Mastering the Six Hats of Construction Business Success
Unlock the power of strategic thinking in construction with the Six Thinking Hats approach. Learn how to make better decisions, spot risks, and find innovative solutions for your projects. Dive into each hat’s unique perspective and transform your business mindset.
Topics we cover on this week’s episode:
- 00:00 – Introduction to Six Thinking Hats
- 03:23 – White Hat: The Analyst
- 05:54 – Red Hat: The Empath
- 08:57 – Black Hat: Risk Manager
- 11:38 – Yellow Hat: The Optimist
- 13:56 – Green Hat: The Innovator
- 17:16 – Blue Hat: The Organizer
- 19:29 – Conclusion and Feedback Request
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Wade Carpenter, CPA, CGMA | CarpenterCPAs.com
Stephen Brown, Bonding Expert | SuretyAnswers.com
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TRANSCRIPT
[00:00:00] Wade Carpenter: Ever feel like you’re juggling too many roles as a construction business owner? What if there was a way to sharpen your thinking, make better decisions, and tackle every challenge with confidence? Imagine a tool that could help you see every angle, spot risks before they happen, and find creative solutions to problems on the fly.
Welcome back to the Contractor Success Forum. I’m Wade Carpenter and today we’re diving into a unique approach that could transform how you run your business. The six thinking hats. We’ll explore how each hat can help you think more effectively, whether you’re negotiating a contract, planning a project, or managing your team.
And joining me as always, my co host, Stephen Brown. Together, we’ll show you how you can use these six thinking hats to solve problems faster, make smarter decisions, and lead your construction company to new heights. So if you’re ready to rethink your business, let’s get into it.
Stephen, initial thoughts?
[00:00:48] Stephen Brown: Thinking outward instead of inward. That was a theme of our last podcast on principles of lean construction. Wade, I like the idea of putting a hat in a different color hat to a principle to help you remember things. Like you were saying, you cannot do everything. You’ve got ten balls in the air you’re juggling at the same time.
And how do you get off that treadmill, that endless loop?
[00:01:15] Wade Carpenter: Again, sometimes there are decisions like you don’t know which path to take. And this actually came up from a client conversation. And a lot of times acting as their accountant, in the CFO role that we take for some of our contractors, I get into almost a counseling session.
And this framework is actually from a book from 1985. It’s called The Six Thinking Hats, and it was by Dr. Edward Debono. I learned about it many years ago, and I’ll tell you a story in a little bit about how I’ve been applying it myself. But essentially, if you’re a business owner, you’re out there on your own a lot of times. You don’t have people to bounce this stuff off of.
These six thinking hats are different approaches to a different angle of a problem. So if you’re trying to make an informed choice, thinking about this logically, and just getting different perspectives. I’ve used AI to build a tool for myself that I can use to look at these angles, but we’ll get into that a little bit.
[00:02:16] Stephen Brown: So tell me a little bit about the six hats.
[00:02:19] Wade Carpenter: They have six different hats.
The White Hat: The Analyst
[00:02:21] Wade Carpenter: The first is a white hat. That’s the analyst. And whatever they mean. I, as far as like the colors, that it is just the colors they assign to it.
But the white hat represents the people that are factual, they’re data driven, they’re all about information. It’s about focusing on objects, basically data driven decisions, and gathering all the relevant information so that you’re presenting an analytical mindset, an analytical path to making a decision.
So that’s the analytical brain.
[00:02:55] Stephen Brown: That’s gotta be your favorite hat. The good cowboys wore the white hats, and that’s right up your alley, Wade, as the white hat thinker. The facts, the information presenting them and helping interpret what they mean.
[00:03:08] Wade Carpenter: It may be my profession, but as a business owner, you’ve got to wear all these things. So yeah, I probably am wired that way, that’s why maybe I started with this one. I don’t know.
But, again, in construction, how do we practically apply this? If you’re looking at market research or whatever, or maybe you’re chasing different types of, construction or, a different niche in construction, maybe you want to do the market research.
You just nailed me, but I’m all about the job costing. Getting the data broken down so that you can figure out whether you’re winning the game. This is what the white hat is all about.
[00:03:45] Stephen Brown: Okay.
[00:03:46] Wade Carpenter: Again, we could make several other things just figuring out the data. Whether it’s on a project, making sure we’re following all our building codes or regulations or whatever, but this is just the data and the thinking hat from the perspective of somebody that’s very analytical.
[00:04:02] Stephen Brown: Okay.
[00:04:03] Wade Carpenter: Let’s move on to the next hat.
[00:04:04] Stephen Brown: All right.
