¶ Construction Technology and Emissions Reduction
Welcome to the Site . Visit podcast . Leadership and perspective from construction With your host , James Faulkner .
Live from BuildX Vancouver 2024 .
Sean . Hello , how's it going ?
It's going well , you're here last time , I am here and I'm here again and I hope to be here another year . Oh nice , that's good .
So things have changed for you . You've been doing lots of stuff , so tell me about what's going on now . So , yeah , you're trying to solve a lot of problems here .
You know when we met last year I was solving the challenge around supply chain constraints , especially in the ready mix industry .
Yeah , and you know I can successfully say that I've helped move the needle on that , especially in the local area in Vancouver here , and towards the end of that year I actually went out on my own and established an own venture to really go help as many more companies as I possibly can .
Been there , helped the big engineering construction manufacturing companies and there's 100,000 different companies to really help in drive changing in industries .
So at BuildX right now , the net effect is here and you have a booth over there , and so what is the main offering you guys are presenting here ?
So what the net effect does very , very well is actually cater to the small , medium-sized businesses in construction and real estate and sub-trades manufacturers that are really actually going out and doing the work , actually building the assets , supplying the job sites , the ones that are actually feeling the real pains in industry .
And what the net effect does very , very well is they , you know , in conjunction with government programs , is removing barriers to adoption , and top barriers being budget is number one and being a registered advisor for the Canadian Digital Adoption Program .
Oh , CDAP .
CDAP very popular , but also we have to make sure it's known .
You know that helps remove that budget barrier for the small , medium-sized businesses by , you know , retaining a professional expert in construction technology , Actually put a plan together that is designed for them to adopt technology , not just pick one , and it also help them successfully drive results with that .
That is essentially what the net effect brings to the table is removing that budget as a barrier and also bringing in the knowledge of new solutions and skills to implement All the ingredients needed for a small , medium-sized business to actually successfully do business and build this decade .
Okay , so this is a consultant company . Yes , okay , so that's so . What do you think you were talking a little bit also about ? You had like four main areas , so technology was one of them . Technology adoption , the labor shortage we were talking about . You're also talking about some environmental stuff in terms of climate and then also the emissions reduction .
So those Can you just take me through Before we just let's just focus on the last two just for a minute ?
We've been seeing a lot of political stuff where there has been I think Jordan Peterson brought this in as this whole doom and gloom of , and I kind of go yeah , I understand where he's coming from that was trying to not depress kids , I guess , or depress the younger youth for having some hope that we're having just killed this whole thing .
But it's clearly evident we've changed the planet . I mean , it's obvious . It's just a matter of what do we do about it ? Yes , right , so I think that the Do you find that some of this stuff is getting political in terms of how people even want to start the conversation ?
Of course , in all aspects there's a political lens to it for sure , but it is a very important topic to talk about and sometimes to remove the politics from it . The facts are very clear . Construction generates 8% of global GHG emissions 8% , 8% from one sector . That's huge .
That's a huge piece of the pie and there are things that can be done to reduce that , and the impact of that is to TBD . But when we talk about someone like myself who's agile and start up trained , it's all about where is the most valuable problem and minimum viable solution . If that is one of the biggest pieces of the pie , that's where we start .
And then it's an industry unchanged for hundreds of years . There are solutions available to them now . They just need to be knowledgeable of them , on how they can actually effectively make change and how to incentivize that change , to make it easy for them .
Depending on who you talk to and which province you live in and which years these things come in In our lifetime and very , very shortly , and some through this decade they're going to be required to reduce emissions by 50% , and that is a make or break sentiment for a lot of construction industries and they don't know the way that's going to hit them .
And that's , among you know , very , very similar , topical , to even just the workforce shortage challenges that the wave has been coming for 20 years .
And now it's here . So just in terms of emissions and you just sort of factoring that down , is there a ? The different categories of the sort of the worst culprits . Obviously , we have off-gassing of concrete In terms of vehicles . Is that a significant part ?
So I'll just make this clear I'm not the expert on environmental reduction , reduction .
I think I wasn't expecting you to give me all this data , but if you do , look for the you know , the bigger , obviously , contributors .
Concrete asphalt production are the largest contributors to that Right . Obviously , lots of technological advancements being made in that front , which is great to see , yeah .
Well then when you actually go to the full life cycle process of , you know , from planning , design to build , to operation , maintenance that construction piece , there is a significant amount of waste that occurs through that build process .
Right , that makes sense .
