NIBS Closing Keynote for the Building Innovation Conference with Nancy Novak and Doug Mouton

Nancy: Hi, everybody, this is Nancy Novak. I’m Chief Innovation Officer for Compass Datacenters. And I’m super excited to be a part of the closing keynote for the Building Innovation Summit that the National Institute for Building Sciences has been putting on. We have a very important and exciting topic to cover. It’ll be about safety and production, and we’re gonna fold diversity into the topic as well. My partner Doug Mouton will introduce himself.

Doug: Hi, everybody. I’m Doug, General Manager for Microsoft Cloud Construction globally. Really excited to be partnered up on this talk with Nancy. Nancy has been helping me think about diversity construction for some time now. So we’re gonna talk about the connection between high-quality safety and high-quality performance and how we can expand that to diversity inclusion.

All right, well, I’ll kick us off. So our key hypothesis that we’re gonna share today is that projects against safety right, I mean, really right and safety excellence, like some of the very best practitioners in construction, we see a discernible pattern that’s proven with data that shows that these projects that have excellence in safety also improve performance and quality, schedule, and cost. So we’ll be walking through some of the things that Nancy and I have observed in our practice here in the data center industry, that are indicative of things that we think are working in those lines.

Nancy: So to Doug’s point, the statistics on production are not really favorable for the construction industry. In fact, 98% of the mega projects are reporting being over budget and over schedule. So I was hoping to talk to you a little bit about an offsite manufacturing process. The new buzzword would be industrial approach to construction because this is the way the future for construction and how we can fold the safety topic in with the production topic, and then also been with the more inclusive topic. So, offsite manufacturing is one of those buzzwords, it’s been around for quite a few years. What we’re trying to do is normalize it in our business.

There are many different types of offsite manufacturing from sub-components to fully-modularized units, but the benefits of offsite manufacturing are many. As you can see on this slide, I visited manufacturing plants all over the nation. And as you can see, the diverse workforce is much more inclusive in this environment. It allows a very controlled environment, it allows regular hours, it eliminates long commutes, it allows better training and oversight, and the conditions are much more harmonious to an inclusive environment.

Therefore, we can bring in more trades which we desperately need. We can have better training for a skilled workforce. And then on top of that, you have these benefits of being able to have a high level of quality in a controlled environment, and then set a cadence up on the schedule for the job site so that when the components show up, they’re put in place on a regular cadence, therefore be more predictable. And Doug’s gonna talk to you a little bit about where it worked really well on some of his Microsoft jobs.

Doug: Yeah. So thanks, Nancy. So, like the offsite, it’s really about planning and just a key learning for me on the offsite work is yeah, we can create that environment where we can introduce more people to the workforce, more diversity, we can get that safe environment. As you all know, we have to watch out for the double handling of our gear, the transportation costs. If we don’t drive the reduction of hours in the field against the pre-manufacturer, we can see ourselves not getting the economic output we want.

But let’s take a little time to talk about planning. To me, to get safety right you got to be a good planner and you got to plan deep into your project to understand what these high-risk activities are. And what is landed as a best practice for us at Microsoft is really the empowerment and engagement of our field teams, particularly those foremen and superintendents.

And we cause them to gather every day, what’s called a daily update briefing, just a big room. And these workers, these leaders are talking about the work they’re doing for the next day. When they do so, they learn what each other is doing, the help they might need from each other, the areas of real estate that they need to coordinate so they can get their work done. And what we find happens when we engage the workforce at that level, they start to drive the refinement of the delivery and project more so than us. So we see the craft and the leadership from the workforce start to drive solutions in the field. That’s the kind of magic and trust that we’re looking for in a high-performing job site.

We go to the next slide I can tell you a little bit. You can see examples of the big room on the previous slide. I wanna just show you where recently we finished three of our first new DCs in Phoenix where we went and launch three campuses in parallel, and delivered these projects in less than a year at the exact cost point we’re looking for. And you can see the big room, the planning that doesn’t require anything special. We can do in the trailer, we can do it in a tent, we can do it on the hood of the Jeep. Whatever the environment is, that doesn’t stop us from doing that deep integrated planning.

So here’s an example of how we like to think about front-end planning, how we use it to empower the craft and leadership. And then we also drive very high performance and safety with this level of approach. So our portfolio right now is running out about 0.49 IRI against a national average of 3.2. So it can be done with that market.

Nancy: So this is an interesting chart that we wanted to share. Again, we’re trying to tie together the fact that a safer job is a cleaner job, it’s a better logistically ran project, which then becomes a more efficient and productive job. And part of that safety that we like to talk about, it deals with the personalities on the job site.

And I talk about diversity all the time, especially in our industry, because it’s quite dismal. In fact, only 3% of trades are female in the industry and we are not very diverse on any level. So I just wanted to go over this chart that Doug presented to me because I thought it was really fascinating on how the buildup of diversity concepts and the things like microaggressions and micro behaviors kind of align themselves with the safety aspects when you look at things that are like near misses or minor incidents.