The Red Hat: The Empath
[00:04:05] Wade Carpenter: The next hat is what he referred to as the red hat. And that is what they call The Empath. And what that means, really, from their perspective is, it’s about emotions, intuition, gut feelings, and focuses on the emotional impact of the decision.
Because sometimes we can make a fact based decision we don’t have the money, we’ve got to lay somebody off, but we also have to consider what that’s going to do. Those are those gut wrenching things. And that’s just a quick analogy.
But this hat sort of recognizes what’s the emotions that play into a crucial role of decision making. Say, what does that do to your team if you make this decision? How does that impact them? And sometimes that can be a very big thing you really should consider is what is the perception? Does that make sense?
[00:04:54] Stephen Brown: Absolutely. You talk about the red hat, the empath. Someone who has empathy, putting themselves, in the mindset and the position and the feelings of others. That’s someone who’s empathetic. And there’s so much to that. Especially as a contractor, there’s things on a job that some of your key advisors might say, this is not a risk you need to take, but you decide to take it anyway, right?
Or you use your team approach to decide this is not a risk I want to take.
[00:05:25] Wade Carpenter: Another thing that, just basically practical application, we talked about team morale, that’s one of those emotional well being of your team, but you also may want to think from this perspective, from you know, your client relation to your customer. What is the way you interact with them, your emotional tone? Are you being factual?
Are you being —
[00:05:44] Stephen Brown: A BSer? Yeah.
[00:05:46] Wade Carpenter: Yeah, or like it gets contentious.
[00:05:49] Stephen Brown: Yeah. You’re angry and you’re combative.
[00:05:51] Wade Carpenter: Again, from that perspective, sometimes that’s the other one is just basically self reflection on what you’re doing. And sometimes we do need to step back. We get emotional about our decisions.
And, again, the thought is if I had a panel of six people thinking through this for me, and somebody is wired this way, would they tell me like, this is something that maybe you should step back and maybe approach it a little differently?
[00:06:19] Stephen Brown: Absolutely. The white hat is data driven, market research, job costing, and, regulatory compliance, just having that mindset of getting that done.
The next one is just being self reflective about how you’re interacting with everyone. Are you outward? Are you inward? And how do you help the morale of the team? And how do you keep clients, owners, happy?
The Black Hat: The Risk Manager
[00:06:46] Wade Carpenter: If it’s okay we’ll roll into the next one because I think that one fits you pretty well. And I know you’re talking about the good guys wear the white hats, but I know there’s also that good guys wear black. And the black hat is the risk manager. That’s what you’re all about.
[00:07:01] Stephen Brown: Some of the coolest, in fact, the majority of the coolest country stars, Wade, wear black hats. So I’m going to take that and run with it as the risk manager black hat wearer, George Strait, Garth Brooks guy.
Black Hat is critical thinking about caution and risk. The construction industry is just ripe with risk. That’s why that’s all we do at McDaniel Whitley insurance and bonding is contractors.
There’s a lot of moving parts. There’s a lot of things that we worry about. There’s things that you can self insure. There’s things you need to buy insurance for. There’s things you can transfer that risk to someone else.
Assessing that risk, planning for the future, and making sure that there’s quality control and how you approach, your projects and also manage your risk is huge.
[00:07:55] Wade Carpenter: That’s all about what insurance is. And that’s the reason you’re paying for insurance.
[00:07:59] Stephen Brown: You’re also paying for advice. You as the owner of a construction company have to manage the risk and we’re not just talking about insurable risk, we’re talking about financial risk. We’ve always said in the podcast, construction is one industry where there’s a limit on the profits you can make and there’s no limit on how much money you can lose on a project.
[00:08:20] Wade Carpenter: Right. Again, it’s not just about insurance or whatever, but I think you’re asking the right question because essentially the black hat is about spotting flaws in the plan, or I hate to say it, but preparing for the worst case scenario. Sometimes you need somebody to to say what could possibly go wrong on this thing?
And essentially gives you thought of should I have a contingency plan in place? What if, you know, this happens. And it’s a good thing to have if, I’ve seen a lot of small things turn into big things and wreck a construction company.
[00:08:52] Stephen Brown: That’s the understatement of the century as far as I’m concerned, Wade. Small things that become big things that wreck a construction company. It’s terrifying. But, it’s just like this risk management mindset. You see the roller skates sitting out on your stairs, you say there is a problem that’s going to happen.
And that’s exactly why we do this podcast. So our listeners don’t have these small things sink their ship.
[00:09:20] Wade Carpenter: Real quick on practical applications of this. You’re thinking about risk management. You’re thinking about contingency planning and also about quality control. Again, mitigating risk through making sure that things are done right so that you don’t have these. So those are just a couple of things.
