If there’s a theme to construction technology over the past several years, it’s the growing realization that technology alone won’t solve all of the industry’s challenges. In a lot of ways, looking inwards at the organizational level to individual construction companies is perhaps the better question.
Thai Nguyen has been at this for a long time. His career came full circle after early detours into other industries that taught him about managing people and processes. With Hensel Phelps, he’s spent his career pioneering organizational excellence and the functional tools needed to advance technology and move the industry forward.
We talk specifics about how technology departments grow within a construction company, how big wins can help break business-as-usual tendencies, and how Diverge is offering to help build a better construction tech world.
Tell me a little bit about yourself. What does your journey in construction and construction technology look like?
Well, it’s a long story and I’m going to date myself! I started out in the late 80s as I was coming out of high school and wanting to be a civil engineer. I went to Illinois Institute of Technology and after about two years, I realized that I just didn’t have the skill set to be a civil engineer. However, I really liked design, and so I pivoted to architecture.
After leaving Illinois Institute of Technology, I worked for a small design-build firm in Chicago and then had my “quarter life crisis” and decided that I wanted to be in the outdoors, so I moved to Colorado and worked for The North Face for eight years.
Going through this story, you likely realize that I wasn’t a traditional hire for Hensel Phelps. I learned a lot about people and working with people, and a lot about management and budgets during that time.
My first opportunity with Hensel Phelps was for a small job in Fort Collins. It was just myself and the superintendent and I look back and realize that I learned the most on that job because it was literally two people having to go through all these different steps of building.
After that job, I went to a larger job in Denver which was around the time that BIM started merging with what we were doing. I was involved in figuring out what BIM meant to Hensel Phelps, and for years, I was known as “The IT Guy” in the company.
I look back at 2012 as the catalyst for Hensel Phelps in which every region started to see the value in BIM. Part of my role was chasing work around different regions. When we were awarded a massive project with a large microchip manufacturer, I realized, oh my goodness, I needed close to twenty-five VDC engineers just for that one job.
Back then we had two people in VDC and so the microchip project became a university for us to onboard people and train them. From that job, we grew out into every single region and those same people are now senior VDC managers around the country, supporting all of our regions.
Over the last 10 years, I’ve been the Director of VDC for Hensel Phelps and really loving that position. Working with our regions, our projects, our people, and our owners, it has naturally transitioned into where I am today with launching Diverge.
Just to unwind a couple of things there — you mentioned your first foray into construction at Hensel Phelps was an eye-opening experience. I had a similar experience early in my career and I definitely hear that first major project being a formative stage for a lot of people’s careers in construction. I also think that’s a challenge for technology folks who come in from outside of the industry. Talk a bit about what it was that you saw that really opened your eyes on project.
I think it’s really getting into the details of the day-to-day. I was the last one to lock the gates and the first one on-site in the morning. I had to do steel submittals which involved making sure that I understood the details and also being so accurate in approving those submittals, because when the steel started to arrive, my god, that was a lot of anxiety — making sure those numbers were right ensured that everything was going to fit the way it did.
All those basic processes of what we go through in construction really grounded me. It ensured that I really got into the weeds — understanding how to read contract documents, understanding design details, understanding submittals, understanding the relationships between all those.
On project, you’re managing costs as well and budgets. You learn a lot about the trades by creating a partnership with the trades early on, because many of them react better in a partnership. I think very few will react positively if all you’re doing is pressing them and thumbing them and not giving them the respect that they deserve.
Those early years allowed me to form a foundation in my career. I was better in terms of understanding how to apply technology to what we do at Hensel Phelps because it’s really hard to provide a solution if you don’t know what’s behind it. Getting through that noise, getting to the right signal, and then applying the right solution to remedy it is a big part of this.
Continuing to unwind this journey — it sounds like 2012 was the turning point at Hensel Phelps and for your VDC department. That’s perhaps not a coincidence because it was also right around the time when I think the construction industry woke up to all of these new technologies swirling around. It was the early days of social media, a renaissance in artificial intelligence, miniaturization of computer processing, new robotic applications, all of that. There was also just something in the air at that time and it sounds like your VDC team was perfectly positioned to capture it.
The timing was exactly that. On the Denver Justice Center project, I had a very progressive general superintendent who saw the value of VDC. For example, we were using a software called Vico at the time to model lift drawings and going from 2D to 3D lift drawings.
That visual aspect of BIM was tremendous. The ability to convey not only the X and Y, but also the Z, showing someone a picture of the model versus them looking at a 2D drawing — there was something big there.
From that, we started to understand that you can tie the model to schedule and do schedule sequencing. And beyond schedule, we were able to quickly do material take off from the model. All of it was just eye-opening.
