The first article in the “In the Beginning” series from Offsite Innovators

There are moments in every industry’s history when someone proposes an idea so unconventional that most people dismiss it before it has a chance to prove itself. Looking back years later, those same ideas often seem obvious, even inevitable. But at the time, they were anything but.

The offsite construction industry has been built on those moments. Long before robotics, artificial intelligence, digital twins, or automated production lines, there were innovators who looked at the way homes were being built and quietly asked a simple question: “Why does it have to be done this way?”

This new Offsite Innovators series, In the Beginning, looks back at those people, companies, and turning points that changed how America builds. Some became legendary. Others faded into history despite remarkable accomplishments. Each has something to teach today’s entrepreneurs, factory owners, engineers, and innovators.

There’s no better place to begin than with the company that convinced tens of thousands of Americans they could buy an entire house from a catalog.

A Retailer, Not a Homebuilder

When people hear the name Sears today, they usually think about department stores, Craftssman tools, Kenmore appliances, or perhaps memories of flipping through the Christmas Wish Book. Few realize that between 1908 and 1940, Sears sold more than 70,000 complete homes that were shipped by railroad to customers across the United States.

It sounds almost unbelievable today, but in the early twentieth century it wasn’t nearly as far-fetched as it appears with the benefit of hindsight. Sears had already built one of the most efficient mail-order businesses in the country. Farmers and families living in rural America depended on its enormous catalogs to purchase everything from clothing and furniture to farm machinery and household goods. If the company could successfully deliver thousands of different products across the nation, someone eventually asked an obvious question.

Why not houses?

That question didn’t come from a homebuilder. It came from executives who understood distribution, logistics, customer service, and manufacturing. Sears wasn’t trying to reinvent residential construction. They were simply looking at their existing strengths and asking how those strengths could solve an even bigger problem.

The People Behind the Vision

Although Richard Warren Sears laid the foundation for the company’s mail-order empire, the Sears Modern Homes program is generally credited to Frank W. Kushel, who recognized that America’s growing railroad network created an opportunity unlike anything the housing industry had seen before.

Kushel understood something that many entrepreneurs still struggle to recognize today. A revolutionary product rarely succeeds because of the product alone. It succeeds because the systems surrounding it finally make the product practical.

Rail transportation had matured. Manufacturing techniques had improved. Customers already trusted Sears with major purchases. The timing was finally right to combine those pieces into something entirely new.

That timing proved to be just as important as the houses themselves.

Designing Homes for a Railroad Boxcar

One of the biggest misconceptions about Sears Kit Homes is that the company simply bundled together lumber and hardware, then hoped buyers could figure out the rest.

Nothing could be further from the truth.

Creating a Sears home required architects, engineers, draftsmen, and manufacturing specialists to work together in ways that were remarkably advanced for their time. Every floor plan had to be attractive enough for families to proudly call home while also being engineered so every component could be manufactured efficiently, packed into railroad boxcars, shipped hundreds or even thousands of miles, and assembled with predictable results.

Each board was cut to size before shipment. Components were labeled. Windows, doors, trim, roofing materials, flooring, hardware, nails, and fixtures were all carefully inventoried before leaving the warehouse. Detailed instruction manuals guided local carpenters and homeowners through the construction process.

In many respects, Sears wasn’t simply designing houses. They were designing an entire building system.

That distinction still matters today.

Convincing America to Trust the Process

Selling a house through the mail wasn’t Sears’ greatest achievement. Convincing people to trust the idea was.

Imagine opening a catalog in 1915 and seeing a complete home offered alongside kitchen tables, work boots, and farm equipment. Even if the price seemed attractive, most buyers naturally wondered whether such an ambitious purchase could really work. Sears recognized those concerns long before customers voiced them.

Instead of simply advertising affordability, the company focused on removing uncertainty. Homes arrived with pre-cut lumber that eliminated much of the measuring and cutting normally performed on site. Every shipment included carefully organized materials lists and construction instructions. Sears even introduced financing programs that allowed many middle-class families to own homes that would otherwise have remained out of reach.

Looking back, it’s easy to admire the engineering. But the real innovation may have been something less visible.

Sears systematically removed every reason customers had to say no.

Lessons That Still Echo Through Offsite Construction

More than a century has passed since the first Sears Modern Home was delivered, yet many of the same challenges continue to define today’s offsite construction industry.

Factories still spend enormous amounts of time educating buyers about unfamiliar building methods. Transportation remains one of the industry’s greatest logistical challenges. Financing, insurance, public perception, local acceptance, and regulatory differences continue to influence whether innovative housing systems succeed or struggle.

The technology has changed dramatically, but human nature has not.

Customers still want confidence before they embrace something new. They want to know that the product has been tested, that the company will stand behind it, and that the process is dependable from beginning to end.

Sears understood that long before anyone used terms like “customer experience” or “innovation adoption.”

Their greatest accomplishment wasn’t inventing factory-built housing. Others had experimented with prefabrication before them, and competitors such as Aladdin Company would become formidable rivals. Sears’ lasting contribution was proving that industrialized homebuilding could become mainstream when backed by organization, quality, and trust.

That may be the most valuable lesson they left behind.

Gary’s Observation

One of the reasons I wanted to begin this series with Sears is because I see so many similarities between 1908 and where our industry finds itself today.

Every week I hear about another startup with an exciting product, a new manufacturing process, an innovative transportation system, or software that’s supposed to revolutionize housing. The enthusiasm is real, and in many cases the technology truly is impressive. Yet too often the conversation begins and ends with the invention itself.

Sears reminds us that inventions rarely change industries by themselves.

What changes industries is building an entire system that people can understand, trust, finance, transport, insure, and confidently recommend to someone else. That’s exactly what Sears accomplished over one hundred years ago. They didn’t just sell lumber packages. They created confidence in a completely different way of building homes.

