Last week we continued a discussion from the 2009 Building and Infrastructure Conference, where a panel of experts debated the reasons why the building industry is slow to innovate. (Read the story here.)

Panelist Kevin O’Meara from Golden Gate Capital, the former president and chief operating officer of Builders FirstSource, attributed the problem to homeowners and builders who are reluctant to invest in new technologies. Several of you agreed with him.

"Totally agree. Tamlyn has developed and/or distributed and seen others try to launch numerous innovative products into the industry and have met with mixed success. The bar is set very high. If it isn’t a vastly better product AND cheaper than what is currently being used or at least no net cost increase, it isn’t likely to be bought. Many times that just isn’t possible. But I think informed homeowners are willing to pay for better products in their homes, and the better products should be at least offered as upgrades at a higher cost, which would not be absorbed by the builder. I also agree the risk of product liability is enormous; insurance companies don’t want to cover building products because of the potential exposure (water intrusion issues, etc.), and the coverage is very high.”
— Tom Tamlyn
President
Tamlyn

“At a recent green building seminar I attended there was a statistic offered that claimed while there was a high interest in green building products (and new and innovative products) among new home buyers, there was a reluctance to pay a premium greater than 11% for the products.  Unfortunately, the reality is that rather than pay more for an innovative heating or utility system, consumers would rather pay big dollars for a granite countertop, for example. The countertop, while no doubt beautiful, doesn’t save them money or create extra dollars for the new homeowner on a monthly basis. Paying extra for an innovative system can in most cases save them money on their utility bills -- money that in time could go toward buying say … a granite countertop. 

“Until people change their priorities I’m afraid Kevin is right on with his comments.”
— Bob Maurer
Marketing director
Swanson Group Sales

“I think Mr. O’Meara is half-right. Builders are looking at performance-related issues (on-site productivity; lower risk of callbacks; lower installed cost), while homeowners will consider aesthetic and life-cycle issues. The problem is most home buyers are uneducated about the benefits of different materials or even their existence. An uneducated consumer will not generally pay more when they don’t understand the value, and most don’t have time to become educated on everything that goes into a house.

“So first, innovation has to create a benefit in one of those two categories. Second, the builder and/or the consumer must be educated about the value of the innovation. The third part is suppliers demanding to get paid for the value they have created. If after having created value, the supplier gives all the benefits of their innovation to the builder, then that supplier is better off not innovating and just following others.

“Builders will pay more for innovations that create value -- manufactured stone and architectural shingles are two examples from the last 15 years.”
—Brad Johnson
VP marketing
Style Crest, Inc.

“ ‘Slow to innovate’ is putting it mildly.”
— Paul Siegel
VP sales
GoPro Construction Solutions
Cleveland 

“Innovation does not always relate to additional cost. In the past we have had several new and industry-changing innovations, such as I-Joists, Micro-Lam beams and more recently lightweight steel beams. These products and countless more have contributed to the industry in a positive way without adversely affecting the bottom line. Lack of innovation is driven by the indecision of CEOs and company leaders to go out on the proverbial limb in an unstable economy. Do you spend valuable resources on R and D, or reduce controllable expenses (such as R and D)?”
— Wayne Gibbs
Gillman Home Centers

“It’s all about price and trust. New items generally cost more, and they don’t always perform as stated. Builders don’t want to be part of the experiment. As a result, new products don’t generate enough profit to be sustained.”
— Jason Kuckewich
Account representative
Morgan-Wrightman Supply Co.
Indianapolis