Eric: In construction, you spend all day, every day, making sausage. What I mean by that is that there's a lot that goes into producing the final product of a completed project and there are a lot of parties involved in that process. One of the biggest challenges that construction companies have is building trust between the owners, the architects, the engineers, the contractors, the subs, the suppliers, and building and maintaining trust is essential if a construction project is going to go as smoothly as possible. The question is how do you do that?
That is the topic of my conversation today with my guest, Andrew Zukoski. Andrew is the CEO and co-founder of Join, the leading construction decision-making platform. If you listen to this podcast, you know that I have a lot of these tech CEOs come on my show, and the reason I do that is because they have an outsider's perspective on some of the biggest challenges that the construction industry is facing. [00:59.4]
The one thing I like about Andrew is that his company is driven by a number of values, including one which is humility, and what he means by that is that he doesn't think that software is the answer for everything, but it is part of the answer to some of the biggest challenges that you have in your organization.
In our conversation today, we spend a lot of time talking about how to build trust, apart from anything to do with software, so you're going to get a tremendous amount of value from listening to that conversation. He tells us the story about how an owner came into a meeting with a bag from Home Depot with about $50 worth of parts and supplies, questioning why a change order was $1,000 and how that change order of $1,000 on a $100 million project violated trust because of a lack of understanding on the owner's part and a lack of communication on the contractor's part. We use that story to pivot into that discussion about trust, and how you can build and maintain that on every construction project that you are involved in. [02:05.4]
Feel free to share this interview with other people. One thing I would request before you dive into this interview today is, will you please go to wherever you get your podcasts, whether it be Apple or Spotify, wherever the case is, and give us a rating and a review? Because that helps Construction Genius to be seen by other people. It helps us to grow as a program. Enjoy my interview with Andrew, and thank you today for listening to Construction Genius.
This is Eric Anderton, and you're listening to “Construction Genius”, a leadership masterclass. Thomas Edison said that genius is one percent inspiration and 99 percent perspiration. If you're a construction leader, you know all about the perspiration, and this show is all about the one percent inspiration that you can add to your hard work to help you to improve your leadership.
Eric: Andrew, welcome to Construction Genius. [03:05.3]
Andrew: Thank you, Eric.
Eric: I know in my work with contractors over the years, one of the biggest challenges that they have in executing a project profitably is developing trust with all the parties that are involved in the construction project, from the owners to the designers, to the subs and to the project partners. I'm looking forward to diving into that topic here today. To begin with, I'd like you to start us off here by giving us a picture of what you think trust means in a construction project.
Andrew: I think that trust in a construction project means that every stakeholder, and I'm speaking primarily of the owner, any owners, representatives, the principal design consultants, the general contractors and the principal trades, but that each one of those believes that all of their partners and stakeholders are going to be straightforward in presenting what they need to move the overall project forward. [03:58.7]
It isn't to say that everybody's going to go complete the open book and share their profit margins or work to erode the profitability of their firm, but it means that that every stakeholder has this belief, when people share things with them, that it's going to be true and it's going to accurately represent, to the best extent that the other stakeholders can, the truth about where that stakeholder is, where the project is, and where they see the opportunities to move the project forward.
Eric: Let's just explore that a little bit because I think it's really interesting. That's one of the things that contractors immediately are thinking about when you talk about being straightforward. It’s like, Hold on a second, I don't want to show everyone how the sausage is made exactly. To what extent is it necessary for someone to go in order to begin to create that trust? Describe that little bit please.
Andrew: Yeah, that's a great question. I'll just share one of my favorite anecdotes around where trust was lost when it didn't need to be, as a way to illustrate some of the things that need to come together to make it happen, and one of the big challenges that's particular to construction around building trust, which is the need to be able to understand and present information in a way that other people can understand. [05:07.7]
In this example, it came from a customer of ours where they were describing, I think it was about a $100 million job, a medical project, and they were in an OAC meeting. The architect had brought some new version of the plans. They were reviewing the plans, talking about it. Someone mentioned, like, Oh, we're going to install this new piece of equipment in this room that we hadn't talked about previously. We're going to need to add an outlet.
Someone looked to the GC and said, “Okay, what's it going to cost to add an outlet to this room?” and the general contractor threw out, “$1,000. Rough numbers, $1,000 to add an outlet to this room.” The conversation moved on and the contractor missed. The owner sat back and crossed their arms and was looking unhappy, and that actually, unbeknownst to the contractor, was a moment where trust was lost.