As we continue this In the Beginning series, I hope we don’t simply admire the pioneers who came before us. I hope we study them. The challenges facing today’s offsite innovators may wear different names, but many of them are remarkably familiar. History has a way of reminding us that the biggest obstacle to innovation is rarely the technology itself.

More often, it’s earning the confidence of the people who are being asked to embrace it. And that’s a lesson that’s just as relevant today as it was when the first Sears house rolled out on a railroad boxcar.

Innovation has never had an easy time finding acceptance in construction. In fact, many of the ideas we now take for granted were once dismissed as impractical, unnecessary, or simply impossible. Sometimes the resistance comes because a product is unfamiliar. Sometimes it comes because changing long-established methods makes people uncomfortable. And sometimes, unfortunately, it comes because of the person presenting the idea.

Nearly a century ago, one remarkable architect experienced all three.

Looking at a Wall Differently

During the 1920s, America was building at an incredible pace. Schools, theaters, factories, commercial buildings, and homes were all rising from solid clay brick. Each brick weighed roughly four and a half pounds, requiring enormous amounts of labor to manufacture, transport, and lay. Once the walls were completed, they provided structural strength but little insulation against heat, cold, or noise.

To most builders, that was simply the cost of construction.

Anna Keichline saw something entirely different. She believed the industry was wasting raw materials, transportation costs, and countless hours of labor. More importantly, she understood something many builders overlooked—air is a far better insulator than solid clay. Instead of accepting centuries-old construction methods, she began asking a simple question: Why does a brick need to be solid?

An Architect Who Refused to Accept “The Way We’ve Always Done It”

Anna Keichline was hardly an ordinary architect. Born in 1889, she had already established herself as a skilled woodworker while still a teenager, studied mechanical engineering, graduated from Cornell University’s architecture program, and served as a Special Agent for the Military Intelligence Division during World War I.

This is one of her earliest designs to improve cooking for women of the 1920’s

When she returned to Bellefonte, Pennsylvania, to open her architectural practice, she entered an industry where women were rarely welcomed on construction sites. Contractors often questioned her authority, and foremen weren’t shy about showing their skepticism as she climbed scaffolding to inspect projects she had designed herself.

Rather than arguing with them, Keichline paid attention to what she saw every day. Watching masons struggle with heavy, solid bricks convinced her there had to be a better solution.

Reinventing One of Construction’s Oldest Products

Her answer became the K-Brick.

Instead of changing the material itself, she redesigned its shape. The exterior looked much like a traditional brick, but the interior contained large hollow chambers separated by structural webs. That simple change cut the brick’s weight nearly in half while requiring significantly less clay to manufacture.

The benefits didn’t stop there. Those hollow cavities trapped air, creating natural insulation while reducing outside noise. They also allowed masons to cover more wall area with less lifting, making construction faster and far less physically demanding. It was one of those rare innovations that reduced costs while improving performance.

On paper, the numbers were compelling.

Unfortunately, construction doesn’t always embrace good math.

“It Will Never Work”

Keichline confidently presented her invention to local brick manufacturers, expecting they would immediately recognize its advantages. Instead, they rejected it almost without discussion. Some insisted the hollow brick would collapse under its own weight. Others argued that masons would never accept it. Many simply couldn’t imagine replacing a product that had changed very little in hundreds of years.

There was another obstacle she couldn’t overcome with engineering calculations alone.

Construction in the 1920s was overwhelmingly controlled by men who had little interest in taking advice from a female architect. Pennsylvania had only recently licensed its first female architect, and that architect was Anna Keichline herself. The building supply industry, contractors, and trade organizations were deeply rooted in tradition, making it nearly impossible for an outsider—especially a woman—to introduce a revolutionary product.

If They Wouldn’t Build It, She Would

Rather than abandoning her idea, Keichline decided to prove it herself. She invested her own money to have prototype K-Bricks manufactured and personally loaded them into her automobile.

Then she drove from construction site to construction site across Pennsylvania.

She met with foremen, explained the engineering, demonstrated the product, and asked builders to give it a chance. Time after time, she was turned away. Some refused even to examine the prototypes. Others dismissed the concept before hearing her explanation. Even when she offered to build demonstration walls, many contractors simply weren’t interested.

For anyone trying to introduce a new building system today, that story probably sounds all too familiar.

The Patent Wasn’t Enough

When manufacturers refused to listen, Keichline took her case to the federal government. Her patent application included engineering calculations, structural testing, thermal performance data, and manufacturing specifications.

On September 6, 1927, she received U.S. Patent No. 1,641,185 for the K-Brick.

The patent confirmed what she had been saying all along. The design was structurally sound, fire-resistant, dramatically lighter than conventional brick, and capable of helping bricklayers complete projects more efficiently while producing walls that were warmer and quieter.

She had official proof.

The industry still wasn’t interested.

Economics Finally Changed Minds

Eventually, a handful of independent builders decided to test the blocks themselves. The walls performed exactly as Keichline predicted. They proved strong, durable, quieter, and more energy efficient. Masons appreciated lifting less weight, contractors appreciated completing projects more quickly, and owners appreciated the improved buildings.

The economics eventually became impossible to ignore.

Ironically, by the time hollow masonry units became widely accepted, the industry had begun transitioning from clay to concrete. Manufacturers adopted the very geometry Keichline had pioneered, replacing clay with concrete and creating what would become the concrete masonry unit of today.

The principle was hers.

The fortunes built upon it largely belonged to someone else.

A Legacy Hidden in Plain Sight

Anna Keichline died in 1943 at just fifty-three years old, never witnessing the tremendous post-war construction boom that transformed America. Yet her idea quietly became one of the foundations of modern construction.

