. I don't know how long it is in the future, but the future of the materials procurement for our audience, which is mostly construction companies, what does materials procurement look like in. In your picture of the future?

‍ ‍

05:23
Speaker 2
It is going to be much more scientific, a lot less art form. When you Just consider all of the technology that is coming into our industry which is badly needed. You know, there's a bunch of statistics out there that show construction is the production of how they say the construction output is down.

‍ ‍

05:47
Speaker 1
Sure.

‍ ‍

05:47
Speaker 2
Compared to 100 years ago. It's taking us longer to do stuff while every other industry has utilized innovation and has they get more done with less. So anyway, the technology coming into the market or to this industry is nothing short of remarkable. But to operate properly it needs data and it needs good data and clean data and easy to access data and most important, it needs it digitally. So that's the science behind the game, if you would. It's about connectivity and collaboration. Let's just say if you went over to the big three car makers, you know, I guarantee you that they are integrated into their suppliers and their supply chain is fully visible and they know what's going on.

‍ ‍

06:43
Speaker 1
Yep.

‍ ‍

06:45
Speaker 2
Now you look at our supply chain and you have zero visibility into your suppliers, inventories, pricing, you know, it's really crazy. There's very little collaboration.

‍ ‍

07:00
Speaker 1
So. So yeah, I remember a couple of different, there were a couple of different moments in my life that I stored along these lines. I remember an interview I was listening to, I think it was 2007 on the radio and I was driving up the road and somebody was talking about the very first. And I don't think they were calling it a smartphone, I think they were calling it a camera phone at that time and. Right. And I was driving up the road and they were talking about this camera phone. And the person said, you know, what do you paint the picture of the future of cell phones? What's the future of cell phones going to look like? And the person who was being interviewed said, you know, I think we're talking about more than the future of cell phones.

‍ ‍

07:44
Speaker 1
I think we're talking about the future of cameras, I think we're talking about the future of video, I think we're talking about the future of maybe even computers. And they're like laughing and they're talking about like how crazy that would be and how this powerful thing in your pocket may very well turn out to be like your go to device for most life items, you know, and they were like, imagine, you know, talking to friends on video on your phone, imagine banking on your phone and things along those lines. I remember that interview back in 2007 or so, it just like burned into my brain as, you know, as, you know, time went on, I went, damn, you know, that was really spot on. And then I remember one other conversation. I was talking to a buddy of mine who, it was so funny.

‍ ‍

08:29
Speaker 1
Right out of college, he went and he became like a store manager at Blockbuster. And I was like, I said to him, I was like, that doesn't seem like a long term gig. And he was so upset with me. It was like it was 2005 or 2006, something like that. And he was like, I don't know, man. He goes, I think people are always going to walk in, they're going to want to always shop around and get advice from somebody. And you know, obviously the market has changed. So when I start thinking about the future of materials procurement in construction, right. And I start, you know, painting this picture. Are we going to point and click for everything? Is that, is that what we're going to do?

‍ ‍

09:04
Speaker 2
No, actually the answer is no, we're not.

‍ ‍

09:06
Speaker 1
Okay, so what's it, how's it going to work?

‍ ‍

09:08
Speaker 2
The system is going to do it for us.

‍ ‍

09:10
Speaker 1
Oh, weird. Okay, now you're freaking me out. Talk about it.

‍ ‍

09:13
Speaker 2
Okay, so here's the. If you don't know the term BIM building Information Modeling, that is going to change everything.

‍ ‍

09:22
Speaker 1
So, so we really embrace bim. Everything gets built in this model and then the model automatically talks to the marketplace.

‍ ‍

09:29
Speaker 2
Yeah.

‍ ‍

09:30
Speaker 1
Yeah.

‍ ‍

09:31
Speaker 2
Okay. You're, you're in a meeting with all the trades around building this building and in the center or you know, everyone's looking at the same screen and they're looking at a, the blueprint, if you would, which is a bim.

‍ ‍

09:44
Speaker 1
Yep.

‍ ‍

09:44
Speaker 2
And they go, okay, here's what's going to happen. We are going to move this wall from here over here and we're going to add a bathroom. Yep. And everyone in today goes, oh, now I gotta reorder.

‍ ‍

10:00
Speaker 1
Right.

‍ ‍

10:01
Speaker 2
The system will be connected up to your management system and your planning and all of that. And it will go, oh, click, order those new things.

‍ ‍

10:13
Speaker 1
Cool.

‍ ‍

10:14
Speaker 2
And it'll reschedule it. Everything will be done by the system, by the art. It's really, it's artificial intelligence is what it turns out to be.

‍ ‍

10:24
Speaker 1
And will I be, will I be plugged into like my preferred supplier or will they be just one Amazon? Will it automatically shop for me? What do you envision there?

‍ ‍

10:35
Speaker 2
Yeah, absolutely. It'll, you'll look into your suppliers and you'll see in their inventories and you know when their next available truck is. Cool.

‍ ‍

10:45
Speaker 1
So, so maybe I can plug in my preferences. What's more important? Delivery time, price?

‍ ‍

10:51
Speaker 2
Actually, you won't have to. The system will do all of this.

‍ ‍

10:55
Speaker 1
All right, so because the system's so.

‍ ‍

10:59
Speaker 2
Much smarter and as you slide the wall around, everything's going to be changing, you know, okay, now you need more two by fours. Nope, now you need less two by fours. Now you need more two by six. So like the system can think so much faster obviously than any human, any group of humans can.

‍ ‍

11:16
Speaker 1
Yeah, there's going to need to be obviously oversight on that. But you know, this goes to one of the things that I've told my children already, which is like, you know, if there's one thing to go to school for folks, it's robotics. And like just, you know, just be somebody that can handle, that can work with the future workforce that may be largely robotic or, you know, artificial intelligence driven behind that.

‍ ‍

11:40
Speaker 2
The next term, CLT or mass timber.

‍ ‍

11:44
Speaker 1
Yep, sure.

‍ ‍

11:45
Speaker 2
That is absolutely going to change our industry.

‍ ‍

11:49
Speaker 1
Yeah. Talk about that from your perspective. Why is that going to change our industry?

‍ ‍

11:54
Speaker 2
Well, two ways. First, it consumes an immense amount of forest products.

‍ ‍

12:00
Speaker 1
Yep.

‍ ‍

12:02
Speaker 2
As it replaces concrete and steel, it's going to, number one, change the way we build. It's going to change who is important from a supply side in the market. You know, your preferred vendor. If they're slinging two by fours today and they decide we're sticking with two by fours instead of going to mass timber, they're probably going to have a hard go of it. It's going to change the trades in the field and how they build and you know, their roles.

‍ ‍

12:36
Speaker 1
There's the first mass timber project is actually being built right now in Baltimore. What's the status of that in Chicago? Do you have a sense of what that's like in your world?

‍ ‍

12:44
Speaker 2
Yeah, Chicago is a couple buildings. I was just up in Milwaukee, the tallest residential, the tallest mass timber building in the United States. This ascent in downtown Milwaukee is.

‍ ‍

12:56
Speaker 1
Do you know how tall it is?

‍ ‍

12:58
Speaker 2
26 stories, I believe.

‍ ‍

12:59
Speaker 1
Oh my, that's awesome.

‍ ‍

13:01
Speaker 2
And these, here's the other thing is everybody wants to say, well, you got it's all wood or it's all concrete and steel. And the reality is as you mix them and you put the best possible material in the best roll for a building, it. That works out really well. And you know, mass timber right now at its price point only makes sense above five stories, five or six stories. But as they figure out a cheaper way to produce it and use it's going to come down like the Midwest has a massive issue with bricklayers.

‍ ‍

13:42
Speaker 1
Okay.

‍ ‍

13:42
Speaker 2
There just aren't enough masons. And you know, you look at many of these, the houses in Chicago, they have concrete block walls. They're going to replace those with mass timber and these houses are going to go up so much faster. So they're like, I haven't teased the whole thing out, especially from how much fiber, how much wood it actually consumes. So it's going to be really interesting.

‍ ‍

14:11
Speaker 1
Yeah, I see the supplies end of that being a critical question. I'm positive there's a bunch of work being done on that right now. I'm not privy, but okay. So we see this materials procurement world where BIM and the machine surrounding all of that tells us what we need, helps us to see where we should be getting it from, and essentially is our decision making tool, human oversight, to double check and make sure all that makes sense. But the AI kind of does it for us. We're envisioning that sort of future world. Why are you doing this? What motivated you to get involved in leading this kind of change?

‍ ‍

14:57
Speaker 2
So I've always been a bit of a problem solver and kind of swimming upstream, going a little bit against the current. And the term that always has driven me nuts since I was young was oh, you have to pay your dues or this is the way we've always done it and you just have to learn.

‍ ‍

15:15
Speaker 1
Right.

‍ ‍

15:17
Speaker 2
When I first got in the business, I looked and there were these people that were making a bunch of money that weren't really that bright and really weren't studying or working their craft, if you would, and they were making money just because they had the relationship.

‍ ‍

15:32
Speaker 1
Right, Sure.

‍ ‍

15:32
Speaker 2
I said, there's just got to be a better way to do this. And I became so frustrated with the lumber and building materials industry that I left and I went into the financial trading world. And at that time the financial trading world was just embracing this digital idea, you know, of trading online. And my, you know, I was actually sitting in Chicago and trading futures market in Europe, the URX Exchange. And we would click the mouse and it would take like one second for the signal to go all the way over to Frankfurt and come back.

‍ ‍

16:07
Speaker 1
Sure.

‍ ‍

16:08
Speaker 2
And it just blew me away by the way, that, oh my gosh, it happens in a second now, you know, we're in milliseconds, like that 1 second time frame wouldn't work. So I ended up coming back into the lumber industry and I walked into the lumber futures pit in 2009, which at that time was all open outcry, just, you Know, guys standing around yelling back and forth at each other and you know, don't let it get lost. That I said, guys, because here's how that industry, that business worked. You had to be very aggressive. It helped if you were big, it helped if you were tall and you had a booming voice. And that's. It was a great system. Don't get me wrong.

‍ ‍

16:51
Speaker 2
Absent of technology, the amount of trading that was being done in the trading pits of Chicago was nothing short of remarkable. But now you overlay the fact that we have technology that we can do these transactions more efficiently, more accurately, have more transparency into them, make the markets more fair. So I walk into the lumber pit with a computer, these all these guys laugh at me and they're like, oh, what's this guy gonna do? In the first five minutes I made $1,000 because there was a digital market alongside the pit market that they were ignoring. Yeah, it was almost like if all the booksellers in the world said, oh, there's that Amazon thing, we're just going to ignore it's going to go away. And I walked in and I was arbitraging between the booksellers and Amazon.

‍ ‍

17:41
Speaker 2
Anyway, 18 months later, 95% of the volume had gone on to the screen, the digital market and the guys in the pit were standing around doing nothing.

‍ ‍

17:52
Speaker 1
Yeah, that's the way it works.

‍ ‍

17:54
Speaker 2
What I want to circle back to though is the comment about there were guys in the pit. Here's where the opportunity lied then. I was an outsider and I came in and I went from totally outside to being one of the biggest traders in the lumber market, especially in the options market. My neighbor is a traitor. Now if this neighbor of mine was a traitor in 1995, that person would have been, you know, probably about 30 years old, about 6 foot 4 with a booming voice and probably an athletic background. Anyway, she is a about 5 foot nothing Korean girl with a master's in physics and getting a PhD in something. So the, everything's been turned on its head right now. That opportunity for her to, you know, apply what she knows, which is utilizing technology to make a system more efficient.

‍ ‍

18:57
Speaker 1
And, and the market now values a different set of trades. Right. Characteristics.

‍ ‍

19:01
Speaker 2
And she trades soybean options. Yep, kind of. You would never expect.

‍ ‍

19:08
Speaker 1
That's awesome.

‍ ‍

19:10
Speaker 2
The cool thing is it doesn't mean that a 6 foot 4, athletic background person could still be trading soybean options.

‍ ‍

19:18
Speaker 3
Right.

‍ ‍

19:19
Speaker 1
It's, you got to have the ability to add value. You know, to that space. And so, so, man, there's so many questions I have. What kind of headwinds have you faced trying to get. Is there anybody who doesn't want this to be successful? I mean, other than your competitors, Is there anybody who doesn't want this to be successful?

‍ ‍

19:37
Speaker 2
Well, who is our competitor is the question. Right.

‍ ‍

19:39
Speaker 1
Okay, talk about that.

‍ ‍

19:42
Speaker 2
Yeah. The wholesale. There's a, a big segment of the wholesale community that has zero interest in this. Now. In this last run up, these wholesalers made so much money. I mean, obscene. Like I know people that made well over a million dollars just quickly buying and selling over the phone.

‍ ‍

20:04
Speaker 1
Yeah.

‍ ‍

20:04
Speaker 2
Or email, whatever. Just being in the mix of it taking on very little risk. They want everything to stay. Nobody wants change. Change is a four letter word, man. You stay away from change. Right. Because if you've built something up, just you want to milk it Right. As long as you can. The, the forward thinking people really like it honestly that the. As the market has shifted, as the market was going screaming higher and there was very. Getting your hands on materials was difficult.

‍ ‍

20:44
Speaker 1
Yeah.

‍ ‍

20:44
Speaker 2
The people coming to us were those whose current vendors were no longer able to support them. So they were looking for something different. Builders, a lot of turnkey framers, panel manufacturers, trust manufacturers. The, the ingenuity of the crafty people out there who are really building the buildings. They were coming to us, the actual distributors and those people in the supply chain, they really weren't so keen on it. Like they were going, you know, I, we see that you're going to disrupt our business.

‍ ‍

21:20
Speaker 1
Yep.

‍ ‍

21:21
Speaker 2
And the guys and the ends, they had already been disrupted. Like they weren't getting their material. They're like, look, we throw in the towel, we'll look for anything. Now what's interesting is the sellers, the supply side are coming back to us and are open to discussing using our platform.

‍ ‍

21:39
Speaker 1
Why, why do you think that is?

‍ ‍

21:41
Speaker 2
Because it's not as easy to sell. You know, they, those guys walked in every morning and they had, you know, a pile of wood to sell and by 9am it was gone.

‍ ‍

21:50
Speaker 1
Right. Because their customers are shifting.

‍ ‍

21:53
Speaker 2
Well, the market was so strong that they didn't need help selling.

‍ ‍

21:56
Speaker 1
Sure. Right. There was, there was so much demand. But do you see the customer shifting to a more online experience? Right.

‍ ‍

22:04
Speaker 2
Yeah, absolutely. Well, you know, this show is a perfect example of what's shifting. And it is, it's about transparency and it's about information people. Now since we have our phones and we have this connectivity and this ability to communicate over long stretches instantaneously. They want real time data. So the information that gets, you know, talked about on your show, they very easily could rely on their sales rep to come out to the job site or whatever and say, oh, let me tell you about this new thing.

‍ ‍

22:37
Speaker 3
Right.

‍ ‍

22:39
Speaker 2
But they don't. That messes with their day. This works out so much better for people.

‍ ‍

22:44
Speaker 1
Right. This is either live or recorded. People can catch it up on their own time. They can fast forward to the parts that they really want to listen to. Right? Yeah.

‍ ‍

22:51
Speaker 2
It's putting the control back into the user's hands.

‍ ‍

22:55
Speaker 1
Well, and I think that's ultimately the way every market has gone, isn't it?

‍ ‍

23:00
Speaker 2
Right.

‍ ‍

23:00
Speaker 1
Like every, every cons, every market will find a way, the consumer will find a way to push progress toward more transparency, more affordability, more quality. The consumer tries to find ways to do that. And I think anybody who tries to stand in the way of that, anybody in industry, if you're, you know, again, if you're Blockbuster and you're saying, nope, we're keeping all the stores, everybody loves walking in, that's just ignoring progress.

‍ ‍

23:35
Speaker 2
It is, but it's the innovators in the industry who bring a product and show it to the consumer and the consumer says, oh, that's kind of cool. Like what cracks me up. People are like self driving cars, for instance. Oh my God, never. I, I like to hold the wheel well, Are you kidding me? Do you know how nice it would be? So my family has a vacation house in way northern Wisconsin. It takes six hours to get there. Can you imagine? If you say I'm going to the lake house, how are you getting there? Well, I'm gonna plug it in the car, the destination, and I'm gonna go get in the car in my pajamas at nine o' clock tonight and I'm going to wake up at, you know, 6 o' clock in the morning at the cabin.

‍ ‍

24:16
Speaker 2
Totally sign me up for that. Right? Yeah.

‍ ‍

24:21
Speaker 1
And again, I think for every, you know, one person who says, I like the feel of the steering wheel and I really like, you know, that's what they're okay. But that's not, I would say there's probably 20 others that would rather wake up at the cabin. I mean that's, you know, that's the deal. So it's not that these marketplaces go away altogether either.

‍ ‍

24:42
Speaker 2
Right.

‍ ‍

24:42
Speaker 1
It's just that they, it's just that the consumer shifts.

‍ ‍

24:45
Speaker 2
Sure. Look at Uber and taxis, like, right. Were we as consumers saying I'm done with this taxis. I want to be able to order it on my phone. No, you have no idea. Like you were just used to downtown Chicago. You walk out and you wave your arm and a car pulls up. That's pretty easy. Why do you, what else do you need? Well, oh, wait a minute. I can sit at my, the table and order the car and pick which kind of car I want. Oh, that's kind of cool. I'll do that instead. Oh, and then they're going to tell me when they're here, right?

‍ ‍

25:13
Speaker 1
And I know the price in advance and I can see my rough arrival time. And I can see, right, if I.

‍ ‍

25:20
Speaker 2
Leave something in the car, I know who did it or know whose car like it and what cracks me up. That's such a good example. The taxi industry was in the best possible position to have pulled off that.

‍ ‍

25:34
Speaker 1
Oh my God, they had all the drivers. Are you kidding me? It was crazy.

‍ ‍

25:37
Speaker 2
Let's flip to the current building material supply chain. Who in this supply chain is better positioned to bring a digital solution and make the lives of their customers more easy?

‍ ‍

25:50
Speaker 1
I would say the people with all the customers.

‍ ‍

25:53
Speaker 2
Right? But you know what? They're not. And they don't want to because they want everybody to be reliant on the archaic systems they have in place. Because if I'm so crappy as a supplier and they're so crappy, I just have to be less crappy than them and just get my talons into you. And once we're locked in, you know, you can't go anywhere else.

‍ ‍

26:20
Speaker 1
Man, I any again. I think you can play this out in any capital market. You can even play it out in, you know, societal change, all those different types of things. Once the world is moving down the progress line, it's, it's a bad idea to try to, you know, ignore it, fight it, disagree with it. It would be much wiser to start to, you know, figure out ways and you know, my God, one of, if not the most powerful company in the world has literally given us the playbook with Amazon. This is how we want to buy, fill in we right with anybody. We all want to be able to shop easily, quickly, and surround ourselves with the information.

‍ ‍

27:07
Speaker 2
Here's the study that I've just basically finished and I'm working on my solution. This last market we had very volatile, In a volatile market, as the consumer of the product, let's say the builder, you know what they need? They need longer term, guaranteed pricing. They need more security. What happened 90 day pricing went to.

‍ ‍

27:30
Speaker 1
30 day, they lost all that. I mean it went to 11 day. Yeah.

‍ ‍

27:34
Speaker 2
It went the absolute opposite direction.

‍ ‍

27:36
Speaker 1
Yeah.

‍ ‍

27:37
Speaker 2
So, oh, you have a problem. Here's my solution. You're more screwed.

‍ ‍

27:41
Speaker 1
Yeah.

‍ ‍

27:42
Speaker 2
And now it's not all the blame, by the way, on the material supplier. As an industry, we need to remember the prison in the background and actually do the right thing and we need to have solid contracts. If I go, look, I want to buy from you for 120 day pricing. Okay. That's a deal. Like you're not walking away from that.

