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Chad and Matt dive right into the question of the day: Why is growth necessary for construction companies? Growth means many different things, and they start by clarifying that growth doesn’t always mean higher revenues—sometimes, it means developing process and adding stability. Meanwhile, other times, it has everything to do with increasing revenue and profits. Either way, central to the need for growth is the fact that great people want to have something to strive toward; with grow comes opportunity. In the X vs. Y section, Matt and Chad argue about whether you should show your team your org. chart. We hope you enjoy and learn how to grow your business effectively through this month’s episode. Subscribe to be notified when new episodes are released on Spotify, YouTube, Apple Podcasts, or LinkedIn. If you’re looking for more ways to engage with the wider construction community, check out our affiliate podcast, The Morning Huddle Construction Show, hosted by Chad Prinkey, Well Built Construction Consulting and Stacey Holsinger from Steel Toe Communications. Tune in every Tuesday morning at 9 A.M. EST on LinkedIn Live for discussions with A/E/C experts, advancing the construction community. 0:00 What is the "Well-Built" series? 2:00 Check-Ins! 8:55 How do you get started into creating growth for the long term? 16:15 Why is it important to maintain growth? 20:46 How does revenue growth tie into growth for other parts of the business? 28:30 Should we share our future organization chart with our staff? 39:05 What are we reading and what are our biggest takeaways? 42:25: Check us out at Well-Built Consulting.com! Thank you to our sponsors! Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit: http://www.themorninghuddleconstructionshow.com/ Follow us on LinkedIn: https://www.linkedin.com/company/82318299/admin/dashboard/ Subscribe to our weekly e-newsletter for the latest updates: https://lp.constantcontactpages.com/sl/Ro2QrVt/Themorninghuddlepodcast?__cf_chl_tk=9S8PSaN6zCOUNBhPtHXE.qk8HWtzxNNluBDlsEYhZkg-1726511898-0.0.1.1-8361

In this episode, Michael Fortinberry, co-founder and COO of Protiv, discusses whether it's time to rethink the hourly pay system in the construction industry. Together, we'll explore innovative compensation models to boost productivity and efficiency, offering valuable insights for those looking to improve workforce performance through new pay structures. 6:28 Guest Intro: Michael Fortinberry Protiv.com 7:30 Close the Gap Between In-Person and Zoom Calls 11:08 Performance Models 12:06 Innovating Compensation 14:17 Shaping Company Culture: Numbers Based 17:07 Who are you when you are at your best? 18:42 How well do you know your people? 20:06 Merit Based Compensation Structures 22:09 Connecting Labor Budget: Getting Your Crew to Understand the Goals 23:18 Stop with the 1099s. 24:42 Incentives and Bonus Structures 25:59 Goals for Incentive Programs 26:28 Transparency 27:30 Creating New Ideas to Get the Job Done 29:40 How the Software Works 37:50 Case Studies and Examples 41:00 How Bonus Structures are Paid Out Thank You to Our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/s...

While many construction companies focus on technology for efficiency and transparency during construction, significant opportunities remain in applying advanced tools to the preconstruction phase. Michael Ho, CEO of Bespoke Metrics Inc. discusses the importance of tech stack integrations, growing concerns around data ownership and security, and the role of prequalification in preconstruction. 1:00 Sponsors 7:23 Bespoke Metrics Intro 9:17 High Risk Prequal and Bringing Structure 10:30 Owner Developer GC Risk Management 11:20 Not Pricing Risk Appropriately/Eliminate Low Bidder Wins 12:30 Prequal will grow 16:00 Working on Prequalifications 16:12 Larger GCs Tracking Metrics and Data Points 17:09 Is Prequal Part of Precon? 17:56 Consider Personas: Partner Vs. Risk Who is the decider? 19:40 May have a Predisposition or desire to get a cheap price? 23:08 AI in Prequal Process 26:51 Data Collection, Data Verification and Standardization 28:28 Generative AI 31:30 All-In-One Solution? 33:05 Concept of Building Tech like an App 36:25 Tech Overload, Need Fewer Choices 37:43 Get a Tech Plan Now 38:48 Choose Best in Class 40:20 Has Tech made us more profitable yet? 41:20 Apples to Apples Pricing: Flat to Lower- Price Tech Accordingly 42:49 Invented Terms and Pricing Thank You to Our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/s...

