How To Innovate, Add Value And Set Yourself Apart From Your Competition | Ep. 173

The construction industry has been one of the most affected fields in recent years with supply chain issues, geopolitical pressures, rising fuel prices, to name a few. So how do you innovate and add/create value and give yourself a competitive edge? Jack Aspenson is the CEO and President of S3 Surface Solutions, a disruptive, client-driven organization that focuses on providing environmentally friendly, simple surface systems that are long-lasting and cost-effective. In this episode, Jack sits down with host Eric Anderton to share the key strategies he used for his business to stay afloat and come out the other end successfully during such a volatile time in the industry. Tune in as he shares his thoughts on the blue ocean vs. red ocean strategy, environmental impact, supply chain issues, and manufacturing back in the US. Jack also gives solid advice to leaders and business owners on innovation and relationship building. Stay tuned.

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How To Innovate, Add Value And Set Yourself Apart From Your Competition

Do you know how to innovate, add value and set yourself apart from your competition? That is the topic of discussion in this episode with Jack Aspenson. Jack is the CEO and President of S3 Surface Solutions, a disruptive client-driven organization that focuses on providing environmentally friendly simple surface systems that are long-lasting and cost-effective. Jack is not a construction contractor but he’s very familiar with the construction world. He understands innovation and how to set yourself apart from the competition.

I like to bring him on the show simply because with his outside perspective and yet, with an understanding of the construction industry, you will be able to glean from our conversation many valuable insights that will help you to be innovative, add value and set yourself apart from the competition. Innovation has to happen if your company is going to be healthy. Innovation can happen in the way that you build products, the locations that you build in, and the clients that you build for. Whatever the case is, innovation is essential.

Enjoy my conversation with Jack. Feel free to share it with other people who you think might find it useful. Give me a little bit of feedback as to the impact of the episode on you. You can reach me on LinkedIn or on my website, ConstructionGenius.com. If you like this episode with Jack, let me know so I can bring on other guests like Jack to provide value for you. Thanks for reading.

Jack, welcome to the show.

Thank you. I’m glad to be here.

There are hundreds of thousands of contractors in the United States, millions around the world. How does a contractor, whether a general contractor or a subcontractor set themselves apart from other people and distinguish themselves from the competition?

The old thought process is I got to have cheaper labor. I got to be faster. I got to have a better project plan and on-time delivery. I have a million little widget things that I can do to be that much better. If they looked at probably a strategy called Blue Ocean, which makes differentiation through innovation and value, you want to separate yourself in a differentiated business model. You want to separate yourself in relationships that create value. You want to be price competitive. You don’t have to be the cheapest. You want to be price competitive, but you want to be able to provide them something that no one else can do, or be it more environmentally friendly, which is one of the key points that I’d like to talk about.

Let’s talk about that a little bit because some folks may be familiar with the term Blue Ocean strategy. I know it comes from a book. Can you give us a little more detail on that to get us into the conversation here?

There’s a difference between a Blue Ocean and a Red Ocean. A Red Ocean, you are strictly a price-competitive business. That’s your bid process. Maybe you win. Maybe you don’t win.

Why Red Ocean?

Red Ocean is the sharks are swimming around and taking bites out of everybody.

There’s blood in the water.

It’s what I call the Price Compression Business. As a service provider, construction company and manufacturer, it doesn’t matter if I make a widget that everybody else makes it. It’s who has the best cost-effective way to make that widget wins. That’s a way to drive everybody’s business down. It’s not a way to make everybody profitable. Through differentiation of your services and your management, creating a higher end-user customer long-term value, or shorten their total cost of ownership and ROI at a competitive price makes you a Blue Ocean competitive. You’re not dealing on a price-by-price basis. You’re dealing with a reputation for being different and being effective.

What are some areas that you have found to be the most interesting or the most effective in terms of this innovation and adding value?

In my company, S3 Surface Solutions, we don’t even bring the product to market unless it has more than one application. It has to solve a problem, not be a band-aid. It has to be environmentally friendly, easy to manufacture, not regionally and not introduce new tools to the industry. Part of your challenge with acceptance of any widget or application that you make is if you change the way they do it, it’s very difficult to get people to accept it. You have to not affect the tools.

