Introduction
Ryan: Hi, I’m Ryan Davies, your host for today’s discussion on “Bridging the Technology Gap For Legacy Industries”. We have Matt Kleiman with us. Thanks for being here, Matt. I’m thrilled to dive into this topic. It’s something I’m passionate about, and I can’t wait to hear your insights.
Matthew: Hey Ryan, great to be here. Thanks for inviting me.
Ryan: He’s the co-founder and CEO of Cumulus Digital Systems, which is digitizing quality assurance and industrial maintenance and construction. with an ultimate end goal of eliminating accidents, unplanned downtime, and reworking at industrial sites caused by poor work quality. So you’ve had some experience with Shell and in aerospace as well. Lots of advising in early-stage energy life science technology companies and leading in different activities, commercialization activities, and energy, biomedical, and space defense. I could go on for a long time. I won’t because we won’t spend the entire half hour here talking about all of your amazing credentials and background. But let you’re clearly the right person to talk to about this and talking about the gap that exists in bringing, you know, these legacy companies and legacy industries from sometimes the last century still into this one. Let’s discuss your 15 years of experience in this field. Can you share what you’ve observed and which older industries typically fall into this category?
Matthew: Yeah, thanks, Ryan. And thanks for that effusive and probably undeserved introduction. Really appreciate it. But you’re right. It has been about years. I’ve been focused on this particular topic, and I’ll just quickly without getting too much into a story, just explain how I got into it. I was originally working in aerospace, as you mentioned. I live and work outside of Boston, Massachusetts, at a company called Draper, which goes all the way back to the Apollo program and building control systems for aircraft and spacecraft. And after the Deepwater Horizon disaster in 2010, a number of energy companies came to us. That said, we want to learn from you as experts in making aircraft and spacecraft safe, how we can apply some of these principles that we bring in, from aerospace. And they have been developed over the decades to make aerospace as safe as it is today. How could we apply that to ensure something like the Deepwater Horizon disaster doesn’t happen again? And I was one of the people among several leading this effort at Draper, leading these interactions with these energy companies. And that was the first time I was ever exposed to real heavy industry through oil and gas in that case. it really opened my eyes to just how important the industry is for the world, and how much desire there is in the industry to improve and get better. with Deep Water Horizon being a big wake-up call. But then also how big of a gap there was to actually cover both from a technology and infrastructure, an engineering, a process perspective and kind of dove right in did that through Draper for a couple of years and then ended up being hired by one of our customers, Shell to start a center inside of Shell focused on bringing in these capabilities throughout the energy supply chain. And that’s kind of eventually led to cumulus, and we can go through that whole story, but I’ll stop there. And that’s how I got into the industry. And that those are the types of industries that we end up focusing on.
Legacy Industries and Their Challenges
Ryan: Yes, there are numerous challenges in these industries, right? Many of them are dominated by industry giants. Change management is a real headache. We’ll delve into that shortly and explore how to handle it. But I’m curious, how have you managed the balance between the slower-moving traditional players in these sectors and the newer entrants who are eager for change? How have you seen these legacy industries evolving over your 15-year experience, not only in terms of compliance but also in their pursuit of industry leadership?
Matthew: I believe that at the executive level, there’s been a longstanding desire for improvement. It’s rooted in a genuine concern for worker safety, environmental well-being, and preventing disasters. However, the challenge lies in the inherent dangers of these industries. They often deal with highly flammable materials and heavy machinery, which pose significant risks. These sectors have historically been conservative and slow-moving because hasty decisions in constructing large facilities could lead to deadly consequences. Thus, there are bureaucratic and technological barriers preventing swift change. As the world and technology advance rapidly, these industries struggle to keep pace. But things are changing.
Matthew: When I joined Shell, I faced a significant challenge. Back then, using a tablet or smartphone in an operational facility was considered impossible due to safety concerns. There was a fear that these devices could cause sparks and lead to accidents, likely because of past incidents during the early days of using such handheld devices. This restriction made it incredibly difficult to introduce modern technology because you couldn’t bring any connected devices into the field. This issue caused substantial delays. However, around 2017 or 2018, people began to realize that the risk of these devices causing sparks or explosions was extremely small, almost negligible.
There were two key drivers of change. First, the immense value that connected devices in the field offered, whether for real-time work tracking, connecting with other IoT devices, guiding workers through processes, or eliminating paper-based tasks. The benefits were so significant that executives recognized the need for this transformation. Once that realization occurred, the adoption of mobile and smart devices became widespread, and safety concerns were addressed. Although precautions are still necessary, especially in live hydrocarbon environments, there are established methods to ensure safety. The second driver of change was the COVID-19 pandemic. A silver lining of the pandemic was that the transformation that initially started with early adopters quickly spread to everyone in the industry. The necessity imposed by COVID-19 accelerated the adoption of these technologies, making them the new norm. However, the overall pace of change in the industry remains relatively slow, influenced by both valid and less valid reasons. Those of us in the industry, like myself, are persevering and making steady progress.