They figured it out at the next meeting where the owner showed up carrying a bag, a Home Depot bag, and everyone else was sitting down at the table. They walked in and they poured the contents of the bag on the table and slammed down the receipt and started yelling, “How can you tell me it's $1,000 to add an outlet? That's outrageous. You're taking me for a ride. You're trying to nickel and dime me to profitability. I went to Home Depot and I bought everything you need to put an outlet in. I bought a faceplate and I bought an outlet. I bought some wire and I bought some conduit. It cost me $49. How can you look me in the eye and tell me it's going to cost $1,000?” [06:23.0]
What do you do at that juncture, right? Clearly, we're in a bad place. The key thing here is that trust there got broken because the owner hadn't seen enough of how the sausage was made and didn't understand enough about sort of where sausage came from. They trusted the general contractor when they said it was $1,000.
Saying it was $1,000 and just moving on, they were missing the opportunity to explain to the owner, like, This is a room. The electrical inspector wasn't going to have to visit at all, so that adds some schedule complications there. It's not just the outlet. It's a pretty long run and there's several trades involved. And, by the way, you have very high standards written into the spec for this project because it's a medical facility and the bargain option at Home Depot probably isn't going to cut it, meeting the performance requirements that you have, and all of this adds up to, rough numbers, it's $1,000. [07:12.8]
That context was missing. That was all implicit in a general contractor. They looked at the project and they knew that instantly, because they are construction experts, but the owner wasn't and they weren't taken along to understand the work that went in and other people's perspectives, and everything that went into this decision they were being asked to make.
As a result, they didn't trust what they were being presented with, which has awful repercussions for the rest of the project. I mean, if this owner went to Home Depot for $1,000 change on a $100 million project, you have to make a million and ten million decisions through the course of a project like this. What are they going to do to get comfortable with some of those larger decisions? They're going to drag out for weeks or months longer than they need to, and there's going to be consequences for the level relationship for everyone that's there and the level of stress that everybody brings into it, and they'll end up firing different people on the project, not for good reasons, but simply because they've lost trust. That's an anecdote we come back to pretty often and understanding it. [08:15.0]
Eric: It's really interesting, because what you described there so well is the reality that, in a construction project, there are often these gaps of understanding that can only be filled by context, and that to fill that context, it requires conscious communication between the two parties.
Andrew: Or more than two parties, right? A lot of things that we focus on decisions, I'm just going to talk about particular decisions, but in a lot of this stuff, you're looking to change the floor-to-floor height in a building. Clearly, you now talk to the general contractor. Probably need to talk to the concrete trade contractor if they're subbing that out. Probably electrical and mechanical, other systems, structural engineer, architect, owner, potentially multiple people from the owner to it’s got construction, as well as sort of development or pro-forma implications. There's a bunch of people that have to come together. [09:04.5]
We think this is a consequence of the inherent complexity and uniqueness of construction projects. We are at the site of a new CLT project that's coming up in the Bay Area. It was an early project with Join and it's sort of exciting to see it come out. They threw out there, the PM mentioned, there's hundreds of thousands of screws in this building, holding. That number, that's pretty close to an airplane. That's pretty close to the Boeing 737, the Boeing 747, this incredibly complex machine that we build.
Every Boeing jet rolls off an assembly line in Everett, Washington, that you used to be able to go visit. It's an amazing tour, but they're all the same and every building is apparently just as complex, but each one is built uniquely. It means that, for every project, there's more complexity than it fits in any one person's head. The only way to get a commercial construction project out of the ground is to bring together divergent stakeholders, each of whom have a few pieces of the puzzle to understand building code compliance. [10:05.3]
It's a whole career to become an expert in this, to be able to design spaces that will encourage a good learning atmosphere. That's a whole career there. There's no way that we could expect a person to bring those puzzle pieces to the table and also be able to bring to the table things cost or constructability, or scheduling issues.
Necessarily, there's different people who have deep insight in one domain, but that insight needs to be coordinated with the perspective from these other participants, who often have assembled only for this particular project. Maybe they’ll work together again in the future and maybe everybody rides off into the sunset to work on other jobs, and they’ve got to come together, build some trust and then learn to see eye to eye, learn to speak enough of each other's language that, when they say, “Hey it's 1,000 bucks,” it gets through and the recipient of the information can actually understand it and is able to dig into it where they need to build more of an understanding. [11:02.4]
Eric: It's interesting as well because you're describing well that different trades have different specialties and different depths of understanding, and then you might be dealing with an owner who this is the one project that they're going to be building for their all-time or for the next five, 10 years, and they're doing the Home Depot runs because they get pissed at 1,000 bucks.
Because of that gap, because of the unknown, because of the inherent insecurity perhaps that an owner has, because of the fact that they're writing a check for a whole bunch of money, and they need to get a project delivered on time and on budget, there's that insecurity that drives these kinds of overreactions when there's a lack of clarity or a lack of communication.