So in order for me to really explain this in a better way, I kind of want to give you some examples on the right-hand side here, about what the microaggressions are, and then possibly also some of the behaviors around those. So as an example, you probably in an everyday conversation don’t even realize, you know, how important words can be. So when you say things like, “Oh, that’s so gay, or that’s so white of you, or we got gypped.” Just little things like that, that are normal or kind of become a part of your daily vernacular, those are microaggressions. And those are very harmful in the long run.

One of the examples I like to use is when people say you throw like a girl. Obviously, nowadays that’s considered, something that’s not favorable, but it was something that was very, very common in the old days and we like to try to change that and let everybody know that language is important.

One of the micro behaviors that you’ll see a lot of times is when someone’s talking and they aren’t being paid attention to, they don’t let someone finish their sentence, they don’t give respect by giving eye contact or, basically, mentioning the achievements of one person over another person. Those are micro behaviors that can lead to a less inclusive workforce. And it can lead to good talent leaving, honestly.

So we look at this buildup on these pyramids, and if we can identify these small behaviors that can lead to the larger behaviors, it’s similar to a safety accident where you see the little things that are happening, they lead to the larger things that have happened. So this is where we wanna focus our efforts so that we can avoid the problems that we’ve been having in the industry and become more inclusive because everybody knows an inclusive business is one that’s more profitable, one that’s more friendly to work at, one that will be more productive and obviously one that is gonna attract a lot of talent.

Doug: Yeah. If I could just add on the previous slide, the model that we’ve tried to make this analogy with is the Heinrich pyramids statistical probability. What’s the march of events that lead to a fatality or maiming? And if you look at the left, it’s the little indicators like poor housekeeping, poor planning, near misses. And all of these are the march up to manifesting bad behaviors or bad outcome on-site, people get maimed or killed.

We see a similar parallel with the environment on our site if it’s sloppy language, and sloppy behavior with each other, that leads to disenfranchised players that cannot be doing their best work or not really leaning in, or feel like they don’t belong. And that manifests in other ways, too. So we’re really trying to connect the dots between not only the burden we have as leaders to provide a physically-safe site but the reality of providing that emotionally-safe site. And this is probably the area where I’m doing the most growth as a leader this year.

So let’s take it to the next slide, which is my perception of what I thought I was doing versus what’s really happening. In the last month, we have all experienced the direct impact of the Black Lives Movement, and how we have noticed this deep divide that we, as this country, need to come to grips within the U.S. And what we’ve had observed in the U.S. construction environment is that for some reason, and maybe it’s precipitated by the Black Lives Matter Movement, but we are seeing acts of hate and racism on our sites, not just data center sites, but North American construction in general in the U.S. There’s a spate of activity.

And it really shocked me because I believed that I could show up on sites and talk about the importance of diversity inclusion, celebrate a few underrepresented folks that were on the site and thought I was checking a block for diversity inclusion, and I absolutely was not. I thought I was doing the right thing. I thought if I stood up and said the right thing, and the other owners said the right thing that we would then magically have this environment we’re looking for.

The last month has proven to me that that’s not correct. And it was an incorrect assumption for me to make. And the way for us to really make a difference is to challenge all the paradigms and stereotypes on our job site. So on the left-hand side is I’d say pretty fair assessment if you ask me about the street, what they think of a construction site. And then on the right-hand is where we must go as an industry if we’re going to really drive the growth and the inclusion and the performance we need out of this industry. Nancy, anything you wanna pile on a [inaudible 00:11:46] force?

Nancy: No, that was wonderful. But thank you for those genuine comments, Doug. I really appreciate that. Because sometimes, the hard conversations have to take place for meaningful change to occur. And I do wanna point out that, the macho manly kind of approach to the blue-collar workforce has been around for decades and decades. A lot of that is a result of having to use brute strength to do the work, which is, again with some of the modern methods of construction is no longer a factor. And some of it is literally harmful to whether you’re a white male or not. It’s harmful to have that kind of an attitude on the job site because it does lead to an unsafe environment.

So I would encourage everybody to think really hard about taking it personally, the way Doug has, the way I have, and really taking responsibility and accountability for how your staff and how your subcontractors and how your general contractors are behaving. So, and I just wanna give an example of what I mean when I say take it personally and be accountable.

Everybody has policies around how to behave on a job site or in a business. And if policies worked really, really well, we wouldn’t need them. So my example behind this is when you see an unsafe act, or when you see somebody behaving in a way that’s not appropriate, take a personally responsible on your own accord and approach them and say, “That’s something I don’t tolerate.” And when you make it personal, it makes a big difference.

And I just have one more thing I wanna add to this. There’s a campaign called “Be that one guy,” that was put out by the steelworkers. And I thought it was a fantastic campaign. And what that means is when you’re that guy on the job site, seeing a behavior that’s not appropriate, be that one guy who stands up for the person who’s receiving the inappropriate behavior, and it’ll catch on because good behavior is equally as powerful as bad behavior.

Doug: Yeah.