Ryan: So, Matt, for our listeners who might be dealing with these challenges in legacy industries or trying to help those who are resistant to adopting new technology, one common issue is knowing where to begin. They might feel so far behind that they’re not sure how to take that first step. There are many pain points, and they worry that addressing one might disrupt everything else due to complex interconnections. You’ve dealt with this firsthand, so what advice can you offer? When you walk into a situation like this, what does starting from the ground floor look like to you?
Matthew: Sure, a couple of key points here. That’s a great question, and it’s something we deal with regularly. One of the most vital concepts we borrowed from aerospace and applied to heavy industry is the idea of systems engineering and systems thinking. It might sound a bit intimidating, but it’s something anyone can use. You don’t need to be a trained systems engineer to adopt these principles. Essentially, systems thinking involves viewing your facility, project, or team, at whatever level of detail, as an interconnected system, rather than a bunch of isolated silos. In many industries, people tend to think in terms of their specific workgroup or a particular area of the facility, believing it’s separate from everything else.
The first step is to embrace the systems mindset, and it’s a bit challenging to explain all the ins and outs of this on the podcast. However, there are resources available. In fact, my company is about to release a book called “Work Done Right,” which delves into this process. It’s all about considering the various factors that influence the challenges you’re facing, whether it’s safety, productivity, or efficiency. Think about these factors as part of an interconnected system. This includes people, suppliers, equipment, materials, regulations, and your contracting process. Approach this with an open mind. Don’t rush in with the latest flashy solution to improve things. First, understand your system and the problems within it.
Matthew: Once you’ve gone through that process of understanding your interconnected system, it’s important to take baby steps before you try to sprint. I’ve witnessed many companies eager to implement advanced technologies like augmented reality or the latest AI, as AI is the current buzzword. These technologies can be valuable, but ask yourself, do you have reliable connectivity in your plant, like Wi-Fi or even 5G reception? If the answer is no or it’s poor, that’s a problem to address before handing out AR headsets to your workers. These high-tech tools might work great indoors or in a controlled environment, but when your workers are out in the field, it’s a different story. But when you take those tools out to the field, you’re likely to run into significant issues, and all the money invested in those fancy headsets might end up being wasted. So, it’s crucial to approach this transformation from the ground up.
Ryan: Creating a roadmap is extremely crucial, and it often gets overlooked or treated as just a buzzword. Road mapping became a buzzword maybe a year or two ago, and now it’s all about AI. However, the importance of road mapping can’t be overstated. The key is having the right data and information, like the extensive data sets you’ve collected at Cumulus, with around 7 million work completions – that’s an impressive number, and you possess exceptional expertise in this area. So, could you explain how you take all this valuable information from your substantial data repository and turn it into a practical plan that demonstrates the achievable transformation in these industries?
Matthew: Absolutely, AI is not just a buzzword; it’s a tangible transformation in progress. In our case, we’ve harnessed the power of AI to leverage our vast dataset of 7 million real work completions. We’ve integrated this data with a sophisticated language model, allowing us to recommend procedures to users. For instance, if someone needs guidance on how to do a specific task, our system can analyze all the data and swiftly suggest the best procedure based on similar examples. Moreover, it can factor in different variables to optimize the process, whether it’s time efficiency or any other specific goal. This is just one way AI is making a substantial impact in our field, as you rightly pointed out.
Matthew: You’re absolutely right. The effectiveness of any AI system or assistant hinges on the quality of the data it’s built on. Unfortunately, many industrial facilities have historically lacked comprehensive data, and that’s precisely why we launched Cumulus. A decade ago, numerous startups and large companies were introducing early versions of analytics products, which might seem rudimentary now but were groundbreaking at the time. They’d ask for your data and promise to provide valuable insights. For us, the data wasn’t readily available; it was often stuck in people’s minds or stored haphazardly in binders. So, we recognized the need for structured data collection from the field, and we’ve been doing this for the past five or six years. With advancements in AI and analytics, we’re finally at a point where we can leverage this data to accomplish remarkable things. When you’re dealing with facility managers, IT managers, or digitalization managers, one of the first questions you should be asking is: Where is your data? You need to understand the condition of your data. Is it easily accessible? Is it complete and accurate? This might not be the most exciting work, and it can even be a bit tedious, but it’s absolutely necessary if you want to harness the potential of the new technologies entering the market.