The operation , maintenance side , which is the , you know , the 80% of the life of that asset , especially if it's a building , that is a huge GHG draw as well . And there are solutions that you know the developers , real estate developers up front you don't need to be aware of and can consider early in the stages .
So even after , like a post construction , there's still this impact . Yes , but does that still consider the construction part ? It was only when the construction was handed off .
It's funny how these different codes work and again , I'm not the expert but I know enough to be dangerous here . But the codes are , you know , very incremental in how they're being put out there . Right now it's more about life cycle , the after .
I see Okay .
There is much , especially because the knowledge of that 8% piece of the pie is in the construction side . The codes that are coming in now and how they're evolving are targeting what is actually happening during construction Right .
That's cool . So you were also chatting earlier about that statistic of you were saying that 99% or probably close to that 98 point , whatever is all SMB business and is not the big you know large , you know PCLs , lead cores et cetera of revenue . And is that a Canadian statistic ?
That is Canadian statistic . So it's interesting and you know what it is Canadian statistic . But that is a typical trend across North America as well . That makes sense .
So that's pretty crazy , and that really is . It becomes very . It's a useful statistic when you talk about adoption and technology , because obviously those companies have had to adopt , they've probably been leaders in starting new things , doing new things , so this other 99% has to sort of catch up .
So the net effect you guys are helping companies become more efficient by adopting technology .
So just take it through that a little bit Sure , and you know I'll go this way is the . So , yes , the statistics , over 99% are businesses less than 500 , less than 500 staff making less than a 1 million revenue , sorry , less than 100 million revenue . So those are the SMBs .
What's interesting , and this is , you know , the PCLs , like those big groups that you know they were the Elaston , sorry , elaston . They were the way makers you know , in the last decade of , you know , trial and adopting things , trying things , funding things , funding things in law regards , and you know again , they .
So we have a lot to owe to them on what they've done . And but I want to put these , this out here , there where , when we , when we look at , let's say , circa 2012 , that is essentially the recognized benchmark for when construction technology transformation started to happen .
Here's some other statistics that are kind of cringe worthy and , if you want the , the sources of , we have to share , share with you . So , in the last 10 years , over $30 billion have been invested in construction technology . There's been less than 2% improvement in productivity .
Over 50% of of technologies that have been adopted actually support the , the top , you know , executive leadership group , their kind of job functions , the actual business results being generated .
Less than 4% in industry that's 6,000 businesses are less out of 500,000 , plus less than 4% in the last decade have actually yielded any significant result from the technology that they adopted . When we look at things like , 80% of construction companies right now are struggling with workforce resource challenges . 40% are going to retire by the end of the decade .
I've thrown lots of statistics , that's awesome , but I'm data driven , so of that crazy workforce challenge that's coming up here . In the last decade , the emphasis of technological adoption has been around top driven . Less than 30% of companies have actually considered or adopted any type of workforce efficiency solution .
It's kind of mind blowing In love with that as it's driven around just .
So dig into that a little bit . So workforce efficiency , so what would those vectors be of change ?
So here's a really interesting kind of Follow , this kind of connection of the dots here and I'm going to continue to throw some data for you and wrap your head around the workforce issue here . So there's not enough people to do the work .
¶ Increasing Construction Productivity Through Technology Adoption
25% of project time . This is on average , but the actual creation on this is quite staggering . On average , 25% of project time is spent on rework . So you already have a constrained labor force and a quarter of that project they're actually doing the work twice so that they can't be deployed onto another project or progressing the project .
Because they're fixing the old one .
For sure Got it Okay . So we've got 25% of your project time Just fixing mistakes . Coincidentally , almost that exact amount of time 25 to 40% of a supervisor's time is actually spent on searching for information or administration , not actually out there supervising and avoiding mistakes . Yeah , avoiding that other 25% , 100% .
So even something as simple as introducing automated time tracking , things as simple as more efficient reporting on your daily activities or logs , things like that , things that can automate more of that supervisor's administrative process , puts them in the field , actually made them able to observe the work and avoid the rework . There are direct connections .
So in my past experience I support over $25 billion in construction I was able to see what worked well and what didn't work well , and the jobs that were able to progress more efficiently , more productively and more profitably were the ones where their superintendents were in the field helping educate . You know we've got to Using the knowledge Exactly .
So that's just kind of a . You know I call it the low hanging fruit where we talk about , you know , the minimum viable problem or the most valuable problem . Minimum viable solution ?
