Comfort Systems USA — Q&A with VP Innovation
Comfort Systems USA is a leading building provider for mechanical, electrical, and plumbing (MEP) systems. MEP trades often comprise a very significant part of a construction project’s budget and Comfort Systems USA has been leading the way with services that aim to improve speed, safety, and quality of project delivery.
As I learned during our conversation, innovation is one of five core values at Comfort Systems USA. Briston Blair is charting the course for innovation’s drive further into the contractor’s organization and culture. We discussed the challenges of organizational change, the challenging dynamics in our industry, and what innovation means to a specialty contractor.
To kick things off: Do you mind talking a bit about the mission of Comfort Systems USA and what it is that you guys work on?
Overall, our goal is to be the premier mechanical, electrical, plumbing off-site contractor in whatever market we choose to operate in. We want to be the best and we want to bring capabilities that no one else brings to the table.
We look at innovation broadly in terms of, if we just get one percent better every day then by the end of the year, we’re a whole lot better off than where we started. And so, you know, a lot of folks dismiss that kind of incrementalism but we find that you can make significant gains if you’re getting a little bit better over time.
My argument is simply that we’re one of the most innovative stakeholders in the whole value chain because we’re constantly having to solve these problems in real-time with poor information and get over the hurdle and get the thing built. And so, there’s some systemic and structural challenges in the industry in the way construction is approached, especially in the U.S., that make it hard to achieve significant productivity gains.
My background is on the Owner and EPC/M side of construction. Explain the unique challenges of being a specialty contractor in a fragmented industry like construction, especially in the context of long-term relationships with GCs and owners and the willingness to invest in new technologies.
The level of fragmentation in the industry, and within the technology landscape, makes innovation and the adoption of specific technologies inherently difficult. There are many GCs/CMs that use many different types of software for many different applications.
As a subcontractor, we are asked to work in multiple project management solutions across our portfolio of work with different GCs/CMs. In addition, the project-based nature of the industry makes innovation difficult in addition to the hodgepodge of building codes and owner requirements encountered across the U.S.
Wrongly or rightly, it’s generally understood that trade-based and specialty contractors have struggled with productivity levels and growth. Plumbing & HVAC, in particular, is one of the biggest activities in construction but also has one of the lowest productivity gains compared to others. How do you read these charts showing productivity across your segment has stagnated or declined?
At this point, it’s viewed as a bit of an insult by the subcontractor community. Many of the challenges facing subcontractors are a result of the structural and systemic challenges. If there were more consistency in codes, project management tools and processes, owner requirements, standardization of means, methods or materials, then each project would be less of a one-off endeavor and productivity would improve for all stakeholders.
Subcontractors are also among the most innovative in the construction industry — by necessity. Labor is our primary asset and cost category so Comfort Systems USA has many ongoing initiatives related to productivity improvement: best-in-class training, a world-class network of MEP firms that proactively and collaboratively share best practices, and some early promising results from efforts to digitize our knowledge base and leverage data and analytics to better plan and execute our work.
Are you able to talk a bit more about those digitization efforts?
We use the McKinsey Three Horizons Model to orient our thinking. In that, seventy percent of our time is spent on Horizon 1 which is finding new digital tools, best practices, and business models that we can apply to our current businesses, markets, and customers.
Horizon 2 looks around the bend a couple of years into the future. Asking ourselves, what might be coming but hasn’t hit us yet? This is where we partner with venture capital. Seed stage companies aren’t necessarily someone that we’d be able to directly partner with — but that’s where the future is.
Reality capture is a good example of this. We’ve got 360-degree real-time video on jobsites. While they can’t count all of the parts and pieces associated with a mechanical system, it will eventually get to the point where that video image can tell us what the percent complete is on a piping system, for example.
And then there’s Horizon 3 which is looking down the road five to ten years. We’re looking at transformations that happen in other industries and how those different transformations evolved. We then use those lessons learnt to understand our range of possibilities.
The idea of corporate innovation is everywhere these days. One estimate says that there are over 70,000 books on innovation available right now. At the same time, 55% of business leaders say their organization is “not able to innovate effectively”. How do you define innovation at Comfort Systems USA?
Innovation is a core value at Comfort Systems USA. It’s something that each of our subsidiary leaders believes in and supports, as do our senior management and board of directors. We define innovation as: “The introduction of new technologies and business models that drive performance improvements and sustainable growth over the long term.”
In addition to that definition, we also strongly encourage and invest in new means and methods that can help us execute work more safely and productively. Some companies don’t think of this as “innovation” as they are more focused on shiny objects — we believe innovation comes mostly in the form of better ways to do things that give us an advantage over our competition.
Nate Fuller is Managing Director of Placer Construction Solutions, advising leadership teams to transform their organizations in ways that improve performance and agility at the field level.
He provides construction companies with a field assessment that delivers transformative information about their field operations and is proven to accelerate innovation & technology adoption for Top ENR contractors.
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