Ryan: I totally get it. We were discussing this earlier, especially with my wife’s company, which deals with machine safeguarding. They’ve faced similar issues. Sometimes she’d leave for a site audit in the morning all frustrated because someone filled in the wrong box or recorded the wrong stop time, rendering the information useless. It’s a common problem, and data accuracy is crucial. So like Cumulus has this invaluable resource of a data lake to draw from, which can draw parallels to the importance of having accurate and accessible data. And yes, “Work Done Right” is the initiative that delves into understanding how the data, digital tools, and workflows come together and emphasize their significance in this context.
Matthew: Indeed, the “Work Done Right” book responds to frequent questions from the companies we collaborate with and our customers. They often inquire about our journey and how we reached this point. We wanted to share our experiences, shedding light on how we identify and tackle problems in a unique and valuable manner. The “Work Done Right” book results from our journey that relies on the systems thinking approach we’ve used since the early 2010s. We created this book as a guide for individuals who find themselves in the same position we once were when we worked within Shell. Its purpose is to provide a starting point for those who may not be trained systems engineers, specifically for digitalization managers or anyone wondering where to commence their journey in this realm. It’s all about knowing how to initiate the process. The book is designed to help you determine which problems are most valuable to solve and which technologies hold the highest potential to address those problems. It guides you through understanding your readiness for these technologies, pinpointing the obstacles that need to be overcome, and paving the way to start your digital transformation journey. It’s essentially a step-by-step guide based on our successful experiences that anyone can follow.
Overcoming Silos and Change Management
Ryan: Absolutely, Matt. I think people are really eager for this kind of guidance. The issue you mentioned about companies working in silos is a common one. It’s like my friend who’s been with a big corporation for over 30 years; they face challenges where different systems don’t communicate with each other. Now. They want to use this, and they want to be on an Excel spreadsheet still or whatever; it’s wild. So take, take us through that journey and a little bit about the companies, obviously, there’s an importance to working in silos. But then, how does that information translate? How do people kind of overcome that gap even when it’s not necessarily even a legacy gap, but just a communication gap, and how does that work,
Matthew: ultimately, in this industry, see it to believe it type of culture, and they have to, you have to create opportunities for them to see the benefits of what they’re doing so that they never want to return to doing it the old way. And then, once they have that experience. It’s very hard to sell someone on that; you have to give them that experience, and I’ll give a couple of examples from just our own work, and then, once you kind of cross that chasm, you can start breaking down those barriers and, people start to have the word of mouth that says, yes, we have to do this. let me provide a couple of examples for your audience. Imagine a customer involved in filling and assembling railroad tank cars. They were frequently fined by the U.S. federal government due to leaks in these tank cars, which contained potentially hazardous chemicals. This was a serious concern, with three to four fines every month. These fines were often the result of improperly tightened bolts and other issues that could lead to leaks. By making improvements in their processes, they not only saved money but also enhanced safety.
And it started to become just a way of doing business, and they just started incorporating it into their costs, but then they could implement our system. In the first six months of implementing our system, they didn’t receive a single fine related to leaks. Here’s what changed: they ensured their workers performed their tasks correctly, like tightening the bolts properly, and they had a clear record of these actions. Since these tank cars were handled by various companies, each operating in their own silos, having a unified record allowed them to demonstrate to the government that they had taken the necessary measures to prevent leaks and enhance safety.
Matthew: When one of our customers was handling a construction project in the data center industry and started falling behind schedule, it was tempting to blame our technology, Cumulus, for the delays. So, they decided to stop using Cumulus for about a week. However, the workers quickly realized that going back to paper-based processes was causing more problems. They informed the management about the challenges they were facing, and within a week, they resumed using Cumulus. The transition back to digital processes was motivated by the realization that the new system was more efficient and beneficial than returning to old paper-based methods. Returning to paper-based processes was a glaringly inefficient choice, resulting in wasted hours. It became evident that reverting to paper wouldn’t resolve their scheduling issues. The workers themselves pointed out the inefficiency, which led to a quick return to the digital system. This group had initially been skeptical, but after a couple of months with the new technology, they refused to return to their old ways. They became advocates for the digital solution and, more broadly, for embracing technology. To bring about real change, you need to create experiences that make people have that “Wow” moment. While inspiring talks and videos have their place, it’s witnessing the technology’s impact firsthand, especially through their peers’ experiences, that truly breaks down resistance.
When they see their peers responding positively, that’s when the excitement truly begins.