In this episode, we’re joined by Scott Arias, CEO of ACE Consulting, and guest host Tom Hughes, VP of Construction Operations at Genesis AEC, to tackle the vital topic of construction scheduling. Scott breaks down the essentials of time impact analysis (TIA), explains the importance of "frag nets," and dives into how the critical path influences scheduling. With real-world examples and actionable advice, Scott makes it easy to understand how accurate scheduling drives productivity and protects your business. 6:57 Introduction Scott Arias 8:25 What is Time Impact Analysis? 12:00 When to Submit Change Order for a Contract Extension 12:45 Example of Contract Extension 14:56 Retrospective Claim Analysis 16:52 As-Built Schedule 17:12 Modeling Perspective: Design Change 18:20 Firm Impact of Overall Project 21:15 What is a “Frag Net?” 23:10 Who has the financial impact and owns the responsibility? 25:19 Need a Basic Understanding to Negotiate a Change Order 28:35 Keep Proper Project Documentation 30:16 A Dozer Costs Money if Its Sitting 34:13 AI Impacting Scheduling 33:30 Tools Used for Time Impact Analysis 36:36 Concept of 3D 37:39 Integration between Primavera and Procore 40:45 Baseline the Schedule 43:40 The Navy Used the Critical Path Method to Construct Submarines 45:30 Marking Up the Schedule Thank You to Our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/s...

In this episode, we’re thrilled to welcome Dr. Estelle-Marie Montgomery, Executive Director of the FH Faunteroy Community Enrichment Center. Over the past four years, Dr. Montgomery and guest host Mark Drury have collaborated on workforce development initiatives, and today, she shares her inspiring journey to Deanwood along with her vision for Washington DC’s first Resilience Hub. We’ll dive into how resilient communities benefit employers seeking talent, the importance of candidate vetting in construction bootcamps, and how the construction community can support this exciting project. Don’t miss this insightful conversation! 0:36 Meet Our Sponsors 2:22: Introduction of Guest Host, Mark Drury. 3:45 Mark’s role in the DC Students Construction Trade Foundation 5:15: Introduction of Guest, Dr. Estelle Marie Montgomery Executive Director, F.H. Faunteroy Community Enrichment Center 10:16 What is a Resilience Hub? 11:36 How does building a stronger community help fill our pipeline? How do we find people to fill our First Source Agreement? 16:49 Success with Construction Bootcamps and Investing in People Upfront 22:40 How Construction Companies Can Support Local Communities 23:33 Workforce Development Plans and Cohorts for Candidates 25:53 Next Steps for Faunteroy Center and How Construction Industry Can Assist 25:44 Current Funders 32:04 Ward 7 Flooding Issues and Mitigation Projects 35:45 Parting Words on Workforce Development and Careers in Construction Thank You to Our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/s...

Whether you are a minority contractor or not, this episode delves into what new opportunities exist within the electric vehicle industry and infrastructure. Specifically, our guest, Larry Bullock from the US Minority Contractors Association discusses how minority contractors can capitalize on the growing EV industry, and what partnership opportunities may exist for non-minority contractors. 00:46 The Morning Huddle Construction Show Sponsors 2:12 Catching Up with Stacey and Chad, Return of the Show Season 7, Episode 1. 4:00 Well Built- Chad's New Book 6:42 Steel Toe Communications discusses launch of Instagram and TikTok @CHAT_CTE 7:35 Introduction of Guest, Larry Bullock 12:57 The Economic Boom of the Transportation Industry. 15:10: 1/3 of where we need to be in fulfilling the 500,000 Station Promise, and half way through funding. Lots of opportunity. 15:53 The Joint Office for Energy and Transportation, www.driveelectric.gov/contact 17:12 Justice40: Goal is 40% of every dollar spent under the $5B operation should be spent in disadvantaged communities. 23:50 Which Non-MBE firms are partners with MBE firms. 28:00 Become Bid Ready 30:58 What kind of trades will be involved in installing and maintaining EV. 33:41 17 Electric Car Business Ideas: You Get in Where You Fit In 46:49 Closing Thank You to our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=google&utm_medium=ppc&utm_term=ntl&utm_content=resilience&utm_campaign=ntl-brand-awareness-mma&gad_source=1&gclid=CjwKCAjw3P-2BhAEEiwA3yPhwBStkU82B0UALO_Ro1GKvn_sfhRJaY7TaEfwisj92ciDKSpYt52NwhoCPAcQAvD_BwE Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/sl/Ro2QrVt/Themorninghuddlepodcast?__cf_chl_tk=9S8PSaN6zCOUNBhPtHXE.qk8HWtzxNNluBDlsEYhZkg-1726511898-0.0.1.1-8361

