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E02 Bechtel Innovation Chief on Construction Innovation at 120-year-old Behemoth

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e02 Bechtel Innovation Chief on Construction Innovation at 120yo Behomoth

DAVID WILSON: Partners in the company set aside funding to invest in innovation. You shoot for crazy, there's a good chance you're going to get to something that's genius.

MANDY HENRY: Welcome to the LITES podcast. It's leadership and industrial technology education and safety. I'm Mandy Henry, and today we'll be speaking with David Wilson, Chief Innovation Officer with Bechtel Corporation.

WILSON: So, Bechtel is a large engineering procurement construction company in large. We do about 30,000,000,000 in work off a year and have 60,000 employees worldwide, 120 years old, private 5th generation owned and led by my family.

HENRY: Zack Parnell, CEO of Industrial Training International, sat down with David to discuss how Bechtel is tapping into the culture of innovation that already exists within the organization to unleash and drive construction and productivity to be safer and faster when getting the job done. Thanks for tuning in.

ZACK PARNELL: Thanks Mandy. I was fortunate to catch up with David at a LITES event we hosted at the Bechtel Welding and Applied Technology Center in Houston. We started with some background on David and Bechtel and eventually explored the $60,000,000 innovation fund that David oversees for the company.

WILSON: So, my role as Chief Innovation Officer over the last year, it's really been about tapping into the culture of innovation that exists in the organization and unleashing that to drive construction productivity and better, safer, faster, leaner execution on our job sites.

PARNELL: Awesome. What did it look like to innovate before the innovation group that we're going to talk about, kind of formalized?

WILSON: Yes, so before it was happening on job sites, so typically you have a project, the project has a fair amount of autonomy to go execute for a customer and every day our workforce, our craft our builders or non-manuals are innovating on solving problems, coming up with creative solutions that advance a project safer, faster, leaner, and delivering for our customers. That's just what we've done for 120 years.

What we've now tapped into with the Future Fund is allowing that workforce in that population of innovators to be more experimental without risking project execution. Taking innovation off of the project execution. Experimenting and exploring new solutions that we can then deliver to the project in a mature innovation fashion that can then scale across the organization. So, it's allowed us to reach a little further into the future but also scale the innovation across multiple projects which in the past it was hard to do because it was typically very direct and purposeful for that project in execution.

PARNELL: We're going to chat a lot about how ideas are created and I’m excited to hear about that. What is the Future Fund?

WILSON: So, the Future Fund 2-2 ½ years ago, the partners in the company set aside funding to invest in innovation, a R&D like fund, if you will, for our organizations. So, the partners set aside money, invested back into the organization, at $60,000,000 aside over initial 3-year period and said we want to go use this to unleash the innovators in the company and put it towards ideas that come up organically through the organization as well as experimenting with external solutions to find good fits for deployment.

PARNELL: Terrific. How did you roll this out? To how many employees?

WILSON: 60,000.

PARNELL: 60,000 employees. So how do you communicate this new idea to the group and then how are ideas to then fed back into the innovation group?

WILSON: Yes. I will tell you starting off, we went out, launched some crowd sourcing tools and platforms and tried to drive engagement and awareness. Honestly communication is probably the more important sibling to innovation because you know understanding where we're at collectively then innovate from it is a challenge with a 60,000-person organization in jobs that are in remote locations. That email is sometimes an option but it's not always there to drive content and so it has been a challenge.

We launched a crowdsourcing tool that we use that allows anybody in the organization to submit an idea and then it goes through the social vetting and feedback and then through an expert review. So, year 1 was really about awareness. What are we trying to do? How do we get engagement? How do we drive participation? Year 2, which we wrapped up last year, was about OK, we've gotten 2000-2,500 ideas in, how do we advance those ideas from concept into deployable solution and accelerate that cycle time or maturation. So, we're getting ideas that actually impact work into the field and on a job.

PARNELL: So those 2000 plus ideas, can you cross section them for us a bit by type of projects, type of people that delivered them, types of ideas?