We create differentiation. Our product does more than one thing, most of the time. Number two, it’s environmentally friendly. Number three, I can regionally manufacture it anywhere and I can distribute it. Now, I’ve added to that environmentally friendly because now I’m within that leads window. The second side of it is my price competitiveness. My square foot price is competitive, but I may do something else that my competitors can’t do.

Let me go back to this one thing that you said, “Solve a problem, not be a band-aid.” How do I distinguish between a band-aid and a problem solved?

If you read my motto when I started my company, it says, “I want to differentiate myself from everybody else who thinks they’re good enough.” That’s what I call a band-aid. A lot of products out there will fix and waste your mitigation problem but does it create something else? Does it have a long-term lifespan? Does it have the ability to handle shifting buildings? One of our products, for instance, was created originally as an asphalt paint. Now I have an epoxy that will bond to a petroleum-based product.

 

You have to prove that the product works. If it doesn't work, then don't even try. Click To Tweet

 

We elevated it up and found out we can go over as best as isolation chemicals. One product doesn’t need 5 like a lot of these systems out there that are 2 or 3. We have one product that fixes that problem. That fixes that problem permanently. It’s not something that is going to peel off later because it’s already designed to stick to petroleum-based products.

Why do you think it’s important to be environmentally friendly?

We have one world. Since you and I are older or I call it wiser, we grew up in the era of high pollution. We’ve cleaned it up a lot but there’s so much technology out there now that we can do things smarter, more economically friendly, more environmentally friendly, and create jobs locally. We can also create jobs globally. We can do this a lot smarter than we do now. I ran into a system that has a new way of making soil cement. It’s not even on the market yet and I’m afraid to talk about it. It has zero effect on the environment so there are no leaching issues into the groundwater. They don’t think they’re going to get traction. Why? It’s because companies are going, “That’s not how I’ve done it before.”

That’s an interesting issue. If I’m going to be innovative in the construction industry and I present that innovation to a client, usually, that innovation is going to cost the client something. If I’m the owner and I want to get a building built, most of the time, one thing I’m concerned about is the money and making sure that it falls within the range of acceptability. In your experience, how do you present these innovations when there are price pressures and other motivations involved with the people who have to buy the innovation?

One, you have to prove that the product works. If it doesn’t work, then don’t even try. You have to test it to the extent. We have one product where we’ve spent three years testing to make sure that we’ve answered every question that somebody is going to throw at us, any ASTM spec. Number two, if you’re a little more expensive on the front end, you better be less expensive on the backend. If I’m a long-term building owner and I’m building my own plant, which I did, I want to make sure that plant is good for twenty years because guess what my mortgage is? Twenty years.

I don’t want to be investing a lot of money back into that. Build it right the first time, then I reduce my maintenance costs over time. Now that product is cheap. As a business owner, what I would tell other people that supply the construction industry, put together that return on investment, that total cost of ownership. Have a good case study. Say, “Here’s what it is.” You hand that to an owner. He’s going to look at it and go, “I like that because it’s my money.”

If you’re going to be innovative, you have to also be able to clearly articulate and communicate that innovation if it’s going to be sold.

You also have to communicate if there’s somebody that builds multiple buildings, do I have this available all the time? You have to have the supply chain.

That’s an interesting thought there. I know everyone who is reading this has been impacted by the supply chain issues that we felt in the United States in the past couple of years. I know you’ve done a lot of thought around the supply chain and how we can work within those constraints. Can you give us a high-picture overview of some of the things that influence the supply chain?

Number one, the stableness of a supply chain now is very difficult to find. You’ve got geopolitical pressures going on now if you import some of your raw materials or your ingredients from somewhere else. You have shipping issues and transportation issues. Transportation is the worst because of also our fuel prices now. The third side of it is we lost a lot of manufacturing in the US. It’s spread out all over the world now.

If I have a supplier in the international world that’s also being affected by the Ukraine war, where do I find other suppliers? A lot of companies stick with one main supplier because they get a cheap price. That goes back to the stableness. You need to look for other suppliers. There are a lot of companies that make certain things. You need to know where to find them. The other side of it is to start looking for sustainable solutions. Something that’s repetitive, recurring and we can recycle. That is going to be critical for our future because as our population and global business increase. Construction is not slowing down. Warehousing is blowing out the ceiling of growth.