Andrew: I think insecurity drives a lot of this. I think another thing that drives it is the ongoing shift in delivery methods that's going on in industry, this shift from a hard-bid and design-bid-build plans and specs worlds to one that looks more design-build construction-manager-at-risk, CM/GC, maybe IPD every once in a while.
Andrew: In the old world, there's not a lot of overlap between the construction team and the design phase. You design the building and then you bid it and then you build it, right? That's a whole idea, and it means that there are fewer opportunities to communicate well. The communication basically comes down to a bid, and then, hopefully, not many change orders through the course of construction. [12:12.8]
In this new world, you're winning the job and keeping the job, not based on hitting the low bid, but on your ability to communicate early, demonstrate that you'll be a good partner, you're going to take the owner on a journey that's going to get them to a good place. Often, when we see our customers, they're presenting proposals for this negotiated work, not a final number. They're showing past projects and they're saying look, we have a history of starting projects here and getting them down to here, and it's a lot of work over several years to get a big job down and 20 percent budget and keep the owner happy. You're communicating that and giving people trust about the journey. Then you’ve got to keep that up throughout.
I mean, we were talking to a company that is now a customer who was describing a job they had won three times, the same job. We talked to other customers about how they built their businesses on hard-bid work, but they've realized the majority is negotiated and it's not going back, and they keep getting fired from negotiated jobs—not because they're not acting in the client's best interest, right? They are doing a good job. They're acting in the client's best interest. It's just they're not communicating enough that the client trusts that, in those communication skills. [13:16.0]
It's a bunch of work, it's a lot of work to be able to do this communication in a way that people understand, and this is holding back a lot of businesses. It's leading to owners putting jobs back on the street. It's leading to decision timelines dragging on, which leads to late compression instead of early compression, and it's a problem.
Eric: Let's just go back to your definition of trust. That is the belief that all parties involved are going to be straightforward. That's so interesting, right, because there's an element there of subjectivity. There's a tremendous element of subjectivity. In your experience, how do the best contractors, whether they be subs or generals, begin to build that sense of confidence? The straightforward aspect is going to be expressed and maintained throughout the building project. [14:01.8]
Andrew: Yeah, it's great. I'll share a little bit about this project I mentioned here in the Bay Area. We just toured it. Most of our exposure with our customers is in the preconstruction phase. This project is well into construction. They've actually carried forward our tool into the construction phase and that's why we're talking to them.
But they described how this was the best job that they've ever worked on because of the high level of trust. I'm not saying that's attributable to the technology, right? It's something that teams do and decide to invest in in technology supports, but what they focused on was really from the outset in how people were going to work, and that they, early on, brought together the core stakeholders that were going to work together. They made mutual commitment around sharing their work.
This wasn't an IPD job. It's not an open-book shared-risk model, because people are going to share their work and they're going to show what's going on and what's important to them, and they're going to make it understandable to the people around them. This means that they can be held accountable. [14:57.4]
If they have a meeting where they realize they're over budget in some area and they say, “We've committed to bringing forward 10 priced ideas that we have that might bring down the budget,” if those aren't there a week from then, two weeks from then, whenever it's supposed to be done, it's going to be really clear to every other stakeholder and they're not going to obfuscate that mess.
But at the same time, if they bring those forward and the owner says no to all of them, if they're showing their work, it's really easy to say, “Yeah, we're still over budget. We did all this work and you can see the work that we did. It's right there for you to take a look at. Don't take our word for it. You can see the work we did to come up with and price all these ideas, and you rejected all of them. The accountability actually is on your end that we're still over budget in this way,” and that mutual sharing and showing of work makes sort of the project state a little bit more objective. It's not something that needs to come from a person to understand the current state. We can look at it a little bit more dispassionately.
Yeah, they're going to are going to be sometimes where someone has screwed up and it actually does just come down to someone who needs to take the blame, but by divorcing it from a particular person or particular stakeholder, we see it's easy for people to come together in a relaxed and collaborative fashion. [16:06.8]
They're like, Yeah, okay, we're in trouble here. We think we can get to here. We don't know all the way of how we're going to get it. Who else has ideas? as opposed to circling around like the trade that's way over budget and everybody pointing fingers at them and yelling at them, and them not having easy ways to substantiate all the work that they've done or how they've been let down by the design team or that the owners held up decisions or the owners weren’t accepting the options they were bringing forward. That making it objective goes a long way and doing it early.
Eric: Let's explore that little bit more. It seems that trust is built on an agreement of what is true or an agreement of what the parameters are of the project that we are committed to.
Andrew: Yeah, I think that's pretty fair.
Eric: Okay, so let me ask you this then. In your experience working with construction companies and with designers and owners, in your mind, who has the greatest opportunity at the earliest possible point for initiating this virtuous cycle of building trust? [17:07.2]
Andrew: The owner, absolutely.
