Implementing a culture of innovation in construction
KvalhoTalks with Hubert Rhomberg | CEO, Rhomberg Holding
Welcome to KVALHO TALKS a series of interviews and discussions with experts, innovators and entrepreneurs within the building industry. A place where forward-thinking individuals inspire + educate + share their views on what changes are happening in the industry today and what comes next.

Disruption. Transformation. Innovation. These words you probably hear tossed around a lot in the building industry. And, while many companies like to ''talk the talk'' when it comes to those words, they don't always ''walk the walk''. This is not the case with Hubert Rhomberg, CEO of Rhomberg Holding, who shakes things up by challenging the status quo and turning ideas into reality. He is the fuel behind the development of a timber-hybrid modular construction system (CREE by Rhomberg), an active practitioner of the sharing economy (via CREEs knowledge platforms) and the man behind the companies' sustainability vision towards improvement of the entire building lifecycle.

Enjoy the interview and find out how Hubert shares his vision with his team and successfully creates a culture of innovation in his organisation.

Could you please shortly introduce Rhomberg Holding?
Rhomberg Holding is a group of almost 90 companies which employs 2800 people and has an annual turnover of 750 mln EUR. The group specializes in construction, resources and railway technology. Railway and construction are the 2 main pillars of the business. Some of the companies in the group operate internationally in various countries including Australia, Germany, Switzerland, Austria, UK, Canada and Scandinavia. The rail business is the most internationalized and now based on this experience we built CREE – an innovative building system.

Your companies' vision and actions are strongly focused on sustainability. Why and when did sustainability start to play a major role for your company?

When I took over the company from my father in 2001 I had to come up with the new strategy for the business. This was an interesting moment, because I realised that before I do the strategy for my company, I needed to do the strategy for my life. At that time I was exploring the topic of sustainability and I coincidently came across of group of scientists including professor Friedrich Schmidt-Bleekwho developed the concept of the ''ecological backpack'' and taught me a great amount about natural resources. The Ecological backpack is a total quantity (in kg) of materials moved from nature to create a product or service, minus the actual weight of the product. So, an ecological backpack measures the amount of materials not directly used in the product but displaced because of the product. For example, Steel: 21 (One kilogram of steel carries an ecological backpack of 21 kilograms.), Aluminium: 85, Copper: 400! Understanding the backpack of all the material you look at the building in the totally different way. That's what happened to me.
I started to look into what materials I wanted to eliminate from the buildings and replace them with something more ''nature friendly''. And what is better for that than wood which has a backpack of 0.2 ! This was striking and hence the mission to revolutionize the building industry by dematerialising and reducing the energy consumption.
It's a fact that the building construction industry is responsible for nearly 40% of global energy consumption, 40% of the world's raw materials consumption and production of almost 40 % of global waste! This makes our industry have the biggest impact on this planet in terms of resources! The moment I realised that, I made the decision for Rhomberg: we have to change! So, we made a new strategy focused on sustainability and decided to build differently than others.
Is this how the idea for CREE began?
In a way yes. In year 2008 we were part of a research project named A+. The aim of the project was to demonstrate possibilities to build high rise buildings made of wood.
This even made clearer to me that if you want to dematerialise the construction industry, using wood as a main construction material is the way to go. If we want to store carbon for 100 years we need to use wooden buildings.
Together with the Technical University of Vienna, we proved that construction of tall buildings is technically possible. I wanted to build 30 story buildings – I basically aimed for 100 m tall wooden buildings which would be cost effective, energy efficient etc. We had a long way to go because we had to prove and test fire performance and address all kinds of building regulations. This project was a success which turned into the spin-off company – todays CREE. Meanwhile CREE is a platform for knowledge exchange with a proven details' library – not a production company.
At some point we realised if we want to make a real difference in the world we must be able to scale and multiply our concept.
Instead of building 3 – 4 projects per year in Austria we want to build timber buildings all over the world. This is the only way to make a change and demonstrate to others the possibilities of timber buildings and their positive impact on the planet. We all have one life and if we have a good idea we should find the way to scale it.
Our philosophy is to share our knowledge with other companies across the globe, allowing them to implement our proved concept in their country. Traditionally, in construction everybody is training to reinvent the wheel ! I also described this issue in my latest book: ''BAUEN 4.0'' – Vom Ego- zum Lego-Prinzip. (also available to download in EN).
The future of construction depends on the change of our thinking.
Which external factors are currently influencing the way the building industry runs?
Normally its cost, quality and time. In the future it will be the same 3 but there are some trends which already have made a huge impact on the industry which are : digitalisation, transparency, new business models and a shortage of skilled labour. The last factor has a significant effect on business already today. Less people are entering the industry while the skilled labour is retiring. On the other hand, the shortage in the skilled labour creates an open window for prefabrication, collaboration, knowledge sharing etc. We also have a big chance to attract young people to our industry – we have the unique combination of the technology + craft. We use technology but still work with tangible things and materials.