The Yellow Hat: The Optimist
[00:09:36] Wade Carpenter: The fourth hat here is the yellow hat. And this is the optimist person. So what does this mean? Essentially this is the person that, we’re looking for the best, the positive things, and focusing on the benefits. And, it’s about seeing opportunities, about the positive side of the situation, the upside that you’re going to see, and not trying to be, I hate to say “the Pollyanna”, but this is the person looking at it from the bright side,
[00:10:03] Stephen Brown: Glass is half full.
[00:10:04] Wade Carpenter: Absolutely. And essentially this is the person that comes in the room that lights up the room, as opposed to the person that brings the room down.
Basically, maintaining morale, motivation, that kind of person, that kind of thinking, there’s a, obviously, some of these fit right well together, because you don’t want somebody that’s so overly optimistic that we’re not balancing it with this risk manager that we just talked about.
[00:10:30] Stephen Brown: Sure. Okay. Yeah. That makes perfect sense.
[00:10:33] Wade Carpenter: Practical applications, basically, these are the kind of persons that are looking for the bright spot, or trying to identify some opportunities, the people that motivate the team. These are good people to deal with client relations as far as–
[00:10:48] Stephen Brown: as Yeah. Clients like them. They like working with them. They like communicating with them.
[00:10:53] Wade Carpenter: Right. Somebody that’s got a positive mindset. Those are good people to deal with your clients.
[00:10:58] Stephen Brown: Okay.
The Green Hat: The Innovation Hat
[00:10:59] Wade Carpenter: The green hat, that is the innovation hat. Basically, we’re talking about somebody that’s creative, They’re looking for innovation, new ideas, basically encouraging thinking outside the box, for lack of a better way to say it. Coming up with some kind of innovative solutions and problems.
And I know you just helped us with a episode on the lean thinking. These are some of the things that not everybody’s doing.
[00:11:25] Stephen Brown: Yeah. If it works give it a shot. And a lot of people are going to tell you you can’t do things. A lot of the best thinkers come up with things that other people could not resolve. But that’s one thing I like about this topic, Wade, is it encourages creativity. It encourages you thinking outside of the box.
Someone can be extremely creative, those are the people you usually think that are way out there, out of the box. And you might say well, I don’t have room for that in my construction company. But those are the people that want to innovate and make things better. And they have the vision for it.
Isn’t it amazing, Wade, how sometimes you’re around certain people and they just have a gift that’s so opposite of yours? Like, for me it’s some kind of interior decorating type personality. To say, this looks good here. This looks good here. And you’re like, nah, and then they put it all together and you’re wow.
That’s a gift. That’s that’s an innovator to me. That’s that mindset. And someone who is a problem solver can also be an innovator. I’ve known a lot of engineering type contractors that were extremely innovative because their whole mindset was, I can engineer my way out of any problem.
[00:12:39] Wade Carpenter: That’s a good analogy there too, and actually hits home because I just went through a exercise that talks about, it’s called personality poker. It makes you think about your own, but I am actually wired as a creative person. And a lot of people don’t realize that I’m like high on the creative side.
Where my team, I went through this whole exercise with my team. And maybe we could do another podcast episode on that too, but ran my team through this. They see me as the strategic leader, but I see myself and I’m wired more to be the creative person. But again, it’s those that are exploring new possibilities and asking, how can we do this a little differently or a little better?
Again that’s another hat that’s crucial for staying competitive and adaptable in construction markets. I mean, you know, construction is always evolving.
[00:13:26] Stephen Brown: Sure. And you’re like, you said, your profession said, maybe I should be wearing a white hat as a bean counter, but you are truly Wade, one of the most creative people I know. And your ability to think creatively, to innovate, is I think what makes podcasting with you so interesting.
[00:13:43] Wade Carpenter: Practical applications, you know, these are the ones thinking through how can we improve the process? Thinking a little differently outside the box. How can we differentiate our service, our construction business a little differently so that everybody doesn’t see us as the next contractor?
And so that we are all competing based on price. If we can differentiate what we do, perhaps we can command a little higher fees, prices on that kind of stuff. This is another thing about problem solving and creative brainstorming. So that’s what that hat’s about.
[00:14:16] Stephen Brown: Love it. Okay.
[00:14:17] Wade Carpenter: All right.
The Blue Hat: The Organizer
[00:14:18] Wade Carpenter: That brings me to hat number six, which is the blue hat. And this is the organizer person. And the blue hat basically represents the process control, the organizational, strategic thinker type person. It’s a person that manages the overall process and makes sure that the other hats are doing all these things the way they need to do it effectively, and in the order they need to.
