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The Home Building Technology Revolution, Part II: Understanding the Obstacles

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Business Management

The Home Building Technology Revolution, Part II: Understanding the Obstacles

Feedback to Part 1 of this series provides instructive insights about how home building’s status quo is hobbling the industry


By Scott Sedam, Contributing Editor February 4, 2021
Man at computer frustrated with new technology
"Success can only be derived from deep understanding and doggedly correct implementation of these systems by home builders." | Illustration: leremy / stock.adobe.com
This article first appeared in the February 2021 issue of Pro Builder.

My Pro Builder column, “(Still) Waiting for the Home Building Tech­nology Revolution,” considered how technology’s promise—of which I am generally a big supporter—has failed to deliver widespread improvements in process, productivity, and profit for home builders. In fact, primary indicators such as schedule, cycle time, and variance show a distinct regression over the past decade. That evidently touched a nerve because I received a ton of email from builders, suppliers, and trade contractors, and more yet from authors and consultants. Curiously though, not a word from the technology purveyors themselves. 

Meanwhile, the buyers of building industry technology clearly demonstrated their concern. In that first column, I promised to reveal the greatest obstacle I’ve found in my years of following the issue of technology adoption. More on that later, but the emails I received were so heartfelt and revealing that I’m compelled to pass on some of their essence. 

I intentionally don’t disclose the writers’ names, companies, or locations because I want readers to focus on the message, not the particular builder or city. That helps stop people from thinking, “Oh, those guys/that company/that city” … and concluding, “Well, it’s different there.” Trust me, it’s not.

A couple of these are perhaps the longest letters I have ever included in a column, but they are just that instructive. Listen, I mean really listen, to their laments.


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The Struggle Is Real

This first letter really hit me, coming from a trade contractor who is obviously articulate, well-informed, and quite frustrated. (Editor’s note: Letters have been edited for length and clarity.)


Scott, I read your article and I agree the technology for home builders is there, but something is not working.

We are a small trade established more than 20 years ago in this large metro market. I spent years with a Fortune 25 firm, then as a consultant to small business before starting this company. We work for over 30 different home builders, including most of the large, well-known “Top 10” builders. We repair tubs, vanities, doors, and windows, and every house needs our help. As a small company, we’ve been able to use technology to make our life easier. Our techs work from home, and with their phone and an app, they get all of the info required to do everything. We create NO paperwork. Yet our young men and women, age 20-30, cannot believe how unorganized most builder field supervisors are! 

There are more than 900 different supervisors employed by the 30-plus home builders we serve. We see all of the same failures you describe in your article. The builders’ field people have technology, but it doesn’t appear to make their job simpler or easier. Fully 19 of these 30 home builders use the same well-known, branded system for communicating internally and with us. That should simplify things, right? Yet each one uses the system differently. The impact on the trades is brutal.

Each home builder seems to create their own version of the system and forget that people like us do business with 30 different companies and we simply cannot keep up with 30 different approaches. There has to be some sharing in these systems. For example, in the 19 companies that use the same big-name system, I have yet to find any accounts-receivable person who has access to the system or has attended the training for it. As a result, they can’t tell when a PO has been completed or, even more important, which ones the field guys have never completed the paperwork for, and thus we do not get paid! It’s like those who don’t use QuickBooks as it was designed and create such a mess even their CPA can’t solve. 

"Each home builder seems to create their own version of the system and forget that people like us do business with 30 different companies and we simply cannot keep up with 30 different approaches."

The building industry culture evolved over the years from a craftsman or worker mentality. Relying only on on-the-job (OTJ) training used to work, but not today. I know of no formal training or degree programs for home builders. One of our big state universities formerly offered one, but it is now gone. And all of the graduates entered commercial building—where the money is—at least when you start your career. 

Even worse is the availability of training for subcontractors, who actually do all of the work. Most of those in our area are great, hard-working people in small companies who have also grown up in an OTJ world and—this is important—they have no computer skills to speak of. We attended a big software company’s vendor school and watched as most of the subcontractors sat there with seemingly no clue about what was going on. 

Maybe change will come when large companies buy out more smaller builders and implement their big-company systems. We also work the remodeler side, and we see a current trend of holding companies buying small remodelers and helping them increase sophistication. We have also seen a huge offshore company buy local home builders. Will that be the answer? I’m not sure. But this culture must change. However, without a new approach, that won’t happen anytime soon. 


The writer brings up multiple key points, including lack of big-picture home building education, coupled with inadequate specific training on software and technology. He describes a “persistent inconsistency” of software applications with messy local customization. He suggests a mentality and inertia that only seeks to maintain the status quo.

Given all that, and the incredible variety of software systems with local variations we ask suppliers and trades to interface with, how can suppliers and trades keep up? I’m not at all sure, though, that big firms buying up small ones will solve the problem because to date, that hasn’t happened. The giants are no better, in fact, they’re often worse than the locals and regionals

 

New Tech Adoption: A Flight Risk

Another letter writer dives deeper into the problem of adapting to new technology with an analogy to one of my favorite subjects, flying airplanes. 


Scott ... Allow me to beat you to the solution you have not yet revealed. The problem is not in the software systems, I agree. I’ll make my case by analogy because I have been flying airplanes for over 40 years as a hobby and believe there is a parallel to be drawn here. 

In the 1970s, when I learned to fly, all airplanes were outfitted with a “six-pack” of “steam gauges” showing the pilot altitude, airspeed, attitude, vertical speed, turn and slip, and heading. These round gauges, reminiscent of the old analog gauges on steam boilers, provided critical information on flight performance; ignoring or misinterpreting them could be fatal. There were other indicators such as fuel flow, manifold pressure, and RPM, but these were secondary to the primary six. Navigation was largely conducted by reference to ground features and checking them against a map. It was a relatively simple process, given the complexity of the activity, but required constant attention to the details if you desired to live.

