On this episode of the Work Done Right™ podcast, host Wes Edmiston sits down with Matthew Kleiman to discuss some of the challenges faced in industrial construction and operations. Matt provides input on the pace of digital transformation compared to other industries, citing “pilot purgatory” as a main barrier to progress.
With a background in the aerospace industry, Matt also discusses some of the ways that industrial projects can use learnings from the aerospace industry to improve quality.
About Matt Kleiman
Matt Kleiman is an experienced entrepreneur, executive, investor, and author focused on bringing safety and sustainability to industrial fields and facilities.
Currently, Matt serves as co-founder & CEO of Cumulus Digital Systems, a connected worker technology that ensures mission-critical work is done right the first time, every time. With previous experience leading key teams at Shell and Draper, Matt leverages his industry knowledge to build impact through thought leadership and speaking engagements.
Matt received a B.A. from Rutgers University, a J.D. from Duke University, and executive certificates in management and leadership from M.I.T Sloan School of Management.
Matt provided a tactical framework that can be used by many industrial facilities (especially in the Oil & Gas industry) to ensure work quality, accelerate digitalization, and improve safety and sustainability. Here are our top three episode takeaways that you can learn from Wes’ conversation with Matt:
1. The OODA Loop is a decision-making framework that can help give industrial businesses a competitive a competitive edge. Originally developed by the Air Force to teach fighter pilots how to make smarter decisions under pressure, businesses that master the OODA loop can always stay one step ahead of competitors.
2. Systems engineering (or systems thinking) can be used to help avoid industrial disasters. This principle centers on thinking of an aircraft or a spacecraft as a complete, living organism and understanding exactly how something happening in one system of a spacecraft can impact all other interconnected systems.
3. To ensure meaningful digitalization, it’s crucial that industrial facilities and construction projects don’t fall into the trap of “pilot purgatory.” An innovation pilot is great, but the real challenge (and benefit) comes when deploying a new technology at scale to solve a problem.
We’ve known each other for quite some time now, and I’ve kind of been a little bit captivated by the fact that you have your law degree from Duke, right?
Then you worked in aerospace, you worked oil and gas, and now you work in construction technology. Can you tell us a little bit about how it is that you kind of made that transition into where you are and what led to the founding of cumulus?
Well, I’m still trying to figure out what I want to be when I grow up. That’s generally what I’m trying to do. Are we all? No. It seems like it’s a curious route, but it actually actually, in hindsight, kind of made a lot of sense and had a plan.
So I’ve always been an aerospace junkie, and I went to space camp three times when I was a kid. I got my pilot’s license when I was 17, so I’ve loved. Aircraft, aviation, aerospace for as long as I can remember.
But I went to law school for a variety of reasons, and not too long after I graduated, I had the opportunity to land my dream job, which was to go back into the aerospace world, initially in a legal role, but that quickly evolved into a commercial and program management role, and I left the law behind.
So that was that transition. And then in 2010, right after the Deepwater Horizon disaster, a number of energy companies came to the company where I was working called Draper Laboratory. And at Draper we were experts in guidance and control systems for aircraft and spacecraft.
And the energy companies wanted to learn how the aerospace industry builds and operates aircraft so safely and what the oil and gas industry can learn so that something like the Deepwater Horizon didn’t happen again.
And I was working in this arm’s length way with a number of energy companies, both contractors and operators, for about two years. And one of our customers at the time, which Michelle, came to myself and the other person who I was leading the program with and said, this is great what we’re doing, but if we really want to make a difference in the industry, we have to bring it inside.
You have to open the kimono, so to speak, and go inside so that people feel a lot more comfortable really opening up and finding opportunities for change and improvement. So I was hired by Shell in late 2012 to start an organization in Boston that we ultimately called Shell Techworks, which had that purpose to bring in capabilities from critical industries like aerospace, like biomedical, like robotics, and improve from the inside.
How? Large capital projects are built and then ultimately operated after construction is completed. So that was the transition to, the transition to Shell. And that’s really where I really dove into construction because from one of the earliest days inside of Shell, I was leading projects focused on improving safety, productivity, and efficiency in capital construction projects.
And one thing led to another. We identified the opportunity for Cumulus, realized that in order to recognize Cumulus’s full potential, this had to be built outside of Shell. Shell is a great company, but it’s not a software company.
And we really needed to bring in outside capital and the right talent who could build and scale a product like Cumulus. The thing that’s interesting to me with that is that kind of like this entire construction tech revolution all kicked off in response to something like Deepwater Horizon.
