We are seeing more black swans in our personal lives everyday. We are also seeing more black swans in building materials. A black swan is something that comes as a surprise and has a major effect on the status quo. Think of a black swan as an unexpected innovation that can disrupt your world.
What did Craigslist do to classified advertising?
What did Amazon do to book stores?
What did Uber do to taxis?
What is Airbnb doing to hotels?
What is Nest doing to the thermostat?
Google is entering the HVAC equipment business.
An ex-Amazon executive is going to start building houses.
A 57 story building was built in 19 days.
All these companies offered novelty, convenience, and efficiency while their more traditional competitors were busying themselves with business as usual.
Most building materials companies worry about a competitor lowering their prices. What if the new price was FREE?
Information is readily available to everyone. Contractors, architects, builders and their customers are able to find information and compare products quickly and easily. They no longer depend on you as their primary source of information.
In this environment, companies that are the first to innovate and offer new services, an original customer experience, or a cutting-edge product can take a huge share of the market away from their competitors.
In large and small ways, this same type of innovation is rapidly coming to building materials. The innovators who are coming have little or no building materials experience. They don’t follow the rules of how a product is sold. They are so well funded that they may not have to show a profit for five years or more. They are not afraid of failure.
The old barriers to competition such as the cost of a plant or dominating a distribution channel are no longer an effective defense. These barriers are irrelevant to the innovators.
If these innovators have not already disrupted your business, they soon will.
The building materials industry is not known for being innovative. It is known for resisting change.
Building materials companies need to learn how to be more innovative, or they will become obsolete and die.
Here is why building materials are not very innovative and what to do about it.
Why You Probably Haven’t Tried Anything New in a While
Now that we’re seeing industry after industry overturned by start-ups and small companies, you would expect people in every sector to be anticipating some kind of disruption in the very near future. And you would think that they would all be brainstorming ways to get ahead before the “Amazon for building materials” or the “Uber for architects” hits the scene.
But that’s not happening. Time and time again, I see building materials companies still doing things the same way they’ve been doing them for years as if there is a single path to success.
Here’s why building materials companies resist change.
1. Routine feels good.
If you do things a certain way for a while, it starts to feel comfortable. People like predictability and they want to know that their jobs are still going to look the same in a year.
Sending sales people to the trade shows every year, doing business over the phone instead of a website or through an app, and using the same type of marketing programs you’ve been using for twenty years all feels nice and familiar.
Any suggestion that you deviate from the way things are done is going to take you out of that comfort zone. You’re going to have an instinctual resistance to change – even if it’s what’s best for your business.
2. Change takes effort.
Changing things requires a lot of work. If you’re in marketing, switching to a new method might mean having to learn about new techniques or finding a new supplier. That’s a lot of effort compared to just using the same traditional methods and suppliers.
There’s no way around this one – change takes work. But no one ever got successful without breaking a sweat once in a while.
3. They’re worried about their jobs.
Employees who do things the old-fashioned way might worry that there won’t be a place for them at an innovative company.
If the marketing team is really skilled at using magazines for advertising, what happens to them when the whole marketing strategy goes digital? Will they even know where to start if they have to put together a social media campaign? If they think they won’t be able to learn and adapt, they’ll resist any suggestion to try out new ways of doing things.
Senior executives frequently see themselves as having invested the time and effort to become a black belt, like karate. They see change as losing their black belt status and having to relearn their job. It’s much easier to coast and look busy.
Some people feel so insecure in their job that they develop a kind of tribal knowledge that they refuse to share with anyone else. They think the key to keeping their job is being the one person who knows something that the company can’t function without. These people will shoot down any major changes out of fear that their secret knowledge will become irrelevant.
It’s important to get advice and input from your team, but you also need to recognize when their fear for their job is holding the company back.
4. They think a crisis is the only time to innovate.
A lot of company leaders think that as long as the money is rolling in, the budgets are healthy and the business is growing; there’s no need to innovate.
They might be open to change – even drastic change – but they never stop and ask whether they could be doing anything better until they run into some serious problems. The trouble is, by that point, it can be too late.
You need to innovate during good times and bad. Just because things are going well doesn’t mean they can’t be better – and it doesn’t mean they’ll still be going well next year.
How to Become a Building Materials Innovator
The good news is that it’s not too late to change and adapt. Just because you’re not starting a new company or don’t have a huge budget doesn’t mean you can’t become more innovative.
Here are some simple changes you can start making now.
1. Focus on the pain of staying the course.
Like I said above, a lot of people feel really uncomfortable about change. They like the way things are, and trying something new just seems like a lot of trouble.
This happens when companies start focusing too much on short-term discomfort and forget the long-term consequences of failing to innovate and adapt. Keep those consequences at the forefront of your team’s mind. Remind everyone what happens to companies that don’t innovate. And when they’re spending too much time praising themselves for the great income stream they’ve built up, ask them how they’re going to keep it going when their customers retire or go out of business, and they can’t gain new ones.
Make innovating the base-line expectation. If those messages get through, business, as usual, won’t feel comfortable anymore; it will feel uncomfortable and scary. And it should – no one wants to go out of business because they were too slow to change.
2. Brainstorm multiple solutions to every problem.
The writing staff for the website Upworthy are all trained to engage in “divergent thinking.” What that means, basically, is coming up with multiple solutions to every problem. It’s a simple exercise, but it trained the staff to be more innovative and is part of what makes the company a continuing success.
Do the same thing at your company. Make it clear that finding a single answer to a problem isn’t good enough. Brainstorm until you have five, twelve, or even twenty.
Why put in the time and energy to do this? Because people tend to stop looking for solutions as soon as the problem’s solved. But the goal shouldn’t be to try to find just any solution to a problem. The goal should be to find the best solution. And the solutions that look great on their own might not look so hot in a line-up next to ten others.
3. Show some excitement.
As you can probably tell by now, a big part of becoming innovative is changing your attitude. It’s about letting go of the fear change and learning not to settle for less.
One of the most important attitude adjustments is learning to see change as exciting. The start-ups and small companies that are disrupting established business models have one thing in common: they’re led by people who love coming up with something new, who love finding different ways to solve problems and who can’t get enough of finding small ways to optimize their business.
You need to model that same attitude. Show some excitement about trying out new approaches and your team will get the message. They’ll learn to embrace change, not see it as a necessary evil.
4. Recognize that big successes are built on small failures.
One of the most frightening things about innovating is all the small failures that come along with it. Most of us have been trained to be perfectionists – we’re ashamed of failure and do anything we can to avoid it.
But failure is just part of experimenting. Every dead end you bump into and cross off your list gets you closer to finding the right path. Try something interesting and, if it fails, learn what you can from it and use it to get better.
Encourage your team to take calculated risks (with measurable outcomes) by praising their innovation and experimentation, not harping on their failures. Make everyone comfortable failing small or you’ll end up failing outright.
5. Innovation Starts at the Top
An individual who tries to be innovative faces a system that is designed to quash innovation. Without a leaders commitment to innovation and change, it will not happen. The person who you think you is your most important employee will probably be the biggest barrier to change.
If the leader is really committed to change, everything and everyone must be on the table.
Two Final Thoughts
“Thank you for you this post and insightful view of our industry. The post was right on target with the way so many companies in building materials industry and builders alike think. Today companies have become so risk adverse that they fail to look for the new mousetrap and instead just put lipstick on a pig and call it innovation.”
Michael I. Johnson
President / CEO