Once a giant gets established, it’s not easy to change. Like academia, the construction industry has existed for centuries, but thanks to its dominance, its leaders haven’t particularly embraced transformation. Which means one thing: for those willing to take on the risks of innovation, the rewards will be immense.
Education is supposed to be state of the art, helping students think differently, training our children to be leaders and innovators. But academia is stuck. And one of the main tools of academia is the SAT, which has also been very slow to change—like 100 years slow.
The SAT test debuted in 1926 and has been a staple in the college entry process ever since. The test questions have been tweaked numerous times over all those years (the usefulness of this test and question types given different demographics is an important debate, but one for another blog). For nearly 100 years it has been delivered in a similar manner: in traditional print, using a #2 pencil and taking approximately four grueling hours to complete (that’s if you can actually complete it all). And don’t you dare make a mark outside the circle. There are many inefficiencies built into this antiquated approach to screening students.
To their credit, earlier this year, the SAT announced some transformational changes to its process. Changes include a new digital format, shorter test time and an embedded graphing calculator. No more pencils, filling in bubbles or waiting for proctors to collect the exam sheets. Students can bring their own laptop or tablet, use a school-issued device or borrow a device provided by the College Board. And the test will go from over three hours to around two. And no more anticipation: rather than waiting weeks to get results, students will receive scores in a matter of days.
From #2 Pencils to 2x4 Studs
Similar to the SAT process, the building products industry has been historically slow to change, much less transform, itself. That’s why in 2019, when Forbes Magazine declared the top three industries “ripe to transform,” it ranked the construction/building products industry first. Over the last 200 years or so, it’s fair to argue the industry has not transformed and to be honest, has barely innovated (if you don’t count tweaking an existing product as innovation). As an industry, we have merely made step changes in designs, application techniques and product solutions along the way, but we have not driven a constant level of innovation that would come close to transforming our industry.
To our credit, our industry has updated some of the building codes and enhanced testing requirements to make homes and buildings safer and more efficient. However, even these positive enhancements were met with constant barriers put up by some of the largest powers that be within our own industry.
It’s pretty safe to proclaim that we have delivered building products and built the finished projects (homes, buildings, remodels, etc.) in a very similar fashion for more than 350 years. We tend to stay with products and processes we know. Just look at that Fairbanks house (pictured).It looks very similar to home designs today throughout the country. And it was built in 1637.
Don’t Get Trapped Being Comfortable
Let’s face it, the construction industry—and many parts of the value chain (manufacturers very much included) —is slow to change. Most people overall struggle with change. And those in business leadership and companies also hate change. Why? Simply because it makes us uncomfortable. And when people are uncomfortable, they quickly revert back to what they know, what they have been comfortable doing for numerous years—those things that got them to where they are.
We as an industry typically associate change with added costs, potential share loss and not optimizing our current (usually old and less advanced) manufacturing assets. You might think the larger companies would have more people, assets and investment to put into innovation. But the reality is that larger companies tend to fall into the “Leaders Trap,” thinking if I make a change, I risk more than my smaller competitors. And that is typically why innovation usually comes from smaller competitors, or more often than not from new entrants into the market.
Where to Start Your Transformation
Why did Forbes proclaim our industry was ripe for transformation? Not only because we’ve had 350 years of very similar approaches, but also because we have plenty of challenges that require an inventive approach. If we just think about the issues we currently face, this gives us a full plate of focus areas to innovate around. Instead of problems, as business leaders, think about them as opportunities to transform your company and evolve the value you provide to the industry.
Here are the six opportunities:
Labor is short
Space is tight to build around (especially urban areas)
Land availability is getting sparce (and expensive)
Continued logistics challenges/interruptions
Cost of local manufacturing (balanced with growing U.S. economy)
Distribution models/need for traditional distribution are changing
Academia, with all its entrenched traditions and red tape, still finally saw its way to transforming the SAT process. Building companies, in many cases, still create their own red tape. I venture to guess that the vast majority of readers would strongly agree with a statement shared with my leadership over 25 years ago: “It’s harder to get great innovation out of our front door than it is to execute it into the marketplace.”
Creating sea change in an established industry isn’t easy. But you start with what you can control. You can work to reduce barriers and red tape. You can choose to hire innovative minds and nurture a diverse and dynamic culture. These choices can make the difference in whether today’s construction industry lives on as tomorrow’s innovators—or in tomorrow’s history books.
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