Is that a trend that you’re still seeing where customers are coming out and looking for new innovations in response to incident or people being more proactive these days?
Unfortunately, yes. It’s still largely reactive.
It is construction heavy industry, even aerospace are all relatively conservative industries. And they’re conservative for good reason, because when there’s a mistake, it’s not like a software app having a mistake or a photo app or something like that.
When there’s a mistake made, when someone makes an incorrect decision, there are real consequences. And those could be safety, it could be environmental, it could be financial. Oftentimes it’s all three so people can get hurt.
So this conservative culture has developed over many, many years, but unfortunately, that sometimes works against the industry as much as it works for it. So the catalyst for change is, unfortunately.
When something bad happens, some sort of accident or incident. Now that is changing a little bit, I would say, especially as a younger generation is coming into the workforce and expecting to be able to use more modern tools and capabilities in their everyday jobs.
COVID also had a major are catalyzing effect and making people more comfortable with digital technologies than they were before. So it is getting better than when I first started 1015 years ago. But it’s still a largely reactive and unfortunately not as fast moving as some people would like.
Now how does that compare you’re with an organization like Draper, right? That is involved in all things aerospace and aviation? Right? How does that reactive mentality lined up against an organization like Draper?
Are they in that industry, are they still very much reactive or is this a kind of uniquely characteristic thing to construction and construction personnel?
There is an element of being reactive. The one advantage that we had in the aerospace world is that the government provided a lot of funding for cutting edge, leading edge research, whether military, NASA, whatever it might be, that funded all kinds of new programs.
Now to get those programs into production and operation took years and years and years. By no means. But there was this forcing function of the military coming in and saying we need to be the best in the world, we need to have the most advanced capabilities in the world.
And you just don’t see that in construction, so to speak. At least in the United States. Interestingly, there are a couple of. Programs in some other countries that at least I’m aware of. So the UK, for example, where the government has said we are going to fund innovation in construction because we need to get better.
And that had some of the same effect, but certainly not to the scale as you see in the aerospace world.
So you were having those instances where say, yeah, it took a while to affect some of that change and input some of those modifications that were made with those discoveries, but you were still light years ahead of it, just due to the amount of capital investment from the government earlier on.
And a structure where there’s a willingness to take risk, to do something new and permission to fail because you take a risk, it might not work and that has to be okay as part of the culture.
That’s also something we don’t see in construction heavy industry, is the willingness to take risk in the sense that, hey, this might not work out. And you of course, don’t want to take risk where human safety is in play, but you do want to take risks that, hey, we’re going to adopt something new or try something new, it might not work like we expect.
And as long as you’ve taken care of the safety risks, that should be okay and accepted and people shouldn’t feel like their career is at risk when that happens.
Yeah, I chuckle a little bit, honestly, just thinking back about a few of my experiences.
I was blessed to have a lot of very good managers over the years, but there were also a few that were a little more scrutinous and we’ll say they didn’t have as high a level of risk tolerance whenever it came to trying new things as what others do.
Right. They didn’t have that same level of appreciation of innovation. But no, you’re absolutely right. It is definitely an area that’s ripe for change and especially whenever you’re looking at. Just generally the amount of investment that’s going on into infrastructure right now because of how pivotal it is.
And the point that we’re in, we’re definitely in a position where we need that investment directed toward how is it that we can not only just build things, but build them better. During your time at Draper, a lot of the innovations were worked on.
You were working on surrounding kind of commercial space business and you’re also someone who is passionate about learning about things in space. In your free time, are there any strengths and innovations in the space industry like things that they do really well beyond securing additional government funding that might translate well into industrial construction?
I think NASA is one of the most valuable brands in the world and that certainly helps. But in all seriousness, we were actually by the folks who I recruited to come with us and to Shell from the aerospace world.
We were pleasantly surprised how similar the technical challenges were in aerospace and in some of the most difficult operations in oil and gas. So operating in deep water, in terms of operating in challenging hostile environments where mistakes can unfortunately lead to death or environmental impact.
So you had to think about designing and building these structures differently than you might something that’s operating in a different environment. But one thing that aerospace does very differently than oil and gas is something called systems thinking and systems engineering.
It’s thinking of an aircraft or a spacecraft as a complete, almost living organism and understanding exactly how something happening in one system of a spacecraft can cascade 1st, second, and third order effects into all other systems of an aircraft and spacecraft.