‍ ‍

28:06
Speaker 1
Yeah.

‍ ‍

28:06
Speaker 2
And his customers not walking away. So like we need to get rock solid agreements and it's out. See the crazy thing is it's out there. You can get this long term pricing, it's just a matter of getting the agreements. But this is a perfect example of where someone is going to come up with the solution that the industry really needs, which is, you know, good product, the right product, the right time, the right price held inside of a commodity market. That's not easy, but it's possible. But we have to work together on this. We have to have good contracts, we have to have good information and we have to think differently. You got to think outside the box.

‍ ‍

28:50
Speaker 1
Well, you're, we're operating in a very interesting world and I, I can't even imagine the, I mean you're a relatively young company. Would you say four years, three and a half, something like that?

‍ ‍

29:01
Speaker 2
Three. It's just over three years from the first code being typed in the computer.

‍ ‍

29:05
Speaker 1
I mean, what a wild ride.

‍ ‍

29:08
Speaker 2
Yeah. If someone would have said, what do you think? Let's do a startup in the middle of a pandemic.

‍ ‍

29:14
Speaker 1
Yeah.

‍ ‍

29:15
Speaker 2
Or you know, we're gonna have a pandemic, then we're going to have a, the wildest volatility you've ever had. Yep. And oh, just for icing on the cake, then we're going to throw inflation and the fastest rate rises you've seen in, you know, 50 years and.

‍ ‍

29:32
Speaker 1
Go, yeah, sign up.

‍ ‍

29:35
Speaker 2
But the ironic thing is it's those outside forces that really pull the covers back on how inefficient and how broken the system is.

‍ ‍

29:45
Speaker 1
It does.

‍ ‍

29:46
Speaker 2
Without those outside forces, you're like, you know, the car still work and don't lift the hood, the car's still working.

‍ ‍

29:52
Speaker 1
Well, keep doing what you're doing, man. I think that's pretty, I think it's pretty aggressive to. I love people who are trying to do something dramatically different. You clearly are and it's working. So, Stacy, what do we have from the audience?

‍ ‍

30:09
Speaker 3
Yeah, let me check. I don't see any new questions, but I was just thinking as you were talking, so you talked about the digital marketplace and building information modeling. What are your thoughts on. So you haven't huge mechanical room and you have all these, you know, equipment will, though, where will there be like ticklers that say, you know, we're coming up on 30 years of this equipment now you should replace it or will there be if like a system breaks down? Do you work with that on? It's time to testing buildings. Yeah. Existing.

‍ ‍

30:52
Speaker 2
You're talking a building that was built using bim, right? Yes, it. Oh my God. Bim's the beautiful. The best solution for this. Think about your house today. You look at the wall. Wouldn't you love to know what's behind that wall if. If you had a digital print of that and you can go so far, there's technology today where they will take an image of the job site every day or every few hours and you can literally see what was behind that wall as it was being built.

‍ ‍

31:24
Speaker 1
Yeah.

‍ ‍

31:24
Speaker 2
So, yeah, the BIM idea with all the information about the building in one spot. Yeah. You can have a tickler and all of a sudden the light pops up. It's been 10 years since you replaced your water heater. You should consider, you know, checking and.

‍ ‍

31:41
Speaker 1
Automatically connect you to. Here's, you know, three different models that you might want to consider and they're being carried by these four different retailers. And this is a new.

‍ ‍

31:50
Speaker 2
System you could put in. It's a tankless water heater and it's going to do this. There was one. Someone made a comment about hard to imagine CLT and residential light frame construction. I don't disagree with the comment utilizing the CLT we know today. But what if the CLT was a honeycomb CLT or if it was a little bit lighter or like, this is where you really need to think outside the box. Do you know why we build with two by fours and two by sixes in the United States?

‍ ‍

32:22
Speaker 1
Because we always have.

‍ ‍

32:23
Speaker 2
Because that's what they make, right? Exactly.

‍ ‍

32:26
Speaker 1
Right.

‍ ‍

32:27
Speaker 2
If when you pull out your kid's drawer of Legos, what are you going to build? Something with the blocks that are there? Yeah, change the blocks.

‍ ‍

32:36
Speaker 1
Yeah.

‍ ‍

32:37
Speaker 2
So I think the one. I don't want to just say clt. I'd like to say mass timber more and just off site construction, new concepts of how to build. And I think it's really, it's a blend. It's using CLT, where it makes sense and then regular, you know, stick frame around the outside. The, the challenge the industry has is that there's probably no one contractor or no one company that knows how to do all of it at one, you know, in one building. All the different type of construction methods.

‍ ‍

33:15
Speaker 1
Katera was opposed to.

‍ ‍

33:17
Speaker 3
I'd love to meet that.

‍ ‍

33:18
Speaker 2
Katera was an amazing idea.

‍ ‍

33:22
Speaker 1
Yeah.

‍ ‍

33:23
Speaker 2
And look, Katera was onto something. And by the way, the assets of Katera have been bought by some really bright people that are going to take it to the next level. Yeah. Look, does everyone love their file sharing and you know how much music that they don't have to have CDs they like? You know, you can go on Amazon Music or Spotify.

‍ ‍

33:47
Speaker 3
Yeah.

‍ ‍

33:47
Speaker 1
Probably 90% of people strongly prefer that to the old CD days.

‍ ‍

33:51
Speaker 2
And it all started with Napster.

‍ ‍

33:54
Speaker 1
Yeah.

‍ ‍

33:54
Speaker 2
And guess what? Napster failed horribly. We work. I think we work is a genius idea. They just basically failed horribly, but they are the ones that are going to plow the street for the idea of, you know, shared space.

‍ ‍

34:12
Speaker 1
Yeah, I think that's right. I think at the, I think at the end of the day we'll think of what Katera tried to do as a, as a positive step, maybe, you know, an overstep, but a positive step.

‍ ‍

34:24
Speaker 2
Right. They definitely brought a new set of, a new way to look at the problem. Yeah.

‍ ‍

34:31
Speaker 1
Yeah, I think that's right. Oh, good. Stacy. Mike, anything else? Stacy, you seeing anything else you want to surface?

‍ ‍

34:40
Speaker 3
I don't see anything, but I don't know if my LinkedIn is freezing because it's all good. Yeah, sorry.

‍ ‍

34:46
Speaker 1
Mike, anything else on your mind before we wrap?

‍ ‍

34:50
Speaker 2
I mean, I just. Kudos to you guys for doing this. Information is power and what I really love is the fact that you're putting it out there and, you know, allowing companies like mine to come on here and talk about what we're doing. But the people who are watching this now live and they're going to watch the replay, those are the people that are going to move this industry forward. So, you know, kudos to you guys. Kudos to the people listening here. Let's, let's make construction great again.

‍ ‍

35:23
Speaker 1
Right? Hey, thank you so much. We really appreciate you being on again. I think you're doing a hard thing. You're challenging norms and overall, I think, you know, the, the trend toward transparency is progress and I really look forward to watching. I'll be I'll be for sure keeping up, keeping my eye on your company and, and looking for the success stories as things come out and leading change. So. And where would people find out more if they wanted to learn more about you?

‍ ‍

35:54
Speaker 2
Materialsexchange.com you know, if you look it up, it's here's the store. This way. No, there is no Eon Exchange.

‍ ‍

36:03
Speaker 1
It's Materials exchange.

‍ ‍

36:05
Speaker 2
Yep.

‍ ‍

36:06
Speaker 1
Yeah.

‍ ‍

36:06
Speaker 2
And look. So this is kind of interesting. In our logo, the bottom of the X is filled in and if anyone remembers from their chemistry class, delta means change.

‍ ‍

36:16
Speaker 1
See, look at that.

‍ ‍

36:18
Speaker 2
Huh?

‍ ‍

36:19
Speaker 1
So it's the details, Mike, the hidden logo. Well done, sir. All right, cool. Thank you so much, Stacy. We have a few housekeeping items. Mike, we'll see you again soon. Thank you, Stacy. Let's, let's talk a little bit about next week. So next week we have someone coming on from the Maryland center for Construction Education and Innovation, the MCC E I. A lot of letters, but they. So we have Jennifer Sproul joining us. Do you know Jennifer?

‍ ‍

36:52
Speaker 3
I do. I've worked with Jennifer. She's, you know, fierce in this industry with leading the way in education and volunteered this past year out in Baltimore. We were doing a bunch of stuff with middle school kids to get them interested in the industry and learn about estimating cool.

‍ ‍

37:13
Speaker 1
We need estimators, my Lord, Please make them good at estimating good. So, so we have Jennifer joining. What she's going to be coming on to talk about is solving the workforce puzzle. So from her perspective on this, you.

‍ ‍

37:29
Speaker 2
Know.

‍ ‍

37:32
Speaker 1
Workforce development starting at the very youngest ages at just as you know, Stacy was talking about creating interest in the youth and things along those lines. She's going to talk about what the MCC EI is doing. She's going to talk about what employers are doing and hopefully what each of us can do to contribute to the industry. So I'll be looking forward to that conversation. Stacy, do you have our marketing minute, our marketing tip for the week?

‍ ‍

38:03
Speaker 3
I do. It's super simple and a change since our conversation today. But when you're thinking about your stilto marketing tip of the week, Mike was just talking about how he left the lumber industry and went to the finance industry and then came back. I think we have to use that in a lot of different ways, but with our marketing too. So stop looking at your competition on what to do, but look outside the industry, especially since other industries are so advanced and see what they're doing marketing wise and bring that information back to your company and use those ideas.

‍ ‍

38:37
Speaker 1
I love it. I think it's a great idea. Get outside the get outside the bubble a little bit looking at what other construction companies are doing. Maybe take a look at what another business to business enterprise is doing or yeah right. Take a look at finance. Take a look at accounting. Take a look at tech. Yeah, I think that's great advice. Hard to translate some of those lessons back into your world but if you can figure out how to do it, you'll be doing something nobody else is doing.

‍ ‍

39:03
Speaker 3
Correct.

‍ ‍

39:03
Speaker 1
Thanks Steel.

‍ ‍

39:05
Speaker 3
That's strong.

‍ ‍

39:06
Speaker 1
All right good. We're gonna wrap it up. I, I have nothing else. Stacy, anything else on your end?

‍ ‍

39:11
Speaker 3
That's all.

‍ ‍

39:12
Speaker 1
I've got a new little wrap up jingle. I look forward to pressing play on. See you next week. Audience will see you next week. Thanks so much for checking in and joining us for the huddle.

‍ ‍

39:24
Speaker 3
See y.

‍ ‍

What is the difference between BD and Marketing, and how should they complement one another? Many construction companies get it wrong, and some don't even incorporate these efforts into their business.

Ronnie Brouillard and Taylor Tobin might have it figured out better than any tandem in the construction industry. These two have been a tandem with the general contractor, Chesapeake Contracting Group for five years, setting a high standard for professionalism in their crafts. Ronnie (BD) and Taylor (Marketing) are in lock-step with their efforts and will show us how to learn from their model.

We welcome them to The Morning Huddle to share their strategies with our audience in a fun and educational discussion.

Transcript:

‍ ‍

00:00
Speaker 1
All right, it's morning huddle time.

‍ ‍

00:01
Speaker 2
Good morning.

‍ ‍

00:02
Speaker 1
I'm not saying it works. I wish you God speed. Godspeed with all of that. I think that's really nice. You know, I'm not sure what kind.

‍ ‍

00:11
Speaker 3
Of success you're gonna have with that.

‍ ‍

00:12
Speaker 1
Today, because the world, my friend, has changed. Right.

‍ ‍

00:16
Speaker 2
A lot of American construction workers, they have different needs. They have completely different needs.

‍ ‍

00:21
Speaker 4
These awards have a huge, like, criteria that you have to fill out. And they usually have a community service or community.

‍ ‍

00:32
Speaker 1
You know, the most productive with a high performance value. And, you know, sometimes it's 11 o' clock at night. Funny, isn't that? Yeah, not. Not for me. Not for me. At 11 o', clock, I am guaranteed to be snoring. So. So. It's morning huddle time. Welcome, welcome. Chad Prinke here.

‍ ‍

01:00
Speaker 2
Welcome.

‍ ‍

01:00
Speaker 1
With Seth Farger standing in for my very good friend Stacy Holzinger, who's in London. Seth, thank you so much for joining us.

‍ ‍

01:07
Speaker 3
Glad to be here. Thanks for clarifying because everyone was going to be surprised to see me and go, whoa, Stacy, you're bald and hairy.

‍ ‍

01:13
Speaker 1
So things have changed. Yes, Just amazing what a week can do. And we've got two of my very dear friends and just absolutely dynamic people who are joining us this morning. Ronnie Bruyard and Taylor Tobin from Chesapeake Contracting Group. Ronnie and Taylor, thank you so much for being here. I feel like this is long overdue.

‍ ‍

01:35
Speaker 2
Oh, thanks for having us. We appreciate it very much.

‍ ‍

01:41
Speaker 1
So. So let's just do a quick check in on what's going on in your life real quick. Seth, you mentioned at the outset of this thing that you're still operating on a different time zone.

‍ ‍

01:55
Speaker 2
What's.

‍ ‍

01:55
Speaker 1
What's new in your world?

‍ ‍

01:57
Speaker 3
I just returned from Alaska. My father and brother a year ago said, hey, we want to go fishing in Alaska. And I have three kids and one more on the way. So planning things a year in advance is hypothetical, but thankfully it worked out. So I just spent five days salmon fishing and UTV driving in Alaska with my dad and my brother. So he's 68, and once in a lifetime opportunity. Highly recommend it get up there if you can. So it was great.

‍ ‍

02:25
Speaker 1
Where did you go?

‍ ‍

02:28
Speaker 3
Which, if you look at a map, is barely Alaska. It's like way, way south and just across from British Columbia. So it's not as, like, way up there. But I mean, from the moment I landed, it is. It is Alaska through and through, mountainous, just peaks covered in trees. There was a salmon run going. So every stream you looked at had was literally moving with fish like it was crazy. Didn't. I saw a bear from about, I don't know, 500 yards away. I would love to have seen one a little closer.

‍ ‍

02:58
Speaker 1
Perfect distance. That's the perfect distance. You don't want to see a bear from a whole heck of a lot closer. I speak from personal experience on that. Awesome. What about you, Taylor? What's going on in your world?

‍ ‍

03:09
Speaker 4
Not much. Celebrating my dad's birthday this week. Yeah, that's about it.

‍ ‍

03:15
Speaker 1
Gonna be a big party or just.

‍ ‍

03:17
Speaker 4
No. If you know my dad, he does not like a big party, so it'll be probably a crab feast in the backyar, right?

‍ ‍

03:24
Speaker 1
That sounds actually perfect.

‍ ‍

03:26
Speaker 3
Yeah.

‍ ‍

03:27
Speaker 1
Well. Well, Ronnie, you and I have something in common. We just checked in. We're going to be at the same party this weekend.

‍ ‍

03:32
Speaker 2
Oh, yeah. That's going to be a shindig for sure.

‍ ‍

03:35
Speaker 1
It's gonna be a good time. Going up to the. Going up to the. To the canyon. Keller Brothers pig roast.

‍ ‍

03:40
Speaker 2
Yeah. You're in my neck of the woods now.

‍ ‍

03:42
Speaker 1
You're gonna have to be my guide.

‍ ‍

03:46
Speaker 2
No problem.

‍ ‍

03:47
Speaker 1
All right, well, good. So. And I have nothing going on. I'm just sick. So let's dive into today's topic. So we, when were preparing for this conversation, was like, I personally think that there's so much confusion about the difference between marketing and business development and sales in the construction industry. Maybe across industries, quite frankly, but in the construction industry, I see so much. You know, so many companies kind of get this wrong, and it's. And it's rare that a company gets it as right as you guys have. And I think that has a lot to do with the way that the two of you work together and the way that you've communicated about roles and responsibilities. And so today I really want to talk about best practices with business development. Ronnie and marketing. Taylor.

‍ ‍

04:46
Speaker 1
And then, you know, talk about how you delineate how you divide and conquer and how that whole effort is impacting the organization. So with that, Seth, I'm going to ask you to monitor, jump on the LinkedIn feed and monitor the. The comments via LinkedIn and, you know, communicate with the group and make sure that we're capturing great questions that we can bring back here in the last 10 minutes. And I'm gonna just start rolling, talking to Ronnie and Taylor about what they do and how they do it. So, Seth, we'll see you with about 10 to go. Is that cool? Yeah, Very good. See you in a bit. All right, so like I said, so much confusion surrounding these roles. I think there's this trap where marketing is just viewed as kind of like social media.

‍ ‍

05:38
Speaker 1
I don't know what that is, but, like, somebody's gotta update our Twitter feed.

‍ ‍

05:41
Speaker 2
Right.

‍ ‍

05:42
Speaker 1
And business development is just kind of golfing all day and. Right. And so, you know, I think that, you know, it's a wild oversimplification. How do the two of you describe your individual functions and how do you distinguish between them? I'll start with. I'll start with you, Taylor. How do you describe your. Your role in marketing?

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06:05
Speaker 4
Sure. I think for my purposes, the way I differentiate what Ronnie and I do is I communicate the brand globally, and Ronnie really communicates it personally. So he's more the boots on the ground of what we do, whereas I'm more up in the air, I guess you could say. What I love about marketing, and you're spot on when everyone thinks I just do social media, which is a big part of my job. But what I love is I really work across every single department within the company. So from. I work really closely with human resources on recruitment and on internal culture. I work with Ronnie for business development, marketing, collateral presentations. I work with pre construction for proposal development. On the technical side, trade, partner relations. I work with leadership on vision and goals, philanthropic activities.

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07:02
Speaker 4
And then I guess the only one I really don't work with would be accounting. But I just spent a lot of money, so I work with them in that way. Yeah, sure, yeah. But Ronnie and I work probably the.

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07:13
Speaker 1
Closest of the two, so that's such a fantastic description and something that I think I would just. I have to underline for. For the people, for the audience, as you're, you know, paying attention, maybe driving in this morning or what have you. One of the things that I really want to amplify that Taylor said is working across every department in the organization and doing so kind of in connection with, as you understand, the broader organizational goals. So you're integral to the conversation. Not just a department that people are sort of, you know, handing things to and saying, hey, can you punch up a proposal?

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07:58
Speaker 3
Right?

‍ ‍

07:58
Speaker 1
Though I'm sure that happens. It's. It's. There's a. There's an aspect of this. It's really strategic where you are working across and connecting with every department. I think that's fantastic.

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08:07
Speaker 2
And I.

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08:08
Speaker 1
And I bet you the percentage of marketing people out there who are getting that kind of engagement from the rest of their company is probably. They're probably marketing people watching this, right? Now, like, record, send to boss, like, immediately. You know, I would be so. I know. I know just the feeling. Okay, so, Ronnie, describe. Describe your. Describe business development to us and kind of how it differentiates from what.

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08:35
Speaker 2
And I'm glad that we're using this opportunity to differentiate the two, because I think it's important because I think it. I think it kind of gets confusing and muddled. First of all, I'm tremendously blessed to have a wing person like Taylor. You know, I mean, it's a great dynamic. It was a revelation when I started working here and. But my focus is obviously, I'm probably going to be the first person that people meet from Chesapeake. So it's up to me to really kind of focus on building strong relationships and just kind of promoting that company brand core values, which you'll see behind me here. You know, everybody at Chesapeake, I think, lives and breathes those core values, but it's also the interface with the client and the building of those relationships. But Taylor is instrumental in helping me promote that brand on.

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09:29
Speaker 2
On a global level. As she mentioned before. It's that taking that relationship from an introductory level and just kind of following up and building on it until it turns into some opportunities and then kind of lifts us up from a revenue standpoint. And it's just a. It's a fun. It's a fun job to do if you're extreme introvert like myself.

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09:52
Speaker 1
Introvert. Yeah. So. So the. What I took away from that, Ronnie, is two big things. One is that you are often the. The tip of the spear, if you will, as it relates to boots on the ground. Yeah. Aerodynamic.

