Industry experts shared their advice at the United Rentals 2019 Total Control & Innovation Conference.
The construction industry is innovating fast, at least in certain pockets, but more change is needed. At the United Rentals 2019 Total Control & Innovation Conference in San Antonio, Texas, experts agreed that companies that don’t innovate will fall behind competitors that do.
During a panel discussion on scaling innovation, Jose Luis Blanco, a partner at McKinsey & Company, was asked whether the industry has made progress in closing the productivity gap since 2017, when a McKinsey Global Institute report put the value of the gap at $1.6 trillion.
“I think I’ve seen some progress on the technology front,” said Blanco. “I think we still have a lot of work to do on changing the mindset, training our workforce, and industry-wide, changing the way we contract and the way we share the value.”
Blanco and other panelists delivered insights on how to foster innovation within a large organization. Here are seven ideas they offered.
Create innovation centers
Sam Hassan, CEO of ZTR Control Systems, advised creating one or more innovation centers within the company. ZTR, which was once part of a larger company, provides monitoring and control systems for construction and railway equipment.
“Internal bureaucracy in large organizations makes it difficult for innovative ideas to rise to the top and grow,” said Hassan. “Beyond that is the whole element of risk.” Many large organizations lean toward being safe and conservative, he noted, which limits their ability to grow. “Hence the reason why you see startups that are able to innovate and grow a lot quicker.”
“My recommendation is to create one or a number of innovation centers within your organization where you actually, truly give them the ability to have independence in budgets, independence in making decisions.” Especially in the technology world, he stated, things are changing fast, the ability to make decisions quickly and the room to fail are critical.
Partner with smaller organizations
Hassan’s second tip: “Partnering with another small, innovative organization is always a wise idea, even as a large organization. Your ability to gain the knowledge both from a cultural perspective as well as technology in that partnership has a lot of value.”
“You don’t have to boil the ocean,” said Hassan. “Seeing some progress and seeing some success is really what’s important. Make sure you’re focusing on some mini-vations that show you have movement in your organization, that these little incubators that you’ve created actually are making a change.”
Focus on something achievable
Hassan also advised focusing on mini innovations, which he called “mini-vations.”
“You don’t have to boil the ocean,” said Hassan. “Seeing some progress and seeing some success is really what’s important. Make sure you’re focusing on some mini-vations that show you have movement in your organization, that these little incubators that you’ve created actually are making a change.”
Test ideas first
Shashank Bhatia, senior director of engineering, global new product development at JLG, noted that spending years doing research on an idea that might prove unviable is the old way of doing things.
“We’ve got small-scale experiments that come up in different teams that basically help us to test the ideas,” said Bhatia.
Celebrate leaders that make it happen
Curtis Rogers, a principal at Brick & Mortar Ventures, a team of five investors in the AEC space, noted that middle managers too often take the credit for innovative work done by others.
“The real change driver that we found effective was celebrating the leaders that made it happen. If you see a company that is highlighting their innovation manager or their CTO or someone like that, they’re really doing a disservice to the project managers and engineers and superintendents that are running two parallel processes — one, the old way of doing things, and one, the new way — and then really evaluating the technology.” When another person takes the credit, he argued, “that’s the last time that someone does an innovative project.”
Start with the problem, not the technology
In the race to stay competitive, it may be tempting to go out and purchase the latest tech for the tech’s sake, but it’s smarter to be strategic about what you really need and why you need it.
“Work as an organization to define the problems you’re motivated to solve, and then evaluate some potential solutions until you find one,” advised Rogers. “Start with the problem, not the technology.”
Provide training
Without adoption of change, there is no innovation. So developing a change management plan is important.
“Technology is an enabler, and what really drives adoption is making sure that you change the mindsets of people and you train them to do so,” said Blanco. Messaging around the change should include the benefits for individuals as well as for the company as a whole. “That foreman doesn’t care at all about how much money the company is going to save,” Blanco continued. He cares, Blanco said, about whether the technology will help him do his job faster and get back home to his kids.
Marianne Wait is an editor and writer who creates content for Fortune 500 brands.