1960 – The Future of Quality Management in High-Stakes Environments with Matthew Kleiman

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1:05With us right now, it's Matt Kleiman. Matt, you are the co-founder and CEO of Cumulus Digital Systems. Your website is cumulusds.com. And by the way, to our friend that's listening to a podcast right now, Cumulus has its own podcast. It's called Work Done Right. It's a Work Done Right podcast. But Matt, it's great to have you. Thank you so much for joining us. Josh, great to be here. Thanks for having me. Tell us a bit more about Cumulus Digital Systems, who you serve and what you do. So Cumulus is a quality management system for mission critical facilities, meaning as our podcast says, work done right, we make sure that when workers are building or maintaining facilities, whether it's a data center or semiconductor fab, a chemical plant, anything where if something goes wrong, the consequences could be really bad.

1:58And by really bad, it could be environmental, it could be safety, it could be financial. Often it's all three. We make sure workers are guided through the work they're supposed to do. And then we validate using different technology that the work was actually done correctly. So that by the time you, for instance, turn on a new data center that you've built, you're not going to have any arc flashes, which are electrical explosions or other types of safety or downtime incidents. That's what Cumulus does. Now, how did Cumulus come to be? I know your background is kind of in the energy sector and looks like you may even have a background education in law.

2:37Yes. So my career, like a lot of entrepreneurs, my career has been a long and winding road, but it all kind of makes sense in hindsight. So I was actually originally, so I did go to law school, practiced law for a couple of years, but then got an opportunity to go work in the aerospace industry at a company called Draper, which does all kinds of guidance and control systems for aircraft and spacecraft. And that was for, I'm a pilot and I'm an aerospace geek. And for someone like me, that was like being in Santa's workshop. And I was working there for a few years. And then I got the opportunity after the Deepwater Horizon disaster in the Gulf of Mexico, a number of energy companies were looking to bring aerospace talent, capabilities, ways of thinking about how to prevent accidents into the energy sector.

3:28So I ended up, long story short, getting recruited and hired by Shell to start a center in Boston, which was dedicated to just that, to bringing in people like myself and from other critical industries to look at how the energy industry does things and how it can be done safer and more reliably than clearly the Deepwater Horizon disaster showed that it wasn't being done. So go ahead. Sorry. Well, no, I was just going to ask you, I mean, if you have insights into that, I'd seen the movie, which is, I mean, I don't know how much of it was fictionalized versus I would imagine quite a bit, but I don't know.

4:07Can you tell me a little bit about the, because it sounds like, I mean, this made a big impact on the industry. Huge, huge, because it was, even though it's the BP deep water horizon and, you know, BP certainly rightfully got a lot of the public blame for what happened. It really reflected challenges throughout the industry and how operating in more and more challenging environments, so in deeper and deeper water and the technology around safety and reliability just didn't keep up. The industry was building things bigger, operating in more difficult environments, but not taking what in the aerospace industry we think of as a systems engineering approach to thinking about how these facilities are operating in these environments and what has to change given the extreme depths and pressures that are being operated in.

5:00So the movie actually was fairly accurate. Obviously, they had to take some dramatic license to make it understandable to a wide audience and not get into all the technical details. But it was the people in the industry and in the know say that they did a very good job for a movie showing kind of what happened. But it was a wake-up call for everybody because as much as BP was the target of investigators and lawsuits and fines, it was a there but for the grace of God go I moment for the industry that this could have happened, this series of mistakes. And as usual, it's not just one mistake. It's a cascade of mistakes that lead to a disaster like this.

5:44It could have happened to anybody and any of the operators in that space. And that's why Shell, to their credit, were really looking for, even though it wasn't the Shell Deepwater Horizon, they were saying, we want to make sure this never happens to us at any of our facilities. So we're going to be proactive in creating this center, which we ended up calling Shell TechWorks, to make sure something like that could never happen again, not only at Shell, but in the industry more broadly. Yeah. Okay. So tell me a bit about where Cumulus fits in and maybe some of the work that you've done historically.

6:21Yep. So where Cumulus fits in is, so I was at Shell for six years. And what I saw as we were working on projects all over the world with all different parts of the energy business is that we apply technology to all kinds of things in our industry to monitor facilities, to plan work, to estimate work, scheduling, 3D modeling. But we as an industry are very bad. And by industry, I mean, broadly, industry generally, not just energy, but construction and data centers, things like that. We haven't kept up in terms of managing people. We could do all this digitalization, but at some point, a human worker has to go out in the field and do something.