How do you find employees who want to support you with fulfilling CREE's mission?

Today, many organisations struggle and complain about shortage in skilled labour. We at CREE put people at the centre of our company therefore we look at this challenge in a slightly different way.
We first ask ourselves: ''how do we have to be as an organisation that everyone wants to work here to fulfil their potential and bring a success to the organisation''? This makes a special culture of the organisation. With good people, you can plan strategies for growth.
What's the most effective way to drive and accelerate innovation in the construction industry?
Generally, innovation is seen by an organisation as a threat because people don't like change. But there is a good way to start innovation process or innovative thinking. It can be done by ''raising the bar'': e.g. do what you do but use half of the resources to do it. This is how I do it with my team: first I write down the goal on the flip chart (e.g., we want to do the same building 50 % quicker, more ecological or with half of the resources). As a next step I ask for 5 reasons why this is a good idea and listen to what the team says. Then I collect 10 arguments why this idea is not possible now. At the end we have a check list of thinks which need to be addressed to make that idea successful. I go back to point #1 and ask my team: how can we solve this challenge. And we go point by point and find solutions to all of them. This really works. In 2009, I said that I want to build a 100m skyscraper made of wood, everybody said it's not possible. But I didn't know its not possible.
For every new idea which I have, I always collect points what things are not possible (now) and based on that, I look for people who are interested in solving these issues with me.
Can you share your view on what existing concepts construction could adopt to improve and grow?
We can learn a lot from the sharing economy. This can be in a form of a relationship platform bringing people together to share knowledge, speed up innovation and scale up business.

Do you know of any example from other industries who adopted this model?

A good example is a consortium of German carmakers including BMW, Daimler AG and Audi who back in 2015 jointly bought Nokia's HERE mapping and location service. The car manufacturers saw increasing competition from Google, which runs its own free mapping service and self-driving cars, and Uber, which is making owning a car less attractive for some people. This is at least a sign of companies starting to collaborate.

What other industries we can learn from?

I personally look into the ship building industry which is similar to construction. It's in a way swimming building with 5000 cabins. Construction can specifically learn a lot about prefabrication and efficiency from the ship builders. In my opinion, the construction industry is really segmented. There are millions of construction companies with an average size of 25 employees. In such a case it's hard to talk about digitalization.
Returning to your plan of entering other countries with the CREE concept, a knowledge sharing platform, you seem to be disrupting the industry business model?
Yes. Because we openly share what we know, and this approach is new. We will not be successful if we think in the same old manner. Just to give an example, we had a big project in Berlin – 35 000 m2 which was located next to the rail tracks. Because of this the façade required a new design to fulfil the acoustic requirements. As soon as we developed the new solution, we made it available to all our CREE licensees, so that they can use it in case they have a similar situation with their projects. Whatever innovation happens somewhere, it belongs to everyone in our network. We even stopped patenting things which makes us a lot faster.
I encourage my employees to share whatever they know with the outside world. We only want to know what is done with the knowledge we made available because we also want to learn.
What are the challenges of using an open knowledge platform?
Every country in Europe has different building regulations. We already proofed our system in many countries, made it compatible with the local building regulations and formed partnerships with licensees. Our goal is to cover all European countries to be a perfect partner to anyone who wants to enter any European market.

What can we do to support start-ups bringing solutions for the industry?

It will be good to first identify enterprises in the industry who are open to collaborating with start-ups and open to try new solutions and work with good ideas. These companies could also invest in startups if they find their idea valuable, which will solve the investing problem for startups. We do this with Rhomberg Ventures – which focuses on promoting sustainable ideas that make our world truly sustainable. Our aim is to support social entrepreneurs in construction, real estate, infrastructure and mobility, and urban development.

How will the construction industry look like by 2030? Is there going to be any big change?

In 10 years' time, there will be more autonomous machines on the construction site. Augmented Reality (AR) and Virtual Reality (VR) will play a big role. Nobody will build a building before they ''experience'' it in VR. For all the construction processes and maintenance there will be greater use of AR. This will affect the whole facility management. In real estate, the assets will be better used. The Smart Building will have a ''consciousness'' with anonymous sensors and data analysing people's wellbeing in the building. There will be no dramatic change in design. You most likely won't see a big difference comparing to today when walking through cities.