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10:15
Speaker 3
Right.

‍ ‍

10:16
Speaker 1
As it relates to boots on the ground and making new relationships really out there, meeting strangers and spreading the word and being a good representation of the brand. So that's one. And then the second is care and nurturing of the relationships and the opportunities that can come out of those. So that the. All of those efforts from marketing and business development, whether it's the two of you or other people inside the company. Right. Because they're doing it too, on some level, gets con. You know, converted into revenue that ultimately that we see a return on investment for that effort.

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11:00
Speaker 2
Right. And you can do all the networking you want. And I highly recommend, I mean, if you're going to be a business developer and you're going to be serious about it, you have to get in that mindset that you have to do the work, the legwork, and that means identifying those organizations that are going to support the markets that you're trying to penetrate and you have to just go over and over again. So where a familiar face turns into a friendly face, which leads to a conversation, which leads to maybe a meeting off site. But there has to be a follow up there. And I'm glad you. Again, I'm glad we're talking about this because we recently did internally at Chesapeake Contracting Group.

‍ ‍

11:42
Speaker 2
We did an introduction to business development and how to build your professional brand with the intent on making everybody in the company, regardless of their position, a business developer. And get in that mindset to promote the company, ask the questions of the client and really just get invested in the success of the yourself and get access. Get invested in the success of the company as a whole. And I think we're on the right track. I mean, we always, there's always room for improvement. My gosh, I know I'm learning new things every day and I've been doing this for close to 40 years. But then you start working with people with Taylor in the company, and Taylor's just one person in Chesapeake that's an amazing professional at what they do. I mean, the company's chock full of them.

‍ ‍

12:26
Speaker 2
And yeah, it takes us forever to hire, but I'm glad it does. It pays off.

‍ ‍

12:31
Speaker 1
You guys are kind of happy where you are. I can tell. That's enough of that. All right, everybody. Not everybody's so damn happy.

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12:40
Speaker 3
Sorry.

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12:41
Speaker 1
I respect the heck out of it. I'm really, I'm proud of you and I'm proud of the company for that. I. So, you know, one of the things that I, I try to put myself in everybody's shoes. I've certainly been a business developer, you know, on some level myself. Ronnie, what do you. I think the hardest part, I think the hardest part of the job for somebody who is really good at being out there shaking hands, kissing babies, meeting strangers, you know, that part of it is the follow up, the organization, the structure side of things. I don't know if you had two or three pieces of advice for somebody who is maybe wired like you, likes to be an extrovert, likes to be out there pressing the flesh.

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13:33
Speaker 1
What, what secrets are there to staying in control of the follow up and the data management?

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13:41
Speaker 2
Wash your hands often, right.

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13:47
Speaker 3
Fail.

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13:48
Speaker 2
Don't never be afraid to ask the client what it looks like for follow up. And instead of, you know, I like to say, you know, how do I stay in front of you without being a pain in the rear and.

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14:00
Speaker 1
Or being a pest rather than guessing, you're literally just getting the test don't be afraid.

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14:06
Speaker 2
Everybody's adults. Don't be afraid to call it out and establish those boundaries. Ask them if does that look like six months, six weeks? Does it, Is it eight weeks? What is an appropriate time to stay in front of you and let you know that I'm still interested in your business? Another one is just, you know, understand the value of the relationship and what it means and don't be afraid of rejection. I always tell people and I like to, I really like to connect with up and coming developers and because I know the obstacles into getting a project built can be insurmountable at times. And the important thing is tenacity. Stay with it. What can I do to be a resource? How can I, you know, just tell me how I can help you and this it.

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14:55
Speaker 2
And I always like to tell people this and they probably are tired of hearing me, but this is a karma business and I like to give without the expectation of return and I always try to instill that in our employees, man, go the extra mile but, and just do it because it's the right thing to do and because it's kind and you know, I am one of those people that hopefully, you know, I'm going to put myself out there. And you know what, there may come a time when you need a hand or you need a good word and that person is going to be there for you. And that's my mantra, I guess.

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15:31
Speaker 1
I just got an email this morning, funny enough, I just got an email this morning from somebody who is working at a client of mine as a result of, you know, they ended up finding themselves out of work and a couple of, you know, a couple of weeks later I ended up finding out about it. I ended up making a connection and it's a year later and they're working and he just, he sent me a note, he said, hey, a year in, I just wanted you to, I almost want to like read it verbatim. But he said, you know, life is timing and relationships, you know, and that was exact. I mean that's the quote as I look at it, you know, warmed up my morning for sure. And, and it's. Here's what I love Ronnie, about what you just said.

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16:13
Speaker 1
That, that I totally expected you to give me some like really technical BD style, like go pro BD style answer where you were like, you know, set aside two hours a week to do X write number this number of emails a week and then send out handwritten notes to this number. All that stuff is happening. I know it is because I know you're a machine. But. But what. What I love is that the emphasis isn't on some sort of, like, metrics, and. And the. The emphasis is on relationships. And it's like, I just do what I think is appropriate for all those relationships. And if you care enough, you're.

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16:52
Speaker 3
You're.

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16:52
Speaker 1
It will bother you if you're not staying in contact with these people. And I know that is such a more sustainable and genuine way to go about business development. Follow up. That was awesome. I'm like, I don't know if you saw. I'm sitting over here scribbling notes for myself. Like, that is. That's wonderful, Ronnie. That's fantastic.

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17:11
Speaker 2
So.

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17:12
Speaker 1
So I. I want to hear about Taylor, how you support. How. How does marketing and business development. How do marketing and business development play together? How. How does. And. And then I know you actually do get involved a little bit in. In some of the networking activities and things along those lines. I'd like to just sort of hear about why you do that and pluses and minuses, things like that.

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17:34
Speaker 4
Yeah. So I view marketing as a support role to Ronnie. Any of the materials, any of the presentations that he needs, I'm the one who does that. What I think works so well with Ronnie and me and why we have such a great relationship is he really respects the amount of time it takes to do that. I think the quickest way to make a marketing professional mad is to say, like, oh, it'll just take you two seconds. The goal is really effortless, but it's not always effortless, and it takes time. And so that's something I always appreciate with Ronnie is he always says, is this enough time for you to get this back to me? So that's really the way that Ronnie and I work together. I. Ronnie loves to tell the story that when he first started, I hated going to networking events.

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18:25
Speaker 4
It was not my thing. I just really enjoyed my little marketing bubble. And while that's still the case, I don't hate networking like I do, especially with Ronnie as your wingman. Everyone knows you in the room. But now I really like to go. It's the one time, other than individual meetings, where I can speak with owners and clients and consultants and trade partners and learn directly from them what's important to them. And as a marketer, you're always wanting to communicate what matters to your audience. And so going to those networking events and having those conversations has been really vital for the way that we communicate what we do and what matters to an owner, what matters to a trade partner, what matters to an architect, that's really important. And I appreciate those conversations at networking events to give me that insight.

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19:25
Speaker 1
The difference between marketing content that is clearly designed by somebody who understands what the customer care about, who understands their world, who's really talked to them, and beyond just getting to know them, but really talk to them about their business and. And marketing content that is a guess at what they think matters is noticeable. And I think what you're doing there, that it's. I. It's funny. I think you're mostly doing it because Ronnie makes you. But. But the joke. No, I don't mean makes you. I mean, maybe makes you feel guilty if you don't. But I. But I think that investment in really learning about the industry, I mean, how long have you been with Chesapeake?

‍ ‍

20:18
Speaker 4
5 and a half years, right?

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20:19
Speaker 1
You. You can talk about the construction industry like somebody who's been in it for 10 plus. And the. The. For a marketing person, that's craziness. Like that tends not to happen. So anyway, kudos on that. I think that's exactly why that your. Your marketing is so on point, is that it's. It's. It is tailored pun not intended to your audience. So, you know, there was a little bit of reference to this earlier. How does the rest of the organization contribute to your success in your role? Because I gotta tell you, I mean, I got story after story where I'm like, I see, you know, fill in the blank with AEC firm, right? And they're like, well, we need new business. So we hired a business developer. We ran out of the need for new business. We fired the business developer.

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21:13
Speaker 1
We hired a business developer, the marketing person, because they were supposed to bring in business and they didn't bring in business, so we fired them. And I'm like, it really sounds like you're putting them out there on an island where that's just their job. I don't know. The rest of our company has no responsibility for actually winning work. It's just the two of you. Go figure it out. I know that's not how it works at Chesapeake, but I'm interested in how it feels to each of you.

‍ ‍

21:35
Speaker 2
What is.

‍ ‍

21:35
Speaker 1
What is it like? You know, how does the rest of the organization support your success in your roles?

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21:44
Speaker 4
Johnny, Ronnie, I'll jump in, and then you can go after me. I think something that Chesapeake really says all the time is we don't chase projects, we chase relationships. And so everyone having that mentality at the company makes you want to do what's right for the relationship and not for the project. So Ronnie and I don't feel this, oh, we have to bring in all this work and we have to go get all these projects. It' that's not where our headspace is at all. And that is really beneficial in the long run. But what I will say is I always think that our superintendents, our operations team, they are so vital to the success of the relationships that we have. I can say how wonderful we'll build your project and how great our team is and how awesome our culture is.

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22:38
Speaker 4
And then you go on the job site and it's not that. And so how quickly you can lose trust when you're marketing one thing and your team is doing another. So our operations teams, our accounting team, everyone is so important in making sure that the relationship maintains is great throughout the course of the entire project.

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23:02
Speaker 1
And important key, yeah, you're out there making promises to your customer. But, but what you're saying is, you know, sure, everybody gets involved. We do have this over development mindset, yada. But, but more than all of that, it's like everybody truly is cash in the, you know, they're acting in the way that we're promising we're going to act. And so fundamentally there's nothing that anybody can do more than actually be consistent with what we say we are.

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23:30
Speaker 2
And it goes back to our core values and you know, to build on what Taylor was saying. First of all, working with ccg, we have leadership that really understands what building a relationship means and how long it could take six months, it could take two years. But the important thing is it's everybody's role. From what I do, I think it's great because I don't have to do any talking in presentations. I'll do an introduction and I just sit back and let our ops be. Our operations people do the talking because they're so good at what they do and I have so much respect for them. You just, you let them just give them all the rope and they're gonna run with it.

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24:15
Speaker 2
And they're the ones that impress upon the client or prospective client what our approach is, what our core values, what our value add is, particularly from a pre construction standpoint. And I think a lot of our clients and people that I interact with, I think they're going to tell you that we qualify our clients as much as they're Qualifying us. I mean, look, everybody on this broadcast is probably crazy busy right now and they understand the human capital is the most critical thing in our workplace today, in our industry. I don't know so much from other industries. I know in the construction industry, not just people, but the right people that are going to fit into your company culture are going to understand and live those core values. I mean, that's kind of what it's all about for me.

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25:07
Speaker 2
But I get to be the, like we said earlier, I get to be the front, the tip of the spear, so to speak, and bringing those people and developing it and developing an interest in Chesapeake and what we do and more importantly, how we do it, that really is the difference maker in my world. And when we go to a project, like the biggest marketing or busy business development tool I have is project tours. We go on a project tour, we give the team the heads up. You go on there. It's crazy. It's how workmanship, like the quality, the safety that everything is tight and there's a pride of ownership there and a pride of workmanship that transcends, you know, and it just, it's an awesome thing to see.

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25:52
Speaker 1
So, awesome thing to be a part of. I will, I, I, I wish we had more time. So Seth has been engaging with the audience and I'm sure has some comments and questions and things to bring to the surface. Before he does that, I just want to summarize two key thoughts that I'm having coming away from this. One is obviously there's a mutual respect and a chemistry between the two people who are the front lines in the go get and the create a new opportunity side of your organization. And that's key. But the organization, every question that we just answered, that you just answered around how does the team best contribute?

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26:45
Speaker 1
I really, I think the greatest answer of all is to be an organization that we can be proud of and that we can have a thousand percent confidence that when we make a promise, when we bring in a new person, that when we highlight or showcase what we're doing, we're going to be proud. And so it's not much more complicated than that, but it really does require everybody to uphold the standard. So with that, Seth, what do we have from the group? What do you feel like these two.

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27:24
Speaker 3
Should be hearing and answering specific questions? But something that I think people touch, he touched on Ronnie, that I'd love you to follow up on is you said your response was going from meeting someone, being familiar to friendly to having a Conversation and then a follow up and sort of that flow. Give some practical advice to business development managers or BD folks that handling the rejection, the things that come in that whole process from being fielded because it's easy to get hung up on or to get discouraged and just I'm not calling back. And someone rightly pointed out that timing is everything and don't count a no as no for good. It might just not be the right time. So anything that you can practically give to people along those lines.

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28:13
Speaker 2
So if I, I guess the most important thing is for from my perspectives and that of Chesapeakes is that it's about a fit. And a lot of people that's an easy word, but it's the most important word. Just determine if you're a fit and if you're not a fit, be adult enough to say and put that agreement up front that if we're not a fit, I give you permission to tell me that you don't think we're a fit. And I would like your permission to tell you that we're not a fit.

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28:46
Speaker 2
Because at the end of the day you can do all the follow up all you want, but if your companies aren't in alignment from a core value standpoint, from a marketing, from a market approach standpoint, if it's not a fit, it's just, it's going to be, you know, it's going to be wasted time. That said, you can still be a resource for that person because who knows, they might go work somewhere else for another company and they're going to remember how you were with them. They're going to remember and the company they go work for might be that fit for you. So it's important to really nurture those relationships.

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29:25
Speaker 1
So maybe the recipe for dealing with rejection in a business development seat has more to do with not thinking about, how about this, with not wanting the sale as much as you just want whatever should happen to happen. And if the, and if the answer is that we shouldn't work together, that's okay. You know, it becomes really easy if we set it up that way. Hey, it's not a fit, that's okay. We identified it's not a fit. Let's do this other thing. But that in your mind, that's not rejection. If you. If we discover that it's not a fit.

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29:59
Speaker 2
That's exactly right. And another point I would like to. Another point I want to illustrate is if you're going to send if you're a business developer or you're a marketer or, and you, or you're sending your people to a networking event. Coach them, set them up for success. Don't just send them among the wolves to fend for themselves. Get an attendees list from the organization, whoever that organization is and they should be, you know, glad to give you that attendees list because why are they there? They're a networking organization. Pick three to five people in it, write their names down, write their companies down and put them on a little piece of paper. That's your hit list.

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30:41
Speaker 2
You're going to go into that networking function and you're going to be you have a targeted strategic approach and then ask whoever you've sent into the wolf den to just kind of give you a summary back about what their experience was at that particular event. Did it have value? Who did you meet and follow up? Regardless of what they do follow up because they person they're strategic partners which we call, you know, a strategic partner could be anybody, but it's people that are going to provide you or provide an introduction perhaps, or perhaps you can provide an introduction for them. That's kind of the point of the whole networking thing.

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31:23
Speaker 1
Taylor, what your look like you're about to say something.

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31:26
Speaker 4
Well, Ronnie never touched on this, but I never met another person who like lives and breathes their CRM system the way that Ronnie does. He is in there tracking everything. And especially when you have other people involved in business development, in our case leadership all being on the same understanding and playing field is so important and I think tactically that's something you can take away is that if you're not utiliz CRM, it's been so vital, I think to the success of the way that we build relationships, knowing who has who and Ronnie's really good about that and he didn't touch on that.

‍ ‍

32:08
Speaker 2
So I was.

‍ ‍

32:10
Speaker 1
How many hours a week should I be planning to mess around with my CRM, Ronnie? How many hours a week do I need to budget?

‍ ‍

32:16
Speaker 2
How many hours a week, how much content do you have to put in there?

‍ ‍

32:20
Speaker 1
If I'm working, if I'm working like you're working, how many hours I live in it.

‍ ‍

32:26
Speaker 2
That's the first thing I turn in all every day I turn on the CRM and you know, I just constantly making sure the updates are being done. I'm doing my updates as I should be doing them and just keeping it tight.

‍ ‍

32:40
Speaker 1
But if you're taking notes on a.

‍ ‍

32:42
Speaker 2
Call, I'm Three hours a week in it. At least I got it. At least.

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32:45
Speaker 1
Yeah, I was just gonna say it's like if. If there's the. There's the. If you're taking notes on a call, you got your CRM up. If you're making phone calls and you're following up with people, you got your CRM up. If you're sending emails, you're doing it through your CRM. And then there may be some, you know, typing in notes of other things that happened at networking event. This, that, the other thing.

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33:02
Speaker 2
If there's a new article, say if there's a newspaper article that has attracted me to a certain client, I'll. I'll copy and paste that article into the CRM under that client. But also if I go to a conference and I got, you know, 40 business cards, but I've got 10 of those that are really potential.

‍ ‍

33:22
Speaker 1
Yeah.

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33:23
Speaker 2
For us, then I have to put all that information in there. And of course, it's the research involved, you know, to determine if that client is a fit, at least superficially, until you get to the nuts and bolts.

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33:34
Speaker 1
Of what they're about. And I'll reiterate something that you said earlier, which is, as long as you're in the mindset of building relationships with the humans on the other end of that and you recognize the CRM as a tool that's going to help you to do that, it's not some death march where you got to open up your CRM and do it. It's. It's something that you.

‍ ‍

33:52
Speaker 2
It's.

‍ ‍

33:52
Speaker 1
It's your friend. It's your tool. What do you use for CRM? What's your tool?

‍ ‍

33:55
Speaker 2
Insightly.

‍ ‍

33:57
Speaker 1
Insightly.

‍ ‍

33:58
Speaker 4
Yeah.

‍ ‍

33:58
Speaker 2
And slightly. And, Taylor, thank you for the. Thanks for the kudos, but Taylor's like the guru of insightly. Everything I know about slightly, I've learned.

‍ ‍

34:08
Speaker 4
From Taylor because I'm young.

‍ ‍

34:12
Speaker 1
You should have seen Ronnie trying to log on today. I just want the record to show it was, you know, what kind of show it was.

‍ ‍

34:23
Speaker 2
Taylor literally got me on FaceTime and walked me through it. Thank you.

‍ ‍

34:26
Speaker 4
We figured it out. We're here.

‍ ‍

34:30
Speaker 1
All right. So, Seth. Yeah, I was just going to say. What else? We probably have time for one more here.

‍ ‍

34:35
Speaker 3
One more quick question, Taylor, for the marketing people in the room. You said you referenced that, like overseeing. Give us a quick rundown of the things that fall in your wheelhouse. Because people think, oh, marketing is just social media or branded T shirts to make sure people in the field have stuff. Give us a quick rundown of all the areas that you oversee as the director of all things marketing.

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35:02
Speaker 4
How much time do we have? I know I kind of touched on it earlier, but I really am across all departments. I do a lot. I don't think people realize how involved marketing and human relationship work together from a culture standpoint. All of our internal events, all of our internal marketing recruitment that all we collaborate so closely with human resources externally, all of our groundbreaking, all of our topping out ceremonies, all of our trade partner events, our external newsletter, our social media, our branding that all falls under the external marketing wing. I work pretty closely with business development and pre construction. I say them together because usually when I'm working with Ronnie to build a presentation or to create marketing collateral that then hopefully leads into a proposal.

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35:57
Speaker 4
And I'm working on team resumes, I'm working on our brochures and our packages for the work that we do. So I really do go everywhere and I work with everyone and that's what I love the most about my job. But it also gives me a really amazing insight into all that we have going on so that I can market it and I can talk about it and I love that. So that's probably a really high level overview of what I do, but I think it sums it up.

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36:27
Speaker 3
Yeah, that's great.

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36:29
Speaker 1
Awesome. All right, guys, I'm going to bring the discussion to a close. As much as I'd love to continue, Taylor and Ronnie, you two are superstars. Thank you so much for coming on, sharing how things really work in your world. And I think, you know, if the whole environment in the construction industry can learn to have more professionalism and you know, a more unified company approach to business development and marketing. I think, I don't know. Chesapeake's experienced a little bit of growth over the past few years. Right? Like it's turned out okay.