Do you see any pivot coming up in the next few years to redomesticate the supply chain in the sense of bringing manufacturing back to the United States?

We’re the largest consumer in the world. The short answer is yes. You’re going to see international companies investing and coming here, especially because of the transportation issue. At the beginning of this, people were hoarding containers. The container price went from $3,000 to $30,000 for the same thing. You had shipping delays at every major port in the United States. There was a combination of issues there that I won’t go into because it gets into politics. You then have a shortage.

The last number I saw was 78,000 truckers short in the United States. By the way, that’s a high-paying middle-class job now. These guys are making $80,000 to $100,000 a year doing long-distance selling. We had great train lines when our population in the United States was 50 million. Now we’re closing in on 400 million and our train lines can’t keep up. Transportation is the biggest issue now. I think they’re going to bring things more locally. You’re also going to see a lot of companies try to stockpile raw key ingredients.

It has an immediate crunch on the system but eventually, that will release. My biggest challenge, and this is why I say go sustainable a little more and find other options, is the impact of reduced petroleum production. It’s like corn and petroleum. They’re used in almost everything we eat and consume. We can grow a lot of corn. As a matter of fact, we grow too much, most of the time. My uncles are farmers but they’re not wanting to invest in petroleum now because of policy.

 

COGE 173 | Competitive Edge
Competitive Edge: Differentiation of services, differentiation of your management, creating a higher end user customer long-term value, or really shorten their total cost of ownership and ROI at a competitive price makes you a blue ocean competitive.

 

That’s interesting. I know when I talk to my clients and the issue of the supply chain comes up. It’s an issue that impacts everyone tremendously. Oftentimes, it is felt to be out there somewhere. It’s like, “What am I supposed to do about it? I have supply chain issues. What can I do about it?” Can you distinguish for us the distinctions with regards to the supply chain between that which I have control over and that which I don’t have control over?

Number one, in the environment we’re in now, pricing is not in your control. You have to figure out how I can find a different alternative that might be less expensive, or you’re going to have to pass on that price through your customer base. In case it’s there, if you have strong relationships with your customers, you might be able to absorb it together. That gives you some competitive advantage. It goes back to that differentiation in Blue Ocean. Your customer service can be a competitive advantage that can separate you in a price-competitive market.

You need to understand what goes into making that widget. Red steel now is expensive. What goes into making that? Where is it made? Can I source it locally? Find redundancy, but the quality is a big concern for everybody. You have to meet certain standards. Most people do a decent job of finding multiple suppliers. Those distributors might be buying from the same guy. Do I find a different distributor?

In our case in my business, we do a lot of packaging in 5-gallon buckets. 5-gallon buckets and 4.25-gallon buckets, which are a little bit off. A lot of people don’t use those. The petroleum that’s used in the PVC in some of the monomers that are used in the adhesives that bond things. The Texas ice freeze in 2021 crushed that business for 3 to 4 months. On top of that, now petroleum production is going down. You see almost a double effect on that. What we’ve started to do is look at alternatives, maybe using cardboard in some ways. Maybe using plastic bags in other ways. Maybe using a container that’s less PVC or is a different form of plastic.

Those are the things that you need to look at. For instance, when I built my warehouse, we had electrical pull boxes. The electrical pull boxes were six weeks out. Why were they six weeks out? Did they not know this was coming, my construction company? As soon as they told me it was six weeks out, I called one of my suppliers and I got my pull boxes. It’s because I had a relationship with them. Having deeper relationships along your supply chain in raw materials and different distributors, finding alternative products, that’s critical for managing your supply chain going forward.

Understanding your supply chain in terms of where things come from.

How they’re made.

Working through the alternatives that may be available, and then deepening your relationships with folks. These are ways that you can take control over some of those issues that may feel out of your control. Let’s say I know that. Why do companies still struggle with the supply chain in terms of what they can control?

It’s practice. Do they consistently do it? Even in good times when you get lazy and everything’s coming to you and the prices are low. Transportation is great, I don’t need to know that. My procurement people, I want to take them out to dinner. I want them to find out what new technology is coming. I want to know ahead of the curve where I’m at. We’re making a pivot away from plastic buckets. We’re two years ahead of our competitors because I found a startup. I’ve joined a joint venture with them to make it for me.