Making money on every project is essential for a construction company’s success. That said, the profit motive can sometimes get in the way of building strong, lasting client relationships. In this episode, Matt and Chad help us to strike the balance between profit and relationships. Also, a great conversation about the right timing to hire a Business Development Manager. If you enjoy this content, consider subscribing, and for those looking for more, you can visit our website at https://www.themorninghuddleconstructionshow.com/. Subscribe to be notified when new episodes are released on Spotify, YouTube, Apple Podcasts, or LinkedIn. If you’re looking for more ways to engage with the wider construction community, check out our affiliate podcast, The Morning Huddle Construction Show, hosted by Chad Prinkey, Well Built Construction Consulting and Stacey Holsinger from Steel Toe Communications. Tune in every Tuesday morning at 9 A.M. EST on LinkedIn Live for discussions with A/E/C experts, advancing the construction community. 0:00 What is the "Well-Built" series? 2:53 Check-Ins! 6:11 Do you put client relationships before profit? 15:59 How do you maintain your relationships with customers? 32:28 What simple rules do contractors need to follow when considering if they should put relationships before profit? 36:20 Should you hire a business development manager? 56:05 Where do you see a business manager's role ending in the sales process? 1:01:18 What are we reading and what are our biggest takeaways? 1:11:30 Thanks for joining us! See you next time! Thank you to our sponsors! Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit: http://www.themorninghuddleconstructionshow.com/ Follow us on LinkedIn: https://www.linkedin.com/company/82318299/admin/dashboard/ Subscribe to our weekly e-newsletter for the latest updates: https://lp.constantcontactpages.com/sl/Ro2QrVt/Themorninghuddlepodcast?__cf_chl_tk=9S8PSaN6zCOUNBhPtHXE.qk8HWtzxNNluBDlsEYhZkg-1726511898-0.0.1.1-8361

In this episode of The Morning Huddle Well Built Series, Chad and Matt discuss why so many contractors “can’t find good people” and what must be done to end that cycle in your business. In the X v Y segment, there’s also a lively discussion about firing slow or fast that leads to excellent lessons for anyone struggling with how to handle underperformers. Subscribe to be notified when new episodes are released on Spotify, YouTube, Apple Podcasts, or LinkedIn. If you’re looking for more ways to engage with the wider construction community, check out our affiliate podcast, The Morning Huddle Construction Show, hosted by Chad Prinkey, Well Built Construction Consulting and Stacey Holsinger from Steel Toe Communications. Tune in every Tuesday morning at 9 A.M. EST on LinkedIn Live for discussions with A/E/C experts, advancing the construction community. 0:00 What is the "Well-Built" series? 5:35 Check-Ins! 9:10 Why do construction companies have trouble recruiting people for positions? 13:30 How do you overcome the mindset of high expectations when recruiting? 24:43 What is "poaching" and what is our stance on it? 31:35 Should you fire fast or slow when handling under performers? 43:20 What is a positive view you can have for firing someone? 50:51 What are we reading this week and what are our biggest takeaways? 56:19 Thank you to our sponsors! Thank you to our sponsors! Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit: http://www.themorninghuddleconstructionshow.com/ Follow us on LinkedIn: https://www.linkedin.com/company/82318299/admin/dashboard/ Subscribe to our weekly e-newsletter for the latest updates: https://lp.constantcontactpages.com/sl/Ro2QrVt/Themorninghuddlepodcast?__cf_chl_tk=9S8PSaN6zCOUNBhPtHXE.qk8HWtzxNNluBDlsEYhZkg-1726511898-0.0.1.1-8361