‍ ‍

37:06
Speaker 4
Just a little.

‍ ‍

37:09
Speaker 1
I know it has made an impact and you know, not just on the go get work side, but on the go get amazing people side, which you.

‍ ‍

37:19
Speaker 2
Want to work for an amazing company. Reach out to Taylor. I had to go there.

‍ ‍

37:28
Speaker 1
Like, yeah, I don't blame, look, I, you can never fault Ronnie for not having the guts to ask for what he wants. And I, I respect the heck out of it. And I'll just say, you know, you guys are a great product of a great organization. So thank you so much for joining and I will Seth, you and I want to just wrap up a couple of things before we jump off. Taylor and Ronnie. Any final words?

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37:54
Speaker 4
No, thank you.

‍ ‍

37:54
Speaker 2
Thank you so much for having us on. Give us a platform. Chad. Seth, it was a pleasure to meet you.

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38:00
Speaker 3
Likewise.

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38:01
Speaker 2
Taylor will meet for beers later today. And then.

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38:08
Speaker 1
At the end of the day as a business developer, it was good. All right, guys, thank you.

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38:15
Speaker 2
Take care.

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38:16
Speaker 1
Yep. Seth, thank you so much. You did a fantastic job today. I think, you know, engaging with the group on LinkedIn. I think I even saw that Stacy was on the LinkedIn chat from Jolly old England. Stacy, we miss you, but thank you so much for teeing us up with Seth. I just wanted to say a brief word, Seth, if you would tell us 30 seconds about your business.

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38:40
Speaker 3
So, yeah, my business is essentially marketing for construction companies. I've branded as construction video pros, though. I'll kind of do everything from web design to social media management. But content is my specialty. The storytelling, photography, videography. Far too many companies. A lot of what Taylor discussed is in recruitment, just sharing the company story, the branding, and so using video and great imagery to share a company story. And that's used for internal videos to help train their people and showcase external videos to recruit, tell people stories. Why do you like to work here? What do we do different? And then also build authority. The worst four words you can hear from someone that looks at your company is I had no idea. Meaning when they finally saw who you are and what you do. Like, wow, I thought you were just a paper.

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39:34
Speaker 1
I didn't know you did that.

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39:35
Speaker 3
I didn't know you did that. Goodness. Because that means their perception is wrong. And I guess I'd say I'm in the business of perception management and I want to help make sure that people get the right perception of your company, other companies.

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39:51
Speaker 1
I know that you and Stacy work hand in hand together on some projects where, you know, Stacy is the guide and consultant for her client on their overall marketing strategy and just speaks incredibly highly of your ability when it comes to understanding how to do the storytelling aspect. So I just wanted a moment for you to tell that story because I think it's something that our audience ought to be aware of. Next week, guys, we are going to be on again live on the 27th, 9am Eastern, where we're going to have Mike Wisnevsky, who is the CEO of Materials Exchange, which is a raw materials digital marketplace. And we're going to be talking about the Amazonification of the, you know, building materials and perhaps beyond in the building industry. I can't wait to get into it with Mike.

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40:45
Speaker 1
He's got some big ideas and I look forward to some spirited argument and discussion between, you know, he and myself and also our audience. So please join us. And then finally, as always, if anybody that you know or you are trying to create positive change in the building industry and you have a story to share, the morning huddle is a platform. So please be in touch with us. We're full for this season, but we are building, you know, our game plan for the winter, which will be season four. And look forward to having people, you know, wonderful new introductions. So please pass those along. Seth, thanks again. Have a great one. Any final words?

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41:25
Speaker 3
No, this was good. Thanks for the opportunity. Thanks, everyone for tuning in. I think, I think the format's great. It's quick, it's short, it's in the morning and tons of value for people in a myriad of roles and industries.

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41:37
Speaker 1
We hope. We hope. All right. Thanks, Seth. Have a great one. Thanks, audience. Appreciate it. See you next time.

‍ ‍

Improving contractor procurement must remain close to the top of the list in our search for positive change. George Nash joins us to share his personal experience in 35+ years with traditional versus alternative procurement methods. We'll talk about what has worked and what hasn't, and we hope to inspire you to lead positive change in contractor procurement wherever you are in the construction industry!

Transcript:

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00:00
Speaker 1
Good morning. I'm not saying it works. I wish you, Godspeed with all of that. I think that's really nice. You know, I'm not sure what kind of success you're gonna have with that today, because the world, my friend, has changed. Right? A lot of American construction workers, they have different needs.

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00:18
Speaker 2
They have completely different needs.

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00:20
Speaker 3
These awards have a huge, like, criteria that you have to fill out, and they usually have a community service or community relations portion, you know, the most with a high performance value. And, you know, sometimes it's 11 o' clock at night.

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00:38
Speaker 1
Funny, isn't it? Yeah. Not for me.

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00:41
Speaker 3
Not for me.

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00:42
Speaker 1
At 11 o', clock, I am guaranteed to be snoring.

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00:45
Speaker 3
So.

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00:55
Speaker 1
It's morning huddle time and we're having technical difficulties. We're live.

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01:00
Speaker 3
Good morning.

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01:04
Speaker 1
It's a part of the live experience. Embrace it. Own it. I apologize to our audience for anything that is annoying or glitchy, but I'm on location today with a client and operating in their conference room on a guest network that I hope is going to hold up. George, you're on location, too?

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01:24
Speaker 2
I am. Good morning. I'm in lovely Urbana, Virginia, at the Chesapeake Inn in their little conference room, and I can't wait to share with the crew why the heck I'm in Urbana, Virginia, today.

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01:39
Speaker 1
It's not. It's not for the oyster. I'm going to be in Urbana, Virginia, for the Oyster Festival. No, that's not me this fall yet. No, that's not why you're there. You have different reasons. Stacy, how are you? It's been so long.

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01:51
Speaker 3
I know. Well, I told you, I'm going to London and I'm really stressed out about the trip. My brother just landed last night. We're going for my other brother's wedding. So the scary part is the way home. The funeral takes place. So I have to head back into London when the funeral takes place. So I'm like, am I gonna make it back home? Am I not? I don't know. We'll see.

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02:17
Speaker 1
You're gonna have a lot of excitement.

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02:21
Speaker 3
Lots of stories, I'm sure.

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02:24
Speaker 1
Totally. Well, we're. We're all. Does that mean that you won't be on next week? Stacy, am I gonna have.

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02:29
Speaker 3
I will not. I have a sub, Seth Farger from Construction Video Pros. I think I'll be on the plane. So if I have Internet, I'll check in.

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02:41
Speaker 1
Right.

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02:42
Speaker 3
If.

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02:42
Speaker 1
Hey, if you're not on the plane, you can always just join the show. Yeah.

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02:48
Speaker 3
In the airport.

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02:50
Speaker 1
Yeah, exactly. Yeah. Live from Heathrow. Well, good deal. So, so let's jump into it. Today we've got George Nash and George is, I mean if you're involved in the construction industry in D.C. maryland or Virginia, chances are pretty good that you've had some exposure to George over the years. You've been involved in ABC on a national level, chances are that you've been exposed to George over the years. George is a leader in the industry, a good personal friend of many, including the two of us. And we're having George on today to talk about something that, you know, at the morning huddle we're always talking about driving positive change in the building industry and there are very few sources of negativity that are so intense as crappy procurement norms.

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03:36
Speaker 1
So we're going to talk about alternative procurement and ways to drive positive change through alternative procurement and hear George's personal experience and stories as it relates to that. So with that as sort of the intro, George, I think the first question that I have is when it comes to alternative procurement, the alternative to what is the traditional or typical procurement look like?

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04:05
Speaker 2
So Jack, for so long in our industry, the typical procurement on the public side and private side, mainly the public sector, was contractors submitted a bid, they were opened by the owner, read out loud and the low bid won the job. Yay. As some of us might say, that's driving the price to the bottom. And many private developers over the years have gone to different models, negotiating privately, doing open book GMPs and that's been in the marketplace for quite a while. Some develop, do that one one with a single contractor. Some developers will do it with multiple GCs through that pre construction process, bid the job to a select list and then negotiate with their, with their low bidder.

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05:00
Speaker 2
It's really been, I'm not sure what the timeframe has been but you know, maybe the last 10, 15 years where we've seen the public sector start to shift away from their rock bottom design, bid build process and go to these alternative procurements and that could be design build, that could be CM at risk, that could be CM agency. There are a lot of, there are different models that different government entities use throughout and Virginia created a law, I should know this but it's probably been on the bookshelf 20 years, 15, 20 years that allows on the public sector to go to these alternative procurements. And, and Chad froze up on us. Stacy.

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05:49
Speaker 3
Oh did he.

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05:52
Speaker 2
Look so good? So, so there he is, he's back a bit.

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05:56
Speaker 1
I'm like Watching it happen. It's a painful experience when you're freezing and you can see it, you're like.

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06:05
Speaker 2
I'm glad it's you, not me for once. And the reason I'm so excited about today, why I'm in Urbana, Virginia is that right across the river in the Lower Northern Neck, our Branch of Builds team has a three day kickoff with our design team with an owner and their stakeholders for three days to start the process on a design build project. And I know we'll get into this a little bit later, but to me there's nothing more exciting in the very beginning. This is before a drawing has been made to sit down with the owner and their stakeholders and find out who, what's their schedule, what's their budget, what are their needs? And really, you start with what are their needs? And you work to their budget and their schedule. So really interesting that we're talking about alternative procurement.

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06:52
Speaker 2
And I'm going across the river here shortly to kick off for three days, so.

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06:58
Speaker 1
So you've given some great examples of what alternative procurement looks like. Share some examples of the good, bad and the ugly of your personal experience in alternative procurement.

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07:12
Speaker 2
So I've had a project that had almost all of it right at the very beginning of the kickoff, similar to what I'm going today. The director for the owner set us all down and told us if he hadn't, if we had not read Stephen Covey's Speed of Trust, we should, because this relationship is all about trust. We all have to be on the same page. We all have to be devoted to the end goal. We all have to figure out problems together as a team. A and E had a contract with the owner. It was a seam at risk project. We had a contract with the owner and the owner had a fairly sizable team involved as well. And it was the first couple months, it was incredible. The team bought in. We were solving problems left and right.

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08:02
Speaker 2
We started every meeting with what's our goals, the budget, the number of students and the schedule. Right. These were all fixed. And we reminded ourselves that was our goal, that was our big target. And I don't know, about five months into that process, the director who had us all read Speed of Trust wasn't at a meeting and a problem came up and it was a pretty big problem. And the owner's team had. And the A and E looked at branch and said, how are you going to fix this? I'm like, well, that's not a really good team building exercise. And it was very, it was an uncomfortable moment for us. We got to the meeting the next day, the director called me, I was on the road and he said, George, I understand you guys had the not so good meeting yesterday.

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08:58
Speaker 2
I said, yeah, we did. And frankly I'm really disappointed in the team. And he said, before you say anything else, he goes, so am I. He goes, don't worry, we're going to regroup, we're going to get through this issue as a team. Like we said, we're going to. So we had a right, we had the really good. It got bad and ugly and then it got really good again. So. And yes we did and we did get through the issue. And to me that's really what this alternative procurement process allows you to do.

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09:28
Speaker 1
It requires. And I think what I pull away from that story so much is that it requires project leadership. It requires, it requires project leadership on the owner side probably so importantly. So, so talk about for me, what does an owner have to want and have to value in order to not do things in some version of the old fashioned way?

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09:54
Speaker 2
Yeah. I think I'll speak specifically to the D.C. maryland, Virginia market. We've got some public sector customers who have more staff and more expertise than many of the general contractors that bid their work. So they don't need our expertise. If you start to go out in some of the more urban areas, the counties and the programs are smaller and when they have a project, they don't have all this expertise on their team. Right. They really need a contractor and their trade partners to come in the very beginning when with the A and E again it could be CM at risk, it could be design, build the different models could apply. But what they really need is a true partner and to get them through from the, to help them track their soft cost. Right. Because they again, they do a project every five years.

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10:54
Speaker 2
They don't know. And I think what's encouraging, Chad, is that we have seen some of our larger public sector clients in this region start to go to alternative procurement. And I don't think there's any, what's the word I'm looking for. There's no surprise that is coming in the middle of coming out of a pandemic. Where are the workers coming from? And I can't get steel joist regenerators for 12 months.

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11:25
Speaker 1
Yeah, yeah. Events right now that owners I think are realizing that they need to lean on their partners more so than ever before. And, and I'm hearing what you're saying is that if you're an owner and you think you've got it all buttoned up, like you can handle the whole thing. You just really need somebody to build the damn thing. Yeah, maybe your tendency and it may be correct, is to say, you know, we'll bid it, we'll scope it. We're gonna figure out, right, we're just gonna figure out who the, you know, most qualified low bid is because we as owners are capable ourselves of qualifying that. But I, I would argue that ownership, who are creating that the majority of open book GMP negotiated jobs, okay, that are happening between owners and general contractors, that is a version of alternative procurement.

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12:28
Speaker 1
But, but then the bidding exercise that the general contractor is often then forced to do with the subcontracting community, that's pretty traditional. You know, at that point it's sort of, you know, low bid, you know, at that point. How do you, how do you square this if you're a. I know your experiences as a general contractor, George. Right. But, but you know, as a, for the subcontracting community that's operating in this open book GMP environment, which I think is, is extremely common in the commercial sector. How, what would you say to a subcontractor that's saying, sure feels like old fashioned, you know, procurement to me, it's just loaded. I mean, what's the difference for me?

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13:10
Speaker 2
So I think there's a couple different approaches. Some projects need and allow for a design assist. We'll just talk about the major trades of mechanical and electrical plumbing for right now and maybe site work, right. That allow for the contractor to interview just like the process went through, interview bring certain qualified partners to the table. They tell what their general conditions and what their margin is going to be and they commit to an open book and they work with the design team to keep the job on schedule and under budget. That is one method I would say most alternative procurements. Chad, we have to commit as a construction manager that we're bringing the best of the best. So our list of electrical firms is not 10 long, it's probably 3 long.

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14:05
Speaker 2
And if it's a job that I know about, I can guarantee you that for six months prior, if not longer, as long as I have, I'm chatting with those folks to let them know that, you know, we've got a project coming up, it's not going to be out in the street. Sometimes there's budgeting, sometimes there isn't. And I, I really think that is the difference because at the end of it, at the end of the quote, bidding process. So first off, we develop a scope of work and a schedule, site logistics. They have all that information that you don't have on a lump sum, low bid job and they're allowed, they bid it. There may be some alternate value engineering. They come in for an interview.

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14:47
Speaker 2
So, you know, we're making sure that the scope is correct, the schedule is right, their safety is correct, their quality is correct. And we're teeing all that up to ensure that we have. So in that model, the trade partners have the opportunity to, to win a project when you're not necessarily sometimes a little bit.

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15:10
Speaker 1
Right. And what I think I'm hearing you say is, you know that yes, it's still competitive. Yes, price is still a factor. But you're being interviewed. First off, your general contractor is bringing in a select group. So, so you can rest assured that you're going to be up against light competition. And then second off, once that has occurred, there's going to be more consideration than just your price as a part of the evaluative process. To me, I'll just say what I always tell my subcontractor clients is it all goes down to the general contractor's ability to sell value to their owner so that they have the credibility to sit across from their owner and say, these are the right teams, this is the right. Right. This is the right people in each trade. I know that this one's 4% more, this one's 2% more.

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16:03
Speaker 1
Right. But they work better together. They've got a proven track record and they know this job inside and out. We're going to deliver. If and if you as a general contractor aren't, you know, aren't there with your owner. Right. You're, you're, you might not be able to get there for your subcontracting community.

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16:19
Speaker 2
Yep, agreement.

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16:23
Speaker 1
All right. So, you know, one of the other.

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16:25
Speaker 3
Things.

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16:27
Speaker 1
That, I guess just in general, I think it seems pretty obvious that, you know, you feel like more scenarios than not it makes sense to do something other than low bid. I think by and large the industry is philosophically aligned with that. What keeps the industry from taking the next step and not just being like bought in conceptually to the idea that, right. Low bid, low bid is probably not the best idea. Right. What keeps them from actually taking the leap and doing it differently?

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17:03
Speaker 2
Unfortunately, the words, that's the way we've always done it. And I think that's one problem that's a paradigm that has to be broken. Some public sectors don't have the ability to go to an alternative procurement. So that's, you know, there's a legal law aspect to that. And again, going to the model of the end users who have six project managers on their staff who have scheduled and phased and done everything that's needed that we would do as an added value they just can't break away from. We've done all the work, we teed this job up, we've coordinated the drawings, we've caught all the problems, blah, blah, and we're going to put it out to bid, and that's there. On the public sector, I think on the private sector, especially in today's environment, you're back to the trade partners.

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18:13
Speaker 2
Today's environment, there's so much risk out there with availability, manpower and availability of materials and price escalation that we're all dealing with that. To me, if you're trying to get through this period focusing on October procurement, whether you're a CM or a trade partner, there's enough out there to do that. It's just a matter of can you make, make the most out of those opportunities?

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18:47
Speaker 1
So, you know, the jurisdiction. I want to focus on the jurisdictional piece of this for a second. So jurisdictional laws may prevent it. Is anybody fighting to change those laws? And, you know, any. I'm, you know, I'm literally not sure of how that works, how jurisdictions made the changes in the past and what.

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19:08
Speaker 2
Can we be doing on that at Virginia? Right. They, they have, they pass a law that covers the entire state and then each county has to adopt their own guidelines. We know in Maryland that they, that they, that there are certain counties that do different types of alternative procurement. There are certain ones that don't. And it's, and it's a matter of has that county gone in? I don't think anyone's fighting it. I don't think there's a, it's just a matter of, you know, has someone had the wherewithal to go in and work with the county procurement office and get those. And get that law on the books or get that regulation on the books, so to speak.

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19:50
Speaker 1
Yeah, I think that the only fight that I'm aware of is a fight of sort of educating people and, you know, kind of the good work that people at the Design Build association are involved in. Right. You know, that type of stuff. The, you know, Lean Construction Institute, you know, all these people are trying to kind of put out content that, that sways people. But nobody's lobbying. There's nobody fighting necessarily. Yeah, that's interesting.

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20:19
Speaker 2
And we again, we've seen that in our region pop up in different forms.

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20:25
Speaker 1
And at the end of the day, why these, the particularly on the private sector, the developers that have that kind of firepower, that kind of staff, why aren't they just GC in their own work? What do you see in there? What's your, what's your feed, you know, what's your feel there?

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20:40
Speaker 2
They're not stupid.

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20:43
Speaker 1
I had to put that one on a T. I'm sorry, I mean, you know, taking the joke out of it, why wouldn't that.

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20:51
Speaker 2
Why did I just call a contractor stupid? Self inflicted wound. So first off, they're a lot of time. They're, they're finance their financing model. Don't. Doesn't allow that. There are a couple of developers in our market that build for their own account. Sure. I think that there are some larger developers and we'll talk about high rise multifamily. Right. That will. In our D.C. metro area, their model is to have two or three general contractors provide preconstruction or free construction during a period of time and then they bid the job. The two or three. And one side of the argument you could say, well, why do that? Well, the construction manager, GC said well you know what, I've worked on this client for 20 years and this is their model.

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21:51
Speaker 2
And we're okay with it because we get every two, every four or fifth job, whatever it is our team gets. And we, and we're invested in that and we're okay with that. And it is. All I can say is that model works for those contractors and that developer. When you have a developer who doesn't have that firepower, who may be doing a job every three or four years, they're the ones who want a true partner from the very beginning. And we have a couple of those. And I tell you, they're awesome to work with because they share exactly what their proforma is in the very beginning.