This then falls on the shoulders of the ownership of the company. How can I, as a construction company owner, set up a practice of innovation specifically as it relates to my supply chain issues? Walk us through step-by-step what I can do there.

The construction world is huge. You have 50,000 components that can go into a building. You have a fairly large procurement group with the larger construction companies, specialized. There’s an old saying, “You stop learning, you die.” I don’t want my procurement people. A good thing is mine are all young. Not like me, gray hair. They want to learn. They’re voracious learners. They brought to me 5 or 6 new technologies in the last few months that can make a significant difference in our business.

You got a special but I have one that’s dedicated to my packaging. I’ve got one that’s dedicated towards chemical raw materials for epoxies and urethanes. I have another one that’s focused on transportation. He was a truck driver. He’s amazing at finding alternatives. We’ve never been without a transportation issue since he’s been on board.

That’s interesting. Getting some ideas here, I need to break down my business into various silos of supply, then assign someone there who has the interest to be able to dive into that particular area so that they are presenting to me those innovations and changes that could have an impact on my ability to source the things I need to source.

Now you’ve added some stability and you’ve created a differentiation. You’re back to the Blue Ocean strategy.

That then requires a conscious effort. How often as an executive team should I be getting together to address the supply chain issue specifically, do you think?

 

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In this environment, monthly, at the least. Your supply chains are changing every week now. Your pricing, availability and transportation rates are changing. Fuel prices are going up and down. Now, they’re as high as you’re going to get. I saw $5.50 for diesel fuel.

Come to California. It’s higher.

I know. My son is stationed out there. He’s in the Space Force in Vandenberg. In my twenties, I owned a trucking company. Diesel fuel was $0.78.

Back in the day. Talk about the quality of your relationships as they relate to what you control in the supply chain. You touched on that earlier. What have you done over the years to develop relationships that have impacted you positively in terms of your ability to manage supply chain issues?

I’ll give you a good example. I have a very good friend of mine who owns a business. He’s a formulator for me now. I’ve known him for many years. We can cuss at each other, hang up on each other, and we still like each other. I went to him to build an adhesive for us. He specializes in construction adhesives. I said, “Here’s a spec I want but I need you to do something against the market.” All pressure-sensitive adhesives are acrylic emulsion-based. That’s the major ingredient in it.

I said, “I don’t want to buy an off-the-shelf acrylic emulsion as everybody else does, then they add their special sauce to it and do whatever they need to do. I want to create our own so that we’re not dependent on that manufacturer who makes that generic acrylic emulsion. We need to make it in-house.” I can’t go into specifics of the major ingredients and more of the maybe what we call minors. Less important ingredients as a percentage of volume, but very important in the percentage of performance.

That’s how we made the strongest adhesive in the flooring industry. We started at the ground and worked our way back up. If I’m in a construction company and I’m using a concrete fill for my trench cuts, I’m going to find out what is the best formula, what is the best solution out there, and build a relationship with that so I can leverage that as a differentiator, cost reducer and availability.

You mentioned that you went into a joint venture with a supplier or a provider in order to be able to mitigate some of your issues. What process did you go through to decide that you wanted to joint venture in this particular situation?

They needed capital to build this out and a customer to test it out. I don’t have to spend a lot of capital if I supply the testing, if you understand what I’m talking about there. We decided after a while that he didn’t want me to commit to a number of widgets. He wanted me to commit to helping him design and build it. This is an opportunity again. This system that I’m working on now is a packaging system. We’ll break the industry. The other side of it, what I got out of it, and this is what I saw and why I went into the joint venture, was it gives me about three times the space on that individual container to advertise.

It’s interesting because you think it’s so easy to fall into the Home Depot mentality when it comes to the supply chain. It’s all Home Depot. I’m not going to influence Home Depot in any way. I’m going to go there and if they got it, I’m going to buy it from them. What you’re saying is you’ve got to take a more innovative approach to the supply chain if you’re going to be able to ride the wave of supply and demand and the various issues that you don’t have control over.