One of the first times that we used it was in response to Deepwater Horizon. One of the main failure points of the Deepwater Horizon was the blowout preventer. And it turns out that there have been failures both within the operation of the blowout preventer and the design of the blowout preventer and also the power systems of that blow up preventor that prevented it from properly closing and severing the pipe.
During that time disaster when we were looking at it, as I mentioned earlier, a number of energy companies have come to the company I worked for, Draper, and then we also built out Shell Tech Works after I joined Shell.
All looking at this problem of blower preventers using a systems thinking approach, really designing from first principles. How should a blower prevent that’s operating in a very deep water environment, how should that operate?
How should it be closed? How could you think about where you place the battery packs, the communication systems, all the things that had resulted in a cascade of failures during that disaster? How do you, through engineering, prevent that from being able to happen again?
And that has now become part of a standard BOP design for new models from a number of different manufacturers. Even thinking about it, beyond just kind of oil and gas the operating facilities, because we do have a good amount of safeguards as prescribed by Will, say, as Me and other agencies out there, effectively other organizations.
But even thinking about that same kind of systems level thinking whenever we’re talking about construction projects or maintenance, right? Just thinking about the way that the entirety of the site operates and assuring that all of the inputs aren’t going to work toward to the detriment of one of the other inputs.
It’s really interesting to consider it that way. So obviously, aerospace, aviation, they are on the floor of innovation and technologies, and they have that culture of accepting innovation. That’s what drives them forward and they know it.
But you’re working in an industry that is still kind of in the stone ages whenever it comes to all things digitalization. What are some of the challenges that you’ve seen trying to deploy a technology in kind of previously uncharted waters?
A few different things. One, and I would say as a first part of the response, that while construction certainly lags digitalization in some other industries, it has advanced quite significantly, even in the 15 years that I’ve been part of it from where it was before.
So it has definitely played a lot of catch up. And there’s a much more general recognition, even in more conservative organizations, that things have to change. And a lot of it, as I said before, is COVID driven.
But more than just COVID, it’s the labor shortage that COVID exacerbated. It wasn’t so much the work from home and everybody beyond zoom. It was just there was a labor shortage. There was a labor issue before COVID that became exacerbated by the economic conditions during and after COVID.
And I think that more than anything is driving change in the industry. But that being said, it’s still a relatively conservative industry. There aren’t these internal structures within construction companies, whether they’re owners or contracts, contractors or gcs, to take in innovation and then replicate it at scale.
So you get a lot of pilots, and there’s something we’ve talked about called pilot purgatory, where new technology just stays as a pilot. Everybody gets excited about pilots. And talks about the issues, cool videos and press releases.
Look at this technology we piloted. And then there’s nobody to hand it off to, to say now take this and scale it up within the organization so that it’s used everywhere. And that just largely doesn’t exist within the construction industry.
And until that does, new technologies are going to stay in the out pilot purgatory and have a very difficult time scaling and becoming just part of standard operating procedure. That’s the biggest thing that I think is missing.
And then you just have general issues with bureaucracy, with people who are paying for the technology, not being too disconnected from the people in the field who are using the technology. That leads to questionable decision making at times.
But I think the most important thing the industry can do is build those scaling mechanisms and not become not settle for a pilot being a victory. That’s just not acceptable.
Hey, real quick, this is wes.
I just wanted to let you know that if you have an idea for an episode topic or a great guest suggestion, we would love to hear from you. Just send us an email at WorkDoneRight@cumulusds.com. Now, back to the show.
Now there is a lot more digitalization in the industry than there was honestly even three or four years ago. I remember whenever I first started seeing this stuff come up just I think it was four years ago, five years ago there was nothing else in the industry whatsoever and everything was just kind of like shocking off after almost.
But even now with these innovations, managers and other similar roles, it almost feels like to me that they are tasked with identifying potential solutions but not necessarily implementing them. They’re kind of still handcuffed and no ill will against them.
It’s really just looking at the situation. They’re a little bit timid toward the idea of saying no, you shall deploy this on a project because there’s a lot of potential risk involved for them. They don’t know who’s going to be using this.
They don’t know if it’s going to be deployed correctly or not. So that’s where it makes sense that you end up in this position where you end up in what you call pilot purgatory?
Pilot purgatory. And also, innovation managers. They might be given a small budget that could do nothing more than pilot something. But when it comes time to scale, frankly, they need an operating budget that they don’t have and they need buy in from the business lines that have those operating budgets.