Eric: To me, that's a problem though, right, because how many enlightened owners are out there? If I'm a contractor and I know that if I go to the owner and say, “Hey, listen, we want to deliver the project to you on time, on budget and with high quality,” and the owner is like, Exactly, now do whatever needs to be done to get that done, and they're not necessarily interested in the most innovative ways of doing it; they just want a building built. How do we not get around that necessarily, but how do we work within that reality?
Andrew: Yeah, most of the time, owners aren't going to come forward and say, “Okay, architect and--” There might be five owners in the world who are sophisticated enough to dictate how the other project team members are going to work together.
Andrew: And this is why we're tackling this problem right now. We think it comes down to the delivery method and that's a really key decision that the owner makes that sets up a lot of financial incentives for different team members that aligns them better with overall project success than a hard-bid “make your money on change orders” incentive structure might, and that brings the construction team in much earlier and gives or has more opportunities for overlap. [18:18.3]
Eric: Let me just ask you, in your view, as you're looking at the construction industry in the next five to 10 years, what are the one or two delivery methods that will continue to gain prominence that will impact this idea of building trust?
Andrew: Yeah, I'd say, the construction-manager-at-risk delivery method and progressive design-build. I think hard-bid design-build is better in many respects than a design-bid-build methodology, but still requires quite a lot to be figured out and committed to very early, without this process of discovery and refinement that happens while the design is being developed. [18:56.0]
So, I think methods that still align everybody's financial incentives around overall project success, but have a softer commitment earlier, where you're not necessarily buying the ticket to take the ride, but you're making some commitments up front and are able to work to refine the exact parameters and scope and a cost. I think these are the two that have sort of the biggest potential impact, going forward.
Eric: What is your recommendation then for a contractor when it comes to progressive design build? Because we all know situations where contractors put a ton of sweat, blood, tears, and cash into winning a project and they never get it, or they get to a certain point, maybe they've made a couple of bucks on it, but because the owner makes certain decisions, they don't go forward. How should a contractor be positioning themselves in order to use these types of delivery methods, and yet do so profitably, without banging their heads against the wall?
Andrew: I think one thing to do is really assert the value of reconstruction services. That engagement in that early phase, and this varies regionally and it's going to vary by owner type and owner sophistication, but being unashamed and asserting the value of what's being brought to the table . [20:06.0]
Eric: What do you mean by asserting the value? Give me an example of that.
Andrew: Like, Hey, we'd love to engage with you on this project during this first phase and this is going to be the bill for our work on an ongoing basis. That's one piece. There's also education that can happen around a lot of the sausage-making, right? Especially in preconstruction where nothing is visibly happening, but a ton of work has to happen. It happens out of sight, out of mind. Having ways to surface that and explain it to the owner and make sure they're involved, and that they can see the work happening and understand everything that's going on.
We see that. I'm recommending this because we see a lot of our customers pulling Join into even their pursuit process as a way to articulate to owners, like, Hey, this is the journey, for example, in a progressive design-build job that we're going to go on together to get to the eventual final price and the final scope, and here's our understanding of the project now, and here's the view you'll have and the transparency you'll have, and this is a bunch of work and it's valuable work that we're doing and no one else can do it, and we shouldn't have to put our firm underwater in order to engage in this speculative loss leader ahead of making money on the actual construction project. [21:16.8]
Eric: Yeah, so it's really interesting because that then makes it absolutely vital that a contractor understands their sales process or the process of winning a project, and understands where the value points are so that they can be assertive in getting paid where they deserve to get paid.
Andrew: I think you can see this happening if you look at, there's a range of sort of adoption and embrace of these collaborative preconstruction forward methods of delivery and you can see this in how firms engage with it. We have some where they've built their business on hard-bid and they're realizing the ground is shifting under them, and they're sort of waking up and realizing that they need to invest in this area. You have others that have been doing nothing but this for 20 years. [22:00.0]
But the folks that are catching up are hiring new professionals. They're reorganizing the departments. They're hiring design manager roles. If they don't have dedicated preconstruction roles to complement their estimating department, they're beginning to break that out. Often, they're centralizing preconstruction, some firms that have been scheduled, split either across a regional office or across a business line.
It's not to say that that's incorrect, but by pulling together what previously had been potentially inconsistent, ill-coordinated efforts that lived inside of maybe one person at an office into a more dedicated function that probably has more senior leadership that's able to speak for it and advocate for it, and coordinate it with business development and marketing activities. It's professionalizing a lot of this early-phase stuff and, as you professionalize it, you're able to better explain it. You're able to better articulate the value it brings, and we think it's both right and fair to get paid for it. [22:57.5]
Eric: Yeah, that's excellent. Okay, so let's go back to this topic of trust then. Ideally, it would begin with the owner, but let's say you are a contractor and you're either dealing with an unsophisticated owner or an owner that perhaps requires a lot of handholding. What are some very practical steps that you can begin to execute on immediately to begin that trust cycle, to get that going?
