Getting foundational industries — like construction, manufacturing, and energy — to innovate isn’t easy, shared corporate leaders from three regional heavy hitters.
“Everybody loves change,” joked Dustin Burns, vice president of innovation at McCownGordon. “They’re just asking for more change to be dumped on them all the time.”
“In my experience, a lot of clients get very excited about new processes, new technology, and then the first thing they cut the budget is change management and adoption,” added Michael Schlotterbeck, principal and Smart Factory transformationist at Deloitte. “It’s still — all these years later — very impressive to me the mental gymnastics that executives will go through to not spend an extra couple of $100,000 after they spent millions on technology to not implement it and not expect the value add.”
Burns, Schlotterbeck, and Drew Robinson — strategic business partner at Evergy Ventures — addressed how they approach innovation within their corporations during a panel discussion at Iron Prairie Venture’s Industrial Innovators event at Brush Creek Partners.
“Oftentimes, people like to make fun of utilities at how slow they innovate and it’s true,” Robinson said. “A lot of it comes down to just how we’re incentivized and how the mechanisms for us to recover costs are built in each state, which truly does douse the fire of innovation in the business.”
“That being said,” he added, “there’s a ton of great innovation that’s happening, whether it’s smart transformers, grid interaction with what’s at your house or in your business interacting with Evergy or other utilities, or how we can make buy power back from you at a different price point based on what the wholesale markets are selling power for.”
One of the ways industry leaders implement innovation in their companies is by partnering with startups to bring in emerging technology, the experts shared.
Evergy has an investment in SkySpecs — which pioneers autonomous drone inspections of wind turbines — out of Ann Arbor, Michigan, Robinson noted.
“It took what was a three to four hour manual job — you had to turn the wind turbine off and had to have somebody climb up the (500-foot) wind turbine and propel off the wind turbine with a lifeline — with a lot of climbing and a lot of safety concerns,” he explained. “We basically took all of that — outside of the actual repair process, if you do find that issue — and put it on a drone.”
“That company now services all of our Evergy-owned wind farms and then all of the wind farms that Evergy contracts are powered off of,” he continued. “So we’ve seen immense growth with that one.”
McCownGordon — which was just a construction startup when Burns joined in 2005 — engages early with tech startups, he said, to help shape and drive the platforms, narratives, and the functionality that they have for the construction industry. The company first began partnering with early-stage SaaS startups for construction management in 2010, starting with Procore Technologies, which is now publicly traded and acquired Kansas City-based LaborChart in 2021.
“We were instrumental in providing the direction of those platforms,” he explained. “We found out that we can repeat that over and over. So we partner up with these early-stage startups to say, ‘This is what construction needs.’ One of the unique things that we do is we don’t necessarily focus specifically on what we want out of it. We focus on what the industry needs out of it. We feel that the rising tide raises all ships.”
Chris Callen — founder and CEO of Wichita-based PLOT Communications, an Iron Prairie Venture portfolio company — knows first-hand the challenges of getting construction companies to implement the technology his jobsite management software startup offers. Launched in 2021, PLOT just closed its $2 million seed round in June and is rolling out a new lead-times tool.
“These construction firms are fairly fragmented as far as how they operate,” he explained. “You get that buy-in from one project and a second project and then you can actually look at implementing company-wide. So moving from project-based pricing and go-to market to more of an enterprise level, that’s also what our new product is built to do more organically than a direct-sales approach typically lasts for.”
Despite the challenges, Maggie Kenefake — founding partner at Iron Prairie Ventures, an industrial tech-focused fund — said she knows the Midwest has so much to offer these tech startups in the industrial space.
“I started Iron Prairie almost a year ago and a lot of it was based on this conviction that we in the Midwest held such tremendous wealth, knowledge, resources, and access to customers,” she added.