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22:30
Speaker 1
Yeah, yeah. And I think what you described with the, you know, three GCs that provide comprehensive econ services and the pile of subcontractors that assist in all that endeavor, they kind of know what they're all getting into. But you know, when you and I talked about this, you know, in the past, we've had conversations about this in the past One of the things that I really loved is that you said, yes, but it works. But you don't get the kind of relationship, you just can't get the authenticity and the intimacy that you really would get if you weren't competing. Because in that environment, you and I, we all know that subcontractors are holding back right there. I mean, the incentive is to not tell you what the problem with the plans is.

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23:24
Speaker 2
We're not giving up our entire goods totally. We're waiting till the owner says it's going to be your job. And oh, by the way, did you consider this and this as potential cost savings? Because why, I would argue there's a lack of trust and that in that model, that you, that you. It's not that you don't trust and don't like the client. You do because you've done lots of work. Sure. And you know that they're awarding you the project. Yes. Because you're low, but because you performed for them. Right. Your team is being selected. Again, I get it.

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24:01
Speaker 2
But when we talk about meeting in the very beginning when they just have a, we want to build X amount of apartments on this property in Washington and I have no drawings and you sit down with a true partner and say, hey, let's talk about budget, schedule, design, team, all that together. Again, it's a different. I love the word relationship and intimacy that the team is bought in from the very beginning.

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24:36
Speaker 1
Yeah.

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24:36
Speaker 2
Again, some developers do that.

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24:38
Speaker 1
You, you have to have. The earlier that you award somebody the project, the earlier that you tell somebody you're in, you don't have to worry about not winning the work or your efforts being not rewarded. Right. You're in. The earlier you do that, the more possibility you unlock in terms of partnership and Right. Your collaboration. However, there's a leap of trust that really has to occur where an owner believes that's what they're going to get in return. Right. And, and so if there's a message that you would have for owners and you know, just a bite sized nugget here. What, what could they do to bridge the trust gap?

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25:30
Speaker 2
So I'll talk to the owners who develop a job every three or five years and it really, this applies to the owners and the contractors. Right. Don't have your first conversation when you know about a project. Go out and meet a project manager and superintendent for a firm that you think you might want to work with, that you heard good things about on Another project two years before your job hits the street. And the same thing with a contractor. Go develop that relationship. Invite the developer to that job and develop that. You know, develop that relationship early. Right. That's. That kind of stuff is BD101. But a lot of times we get so busy that we forget that if we want a true relationship.

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26:19
Speaker 3
Right.

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26:21
Speaker 2
Before I said, before I asked my dear wife if she, we. We got to know each other. I still don't know why. Yes, she's still kicking herself after. But it's, hey, it's a, it's the same model each other. We have to understand. From a perspective. We need to understand what the developer is all about.

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26:59
Speaker 3
Yeah. Okay. I think we're glitching up a little bit.

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27:06
Speaker 1
You're good. You're good. Stacy. I think it's time for audience questions anyway. Go for it.

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27:10
Speaker 2
Good.

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27:11
Speaker 3
So I have a few. I don't and I apologize if you already answered this one. So just let me know. Casey has two questions. It might be addressed later. But how is the change order processing improved in the method?

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27:27
Speaker 2
Oh, so on the public sector side, and I think that the private sector applies this to, on a couple of our projects. Right. We create a contingency up front. It's defined what that contingency is used for. If there is a hole in the scope that somehow we missed with the trade partner, that's a, you know, that's coming out of the contingency. If the, if the A and E had a couple doors that were supposed to be right handed swing, but they designed this left handed swing and we caught, we didn't catch it early enough that those kind of items are funded out of a contingency. Usually there are not scope ads by an owner.

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28:12
Speaker 2
I say usually because I said in the very beginning, you define the scope, the budget and the schedule and once you move forward with that final gmp, you know what you're delivering. Once in a while an issue will come up, but again, it's all open book and you've developed a level of trust with that client and they have some funds set aside to adjust that if they want to add something. Usually they don't.

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28:41
Speaker 3
Okay, great. His second question was, are the finishing contractors involved in this process like the major subs are or are they left out as is the normal case?

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28:56
Speaker 2
I would say in A, in this type of environment, we are getting A, we're getting budget pricing early and B, we're notifying our trade partners early that the project's coming up and why I just mentioned it multiple times. Manpower, materials. The last thing we. It doesn't matter if it's flooring, tile, painting, wall covering, drywall, ceilings. The last thing we want. We want is to tell an owner that, you know what, we forgot to talk to the flooring guy and sorry, your job's coming here three months late because the carpet's not available. Right. That's not doing our job. So yeah, these alternative procurements all. All the. I would consider the finished trades are part of that major package.

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29:43
Speaker 3
Cool.

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29:45
Speaker 1
Are they even involved in the design assist conversations? I guess insofar as they're informing on materials availability and saying, you know, look, you might want to consider something else.

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29:55
Speaker 2
Yeah, typically not. Sometimes if an owner is trying to decide on a different. A certain type of floor finish, we might take them to another project. You know, whether they're trying to side between terrazzo and polished concrete or different types of flooring, we'll take them to a project. And of course we're doing that. Finding out who that trade partner did that work and using that trade partner as part of that so they can answer any questions. That to me is the best path to get them involved if one's needed.

‍ ‍

30:28
Speaker 3
Okay. Have you seen technology play a role in changing procurement?

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30:41
Speaker 2
I don't know. I think some of the methods. Right. The lean we talked about earlier, a branch. We call it team center planning. It's not really a technology. Right. It's a method of scheduling and partnering that we apply on all of our projects, whether they're alternative procurement or design bit built. I would say the modeling. The BIM modeling has certainly helped. Right. If we can get a model from. Or when we get a model from the. We actually will put that model. We'll develop our initial budget off the model so you can have a meeting. And let's say the owner said, you know, I really don't want tile on all my bathroom walls. Can you change that to paint?

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31:31
Speaker 2
And the estimator pre kind manager can go right into the model, change that and the owner can see it live with that impacts or some of the stuff that's the technology has really helped us. Not in the procurement side, but in the delivery side.

‍ ‍

31:49
Speaker 3
Okay. Well that's all we have for questions except for Mark wants to know when you're going fishing next.

‍ ‍

31:59
Speaker 2
Mark really wants to. Let's see, what am I going fishing next? I think October.

‍ ‍

32:05
Speaker 3
He wants an invite.

‍ ‍

32:06
Speaker 2
I think Mark's not coming. He's never invited.

‍ ‍

32:12
Speaker 3
Bad luck.

‍ ‍

32:14
Speaker 2
No, it's not just bad guy. Really?

‍ ‍

32:16
Speaker 1
Oh, that guy. Oh, yeah. Agreed. All right, guys. George, thank you so much for joining us today. I think, you know, bringing the topic to a public square and discussing it regularly, helping to influence maybe people to take a shot and to get more involved in changing the old ways, you know, of doing things and buying into the idea that, you know, if you're really looking for a partner, the way you're doing it isn't the way to do it. Yeah, Right. So that's a fantastic message and we really appreciate you joining us today. Any, any parting words?

‍ ‍

33:02
Speaker 2
I really appreciate the opportunity to be part of your morning huddle today and kick off what Season 3.

‍ ‍

33:08
Speaker 1
Season 3.

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33:09
Speaker 2
This has been awesome. And I'm on different social media platforms and you can connect with me via our branch builds website. If anyone has any other additional questions or if you're a trade partner out there who wants to get connected with our team, please reach out to me. So thank you very much for having me. I appreciate it.

‍ ‍

33:29
Speaker 3
Thank you, George. See ya.

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33:32
Speaker 1
All right, Stacy, let's do a little wrap up here. First things first, new feature to our weekly show. The we're calling it the Steel Toe Marketing tip of the week as Stacy's business is Steel Toe Communications. And Stacy, what's the one, you know, simple thought that we can carry forward this week from a marketing standpoint.

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34:00
Speaker 3
So I think when you guys are doing video just to make sure that you understand most people, about 85% of people watch video without. So make sure to use captions. And the easiest way to do that is to visit rever.com and you can plug in your video and upload it within 24 hours or less. They'll shoot out the captions for you so you don't have to sit there and listen to your video and retype the captions out. So that's just a little tip.

‍ ‍

34:30
Speaker 1
Stacy, help us figure out captions for this show.

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34:34
Speaker 3
Oh, I totally can.

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34:36
Speaker 1
All right, fantastic. All right, guys, we will be back with you every week for the next 11 weeks as three of the morning huddle. Next week we are going to be having Ronnie Brewiard and Taylor Langley, which is a tandem, a force of marketing and business development that work at Chesapeake Contracting Group to talk to them about how they've differentiated marketing and business development in their organization and as a general contractor, how they have approached the strategy together and been such effective team, which I think they really have been. So we look forward to that conversation and as always, make sure that you are liking and subscribing. We now have a a LinkedIn page for the morning huddle. So make sure that you like the or follow. That is our huddle page and we have a YouTube channel.

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35:40
Speaker 1
Make sure that you're subscribed to that. We know a lot of people are switching over to watching YouTube live and as always, this is available on Apple Podcasts and on Spotify Podcasts, as well as other recorded formats in video form. So if you missed it or you just got the tail end, you can always go back. Thanks so much everybody. Stay.

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36:01
Speaker 3
Thanks. Have a great day.

‍ ‍

In what has always been a high-pressure industry, now more than ever, teams in the building industry are facing breaking points and burnout. Everyone seems to be too busy, feeling overwhelmed, and can barely keep up with the fires from day to day. It's not sustainable and an industry with a poor quality of life won't attract the bright young people we need for the next generation.

Rex Miller joins the huddle to talk about creating and maintaining healthy construction teams that place an emphasis on mental health and wellness. Rex is passionate about helping leaders transform "the grind" into an inspired performance that leads to more energy rather than burnout. His experience with construction professionals in particular makes him a perfect fit for this discussion.

Transcript:
‍ ‍

00:00
Speaker 1
We need to get back to work.

‍ ‍

00:02
Speaker 2
And work is one of the ways.

‍ ‍

00:03
Speaker 1
That we contribute to this country, that we grow our gdp, we grow our tax base, we contribute to each other effectively. We help finance our national security, our homeland security, our infrastructure. I had key employees that really wanted to be leaders in the company, but they didn't want to have any ownership in it, responsibility that way. So I just had to start researching.

‍ ‍

00:25
Speaker 2
Out and figuring out, well, how do I market my company?

‍ ‍

00:28
Speaker 1
Go to your local school board for one hour twice this year. And if you can have even just 10 or 15 employers show up and do that at the same school board every single month, there's two contractors filling out a little card to give your 30 seconds at the podium that says, I need your help and we have great jobs. Eventually they will hear you. But if everyone just did two hours a year, that's how we change this. Stacey, how you doing this morning?

‍ ‍

00:51
Speaker 3
I'm doing great.

‍ ‍

00:53
Speaker 1
She loves it. I ask the question every time. She's like, I'm fine, dude, just a little much.

‍ ‍

01:01
Speaker 2
And I say to that owner, I.

‍ ‍

01:03
Speaker 1
Said, sue, you're not willing to invest in yourself. You're not going to invest in yourself. You're going to invest in companies you have no control over, whereas your company, you control and you don't have the confidence to pour the money into that. When things are busy and they're looking for their GC friends to sit down and negotiate a project on a GC and a fee, and they're more excited about building the project, and then all of a sudden the model, the market swings, and now the developer market is wanting to go out and they're going to hard bid the same project to two or three different GCs. And that's where. That's where it starts going. It's morning huddle time. Hey, how's everybody doing? We got Stacy and Rex here this morning. I'm Chad Prinky. Rex, Stacy, how are we doing today?

‍ ‍

01:55
Speaker 3
Doing good.

‍ ‍

01:56
Speaker 2
Yeah, we're good. I got to walk the creek this morning, so that's great.

‍ ‍

02:01
Speaker 1
I'll take that walk in the creek. Want to hear more about where the. I'm actually heading up to the creek tomorrow in my world.

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02:08
Speaker 2
Yeah? Yeah.

‍ ‍

02:09
Speaker 1
Good man. So it's episode 26. It's episode 12 of season two, which means today's our last episode of season two. And Rex, just before we started, Rex said, typically in the season finale, one of the characters die.

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02:26
Speaker 2
Yes. That's. I mean, that brings the suspense and tension for the next season.

‍ ‍

02:32
Speaker 1
I'm betting it's Stacy. Like, no offense, Stacy, but I feel like. I feel like it's probably make me.

‍ ‍

02:37
Speaker 3
Start coughing this nasty call for a week. So I might be hearing.

‍ ‍

02:45
Speaker 1
Yeah, she's the one that's going today.

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02:47
Speaker 3
Yeah, unfortunately.

‍ ‍

02:50
Speaker 1
All right, so it's also the start of summer. It's the solstice. Love that longest day. We'll take it. That's. I'm going to make good use of that this evening, hopefully. And I want to introduce Rex Miller. So Rex is the author of several different books, one of which I think I've even told Rex was extremely influential and, you know, shaping my outlook on the opportunities for the building industry to improve. It's a book called the Commercial Real Estate Revolution. He's a CEO, he is a construction industry revolutionary and he is a mental health advocate. He's currently the head of a company called Go Mindshift. And. And he's. And he's got a pretty cool ranch from what I understand down in Texas that I got to get down to visit. Where are you in the world, Rex?

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03:46
Speaker 2
So Glen Rose is 90 minutes southwest of Dallas. It's a small little town of about 3,000. The old little town square. We've got a river that goes through it. There's a dinosaur state park. And so we're known for dinosaur footprints, fossils, clean river. And we used to be the moonshine capital of Texas.

‍ ‍

04:10
Speaker 1
You used to be or can you still procure some of that moonshine down here?

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04:14
Speaker 2
There's a new distillery called Sledge and they're bringing it back.

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04:19
Speaker 1
Nice. Yeah, it's moonshine, but legal this time. That's awesome. And for what you. One of the things you've described is sort of what drew you down there and what project you're working on. I just think it's cool. Want the audience to hear about it. What do you. What do you have going on down there?

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04:35
Speaker 2
Well, it's kind of a convergence of circumstances. My wife and I said, God did it. But were down a year ago in April, spring break, we drive through the town. My wife sees this little two story stone house and says, oh, they've lowered the price. And I had no clue what she was talking about. And before I knew it, we bought a 15 acre ranch. And then we said, now what do.

‍ ‍

05:02
Speaker 1
We do with this?

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05:04
Speaker 2
And it had seven buildings on it. We've added one. So we've built it into a leadership retreat center. We've had clients down here, individuals, and it truly is a magical property. It's on the river, twenty foot bluff. It's got a creek that cuts it in half. And we're just excited. It's a whole new stage for us in this period of life for us now people can come to me, we can curate the experience and we can do it Texas style. And so that's what we're looking for.

‍ ‍

05:39
Speaker 1
That sounds great. Anytime I hear Texas style, I imagine just really good food.

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05:44
Speaker 2
Oh, my gosh, the food. Yeah.

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05:47
Speaker 1
Fantastic. Well, cool. All right, so Rex has joined us today to talk about mental health in the building industry. And, and Stacy, per usual, except this time I know you're just like holding back a cough, so you're dying to get off. We'll bring you back on, you know, make sure that we get the great questions from the audience and comments from the audience and make sure that we get an opportunity to, you know, bring today's content to a custom level for those guys. So with that, Stacy, we'll see in a bit. And Rex, let's. Let's dive in. So.

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06:18
Speaker 2
Sure. Yeah.

‍ ‍

06:20
Speaker 1
The construction industry, the statistics are real, right? The building industry is one of the more challenging industries. From a mental health perspective, why does the construction industry take such a toll on people's mental health?

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06:37
Speaker 2
Well, Chad, you know, it always has. And so I think in our research and were researching mental health and physical health in the corporate world, but the problems that have been chronic and growing, the pandemic just made them acute. And it just exposed all the vulnerabilities and the adversarial nature of the industry. The vulnerability of the sub trades as being kind of the. They don't have the same level of clout and voice in the process. So they just have to take what they get. The disruption of supply chain, I mean, we're building on our property and I'm experiencing on a micro scale. It took me five months to get the lumber for the trusses to the barn.

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07:30
Speaker 1
Right.

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07:31
Speaker 2
So you and I know that a construction project is interdependent. And so one item, one key item can hold the whole thing up. And so the pressure there, owners who have their budgets and their business plans, and now those get shot to pieces. So the pressure runs downhill. There's no escape. And we still haven't adapted yet to look at how do we take care of first responders. It's essentially the same, the kind of pressure cooker we're in. What kind of rotations do we need? What kind of breaks do we need? You and I talked the other day about FAA air traffic Controllers how intense it is that they can only be on a scope for four hours and take a two hour break because of the stress and pressure they're under.

‍ ‍

08:22
Speaker 1
Right. When's the last time a superintendent or a foreman got a two hour break in the middle of the day?

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08:27
Speaker 2
Yeah, absolutely. We've got to start recognizing that and unfortunately we're starting to see the sad statistics and suicides. I mean, you and I both know I, I can name a half dozen large construction firms we all know well who have said I had somebody die, kill themselves and family, you know, stress and pressure, divorces, coping, unhealthy coping. I mean it's a real problem.

‍ ‍

09:03
Speaker 1
It is, yeah. I think I've heard comments along the way of like, you know, so of course I'm divorced, you know, that's a part of the construction industry. And it's, when you hear that kind of comment, it's jarring and concerning for, particularly for those of us like. And I, you know, I feel like I'm very much a part of the construction industry, but peripherally, right. Like I'm not a practitioner, I'm a consultant. I'm not in it, I'm around it, I climb into it, but I don't have to sort of stay there. And, and you know, there's a, a picture that I get in my mind with this travel, high intensity time away from family, you know, kind of environments. A lot like the military, right?

‍ ‍

09:48
Speaker 2
Yeah, very much, yeah.

‍ ‍

09:50
Speaker 1
And, and so our, you know, being in the building industry has these sort of, as you said, chronic built in challenges. Let's get more into some of those chronic challenges. One of the things that this book, and it's literally sitting behind me right here. One of the things that this book, Sorry, I promise Rex didn't ask me to plug that. But you know, one of the things that book brought to the surface and put into clarity for me in ways that it hadn't before I read it was the running downhill that you described. Take a moment and describe how the, the nature of, you know, decision making in the industry and sort of purchasing in the end is all that stuff how it compounds and amplifies some of the pressures.

‍ ‍

10:53
Speaker 2
Well, the traditional process is that most of the decisions are made on the very front end and yet 80% of the knowledge. So you've got your designs, you've got the owner involved, the architect and the GC and By the time the sub trades get brought into it, that's 80% of your cost, 80% of your knowledge. The decisions are set, you know, and you can have a little bit of fluff and play and how many contractor meetings or team meetings have you had where people walk out, say if only they had brought us in at this stage, we wouldn't be having this problem. So projects are so complex, you know, 80 years ago most companies were self performing. We didn't have all the trades.

‍ ‍

11:49
Speaker 2
Reed Construction data estimated that on a good sized job there can be up to 250 contractors sub trade specialty and another 250, you know, manufacturing items. The complexity is way beyond the model of design, bid, build. It, it's, it was way, it's way beyond that model and we just cannot manage the details. And so what happens is we manage problems, you know, we, it's problem solve it. There's not a day that doesn't go by that you're not putting out fires, solving problems and then all of the drama that goes with that. The model that we saw, and that's in the book is having more of a team base, collaborative, get that knowledge in on the front end. So you're not so dependent one or two key players, you know, the project manager.

‍ ‍

12:47
Speaker 2
And that's why if the project manager goes down, the job is sunk. You know, they've got the relationship with the owner and the client, everything depends on them. They're they're the air traffic controller, so to speak. But this collective knowledge and collective decision making process is part of the integrated project delivery process, part of the progressive design build process. So we have models that allow that. What we don't do is we think that if we just push everything out, we can get the lowest price by just bidding all the sub trades against each other and then try to put it together after that.

‍ ‍

13:34
Speaker 1
Hence the term mind shift, right?