Some things as simple as just better empowering your superintendents to actually be out there doing the job while still being able to administer the work , do the project administration and feed that information up to the you know , the top levels that need to make those business decisions .
Those simple little things , those 1% little changes , make ripple effects in terms into what a construction business can do with their existing workforce and profitability . And does that so , does that kind of wrap things ?
around it does . I'm just wondering , like what are you finding in the reasons people are not adopting technology like they should be ?
So there's and it's very interesting in 2019 , mckinsey put out a report and said here are the top 10 things . Top . You know they can McKinsey's great cause . They can have so many the consistent top 10 barriers . Maybe we'll just go through the few . The first one is budget .
Budget is one of the biggest barriers and even for the largest companies , and when you look at larger companies you think , well , they can write a check . But even large companies are made of the smaller little baby companies or geographical units with their own operating . Oh and they're waiting to be paid , often For sure .
So budget is always the number one barrier and then the next two that are tied management hesitancy and workforce hesitancy , and that is what we typically call culture . So and it's interesting around management hesitancy is they're typically tied to two strains budget and knowledge of solutions .
So when you start solving the budget problem and bringing knowledge of solutions to the table , the management alignment starts to click in .
Then the next big hurdle , which makes up obviously the bulk of the engine , is the workforce and a typical , as we said , the big groups took them 10 years plus to adopt technology and they're still not receiving the results that they probably should have .
A lot of it is , I guess , failure to help that the bulk of the workforce understand how this technology resonates and makes their life better , or selecting , crafting their technology adoption plan around the actual project execution operations rather than organizing that technology plan around the office leadership group .
The groups that are the most successful right now are rethinking the approach and they're actually putting their operations project execution team at the center core , giving them the tools they need to do their job better and then , through the power of integration and otherwise , still being able to get the information needed for to support counting financials and business
management .
Yeah , I mean I think of the a lot of the issues that I find is that because construction is a very unique set of individuals working together and that unique set is depending on the diversity of different sub-trades , depending on what a particular project is , you have businesses showing up at a business to do business and they all do business a different way and
they all actually want the agility and autonomy to do it their own way . When they are mandated to work on a certain way at a certain job site because of a GC software or whatever it is , there's a reluctance to that . However , there's critical information there .
They have to go get it , they want to use it at a minimum , they want to do their stuff because they need their own records too . And it's who owns the records ? For sure , because you've got on the safety side , you have CORE to deal with , you've got WorkSafePC here in British Columbia , I'm sure there's obviously the jurisdictions everywhere for safety .
So it's really because businesses are showing up at businesses to do business . That's the reason , and I wonder whether or not that will be ever fixable .
So what I find very interesting is there is a solution to that and it all starts with understanding . When I work with customers , we go through problem fit , solution fit , business fit . Then I start looking at opportunity to fit customer fit .
And , as we started talking about the opportunity to customer fit , it's helping those organizations move beyond the what do I need just for my business , helping them understand you are working for others and you need to .
If you want to be seen as value and especially the systems you use are valuable and maybe want to get them paid for by your customers , you have to align . It's critical that you align your technology portfolio to your core customers and it doesn't necessarily mean if your customer uses Sitemax or a ProCore or whatever .
How well does your systems and data , especially the data side ? Are you collecting the right types of information that your customer needs ? System agnostic ?
There are many talented individuals out there that can make those integration connections between systems nowadays , but it's about mapping out , especially if you have a core , if over 30% of your business is from one customer , you better start aligning your technology , especially around your data , to how can we make that data accessible to your customer where there's no
disruption to whatever system process they use and whatever system process you use . There is a roadmap to do that and that has been a critical success factor for a number of businesses .
Interesting . Okay , Wow , there's a lot there . Do you think that we have a power dynamic that is ? I'll give you an example . So the phone that I have here in my hand , this thing has become ubiquitous . It's basically and it's an appendage . Now , Luckily , we can take it away .
It would hurt to get rid of it .
Yeah , but people are just tied to this thing . So you end up with a bring your own device to work situation and there is a . There are some people not all people but there is a little bit of a power dynamic struggle between management and field crews . And there is the why should I , why should I do anything extra ?
And sometimes digital adoption feels like an extra , and it really isn't , but it feels like it because it's like someone else's . It's my hassle to learn and I have to do this and I got to do something different way . It's taking data on my phone . Are you going to pay for my plan ? Are you going to like all of that stuff ?
Because we are talking about that other 99% , right , this is where this stuff happens . So there needs to be a cultural shift in terms of technology , of hardware , as in you get this . It can all come down to . You know , are you giving them a $450 phone or are you giving them a $1,700 phone ?