Today, hospitals, schools, warehouses, office buildings, and countless commercial structures rely on hollow masonry units based on the same engineering principles she carried from construction site to construction site in the trunk of her car. Millions of people see those blocks every day without realizing whose vision made them possible.

CLICK HERE to read more about Anna Keichline

Gary’s Observation

Whenever I hear someone dismiss a new product because “nobody’s using it yet,” I think about Anna Keichline. The offsite industry has no shortage of innovators introducing better ways to build, transport, manufacture, and assemble housing. The real challenge has never been developing new ideas—it’s convincing an industry built on tradition to give those ideas an honest chance.

Whether it’s Uni-Frame, robotics, artificial intelligence, advanced transportation systems, or the next breakthrough none of us has seen yet, every innovation faces the same uphill battle. History has shown that truly valuable ideas are often questioned, criticized, and even ridiculed before they become standard practice.

Anna Keichline didn’t change the construction by winning arguments. She changed it by creating an idea that eventually became too practical—and too profitable—to ignore. That’s a lesson worth remembering every time someone says, “We’ve always done it this way “

Several weeks ago I had an opportunity to learn about a panelized start-up in Durango, CO. I was immediately struck by their innovative approach to maximizing sustainability through the use of readily available underharvested Ponderosa Pine. Timber Age and their use of cross-laminated timber (CLT) which is composed of sustainable Ponderosa Pine, epitomize true sustainability.

I talked with Kyle Hanson, co-founder of Timber Age Systems about his team’s approach and work at this innovative panel manufacturer in the heart of sustainable timber country. Thank you Kyle for leading the charge on providing innovation through sustainability in Offsite manufacturing.

Kyle and Charlie. Kyle is the one on the left!

Timber Age Systems Interview Questions

Bill Murray, Offsite Innovators: Would you summarize your current business model?

Kyle Hanson, Cofounder of Timber Age : First and foremost, Timber Age™ makes durable, attainable, high-performance homes in an off-site modular factory. The homes are produced from locally and sustainably harvested Ponderosa Pine.

Our business model leverages a local value chain and community partnerships supplying design, engineering and installation support. This focus on circular economics allows Timber Age™ the chance to address forest health, housing constraints and job creation while significantly improving the built environment in terms of embodied and operational carbon content.

Secondly, Timber Age™ is continually refining a replicable production model in preparation for widespread expansion over the coming decade. This production model prioritizes shared ownership, a short amortization of investment capital and a flexible and adaptive learning environment supplied through the Timber Age Operating System (TAOS).

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Bill: What inspired you to found Timber Age Systems?

Kyle: After spending four years as the Business Unit Leader for a local wood products manufacturer working closely with the US Forest Service, I developed a curiosity to better understand how to create a use for the overabundance of Ponderosa Pine in our region.

In addition to unhealthy forests, many teachers of my two daughters struggled to establish stable local housing. An inability to establish an “anchored” existence in our community frequently ended in job openings. This damaging pattern of churn repeats across public servant roles resulting in instability for schools and local government.

Last, but not least, many in our community maintain seasonal and overlapping jobs in an attempt to achieve sustainable adjusted median income (AMI) levels. My background studying and implementing Lean Operating Systems to achieve world-class manufacturing operations illustrates how the creation of predictable, safe and rewarding skilled labor jobs could help create more anchored community members.

A 2018 USFS Wood Innovation Grant award catalyzed an amazing group of individuals collaborating around the key market definition and challenges. This group problem solving process eventually allowed our co-founder Andy Hawk to enter the fray as team member number two.

Most of the idea development has followed the ideas inherent in the world of Lean (Operational Excellence, TPS, etc). These themes surrounding rapid experimentation and improvement have been codified in the excellent book “The Lean Startup” by Eric Ries. Our team is continually working to clearly identify a problem and its causes and then establish an experiment where we can test a hypothesis to address the problem. When we do this in a disciplined and continuous manner, Timber Age™ gets better and we all get smarter and more connected as a team.

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Bill: How would you describe some of the most innovative solutions Timber Age Systems has developed for offsite construction?

Kyle: Our approach to vertical integration and small scale manufacturing of Cross-Laminated Timber (CLT) seems to be a differentiating factor in the worlds of mass timber and off-site manufacturing. We don’t have a huge factory with giant cranes, and yet we create beautiful enclosures which are easily installed.

In the long-term, we believe our integrated approach to helping create housing, fulfilling jobs and healthy forests will provide a powerful model for sustainable community development around the world.

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Bill: In what way does Timber Age prioritize sustainability in its innovative approaches to construction?

Kyle: Timber Age™ is intensely focused on both the embodied carbon and operational carbon of buildings. A key mission metric for our team is miles traveled/ pound. In this way, we can look at the many components in one of our assemblies and create a weighted average of the total waste associated with transportation. In addition, our assemblies are almost completely foam-free.

Our CLT is constructed from trees which would have otherwise released carbon dioxide into the air due to overcrowding, fire and disease.

This approach to using a carbon-sequestering structural material (CLT) combined with recycled cellulose insulation (also carbon-sequestering) means an enclosure with net-zero embodied carbon and a home with super low operational carbon emissions due to the passive house building science behind our system design.

The Timber Age™ Modular Building System (TAMBS) incorporates low-carbon materials and is designed to meet the Passive House building standard.

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Bill: What are some of the biggest challenges you have faced in gaining an acceptance of your innovative approach both locally and regionally?

Kyle: Since the Timber Age Modular Building System (TAMBS) contains many unique innovations, our biggest challenge was proving out the ability to manufacture the system at a hyper-local scale. After proving out the system, our biggest challenge has been builder uptake of our approach. Introducing an innovative building system into a marketplace where demand for the status quo is still outstripping the capacity of local builders doesn’t incentivize builders to seek out or make time for learning a new system even if many of the builders understand and appreciate the inherent value proposition.

