How Construction Giant Bechtel is Building the Future

By Scott Kirsner |  June 4, 2019

When you need to get an airport, bridge, light rail system, or Chunnel built, Virginia-based Bechtel is often the company that gets the call.

The company traces its roots back to the late 19th century, when farmer Warren A. Bechtel got into the railroad-building business. A few years later, he was one of the early adopters of the most advanced construction equipment of the era: the steam shovel. In the 1930s, Bechtel organized the consortium of companies that built the Hoover Dam in Nevada.

David J. Wilson, Chief Innovation Officer

These days, Bechtel is the biggest construction company in the US, with about 55,000 employees and $33 billion in revenue. But the company is facing more intense competition, in part from Chinese rivals, and it acknowledges that it must get better at testing out new software and tools.

Leading the innovation charge at Bechtel is David J. Wilson, who has worked at the company since 2001, and took on the role of Chief Innovation Officer in 2016. We spoke to him in January. Edited highlights from the conversation are below.

Innovation in Construction

Construction has not been a hotbed of innovation. We’ve been lagging [behind] most every other industry in driving technology and R&D, because our product is not a widget. It’s not a pharmaceutical. It’s a build or a project like an airport or a power plant. The life cycle is much longer than some other kinds of projects, and the need to drive technology or R&D or innovation isn’t as obvious, but it’s just as important.

In terms of how long it takes from proposal to early design to build into operation, it’s not uncommon for it to be three to five years or more. So if you were to ask, “How do I start to measure R&D, and innovation, and adoption within that kind of project,” it can be hard to connect [and say,] “Well, we did this five years ago, and here’s the benefit…so the next job needs to incorporate these aspects.”

For the construction industry, in the last 30-plus years, it has ignored innovation aside from the desktop computer. Now, it’s becoming more of a necessity to find ways to improve construction productivity—for us to get the right resources in the right place at the right time, and make better decisions around what to install, what to buy, how to use the time. Technology can do a lot to help us improve productivity and the industry’s performance.

But because we’re a risk-averse industry, there hasn’t been a lot of appetite to go do new things.

That has historically been the challenge, which we’re slowly overcoming. Our approach has been, “Let’s make innovation less risky, and demonstrate real, mature deployments.” Innovation shouldn’t be seen as this abstract, obscure thing. It needs to be relevant to that three-to-five year project lifecycle.

Creation of ‘The Future Fund’

Back in 2015, the organization recognized that construction productivity had lagged, in part because we weren’t adopting technology. Innovation doesn’t transfer from job to job. So the partnership [that manages Bechtel] said, “Unless we do something deliberately, [nothing is] going to happen.”

So they set aside the “Future Fund” to provide dollars to take things from concept to prototype to early pilot. The idea was to take that off the project’s spend.

It was a three-year, $60 million fund at first. The first three years were 2016, 2017, and 2018. We’re now into an annual funding model; every year, we’re re-funded. That’s because the first three-year period proved valuable and successful.

In the first three years, we admitted that we didn’t know what this would look like. We knew we were not doing enough innovation. So I went and interviewed stakeholders. [Their opinions] went from incremental, deployable innovation to moonshots. Some said, “If it’s not a unicorn-like idea, we shouldn’t do it,” all the way to, “if it’s not deployable, I shouldn’t do it.” So we took a portfolio approach—ranging from “roof shots” to “moon shots.”

In the first three years…[the company] hadn’t adopted a full digital toolkit, so we felt that there was lots of room for new planning applications, resourcing applications, improved design approaches. So [about] 70 percent of our work focused on digital and software.

We have narrowed the focus [for] the next couple of years. Now that we’ve got the foundational pieces in [place, the plan is to] focus on physical innovation—materials, processes, pipe, and steel—to close some more gaps.