We’re in the discussions of a joint venture now wherein their industry, no one is being able to work because they can’t get anything or projects are being significantly delayed. I’m sitting here with a solution that cuts three steps out of their process. It’s a little more expensive but they’re going, “I can get my job done.” During the whole pandemic and bucket issue, I was only without buckets for ten days in two years, whereas my competitors were out of buckets for months.

What impact did that have on your business?

The ten days? Not much.

What I mean is the fact that your competitors didn’t have it and you did.

We had record month-over-month sales because we were the only ones being able to supply and keep our customers moving.

 

COGE 173 | Competitive Edge
Competitive Edge: If you have strong relationships with your customers, you might be able to absorb it together, and that gives you some competitive advantage.

 

Let’s say I want to stop complaining and I want to start acting. What are some immediate steps that I should be taking as an entrepreneurial construction company business owner to assert as much control as possible over my supply chain?

Find out the critical components that are causing you problems. Identify your top five. Concrete is probably not going to be one of them. Water, portland and rock are easy to find, but red steal is a problem. Rebar, copper piping, electrical boxes, copper wire, those are all problems. How do I get closer to a manufacturer? How do I find other companies that can ship it to me? How can I build stronger relationships on a regional basis so that I have a volume-buying capability? I move up that priority list. Those are minor things to start working on. You got to identify your top five pain in the rear-end products. Expand that once you figured that out, then move to the next five.

I have a business. We’ve done a very good job of design where we use a lot of the same stuff in our packaging. A lot of the same chemicals are used, so we have redundancy, then we have redundant suppliers and redundant manufacturers that we work with. That’s easy. In the construction world, redundancy doesn’t always play into it. They may be able to buy a box over here and their main supplier is distributor X. We’ll use distributor Y if we need to. You might want to build that relationship a little better with distributor Y if he’s not doing the volume with distributor X.

Identify those top five critical components, get yourself closer to the manufacturer, find other companies that may be able to help you build stronger relationships, then move on to the next five. What else do I need to do?

Understand the impacts of the global world on your products. If you don’t have an economist or somebody that knows what they’re doing that can help you predict what are my three different scenarios, you’re going to be riding the wave of whatever happens. The second thing is if you’re a domestic-based company, try to find something that’s domestically manufactured even if it’s a little more expensive because you’re going to save on headaches and shipping problems. You probably are going to get your jobs done faster. If you’re a globally-based company or you want to be a global company and you want to use the globalistic view of trade, you’re going to have to find multiple suppliers.

For instance, one of my raw ingredients for one product comes from Germany. No one else makes it. I have no redundancy. I went to that supplier and said, “Can we work on somebody in the United States licensing this formula from you to make it for us?” I took a globalistic approach and brought it back domestically.

That’s very interesting. I think what’s useful for my audience to hear is this idea of being proactive, being entrepreneurial, being solutions-oriented instead of throwing your hands up in the air and saying, “There’s nothing we can do about this.”

Quit complaining about the price. It’s a market thing. You can’t affect the market.

When you say having an economist on staff, I know that many of my audience won’t have an economist on staff. That’s where probably being involved in good trade associations that do have access to economists becomes important. That’s excellent.

You got to also understand the domestic policy. Every president that comes in has different policies that they enforce or start or executive orders. Most good C-level executives know, “Keystone Pipeline shut down. There goes my petroleum base. Prices are going to go up.” We all know that. Do you know the downline projection on it, some of your other products? Not all of us have visibility. The good thing is I’m in a very fast-growing company that I created. I have four great partners who all contribute well to it. My job is to focus on how everything is affecting us and what’s the strategy for the next month, 6 months, 3 years, 5 years.

Let me ask you this. Something popped into my mind and I’m looking for an opinion here. What is the value of a company CEO or president getting involved in political lobbying at either a local or a state level in terms of wanting to influence policies which would impact the supply chain and other issues like that?

I’m not a fan of any politically getting involved for something. Let’s say I’m the CEO of a big construction company and I’m the largest in the Southeast. If I’m going to put forth the effort, and this is me personally, it’s going to be put forth to advance the whole industry.

Why do you say that?

There aren’t going to be jobs that don’t win. There are going to be relationships that are better than mine. If it’s going to affect something, let’s effect it across the board. It shouldn’t be for the benefit of lobbying. I’m a competitor. I’m a sales guy all my life. I hate losing but if it gives me that perception that I’m helping the industry and it does, then that’s better for my reputation in general. If I show that ingredient, push it towards one direction that benefits me, then there are going to be a lot of people that don’t look favorably on that. I try to stay out of politics by the way.

