INDUSTRY INSIGHTS
Have you ever heard of an Entrepreneur in Residence (EIR)?

We’ve seen the term “Entrepreneur In Residence” (EIR) coined in many ways. Is it just a “trendy” word? Is it a must-have title these days? Why the hell do you need one in construction?

Well, Victor Muchiri, an EIR at Barton Mallow, recently shared insights with us. His perspective sheds light on this emerging role in construction.

What is an Entrepreneur in Residence?

An EIR joins a company to provide expertise and guidance on entrepreneurial endeavours.

In construction, the EIR evaluates ideas within the firm. They look for ways to commercialise internal innovations and generate new revenue streams.

Muchiri explains:

The EIR role differs from typical innovation management. 

Whilst innovation teams focus on finding external solutions to internal problems, the EIR looks for ways to monetise the company's existing ideas and processes.

Why Have an EIR?

It will not be news to anyone that reads this newsletter but construction productivity has been flat or decreasing for decades. An EIR can help companies rethink processes and find new business opportunities. They bring an entrepreneurial mindset to longstanding industry challenges.

Muchiri argues that every major contractor should consider having an EIR.

The EIR role allows construction firms to tap into their internal innovations. Many companies have valuable intellectual property or efficient processes. An EIR can help turn these assets into new revenue streams.

Key Focus Areas for Construction EIRs

So what do EIRs in construction actually work on? Victor highlighted several key areas:

• E-commerce marketplaces: Creating platforms for contractors to sell their innovations to others in the industry.

• Fintech and payments: Improving financial processes and cash flow in construction projects.

• Risk management: Enhancing pre-qualification, insurance, and financial services for contractors.

• Emerging technologies: Evaluating AI, robotics, AR/VR, and other tech for construction applications.

• The EIR assesses both internal innovations and external technologies. They look for opportunities to create new products, services, or even spin-off companies.

Challenges and Considerations

Implementing the EIR role comes with challenges. Construction firms must balance innovation with their core business of building projects. Muchiri notes that whilst innovation is crucial, it's not the primary focus for most contractors.

Another challenge is the long sales cycles in construction. New ideas often take time to gain traction. EIRs must be patient and persistent in pursuing opportunities.

Data utilisation is also a key hurdle. Many contractors struggle to effectively capture and use project data. This limits the potential for data-driven innovations.

Balancing VC-backed startups with internal innovation is another consideration. Muchiri cautions that VC incentives don't always align with contractor needs. EIRs must navigate this landscape carefully.

Impact on the Industry

The EIR role has the potential to shake up the construction industry. By commercialising internal innovations, contractors can create new revenue streams. This could lead to more specialsed, tech-enabled construction firms.

EIRs may also help bridge the gap between startups and established contractors. Their entrepreneurial mindset can help firms adopt new technologies more effectively.

In the long run, EIRs could drive significant productivity gains in construction. By rethinking processes and leveraging emerging tech, they may help solve longstanding industry challenges.

How Construction Companies Can Use an Entrepreneur In Residence

1. Assess internal innovations
Construction companies often overlook valuable internal innovations. Conduct a thorough audit of unique processes, technologies, or solutions developed within the organization. This may involve forming a dedicated team to review operations across different departments and projects.

Engage with both experienced project managers and newer employees to identify potential innovations. Once identified, the EIR can evaluate these ideas for their commercial potential and develop strategies to monetize them within the broader construction industry.

2. Consider an unconventional candidate for the EIR role
The ideal EIR candidate may not come from a traditional construction background. Look for individuals with diverse experiences in areas such as technology startups, venture capital, or other innovative sectors. Key qualities to seek include an entrepreneurial mindset, ability to identify market opportunities, and experience in product development and commercialization.

The right candidate should be able to bridge the gap between construction industry challenges and innovative solutions. Consider candidates who can bring fresh perspectives whilst quickly grasping the nuances of the construction sector.

3. Integrate the EIR with existing innovation teams
Ensure the EIR works closely with established innovation or R&D departments. This integration is crucial for maximising the impact of both the EIR and internal innovation efforts. Establish regular collaboration sessions between the EIR and innovation teams to share insights, align objectives, and work on joint projects.

The EIR can provide an external, entrepreneurial perspective to internal R&D efforts, whilst innovation teams can offer industry-specific knowledge to guide commercialization strategies. This synergy can lead to more effective innovation outcomes and increase the potential for successful commercialization of new ideas.

To roundup...

From what we learnt from Victor, whilst most of the industry focuses on bringing external innovation in, an EIR focuses on bringing internal innovation out. 

Clearly the role is only available to those who have the budget i.e. incumbents or larger companies . And everything about larger companies is very slow. So it feels counterintuitive when larger companies try to adopt the startup mentality needed to develop commercial products at speed.

But by nature of innovation, there is a lot of experimentation as to the correct strategy. And a diversified approach (if available) will give you faster feedback as to what method works best.

I personally like the idea. If an internal tool/process works for a high-revenue company, the product has an element of product market fit... Thus commercialisation should be possible. But who knows. Construction is weird. People work in their own ways. So just because it works for one, does not mean it will work for another. 

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