7:05And the technology for guiding the worker through the process and verifying that they actually did what they were supposed to do is still very much a pencil and paper type operation. And that's what, when I left Shell in 2018 to start Cumulus, that's what we set out to solve, to create a system that makes it really easy to take a work procedure, turn it into an easy to follow workflow, guide a worker through a process, and then collect all kinds of data so that you can make sure that the work was done properly and you could confidently turn on your facility and not have an accident. Yeah. What would be some examples of work that you've done?

7:44Maybe thinking about it from the, what was the gap? What was the concern or, you know, hopefully foresight, you know, that a client had and they approached you around that. I'm curious, like what those initial conversations sounded like. Sure. I'll give two examples, one in energy and the other one in data centers. In energy, one of the most common things we are used for is piping. So you can imagine a chemical plant or refinery has thousands and thousands of piping connections, and they have to be bolted together, either bolted or welded. But in this example, it's about the bolting them together.

8:28And they're bolted together just like you would change a tire in your car or something like that, where you have a wrench and you have to assemble it in the right way and have the right pressures and the right torques around the piping. But what the most common cause of leaks at a chemical plant or refinery is improperly assembling that piping together. So one of our first customers, the first use cases for our system was using a connected wrench. So a wrench that has a Bluetooth radio in it, use that with our app to guide a worker through the torquing process and then collecting data from the wrench that the torques were done properly and the bolts were tightened properly.

9:12Yeah. Bolts, loose bolts were, are, have been in the news this year because of Boeing, uh, and the issues they've been having. Um, but they are an issue everywhere. And, uh, it's, it's simple human error when things go wrong and, uh, and our system would present or prevent that. Um, and then we have, so examples, chemical plants use us and we are able to bring leak rates down from, you know, 20 % of bolted joints leak down to almost zero bolted joints leak. just because we're collecting that data from the workers. Same thing with data centers, except instead of piping, you're looking at high voltage electrical connection.

9:49There's over 2000 electrical accidents in the industry every single year, just because the electrical connections. And I'm not talking about plugging something into a wall socket. I'm talking about high voltage electricity coming off the power grid to power something like a data center. When those connections, which are still assembled by hand, aren't installed properly, that's where you get something called an arc flash, which is an electrical explosion. That's where people get hurt or can get killed. And that's another type of thing that our system is used to prevent is make sure that those electrical connections are installed properly, the procedures are followed.

10:27And when you start up a data center, you don't get one of these incidents. You know, when we're talking safety and so forth, I don't mean to be too trite on this, but, you know, just for me, you know, from a sales and business development side on your side, you know, the ROI or the potential ROI is it's, it seems like it would be, you know, as long as, you know, leaders are being smart about allocating budget, right, to the right things, the potential damage, not only to obviously life, you know, and we're thinking about disasters and people getting hurt and so forth. But boy, I mean, I can't imagine the economic damage, you know, of some, you know, when there is a disaster that could have been prevented with just, again, a little bit more, you know, careful consideration.

11:22And, you know, again, aligning and partnering with you, Matt. Absolutely. Just to put some hard numbers on it. On the first example with piping, the average chemical plant loses$1.8 million a year in just lost production because of improperly installed piping. And that doesn't even get into if there's a fire and fines and environmental remediation. Just in the downtime and lost production is$1.8 million a year on average. And a data center, every day a data center is down means millions of dollars of lost revenue for some of the hyperscaler customers. So these numbers add up quickly. One of the challenges we have is it's all cost avoidance, right?

12:13So it's hard. Cost avoidance is always a harder sale than saying we are going to make you money. but it's a pretty clear ROI that these things happen a lot. And we've been able to show very conclusively that our system is able to prevent these incidents almost completely from a before and after perspective. So those numbers do add up and the savings adds up too, not to mention the safety and environmental benefits you get. You have, Cumulus has kind of taken a very proactive approach in terms of providing resources for the industry, a little bit of brand journalism, a little bit of content. Can you tell me a little bit about your vision for that or where you see yourself continuing to play in this space?

13:02Yeah, so great question. So a challenge that we have as a relatively young company in this space, selling into relatively conservative industries is that we have to overcome the, well, this is the only way we've done it. And the last time we did one of these, we didn't have a problem, so it must be okay. And that is the kind of culture that we have to overcome in our sales process. So we spend a lot of time talking about work quality and safety and how doing that is better both for the workers and for the companies that employ them from an economic ROI perspective. So there's a lot of evangelizing, frankly, that we have to do.