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13:36
Speaker 2
Yeah, absolutely.

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13:37
Speaker 1
If we're gonna make that shift, what do we have to start thinking instead? So if I'm gonna make this shift from, you know, going out to bid, gotta be competitive, make sure that I'm getting the lowest, best price, lowest qualified. If I'm gonna make this shift to saying, going to build a team, we're going to collaborate, we're going to get in early and I'm going to select people based off of totally different criteria because there's no plans to bid yet. Right. What's the mind shift that has to happen?

‍ ‍

14:04
Speaker 2
Well, that is the process because all those assumptions that you said are part of the current mindset. You know, that in order to get due diligence, I've got to competitively bid it and take the lowest price. You know, you're told that we're going to take best value, but you only make that mistake once. If you're a vendor, you know, you. You come in with a good price saying, we've got all this other stuff and you don't get selected. So the biggest issue we had, I mean, when we brought everybody together for the very first meeting and, you know, we want to change the industry, and I opened up the conversation and asked, what does the problem look like from your seat on the bus Now? We had a graphic scribe mapping this out.

‍ ‍

14:52
Speaker 2
We had columns for each of the stakeholders, the owner, the developer, the gc, the architect, all these different. And we had them in the room. The very first words from the contractor were, if only the damn architect could give us complete drawings, we wouldn't have these problems. I had two principals from the largest architectural firm in the world in that room. And the other one said, well, if only the contractor knew how to read the plans and understood design intent, we wouldn't have these problems. And then gsa, if only the owner wouldn't change their mind then. If only the developer would give us the right number. If only the MEP would just get their stuff in on time and not wait till the last minute. If only the AIA would give us contracts that were neutral and.

‍ ‍

15:37
Speaker 2
And didn't put a thumb on the scale. And that was two hours of tense conversation. Then the person who started food fight, he said, wow. And he was watching the graphic scribe connect the dots and find that basically everyone's pressure point, pinch point of frustration was similar. And he started saying, we're all experiencing similar frustrations. And he said, and this is where it changed for me, too. It changed my career. He said, there's something about the system that drives this. We had never thought about this as a system. We always thought about, you're the problem, Chad. Now we're starting to think, what's the system? What's the system? And then we started tracing upstream. Where do we go up? Where does it start? And it starts with the owner and the bid process. And so the. The rules to win.

‍ ‍

16:40
Speaker 2
What are the rules to win, Chad? You know the rules to win. If you're competing for a project, what do you have to do to ensure that you're going to win the project?

‍ ‍

16:49
Speaker 1
Get low.

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16:50
Speaker 2
Okay, all right. So that means everybody's playing that Game cutting. I mean, I was just a conversation with a contractor yesterday. There's an incentive clause that they have in there that if they do all these value add things, they get a certain number. They, they're counting on that to get them back to whole again.

‍ ‍

17:12
Speaker 1
Absolutely. Yeah. They got to participate in the savings there. And, and they, the way that they bid the job, they're not, they would make no money if they didn't have an opportunity to participate.

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17:22
Speaker 2
So they have to hit all the, they have to hit 100%. And so that's risk. And, and so we play these games to win, hoping, you know, we're bidding on schematic level information, 20%. So we know there's another phase of design that's design development. And I know, and I used to play the same game. I knew that if I win, I had to find little weasel clauses in the bid. Any little thing that I could legitimately take something out of what I was offering knowing that they actually wanted it because I'm reading the letter of the law and I had to do what was legal and what I could sleep with. And then if I won, I knew, oh, there's going to be another round of design. And that door that I bid on now has some details to it.

‍ ‍

18:14
Speaker 2
It's a wood door and it's got a certain lock. Oh, well, I didn't bid that. Now with this new detail, so the price goes up and now the owner hires a third party because, you know, to beat everybody up. And so what we decide is the system is designed to create distrust and fragmentation and designed to create adversarial relationships. It's designed to do that. So a great job. We've all been on good jobs, but they happen more by accident. You know, 70% of all projects come in late and over budget. And so a good job happens because people go against the grain. Or you have an owner. I'm on a project out in California. The owner is fair, wants to play a game where everybody brings their best to the table, but the number that came in was much higher than they had anticipated.

‍ ‍

19:24
Speaker 2
So now he's second guessing. Oh, you know, I'm letting the fox guard the hen house type of thing. So all these suspicions and things like that. So the question is, how do you design a process that begins with the stakeholders, the people, the key people who have a stake in the outcome, where they decide the rules of the game and they validate the cost and the pricing. They, they work with the owner based on the business case, we need to know the business. What are you trying to accomplish here and now that informs me as to what kind of solutions I can use to help you accomplish that. So everybody holds their cards close. We're guessing.

‍ ‍

20:07
Speaker 2
We have to build all that guesswork in our numbers and risk and contingency and so we, went to 18, what we call outliers, people breaking the rules, getting better results. And what they were doing is bringing people in early, making decisions before they started designing, even in your market. The DPR offices in Reston, Virginia got a well gold certification, but it only cost them a half a percentage more than traditional construction. Now how do you do that? What they did is they brought the highest cost, the MEP folks, the highest cost people in early and said, here's what we're trying to accomplish. How do we solve this problem before they design? So it, we have to redesign the process.

‍ ‍

21:05
Speaker 1
It's, and so I love this discussion. I feel like it's such a different and equally, if not more valid take on mental health in the building industry than what I've heard. Because what we're saying is that in a system that is broken, that is designed to create, you know, conflict, negative conflict and you know, people, you know, kind of protecting and attacking and distrust and all that type of stuff, the trickle down effect is massive. It impacts everybody in the chain. It's, you know, you can't, you know, if, if to merely survive. Right. You have to do things that are less than ethical.

‍ ‍

21:57
Speaker 2
Right? Yeah. One person said the system causes good people to do bad things.

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22:02
Speaker 1
Right. Right.

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22:03
Speaker 2
Now let's go back to Edward Deming. Deming said a system is perfectly designed to get the results that it's getting. So I can't tell you how many Team kickoff partner meetings I'm brought in on and we're bringing them in and we always say we're going to build these great relationships, but we're building them in the same old system.

‍ ‍

22:27
Speaker 1
Yeah.

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22:28
Speaker 2
And so we have the warm and fuzzy, get to know each other. I believe we do things better in that area in terms of getting to know each other in the process, but it's still in the same system. So we actually, in our partnering meetings, we plan for the disasters happening. I mean we say in this system we're going major disruption problems and things and people get mad. How do we plan for that and.

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22:59
Speaker 1
What we do, this is a solution that comes from. I think you Were saying the health care industry when we talked emergency room. So, so the idea is that we kind of, we pre plan for the disasters we know are going to happen. This is a way to decrease stress and rely on our training, rely on the fact that we plan for this. We know what this is going to look like.

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23:24
Speaker 2
Yeah. Think of a formula one pitrew or a emergency command center. Problem hits and there's typically, you know, 10, a dozen things we know are going to happen. Some we're going to have a material issue, we're going to have a budget issue, you know, supply chain issue, maybe a safety issue, maybe a site condition issue, we know those are going to happen. So by planning ahead of time, creating a playbook, creating roles, you know, here's the triage team for this problem now that takes all the stress out, depersonalizes it and allows you to work the problem, not work the person over. And, and I've seen that work tremendously. And you come every day knowing that it's okay for me to bring a problem together because I'm not going to get thrown under the bus. We have hide it.

‍ ‍

24:27
Speaker 1
We agreed up front that these problems would exist. Like we knew this was going to happen. Surprise though.

‍ ‍

24:33
Speaker 2
They're a surprise. Yeah.

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24:35
Speaker 1
Yeah. That's wonderful. So, so another, another thing that I, you know, I guess when we look at some of the more acute issues that have really been, you know, stemmed probably originally from COVID and then inflation and then, you know, hyper demand and all kinds of interesting combinations of things, we have an acute opportunity and notice I say that right, not a problem, but I think an acute opportunity to, you know, address what's happening right now in a slightly different way. And you. The term that really stuck out to me in our most recent conversation, Rex, was transparency with the owner, this idea. So talk about that. How can, how can we work through our current acute stressors in the industry through transparency?

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25:28
Speaker 2
Yeah, well, I'm an owner right now and I've got construction going on and we've had some problems and I went to one of the suppliers and said, hey, look, I can deal with knowing in advance I'm going to have a problem. What I can't deal with is that you make a promise, you don't keep it and I get hit blindsided. We're in this condition where there's so much unknown, there's so much unpredictable things going on and the best thing we can do is bring the owner who's going through their learning curve with this as well. You know, they've made commitments to their board or they've made commitments, capital project commitments, and they're getting pummeled. The best thing we can do is, you know, forewarned is forearmed. We can help going through and giving them sight line down.

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26:22
Speaker 2
Here's what we're running into with our supply partners. Do you want us to change supply partners? Do you want us to do whatever? My contractors are calling me every day. We can't get this here. Do we get our refund, go someplace else? What do we do? Do we do a different product so we, it. We couldn't get what we're doing done without daily adjustments, pivots all the time. Just imagine, you know, a 700 room bed tower or something like that and all the things going on there. That line of communication with the owner is the most vital thing we can begin part of its education. You know, they, well, they don't get into the weeds all the time.

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27:07
Speaker 1
It's, you know, contractors, God bless them. And I understand it, I really do. You have a deep sense of personal responsibility and you know, I, I find very frequently it's you and I do the very you. We do the same work, you know, from a collaboration and, you know, team development standpoint. And when I'm in the trenches with a project team, I'll find frequently that the contractor, through no desire to be, you know, to hide anything, they've just kept all the problems to themselves, right? They just kept thinking they're doing the.

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27:38
Speaker 2
Owner a favor and trying, you know, they're like ducks where they look calm on the outside, but they're paddling fast underwater to try to come up with a solution, hoping they can pull rabbit out of the hat. And then there's no time to react if they can't.

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27:54
Speaker 1
And it's a very lonely place to be, right when you're, when you feel like you're dealing with all the problems all by yourself. And, and if the owner of the organization is feeling that way, then it's highly likely that the foreman are feeling that way. And if the foreman are feeling that way, it's highly likely that the crew is feeling that way. And, and this is where we start to get those sad statistics. And, and you know, people, you know, leaving their companies, leaving the industry not performing at their very best, you know, dealing with addiction issues and you know, fill in the blank because it's just not a happy place. Place to be. So. Okay, I gotta bring Stacy in. I, I feel like we should have budgeted an hour and a half, but we're like up on time. So.

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28:38
Speaker 2
Yeah, I'm seeing lots of good questions too.

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28:40
Speaker 1
Me too. Yeah, I'm bringing Stacy in. She'll steer those questions to us here and, and make sure that we get a chance to cover it.

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28:47
Speaker 2
And by the way, I do want to review the six disciplines for post traumatic growth resilience that every project team, I take them through these and so I want to make sure we leave that with the folks and. All right, and those are in that PDF that you downloaded. They're in there as well.

‍ ‍

29:09
Speaker 1
And we will make sure to share that on this LinkedIn post to share that out to the audience as a result of this. So, but yes, let's commit to covering that before we finish. Stacy, let's try to get to three questions. And Rex, let's do our best to try to keep our answers inside a 10 minute period because I will go over, but I don't like going over by more than 10.

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29:30
Speaker 3
Sure. So Tom Hughes had a really good comment here. He said he has about 85 people in his group and he's had open conversations with exactly two of those people regarding mental health issues. And he's like, he likes to think of himself as someone who people can talk to, but a lot of times you know that you don't have that person to talk to. And I know in the notes you had said something along the lines of like creating some peer to peer support or how do you address, you know, the tough guy stigma on trying to have these conversations more frequently for people who, you know, keep everything to themselves.

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30:19
Speaker 2
So on the website there are some free downloads to some templates. So one of the things we've done is we've borrowed a tool that cognitive behavior therapists, clinical psychologists use with groups that go through trauma and it's storytelling. So we've created a template that allows you to everybody to fill it out. So we call it low risk, high value because everybody fills out the same thing and it's just a fill in the blank and you read it and it's a progressive way of going into.

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30:55
Speaker 2
So during some of the times when our companies were experiencing, you know, what is work from home like and the pressure there was a template around my work from home experience, my return to office experience when the George Floyd event happened and it was really uncomfortable for people to talk about and we can help create and we'll do it at no cost if there's a topic you want to address in a construction area. And there's tremendous power of everybody sharing their story and they can disclose as much as they want or as little, but knowing that you're not alone, having a model to go about, and that takes a lot of pressure off the manager because Gallup says that only 18% of managers are wired to be that listening, coaching voice. Most managers are task oriented.

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31:50
Speaker 2
Here's what you do, here's how you get it done. And their soft skills are not soft.

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31:58
Speaker 3
Yeah, all great. George Nash had also mentioned when you were talking about addressing the low bid design build procurement process, do you believe that variations of alternative procurement allow for the collaborative environment in which there needs to be a high level of trust that allows for a successful project for all team members?

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32:21
Speaker 2
Yeah. So the ideal situation is that the owner would tell either the architect or the contractor, you put your team together and you come and show me how you're going to solve some of my big challenges and problems. You know, Patrick Bruner with GSA did that with the Edith Green, Wendell Wyatt. He brought teams into a room not to present their wonderful stuff, but to solve a problem. And what he wanted to see is that team dynamic. He was watching for the team dynamic and he threw them off. He brought them in a room with no table. They brought their, you know, their projectors in and their laptops and they were given a stressful situation to begin with and then given some problems that were unsolvable. He was pretty ingenious.

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33:17
Speaker 2
He had blueprints that were unsolvable and he wanted to see how the team behaved. He was more interested in the dynamic of the team, not the price. Now the price is important. They had a budget, but then the team worked to bring it in at that budget and make business case. That's the ideal that I would say. And he didn't use PD process. He used a CMC6. So you can basically create collaborative structures with any of the delivery models. You just have to write and build it in. And the big thing is let people come as teams, not as isolated individuals, because you're only as good as the weakest link. If you were assigned the shotgun wedding approach, you're only as good as your weakest link.

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34:07
Speaker 3
Yeah, Great answers. Dennis and Ethan also had kind of a similar question. They were talking about the use of cell phones 24, 7 and you never feel like you're off the job and unrealistic expectations of responding immediately. Like, I just feel like we can definitely all relate to that. So I don't know if you had any advice on how to handle that and manage those pressures.

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34:36
Speaker 2
Well, we have a digital sunset in our house. And a digital sunset is that at 8 o'. Clock. Cell phones are off. Everything's off. Your brain needs about two hours of no screens at all. Screens. Project blue light. Blue light is noon. It's telling your body peak cortisol. It takes about two hours for that cortisol to. To get out of your system for the melatonin to get in. So we need to practice one of my clients on Friday at 5, all emails are shut off, no cell contact over the weekend. Now, you may not be able to do that for projects, but some boundaries, some rules, some ways to escape and make it a habit or practice. The average person checks their cell phone 150 times a day, and you need 20 minutes of focus work. We're operating in the shallows.

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35:38
Speaker 2
Our brains never get into that deep work mode that's really healthy. And being in the shallows is stressful all day. It's cortisol all day. It drains you all day. And you feel it at the end of the day. And that's when you reach for comfort, food, alcohol, some medication to sleep. You binge watch Netflix. So the cell phone is public enemy number one. It's designed to make you addicted to it.

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36:09
Speaker 1
Yeah. I've found myself in lots of conversations, quasi debates about productivity. And, you know, people talk about being busier than they ever have been. And I would, I don't know, I think I challenge that a little bit and say, I think you're feeling busier than you've ever felt. I don't know that you are actually, you know, any more productive, you know?

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36:38
Speaker 3
Yeah.

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36:38
Speaker 2
Disney and productive are two different things. Yeah, right.

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36:42
Speaker 1
Yeah. So this has been fantastic. I want to make sure that we bring it to a close with those six disciplines. Walk us through that, Rex. And then walk us through, you know, where that comes from.

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36:54
Speaker 2
Well, we're familiar with post traumatic stress syndrome and the research really picked up after the gulf wars. And Dr. Martin Seligman the University of Pennsylvania led the research and he found some attributes we've added to that. But the very first attribute to build resilience and what we're talking about is you come back stronger. The setback, the impact on you doesn't, you know, there's robust, where you just kind of withstand it. Resilience is bouncing back. Post traumatic growth is coming back stronger. And the first one is resilient mindset. And the resilient mindset Revolves around three things. Growth, mindset, grit, persistence, which most of us have, and gratitude. This morning I. Every morning I. I do my gratitude journal. Then the next one is playing to your strengths. We use the cliftonstrengths. There are other assessments, but those release positive chemicals. Dopamine, serotonin, endorphins, oxytocin.

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38:06
Speaker 2
But more importantly, they're satisfying in and of themselves. And everybody has a set of unique strengths. Knowing what they are playing to them is healthy in and of itself. The third is your circle of five. Five key relationships that are essential that keep you buoyant. These are people that lift you up, that will kick you in the rear end if you need to. We'll be there, we'll check on you. And we need five. Most people, I'm surprised at how many people say and come back, to me, that was the most insightful thing they got. And to me it's. It seems to be natural, but it's not. For most people. We have this loneliness epidemic. The third piece is energy. Having peak energy. You can't be mentally strong if you're physically tired.

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38:57
Speaker 2
So sleep is my number one sleep, health, habit, movement and then eating, getting as much sugar out of your system as you can. That's carbohydrates, breads, pastas, all of that. That keeps you in a chronically fatigued condition. Then meaning and purpose. Having something greater than you that you're working for or aiming for, and especially on construction projects. How many people work a project but really don't know who it's benefiting, who they're serving, why it's important they do what they do? And the best story I've heard is Stuart Ekblatt's story at the UCSF Children's Hospital, where they brought the project team together with the patients and the doctors for a day, and he came back later with a drywall sub who was vacuuming out the studs. Before he closed it off. He spoke English as a second language. Nobody told him to do that. Why?

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39:59
Speaker 2
Because he knew that dust would compromise somebody with cancer. That's meaning and purpose. And then the final one is keeping score of leading indicators. Having a process and protocol that you go through and working the process and letting success come as a result. You go to the All Blacks, the most successful rugby team in the world. You go to John Wooden. It's all about the process, getting the disciplines, getting the things right. We focus so much on the lagging indicators, the budget, and all these things that come after the fact that we miss the point. So Those are the six disciplines.

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40:38
Speaker 3
Those are super helpful. Yeah.

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40:40
Speaker 1
What, what a great note to end on. So, Rex, what. What email or, I'm sorry, what website would you steer people toward to learn more?

‍ ‍

40:48
Speaker 2
Yeah, inspired by RexMiller.com LinkedIn is where I do most of my posting, so connect with me on LinkedIn. If you're interested in any of the free material, let me know. I know you're going to put some links there and, you know, and come down to the ranch. Thanks.

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41:11
Speaker 3
Rags will be ready in April, you said, Right.

‍ ‍

41:16
Speaker 2
Well, the Ranch is ready now for small groups of eight to 10. In July, it'll be ready for groups of 30.

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41:24
Speaker 3
Nice.

‍ ‍

41:26
Speaker 1
Nice. Hey, thank you so much for being here. This was a lot of fun.

‍ ‍

41:31
Speaker 2
Thank you.

‍ ‍

41:32
Speaker 1
Yeah, it really means a lot. So, Stacy, let's talk a little bit about what's coming up from here. Let's talk about season three.

‍ ‍

41:42
Speaker 2
Yep.

‍ ‍

41:44
Speaker 1
Sorry, I froze there for a minute as I was thinking about the work.

‍ ‍

41:49
Speaker 3
So.

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41:49
Speaker 1
So it's going to be great to take a little bit of time to reset and per usual, like, you know, just like we did in the last off season, I guarantee we're going to have a handful of things that we do to make this better. I don't think we're changing the time. I don't think we're changing the day. We'll be back in September. And so far, you know, we're looking really good in terms of a fantastic series of guests that are going to bring a lot of value and continue types of conversations that we've had. But I'll say what we always say, which is that, you know, if you or someone that you know has an important story to tell about creating positive change in the building industry, please contact us.