Nancy: So this slide has just a host of ideas that I came up with that will help make a job site more inclusive. And they’re very simple things that you can do. Some people don’t realize that the PPE that we have on project sites are typically made for men. So, when I go to a job site, I always ask for a safety vest and it’s usually kind of snug around my hips and looser on the shoulders because it’s not made for a woman. These types of things, are not very welcoming when you already have the image that women don’t belong on a job site. And the same thing can happen for other races and diverse employees.

I think some of the ideas would be amplifying the voice of either women or underrepresented people in meetings. Or, as a great example, I love this one, if you have an innovative idea, and it’s been derived through diverse collaborative approach, make sure you brag about it. Talk about in the toolbox meetings, talk about it on an OSC meetings, make sure people know that the reason why this is such a great idea or the way we’re getting more innovative is due to this collaborative approach of innovation and looking through different lenses.

Encourage ways to improve diversity all the time. We try to do with our contracts here at Compass. We try to make sure our subs and our supply chains and our GC’s all know that that is a lot to us, and we incentivize them to become more diverse, because we know it’s better for our bottom line. And we know it’s better for the health of the team on the job site.

Doug: Yeah, that’s excellent. Nancy, thank you. So let me take this one. So we’ve gone over some things like pre-manufacturing, the importance of planning and how that delivers higher safety and how that equals a better project. And we have probably high centered on diversity, we’re gonna stay in that realm because it’s probably the biggest untapped potential we have in our market right now.

So the curve right here shows you two curves, it shows you one in blue that like a bow wave in reverse, it just kind of gets up to speed and just starts to deliver. And then you have that contrasting color maroon or purplish curve, it’s S-shaped, but it builds slower but actually achieves a higher altitude before it plateaus out. And this is a story of diverse teams coming up to speed versus maybe not as diverse teams.

I’ll give you a simple example from my background. Many may or may not know I spent 33 years in the guard, including a tour in Afghanistan, where I was the engineering commander for all the country for the coalition forces. So I had Thai engineers, South Korean engineers, German engineers, Polish engineers, it was just a wonderful collection of different in-combat engineers there for a common purpose. And we didn’t speak the same language, we didn’t have the same tools, but we had the same common mission set and we started slow, our concrete was really poor, our production was bad.

By the time we finished the project, the Thais taught the Americans that just a simple iron bar screen over the forms is a lot better than the fancy American gas-powered screens. And we just learned so much from each other, and has so much joy and working together, we absolutely did exceed the production goals of the command at the time. We poured more concrete than it only been the second amount of concrete poured by military engineers, and only was exceeded by the Pacific World War II campaign. So tremendous achievements with a diverse team that became a high-performing team is a personal experience of mine. I think Nancy and I are now gonna take you through some summary, ideas around this presentation.

Nancy: So Doug and I put together a call to action. We figured if we’re going to do a presentation like this and typically when you talk about safety and production and quality, diversity is not something that people bring up. But we feel so strongly about it that we would love to have a call to action for everybody to consider so we can start to see some really good momentum in this direction. And we really want the believers in the room to be able to really carry that torch and shed the light where it needs to be on how diversity and inclusion is gonna make us a better industry, it’s gonna make our jobs a lot more fun, and it’s gonna make us more profitable. So, Doug go ahead and give some examples on this call to action. There’s a few really good ones in here.

Doug: No, absolutely. I think Nancy’s spot on. Is this the problem-solver construction? I say yes, it is. I say yes, it is, when we will look at the latent and resistance that we see in this industry to become diverse and inclusive. We need to drive into that. It’s a moment in time in U.S. history that we have an opportunity to take this event and capitalize on it to really drive that step change in this industry. And we’re also seeing those effects across the globe.

So the idea of trying to get to diverse talent is not easy. You’re gonna have to make decisions and create parallels and connections to people that you may not have, as opposed to the perfect resume with a perfect experience. No, you’re gonna have to draw some different conclusions and that’s not just gender perspective, it’s also, racial backgrounds. As we build these diverse teams, I’m convinced we’re gonna create better projects.

I think a lot of this goes down to the supply base as well and how do we talk to our supply chain? How deep do we let our suppliers subcontract the work so we can control that environment? I’m learning that we have to get really involved in how the work is bought out and the disposition of the leadership of the supply chain that we engage because if we can’t get the hearts and minds of the leaders of the teams that we build, we’ll never get the behavior of the workers to align. They’ll be in paradox, they’re like, “Hey, Microsoft has a really great inclusive site but my project boss that will give me the next project has a different set of values that I better figure out what code to speak in each group so I can keep myself employed.” And we should never put workers in that kind of a paradox.

Nancy: Yep, totally agree. I would encourage too anyone in the audience who does have best practices they would like to share to reach out to us and if there are any questions about any part of the presentation, dealing with production, safety, offsite manufacturing, and by all means diversity inclusion, I’m happy to have an engaging conversation about that, because we do want to learn. Doug and I want to continue learning and we want to share what’s been working for as well.

Doug: Exactly. There’s nothing proprietary about safety and humanity. We should share each other’s best practices as much as we can. Thank you all.

Nancy: Thanks so much.