13:44And that's why we put out resources like the podcast. I wrote a book last year called Work Done Right. We put out newsletters, really just trying to build a community around that work done right concept so that eventually that permeate, our goal is that that permeates the mindset of the industry, especially as there's a lot of turnover and newer people come into management positions that don't accept that this is the way we've been doing it before. our mindset that nope, that is not a risk that's acceptable for our companies to be taking. And we need to use a system, whether it's Cumulus or another system that addresses quality, but we can't leave quality as an afterthought, as just a paper checklist where you have somebody goes around and just marks things off on a piece of paper and that piece of paper goes in a binder in an office somewhere never to be looked at again.

14:41That's what we're trying to overcome. And that's why you see all the materials and the effort that we spend trying to raise awareness in our target industries. You know, we talked a bit about the energy sector, but could you mind just kind of going through all of the industries that you play in for someone that's listening and they say, well, you know, I know a few leaders in that space and that might make a good connection. So we focus predominantly in construction. Now, our biggest markets for construction are energy, data centers, and semiconductor fabrication. But we have customers across probably dozens of different industries, whether it's railroads, commercial contractors, pharmaceutical companies, really anywhere.

15:34The way we define our market is it's anywhere where a quality failure is going to have a major impact from a cost or safety perspective. You know, as annoying as a water pipe, you know, plumbing accident might be that that's just carrying water, that is going to be annoying and costly, but it's not going to hurt anybody. So we don't really focus, for instance, in residential construction. We're really focused in heavy industry where when things go wrong, that has a societal impact. And so if someone's thinking about, you know, they're either themselves in the industries or they know people who are fit that definition that I just described, that's our target market.

16:15In your space, Matt, what are the innovations that you are excited about, say, over the next 6 to 12 months or even beyond that you think are going to really improve safety, outcomes, maybe cost savings or efficiencies? Yep. This is going to sound maybe a little bit cliche, but I'm going to say AI. Yeah, yeah. Yeah, everybody does. But I'm going to give a specific example and it's not a chat bot. Yeah. So why AI and how is is is exciting is because for the one of the biggest problems that we have in construction is unstructured data. So it's really easy when you have nicely organized data that's in a database.

17:00You can do a lot with that. And and that's where AI up until recently has been focused in structured and having nice structured data. And that's why AI didn't have much of an impact until recently, because there's not that much structured data in the world. Most of the data is just out there in bits and pieces. It's imperfect. It's incomplete. And that's what you have in construction. You have data that exists, but it's in all kinds of different formats. It's in spreadsheets. It's in PDF documents. It's in everywhere. And what we've started using, I know other companies have as well, using these LLMs to make sense of unstructured data much faster than a human can.

17:42And that's been a game changer for us. So, and I'll give a very specific example of something we've done in our system. We've made it possible that we can take huge procedures, you know, 50, 100, 20, 200 pages long of engineering procedures and use AI to turn those immediately into digital workflows a worker can follow. So you don't need to spend hours or days or weeks having somebody program your workflows for you to give to somebody in the field. A worker can say, I have this document, or maybe their manager says, I have this document. I want my workers to follow it. They upload it in the system.

18:19And in 30 seconds, they could have their workers out in the field following that engineering procedure. That is a game changer because that means there's no longer the excuse of it's too hard to use a system like ours to manage quality in the field. And that has just had a tremendous effect on our business, on our go-to-market strategy, because suddenly we could help anybody, large or small, at much smaller, much reduced cost than we could before. Matt Kleiman, your website is CumulusDS. When our friend is listening to us, ghost your website. What would you recommend they do next? I know you've got, again, you've got some great resources there.

19:04And certainly it seems fairly easy to schedule a demo. And by the way, you're in the app store, which is certainly part of the platform. We are in the app store. Absolutely. So what I recommend someone does, look at our case studies. On the website, we have case studies for different kinds of work that is commonly done with our system. It's not exclusive of it, but see, do I recognize the work that I do or my company does in these case studies? And just read about how we help. And if that resonates, yeah, you could download our app and start trying, you know, start trying it out, start converting some of your procedures into digital workflows.

19:42Or of course, what we'd love for people to do is request a demo, talk to one of our team members, and see how we can help your company make sure work is done right every time the first time. Love it. Matthew Kleiman, again, co-founder and CEO of Cumulus Digital Systems, your website, cumulusds.com. Matt, thank you so much for joining us. Josh, great to be here. Thanks for having me.

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