Home Innovation Insights

Promoting innovation in home building and knocking down barriers that stand in the way is all we do.

J. Michael Luzier
February 6, 2014

Innovation is Our ROI

Home Innovation Research Labs can be an enigma. We are a for-profit corporation operating as an independent subsidiary of a non-profit organization. At the same time, our by-laws outline a corporate mission of research and development aimed at increasing the affordability, and improving the quality and performance of homes and apartments nationwide. Our mission appears to belie our for-profit organizing principle. Most companies work to capture market share with an understanding that their gain is their competitors’ loss. Less common are organizations that seek to return a profit and, at the same time, work to improve their entire industry.

However, this seemingly schizophrenic charge offers insight into the barriers to innovation within the residential construction industry, and an understanding of how Home Innovation Labs can successfully navigate those challenges.

Innovation doesn’t come easily to the home building industry. It is an industry dominated by small firms with a lack of integration. While the recession may have caused some consolidation, small construction firms continue to hold a larger market share than big firms. There are also few economies of scale within the industry which contributes to the fragmentation. Small firm dominance, along with other reasons, hinders information flow. Finally, home building is regulated at the local level so that any one building product used in residential construction must comply with myriad building codes, permitting rules, and land use regulations across the country. The result? Seemingly impenetrable barriers to innovation.

Fifty years ago, home building leaders recognized their own industry’s shortcomings. Their collective desire to build a better home inspired them to form a start-up research and development organization dedicated to serving the needs of the industry. Home Innovation Research Labs’ mission is simple: to promote innovation in housing technology to improve the quality, durability, affordability, and environmental performance of homes and home building products of all types. By launching our organization, autonomous from their trade association, the industry made a capital investment with an expectation that their long-term return on investment would be innovation. Innovation that would help the entire industry build a superior, more affordable home.

Our by-laws are an express acknowledgment about two critical facts. First, while the barriers to innovation are great, it is possible to accelerate the innovation adoption process with the benefit of deep industry insight. Second, because of the industry’s fragmented organizational characteristics, innovation can’t always happen at the individual company level. Often, it doesn’t pay to be first to market in our industry – better to be second to let the leader bear the risk and cost of a new product or technology. We work to bring innovation to the industry in both ways. The deep expertise of our staff in residential construction is specifically designed to help builders and product manufacturers bring new products to market and expand market share. Our goal is their commercial success.

The investors sought innovation as return on their investment. But they also believed that an organization expected to return a traditional profit would be more competitive, more nimble, and more customer-focused, and most importantly, better understand the challenges faced by all residential builders. Like every successful business, we care about driving value to our clients.

A home builder faces a basic challenge every day: “How do I build a house today that is better – more energy /water /resource efficient, more durable, better air quality, reduced stormwater impacts – than the house I built yesterday, yet remains affordable to homebuyers within my market so that I can sell it and build another house tomorrow.” Simple to state the problem; not so simple to accomplish. It is easy to design and build a near-perfect house if there is no consideration for cost. It is infinitely more difficult to design and construct a home with new products, new technology, and new construction practices and return a profit sufficient to turn around and try to do it all again tomorrow.

Home Innovation Research Labs was set up to meet the same challenge every builder faces. We deliver innovation to the industry—not in a utopian research-and-development center, but within an organization focused on delivering value to our clients. Our work encourages lower construction costs and improved quality in construction and design. We work to not only solve those problems, but to provide definitive and verifiable results so that our clients can stand behind our word and our mark. Code officials and consumers look to us to confirm product performance and code compliance claims.

Promoting innovation in home building is all we do. If innovation is part of your business strategy, let us help you get there as effectively and successfully as possible.

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