Not many executives are willing to burn their business to the ground in order to stay relevant. That’s what makes Kohrs Lonnemann Heil (KLH) Engineers' President and COO, Jim Tavernelli’s, story so fascinating. Follow along as Jim tells Constructible how they completely reinvented their role in the construction value chain, diversified into new brands, and focused on strategic relationships in order to become an engineering firm of the future.
How KLH Engineers Built the Consulting Engineering Firm of the Future
What prompted KLH Engineers to redefine the value and role of the consulting engineer?
About six years ago, we recognized something was broken. We weren't innovating to be better, and we had quality and consistency issues. We were relying on things that worked 10 to 15 years ago, and our culture was waning as a result.
There was a distinct inflection point where our leaders looked at one another and asked, "How do we fix this thing? Knowing there is fee compression, schedule compression, and rising demands in the industry, how do we even remain relevant?" This awakening set us on the path of fundamentally reinventing the way we work and who we serve.
What were some actions you took to figure out what needed to change?
We had the opportunity to speak to several contractor peer groups — electrical, mechanical, and general contractor peer groups. We wanted to know how they felt about MEP engineers like KLH. The responses were unflattering, to say the least. They flat out despise us and view engineers as a necessary evil — that we're arrogant, we only serve the needs of a permit, and we're just a stamp.
We also got feedback that drawing sets were incomplete, designs were not coordinated, and just forget about constructability. We also heard that engineers take 20 days to answer RFIs, and the response is typically something like, "It's in the specs." When things go sideways, we show them our stamp and tell them to reference some CYA note on sheet 802.
The worst part is we spent all this time and effort on a set of drawings that ultimately get thrown in the garbage because these other contractors recreate our designs. We realized that there is so much waste in the design and construction industry and that KLH was enabling it. We had lost respect and our position in the value stream was actively being commoditized, and potentially eliminated, because of the chasm that exists between design and construction.
KLH Engineers is transforming the electrical design process through automated and enhanced deliverables.
What were some key realizations you had at the beginning of your transformation?
After this feedback we started asking ourselves some really tough questions in the spirit of breaking old thinking. Questions like:
Who is the true consumer of our drawings?
How do we coordinate up- and down-stream in the construction process?
In the next 10 years will we use more data or less?
How will the roles of architects and engineers change in the next 10 years?
And, will the roles of architects and engineers even exist in the future?
We realized that in our current state, as the MEP silo, we were serving needs counter to the direction of the construction value stream. We were serving the needs of the architects and trades, and it was one of the main reasons contractors were fed up with us.
What has been the focus of KLH’s transformation?
We made a conscious decision to refocus on the point of install so we can utilize programming and the integration of data to reduce and eliminate rework between the silos. Less rework means faster schedules, fewer change orders, and more importantly a less expensive and more enjoyable construction experience for the owner, contractor, and all of us.
As we grew a bigger appreciation for the dynamics of the value stream, we began to research, develop, and create adjacent innovations that serve the needs of other stakeholders in the value stream. Most notably, we recently launched a data consulting startup called Levcon Analytics that helps various stakeholders identify, leverage, and audit data to drive planning, design, construction, and operations.
What are some methodologies you used during your transformation?
In 2016, the technical leaders of KLH went offsite for a day to chart the technical future of the business. Three critical outcomes were established that day. First, KLH committed to abandoning the legacy 2D platform and executing all its projects on a 3D BIM platform. Second, we created an independent database that allows us to connect building models and share data in a more meaningful way. Third, as disciplines of W. Edwards Deming, we embed process into all of our software tools.
Throughout our transformation, we utilized agile methods like the Kanban huddle. This empowered our employees to focus on small, iterative tasks first, and with success the small wins snowballed into bigger initiatives. Over a very small window of time, our culture totally transformed into one that is playing offense.
We started by focusing on low effort, high impact initiatives like responsiveness. We use our project management platform to measure the KLH turnaround times on RFIs and submittals for the past 30 days. These are prominently displayed throughout our office and they are updated daily. We use these to emphasize the importance of a prompt response to the contract from the field.
Knowing that software development was central to our technology strategy, we organically built a software engineering department which today represents 20% of our staff. By pairing an engineer with a developer, a really powerful dynamic emerges. We have created over 80 custom Revit add-ins for MEP that have allowed us to automate routine processes, ensure better quality, and increase margin internally.
How have KLH’s strategic partnerships helped you transform?
As we developed better workflows internally, we discovered we could only move the needle so far — we can’t influence the broader changes in the industry that we desire on our own.
We searched for like-minded companies all over the country. Luckily, we found four companies that were also tired of the current reality. In 2018, we co-founded an MEP consortium called Demain, along with Tweet/Garot Mechanical out of Green Bay, Wisconsin, as well as Rex Moore, Construction Innovations and DPMG out of Sacramento, California. Demain’s focus is on improving design (DE), manufacturing (MA), and installation (IN) within the MEP buckets of the value stream.
One of the main reasons we’ve been able to diversify into a house of brands (including Levcon Analytics, KHL Engineers, and KLH Software Solutions) is due to our strategic relationships. The collaboration from these partnerships provides us with the expertise and perspective that allows us to develop unique solutions.
We value these relationships dearly and are always open to meeting like-minded firms. Whether you’re an architect, contractor, owner, or manufacturer, there is enough for us to fix for all of us to join.
How have you used technology to accelerate your transformation into an engineering firm of the future?
As I mentioned earlier, we’ve created over 80 custom software add-ins that enhance our ability to deliver engineering services. These add-ins started small as ad-hoc solutions to take something from 10 clicks down to one click — basically, to fix annoying features within a software that were ripe for better solutions. These started as hobbies and night tasks for some of our engineers who had a minor in programming. Over the years, we’ve corralled these efforts into initiatives that were made firm-wide.
For example, one of the software solutions we developed is called the Model Management Assistant. It provides the user with a step-by-step workflow in setting up the levels, links, sheets, and views within a Revit model. This takes the typically arduous task of setting up a model and streamlines it so that you have consistent, high-quality models every time you get into our BIM software.
In addition, we’ve developed advanced algorithms based on machine learning (ML). One use case is when we use ML to translate CAD into a three dimensional model. By analyzing all of the layers that we’ve received over the years from architects, we’ve been able to find patterns on what those corresponding layers would equal within a 3D model.
By documenting those patterns and creating codified solutions for these patterns, we were able to take a CAD file and convert it to a 3D model. This 3D model then sets us up for the data-driven solutions that we’ve developed all throughout our history.
You launched Levcon Analytics in March 2021. Tell us more about the firm's propietary data integration platform, Convergit™.
Convergit is Levcon Analytics' cloud-based web app and Revit add-in that allows building owners, contractors, and design professionals to insert, manage, and audit pertinent project data within the building model. Typically, this is not easily done within Revit. However, with this web app, we’re able to connect to the needs of the building owner within the workflow of the design professionals, and the input of the contractors so that we get a single source of truth.
How will KLH harness all the momentum you’ve built to carry you even further into the future?
Our mission goes beyond just what KLH can do on a project — we want to impact the construction industry as a whole.
That mission keeps us focused on what we need to do. First of all, to keep complimenting our growth with new services and tools that help leverage data in a meaningful way to inform design decisions. I can’t talk much about it now but we have a new pre-seed startup that we look forward to sharing more about in the coming months. Secondly, we actively seek out relationships with those who share our concerns and passion for disruption. We recently partnered with Trimble MEP and look forward to announcing future collaborations across our two firms.
We keep tech and innovation critical to our business, and it’s kind of strange to say it this way, but through those guiding principles, we feel like we’re bringing joy back to construction.