Right , give them a $1,700 phone and you mandate what they do with it . And , yeah , they're going to . You're going to have 25% of them with a smash green every month . But what is the actual if people can get over ? It's interesting that there is a psychology of money that I think as humans in this . This flows into how we do business as well .
If I say to you , here we're going to go out for dinner , we're going to go for drinks , and you're like , yeah , okay , let's go to a good place , you're going to have a good time and whatever , and you drop $250 . And then I say to you we go to , we go to , you know , shopping on on Robson Street , and I'm like here's a pair of jeans for $250 .
You're like , oh , no way $250 . But you blow it just for the experience , where you didn't even think about it . It's that kind of thing . There's money being spent in these companies that are the nightlife stuff , it's the golf tournaments , all this experience stuff , and then , like I don't know , $70 for a phone . It's like hello .
This is the actual channel to productivity , to everything . So I didn't think there definitely needs to be something around how that shift of spending . When you said budget , you're correct Budget , but psychology around budget For sure .
And you know you're on , you're exactly , exactly accurate . And it's so funny how often even that scenario comes up where , where I don't want to pay for my you know I have a hundred crew and they're trans and who knows who's showing up . I can't buy everyone devices but I don't want to pay for a hundred people's phone plans . Yeah , it's .
It's crazy , as you said , the psychology of money when you start , when you give the you know , levers for them to pull , to remove that budget as a barrier , it's crazy how the floodgates open right and you know I'll just use case in point . Can you see that for ?
that stuff or not ? Yes , you can , yes , buying , buying hardware .
Yeah , so that's , that's the beauty of it . The CDAP program , you know it's the front end . It's essentially a forgivable grant to to bring an expert in like myself to actually to put a plan together for them , and the give or is a plan , that's a 25 grand right .
So that's , that's about 15 , 15 .
And you guys that's usually so that up right showing the way . Yes , I see them and but in that plan , you know , what we tried to do very , very well is is help connect the dots to . You know that actual , you know what , what is , what are the costs and what are the ROIs , and we help them understand .
Okay , yes , and then you know , through the CDAP program , if they need it , if the company's needed , it's almost instant access . Approval to up to a hundred thousand dollars in industry for loan for five years . Yeah , you know , if you have the right plan , you know fast , you can get your ROI .
Yeah , pretty quickly , sometimes after the five years , though you pay that back , but so in terms of your so it could be a hundred thousand dollars .
Sure , like we knew when we did the the COVID loan stuff .
Like you pay that if you don't pay it back in that time there's some trouble so , yes , there obviously some T and C's involved with with the BDC loans , but if you you know , if you actually work with the right expert advisor , there you go they are . They are crafting a strategy . Where you're , you can get your ROI .
Yeah , and we struck , you can structure in a way and there's some great new solutions that actually put money back in your pocket , and if you're smart and savvy and you understand the process , you're using that to pay . You know , to pay off your loans and do things like that . But what's interesting ? Yes , exactly as you said , you know we go okay .
Well , look , if , if your barrier to getting your workforce to adopt new technologies is a Paying their their internet bill , yeah , which is very affordable if you do it at scale , yeah , yes , that is what they'll use the loan for .
That , 100% for sure , you get them to adopt these things , you start getting the ROI back in return , they are happy to continue to support you and you're making their life happy . That's , you know , it's about reducing that budget as a barrier and , like you said , it's they're happy .
Companies are happy to go spend $200,000 on new Silverado's , but they won't pay for $30 foam plan . Well , let's just , let's just negate , take that out of the conversation completely .
That would be . That would be really cool if you didn't have a presentation or psychology of money . So yeah , I mean , as you know , sean , these are like short podcast or but I Think we could probably dig into this a little bit more . How do people get hold of you ? What's your website ?
all that kind of stuff . So you can contact me a number of ways as so I'm here on behalf of the net effect group . Yeah , so you can contact me , sean shawan , at the net effect dot ca . Okay , that's my direct contact and let's go through those channels . And website addresses are WWW dot the net effect dot ca . Okay , go through that .
Okay , that's the best way to contact me and you're on LinkedIn , obviously , and on LinkedIn , yep , sean pray .
Yep , you can contact me on there .
Well , that sounds like you got a valuable thing going on there , so that's awesome . Good on you , man .
Thank you , okay , cool . Yeah , thank you very much for having me on the show here . You're very welcome , thanks .
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