Matt Betts, Value Stream Manager

The world of building, much like the world of healthcare, encompasses multiple customers with varying definitions of value. We are working hard to collaborate with as many stakeholders as possible to ensure the highest level of value is created for each step off the value chain. We believe our system is easy for designers to implement, very quick and effective to install for the builders and beautiful, durable and very energy efficient to help enforce the inherent value for the end users.

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Bill: How important are collaborations and partnerships as you seek to grow your business?

Kyle: Timber Age™ would not exist without the help of our local forest collaboratives, fellow building scientists, collaborating designers and contractors and especially the funding and support of the US Forest Service and our incredible mission-driven shareholders.

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Bill: What are you short- and long-term goals for Timber Age Systems and what philosophy did you use in developing these?

Kyle: Short-term: Get our new interim factory running to produce our current backlog of projects and hire another ten great team members.

Long-term: Construct our new prototype factory and housing models in Mancos and then replicate this model across all viable markets to help create 1000+ fulfilling jobs and hundreds of thousands of durable, beautiful high-performance housing units around the world.

Our philosophy around planning, Hoshin Kanri, follows the teaching and examples of Toyota and other world-class companies.

Tens of thousands of acres of sustainable pine being put to use by this innovative panelizer in Durango, CO. Sustainability is more than a buzzword at Timber Age Systems, its a way of doing business and a way of life.

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Bill: I want to thank you , Kyle, for a very insightful, behind the scenes look at what you and Timber Age Systems are currently doing and what you have planned for the future.

Bill Murray, co-founder of Offsite Innovators, is a 40-year veteran in the Offsite industry. His goal is to assist in the growth of the industry by presenting and sharing innovation.

CLICK HERE if you would like to be interviewed about something innovative you have designed or are currently using.

Walk into almost any offsite factory and ask who’s really in charge of operations, finance, or long-term strategy, and you’ll usually get a confident answer followed by a quiet reality check. The titles are there, the responsibilities are assigned, but the experience behind them is often still developing. That’s not a knock on anyone—it’s simply how this industry has grown up.

We promote from within, we wear multiple hats, and we figure things out as we go. It’s part of the culture, and in many ways, it’s admirable. But it also creates blind spots that don’t show up until margins start slipping or production slows down for reasons nobody can quite explain.

Enter Fractional Management—Without the Fancy Label

Fractional management is a simple concept wrapped in a slightly pretentious name. It means bringing in an experienced executive—COO, CFO, or sales leader—on a part-time or project basis instead of hiring them full-time. You get the expertise without committing to a full-time salary and benefits package.

In plain terms, it’s like renting experience instead of buying it. You don’t need that executive sitting in an office five days a week; you need their brain applied to your biggest problems at the right time.

Why This Model Is Quietly Taking Off

In other industries, especially tech and advanced manufacturing, fractional executives are no longer unusual. Companies have realized they don’t need a $200,000-a-year executive to solve problems that require only a few days a month of focused expertise. They need precision, not presence.

Offsite construction, however, has been slower to adopt this mindset. Many owners still think in terms of full-time hires or going it alone, with very little middle ground in between.

The Places Where It Fits Like a Glove

The most obvious place fractional leadership shines is in operations. A factory struggling with bottlenecks, inconsistent quality, or scheduling chaos doesn’t necessarily need a permanent COO. It needs someone who has seen these problems before and knows how to fix them without turning the place upside down.

Financial management is another area where the gaps are often invisible until they become painful. Many factories are profitable on paper but constantly tight on cash, unsure where margins are being lost or why projects feel harder to complete than they should. A fractional CFO can step in, connect the dots, and bring clarity without becoming a permanent line item.

Sales and marketing is where things often get even murkier. Some factories rely on a single salesperson, others rely on relationships, and a few rely on hope. A fractional sales leader can build structure, define a real pipeline, and help companies stop chasing every opportunity that comes through the door.

Why Offsite Has Been Slow to Catch On

Part of the hesitation comes from pride, and part of it comes from habit. Factory owners are used to solving problems internally, often with limited resources, and there’s a belief that bringing in outside help signals weakness or loss of control. In reality, it usually signals the opposite.

There’s also a misunderstanding of what fractional leadership actually is. It’s not a consultant dropping off a report and disappearing. When done right, it’s hands-on, practical, and focused on results, not theory.

The Catch Nobody Talks About

Not every fractional executive is created equal, and this is where companies can get burned. Some have real-world experience running operations, managing teams, and dealing with the daily realities of production. Others have spent more time advising than doing.

The difference shows up quickly. One delivers measurable improvements, while the other delivers well-written recommendations that never quite make it onto the production floor.

Bill Murray – Fractional Executive Leadership for Offsite Construction

Bill Murray brings over 40 years of hands-on operational management experience in the modular and offsite construction industry, offering companies access to seasoned executive leadership on a fractional basis. His career began in the field as a contractor and builder, giving him a ground-level understanding of construction that continues to shape his practical, results-driven approach today.

Transitioning into the manufacturing side of the business, Bill quickly advanced through the sales ranks before stepping into senior leadership roles, ultimately serving as General Manager and COO, overseeing multi-plant operations. His experience spans the full lifecycle of offsite construction, from production and sales to strategic planning and operational execution.

As a fractional executive, Bill works with owners, prospective factory startups, and builder-developers who are evaluating or expanding into offsite construction. He provides high-level guidance without the overhead of a full-time executive, helping companies navigate critical decisions, avoid costly missteps, and improve operational performance.

Contact Bill: [email protected]

Bill’s advisory and consulting work has taken him across the United States, into Mexico, and on international assignments, giving him a broad perspective on different markets, production models, and business challenges. Whether stepping in as a fractional COO, strategic advisor, or operational guide, Bill brings real-world experience and practical insight to every engagement.