And that’s where things end up falling off, the falling through the cracks, so to speak. There’s definitely room in order to connect some of these gaps together and make this go a lot easier. But I think that’s one of those all in due time that we’re going to continue to learn from these experiences and what technologies will and will not survive.
So if you could, going back to your experience in aerospace, if you could summarize that experience into one actionable lesson that the construction industry could take away from our conversation and from your experience, what would it be?
Sure, I would say two things. I know you said one, but I’m going to give you two a bonus. That’s great. Exactly. One is the concept of systems engineering. It is so powerful, we’ve seen the power of it, bringing it into capital construction projects where we’ve been able to implement it and, and making that part of corporate strategy, corporate culture, technology strategy within these construction companies is critically important and will yield very significant benefits in really helping with decisionmaking.
Two is what we were just talking about earlier, which is not to inadvertently incentivize pilots as being a win. Pilots are simply a step along the way to implementation and the full structure to implement a technology at scale has to be part of a technology strategy.
It’s not going going to happen by itself. There needs to be a sense of urgency around that idea of if we’re going to meet our digitalization initiatives as well, we can’t allow the momentum to end whenever we come off of these pilots to pivot just a little bit.
Thinking about again back to your experience, you went from a law type background, moved into aerospace, went into a company like Shell and then you went into a startup environment. Was that a big shift?
And what’s it like working in a startup as compared to some of these multinational corporations?
Sure. Well it is night and day different and you can spend hours talking about it. I’ll pick up a few things but first I would say I am very glad I had that period of learning and growth during my career in different kinds of organizations.
I think especially in an industry like construction or heavy industry or even aerospace. Someone coming out right out of college and trying to build a company in this space is going to have a really hard time.
There’s a lot that I learned and I know folks at our team learned through their experience over the years working in different companies, in different industries that build on itself, build on it and you bring to a startup like Cumulus.
So I wouldn’t. To advise somebody, hey, go right to doing a startup. That’s your very first work experience. At least if you’re focusing on construction, maybe in some other areas that makes more sense.
But the big difference is in a large organization there’s structure there for better and worse. For better it’s because the organization has been around for a long time. For worse is that sometimes the structure gets in the way of change.
It could be be both a benefit and a curse. But there is structure and you have to navigate your way through that structure. Even if you’re in a position where you’re trying to bring change to an organization, it’s changed within a certain structure, within certain expectations and that has benefits and drawbacks in a start up.
There is no answer. There are no answers to the test. You have to build it from scratch. You’re going to make a lot of mistakes. You have to figure it out. Be willing to pivot, be willing to take two steps forward, one step back, sometimes two steps back, one step forward until you find your new way.
But you have to be comfortable with that. Things are going to change and things are you, as part of the leadership team of a startup, have to be adaptable and willing to be nimble enough to figure out the right path.
Because that path isn’t going to be predictable. Nobody has ever forged that path ahead of you. You have to figure that out and you have to be comfortable doing it and comfortable with the risks from a career perspective that come with it.
Whenever you said figure it out, that I reflected back, that was I swear my mom’s favorite sang to me whenever I was growing up and in the in the moment, I probably didn’t appreciate it as much as I do.
Reflecting back on it now. You have to have a certain mentality going into issues, especially like you were saying with, with working with one of these small companies. Where you’re just working toward problem solving and you’re not just looking to everybody else or what does the procedure says I should be doing.
Yeah, interesting. Have you reflected back? Are you happy that you made the shift?
Yeah, I am. Certainly there are moments where I think, oh, man, that big structure would be nice. That would be nice to have right about now.
There are certainly moments, you know, it’s cliche that a start up is the highest highs and the lowest lows. And that’s certainly been true from my experience. And during those lowest lows, you think, did I make the right decision?
But looking back from a neutral perspective, not in one of the highest highs or lowest lows. It’s something the amount of change that our team has been able to bring to the industry and what we’ve built from something that was a business plan that we draft in a very cliche way.
Drafted up in the Starbucks about a mile from my house into what cumulus is today. The sense of accomplishment and the learnings that have come with that are hard to beat. So I’m very glad I did it. I’m very glad I had the experience in the large companies that taught me a lot, but I’m glad I made the decisions that we did.
I’m sure that listening people are going to rush out and they’re going to start up their own companies thinking about just how great you’re making it sound with all of the potential risk, but also just high risk, high reward, right.
As you’re saying, the lowest lows and the highest highs. So that’s great. So going from working in an organization like Shell and kind of seeing how they work inside and now working with one of these smaller organizations that directly services a company at like Shell, what is it like being in this kind of David versus goliath situation when.