0:23 Independent Electrical Contractors: Skills USA Involvement and Workforce Development 2:58 How IEC works with parents and students to train future electricians. 3:24 Jacksonville, NC Teacher and Skills USA Coach chats about his all girl Teamworks Team: Carpenter, Plumber Bricklayer and Electrician. 4:40 Skills Jam Documentary 5:39 Teacher Involvement with SkillsUSA. 7:22 Using Associations to connect schools to businesses. 7:52 Otis Elevators talks about careers in the Elevator Industry. 9:36 Why all trades can transform over to the Elevator Industry. 10:08 Career Pathway Showcase for Career Services: Students Discuss Why SkillsUSA 10:42 National Technical Honor Society looking to make quality connections with Top Contractors: 100k Active Members, 65k New Members NTHS.ORG 12:47 Don't shy away from a school that doesn't have a construction program, have a conversation with a CTE instructor. 13:14 Skills USA Competitors talk about their involvement in the largest skilled trades competition. 14:07 General Dynamics builds destroyers for the navy, and also visits high schools to develop relationships with students. 18:06 York Technical College, SC student is set to compete in the HVAC category. 20:51 Recruiters from McCarthy on fall and spring apprenticeships and internship programs. 22:58 Interplay Learning talks about non-traditional academics, and consistently adding new modules to their program to help businesses, schools, and non-profits who want to learn about the trades in a digital format. 26:52 CBRE employs over 45k technicians all over the world. 29:18 Virtual Reality Demo 30:20 Two Skills USA student competitors talk carpentry and drywall.

Has this happened to you? A high-potential employee with a bright future shows up one day and tells you, “Sorry, but I got a job offer for more money. I’m leaving.” If you’re like most contractors, the answer is a resounding YES! In this episode, Chad and Matt discuss if and when employees really do leave for money, and what other hidden factors are at play. Here’s a hint: it often comes down to leadership and culture! You will walk away from this episode with some tools to better retain great people, and be a company where people want to work. After that, the guys debate whether it’s feasible to hire executives from outside, or if you need to promote from within. Let us know who you think won the debate in the comments!

Construction company owners are often highly capable sellers and doers. They built their business from scratch to where it is today for a reason! This all works fine until one day, they wake up and realize they've created a time-eating, stress-producing monster with themselves at the center. What they need is a team of trusted leaders inside their business to help them take control and reduce the pressure on a single owner. They need an executive team. In this episode, Chad and Matt talk about how and why owners should create an executive team. Also, they fight about work-from-home arrangements in the construction industry in our XvY segment. Subscribe to be notified when new episodes are released on Spotify, YouTube, Apple Podcasts, or LinkedIn. If you’re looking for more ways to engage with the wider construction community, check out our affiliate podcast, The Morning Huddle Construction Show, hosted by Chad Prinkey, Well Built Construction Consulting and Stacey Holsinger from Steel Toe Communications. Tune in every Tuesday morning at 9 A.M. EST on LinkedIn Live for discussions with A/E/C experts, advancing the construction community. 0:00 What is the "Well Built Series?" 3:00 Check-ins! 3:57 What is the "Well Built" book? 6:18 What was Chad's inspiration for writing "Well Built?" 12:57 Why do we build executive teams? 23:05 What is an executive team? 26:37 What is the difference between a management team and an executive team? 32:54 How do you go about setting up your executive team? 35:23 Where do you start when choosing your executive team? 47:25 Home vs Hybrid workplace 57:33 How do we create a positive work environment? 59:40 Can working from home in the construction industry be successful? 1:01:25 What are we reading and what are the biggest takeaways? Thank you to our sponsors! Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Genesis AEC (Full Service Architecture, Engineering, Construction in Life Sciences) https://www.genesisaec.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... Construction Links Network: https://constructionlinks.ca/ For additional episodes and information visit: http://www.themorninghuddleconstructionshow.com/ Follow us on LinkedIn: https://www.linkedin.com/company/82318299/admin/dashboard/ Subscribe to our weekly e-newsletter for the latest updates: https://lp.constantcontactpages.com/sl/Ro2QrVt/Themorninghuddlepodcast?__cf_chl_tk=9S8PSaN6zCOUNBhPtHXE.qk8HWtzxNNluBDlsEYhZkg-1726511898-0.0.1.1-8361

