The CIO Blind Spot

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All it takes is a few clicks for you to make a difference . Welcome to the future and welcome to the Shadow Network with KP Ready .

If you follow him on LinkedIn , or the benefit of that work , because he spends a lot of time reflecting and posting about it . So I am joined again today by KP Ready Hi , kp .

So we do this series where we unpack one of KP's posts . What inspired KP to write what he wrote ? So I'm going to start out . I'm going to read this as a short post this time , so I'm going to read the whole thing and then we'll ask KP to unpack it for us . All . Right , it starts out .

It says the blind spot that I see with almost all chief innovation officers in the architecture , engineering and construction space is less about understanding advanced technologies , but really around business model innovation . Hence a lot less success in monetizing innovation initiatives .

We talked about this a little bit offline Earlier and I love this one because I think this is really the crux of the struggle , I think , for innovation in the AEC world . So what inspired you to write this particular post ? It's just a pattern .

So if you're an engineering firm and you're looking at and you're the head of innovation , you probably are naturally intellectually curious to understand how things work 100% . The second half of innovation is the business model innovation , and that's where I think there's a huge gaping hole right in terms of understanding . How do you launch a new business ?

What's the business model making it ROI driven ? And the challenge is so much of the innovation that's being looked at is how do we increase productivity ? Now , the ongoing challenge of how do we increase productivity ? Well , we know you can increase productivity right , that's a foregone conclusion with tech in general .

However , if you become more efficient and therefore your costs are down , who benefits from that ? If you can do it 20% cheaper and faster , does the client benefit from it ? Ie , now you charge them less and you deliver faster , which might be okay . That might be a marketing strategy , right ? We want to be the Walmart of structural engineering .

Is there's nothing wrong with that strategy ? Or do we want to launch a different product and we benefit from that margin benefit of being innovative and deploying a new technology ?

And I think the crux of why industry struggles with who benefits from the innovation and there's almost like a standard default to pass it down to the customer is because they don't understand how to create new business models . And that is squarely , and look , the marketing department of an architecture firm is not going to be that helpful .

If they have their own job and their own skill set , they're not going to help you innovate a business model . So it really does come down to the chief innovation officer to have a skill set around understanding how to do new business model innovation , and from what I continue to see , there's not a lot there .

In fact , the fault is to become a tech enabled services . Ie , we're going to provide the same service we've always provide , but we're going to put a little bit layer of technology wrapper on it and that's what that's going to be , which is not in some cases .

That might be the right idea , but I think the lack of understanding and knowledge of how to build a new model is is is the where the real value is and there's like zero capability . It's like you know why didn't the taxi industry invent Uber ? They didn't .

You know there's , there's not going to do it right there , they're going to use technology to make themselves more like how do we make our existing business more beneficial ? You know why didn't blockbuster get into stream ?

And there's millions of examples , probably right now , right , but I think it's incumbent that , if you are going to take on the role of a chief innovation officer , that it's not just about understanding what technology is coming out . It's about understanding how do I spin up new businesses .

In many cases , maybe my mission is to spin up new businesses that put my existing businesses out of business . Right , god forbid . Right , I know you like saying that . Yeah , like creative destruction right . I mean , I think so . I think part of it , though , is I just did this workshop for a multi-billion dollar company , their C-suite .

You know the question about what does innovation mean to us and how does it fit into our corporate vision and mission . I kind of argued like the innovation team might have a different mission than the corporate team , and that's okay . Right , that's okay . I mean friction , competition , all those things , those , those make the world go around .

We're driving towards that efficiency and some of the innovation people that I've had the opportunity to talk to , you know , and hear the numbers that are talking about it . It blows my mind . Right , Our utilization of XYZ software , you know , is 4% , something like that . So we see getting up to 6% or 7% as a huge victory . That's not innovation , right ?