WILSON: So, we've had a lot that tie into, called information delivery if you will. So how do we deliver information to the workface, whether that's in design or procurement or construction more efficiently and effectively, whether it's a software application that's tailored to what role you're in and how do you get to what you need to make the best decision you can? So, we've had a fair number of information delivery, innovation and suggestions.

We've had quite a few number of physical innovation, so different pipe support, different type of rack for shipping, a different type of pipe configuration, different type of assembly. So, we've had a fair number of physical innovation that we can deploy on a job site. There's, there's a lot of process in between, you know, if we could do this differently or what if we eliminated the step or how about this that we have experimented and explored and then I'm certainly bringing in outside technology that's used in other industries and applying it, whether it's anything from blockchain that's a life of its own and finance and now into healthcare.

How does that fit in construction? VR for instance, you know, been used for a while in educational roles and purposes, what's the fit for construction? So, a lot of those questions were posed and we were able to experiment and try to find how they fit and can apply to our execution of construction.

PARNELL: Did you receive any ideas that surprised you?

WILSON: Yeah, there's been a fair number of them. For a while, my benchmark for the crazy idea was inflatable scaffolding. And the reason that's important. Yes. There's just so many. You know, it's a great, great example of, you know, what if we had an inflatable scaffolding, think about how many problems that would solve and safety benefits of it. I mean it is a total radical idea. The initial reaction least mine was, well, that's just silly. That's not going to work, but you start to pull that back and unravel the idea.

I said, “Well, there's some so that might actually work, you know, there might be better, there might be aspects of that that we could work with and play with.” And so, we've tried to communicate to the ideators and innovators in the company that you shoot for crazy and just shy of crazy is genius. And if you limit yourself to genius, you're probably going to end up at, you know, good or maybe mediocre. But if you shoot for crazy, there's a good chance you're going to get to something that's genius and significantly disruptive.

WILSON: Inflatable scaffolding surprised me. The one that came up after that that we've actually got into a working prototype is an artificial cloud. So, again, somebody puts in artificial cloud, you think, “Well are we going to modify the atmosphere to create cloud coverage? Are we reseeding the atmosphere? What's the plan here?” No, it's, it's not quite that complex. It's really just, how do we create cloud cover to reduce the ground temperature on a job site for both the workers performance, but also the process performance. And you know, we've now got a prototype of that and it's coming along. It's pretty interesting. So, there's been ideas that I've stepped back and said, “Wow, that's crazy. And actually, might be genius.”

PARNELL: Incredible. So, you've received about 2000+ ideas to date, have you found that Prado’s Principle apply here? Are you're getting some really innovative people that are driving a lot of the ideas? I’m curious about the people delivering the ideas to the group. What have you learned?  

WILSON: Yeah, you see Prado’s. You see hot spots or hotbeds of innovation within the organization and I stand by the idea that everybody can innovate and be creative, but in some cases, it's a repressed muscle for a lot of us as we go through school. In some cases, if we've been in a technical discipline, kind of gets worked out of us to some extent and you have to go back and find some of that and develop some of that capability so that you're not limiting yourself on the creativity because of maybe a technical expertise.

You step back and look at things differently and that's where design thinking and practicing and being creative and innovating and pushing towards crazy helps create more comfort for innovation.

PARNELL: I'm sure you've also had to enable and help people flex that muscle. Right? So, what have you learned about communicating things like failure is OK and that those sorts of things that are not usually culturally aligned to a maybe a construction company, per se?

WILSON: Right. Either the Silicon Valley, you know, adage that fail, fast, fail often. It doesn't resonate within construction because the risk aversion, which is absolutely the right approach. We can't have, you know, risky failure on jobs, it's just not viable. But how do we take some of what is already in existence in other industries, whether it's in healthcare and how they explore and experiment because they have the same risks. You can't fail on an operating table just like you can't fail on a job site. So how are they innovating? Well, there's a lot more that gets done in the upfront prototype concept development, prototype pilot before you ever get to the job site to work through that learning. And so we've changed the adage to say, “We want to learn safe, fast, and forward,” and if you were to flip the word and say we want to fail safe, fast, and forward, I would argue that that's the case, but really it's learning forward and learning in a productive manner, and how do we bring that culture and make that OK to say, “We don't want to fail on a job site, I absolutely agree, but let's go try to experiment and explore in a lab or in an environment off of the job site.”