Military veterans possess a unique skill set that can significantly impact white-collar and blue-collar roles in the construction industry. Their transition from military service to construction is seamless, and they bring valuable experience. In this episode, Zach Scheel, co-founder and CEO of Rhumbix, and Scott Friend, founder of The Construction Veteran, discuss their experience being Veterans in construction. They'll explore tools that enhance efficiency and address the frustrations field employees face. Additionally, they share insight into how hiring veterans mitigates labor shortages and enriches the industry. Tune in to discover how transitioning veterans can embark on a rewarding construction career! 🔗 Follow Scott on LinkedIn: https://www.linkedin.com/in/scott-friend-a8a05723/ 🔗 Follow Zach on LinkedIn: https://www.linkedin.com/in/zscheel/ 🔗 Follow Chad on LinkedIn: https://www.linkedin.com/in/chad-prinkey/ 🔗 Follow Stacey on LinkedIn: https://www.linkedin.com/in/staceyholsinger/ 🔗 Subscribe to Show YouTube Channel: / @themorninghuddleconstructionshow Follow Us: The Morning Huddle LinkedIn: https://www.linkedin.com/company/themorninghuddle/?viewAsMember=true The Morning Huddle Construction Show Newsletter: / https://lp.constantcontactpages.com/sl/Ro2QrVt/Themorninghuddlepodcast Visit Our Website: https://www.themorninghuddleconstructionshow.com/about Thank You to Our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... For additional episodes and information visit www.themorninghuddleconstructionshow.com Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/s...

Join Greg Sizemore, Joe Xavier, and Haley Moyers from Associated Builders and Contractors (ABC) as they delve into the critical topic of mental health in construction. Discover how ABC is revolutionizing industry attitudes and explore their transformative initiatives like the Total Human Health Initiative and the pioneering Vital Cog program. Gain actionable insights into implementing mental health support within construction companies while hearing inspiring stories of contractors championing worker wellness. Thank You to Our Sponsors: Well Built Construction Consulting https://www.wellbuiltconsulting.com/ Steel Toe Communications (Digital Marketing for Contractors) https://www.steeltoecommunications.com/ Katz Abosch (Tax, Audits and Accounting) https://www.katzabosch.com/ Lawrence Law (Legal Challenges for Contractors) https://lawrencelawllc.com/ Sandy Spring Bank https://www.sandyspringbank.com/ Marsh McLennan Agency https://www.marshmma.com/?utm_source=... For additional episodes and information visit https://www.themorninghuddleconstructionshow.com/about Subscribe to our weekly e-newsletter for the latest updates. https://lp.constantcontactpages.com/s...

The Well Built Series is a special podcast designed for decision-makers in the construction industry, as well as those aspiring to be leaders. Hosted by Chad Prinkey and Matt Verderamo, this series delves into the best practices perfected by successful contractors. Join us as we explore the “Do’s” and “Don’ts” that transform good companies into truly “Well Built” organizations. Whether you’re an industry veteran or just starting out, this podcast offers valuable insights to enhance your construction journey.

AI and automation are reshaping the construction landscape. Technology enhances efficiency, safety, and cost-effectiveness by optimizing equipment usage, predicting maintenance needs, and streamlining processes. Companies that stay at the forefront of technological advancements position themselves strategically, ensuring they are well-prepared to address the evolving needs of future owners. Tune in to this engaging conversation with Adam Stark, CEO of Jet.Build, where we discuss how a top-down approach driven by construction owners, combined with contractor readiness, can shape the future of sustainable construction.

In this episode, we delve into the private side of the public-private discussion. We're joined by Neal Rackleff, Attorney at Law at Rackleff LLP, to uncover the challenges faced by professionals dealing with government entities. We’ll explore process-oriented reasons behind the distinct behaviors of government employees versus their private sector counterparts. Neal dispels common notions about the public and private sectors, sharing his unique experiences. Tune in to understand Neal’s impactful journey—from private roles to federal government positions and back again.