Andrew: I think another key stakeholder to bring in that's going to be an important ally in educating the owner is going to be the design partner. Probably, the first step is really solidifying a relationship with the key individuals there.
Our customers talk about how they do a lot of repeat design-build work often with the same firms, and once you've done a few of these jobs, maybe not the owners—because they're not sophisticated; they don't do as many of these projects—but the participants, they kind of get it and they walk in ready to trust and ready to rock and roll. It turns out that's not firm by firm. It's actually individual by individual and team by team.
Eric: That's interesting, isn't it?
Andrew: That's necessary.
Andrew: Yeah, it's very interesting. It just shows construction is like one of the things about this industry is, as much as we're doing to shorten construction cycles, it still takes five or seven years to get a substantial project designed and built, and maybe four for something that's on the smaller side. [24:11.8]
The result is if you're involved in a project end-to-end, you don't need all your fingers to count your career. That’s just the truth of it, and it means that it takes, as the world is shifting these collaborative methods, a lot of people, especially folks in senior leadership positions, 80 percent of the projects they worked on might have been in a really disjointed and antagonistic hard-bid methodology and mentality, and they're often carrying forward that scar tissue, that assumption that disjointed action is how it has to be into these new interactions.
Eric: I'm interested here in your view. You're describing the senior executives who, perhaps, let's say, they're in their fifties, their sixties, maybe late-forties, and they come from the old school of “we're going to bid it and we're going to build it, and we're going to wrestle for change orders and we're probably going to be combative. Hopefully, we can build another project with these guys, whether it's the subs of the designers, but it's kind of challenging.” Yet there's this generational shift that I'm hearing you kind of describe that's underlying all of these things. [25:09.3]
What do you think is the difference between, let's say, someone who's late-millennial, Gen-Z, as compared to your Gen-Xers and your baby boomers, in terms of their approach to construction and how that contributes to the new delivery methods that are becoming more prominent?
Andrew: Yeah, that's a good question. I think a lot of it is the type of experience they've had. I don't think that there's anything special about the kids. I think it's that let's say you're a project manager at a design firm in your thirties or forties and you've done four or five jobs, but you were a junior for the first two, so you've done three jobs, and two of those were pretty antagonistic ones. That's the experience you rest on. Ninety percent of that experience is probably still very valid to this new job and it's right that you're in this senior leadership position, but that 10 percent scar tissue isn't necessarily right to carry forward. I think it's the shape of the experience. [26:04.2]
I will say the one thing that's different is that the newer generations in the workforce, honestly, have grown up with a much higher standard around technology, right? A lot of these folks have always, always been able to press a button on their smartphone and see an Uber show up. They've always been able to order something on Amazon and get up-to-the-minute notifications as it travels across the country over the course of two business days to their front door, and carrying that into construction, which is a much more complicated domain than many of these things. But you come to this and you say, “This is all we got,” so there's a desire to reach for more.
Eric: That sounds like it would be really challenging to build trust because of that. Not because of even any kind of violations of trust, but the fact that my expectation for delivery as a younger person and transparency is different from the expectation of an older person, perhaps, natively speaking. [26:54.1]
Andrew: That may be. I would also say, when we talk to the people that have that scar tissue, they also … People love this industry. People who work in this industry, for the most part, could probably work in other industries. Not everybody, but mostly very proud of the work they do and they love and understand how important construction is. They've got that scar tissue, but they also have understood what's possible. They've had even that one project that went well and you can remind them of that. Then that sparks this thing and they light up. You were asking, what do you do at the outset -
Eric: Yeah, yeah.
Andrew: - to really make this happen? I think as you address it really head on. Probably work with the architect. Make sure you guys are on the same page. Sometimes this means that you set up regulars. A bunch of our customers, I want to say probably the ones working with less sophisticated owners, they have a weekly cadence of OAC meetings, where they go in and they ask the owner to make decision, decisions, decision. [27:49.3]
The contractor and the architect will meet ahead of time, and it's not that they're teaming up on the owner. They know that they have divergent interests, but they're straightforward about what that is. But then they're able to go in together and, at the very least, say, like, Okay, unsophisticated owner, I know that you're very excited about the finishes and you just want to talk about paint colors and fancy Italian light fixtures, but today we need to make these massing changes, because we would really to get concrete out to bid and have people start digging the foundation out, because it's so important for delivering this project on time.