Ryan: I’m sure you just sat back and smiled, knowing they’d return in a week or two.
Matthew: I didn’t anticipate such a swift return, but similar situations have occurred in the past. It’s a bit like that scene from the movie Hamilton where King George sings, “You’ll be back.” Apologies for the momentary distraction; my daughter and I listened to Hamilton repeatedly. Anyway, I lost my train of thought there. I expected them to return eventually. However, when they initially told my team that they would stop using our system, it was concerning and disappointing. The surprising part was how quickly they decided to return; it happened in record time. I had confidence that they would return, and I knew this wasn’t the end of it. we’ve seen this happen before because it’s easy to blame whatever the new system is for whatever problem you’re having, and that’s a risk for technology companies. And that’s something I’ve warned people I warned peers about and even talked to potential customers about. There are some companies where you can go in there, and they are just a mess, and you can tell they have lax management practices. They have terrible safety cultures and, and there’s sometimes you have to select your customers because if you bring a system in like that and say, like your, problems aren’t technology, you have some more fundamental issues to work out because what’s going to happen is they’re going to bring in the new system, something will inevitably go wrong because what’s the expression that, culture eats strategy for breakfast. I think it was either Warren Buffett or Charlie Munger who said that culture eats strategy for breakfast. The same can apply to technology – no matter how great your system is, it’s still operated by people. We’ve had a few instances where we didn’t win a contract or withdrew from a potential customer, and later, there was an accident at the site. We realized they were just trying to put a band-aid on deeper issues within the company that needed to be addressed first. This is where the systems thinking methodology comes into play. Sometimes, technology isn’t the solution to your problems, whether it’s a cultural issue or a problem in your contracting process. You have to be honest with yourself about how you manage your people. If you introduce new technology into a troubled situation, it won’t resolve issues; in fact, it might make them worse. It’s easy to think you’re fixing the problem, but you’re not truly addressing the underlying issues.
Ryan: I understand where you’re coming from, especially based on my experience with digital transformation and automation. People often come in with a predetermined solution, thinking they have it all figured out. However, I’ve seen that approach and recognized that without the necessary groundwork, it’s bound to fail. It all ties into the art of change management. You’re right; it’s not just about the changes people think they need but also guiding them through the process and addressing the right audience. It’s crucial. the sea level suit often doesn’t align with what a person on the shop floor needs to see. That disconnect is quite evident. Regarding change management, I firmly believe that addressing this misalignment is fundamental to gaining buy-in. It’s crucial to bridge the gap between top-level strategies and the practical needs of those directly involved in the work.
Matthew: Change is undeniably challenging for both individuals and organizations, regardless of their size or industry. What I’ve come to realize is that people tend to focus on change too narrowly, seeking quick and easy solutions. In reality, managing change requires a systematic approach, and it often involves addressing the less glamorous, more fundamental aspects of managing people and organizations. It’s hard work, but it’s essential for achieving real change.
Conclusion
Ryan: Absolutely, Matt. We can definitely delve deeper into change management in another conversation. I’d be happy to return for that. Now, regarding “Work Done Right,” the book is a valuable resource for those navigating digital transformation, particularly in industrial sectors. Is the book that’s coming out here right away? Cumulus Digital Systems, CEO, let us know how people can find you, or they can learn more about you and connect with you to kind of get some of that expertise and guidance that probably a lot of our listeners might desperately need or, want to shine a light to somebody who does need it for sure.
Matthew: Yeah, thanks, Ryan. I really appreciate the opportunity to plug in a few things, but yeah, LinkedIn is the best way to get in touch with me. I’m pretty active on it. you know, Matthew Kleiman cumulus digital systems should be pretty easy to find. Also, just matt@cumulusds.com is my email address. The book to plug it. Yeah, it worked on, right? It is available for preorder now on Amazon, and it will be fully published on October 31st, so Halloween. but it’s not so scary. reach out love to talk to people who are very passionate about helping people in industries solve, solve these challenges.
Ryan: You know, the book might not be scary, but I bet you the situations that people are in are, and that’s the point of why you need to get the book to be able to start unraveling those scary situations.
Matthew: That’s great, Ryan. Thanks. Feel free. It’s all yours.
Ryan: So, Matt, I want to take a minute to thank you, Matthew Kleiman, for this amazing podcast, bridging the technology gap for legacy industries, and I want to thank our listeners. We can’t do what we do without you until we meet again with another amazing TBR episode. I’m your host, Ryan Davies. Thank you so much for joining us for listening today. Feel free to like, comment, and share this with anybody who would benefit from Matt’s expertise. Matt, thanks again. Can’t wait for our next one. Take care everybody.