Join us on The Morning Huddle as Jeremie Harrison, Senior Project Manager at Leebcor Services, LLC, and guest host Tom Hughes, Vice President of Genesis AEC, delve into the pressing need for proficient Project Managers (PMs) in construction. Discover how the Project Management Professional (PMP) program provides a transformative solution, equipping PMs with vital expertise in contract language, project scheduling, and construction sequencing. Tune in to explore the impact of skilled PMs on project completion, efficiency, and innovation in the industry.

Join The Morning Huddle for an insightful conversation with Jennifer Todd, President of LMS General Contractors, as she explores the nuances of unconscious bias and its impact on the construction industry. Drawing from her experiences, Jennifer reveals how these underlying attitudes shape the industry, potentially impeding efforts toward inclusivity and diversity. Discover strategies for cultivating a more equitable future in construction as Jennifer uncovers the effects of unconscious bias and shares her insights.

In this episode, Pat McGettigan, Vice President of Excellerate Manufacturing, joins us to share his unique insights into modular construction. From UPS data centers to driving innovation in off-site manufacturing, Pat's expertise sheds light on the pivotal role of modular solutions amid labor shortages. Throughout the discussion our guest host, Tom Hughes, Vice President of Genesis AEC, also shares his valuable knowledge, enriching the conversation on the convergence of manufacturing and construction.

In this episode, join Chuck Rakich, Superintendent Safety Manager at Henley Construction Co., Inc., as he reveals the keys to running projects that meet OSHA standards and cultivate a culture of safety excellence. Chuck passionately emphasizes the transformative power of viewing OSHA inspections as collaborative partnerships rather than dreaded encounters. Tune in as Chuck shares invaluable strategies for establishing a robust safety culture from the highest echelons of management down to the frontline workers, setting your job sites up for unparalleled success. Don't miss out on this episode packed with essential insights that will empower you to navigate OSHA inspections seamlessly and turn them into catalysts for improvement and collaboration.

As the economy goes, so too will the construction industry. It always helps to learn about economic trends and their likely impact on construction. Niladri Sannigrahi is the Senior Director of Product Management at Liberty Mutual Surety, and his passion is economics. He'll join The Huddle to talk about interest rates and their impact on developer-driven construction, the likely impact of the 2024 election on the construction economy, and many more topics to help you plan for what's ahead.

Traditional leadership programs often overlook the hurdles obstructing women's path to leadership in the construction industry. During this interview, we'll confront these barriers head-on. By identifying the real issues holding women back, we can lay the foundation for genuine transformation.

One of the challenges is the double bind - Women are told to be more assertive and confident if they want to advance to leadership roles. Then they’re reprimanded for being too bossy or called aggressive.

We often hear from well-intentioned men who want to contribute but are unsure how. During this interview, we'll talk about how to shift the burden of change off of women’s shoulders and create a shared responsibility for change across your entire organization. We'll also share evidence-based strategies that you can use to accelerate the path to leadership for the women in your company.

Mike Henderson has served the construction industry as a part of the Associated Builders and Contractors for over 30 years. In his role as the President of ABC Baltimore, his sights have turned to positively impacting the minority contracting community as well. Chad and Mike will discuss an innovative approach they're both working on in the city of Baltimore to create profitable growth for the minority contracting community and the good of the overall construction industry.

In this episode, we'll debunk myths around government contracting, navigate the challenges of transitioning from commercial to government work, and uncover hidden opportunities in this dynamic sector. The stories and insight provided by Eric Coffie, founder of Govcon Giants, promise a thought-provoking journey into the world of government contracts. Join us for an enlightening conversation that might reshape your business strategies!

In this episode, we explore the evolving landscape of social media strategies and transformative tactics in the commercial contracting sector. We'll examine the strategic collaboration where marketing, sales, and business development should converge, making "collaboration" a vital force in content creation. Our guests, Matt Graves, founder of Construction Yeti, and Jonathan Cor, founder of Customer Growth, share unique insights and uncover out-of-the-box approaches for securing optimal coverage and selecting the most impactful social channels. Join the conversation as we dive into innovative strategies to up your game in the competitive commercial contracting world.