Where It Makes the Most Sense

Fractional management works best in moments of transition. Startups trying to get their footing, factories looking to scale, and companies feeling that slow, steady erosion of profit are all prime candidates. These are the times when experience matters most and mistakes cost the most.

It also works for owners who recognize that they don’t need to have all the answers, but they do need access to them. That mindset alone often separates companies that grow from those that stall.

Where It Doesn’t Work

No outside executive, fractional or otherwise, can fix a company that isn’t willing to change. If leadership is resistant, defensive, or simply going through the motions, even the best advice will sit unused.

Fractional management is not a shortcut or a magic fix. It’s a tool, and like any tool, it only works when someone is willing to use it properly.

Modcoach Observation

Most offsite factories don’t fail because they lack effort or ambition. They struggle because they wait too long to bring in the experience they need, hoping to grow into it instead of borrowing it when it matters most.

Fractional management isn’t about admitting you need help. It’s about recognizing that in an industry this complex, the smartest move you can make is knowing exactly when to bring the right expertise through the door—and when to let it go.

Photo – Autovol

Fourth in a series on improving the Bottom Line by 1% and more (For a list of all the articles, go to the end)

I’ve talked to more than a few factory owners over the years who all say the same thing in slightly different ways. Sales are steady. Backlogs look decent. The plant is busy. And yet, at the end of the quarter, the profits aren’t where they should be.

No one can point to a single disaster. No massive estimating mistake. No catastrophic project failure. Just… less money than expected.

That’s when I usually bring up something most people don’t want to hear about because it sounds too simple to be dangerous.

Overhead creep.

The Slow Leak Nobody Sees

Overhead creep isn’t a line item. It doesn’t show up as a glaring red flag on a financial report. It’s not a bad investment or a failed expansion. It’s the accumulation of small decisions, made by good people, for reasonable reasons, that slowly chip away at your margin.

It happens quietly. A design tweak here. A favor for a builder there. An extra step on the production line that was supposed to be temporary. A service call that “just needed to get done.”

Individually, none of them seem worth talking about. Collectively, they can take one percent—or more—right off your bottom line. And most factories never see it coming.

The 1% Illusion

Let’s talk about that one percent.

If your factory does $20 million a year, 1% is $200,000. That’s not a rounding error. That’s real money. That’s additional staff, upgraded equipment, or pure profit that should have been there.

But here’s the problem. One percent doesn’t feel urgent. It sounds small. Manageable. Almost not worth the argument it might take to stop it. So the decisions that create it get justified.

“It’s just this one job.”

“We need to keep this builder happy.”

“We’ll make it up on the next project.”

You almost never do.

Where It Starts—and How It Grows

Overhead creep doesn’t live in one department. It spans your entire operation, and every department contributes in its own way.

Design Favors That Become Expectations

It often starts in design. A builder asks for a small change. Nothing major. The design team accommodates it, maybe without fully pricing the additional time. Then it happens again. And again.

Before long, those “one-off” details aren’t one-off anymore. They become expected. Your design department is doing more work for the same revenue, and nobody has formally acknowledged the shift.

Sales Promises That Production Pays For

Sales wants to close deals. That’s their job. So they add a feature here, smooth over a concern there, and sometimes stretch what the factory can realistically deliver without added cost.

Production inherits those decisions.

Now the floor is figuring out how to build something that wasn’t fully accounted for. It takes longer. It disrupts flow. It introduces rework. And the margin that looked fine on paper starts disappearing before the first module is finished.

Production Workarounds That Become the New Normal

Walk through almost any factory and you’ll find them—those extra steps that weren’t part of the original process. Someone added them to solve a problem. A good intention. A quick fix. But no one ever removed them.

So now every module carries a little extra labor. A few extra minutes here and there. Multiply that across hundreds or thousands of modules, and you’ve created a permanent drag on efficiency.

Service and Warranty That Never Feed Back

This one has been a problem for decades. Something goes wrong at the jobsite. A crew is sent out. The issue gets fixed. Everyone moves on. Except the root cause was never addressed.

Design doesn’t hear about it. Production doesn’t change anything. So the same issue happens again on the next project. And the next. You’re not just fixing problems. You’re paying for the same mistake over and over again.

Administrative Growth Without Accountability

Then there’s the overhead you can see—but don’t question.

An extra position gets added to “help.” Another software subscription gets approved. Meetings get longer and more frequent, but not necessarily more productive. None of these decisions feel excessive on their own. But together, they quietly increase your fixed costs without improving output.

Why It Continues

The reason overhead creep is so dangerous is because no one owns it. Each department has a valid explanation for what they’re doing. Design is helping sales. Sales is supporting revenue. Production is solving problems. Service is keeping customers happy. Individually, they’re all right. Collectively, they’re bleeding margin.

Leadership often focuses on the big picture—growth, backlog, new opportunities—while these small leaks go unchecked. And culturally, most factories avoid pushing back because they don’t want to create friction internally or with their customers.

So the creep continues.

The Compounding Effect

One small inefficiency doesn’t matter much. Ten starts to get noticeable. Fifty begins to hurt. A hundred, and you’re working just as hard as ever, maybe harder, but the financial results don’t reflect it.

Factories rarely lose money on a single big event. They lose it slowly, through a series of small, accepted compromises.

Recognizing the Early Signs

You can usually spot overhead creep before it becomes a crisis—if you’re willing to look.

Margins begin to decline even though pricing hasn’t changed. Rework becomes more common but is treated as routine. Design teams are busier than ever, but not generating additional revenue. Service calls feel like part of the normal workflow instead of exceptions. And the most telling sign of all?

“We’re busier than we’ve ever been, but we’re not making the money we should be.”

Plugging the Leaks

The solution isn’t complicated, but it does require discipline. It starts with paying attention to the small things you’ve been ignoring. Questioning processes that have quietly changed over time. Making sure every change, every favor, every added step is either justified or eliminated.