That’s fine. I know many of my audience, when it comes to making strategic shifts, it can often be challenging for a construction company because there’s so much risk involved with taking on a particular project. When it comes to this idea of the Blue Ocean strategy, if I’m in a high-risk industry, such as construction, do you have any recommendations as to what would be the first step that I might take from sailing out of the fed ocean into the blue ocean?

 

People and process make the biggest difference. Click To Tweet

 

People make the biggest difference, people and process. I met a superintendent of a pretty large construction company. He wasn’t educated at the biggest construction company in the world, Texas A&M or any of these big engineering companies, Auburn or in my world, Georgia Tech. He wasn’t educated. He grew up in a business. He saw what works and what doesn’t work. He was young. He impressed me because he was willing to look outside the box. He has that process in people. He was willing to change the process if it sped up his construction.

He wanted to do things right. That always helps. The least risk that you have right there is having people and processes. Changing your process is a big thing. How do I build the building? How do I present the proposal? How do I tell the customer, “This is the best way to build your building long-term. This is cost-cutting and here’s not cost-cutting. Here’s what I believe the end result will be twenty years from now?” Those are two things that I think need to happen.

The third that’s a little bit riskier and will take more time, working with the architectural firms, working with the engineers to bring in new products that could be more available or are more available. Bringing in new products that can also cut out certain challenges that the building might have during construction. Like our product for tilt-wall construction. That gets rid of half of the coverage that they need for the floor, which saves them $2 to $3 a square foot. My product is $0.13 a square foot.

That’s interesting. You’ve mentioned those three areas of innovation being the people, the processes and the products. Those are three areas that I can focus on. As a construction company leader, I would want to look at perhaps areas of least risk, to begin with, but that might have the most positive impact. You’ve mentioned a number of different people that have had an impact on your business, particularly in light of the innovation aspect. How do you identify people that you want to hire, who you know will be innovative and will give you some of that juice that perhaps you know you don’t have but you need?

I’ve been blessed with smart people. My Chief Technology Officer is probably one of the top material scientists in the world. He can go across Chemistry and Material Science, which I went to college for Material Science but I’m a kindergartener compared to him. I was blessed because I was part of a company and I ended up taking over the company. My young people, that’s where I focus. My effort is on the younger people that I bring into the company. They have to be voracious learners.

How do you know if someone’s a voracious learner?

There’s a series of questions you can ask. I can write those down someday.

Give us a couple.

I don’t want to give my trade secrets away.

This is construction. They won’t steal them from you.

Do you read to amuse or do you read to learn? What channels on TV do you watch? These are not HR-breaking questions. If you watch Discovery Channel and Natural Geographic and This Old House. One other question I ask them is if they have a house or they still live at home, “Have you ever done construction? Have you ever built something?” I probably have the only daughter in the world that knows how to change her own brakes.

That’s pretty cool.

She’s a problem solver. That’s what I’ve raised. I look at young people now and I think they’ve been too overlooked as, “You need to go to college.” My operations manager, Toby, wrote down in his personal development plan, “I want to get my bachelor’s in this,” because he doesn’t have a degree. He says, “I want to learn Spanish.” I said, “Why do you want to learn Spanish? We don’t have anybody that speaks Spanish in the company.” He goes, “I want to learn it.” I went, “Okay.”

That’s interesting. You personally don’t have a bias towards degree or non-degree. Is that what I’m hearing? Does it depend on the position?

I look at the ethic. I can tell their work ethic in about 10 minutes of sitting down. I have 180 hours of college, 5 minors and no degree and I’ve had 4 companies. Bill Gates did pretty well too.

 

COGE 173 | Competitive Edge
Competitive Edge: That’s how we actually made the number one then than strongest adhesive in the flooring industry. We started at the ground and worked our way back up.

 

How do you, as an older person who’s had success and experience, stop yourself from looking down on the younger people who may have a bunch of great ideas but their packaging of those ideas or their lack of savvy or wisdom might cause you to say, “I don’t want to listen to that person?”