In this episode of The Morning Huddle, explore the role of schedulers, debunk misconceptions, and delve into the necessity of schedules for all projects. Gain insights into software preferences, critical paths, and the complexities of delayed claims. Discover the evolving trend of a proactive scheduling model focused on efficiency, execution, and the challenges subcontractors face with CPM schedules. Uncover the value of a two-week look ahead and pull planning in this concise discussion on construction scheduling intricacies.

In this episode, we dive into the captivating world of Employee Stock Ownership Plans (ESOPs) with our guest, Ben Nichols, President of Harkins Builders, Inc. With over two decades of experience, Ben sheds light on the inner workings of Harkins' ESOP, dispelling myths and highlighting its role as a robust accountability and culture-shaping tool in the construction industry. We explore the tax benefits, recruitment strategies, and value-maximization tactics employed by Harkins, showcasing how being an ESOP isn't just a retirement plan but a key to empowering employees and building lasting wealth. Tune in for an engaging conversation as Ben passionately advocates for broader adoption of the ESOP model and shares Harkins Builders' success story beyond traditional retirement planning.

In celebration of National Apprenticeship Week, we have designed a special episode that focuses on the recruitment of seniors and recent graduates into the electrical industry.

We'll explore the benefits of choosing a career in the electrical industry, debunk common misconceptions, and uncover the vast opportunities that exist within this exciting field. Our guests will share their personal journeys, providing firsthand accounts of the hands-on training, career growth, and job satisfaction that can be found within the electrical industry. From apprentice success stories to the mentorship and support offered by contractors, you will hear inspiring narratives that showcase the rewards of pursuing a career in this dynamic trade.

As governments and school districts recognize the massive need for employees in the construction industry and the phenomenal opportunity that need presents to their students and constituents, many are finally investing time, money, and energy in developing successful CTE programs. Our guest, Catherine Schoenenberger, joins us to share a time-tested and proven methodology she has been overseeing for years.

In this episode, we delve into the fascinating dynamic of semi-rivalry and discord between contractors and engineers. Join us as we explore each profession's crucial roles, uncover the valuable lessons they can glean from one another, and discover how they can unite to drive success as a cohesive team. Our guest, Sol Rosenbaum, owner of SR Engineering and Consulting, is a seasoned mechanical engineer who supports due diligence firms and building owners in the CRE world. The founder of Sol, sets an excellent example for younger engineers by inspiring them through mentorship. Join us as Sol lends his insights to this insightful discussion.

It has been proven that exposure to the construction industry for school-aged kids inspires many to join the industry upon graduation. By the time kids are in high school, many have preconceived notions about the industry that make them hard to reach. In this episode, Mr. Jarrett joins us to share his story about the first CTE Program in Middle School in Philadelphia and the impact it's making on young lives.

With over 20 years of experience and certifications across multiple trades, Jason Blackwell was in a wreck that changed the trajectory of his life. Approached with the opportunity to teach, Jason found ways to inspire and support his students through his CTE program. In 2022, as the high school industrial maintenance teacher at Escambia Career Readiness Center in Brewton, Alabama, Jason was named a grand prize winner of the 2022 Harbor Freight Tools for Schools Prize for Teaching Excellence, winning $30,000 for himself and $70,000 for his program. That then led to his current role with the Alabama State Department of Education and dreams of running for Governor. Join us to uncover what it takes to master craft training in and out of the classroom.

Sadly, too many construction projects fail to meet schedule and budget expectations and more than a few come completely off the rails in every mark in every year. Owners, architects, general contractors, and subcontractors alike retreat to their corners and focus only on protecting their selfish interests. In this episode, construction attorney Michael Wagner joins us to explore what happens to cause a project to become derailed, what behaviors worsen the situation, and what to do if it happens to you.

Great leaders are formed through their experiences. From the interactions they have with bosses, colleagues, and mentors to the education they receive from books and classes, our construction leaders are a product of the development they’ve received. In this episode, Vice President of Construction at Foulger-Pratt, Brett Harton, joins us to share his own leadership development journey and advice for current and future leaders alike on how we can build a better leadership culture in the industry.