It means closing the loop between the jobsite and the factory so problems get fixed once, not repeatedly. It means holding the line on pricing and expectations, even when it’s uncomfortable.

Most of all, it means someone has to take ownership of protecting margin—not just chasing revenue.

Modcoach Observation

Overhead creep doesn’t show up with a warning label. It builds quietly through decisions you barely remember making and processes nobody ever revisited. By the time you feel it, you’re not asking what went wrong—you’re asking where the profit went. If any part of this article sounds familiar, it’s probably already costing you more than you think.

This is exactly the kind of problem Bill and I work through with factory owners—finding the leaks, challenging the assumptions, and helping you get that lost 1% back before it becomes 3% or 5%. If you’re seeing the signs, don’t wait for the next quarterly surprise. Reach out. This is fixable—but only if you decide to fix it.

Other articles in this series:

When Developers and Builders Go Modular, the Learning Curve Is Steeper Than Expected

The Offsite Factory Warranty Loop That Never Closes

The Quiet Profit Killer: “When Factory Quality Slips Before It Ships”

If you are serious about continuous improvement, reach out to us via email.  We’ll schedule a brief phone call to explore the possibilities.  Contact Gary at: [email protected], contact Bill at:[email protected]. We’ll respond promptly and schedule a brief call.

Every month in the offsite construction world, I hear about another promising new idea. Someone has developed an app that will streamline scheduling, a machine that promises faster panel production, or a digital tool that claims to simplify design coordination between factories and builders.

The process almost always starts the same way. One person—or maybe two or three partners—becomes convinced they’ve discovered the next breakthrough. They sketch out the concept, begin building a prototype, test an early version of their software, or casually run the idea past a few friends.

Then comes the moment when they decide it’s ready for the market.

And that’s where things often begin to unravel.

Not because the idea is bad. In fact, many of these ideas are genuinely innovative. The problem is that between the original spark of inspiration and the launch of the business, too many critical questions were never asked—and even more were never answered.

That’s where bringing in an advisor early in the process can make the difference between becoming another forgotten startup and building something that actually survives in the real world.

Advisor vs. Consultant: A Difference Most Startups Miss

Many entrepreneurs assume they need a consultant. Consultants are typically hired to solve a specific problem. They arrive with a defined assignment—optimize a process, write a marketing plan, redesign a workflow—and when the job is done, they leave.

An advisor plays a very different role.

Advisors aren’t there to execute tasks. They’re there to challenge assumptions. They ask uncomfortable questions, connect dots the founders didn’t see, and help bridge the gap between what the startup team knows and what they don’t yet realize they need to know.

In many cases, the advisor’s most valuable contribution is a simple but brutally honest observation:

“Your idea, as you envision it today, either won’t sell right out of the box—or it won’t scale.”

That kind of feedback can save years of frustration and hundreds of thousands of dollars.

1. The Industry Reality Check

Offsite construction is a specialized industry with its own culture, production methods, regulatory hurdles, and financial pressures. Many startups underestimate how different it is from traditional tech or manufacturing ventures.

An advisor with real industry experience can quickly identify whether a new product or system actually fits the way factories operate. What looks brilliant on paper may be completely impractical on a production line that already runs on razor-thin margins and tight schedules.

2. The Market That Doesn’t Exist Yet

Many startups build solutions for a market that should exist—but doesn’t.

An advisor forces founders to answer tough questions:

Who will actually buy this?
Who controls the purchasing decision?
And how long will it take before the industry is ready to adopt it?

Those answers often reshape the entire go-to-market strategy.

3. The Scalability Illusion

A prototype that works in a lab or on a single job site doesn’t automatically translate into something that can be produced, sold, and supported at scale.

Advisors frequently spot scaling problems early. Maybe the system requires too much customization. Maybe it depends on skilled labor that’s already in short supply. Or maybe the economics only work at volumes the startup may never reach.

Better to discover those issues before the company invests heavily in the wrong direction.

4. The Missing Business Model

This is one of the most common gaps I see.

Many founders focus intensely on the product but spend very little time designing the business around it. Pricing, support, distribution, installation, training, warranties—these aren’t small details. They determine whether the idea becomes a viable company or just an interesting invention.

An experienced advisor helps fill in these blanks before they become expensive mistakes.

5. The Network Gap

In offsite construction, relationships matter. Factory owners, developers, engineers, lenders, and code officials all play a role in whether a new idea gains traction.

Advisors bring more than opinions—they bring networks. A well-placed introduction can open doors that might otherwise remain closed for years.

This is one reason why platforms like Offsite Innovators exist: to spotlight emerging technologies and connect innovators with the people who can help move their ideas forward.

6. The Hard Questions Nobody Wants to Ask

Startup teams are usually optimistic by nature. That optimism is necessary—but it can also blind founders to serious weaknesses in their plan.

An advisor’s job is to ask the questions others avoid:

What happens if adoption takes five years instead of two?
What if the first factory says no?
What if your competitors copy the idea faster than you expected?

These questions aren’t meant to discourage founders. They’re meant to strengthen the idea before the real world starts testing it.

The Value of Experience

The offsite construction industry is filled with innovators, and new ideas are essential if we want to build housing faster, smarter, and more affordably.

But ideas alone don’t build companies.

The startups that succeed are usually the ones that bring experienced voices into the room early—people who have already seen what works, what fails, and what pitfalls lie ahead.

Through our work and the conversations we feature on Offsite Innovators, we regularly meet entrepreneurs with exciting concepts. Some are already on the path to success. Others simply need guidance to close the gap between inspiration and execution.

In many cases, the difference between an idea becoming another also-ran or becoming a real industry breakthrough comes down to one simple decision:

Did they bring in the right advisor early enough?

