Demystifying Innovation in Construction with Danny Small, DaVinci Consulting

Calling all CEOs and Innovation Executives in the construction industry, Daniel Small wants to explain how to innovate in construction without putting your company at risk.

Listen in to discover the structured, Lean Six Sigma-based innovation process that enables anyone to quickly, inexpensively, and consistently develop solutions that address unmet customer needs and leapfrog the competition. Learn how you can not only survive, but LEAD the disruption of construction.

Daniel Small is the Founder & CEO of DaVinci Consulting, an Engineer, Innovator, MBA, and Lean Six Sigma Black Belt. Learn more about DaVinci Consulting and connect with Daniel on LinkedIn and Twitter.

Many thanks to our partners at the University of Denver for their editing and post-production talents, specifically Lija Miller and Lisette Zamora-Galarza.

The University of Denver Franklin L. Burns School of Real Estate and Construction Management, teaches the full life cycle of the built environment. From integrated project leadership skills to a cohesive understanding of the built environment ––experience the only school of its kind!

"Upbeat Party" is brought to you by Scott Holmes, songwriter from Free Music Archive. 

Transcript

Speaker 1 (00:06):

Welcome to the Housing Innovation Alliance podcast in partnership with the university of Denver's Franklin L Burns school of real estate and construction management, the housing innovation Alliance is a nationwide community of game-changers, driving the future of home delivery through crowd accelerated innovation. We represent thought leaders from dirt to dweller with a focus on the production builders business environment.

Speaker 2 (00:30):

Hi, this is Dennis Steigerwalt present of the housing innovation Alliance, and you're listening to our podcast series. I'm joined today with Daniel Small founder of DaVinci consulting. How are you doing today, Daniel? Great. How are you, Dennis? Yeah, I'm all right. Thanks for joining us. And I'm excited to talk to you today, Daniel, about your interest in innovation in the residential construction space. And I know with your background as a mechanical engineer and you're, you've earned an MBA, you have a lean six Sigma black belt, and you've, you've been an innovator in the space for quite some time. So you can just tell us a little bit about your career evolution, you know, how you got into where you are today and why you're so passionate about innovation. I guess it all started back in college. I actually changed my major three times. I think while I was in college, uh, started off in business, uh, then moved to Japanese and then back to business.

Speaker 2 (01:15):

And then finally I decided that I really wanted to get a mechanical engineering degree or an engineering degree of some sort, because what I noticed at that point was looking around. I noticed that in just about every company, there was this huge chasm between the marketing and the sales and the commercial side of things and the technical side of things, the engineers and the R and D folks and things like that. It was like they were from different planets, right? They couldn't talk to each other. They disagreed on just about everything. They didn't work well together. I didn't want to be a full time engineer. I wanted to be kind of a hybrid guy. I wanted to be able to bridge that gap between the commercial and the technical in the business world. And so I kind of started over changing my major. One more time.

Speaker 2 (01:56):

I did that because I really wanted to, to, uh, be able to help bring commercial and technical together. And I've been able to use that throughout my career in construction, starting off doing sales and marketing for a trade contractors, then moved into building products and materials did innovation and product development. Then, uh, eventually getting into consulting, getting my MBA and my lean six Sigma black belt and helping contractors to innovate and build products. I also worked on strategy, et cetera, over the course of my career. I've kind of built up this expertise in combining engineering with innovation. Yeah. So, no, that's great. I think one of the things we we've experienced and we've had conversations about this, the industry itself has not been very successful at adopting new technologies and kind of driving itself forward. So I'd like to talk to you a little bit about, you know, why do you think that is?

Speaker 2 (02:51):

Why, why are we having so much trouble bringing in new thinking and new solutions? Oh, this is, this is constantly on my mind. And I know it's a big topic, the industry, as well as many of your listeners will know, although it's an increasing of late construction is still the lowest investing industry in R and D among all industries. And there's a reason for that. I think even in high R and D investing industries like software and tech, et cetera, innovation is basically just kind of accepted as a really expensive high risk and kind of random exercise, kind of like a game of roulette, if you will. And in construction with margins being so low, you know, one to 3% for a typical GC and project risk already being so high that I think construction executives just simply don't dare in many cases to invest in something that they feel like could literally be gambling. Their company's survival. It's very understandable that construction executives are very risk averse, very conservative. They need to be right. As I've discovered through my career, I think there's a better way. And there's a way for these folks to get around that and to actually innovate in a low risk, a high confidence manner.

Speaker 3 (04:08):

Yeah. So I think you hit it right there, right? The risk reward profile just historically, hasn't been there for this type of thing. And what I'm wondering is what are your thoughts around how we kind of can demystify or de risk innovation

Speaker 2 (04:19):

In my opinion, and from my experience, uh, I think that the way that we can do that is by kind of combining some things that will add some confidence to the innovation formula, right? I'm a subscriber to, and, and, and I utilize for my clients, the concept of jobs to be done theory in a nutshell, basically what that is, is the concept that customers buy things, products or services, not to have things, but to help them get a job done, they buy something because they're hoping that that will help them accomplish something in their lives without fail. And so the job becomes the focus in that type of a paradigm of innovation rather than the solution. We're focused on something that doesn't change that is going to be consistent across, across people who do it across customers across geographies across time. So that really eliminates a lot of variability in the process, which in turn of course reduces risk.