So, you talk to the owner explicitly about how you're going to work, that you're going to share things, you're going to hold them accountable. They're going to be able to hold you accountable. They're going to be able to see the work that you do.
Then you'd work with the architect as well so that you don't get into an OAC meeting and the architect and contractor are butting heads unnecessarily. They're obviously going to disagree about really substantial things and that's where the owner has to make a decision, but the agenda of the meeting can be agreed to in advance.
Eric: That's a really good insight right there, just that idea of having the meeting with the architect prior to the OAC meeting so that you guys are on the same page. It's like the parents can have a fight before they get with the kids and talk about what's going on kind of thing, if they need to. [29:04.7]
Andrew: Yeah. Yeah. It's like, Okay, you guys sort it out. Then it's weird like the kid who is also the parent in a way, right? Because for these owners that are less sophisticated, they're still the customer, at the end of the day. They still are.
Eric: No, they are. They are.
Eric: Let me ask you this. Let's say you're in the middle of a project and you're looking in the mirror and you're saying, “Man, trust is broken here. We're not doing well. The dude came in with the brown bag from Home Depot and slammed it on the table and did his little song and dance.” What can you do to kind of do the reset?
Andrew: That's tricky. One thing that we have seen work and it requires that the owner is really far gone, but if they put the project back out on the street, they hit some document issue and they say, like, Look, we're going to put this back out, not even for the full construction contract, for new preconstruction services contract or maybe we'll go look for a GMP and we're going to look beyond you. We don't trust that you gave us the best number. That's a scary place to be and, hopefully, you can find ways to reset long before you get to that. [30:02.6]
But that becomes a way to reset, because we know that it happens all the time that owners do this and it's a huge waste of time and money on everyone's part, and they end up with the same team at the end, because it turns out that the construction team was working in their best interest and was giving them the best price, and, in fact, is miles ahead of anyone else in the world in understanding the particular needs of this project. You rebid it and you end up with the same team again.
You get a new kickoff then and you can start fresh in some ways, and really overinvest in communication. I’ve got to imagine, in those meetings, that you've got … I can't imagine walking into that and thinking, Boy, I'm really looking forward to communicating with this owner and owning my mistakes. But that's kind of what you’ve got to do, I think, at those junctures.
Eric: That's interesting, right? The willingness to own your mistakes as soon as possible. In my experience, that is actually one way to build trust and maintain trust when it's been broken, which is to be transparent about the mistakes you've made. Not necessarily about how the sausage is made, but the mistakes you've made in the making of the sausage. [31:10.0]
Andrew: Yeah. Here's an example of how you can start to do this and, I mean, you start adopting these processes and you do it directly as you go forward. Here's another example. Many projects that we're working with are going sort of milestone to milestone. There might be 12 milestones on a given project and there's usually a document issuance around a milestone where you get a milestone and then you'll think about it, and analyze a bunch of things and make it a bunch of different decisions, and they get embodied in the documents and you get the new document out, and then you maybe do an updated price based on.
You've trended in between, but you get this new document set, a new price based on the new documents. You’ve got to reconcile between where we thought we were going to be, based on all the decisions we made, and where we ended up. It's complicated. You might have made 50 decisions that changed all sorts of things and the designers have drawn a bunch of stuff that was just white paper before, and you've probably sent some stuff, you might have started to bid out a few scopes and so you're learning things to the market. [32:01.2]
But being able to come and really crisply explain here's the delta, here's what we attribute to the architect not doing what they said they do. We agreed that we'd eliminate 80 percent of the sunshades on the exterior of the building because it's in a shaded location and we don't need them, and the architect only eliminated 40 percent. That's a miss that we believe is on the architect. This miss is on us. We mispriced it.
This miss is just something new that the owner added in scope that wasn't in the previous price. This miss is just something that we’ve learned from the market. This was just a risk that we highlighted where Covid happened and the lumber price shot through the roof or we got new steel tariffs, or it turns out it's impossible to find carpet tile in northern California right now, and as a result, we learned something from the market that wasn't what we hoped to learn necessarily.
Sometimes it's good news, but often it's not and being able to break it down and explain that it means that it's a human thing. It's this reciprocity thing where it's okay. I'm saying this was my mistake and you added a 4-story atrium halfway through construction documentation. We're able to understand where price changes come from and price is a really big source of contention. [33:16.0]
Eric: Andrew, tell us a little bit about Join and how you guys are addressing this problem of building trust and helping contractors and designers and owners to work together in order to get projects built that are where everyone's happy.