Cut to 2020 and the instruments are now displayed on a “glass panel” or two, backed up by modular computers and sensors, even in single-engine planes, all linked to GPS that’s accurate to a few feet in any dimension. The result is an exponential increase in the information available compared with the “steam gauge” days. Yet general aviation pilots (as opposed to commercial and airline pilots) still manage to kill themselves at the same rates as before. 

Now take this to the next level. Systems aboard airliners are more complex than ever and do everything I described above and considerably more, and commercial airline safety is at an all-time high. This is because the crews are thoroughly trained in every aspect of these systems: how to read them, how they work, and how to respond to any failure, and the training is ongoing. Further, airline pilots get experience with someone at their side as they gain flight hours. It can easily take a decade or two of flight hours and experience to move from the right seat (copilot) of an airliner to the captain’s seat on the left.

The bottom line: Safety and performance depend on the flight crew utilizing the information presented to them correctly, efficiently, and without error. Checklists are integral to this process. To fail is to kill yourself and everybody sitting behind you, so failure is not an option. Training is endless and experience is essential. Compare that to home building.

How thoroughly is builder management trained in understanding and using their new software tools? What is the source of their training? How much “flight experience” do they have employing these new tools? Do home builders even trust their instruments? Success can only be derived from deep understanding and doggedly correct implementation of these systems by home builders. This is hardly an accurate description of most building companies today; their systems simply crash and burn in their own way with no one understanding why.


This letter spoke to me in spades for several reasons. First, as a 40-year private pilot with 85% of my hours flown for business, I am currently undertaking transition from the old steam gauges to the new glass-panel avionics. Let’s just say it is far, far more difficult than I expected, aggravated by COVID-19 cutting my flight hours last year by 75%. I find myself going back to the training videos often and expect I will continue to do so for months to come. Veteran pilots who believe they can adapt to the new technology by figuring it out on their own are kidding themselves, and I would not fly with them. See any parallels here with home building? 

"We fought and got some time and budget to develop the user training. In the three divisions where we implemented it, it worked and made a massive difference. Whereas most divisions resisted the new software and said it stank, our three user-trained operations people loved it."

Second, right up front, this writer highlights an issue I worked hard on more than 25 years ago when my builder-employer spent tens of millions of dollars developing its own software. The software was actually pretty good, maybe damn good, considering we’re talking about the 1990s. All of the training our IT folks developed, though, was directed toward the implementers and operators out in the divisions. That’s important, of course, but we soon realized what was missing then, and is still largely missing today: user training. By “user” I mean the managers and executives at all levels who could use the data and reports to make good and better management decisions—if they knew how. We weren’t training these users on how to get the information they needed from the system, and it was a huge obstacle to adoption. 

We fought and got some time and budget to develop the user training. In the three divisions where we implemented it, it worked and made a massive difference. Whereas most divisions resisted the new software and said it stank, our three user-trained operations people loved it. Why? Because it became a tool to help managers and executives get work done, simple as that. Yet, this training died on the vine because the management teams in the other 30-some operations were just too busy or too important to go through the training. 

Over the years, I have offered to work with several technology companies to develop such user training. They always love the idea, agree it’s needed, but never get around to doing it. Done well, good user training would sell more of their software than all of the money they spend on marketing, and then some. 

The third issue highlighted in this letter is the old D-word: discipline. One of my favorite things about flying is the discipline it imposes on you, and I’ll confess that’s not normally one of my greatest attributes. I just have too many things bouncing around in my brain, it seems. Not so though, when flying; I become genuinely anal-retentive with intense focus and I don’t let any other thoughts—work or personal—interfere with the task at hand. As the letter writer said, if you fail that, there’s a good chance you’ll kill yourself and perhaps others. This discipline is what’s missing for most builders—nationals, regionals, and locals alike. Does it really have to be life or death to find this discipline?

 

So, Can Home Builders Overcome the Obstacles to Tech Adoption?

There’s so much more that came through in these letters, from a seasoned industry consultant who suggested home builders should structure their businesses using a more vertically integrated model, to a brilliant engineer my firm has worked with many times who said: 

The problem is the lack of and the poor execution of the design process, including documentation and takeoff. This process is running backward: “Here ... I have a set of plans. Please bid and build them Mr. Subcontractor. I’m not sure what’s in them, but you guys know ... .” 

All fees and schedules are defined at the subcontractor level but consumed at the builder level—without deep knowledge and understanding by the builder. And it’s getting worse, despite all of the technology.” 

This may all sound discouraging, and some days I share that feeling. Yet I have seen a few firms embrace both the technology and the discipline. It can be done. If you’ve read about NHQ Gold award winner True Homes, you have an idea of what it takes to overcome the obstacles to adopting technology in our industry. 

My tease at the end of part I in this series was that I’d present my answer to this riddle—what most everyone is missing—in part II. But there are more important points yet to pull from those emails, and I received two more letters as I was writing this column-—both offering great input. I’ll present those in part III, with a summary of the key obstacles, and yes, I’ll reveal what I consider to be “the missing link.” 

 

 

Written By
President

Scott Sedam is president of TrueNorth Development, a consulting and training firm that works with builders to improve products, process, and profits. A senior contributing editor to Pro Builder, Scott writes about all aspects of the home building business and won the 2015 Jesse H. Neal Award, business journalism's most prestigious prize, for his commentary in Pro Builder. Scott invites you to join TrueNorth's Lean Building Group on LinkedIn and welcomes your feedback at [email protected] or 248.446.1275.

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