Speaker 2 (05:19):

What I've done is I've combined that concept with data-driven engineering approach of lean six Sigma process control methodologies. The basic crux of lean six Sigma is reducing waste and errors in a process by combining jobs to be done theory with lean six Sigma methodology. I believe I've found a way to really reduce the risk of innovation while at the same time dramatically, reducing the time and the cost and increasing the success rate of innovation. I call it engineer ovation. And I think that that type of a methodical structured engineering type of an approach is ideal for really making innovation accessible and reliable for construction firms who, who need that type of an approach in order to, uh, to feel confident going forward. The problem with most innovation is that it is solution driven, right? We lead with our gizmo and we ask our customers about how we can make our gizmo better or how to design a gizmo, right? That's not what they're experts on the customer is expert on what the customer is trying to do. So we need to lead with the customer's needs. That's where the gold is. That's what's going to then turn around and drive our solutions.

Speaker 3 (06:41):

One of the things I'd like to kind of highlight a little bit is so as we talk about a process tailored to our industry, as you're working with clients in this space, you know, what do you find is one of the biggest hurdles you have to overcome when you first start working with a client? Is, is it, you know, it's something in the internal organization in their paradigm. Is there a certain cultural issues that you have to overcome within the organization? Just kind of curious how that might be.

Speaker 2 (07:04):

I believe that ironically construction, the construction industry is actually ideally suited to succeed at innovation. If, if they do it correctly, if they change their paradigm to this structured engineering data-driven approach, then that's, that's their wheelhouse right construction industry or construction firms are short on time profit and risk tolerance, right? Those are the things that, that construction companies don't have a lot of, but they do have a lot of discipline and process management skills. So if we can turn innovation into a project, suddenly construction firms are all over it, right? That's what construction firms do best. They manage projects, they're detail oriented. They can follow that process and drive it home to completion. If we look at innovation as a project and we manage it like a project, then I believe that construction firms are some of the most qualified companies to succeed at that. It's just a difference in how you look at it. If you look at innovation as this random spin of the wheel, where we're throwing stuff against the wall to see what sticks, where we're just relying on creativity and inspiration and intuition, first of all, it's shown not to consistently work for any industries, but least of all for construction, because construction, that's not the way the mindset works. There's a lot of engineers and construction and they're analytical thinkers. And I think if we give them a process that they can follow like a project,

Speaker 3 (08:41):

They'll knock it out of the park. If we look at what's gone on in the market over the course of the first half of this year, kind of curious to get your thoughts on what you think the biggest impact of the COVID public health challenge has been on the industry. So, you know, maybe, you know, what's happening now. What if we had to rethink that will be a positive carry forward that will quickly evolve over the next six to 12 months, it will set the industry in a better place.

Speaker 2 (09:06):

You know, obviously the health crisis is something that has, I think, permanently changed business, including construction in a few very important ways. Most industries, including construction have really gotten a, a crash course in digitization in learning how to have their people work remotely and learning how to use technology to facilitate their work. And I think that that's going to stick most companies, most industries and particularly construction, as we talked about earlier on, uh, we're not comfortable with, uh, leveraging technology in their work to gain efficiencies. Well, we've had to do it now. And so I believe that we've learned as a society and as an industry that, Hey, we can make this work right now. We've now we've been forced to make the, uh, investments in infrastructure that we need to do it for one thing, but also we've been forced to learn. And I think that a lot of that is going to stick and it's going to benefit the industry longterm.

Speaker 2 (10:10):

Um, some other things that I think are going to stick with us and benefit us are the idea of not only remote work, but remote building. I think we're in general going to become and stay more comfortable with the idea of things getting done remotely in, in a different location than maybe the job site is right. And so offsite, construction, modular construction, prefabrication, these concepts, although they've been accelerating over the last five or 10 years, I think that that's going to add fuel to that fire. And it's going to accelerate even further the growth and expansion of those offsite construction methodologies.

Speaker 3 (10:53):

You know, this is all, this has been informative. It's, it's great to get to know you and how you're thinking about things. Um, just want to kind of wrap things up a little bit, kind of curious, you know, when you get up in the morning, what are the, you know, what are those words you whisper to yourself to give you that drive, to go out and tackle some of the problems and opportunities that are ahead of us?

Speaker 2 (11:11):

The concept that has been on my mind a lot lately, obviously along with really everybody else in the country over the last four, six months is, is of course this black Swan event, if you will, of the, uh, the coronavirus crisis, I strongly believe. And I've, I've done some research on this and, and found that, um, these types of black Swan events as they're called events that are wide reaching a far reaching impact in almost all cases, these types of events will spur innovation. They drive, uh, creative thinking. Um, because what it does is it forces us to think in ways that we don't think it forces us to do things and find the courage to take steps that we wouldn't normally do because of distractions, fear, hesitation, what's, we're forced to do these kinds of things. People really can make some amazing things happen.

Speaker 2 (12:10):

And I think that that kind of thing will definitely be one of the major legacies of this crisis that we're going to see some major innovation. Yeah, no, I, I completely agree with you, you know, some early words of career advice I received where, you know, you can only control two things, how you prepare for what's going to happen and how you respond to what just happened. As, as a society, we have to continue to move forward in this. We will come out of this stronger and better, um, as, as will our industry. And I think that you hit it right on there. It's, it's, it's all in how we respond and what we do with what we're given right now to be courageous. And I think that's right on, well, you know, Danny really appreciate the time today. This has been a great, great introduction to who you are and what you're doing. Uh, any final words to leave our audience with just excited to be a part of this, uh, this transformation that we're going through and, uh, hope that everybody's staying safe and, uh, continuing to innovate. Alright, thanks a lot, Daniel. Appreciate it. Thanks Dennis.

Speaker 2 (13:14):

On behalf of the Housing Innovation Alliance and the University of Denver. This is dr. Eric Holt, Thank you for being part of our journey. This is where innovation calls home.