Our Welding and Applied Technology Center is a great example of, “Let's go try some different approaches in that technology center, figure out if it works so that we can then deliver it to a job site where failure isn't an option.”

PARNELL: The Welding and Applied Technology Center David is referring to is actually the facility we were in for the day. Serving as one of Bechtel’s best places to learn safe, fast and forward, I couldn't help but compare the place to other historic R&D sites. There was Bell Labs in New Jersey that pioneered the transistor and the Xerox Park Facility where a young Steve Jobs first discovered the graphical user interface and mouse. These R&D facilities were home to some of the brightest engineers in the world and were responsible for pushing the limits of technology. By nature, R&D is high risk and high reward. So, we explored with David how ideas are generated within Bechtel and how the company measures success

WILSON: I think a lot of times the jump is to say, “What’s the ROI of this idea?” And that's OK. Every idea needs to, if it's going to be successful in the end to deliver ROI, but really there's a different accounting and innovation accounting I think is a real thing and Eric Ries presents it in The Startup Way, which is really pretty good around, how do you track the maturity and the progress of an idea with some leading indicators that might not be ROI at the early phases? We've adopted that and said, “OK, you've got a concept. We think the concept has merit, it aligns with some of our strategic principles and objectives, so does it help us apply to safety, apply to quality and apply to productivity and physical execution? Yep. OK. Is it cross GBU meaning, does it affect more than one business is or is it a very business specific idea? If it's cross GBU, it's a fit. Is a disruptive? Meaning, Is it new learning? Is there a hypothesis that we needed to test and explore to, to demonstrate your learning that we haven't already established? Or is it a replication or incremental? If it's replication or incremental, we, we typically push those back to the functions and say, “This is probably a go-do you should consider.” So that's the first gate that we go through.

PARNELL: OK. Then take us through the rest of the gate. So please go back to that. So, if somebody can implement a quick solution right there on the project you're saying you can tell them go implement that and that's your first gate.?

WILSON: Well yeah, exactly. So, if there is an idea, it's mature enough and proven enough that we already know what the ROI is, we already know what the benefit is, then we turn it back to the functions and the project and indicate this idea has come through, it's vetted enough and mature enough and we've got enough benefit demonstrated from other applications wherever else it might have come from. You should just make a decision to go and implement it because you get all the benefit and you know what the cost to implement is. Go make the decision as a business decision on project or in function, if you want to balance your priorities to go do this.

Not every go-do that comes in is an equivalent go-do and that applies to ideas and we try to communicate that to folks that not every idea is equal. Some ideas will have so much potential for impact that they're going to get extra help and extra prioritization and extra assistance. Other ideas, they're nice and they're interesting, but we're going to let the originator continue to work with those. They just may not get the help of the full organization to develop that. So, if it's a go-do we turn it back and say, “We think it's got merit, but you need to prioritize and figure out if you're going to go do it now or later.”

PARNELL: Would that employee, you have to get buy in from the project manager whoever managed to budget on that site?

WILSON: Correct. Because then it's going to get implemented right where they're at and we would try to broadcast that and share that across the organization.

PARNELL: In speaking with David Wilson, Chief Innovation Officer for Bechtel, the world's largest construction company, we delved into some best practices David and his team have learned that he wanted to share with others.

WILSON: Yeah, so a few things, so you need the space and when I say space, you need people to have the bandwidth to think and be creative and have the safety to question and to explore. So if you're so focused on job security and your professional safety, you're probably not going to be as disruptive or innovative as you could be.

Giving people the space to innovate, having the resources to then go and fund the innovation so they're not actually trying to solicit funding from projects because what will then happen is we only get innovation that meets the project's current needs today and scope for that project.