If you look at the tooling in the industry, it hasn’t changed substantially. The heavy equipment we use has been enhanced, and it’s certainly smarter today than it was a few years ago. But the basics of concrete and rebar and cranes—not a lot has changed. You look at car manufacturing today versus 30 years ago, and it’s pretty different. So we’re exploring [these questions:] Are we ready for robotic assistance to help in the field…with repetitive activities? What about additive manufacturing to help with concrete? Autonomous delivery of supplies? We’re trying to go through those explorations, so we can change some of these key physical activities that happen thousands of times [during our projects].

Two Ideas We’ve Worked on

One project is the computer in a job box, which we call BaseCamp. Literally, somebody took a computer and put it in a job box. So we iterated on that. … It was focused on keeping the craft [workers] close to the workplace to drive productivity. It reduces their miles walked each day. It didn’t change how they worked, but it changed where they worked. That has shifted to, “What if we had it on a tablet or a smartphone?” So it is starting to change how we work.

Another one, Live-StrOM, involves shipping. …When we ship large modules up a river, sometimes they are so large that it blocks the captain’s view of the river. They can’t see what’s ahead, when they’re going to dock. [You often] need a second boat, or someone to communicate up to the captain. That has a significant cost. So one of our traffic and logistics experts said, “What if we put a camera on a magnetic platform that locks to the front of the boat?” He wasn’t an engineer, but he went out and prototyped it with engineering and third parties. [The system] has an infrared and video camera, and it provides a live feed to the captain. It’s a patented and licensable product that we’re looking at scaling.

Metrics Have Changed

Each phase of the program has had different metrics.

In the first year, we focused on awareness and engagement—people getting involved, submitting ideas, idea counts, idea comment count.

In year two, we focused on how quickly we were moving ideas from concept to pilot—what’s the cycle time and throughput?

In year three, it was how many mature innovations are on projects. It was traction and adoption metrics. We had about 40 or so by the second year of the program. Last year, it was up to about 150. In 2019, we are trying to get up to 500. And those deployments will result in schedule and cost benefits to the company. An idea shouldn’t make it to scale or to multiple job deployments if it isn’t demonstrating impact.

The Importance of Communication

A page from Bechtel’s comic book envisioning the future of construction.

Communication is probably the most important sibling to innovation. If people don’t know about [what you’re doing], they can’t engage and participate, and if they can’t do that, they won’t be stakeholders in the adoption. The more awareness you can build, the better off you’ll be.

It takes a lot of repetition in a lot of different formats. … But the more you invest in communication, the less resistance you face.

We put together a comic book early on [to give] people a vision of where we’re going to go. It was focused on a day in the life of a site supervisor in 2020, if they’d been teleported from 2016. We do videos, we do podcasts, we do emails, we have done a hardcover book. We have a magazine that goes out internally to spotlight innovation and talk about where things haven’t worked. We’ve spent more energy on communications than other initiatives, because of the need to get people involved and show progress. And also because the immediate monetary or schedule impact was not going to be there right away. We knew we needed to start messaging to set expectations, so it wasn’t an ROI conversation from day one.

What I’d Do Differently

There are always things you don’t appreciate early on, things that I’d do differently. One is finding ways to appropriately engage stakeholders. [You want their involvement] so that when the time comes, they’re aware and ready to dive in, but [you also don’t want them to] try to take control or stifle something because it’s different. Sometimes we try to adopt and deploy too quickly, or somebody gets excited but doesn’t understand [the initiative], and tries to replicate it, but they may end up killing it and bogging it down.

The other part we could’ve done better is that…maybe we didn’t right-size expectations around how hard it is for ideas to mature and get developed, and how much inertia there is in every organization. We may have been able to communicate that better to help [idea] originators not get discouraged.

Team Size and Structure

We’ve got 10 people in my core group, but the extended team quickly gets to 100. Not every idea comes into headquarters to be developed here. Some may be incubated locally, and some at the corporate level.

Our CEO Brendan Bechtel has been key in driving this, and my boss, the corporate manager of functions, Mary McLaughlin, has been supportive. If you don’t have senior buy-in and funding, innovation is probably just a buzzword.