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The Modcoach Observation

Great ideas are common in offsite construction. What’s rare are founders who are willing to let someone challenge those ideas before they go to market. The smartest innovators I’ve met aren’t the ones who believe their idea is perfect—they’re the ones who invite experienced advisors to poke holes in it until it becomes strong enough to survive the real world.

Gary Fleisher—known throughout the industry as The Modcoach—has been immersed in offsite and modular construction for over three decades. Beyond writing, he advises companies across the offsite ecosystem, offering practical marketing insight and strategic guidance grounded in real-world factory, builder, and market experience. 

[email protected]

The View From My Windshield

For years, I’ve driven past empty malls, dark office towers, and logistics buildings that look like they’re waiting for something to happen. In many cities, they sit quietly on valuable land while local leaders hold meetings about the housing shortage. It’s almost surreal. On one side of town, families can’t find affordable housing. On the other side, millions of square feet of real estate sit idle. The obvious question is finally being asked: Why aren’t we turning these buildings into homes?

From Empty to Opportunity

The answer is that we are—slowly. The trend has a formal name: adaptive reuse. It includes converting offices, retail centers, warehouses, schools, hotels, and churches into housing. Since the pandemic, the number of projects has surged. Remote work left downtown towers half empty. E-commerce changed retail patterns. Some logistics space is now underutilized. Meanwhile, housing demand has only grown stronger. Developers, cities, and investors are now looking at these abandoned or underperforming properties as opportunities rather than liabilities. For the first time in decades, adaptive reuse has moved from being a niche experiment to a mainstream strategy.

Not a Silver Bullet

But before we start celebrating, let’s be honest. This isn’t a silver bullet. Some projects are wildly successful. Others stall, collapse, or never get past the feasibility study. The difference between success and failure is usually not the building itself—it’s the early decisions. When the layout, structure, and location align with residential needs, the results can be impressive. Downtown revitalization happens. Communities regain energy. Affordable and workforce housing is created faster than ground-up construction. But when those factors don’t line up, costs explode and lenders run for the exits.

Design Realities Nobody Talks About

One of the biggest challenges is that most buildings were never designed to be homes. Office buildings, for example, often have deep floor plates. That means the center of the building has little or no natural light, which is a problem when you want apartments. Structural columns may be spaced in ways that limit unit design. Mechanical systems need complete replacement. In some cases, it’s cheaper to tear the building down and start over. That’s not what city leaders want to hear, but it’s the reality developers deal with every day.

The Financing Wall

Financing is another major obstacle. Traditional lenders still view adaptive reuse as risky. Construction costs are harder to predict. Unexpected structural issues are common. Zoning and code barriers can stop a project long before the first permit is issued. Local politics, community opposition, and lengthy approvals add time and uncertainty. In an industry that already operates on thin margins, those risks can kill deals quickly. It’s no surprise that many announced projects never move forward.

Malls and Warehouses: The Next Frontier

And then there are malls and warehouses—the next frontier. Across North America, there are hundreds of underperforming shopping centers and large-format retail sites. Some have already been redeveloped into mixed-income housing, walkable communities, and neighborhood centers. These projects have the potential to create entire new districts rather than just apartment buildings. Imagine turning a failing mall into housing, medical services, childcare, retail, and green space. When done well, the results can be transformative.

Why It’s So Hard to Get Right

But here again, the reality is complicated. Many malls are located far from public transit. They were designed for cars, not people. Infrastructure upgrades are expensive. Schools, utilities, and transportation systems must be expanded. Community resistance can be strong. People who oppose density suddenly become experts in zoning, traffic studies, and environmental reviews. The same communities that demand affordable housing often resist the changes required to make it happen.

Momentum Is Building

Despite all of this, the momentum is real. Cities are offering tax incentives, zoning changes, and faster approvals. Public-private partnerships are becoming more common. Nonprofits and faith-based organizations are stepping in, unlocking land that has been underused for decades. The private sector sees opportunity. Investors see long-term value. And younger generations, who are struggling the most with housing affordability, are more open to creative solutions.

Where Offsite Construction Fits

This is where the conversation gets interesting for the offsite and production construction industry. Adaptive reuse projects demand speed, cost certainty, and risk reduction. They require precision planning, early collaboration, and strong integration between design and manufacturing. In other words, they demand the very strengths that offsite construction has been promising for years.

Yet many developers entering adaptive reuse have little understanding of offsite methods. They know land. They know finance. They know entitlement. But they often do not know how to evaluate factory-built solutions, when they make sense, or how to structure projects to take advantage of them. The result is missed opportunities. Projects that could be faster and more predictable remain stuck in traditional processes.

The Opportunity Hiding in Plain Sight

This disconnect may be one of the largest untapped opportunities in the industry today. Adaptive reuse is not just about recycling buildings. It’s about rethinking how housing is delivered. It’s about integrating design, engineering, and manufacturing from the beginning. It’s about reducing risk and improving outcomes. Most importantly, it’s about aligning incentives so that every stakeholder benefits.

A Bigger Lesson for the Industry

There is also a deeper lesson here. For decades, the housing crisis has been framed as a supply problem, a labor problem, a zoning problem, or a financing problem. The truth is that it is all of these at once. Adaptive reuse doesn’t eliminate those challenges, but it forces collaboration in ways traditional development often avoids. When a project requires coordination between public agencies, developers, manufacturers, and communities, the industry either evolves—or the project fails.

The Turning Point

The irony is that the solutions have been sitting in plain sight. Empty buildings are everywhere. The need for housing has never been greater. Technology and manufacturing capabilities have advanced dramatically. The question is no longer whether adaptive reuse can work. The question is whether the industry is willing to change fast enough to make it scale.

If the answer is yes, abandoned malls and empty offices may become symbols of a turning point in how we build and deliver housing. If the answer is no, they will remain what they are today—silent reminders that knowing what to do and actually doing it are two very different things.