PARNELL: An inherent system level reality that builders face and deploying innovation is that the nature of the business involves managing economic returns at each distinct project. These realities make it difficult to justify project level spending on innovation that pushes the limits and might not bring immediate return to a given project. Next, we discussed if and how Bechtel has built a taxonomy around the types of problems that need solved. David describes two major areas, including delivering resources to the workface and safety.

WILSON: It kind of goes back to their first, you know, we look at how do we effect the time on tools, how do we affect the productive time for our builder population at the workface, and that can be a function of getting the tools to workface, getting the material to the workface, getting the people to the workface or getting the information to the workface. So how do we do that as efficiently and as effectively as possible, and then give them the power to control their own destiny? So, do they know what they need to get done? Do they know how their performance is accurately tracked? Are they empowered to fly constraints in action? Those that are supposed to be helping them. How do we create tools and structure that allows that to happen because I really believe that our builders want to do a great job or are really passionate about what they do and it's almost just how do we get out of their way and make sure that they are not constrained in doing that, whether it means getting information, tools, material and resources to the workface? So, that's one way we look at the construction piece of it.

Then there's the safety and quality aspect too. There things that we can innovate around that eliminate dropped objects or eliminate working at heights or eliminate working near or around loads? Are there things that we can do that eliminate the potential for, you know, a person, equipment, machine interaction that never ends well? So, how do we leverage technology and innovation to really make zero a reality when it comes to safety in accidents. We have some internal applications that we have been working on that are tailored towards our, our builders that allow them to access resource schedule, plan, execute differently.

We've got applications that we've been developing internal that now are on I think 11 projects at the last count that have gone from concept into prototype into pilot on a few jobs to prove the value in the merit that we now have deployed on 11 projects in a working on scaling. So that's an example of where we, we had a need, there was anything that was off the shelf that we could configure or that we could customize it, we thought really how we executed. And so we went and developed some solutions that we're now deploying. And that's one example from a software perspective.

On the hardware, there are some examples where there's a couple of these were, I kind of have to speak generally be good because there's a couple that are still going through the patent process because there's a couple where our engineers identified that there was a different way to do fittings. We funded the exploration, testing, and improving of a new fitting that they fabricated. They tested, they evaluated, they went through and got all the engineering testing and search for that is now about to go into production at a fabrication site where it went from concept, again, we funded concept, we funded the lab, we funded this research, we funded the testing, funded the proving and now it's about ready to go into production and it could have significant impact and benefit to some our approach to piping. Right? So that's an example of a physical one and then looking on the external, I'll just use ITI for just no reason other than I think it's a good example. So ITI, we identified, it's probably been a year, year and a half ago. The promising VR capability around simulation, liked it, you know, I think it's got a ton of potential for training, with the right business stakeholder from Jim Nolan and BEO engaged. I think it really resonated with the potential for us to deploy it with real benefit on how do we train or how do we validate training before we send somebody to a job site? How do we make it more experiential? How do we do all these things without the costs of putting somebody on location in a piece of equipment and had a ton of potential and benefit, but it didn't have some of the scenarios and some of the equipment that we wanted to use.

So good example of more or less an off the shelf solution, we wanted to deploy, but didn't have all the scenarios that we were interested in potentially deploying on our jobs. It's just because of the pieces of equipment. Through the conversations, you know, could we prioritize what got developed next so we can deploy those other pieces of equipment in the simulation to our job sites? Had dialogue and conversation around how can we help expedite that development so we can deploy the solution more broadly and work through that agreement and that discussion around could we get these developed, can we deploy it? And that was an example of where we participated in co-development or strategic investment to expand their portfolio for our benefit, but I think also helping ITI get more to market quickly, so that's it's an example of where we're trying to.

We're trying to be a good customer for startups and for solutions externally. We're not necessarily interested in being equity investors, you know, we're not investing for investment's sake when it comes to external. Our partnership and our partnerships externally are really geared around how do we co-develop, how do we become a strategic partner so that we can be a customer for a very long time of the solution where we may not have the ability, the means, the methods or even the desire to build in-house?