‍ ‍

42:30
Speaker 1
We, we do have a handful of open slots for season three and obviously we'll be loading for season four, which is going to be, you know, in 2023. So, you know, please reach out and let us know about that. As always, email us to be added to our weekly mailing list. Stacy, what am I forgetting?

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42:50
Speaker 3
I think you got everything. We'll do a recap of today's episode and then me and Chad are going to meet to kind of lock down our season three date sometime in September. So I hope everyone enjoys their summer, gets some vacation in and we'll catch up with you in September, right?

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43:09
Speaker 1
That's right. Take care of yourselves, folks. Do and make sure that you focus on that mental health. I love the, you know, the advice we got from Rex today and you know, was taking furious notes myself because I've got a couple of ideas that I need to focus on in my own. Thanks so much, and have a good one. See you, Stacy.

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43:27
Speaker 3
See ya.

Since most office-based workforce was forced into working from home over two years ago, many theories have been swirling around about "the future of the office". While the debate isn't entirely settled, today it at least seems clear that offices will indeed continue to exist and play an essential role for most companies.

Kelly Ennis is a workplace strategist and the Founding Principal of The Verve Partnership, an interior architecture/design firm. Kelly joins the huddle to share her expert views on the future of the office and what that could mean for the construction industry in terms of trends in the types of construction projects we'll see in the office market sector and other related topics.

Transcript:

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00:00
Speaker 1
We need to get back to work. And work is one of the ways that we contribute to this country, that we grow our gdp, we grow our tax base, we contribute to each other effectively. We help finance our national security, our homeland security, our, you know, our infrastructure. I had key employees that really wanted to be leaders in the company, but.

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00:19
Speaker 2
They didn't want to have any ownership.

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00:20
Speaker 1
In it, responsibility that way. So I just had to start researching.

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00:24
Speaker 2
Out and figuring out, well, how.

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00:26
Speaker 1
Do I market my company? Go to your local school board for one hour twice this year. And if you can have even just 10 or 15 employers show up and do that at the same school board every single month, there's two contractors filling out a little card to give your 30 seconds at the podium that says, I need your help and we have great jobs. Eventually they will hear you. But if everyone just did two hours a year, that's how we change this. Stacy, how you doing this morning?

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00:50
Speaker 2
I'm doing great.

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00:52
Speaker 1
She loves it. I ask the question every time she says, like, I'm fine, dude, just a little much.

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01:00
Speaker 3
And I say to that owner, I said, sue, you're not willing to invest in yourself. You're not going to invest in yourself. You're going to invest in companies you have no control over, whereas your company, you control. And you don't have the confidence to pour the money into that. When things are busy and they're looking for their GC friends to sit down and negotiate a project on a GC and a fee, and they're more excited about building the project, and then all of a sudden the model, the market swings and now the developer market is wanting to go out and they're going to hard bid the same project to two or three different GCs. And that's where it starts going down.

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01:43
Speaker 1
It's morning huddle time. Chad Prinke here with Kelly Ennis. Kelly, how are you this morning?

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01:48
Speaker 2
I'm great, Chad, how are you doing?

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01:50
Speaker 1
Great, thank you. Thanks so much for being here. So Kelly is the managing partner of the Verve Partnership, which is an interior architecture and design firm in the Baltimore and sort of, I guess, mid Atlantic region. You're doing work not just here locally, but regionally. Kelly, what's. What's going on in your world these days?

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02:15
Speaker 2
Oh, a lot. A lot is going on in our world, proverbially speaking. We are busy and we are busy trying to help people figure out what the next step is with their office strategies.

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02:28
Speaker 1
Awesome.

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02:29
Speaker 2
Yeah, it's keeping us really busy.

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02:30
Speaker 1
So that's what we're Going to be digging into today is really the future of the office, which is, you know, maybe a played out discussion intensely over the past couple of years. But I, I think we're at a place where we're ready to stop talking about what might be happening and we're ready to start talking about what is happening. Right. Intangibly. This is what is going on. And to your point, this isn't conjecture, this isn't stuff that we're imagining, but this is what's keeping the Verve partnership busy right now. This is what's keeping firms like yours and the construction industry can expect to see a lot of stuff coming down the line. I know the office market never went away during the pandemic, but there were certainly a lot, there was a lot of uncertainty.

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03:19
Speaker 1
Have you seen that uncertainty start to dissipate at this point?

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03:27
Speaker 2
I think the uncertainty is definitely waning. People are itching to get back. People perform better face to face. People react better face to face. It's just all across the board from a culture standpoint. People need people and we need to be together. Virtual is great. It served a need. But it also proved a lot of things that we have been working on our entire careers that hybrid does in fact work culture. If you're designing and planning to a culture that works. If you have flexible work from home policies, that works. So, you know, we're seeing it all come back, come back to the forefront.

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04:14
Speaker 1
Yeah, it's, and it's a really, it's a good point. It's that in the office environment, depending on the type of business you are, right. You were already running hybrid work. That was, that was happening as it was heading into the pandemic. Certain positions maybe weren't used to working from home or working from anywhere. What, you know, whatever that means. But specifically, as we think about our audience, which is made up largely of construction companies, general contractors, subcontractors, and to another extent, you know, architecture and engineering and design firms. There's a field aspect to being, you know, a construction company where depending on the company it could be the majority of your workforce is actually, you know, not working from the office. So that was something. When you and I were talking, I was like, right, duh, you know, that's.

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05:16
Speaker 1
If that's not, I guess that's hybrid, right? It's some version thereof. But it's still. But what I will say is this, and this is something I'd be interested in your comment on is that I have noticed and I Think there's been a lot of discussion about over the years that there is a little bit of a divide between the office and the field. I wish there weren't, and in some companies there isn't. But there's a bit of a divide between the office and the field. And I do think that there's some aspect of that just goes to the fact that they're not working side by side every day. So, anyway, I'll ask you weigh in on the balance. How do we pull off hybrid correctly? How do we make sure that we're not now having a divide between the office and so on.

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06:05
Speaker 2
So that's a lot of questions to answer. So a couple things. What we have to understand in the marketplace, generally speaking, that each market is. Is different. You have, you know, law firms that were, you know, slower to the. The hybrid, the hybrid office. But on the flip side, you know, like you said, your general audience, Hybrid's just a new word. People were had hybrid and flexible work from anywhere options. But hybrid is simply just a new word that's in response to the people pandemic in the general contracting field. Like you said, you have people in the field all the time. You have project managers some of the time, and then you have, you know, the corporate and headquarters kind of staff who is actually in the office occupying space, you know, 70, 80% of the time.

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07:01
Speaker 2
So the differentiator is really understanding the strategy of the market with which we are designing and planning to. Each market is a little bit different. And like you said, in the general contracting world, you know, they've been doing hybrid technically for a very long time. It just wasn't hybrid, right? It just wasn't.

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07:22
Speaker 1
Yeah. Yeah. So let's talk about strategy a little bit more. When you say designing to strategy, what does that mean in real terms when it comes to how your clients are looking at their office space?

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07:43
Speaker 2
Yep. We dig deep to figure out who's working, where, how they are working, and where they are working best and most productively. So different people can work at different times of day more effectively and in different kinds of space. You know, I. This is. Again, this is not all. This is not new information. You know, we've been planning for different settings. And I say settings. That is a setting. As a private office, a setting is a workstation. A setting is a. As a huddle, room is a conference room. And there are many, many different kinds of settings where throughout the course of the day, people can work differently and possibly work better. We were not really meant to sit in a box and be corralled in little squares, quite frankly, like cattle working, you know, sitting in an office all day long.

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08:36
Speaker 2
We're just not programmed that way as human beings. So to have that differentiator throughout the course of the day, it's choosing how you want to work and where you want to work. And, you know, people are just generally happier that way, which is why the work from home piece of it is really successful. I myself work from home every morning. I don't even go into the office. And until later this afternoon, my head's down, time is at my house.

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09:02
Speaker 1
Interesting. So I think what you're saying is intuitively true. Like, I believe that, but it's so antithetical to the traditional thought process of the office. And so I don't know, I recognize you keep on prefacing things by saying, like, this isn't new, but it is kind of new to me. I'm not an expert what you're talking about, and I'm guessing there's probably a lot of our guests, I'm sorry, a lot of our audience, that this is kind of new for when I think about this, I'm like, were we prioritizing for, you know, decades, just sort of productivity and maximize, like maximizing space as the way of achieving productivity or something like that. Like, like what hard data started to create this strategy first approach that you're using?

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10:08
Speaker 2
So again, lots of questions with lots of answers. We can start with how people work differently. And the data that supports it is really catering to the culture of the individual industries, if you will. Like I said, you know, law firms are a really good example for a very long time, the law industry, if you will, people didn't work outside of their office. If they weren't sitting in their office, they were clearly not being billable, which is a very. It's a very huge metric in the legal industry. Whereas what the pandemic proved is that people can actually work quite effectively from their house or from different areas. So when we talk about the data is more in kind of an organizational development category. But if you can track productivity and you can track performance.

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11:12
Speaker 2
And that's where, you know, the whole performance review thing comes up and people track those metrics. And in the construction, again, I'm going to kind of go back to the construction field because it's a perfect example. People usually aren't in the office when they're working in the field, they're working on A dedicated project. And if that project coming out of the ground doesn't keep track with the schedule or keep track with milestones, or keep track with expectations, it's very apparent, very similar in professional services.

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11:43
Speaker 1
Interesting. Yeah, I think that's right. And so I, as I think about, I don't know, I know you've actually had some experience in building for, designing for builders, which is pretty cool.

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11:59
Speaker 2
Yeah.

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11:59
Speaker 1
What are some of the things that you have that you would call out that you've done when you're designing for builders? In this case, it's general contractors. I don't know if you've done subcontractor spaces, but talk about the space that you've done for general contractor. Some of the trends.

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12:16
Speaker 4
So.

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12:17
Speaker 2
Excuse me. In designing and planning for general contractors, we've done two here in the region, it's very important to have shared collaborative spaces, project room kind of spaces, huddle spaces where both you have, you know, this kind of technology so you can, you know, throw up a plan and you know, have your team and your subcontractors join in the office.

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12:43
Speaker 1
Right. People are out in the field. We want to be able to bring them right into the people who are in the office and have this sort of seamless meeting on the spot.

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12:52
Speaker 2
Yep. So technology is really important, but you also have a myriad of generations and sometimes actually seeing a physical plan, you know, that is 30 by 42, 36 by 48, you need some big desks, you need some big meeting space to actually drill down and look at that. You know, the analog nature of what plans are telling you. I'm a paper person. I like to look at paper, I like to review drawings in paper. And I need a big desk to do that or big meeting table to do that with my peers. Same with general contractors.

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13:28
Speaker 2
So again, it kind of goes back to, you can't do it at your desk prompt room, but creating those project room and project areas where people can get out of their desk, go to a common table and just kind of dig in and, you know, solve problems.

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13:42
Speaker 1
Are you seeing anybody? That's. That makes total sense what you're describing. And I've definitely been in my clients offices, general contractors, subcontractors, different spaces and felt constrained, you know, when they don't have the right space for stuff and we're cramming into an area or you can see the frustration on the face of that person who is a paper person who's trying to get the plans open and talk about them. And then I have been in actually, in fact in some of your clients spaces and felt the exact opposite. Sort of felt like this enablement of what it is that we're going. So it matters, it really matters. And so I can sense when it's done right here's a little bit of a sidewinder.

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14:33
Speaker 1
And I have to ask, is anybody actively talking about and planning for like, oh God, I'm going to sound terrible, but like germ free kind of solutions in the office? Are they, are they like, is that going to be a thing where people are thinking about like, okay, and so how do we adjust when we need to, you know, isolate each other? Like, I'm just really afraid that we're all going to become extremely OCD germaphobes and their office spaces are going to accommodate the insanity.

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15:10
Speaker 2
So I think you had people like that before the pandemic and the whole kind of the shared desk kind of thing, you know, that's, you know, we're seeing not our clients, but you know, out there on the street with other, you know, articles that I'm reading is okay, always have like this little kit like okay, that's great. But at the end of the day it really comes down to air circulation, air exchange. And I often say, you know, we can design and plan and develop strategies all day long. If you're in a class C building from 1988 that has horrible rooftop units or any sort of H vac systems that are not, you know, high of higher quality, it's about air. So you gotta balance design and strategy with the quality of the air.

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16:05
Speaker 2
That is the biggest component that should, that will be addressing any sort of, kind of phobias that people may or may not have. You know, we can design and plan all day long, but if you're still circulating bad air, you know, that's a whole different conversation.

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16:23
Speaker 1
That's a really fair point. And I, and I do, I think it is the mechanical systems that you have in place, the H VAC systems that you have in place, those are going to be the places where you actually keep people healthier. The rest of it's just kind of policy, right? Like you know, wash your hands, you know, and other, you know, simple kids right when they're five years old, not super complicated. I'm just, it's, it just fascinates me. I just picture this world where we walk into offices and everything's like, you know, everybody's hermetically sealed in their envelope and I'M like, that doesn't seem, that seems actually like we should all go back home. That's not the intent.

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17:09
Speaker 1
All right, so what can contractors start to think about and expect in terms of materials, in terms of, you know, things that they need to be, you know, see as you're on the design end, things that they need to be prepared to see coming down the pike when it comes to office construction, you know, in the, at least for the foreseeable future.

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17:39
Speaker 2
Qualify materials for me.

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17:41
Speaker 1
So what kinds of materials are you seeing specified? Is anything, is anything new being specified? Is there anything coming down the line in terms of, you know, technology that's being specified? Is there? You know, like. I hope that answers your question. I'll shut up for a second.

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17:59
Speaker 2
Well, I mean, to some degree, I think I'm going to go back with air. I think our peers and our consultants, really, we all need to either be reeducated or hone in on what we already know about air quality and air exchange rates. I think that is key in the health care industry, which we don't practice. We're not in the health care market sector. But from a material standpoint, you know, there's a lot of, you know, topical antimicrobial kind of solutions already built in with, say, within textiles and wall coverings that you use, you know, in a hospital type situation.

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18:38
Speaker 1
Some of that stuff may be adopted.

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18:40
Speaker 2
Yeah, yeah, adopts. Adopt some of the design solutions that, you know, that the healthcare industry has been using over time. But I still go right back to air every time. Like I said, we can design and specify all day long if the air is still not clean. It's not helping.

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19:00
Speaker 1
Yeah, it's not helping you along those lines. One of the things that I have actually recently seen, and gosh, I feel so guilty that I can't plug the company. I wasn't, I wasn't anticipating this opportunity to do so. But there is a company that I recently became aware of that is actually releasing their. They're basically monitoring air exchange room by room, installing these sort of sensors, and then it becomes sort of controlled by an application. And that then becomes something that you can use to make decisions about how to set up your mechanical systems. Moving forward. I just, I think that type of Internet of things, you know, solution for air exchange is something that we're going to see become very normal. I know they're hoping it will be.

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19:58
Speaker 2
They are, they are. I think I probably know who you're talking about. But yes, those types of tools and technology can Only better all of our situations.

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20:05
Speaker 1
Yeah, right on, agreed. So what is the importance? Okay, well put it this way. The importance of a well integrated virtual in person meeting space. That space that you described, that I think, you know, hey, we can easily pull our members of the field right into our conference space and we can have this collaborative meeting and it doesn't feel like a mess when we do it. That's obviously really important. But what, how else is space changing? You talked a little bit earlier about, you know, different settings, you know, how else is space changing touch all employees?

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20:56
Speaker 2
So that's not a one sided comment. And I'm kind of monitoring some of the comments in the chat over here which are extremely fascinating. And I'm going to go.

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21:05
Speaker 4
I know.

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21:05
Speaker 1
I do the same things.

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21:07
Speaker 2
I'm going to go to a kind of a. Just a comment that I've been writing a piece on is really honing in on the co working mindset. So one of our verticals is co working and innovation. And in that type of space it's a highly flexible, highly amenitized, highly collaborative type of space where people can move about throughout the course of the day with some level of structure, but with also some level of freedom. And I keep going back to, you know, if we're designing spaces where people actually want to be and you couple that with a policy or a co working mindset, people still need to have face to face meetings in order to be successful. Especially in design and construction. When you have touch things, you know, you have materials, you have building materials, you have furniture.

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22:05
Speaker 2
In our world to do all of that virtually is not always going to work. So having the options and the policies to have a co working mindset in a typical corporate office I think is really going to beneficial. Co working spaces at the moment are really not that they weren't already taking off already. But the well run, very well organized co working is not just only about two and three person offices anymore. You know, we're designing spaces that have a huge centralized core of all kinds of meeting spaces. You know, a bar, a training room, a place to have, you know, board meetings and then smaller huddle rooms across the way, phone rooms. And then you know, your companies that are occupying up to 3 and 6,000 square feet have access to these.

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22:56
Speaker 2
It really is, you know, what's the mindset and what's the policy and then design and plan space where people actually want to be to entice them back into the office.

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23:12
Speaker 1
Isn't that a funny term to entice them back into the office? Such a fun like that. It's like, come on, we gotta. It's. It's real nice in here. I'm going to pull Stacy in and when I do that, I want to make one quick comment. Just that I think the importance of the. The types of space that you do create in your office, in this hybrid work environment, which, by the way, again, in the construction industry we've been having for a long time. Have you been creating space where people want to get together, where the culture organizes opportunities to pull people together? Because I will tell you the one thing that does worry me. I can't help it. Maybe I'm a little old school. I'd be open to people picking on me for it.

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24:00
Speaker 1
But I gotta tell you, I think when we only see each other virtually and we get together extremely rarely, that it does erode on some level my sense of. What's the right word? Loyalty, perhaps, or connection with an organization and with. And maybe with my direct boss or the people that I work with. And it makes it much easier for me to kind of, I don't know, not be a part of the culture or in some way be detached. Makes it easier. It kind of, you know, I'm afraid, might amplify some of the job hopping that. That, you know, I think is, you know, sometimes necessary, obviously, but. But overall economy wide unproductive. Stacy, we've got. I'm seeing a super active chat situation going on, so why don't you channel some of these questions into Kelly while we have her.

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24:58
Speaker 4
Hi, Kelly. Sorry I'm a little late here. Yeah, we have some great interaction. Everyone's just commenting on, you know, the status, whether they're remote or 50 or mostly in the office. But it's just kind of funny, you know, if I asked this question prior to the pandemic, I pretty much think we would all say were in the office 100%. So definitely a lot of change. We did have a good question from Bill Wilson. He said, are you seeing a change in staff density or sense of separation in office design?

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25:38
Speaker 2
So that's. I did see that come through. So the challenge to answering that question is because our approach is always about strategy and asking the right questions. If your office was overly dense, that tells me somebody wasn't asking the right questions. A lot of your technology companies were using something called, like, it's called a benching system, where each person only had four or five feet and then people would jam pack themselves in there. We don't approach space like that because each, like I said, each person works differently. And if you can kind of find a baseline, it shouldn't, I mean the bottom line answer is yes, it should be less dense than it was. I would say a good 60 to 70% of spaces out there pre pandemic were way too dense.

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26:32
Speaker 2
I think you're going to see less dense spaces, but you're going to see a rise in the common spaces. Like I go back to the co working mindset, the shared highly amenitized meeting zones, coffee zones, bar conference areas to accommodate for flexibility and less dense spaces. So the quick answer is yes.

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26:56
Speaker 1
Yeah, but, but I'm, but I'm hearing you say that yes, comma, because people were just smushed together in a lot of these situations. Not because we're becoming, you know, whatever we need to separate more now after the pandemic or something. But it's actually created a little bit of awareness.

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27:15
Speaker 2
Yes, awareness is a good word.