The year of 2012 was also when the people aspect came together. Now I had a team and able to do all of these amazing things. We had the resources to look at all the different nuances of how VDC can support the jobsite, including how we chase work throughout the design and preconstruction process.
Today, a lot more owners are getting interested in these topics and the question is how we transition from not only capturing it but also how to get information to the owner so that they can use it to start early planning of operations. The owner can absorb this data and use it to plan budgets and even manage facilities.
You said many of the resources were opened up after that project. Was there senior leadership at Hensel Phelps who saw that future and gave your teams the resources to do what needed to be done? The reason I ask this is because a lot of people in the field who are very technology-forward might lack the insights to get things done at an organizational level.
I think a lot of this stemmed from the field. It was really the field pushing this up. For leadership at the time, they saw the value of ROI in terms of cost avoidance. It took some time to realize that there was so much cost savings on the back end that could be realized.
It also took a lot of leadership just trusting the process and then trusting the field staff to be the ones pushing the value of it — showing that in all these different areas, VDC and technology can truly make the workplace environment so much better.
It sounds like you overcame that perennial challenge in the industry which is that construction has such a business-as-usual tendency — it’s very easy, in this industry, to get stuck in a cycle of rinse and repeat. I’m always curious what the impetus is within different construction organizations to actually go ahead and create these departments.
You’re absolutely right. I think specific to 2012, it was just a perfect storm with the perfect job and the perfect owner. Looking back, at its peak, the microchip project had 6,000 laborers and was the largest project in the United States at the time. We had thirteen teams coordinating across thirty-five different trade partners.
It was a milestone project for Hensel Phelps, and it really brought everything together. To your point, we had to teach ourselves something new in terms of how to self-perform laser scanning which was unheard of for a GC to be doing at that time. The supportive leadership and trust to make it happen, and then seeing the ROI was eye-opening.
What then happened is that every region saw the value from the project. They saw the process. They saw the talent coming out of that job, and they realized, “This is a game-changer for us. This is something that we need to focus on as a company and continue to grow.”
It wasn’t just, to your point, rinse and repeat. It was something new.
Shifting gears, tell me about Diverge. How do you guys fit into the ecosystem?
We’re still at a point where collaboration still needs to be improved around the construction industry. That’s a large part of why we formed Diverge, which is to improve transparency and partnering at all different levels from startups to VCs.
As a general contractor, I started to see in the last handful of years that Hensel Phelps’s tech stack was starting to become very bloated. You and I have talked about this, but sometimes the tools reflect the industry — and the construction industry is very fragmented.
There’re so many tools. For us, every job was like, “My goodness, we’ve got thirty-five different products.” It’s not sustainable. Our people are having tons of different sign-ons with an app for material tracking and an app for daily reporting. There’re so many different apps and nothing talks to each other.
We realized that we needed to put real strategy behind how we absorb these solutions and innovation in general, so we formed Diverge.
This group is focused on partnering. It’s not just partnering with VCs — it’s partnering with other GCs, the owners, trade partners, and anyone willing to solicit a perspective.
A lot of times a startup is only listening to just a single general contractor which can become so custom that it may not be good for the startup or the overall industry. Giving startups context from the owners and other industry professionals will give them a more baseline approach rather than just a customized approach for one entity.
That takes a good level of self-awareness and it’s an issue that I advise startup clients on. A lot of construction companies that are just starting out with technology look at it from only their perspective. But as a startup, you’re resource-constrained and not able to commit to just one customer who then has you jump through a million and one hoops for a custom solution.
That’s it. We’re going to have a true process for every startup that engages Hensel Phelps. We will do a discovery with them, put them in our database, and fully communicate. They’re understanding at what point in the process they are and not hitting up every project manager and every project superintendent in the company.
For a startup, it makes sense because it’s a low barrier to entry. For us, it allows us to manage things better. I start to understand, “Where does the solution fit within all of our categories? Is it really focused on the field? Is it about project management? Is it about AI or machine learning?”
Within that cycle, the natural ability to make the product better is then evident with our people’s feedback and the owners’ feedback. If it scales to the point where it’s starting to be used by more than just a handful of regions, we can go ahead and start talking about an enterprise agreement.
Then there’s the other piece of Diverge. In the last year, we did our first sidecar so now we’re able to actually invest. When we feel it makes sense, we can invest financially.
At the moment, it’s really about building the foundation of innovation within Hensel Phelps and continuing to partner with the wider industry. In the next handful of years, we’ll be driving innovation towards our North Star which is what will define Hensel Phelps in the next 10 to 15 years.
Nate Fuller is Managing Director of Placer Solutions, advising leadership teams to transform their organizations in ways that improve performance and agility at the field level.
He provides construction companies with a Field Assessment that delivers transformative information about their field operations and is proven to accelerate innovation & technology adoption for Top ENR contractors.
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