I Visited the Katerra Headquarters. This is What You Should Know.
The building industry has been prime for disruption, and there are now a few players looking to lead a drastic shift through offsite construction - which moves the planning, fabrication, and assembly process away from unpredictable job sites. Katerra is an offsite construction company that is driven by technology and changing the future of specification.
Still wondering why you should care about a company like Katerra? I’ll give you two reasons. For one, businesses like theirs are poised to become key specifiers for a growing share of building material products. They represent a potential new customer you need to understand if you hope to win their business. Secondly, this is a company that thinks and operates differently than most in our space, and offer forward-thinking ideas manufacturers should appreciate if they want to stay relevant in the years ahead.
Understanding Katerra’s business is so critical to this industry that I decided to see it in person, so I headed to their headquarters in Phoenix to take a tour. Having been there, I really think it’s impossible to appreciate the power of the organization without seeing it firsthand. The energy level is what I’d imagine Google felt like in its infancy. The scale is massive, beautiful, and impressive. My visit changed how we work at Epiphany, and I think it can change your business too.
Here are five ideas I think every building material company can learn from Katerra.
Embrace an agile mindset
If you don’t follow the software development industry, you might not be familiar with the agile method. Essentially, it’s a way of working that is based on a high level of collaboration, testing, and refinement on an as-you-go basis. Meaning—no more months of planning and devoting budgets to a monster project that no one is sure will be effective. This is exactly how Katerra works; testing every facet of the process. They take a no holds barred approach marshaling impressive resources, and are willing to energetically abandon an idea at the first sign that it isn’t working. We’ve all heard the business adage, “slow to hire, quick to fire”. While this concept may be debatable regarding staffing, it’s a bold strategy when applied to ideas. And that’s core to the Katerra ethos. They have no fear and don’t force ideas to work because they’ve become attached to an unproven theory. It’s an environment of positive failures which is so contrary to how the building industry has worked up until now.
Reach beyond the industry
When it comes to problem-solving, Katerra often looks beyond the industry. Here’s an example - while they are waiting for their robotics to be designed and built, their off-site factories run jobs the traditional way—with people, hammers, and nails. With or without robots, they want a machine-like assembly process. So when the construction experts didn’t give them the results they wanted, they tried to correct course with a team of military strategists to engineer the process. After their input, they still felt like they could do better, so they called in a team of aerospace experts. They are incredible at finding new sources for solutions. This unwillingness to accept building ideas and designs at face value is what makes Katerra tick.
Turn a problem into a benefit
Katerra’s strategy is to pick something—an industry, a geographic area, a niche—and energetically own it. Make it happen so fast that it will turn heads. Katerra goes beyond what is expected to challenging what’s possible. For example, they use so much lumber that their warehouse looks like it should be supplying all of Arizona, not just this one location. How can this approach be applied to your company? Is there an area you can take over and land like an alien? The building industry is changing so fast that a change of mindset is needed for the companies who serve it.
Take over and land like an alien
Katerra faces the challenge of a national construction company having to meet local codes. Their solution? They over deliver. They find out which localities have the toughest code restrictions and tailor their way of building to meet them. The end result? Most owners get a higher standard of product than they paid for. Customers appreciate a superior product and Katerra wins by not having to spend time tailoring each project to a local code when they can simply (and efficiently) exceed them.
Ignorance is bliss
Because Katerra did not come from the construction industry, they don’t immediately realize what is outside of tradition. And, customers love it. Want to order a multi-family building? Sure, we’ve got you covered. Want it to be delivered with all of the finishes and provide you with the appliances? Sure, we can do it. All at one stop. Want to choose 3 of 5 feature trends? You’ve got it. Consider that through the eyes of the developer. No more coordinating architects, builders, designers, and subs or looking at research to see what is new. Everything is in one complete package saving them time, money and a whole lot of Xanex.
We cannot yet predict whether Amazon, Katerra, or another business will take the lead at reimagining this industry, but change is most certainly coming. If you are smart, your business can still thrive. At their core, their strength of a silicon valley mindset is not without weakness. Ignorance is bliss, but there is still value to knowing this industry as you do. Now is the time for you to see what’s under their hood, so you can position your business for what’s ahead.
If you have a question that hasn’t been answered or would like find out more about how Epiphany can help you get specified, give me a call: 804.377.0106.