[00:14:44] Stephen Brown: First one that comes to mind when I think about the blue hat, the organizer is my partner, Richard Whitley. He is the most gifted person at organization. The way his mind thinks, and the way he strategically thinks about getting things done properly, done right. His nickname around the office is the wizard.
[00:15:03] Wade Carpenter: Oh. Nice.
[00:15:04] Stephen Brown: Yeah and, my other partner Mike in the business, McDaniel, his nickname is Coach. He’s always coaching, so there you go.
[00:15:13] Wade Carpenter: Sounds great. Well, again, this one’s all about what’s our plan of action? How do we need to organize this? This is the strategic planning type thing, the project management. You’ve probably got some of that gene in you in construction if you’re a project manager. you need to have some kind of organized structure for making these decisions, which sort of pulls all this together.
And this is why this, I’ve always loved this approach. I heard about the concept long after the book came out in 1985, but I’ve probably known about it 15 years or so. And when I heard the concept, I was like well, I try to apply it.
And you bring up this all the time about a construction board of directors. But it’s not about functions, because you may need a CPA, a bond agent, and your lawyer, and a banker, and all this stuff on your construction team. But, if you are looking for a board of directors to advise you on a decision, don’t you want to think about all these six hats we talked about? Come about it from six different ways?
[00:16:09] Stephen Brown: Sure.
[00:16:10] Wade Carpenter: And I know this is where I’m going to get everybody going to say I’m such a geek, but, about a year and a half ago– this is why it came up because I had a conversation with a client this week that was trying to think through some of this stuff. And I actually pulled this back out.
But about a year and a half ago, when they first came out with these custom GPTs, I heard about prompting with Multiple Perspectives. So I don’t know if you’ve ever heard about creating your own panel. Say you want Einstein to, recognize this, or maybe a famous author.
But I created my own GPT with these six thinking hats. And believe it or not, you try to put a persona about it. I took I the cast of Friends, the TV show Friends, and tried to apply each one of their characters to this hat.
I wanted this GPT to actually respond as Ross Geller or, Phoebe Buffay from Friends. I need to go back and see how I, if you want to hear more about it, if you want, if you think it’s silly–
[00:17:05] Stephen Brown: No, I don’t think it’s silly at all. One thing that made Friends work as a show so much was the different personalities. And they were so over the top in that personality. That’s what made him funny. And it’s what makes you interesting, Wade. Your gifts that you have for certain aptitudes, for some things that you enjoy doing and things that you don’t enjoy doing.
We were talking just simply about the joy of being a contractor, the joy of seeing a project done, the joy of coaching and mentoring employees, the joy of making owners happy, the joy of making profit, to be able to do the things you want to do.
That all ties into understanding these different hats and these different personalities and what you have to have. You have to have all six hats stacked one on top of another to own a construction company, don’t you, Wade?
[00:18:01] Wade Carpenter: You do, and it is true that some people are wired a different way. Or you’re in a certain situation, you may not be able to be thinking rationally about certain things.
So that’s why I was like, I pulled this out a few times, but, in a construction owner, they’ve got to think this way. And I thought this was a great way for them to like, hey, put in this question what is your perspective on this? What’s the risk that, what’s the worst case scenario? What’s the best case scenario? And hopefully you see how these fit.
But if anybody really is interested, I suppose I could give you the prompt, or I could probably make the custom GPT available to everybody. I could give the one that with the Friends in there as the–
[00:18:43] Stephen Brown: I, you’ve got to send it to me. I got to see that, Wade.
[00:18:46] Wade Carpenter: Okay. I may have to work on making it available outside of my organization, but, I think we could probably do that. Maybe stick that in the show notes.
[00:18:54] Stephen Brown: I enjoyed it. The six hats, it’s a great way. And that’s one thing that we talk about different ways of thinking, different ways of working, different ways of living, and how it relates to the construction industry.
Because, like our name construction success. It’s a forum of all of us bouncing ideas off each other. So we definitely would love to get some feedback from you on what you think about this.
[00:19:21] Wade Carpenter: Okay. If our listeners have any thoughts on today’s exploration of the six thinking hats, as it applies to construction, maybe you’re curious about how to apply them to the next project. Whatever’s on your mind, we love to hear your thoughts, share your questions, experiences, or ideas in the comments.
Thank you for tuning into the Contractor Success Forum. For more information and insights on decision making, leadership, or any of the other topics, head over to ContractorsSuccessForum.Com or to the Carpenter CPAs YouTube channel, or visit ProfitFirstConstruction. com. If you found this episode helpful, make sure to like, share, and subscribe, stay connected with us.
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