After raising three kids, I learned quickly that I had to have patience in the way they talk to me. I don’t talk like I did to my father, the colonel and pastor. There’s a difference in how we communicate now. Instead of letting them explain it to me, I always say, “Give me the cliff notes. Give me a short description of what you’re talking about. I need you to write this up in an email.”

Why do you ask them to write it up?

It’s because they have to think about it.

That costs them something. It’s not just, “I got this idea off the top of my head and you need to listen to me,” but it costs them something to think it through.

If one of my people came to me and said, “I found a new bucket.” What does it do for me?

How much rope do you give people in their innovative efforts?

A lot. It’s what I call fences. One of the former CEOs that I worked with said, “Give people fences. They can make decisions all through here. It also gives them accountability. If they go over the fence, you push them back. You got to keep them in these fences.” I give them a lot of room in those fences to make decisions. You have to. No one is going to grow without making mistakes. Give them fences where it’s not too expensive to make mistakes.

We’re speaking in generalities here. You’ve given someone fences and you’ve asked them to innovate. How often do you check in with them? What’s your accountability rhythm there?

About every two weeks.

Why two weeks?

It’s because things change too fast in this market now. As my confidence level in them builds, that will change. Now, it’s not confidence in them. It’s confidence in the market and watching.

Watching the ups and the downs.

There’s too much instability in the market but it’s still possible to create a stable supply chain.

What are you learning at the moment as you go through this instability in terms of your business or in terms of entrepreneurship? What are some of the main insights that have helped you or that you’re grasping as we’re going through this challenging time in the last couple of years?

 

If you’re on autopilot, you’re going to fall behind. Click To Tweet

 

I have the benefit of being a smaller company. We have sixteen employees. I have great partners. I don’t manufacture. I partnered with a manufacturer, so I don’t have to have that overhead. What I’m learning is that you have to have adaptability almost on a week-by-week basis for how you’re selling, how you’re delivering and how you’re manufacturing, and have that type of partnership. I had a partner that wasn’t that flexible. We had to find a replacement for him. I don’t like having to be rushed to find it, so I start looking ahead. You got to be adapting, not every week but it’s pretty close to that now, in some cases.

There’s no room for autopilot at the moment. None at all.

If you’re on autopilot now, you’re going to fall behind.

If I wanted to adopt a Blue Ocean approach, which the book itself is worth reading.

Study it. Don’t just read it.

How would you recommend someone study it?

You need to highlight the areas that are of interest that you can go back to. I use little sticky notes when I say, “That’s it.” I have them color-coded by idea level. There are some examples in there that you can do with your own business.

Some exercises, that’s great. Would you start with people, processes or products? Where would you start?

If we’re talking about project management-based construction, people and process. Product is not as critical because you’re probably not buying the product. Can you be a benefit to them by knowing the product? That would be third down the line. If I was a general contractor that went soup to nuts, and I had subs working on me, that one is going to be product and relationship. The relationship with that sub.

It’s interesting how the quality of your relationships can be that differentiation.

It’s huge. The flooring business is where we started. We’ve expanded into the construction industry quite a bit with our cementitious products. What blows me away is the lack of trust in some of these industries. That trust gets highlighted in markets right now.

How do I build trust?

You have to earn it, number one. There’s another book that I like and enjoy called Smart Trust. You have to create the perception of trustworthiness. I get accused every once in a while of being too direct, but in order to gain trust, you have to be direct and not be ethereal in your discussions or vague. People don’t like vague. People react differently to vague. Be direct. Tell them what you expect. Set the expectations and tell them a timeframe and what you want to deliver. If they deliver, you trust them. That’s the foundation for trust. Another thing that I find interesting is if you don’t set expectations, what are you expecting to get done?

That’s interesting. As we’re wrapping up here, Jack, I appreciate your insights. We’ve had a wide-ranging conversation. Summarize for us in terms of the supply chain issues. Give us 2 or 3 top things that as a construction company owner, I need to stay laser-focused on.

Depending on the product now, globalization is a big deal. If you’re bringing anything over on a boat and it has to be shipped from a port, transportation is your second view. The third view is redundancy. Can I find it somewhere else? Can I replace it with something else? Start looking for innovative products that you can replace current systems with.