Andrew: I would love to. On these collaborative projects where the construction team is brought in early, there's a lot more people around the table. There are a lot more overlap activities. There's a lot more going on and keeping track of all of that information, keeping it in one place that's coherent and up to date and accurate is a big challenge, and then communicating that out to all of the different stakeholders is a big challenge, and so we have built a software platform that does that. [34:00.4]
We typically go to market through general contractors, who without us are usually the air traffic controllers around a huge complicated preconstruction spreadsheet that might have a constructability log and a value engineering log, and 17 other things besides where there are air traffic controllers, and shuttling emails around and trying to merge different versions of the spreadsheet and all that.
We’ve replaced that for the software platform that they can bring all the other stakeholders to. With the right information, compartmentalizations, people aren't peaking at bonding rates or other things that they shouldn't, and in doing that, you centralize it and you mean it's always up to date, and you don't have issues with formulas and so forth.
Then the other thing we've got on top of that, sitting on top of that data, one thing that our teams reflect as being very important in building trust is being able to very quickly create very simple reports that sit on top of this. As an example, let's say you're a contractor and you're completely committed to having the owner understand everything about how the cost sausage was made and so you've done your complete detailed take off an estimate, and you've going to share all your markups and all your labor rates and all your unit costs, everything you think. [35:09.7]
You send all this over to the owner and they look at this 20,000 line spreadsheet and say, “What do I do with this? How do I interpret or understand this?” They don't need that information. They need that information grouped and presented in a simple way, but grouped and presented in a language that makes sense to them.
Inside a Join, there's very flexible categorization. You're able to slice and dice this data in many different ways very easily so that you can walk into a meeting and say, “Okay, owner, you want to understand this in terms of your own budget and which budget we're drawing from to pay for different things inside the building. Okay, let's pivot it because the architect doesn't care that we're way over an electrical conduit. They want to understand how we're spending money in programmatic areas, and here we can show both of them. If there's some other filtering or grouping we need to do, we're able to do it all on the fly.”
That means that, often, you need kind of a new report to answer a question, right? It means if you have to ask like, Okay, I need to see this report, and it takes a week to come back, is that going to help build trust? What's this person doing? Why does it take a week to get me this report to answer these questions? [36:14.1]
Other stuff is also going on by the side, and it turns out, if you're pushing these numbers around in Excel, it just takes a long time to create all these reports and it's instant in Join.
Eric: Let me ask you, who is your software package not for?
Andrew: Yeah, great question. I'd say it's firms who believe that design-bid-build is the future of their business. Probably not a great fit for us.
Eric: So, hard-bid contractors, design-bid-build, that's not a fit for you?
Andrew: Excellent, excellent. How did you get to the point where you are involved in the construction industry? What was your journey?
Eric: Oh, it's kind of a funny one. I grew up in the 3D printing world. Actually, my background is in software engineering and I was doing customized medical devices.
Eric: Look, I’ve got to stop you. I’ve got to stop you. Sorry. Are we ever going to get 3D printing in construction that is realistic and not totally ugly? [37:00.5]
Andrew: I don't think so.
Eric: Yeah, I don't either. I was just wondering what you thought.
Andrew: Yeah, I don't think so. I think if you look at where it's succeeded in other industries, large parts made from low-performance materials and relatively simple geometries, you don't need to 3D print it. You need a bigger machine than the thing it is that you're printing in order to do it and that limits site applicability, and you always have to compromise the materials to 3D print it. That's why you often see it in fixtures, right? Like custom hearing aids. You don't print the hearing aid. You print the mold that then the hearing aid is cast with, right, and because the mold doesn't actually need to be performed very well. Anyway, it's probably more detailed than you're interested in.
Eric: Yes. Sidebar on the 3D. Tell us how you got there into construction.
Andrew: I saw a job posting from a company that was a Google X spinout that was doing sort of customized design tools, cloud computational design tools for architects and engineers, and I thought these hearing aids and other medical devices are cool, but there are a lot more buildings than there are hand braces in the world and they're bigger, and it seemed interesting. [38:10.8]
So, I jumped there and that was an interesting ride. The company got a few things right and several things wrong, but I met the founding team through that, founding team of what became Join through that, and we knew that there were opportunities around sort of this decision making space. We knew that, hey, owners, they’ve got to make a lot of choices. Every building is unique. It's very hard to get to the data that guides those decisions. We knew there were opportunities there and, you're going to laugh, we thought the opportunities were all inside the design tools. It was very naive of us where the designer sits in front of the design tool and makes all the decisions and informs the other stakeholders, right?
We tried that for a little bit. Fortunately, before we ran out of money, sort of found our way to the OAC meeting and the collaboration issues that arise around there, and did a bunch of discovery meetings and conversations with construction teams around the country to understand these particular problems, and that led us to where we are today. [39:04.4]
Eric: What do you do differently? Because I know around the construction space, and I’ve had many of these folks on my podcast, there's tons of guys and gals who are coming with tech solutions to the industry. What are you doing differently in terms of your approach, your perspective that other software companies aren't that sets you apart?