PARNELL: David’s team works out of Houston where the innovation group started. We explored what that looks like today and how they think about managing innovation groups worldwide.

WILSON: Really, it’s a collaborative space. It's a space that we can have startups, we can have partners, we can have customers, we can have collaboration happen and come together. So, when we say Houston Innovation Center, really, it's space. It's an environment that we can bring people into and collaborate around and do demonstrations and do innovation exhibits and expos, and that's worked really well.

Why Houston? Well, this was just the start. So, we now are working to replicate in Reston, where we have our corporate headquarters. We have small footprints in London where we're doing the same thing. Our New Delhi office has an innovation center in their office where they're exploring different technology and working on new solutions and bringing folks into to demonstrate. We have a small footprint in our San Francisco office. There are now hubs in different locations that allow us to have space to go to, a beachhead, if you will, to go innovate and bring people around to discuss how can we execute differently? So that's a part of the innovation. So there's no magic to it other than it's a place for people to come to.

PARNELL: You mentioned your customers several times. Have you engaged your customers in a formal way with the innovation group and how? How so?

WILSON: Yeah, absolutely. So, we've had a couple different ways. So we have had customers come in and we've walked them through what could it be? What's a tailored approach to your project look like using the real innovation that we have in the pipeline. That's important because a lot of folks will talk about innovation theoretically and futuristically. We bring them in and show them. We say, “OK, this is exactly what it looks like. This is the experience. This is how it would be deployed. Let’s make this an experiential presentation around innovation for your job site.” Bring them in, have that conversation. That's one aspect when there's a specific project involved.

Others are we want to go collaborate around safety, around sustainability, around diversity and inclusivity. Let's get around a table and sit and talk about how can we co-develop or collaborate around these key values for all of us to the industry forward through innovation. From the customer’s view, we offer the opportunity to go actually test some things that they might be exploring or thinking about doing, whether it's new approaches to VR, or new approaches to torque or new approaches to documentation or data or any of that. We can be proving ground if we collaborate and they can help expedite the adoption because they can drive the requirements.

PARNELL: One final question. If you could isolate the single biggest problem that you feel needs to be solved in the next decade and construction, what would you say?

WILSON: Yeah, great question for the last question.

PARNELL: Hahaha

WILSON: Thanks for that. A single biggest problem, I think that when we go back, and I’ve kind of shared this in a couple of cases, my view is we have been stuck in this chasm between document centric workflows and data centric workflows for probably 10, 15, 20 years. And so you think about, “OK, I'm doing a lot of digital content and data centric work on the design side, but it never makes it to the field or it makes it to the field in a reduced less effective fashion, but we're still doing all the documentation.”

We actually found the worst-case scenario where I'm doing all the paperwork and we're doing all the digital enhancing and entry. So, we're spending more hours, less productive, taking more time and energy. I think the best thing that can happen for the industry is that we find a way to get all the way up the curve on the data centric execution across the whole value chain, which really requires the customers and the owners and operators, the builders, the designers and the small suppliers to find a way to inter-operate between data platforms and data standards. How do we get out of issuing objects on drawings and how do we get rid of that archaic approach to where we can really drive information to the workface wherever that workface might be to make the best decisions possible? So, if we can crack that, there's a lot of things that can happen and relative to machine learning and big data, AI and just making better decisions and more productive time at the workface and you can get tools and equipment predictively to the workspace.

A lot of very interesting things can happen if we can crack that industry wide data centric problem and get out of document centric. So, if we can all rally around that, I think in the next 5 years, I think we'd see a phenomenal shift in the productivity curve that has really hurt the industry and then if we've done it intelligently, then we can plug new solutions into that foundation that we could continue to iterate and enhance and move forward and improve upon.

PARNELL: You know, we're excited to see that work. So excited for your work, thank you very much for spending time with us today.

WILSON: It was great to chat. Really appreciate it.

HENRY: Thanks for tuning into LITES. It's leadership and industrial technology education and safety.

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