 

COGE 173 | Competitive Edge
Competitive Edge: Find out your critical components right now that are causing you problems. Identify your top five.

 

Globalization, transportation, redundancy, then looking for innovative products that can replace some of the stuff that you have now.

Globalization, not as much, but the rest of it can create a differentiator in your business model from a competitive standpoint.

That’s excellent. Jack, I appreciate your insights here. Tell us a little bit more about yourself, your company and where people can get hold of you.

You go to S3SurfaceSolutions.com. We are in the process of adding all of our products to our website now because we’ve created four new cementitious products. S3 Surface is an innovative chemical and cementitious manufacturing company strictly around construction in the flooring industry, specializing in moisture mitigation, asbestos isolation, and a new product coming out that’s a chemically bonding cementitious product that is going to revolutionize the industry. You can reach me at [email protected]. I’m on LinkedIn as well, easy to reach. I’ve got a few magazine articles coming out on this same process of supply chain challenges that will be coming out soon.

What are the companies that you would consider to be your ideal clients?

Number one, they have to have a budget. I also need somebody that I can be top to top and have a good relationship with that is a partner in driving innovation. We get half of our ideas in our company from our clients. I will always ask our customers and our partners, “What do you need next?” That’s my ideal client. Somebody who can partner with, who has a budget, who’s willing to innovate, and follow the Blue Ocean strategy because together we’re going to be more competitive than we are individually.

Last question, Jack. Are you out of the South? Where are you located?

I’m in Jasper, Georgia. Our office is in Dalton, Georgia.

If I’m in your neck of the woods, what’s the one restaurant I need to visit?

In Dalton, the Oak Room. It’s a good old country diner.

The Oak Room in Dalton, Georgia.

If you’re in Jasper, Georgia, there’s not a lot here. I live in the mountains. I’m in a community that’s nothing but homes and trees and the occasional bears.

What bears you got up there?

Small black bears. My dogs are bigger.

 

COGE 173 | Competitive Edge
Competitive Edge: Depending on the product right now, globalization is a big deal.

 

That’s awesome.

We had 24 deer and 10 turkeys in the front yard.

I got the Oak Room in Dalton, Georgia, in case you’re swinging by there. Jack, I appreciate your time. Thank you for joining us.

It’s my pleasure. Take care.

You too.

I appreciate you reading this episode’s interview with Jack. I hope you walk away with some insights that you can use immediately. Blue Ocean Strategy is an excellent book that I encourage you to read. If you are considering ways of innovating, I have a tool that you’ll find extremely useful. It’s called the Construction Niche Analysis. What it’s designed to do is to help you to understand the various niches that you are in so that you can analyze them, and think about which niches are most inviting when it comes to this idea of innovation. It’s free. You can check it out and see if it’s something that’s beneficial to you. If you have any questions about it, reach out to me on my website, ConstructionGenius.com/contact. I’m happy to interact with you via email.

 

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About Jack Aspenson

COGE 173 | Competitive EdgeJack Aspenson is the CEO and President of S3 Surface Solutions, a disruptive, client driven organization that focuses on providing environmentally friendly, simple surface systems that are long lasting and cost-effective. With more than 25 years of experience in entrepreneurial business development, consulting, and sales management, Jack knows how to develop a competitive advantage.

In 2016, Jack launched S3 to meet the needs of an outdated industry that was in dire need of simple yet innovative technology. S3 Surface Solutions exudes seal, strength, and secure with their unique concrete preparation, moisture barrier engineering and breakthrough adhesive technology. This pioneering technology offers a simple solution that ensures the longevity of concrete subfloors and minimizes costly repairs. As CEO, guiding his team to meet the needs of everyone in the building process from Architects, structural engineers, property managers, developers, and end-users alike.

Jack studied materials engineering at Southwestern Oklahoma State University and Organizational Leadership with a concentration in finance and Marketing at Colorado State University. Prior to founding S3, he has held many leadership roles in high tech, as well, restoration focused companies, where he focused on securing up to $20M+ in contracts, including joint venture partnerships. Jack lives in Cumming, Georgia where he focuses on continual learning of the industries S3 serves to understand client needs. Utilizing hands-on process development, active listening, and in-depth knowledge of the industry to find the perfect flooring solution.