With working with these larger companies and with having that insider’s perspective and now outsiders perspective. What can these companies do in order to kind of help themselves? It’s definitely a challenge and probably the biggest challenge I think is the difference in operating tempos of the two types of organizations.
They’re just operating at such different speeds that it kind of sometimes makes it hard to bring those gears together because a large organization is on annual budgets and thinking in terms of years.
That’s how it thinks. And then a startup is thinking in terms of weeks and needs things to happen in order to hit certain funding milestones or whatever. It might be well within that OODA Loop of the large organization and that’s probably the most difficult thing to manage expectations and plan your business so that it can align because there’s really not much you could do to make that big organization move faster.
It’s a big whale swimming through the ocean and you’re a small little dolphin trying to get its attention but having some knowledge, having been inside the whale, so to speak, you understand how people are motivated, how planning is done and you can try to align your business that way, but that’s probably the most difficult thing.
It’s just the expectations of speed and what’s fast-forward or one type of organization versus another and also just what’s even possible within a big organization. Even if somebody wants to move quickly, sometimes it’s just not possible and you have to expect that.
Now you name dropped something real fast and just kind of glossed over it. But to. To circle back a little bit. You said OODA Loop. Could you explain that a little bit? In all these industries, you use acronyms and don’t even think about it, and you have to learn not to.
OODA Loop is short for observe, Orient, decide, act. And it was actually something that was first developed by the Air Force to teach fighter pilots how to think and how to make decisions. And the idea getting inside your opponent’s.
OODA Loop means making informed decisions faster than your opponent. And you can imagine how that works in a dog fight with two fighter planes. But that’s since been expanded to apply to all sorts of competitive situations.
Here’s an example. One of the first times we deployed the technology was during a project turnaround at a facility in Singapore. And it turns out one of the teams that was using the technology that was working on the project, they were not lubricating the joints properly, and it was discovered that they hadn’t been properly trained.
Now, without a technology like Cumulus, there would have been no real way to tell with certainty which piping connections that team had worked on. So the standard remedy would have been just to go and redo all the piping connections, re lubricate everything, just in case.
One of the piping connections were one of the ones that that team worked on. But using our system, we were able to very easily look up. All right, these are the series of both the joints that this team worked on.
Only go apply corrective action to those per particular voltage joints, saving hours and hours and hours of labor time during that project, all helping the management team just make better decisions and take actions that are more effective with better information.
Yeah, there’s something we talk about a lot in construction quality, which is. Risk based inspection, which, by the sounds of it, using your system and kind of shrinking that OODA Loop. You kind of take that to a whole new level by being able to point not just at kind of a generic area, but specifically at the areas that have the problem.
So I can see how it is that is totally valuable and saves a good amount of time and money. Yeah, exactly. A risk-based inspection takes you part of the way there because it looks at the type of work that commonly results in problems, and you focus your inspections on that type of work, but without any evidence that there actually is a problem or not, it’s really just based on historical data.
No, you’re absolutely right. This takes it just that one step further by not only looking at areas that have a high risk of failures, but using technology to detect that there actually has been a problem.
Rapid Fire Questions
When you need to get motivated, what song do you turn to?
I turn to the song Give Me Some Love and by The Spencer Davis Group.
Where’s your favorite place where you’ve traveled?
Probably Alaska. I went there four years ago now on a family vacation, and I love the outdoors and nature, and it was just an incredible trip.
Cats or dogs?
While I respect cats, I love dogs, and I am I am definitely a dog person.
What is one word that best describes you?
What is your favorite quote?
Favorite quote is, this has been alternatively ascribed to Thomas Paine and General Patton. There’s a little bit of a debate, but it’s: “Lead, follow, or get out of the way.”
You could choose one of those three. You could be a leader, which is great. Be a follower, but don’t be someone who just stands in the way.
So if you could have dinner with anyone in the world, live, living or dead, who would it be?
It’s not a famous person, but it’s my grandfather, Stanley Kleiman. We were very close growing up, but he passed away much too early when I was in college. And I would just love to have dinner with him and introduce him to my family and talk to him about all the things that have been going on in the 20 plus years since I last spoke with him.
That sounds like a very pleasant dinner. I’m sure that he would be very proud of the man that you became but not at all surprised. Matt, I have appreciated the conversation and the time you gave. I hope to chat again soon.
Great to be here, Wes. Thanks a lot.