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27:18
Speaker 1
Yeah. I'm. Did you see this question from Dennis Stacy, Dennis Kasich about pool planning and such like that? It says. I'll just read it off here. It's, it says we, Dennis says, we found some types of meetings must be in person. Things like pool planning, scheduling, commissioning meetings. During this type of meeting you may need, you need many people to be able to join and remote has its drawbacks. So, so you know, not an explicit question therein but you know, agree, disagree. What are you seeing, Kelly?

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27:55
Speaker 2
Agree. I absolutely agree people. We face to face works because it's quicker. You can, and you can solve a lot more problems in a lot less time. Face to face. I absolutely agree. Remote's good. Virtual is good. I mean we're here doing this virtually right now anyway, you know, so. But when we meet face to face, it's much more effective and it's much more efficient use of time and you get to problem solving quicker. And I see that as a common theme over here on the chat. You know, people like to work at home and they like to go in for face to face meetings. That's usually the case even pre pandemic. So I think a lot of policies will change as a result.

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28:38
Speaker 1
So this isn't necessarily the focus of this show, but I have to say this, which is if you're going to bring people in for in person meetings, make sure they don't suck, make sure that you're capitalizing on the opportunity to actually plan a good meeting, execute a good meeting, and do stuff in the meeting that can't really actually be done very well virtually that elevate the quality of the meeting, like getting up and using a whiteboard or like, you know, using sticky notes and right. You're doing a pool planning session, those different types of things. If you're gonna get people together in person, just make sure that everybody doesn't look at each other and be like, dude, that could have been an email.

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29:15
Speaker 2
But I think with that said, I think it's also leaving some time for some social interactions that you may have missed because when you're not together, like you said this a little bit earlier, Chad, you're not together. When you can't see people physically, that's a. It's challenging. Right? So when you are together physically, just set aside some time for, you know, some small talk or a cup of coffee and make sure people are engaged, you know, pre, during and after the meeting. Because that's how we re establish some of the connections that we lost because, you know, were home for almost two years.

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29:51
Speaker 1
Love it. Yeah, love it. That's great stuff. Stacy, what else we got?

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29:54
Speaker 4
Yeah, I have a quick question. So meeting spaces, you talk a lot about the future of work being very collaborative. Is there any need for, like, I just worry about, you know, you're trying to draw people back into the office, but those people that still want the collaboration, but also independent space or that are you seeing, like, I don't know if I missed that in the first 10 minutes, so I apologize.

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30:28
Speaker 2
So that's going to boil down to policies. What are your work from home policies or, you know, Steelcase termed this phrase years, almost 20 years ago, developing me spaces, my spaces, me spaces and we spaces and having those dedicated desks or dedicated, you know, phone rooms, quiet rooms, small one and two person rooms, where that is heads down space. So it's really, and again, it's very dependent on the market sector. But having a healthy balance of me and we spaces as it applies to the organization that we are working with is critical to the success of all the organizations that we work with only because everybody works differently. And general contractors work differently than accountants work differently than architects and designers. That's where the strategy piece comes back in.

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31:24
Speaker 2
And programming a space properly and really drilling under, drilling down and understanding where people work, when they work, and what makes them, you know, the most productive with a high performance value. And you know, sometimes it's 11 o' clock at night.

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31:41
Speaker 1
Funny, isn't? Yeah, Not. Not for me.

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31:44
Speaker 2
Not for me.

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31:45
Speaker 1
At 11 o', clock, I am guaranteed to be snoring. So. So, you know, one of the things that I'm laughing about as I'm thinking through this whole. Like, I don't envy your role sometimes, Kelly, where if you're starting with strategy first and you're talking to people about culture, and then there you're building a space to match their culture, what happens when you come in and you're like, oh, man, these guys have serious cultural problems. Do you build a dysfunctional space or, like, what do you do?

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32:13
Speaker 2
Yeah, we have to. I mean, we drill down on what those. It's usually a communication problem. It's you, nine times out of ten, all about communication. And we have consultants who are better equipped than we are to actually address. Address those kinds of challenges, and we bring them on our team as part of the workplace strategy process. Because then you can veer off into two different problem solving methods. And then when you come back, the space aligns, you know, aligns with those challenges, but it's usually about communication is where the disconnect and the culture happens.

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32:46
Speaker 1
That's a really. That's a really good point. You know, I've noted and I see this, you know, comment here about, you know, we have beautiful break rooms, but very few people actually use them. You know, one of the. And I've seen this a ton, you know, where we'll. I'll be in a client's office or a potential client's office or whatever, and I'll be like, oh, my gosh, this is a gorgeous space. And they're like, yeah, we never use that. And, you know, it's. It's. When it comes to this type of stuff, it's not. If you build it, they will come. Unless it was a part of your culture, you creating collaborative spaces won't make you a collaborative company, you know.

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33:18
Speaker 2
Right. So the interesting thing on that aspect is if your senior leadership is not using those spaces that they just, you know, paid a bunch of money to design and plan, it's follow the leader. If the leaders of those organizations are not using the spaces that they designed for their teams, then nobody's going to use them because there's a preconceived. There's a conception, right. That if my boss isn't using the space, then I, oh, my gosh, I can't be seen working on my laptop, drinking coffee in a break room.

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33:47
Speaker 1
Totally. Yeah. We have A ping pong table. But because the bosses never use the ping pong table never gets you. There is, there's a culture. That awesome book I do, man, I'm having a hard time pulling it. That is about primal leadership that has different leadership styles, you know, and pace setting leaders. Right? It's exactly what you're talking in construction. I see a ton of pace setting leaders right there. They are hard charging. They set the standard. Everybody respects them because they work really hard. Right? All these different types of things. And in construction, if we want to attract people to have this better work life balance and this better sense of contribution and this more, you know, connection and collaboration, all those types of things, because we're desperately trying to get people and keep people.

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34:35
Speaker 1
Those leaders need to build those spaces and leverage those spaces, set the pace. That doing that is cool. And it's actually a part of what we want to encourage here. It's such a good point that it could be as simple as the boss just taking a moment, really easy stuff. You're like, yeah, dumb, easy. Why aren't we doing this? This has been awesome. Kelly, thank you so much for this conversation. I am not shocked that went over, but, you know, I think I sincerely hope that our audience had some really cool takeaways. Construction companies thinking about how they create office spaces that match what they're trying to become as businesses. So again, Kelly is with the Verve Partnership. She is an absolute rock star. Her team are wonderful and I would encourage anybody to reach out to Kelly if they have more questions.

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35:29
Speaker 2
Thanks, Chad. Thanks.

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35:30
Speaker 1
Thank you. Have a great one.

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35:31
Speaker 2
All right, see you.

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35:33
Speaker 4
Have a good day.

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35:34
Speaker 1
Say, let's talk about next week.

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35:36
Speaker 4
Yes, we have Matt Bulliard, I hope I pronounced that correctly, from Southway Builders joining us to talk about GC Sub Partnerships.

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35:45
Speaker 1
Yeah, gc. Sorry, GC Owner Partnerships. Partnerships with Matt. So. Yeah, so. So Matt is with Southway Builders and it's funny how this thing materialized. I have a really great relationship with and a developer that does work across, you know, multiple states and their leadership team. I, I said, you know, I'd really like to bring in a general contractor that gets partnership that really understands how to partner with you as an owner. And you know, I wonder if you would be, you know, if there's any GC that you'd like to connect. They didn't skip a beat. They said, you should talk to Matt Bolliard at Southway. And I was like, wow, that's a heck of an endorsement from their customer. And. And, you know, they were like, we'll introduce you. And I was like, I actually know Matt, so, like, that's easy. That's easy.

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36:36
Speaker 1
I was expecting to work across, like, 15 states, and. And. And they said, you should talk to Matt Bollard right next to you. And I was like, how funny is that? So, yeah, so we're bringing in Matt and look forward to that conversation. Reminder, as always, because every time we remind you, we get more. So keep them coming. Send email. Send Stacy an email if you want to get added to our weekly list. You'll get an email from Steeltoe Communications that gives you a rundown on everything that's coming up in the next, you know, show and recordings of the previous show. Stacy, is there anything else that you want toss out there before we sign off for the day?

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37:13
Speaker 4
Nope. I think we're good to go. Just two more episodes left, right?

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37:17
Speaker 1
Just two more episodes this season. Then we're back in the fall reload. What are you gonna do for two months, Stacy? Because I don't. I don't know if anybody. I don't even have a day job. This is just what I do. This is what I. I just hang out here and do this.

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37:31
Speaker 4
It's been great, though. I love meeting the people that come on the show and the people that participate in the audience. It's been so great. So we'll start looking for guests for June, like we said, and if you're interested, please send me an email.

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37:46
Speaker 1
Guess for September, just so that everybody's got that right.

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37:49
Speaker 2
Yeah, we're.

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37:50
Speaker 1
Yep. We're wrapping up. We're stopping here in the. In, like, the. Toward the end of. We've got two months to reload. I think we have eight out of the 13 guests that we want for next season lined up, or 12 guests. So we have four spaces left. And we'd really love to hear from anybody that has a story to tell. So thank you. See you, Stacey.

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38:10
Speaker 2
Have a great one later.

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Of all the ways the building industry is innovating and evolving, the use of modular construction methods is perhaps the most practical and promising way to increase efficiency in the field.

Nancy Novak joins The Morning Huddle to talk about her experience with Modular Construction in her role as the Chief Innovation Officer at Compass Datacenters where she brings immense experience as a General Contractor to perhaps the most forward-thinking sector in the construction industry.

Nancy's passion for creating positive change in the industry will inspire you to start thinking differently about what is possible no matter what market sectors you build in.

Transcript:

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00:00
Speaker 1
We need to get back to work. And work is one of the ways that we contribute to this country, that we grow our gdp, we grow our tax base, we contribute to each other effectively. We help finance our national security, our homeland security, our, you know, our infrastructure. I had key employees that really wanted to be leaders in the company, but they didn't want to have any ownership in it, responsibility that way. So I just had to start researching out and figuring out, well, how do I market my company?

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00:27
Speaker 1
Go to your local school board for one hour twice this year and if you can have even just 10 or 15 employers show up and do that at the same school board every single month, there's two contractors filling out a little card to give her 30 seconds at the podium that says I need your help and we have great jobs. Eventually they will hear you. But if everyone just did two hours a year, that's how we change this. Stacy, how you doing this morning? I'm doing great. She loves it. I ask the question every time she's like I'm fine dude, just a little much.

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01:00
Speaker 2
And I say to that owner, I said sue, you're not willing to invest in yourself. You're not going to invest in yourself. You're going to invest in companies you have no control over, whereas your company you control and you don't have the confidence to pour the money into that. When things are busy and they're looking for their GC friends to sit down and negotiate a project on a GC and a fee and they're more excited about building the project and then all of a sudden the model, the market swings and now the developer market is wanting to go out and they're going to hard bid the same project to two or three different GCs and that's where it starts going down.

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01:43
Speaker 1
It's morning huddle time. Good morning. Chad Frinke here with Stacey Holzinger and Nancy Novak, our guest today. Good morning. Good morning. How are you Stacey and Nancy?

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01:52
Speaker 3
Good morning. Doing great.

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01:54
Speaker 4
Yeah.

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01:55
Speaker 1
Excellent. Long Memorial Day weekend. Hopefully everybody got a chance to enjoy. Best thing that happened for you this weekend, Stacy, what was it?

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02:03
Speaker 4
I got done so much yard work that has been. It just looks incredible and thankfully to my sister in laws so that's awesome.

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02:17
Speaker 1
So you had like a crew.

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02:20
Speaker 4
Say that again.

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02:21
Speaker 1
You had like a crew to come up.

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02:23
Speaker 4
Yes, they all helped during Memorial Day weekend. It was amazing.

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02:26
Speaker 1
So what about you Nancy?

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02:29
Speaker 3
Oh, I got lots of sun. We, I got to see my 8 year old dive off the diving board at the club and then we got to take the boat out, which is always fun in Virginia since it's so seasonal. So, you know, I like the water.

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02:41
Speaker 1
So it was, it is, it kind of, it marks this milestone for boat owners. I know where they're like, I got the boat out. You know, it's, I got what my John Livingston, who works with me, he sent me a message. I was like, hey, take a look at this, you know, over the next few weeks. And it was really funny. He was like, look, man, it's boat weather, so I'll do my best. He's like, no promises. I get it. So, well, cool. I, I got out on Friday night. I did some fly fishing unexpectedly, right, because it was really bad weather on Friday, but the stream held up perfectly and I had one of my best evenings fly fishing in quite. Yeah, it was lovely. So, anyway, so let's, let's get in a little bit to, you know, who's Nancy?

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03:31
Speaker 1
What are we here to talk about today? You know, that type of stuff. So, you know, Nancy Novak is with us. She has an immense, you know, amount of experience and really cool story that I'm going to let her kind of expand on. But today, working for Compass data centers, is that right? Compass, yes. And, you know, is doing some really interesting and exciting things, utilizing modern methods in construction, modular construction, being at the center of that. And so today we're just going to have a conversation, a dialogue about modern methods and construction. What is leading the way, why some organizations or some parts of the market are lagging and what are some of the common sense things that we can be thinking about to make that happen.

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04:24
Speaker 1
So with all that said, Nancy, give us a little bit more on your sort of story. What brought you to where you are at Compass Data Centers?

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04:35
Speaker 3
It's a little serendipitous. I've been in the built environment for over 30 years. My dad was a general superintendent. He worked globally for the largest firm in the world at the time. So I spent a lot of summers on job sites and earning extra money, which is really good money when you're that young. Fell in love with the industry and just started out in the big GC world. So I worked for 20 years with a company called Hensel Phelps and got to build some of the coolest, sexiest things in the nation. Right. I mean, I did everything from spectacular museums with Smithsonian to hospitals, airports and the launch facility for Lockheed, which was, you know, really got me interested in space. So I, I loved it because it's Like a continuous learning environment.

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05:22
Speaker 3
Every time you build for someone, you learn about those, you know, those businesses that you build for. So it was just fascinating. Moved a lot coast to coast, you know, back and forth. And. And then when I became an executive with Hensel Phelps, I spent the next seven years kind of, you know, running in a division, and I. I was able to retire quite young, which I was super happy about, because I kind of. I had all these passions that I wanted to explore. And, you know, when you're running work, it takes everything. It takes everything from you. So I love the company and I love the business, but I really wanted to see what else was out there.

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05:57
Speaker 3
So I spent a few years traveling and focusing on things like diversity and inclusion and, you know, supporting other, you know, women in STEM organizations around the world. And while I was retired, Hensel Phelps had me come back in to help with some of their major procurements. And then I met some other firms that we joint ventured with on a couple of very large multibillion dollar procurements. And. And then literally, like a year or so into before I finished my retirement, I ran into the chief of enterprise for Balfour Beatty, Skiing and Steamboat, and he asked me to come in and help them become one national firm because they had acquired in a lot of mergers and acquisitions. And it just so happens that Chris Crosby was one of our national accounts. And I met Chris doing that working for Balfour.

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06:43
Speaker 3
So after being there for about four years, I retired again. And Chris called me to, and he said, would you please come help us build our company? So here I am at Compass, and it's been an interesting trip because I never, ever expected to be working for a developer and especially building data centers, but what a fascinating environment, and I'm so grateful that it went that way.

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07:06
Speaker 1
Wow, that's such a cool story. And if this were. If this episode had a different theme or this show had a different theme, I think we could just have a discussion about how to retire young.

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07:19
Speaker 3
I was just thinking that let's scrap.

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07:22
Speaker 1
Everything else, give us the game plan. How do you retire? But, no, I think one of the things that speaks to and immediately exudes, you know, when. When you start talking about your work is that you're doing what you're doing because you're passionate about doing it, and. And that really does shine through and. And, you know, certainly been fortunate and I'm sure made some, you know, tough and important decisions over the course of your career to keep you in that position. So that's pretty cool. Stacy. I'm going to do you the favor that I always try to do, which is like not make you have to stare at the camera while engaging with the audience, you know, typing and all that stuff. So we'll bring it back.

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08:06
Speaker 1
I'll, and I'll keep my eye on, I'll try to bring you back in the most awkward moment. If we can do that. We'll, we'll see at the end here. Stacy. So, so Nance, Nancy, let's talk about modern methods of construction. And you know, you've obviously, like you said, done some really cool sexy projects. You're probably doing some really cool sexy projects right now. What, what are some, give some examples of modern methods of construction that you've been involved with. And obviously bearing in mind that, you know, we have like 20 total minutes, so, you know, highlights. Even though I would love to get into details. Afraid we're in highlight show.

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08:49
Speaker 3
Yeah, I mean the most popular way of thinking about how to change our industry so that we're more efficient in the modern methods world is what we call off site manufacturing. And it has many different words. It's designed for manufacturing, it's off site manufacturing, it's industrialized construction, it's the assembly approach. And it's everything from advanced work packaging to prefabrication to fully modularized units. And the idea is that you're trying to get more tool time for the tradesperson, right? So what you're trying to do is you're trying to avoid some of the things that make us inefficient. And that is being able to set up a cadence on the job because you've got certain components coming in at certain times that everyone can plan around.

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09:31
Speaker 3
It's also like not having to run around looking for tools or parts or nuts and bolts in order to assemble things. It's also not making the tradespeople assemble things on the ground or in a lift. It's being able to put these components in a more efficient manner. So that's really, and it's interesting, that's the most obvious thing that I think we can do from an efficiency standpoint. And there's a lot. And when you get really into the modern methods, when you get into the off site environment, then you can get into the robotics and the various ways that we have computer systems and programming that can allow us to do this more efficiently, which again takes a huge investment. Right.

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10:09
Speaker 3
I also think that it's important to note, because I always like to note this, that when you're in an offsite environment, it has all these wonderful benefits. Right. So in construction, one of the reasons we're not very diverse, honestly, is that it's a very difficult trade to be in when you have to commute long hours, when you have to go to different jobs, when you're always working yourself out of a job, etc. Etc. So it's not as steady as a lot of normal jobs are. But if you're in an offset environment, you literally have regular hours, you have a controlled environment, you have a way in which you can train and monitor people. You have a way to put like, let's say a daycare next to it.

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10:49
Speaker 3
You just have all of these features that our industry doesn't typically allow, therefore making it less diverse. And when you really think about the fact that once you perfect this, which a lot of firms have been doing, it's better for cost, quality, schedule, and it's also better for sustainability, it's better for safety, it's better for diversity. Right. So when you really add all of that up, it makes absolute sense for us to start changing our industry and moving more in this direction. But I know we're going to talk, Chad, about some of the roadblocks there.

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11:21
Speaker 1
Yeah, well, and it's a wonderful picture to start getting in mind of what is currently happening, what we could be striving toward. I'll tell you what, you know, my naturally skeptical, sort of, you know, maybe slightly jaded construction experience tells me is that I'm sitting here kind of saying, well, yeah, that's great. If you're, you know, a mechanical. Right. Cool. You could do off site, you know, fabrication of your stuff. If you're a mechanical contractor, you can bring it in. If you're not doing that and you're a mechanical, that's something that, you know, I might even say you're getting close to being behind depending on the market segment that you're, you know, in right now. But, you know, if we really want to make strides, you're gonna, I think, have to get multiple trade contractors to work together in this kind off site environment.

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12:13
Speaker 1
And then immediately I kind of. Good luck with that. So, so is that happening?

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12:19
Speaker 3
And I'm so glad you brought up mechanical. Yeah, that was one of the most interesting things. So Honestly, you are 100% right. The mechanical and electrical trades are well in advance on off site manufacturing because they have a very keen desire and need to want to perfect that. What's weird about it is it's one of the most difficult, they are the most difficult trades. And I just love this topic because this is all about looking at projects and how they lay them out when it comes to the different disciplines. So mechanical electrical are drawn isometrically or schematically. They are not to scale. How do you fabricate something that's not drawn to scale? Right. So being able to take what we have in the 2D or 3D, you know, environment in our models and then put those into fabricated fabricatable drawings is a challenge.