If you’d like to explore this possibilty for yourself, connect with me today.

Bill Murray, Co-Founder of Offsite Innovators

Ribal Zebian

I often hear about someone—or some company—that has a new idea to improve, restart, or outright fix a problem in construction. Every time I hear that word, new, I can’t help but smile. Not because I’m cynical (well, not entirely), but because “new” has become one of the most overused words in our industry. It’s so overused that the moment it’s spoken, my mind immediately jumps to the same two questions:
How long will this take to fail?
And on rare, glorious occasions: Will this actually work?

Construction has a long memory. It may not always look that way, but it remembers. It remembers what worked, what didn’t, and what sounded brilliant in a conference room but died quietly on a production line somewhere between Tuesday morning and the first broken fastener. That’s why “new” is such a loaded word. Most of the time, it isn’t really new at all.

Over the years, I’ve noticed that new ideas in construction tend to fall into two very distinct categories. Understanding which category you’re dealing with can save you a lot of time, money, and embarrassment.

New Idea #1: “It’s New to Me”

The first type of “new” usually comes from someone already inside the industry. These ideas are often introduced with genuine enthusiasm and good intentions. The person presenting it truly believes they’ve stumbled onto something groundbreaking.

In reality, what they’ve created isn’t new—it’s an evolution.

That’s not a bad thing. In fact, most real progress in construction comes from evolution, not revolution. Someone sees a problem, remembers ten years of dealing with that problem, and figures out a slightly better way to handle it.

Take automated manufacturing equipment as an example. A machinery manufacturer announces a new automated table with built-in AI responders that can detect imperfections down to one millimeter. That sounds impressive—and it is. But it isn’t new. It’s an improvement. A meaningful one, perhaps, but still part of a long, steady march toward better accuracy, better consistency, and fewer human errors.

The real questions don’t start with Is it new?
They start with:
Will it survive the production line?

Because that’s where construction ideas go to be tested. Not in brochures. Not in PowerPoint decks. And certainly not in press releases. They get tested at 6:30 a.m. on a Monday when the line is already behind schedule, the crew is short two people, and someone just spilled coffee on the control panel.

Even if the technology works exactly as promised, there’s another hurdle: Will anyone actually want it?
Does it save time?
Does it reduce labor?
Does it lower costs or increase margins in a way that makes sense?

If the answer to those questions isn’t clear, even the smartest improvement will struggle. Construction doesn’t reward cleverness for its own sake. It rewards results.

New Idea #2: “This Will Change Everything”

The second type of “new” is far more entertaining—and far more dangerous.

This version usually comes from someone with experience in a similar industry. Automotive. Aerospace. Advanced manufacturing. Sometimes tech. They look at construction and immediately see inefficiency, fragmentation, and chaos. And they’re not wrong.

The problem is what comes next.

They become convinced that their idea—borrowed, adapted, or reimagined from their previous industry—is going to revolutionize offsite manufacturing. They pitch investors. They raise capital. They land glowing write-ups in industry publications. They appear on podcasts, host webinars, and speak confidently about “transforming construction as we know it.”

All of this often happens before they have a finished product. Sometimes before they have a working prototype. Occasionally before they’ve spent more than a week inside an actual factory.

And for a while, it works. The buzz builds. The language gets bolder. Words like disruption, scalability, and game-changing get tossed around like confetti.

Then something truly remarkable happens.

They meet the Demons of Construction.

When the Buzz Meets Reality

Construction is polite at first. It lets you talk. It lets you demo. It lets you believe.

Then it asks for results.

Not someday. Not after the next funding round. Not once the market “catches up.” It wants results that are effective, affordable, and scalable—right now. Results that work on real factories, with real people, under real constraints.

This is usually the moment when things start to unravel.

The solution doesn’t integrate as easily as promised.
The learning curve is steeper than expected.
The costs don’t line up with the savings.
The factory managers nod politely and never call back.

And slowly, quietly, the once-promising startup begins to fade. Fewer posts. Fewer appearances. Eventually, silence. Another idea chewed up and digested by an industry that has no patience for theory without proof.

It’s not cruelty. It’s survival.

So Who Are These “Demons of Construction”?

Every time I hear about a new process or a new idea, I ask myself a simple question:
Who is this coming from?

Is it someone inside the industry, whose idea has at least been shaped by experience? Or is it someone looking at construction from the outside, convinced they’ve found the missing piece we’ve all somehow overlooked?

Either way, I smile. Because I know the Demons of Construction are already waiting.

Who are they? I don’t really need to tell you. If you’ve been in this business for any length of time, you already know them.

They show up as budgets that never stretch far enough.
Schedules that laugh at optimism.
Labor shortages that refuse to be solved by software alone.
Codes, inspectors, logistics, weather, transportation, and human nature.

They aren’t villains. They’re realities. And they don’t care how elegant your idea looks on paper.

If you’re new to construction, you’ll meet them soon enough. Usually right after you try to implement your first “simple” improvement.

Why Experience Still Wins

None of this means innovation is pointless. Far from it. Construction needs better tools, smarter systems, and fresh thinking. But the ideas that survive tend to share a few traits.

They respect the complexity of the industry.
They solve one real problem instead of ten imaginary ones.
They prove their value on the floor before shouting about it online.

And most importantly, they understand that construction doesn’t need miracles. It needs improvements that work on a bad day, not just a good one.

So the next time someone tells you about a new idea that’s going to change everything, listen politely. Ask a few practical questions. And watch closely.

If it survives the Demons of Construction, you might just be witnessing real progress. If not, well—there will always be another “new” idea coming along next week.

And I’ll probably smile at that one too.

Written by Gary Fleisher—industry writer, consultant, and longtime voice of offsite and modular construction.