Andrew: Yeah, that's a great question. I think one thing, and in none of this, we're not totally unique in each of the things I'm going to mention, but I think together they set us apart in a few ways.
One, we think people are always going to solve construction problems. We think it's all about the people. The team has a stack of patents in all sorts of domains where computers come in and use things that look like artificial intelligence to solve very complex problems. We can build anything that a computer can do and it's tempting to look at construction and say, “You don't need people. All buildings are actually similar enough, the computer can make all the decisions,” right?
No, hard no. We don't think so. We think it's all about the people and getting the right people at the right time with the right context and with enough trust that they can work together to move the project forward. We're pretty unabashed about that. [40:13.0]
Eric: That would be almost sort of a modest approach to what tech can actually accomplish. It can accomplish a lot, but at the end of the day in construction, the relationships between the people are absolutely vital.
Andrew: Yeah, I mean, humility is one of our company values. We hire for it. We demand it in everyone who is customer-facing. Yeah, we think technology can help a lot, but technology isn't going to go build a building. It's always people who will make the most interesting decisions who are the most important players.
Yeah, early on, we thought maybe the technology can do all this, maybe we can automate all of it, and there were two things that changed it. One, we were talking to an architect who was very proudly describing how he was working on what was going to become the largest passive, house-certified development in the world in New York, and how they had this problem because they needed these exterior doors on every floor to do maintenance in a certain area, and passive house is all about how well sealed the building is essentially. [41:07.3]
They couldn't find exterior doors that would hold enough air pressure to be able to meet it. Eventually, they figured out that what they needed was they needed to find the people who manufactured walk-in freezer doors and have them scale it appropriately and change some of the finishes so it could go on the outside of the building. It’s like, how is a computer going to suggest that? There’s no way that computers are going to be that creative anytime soon. There are so many steps between here and there.
Eric: So, A.I. will not be overcoming construction people anytime soon, huh?
Andrew: Yeah, we don't think so.
Eric: I know when you were in university, you ran cross country in track and field. I have a quick question for you, and if you don't have a good answer for this, it's okay. What's the fastest way or the best way for me to improve my 5k time?
Andrew: It depends where you're starting from, but--
Eric: Let's say I'm a beginner and I have a goal. I want to run, I don't know, what's a good 5k time? Let's say I want to run a good 7-minute mile. I'm not an expert by any means or an uber-athlete, but I really want to get to that 7-minute mile point. [42:09.5]
Andrew: Probably going to need a few months to train up and what you want to do is you want to get in a habit of running regularly, so several times a week, but not too much that you get hurt. A lot of running training is sort of the balance between training stimulus and injury, and, fortunately, for beginners, as long as you're not too crazy, there's a lot of improvements that could be had without getting to the point that you're getting hurt.
A lot of what's important is a gradual buildup and you want some variety in what you do. You want one of those runs to be longer. It's like you want to run a good 5k. You're probably going to run longer than 5k in your training runs and you're probably going to run faster than 7-minute miles in parts of your training runs and you probably want to do some strides and some speed work, and it's about just exercising different aspects of sort of the bodily system that lets you run. Then the parts and pieces come together and you're able to get together a good 5k.
Eric: As we're wrapping up here, Andrew, just give us a summary here. If I'm a general contractor, I'm looking to really focus in on that vital element of building trust with the project partners, the various entities involved in the projects I build. How can I go about doing that? [43:14.4]
Andrew: Yeah. Show your work. Start from the beginning and look for opportunities to deploy technology that'll make it easier for your teams to do that.
Eric: Excellent, and then with that in mind, how can we get in touch with you, Andrew?
Andrew: Great. We got a website, Join.build. You can reach out to people on the team, if anybody is interested in learning more. Then, my email address is firstname.lastname@example.org, and love to hear from anyone listening to the show.
Eric: Excellent. Andrew, I really appreciate your generosity today. All the links will be in the show notes so people can check out your company, and I do wish you the very best.
Andrew: Thanks so much, Eric.
Eric: Hey, this is Eric. Just before you bounce, I want to thank you again for listening to today's episode. Make sure you check out the links in the show notes to get in touch with Andrew, if you'd to learn more about what he does.
Again, as I asked at the beginning of the show, I'm going to ask it one more time. Please give us a rating or a review wherever you get your podcasts, and that helps the Construction Genius show to be multiplied in its visibility across the interwebs, and so the more construction leaders who get a chance to listen to the show, the more they can benefit from the killer content.
Thanks again for listening to Construction Genius. I'll catch you on the next episode.
This is ThePodcastFactory.com