And again , you want to be more efficient . But we're also in this such a low margin industry that it seems like there's a law of diminishing returns somewhere wrapped up in there .

these ideas off of each other . How does this work in the real world ? You know , and you're involved there , you stop in there and you share your experience and your advice and I facilitate these , but it's , you know , it's like I said , chief innovation , director of innovation .

There are several nuances to those titles across the industry , but these are the type of people that are participating and saying , okay , what does it really look like to innovate on the level that KP is talking about ? How does it look like to innovate the business model ?

Because I think that's super important and you know , like you said in your post , I mean that is the blind spot . I don't see a whole lot of people with their finger on the pulse of that .

But you know , if you had this amazing idea , innovative idea that drives to our true ROI , is highly disruptive , has big scale , maybe you would quit your job to do it Right ? And I think that's kind of what happens . You know , when we look at the not talk to 50 startups . You know , see 50 startups a week about in our space .

None of them , like , came from from the restaurant industry . No , they worked at an engineering firm , they worked at a construction company and they have disruptive ideas , but they no longer work at those companies . And when you ask them , like , why didn't you build it at this company ?

I know your company , I know the CEO , they're very supportive , why wouldn't you have done it there ? And the response is because , if I'm successful , it'll cannibalize some of their existing businesses . So I got no support . Yep , and I think that's something like from a hedged bet perspective .

It's okay to build businesses that might cannibalize your existing business . Right , because chances are it may or may not . Right ? I mean , here's the interesting .

The Blockbuster example is a simple example right , if Blockbuster had started doing streaming which , by the way , they did get into the DVD delivery stuff , the subscription business , a little bit too late but they did get into that . But think about the optionality of I have streaming and I could go to a store and get a DVD , like giving customers .

It may not have killed the DVD business but it would have given clients , like the customer , optionality and it might turn out that people would stream and buy the DVD . They might have done both .

So I think it's a super interesting thing around this idea of cannibalizing an existing business line and I think a thoughtful chief innovation officer should always have something that will attack and you know , attack an existing business , attack the golden goose , because that's where the best ideas start to come to the forefront .

One runs arguably tangentially from the industry , but not specifically out of an AE firm or something like that . So you know what's the math on that 97% . And you were talking about quitting the job . We had a co-founder . That that is , and maybe maybe that's what you were thinking about when you brought up that example .

But we had a co-founder , had an idea , took a two leadership , decided to quit his job , quit his job , sold his house , has a you know a wife and young baby and he put all the chips on the table to create this innovation and he just graduated from our incubator . That's real right . People do this all the time and I think you're exactly right .

You're going to see this in teams . Why not spin this out ?

It is a great way for people in like situations , like-minded people , to put their heads together and learn and mentor and create an environment that supports something bigger as a whole , supports something bigger than the parts , and I think it's a great environment to get into .

And so , if that's something that you're interested in , certainly reach out to me , reach out to KP . We do have I think we have capacity maybe a seat in each of the mastermind groups . I think we have a little bit of capacity to add . If you're interested in joining that . Again , we call it innovation leaders masterminds .

It's for chief innovation officers , directors of innovation , and there's a group of your peers to join and to support and to learn from . If you just joined us somehow , if you missed the beginning of this , we've been talking about KP's post on LinkedIn .

It says the blind spot that I see with almost all chief innovation officers in the architecture , engineering and construction space . It's less about understanding advanced technologies , but really around business model innovation . Hence a lot less success in monetizing innovation initiatives .

If you are not following KP Ready K Period P Period , ready R-E-D-D-Y on LinkedIn , you need to be . This is his personal profile , is what we're talking about here . His personal profile is where you can go to learn about what's happening in the AEC , the CRE , industries , innovation for the built environment .

He's always posting about things that he notices , his reflection on conversations he's had he said it earlier startups and leaders of some of the largest , most valuable firms in these markets . So follow KP Ready K Period P Period , ready R-E-D-D-Y on LinkedIn and join us again next week we will unpack another of KP's posts on LinkedIn .

Kp , thanks for doing this with us again this week .