A significant number of our field employees do not speak English as their first language. This language barrier has contributed to thousands of injuries and even deaths each year. In this episode, two-time Morning Huddle guest, Oscar Garcia, joins us to discuss how he is using artificial intelligence to breakdown language barriers and create safer job sites for Hispanic workers.

Countless women in construction have been sacrificing comfort and jeopardizing their safety for years by adopting PPE designed for male bodies. Dave Rosenbluth National Sales Manager for Utility Pro Wear will join us to discuss a manufacturer’s perspective on Equity and Access to Safety Apparel for women. This episode contains a discount code for apparel, so be sure to tune in!

While Artificial Intelligence (AI) has been a part of our lives and work for many years now, the release of ChatGPT in 2022 has brought the possibilities of this advancing field to the forefront. People like Morning Huddle guest, Stjepan Mikulić dedicate themselves to researching the latest advancements and exploring the most viable technologies AEC firms can implement in the near term. He joins us to simplify the topic and help our audience understand how they might apply AI in their construction businesses.

For any business, cash is crucial to health and success. Employees and vendors must be paid, or the whole thing comes to a halt. Contractors, in particular those who must purchase materials for installation, face a high-risk environment dependent on their customers’ timely pay. Scott Peper from Mobilization Funding has a front-row seat to the unique cashflow challenges faced by contractors, and he joins The Morning Huddle to discuss the topic and share strategies for maintaining a healthy cash position.

Most construction companies recognize opportunities to improve their business. Few have a track record of capitalizing on those opportunities and driving positive change. In the fast-paced environment of designing and building, companies become accustomed to their problems and focus on getting their work done instead.

In a first for The Morning Huddle, host Chad Prinkey will become a guest and share his experience driving organizational change as a consultant for the construction industry over the past 15 years. We’ll discuss why companies get stuck and what employees and executives can do to get better today.

The spaces we occupy for our work can make a world of difference in profitability. Our guest, Nitin Govila, is the head of Sales and Marketing for global textile manufacturer Serge Ferrari. Their materials are integral to a wide array of construction products, ranging from acoustical panels to PT concrete. He’ll share insights on constructing workplaces with sustainability and profitability in mind from the start.

Guest: Nicole Coates

Guest: Heather Groves

Guest: Catherine Schoenenberger

Guest: Doreen Bartoldus, Jacobs

Guest: Heather Groves

Guest: Catherine Schoenenberger

America's top-performing contractors in every field have certain things in common. One of those things is a strong culture that allows them to maintain consistent results for customers and employees as they grow. Few contractors have done this more effectively than Ruppert Landscape. With over 2,000 employees across 8 states (and rapidly growing!), Ruppert has built a culture of success.

Our guest, Phil Key, is the President of Ruppert Landscape. He joins us to discuss how Ruppert has built and maintained their culture and why it has worked so far!

New construction laws are passed virtually every session, leading to challenges and opportunities for contractors to navigate. Join us and our guest, construction attorney Jackson Nichols to discuss the 2023 construction legal landscape so you can learn about the legal changes that may impact your business.

Many construction Project Managers have never received an education in their craft. Finding the time to travel to a training facility and sit for hours can be challenging for the average PM. We have so much going on and limited time, but quality professional development creates efficiency and reduces stress. In short, it is always worth investing time in training that will elevate your performance.

Join me, Stacey, and our guest Jim Rogers, a LinkedIn [In]structor who dedicates his time to delivering top-quality, easy-to-attend, online training programs for construction professionals right here on LinkedIn.

Virtual design and construction (VDC) as a tool for building better spaces is quickly becoming the norm, but our guest for The Morning Huddle's 47th episode, Darren Young, believes in taking things a step further.

What if your VDC efforts were aimed at reducing waste, creating scalable and resilient technical frameworks, increasing data quality, and leveraging opportunities to generate new revenue?

Join us as we discuss aligning proven VDC technology with compelling business goals to build a better future!

$7M in baby boomer businesses will sell by 2030. Many of those will be building contractors. Whether you’re in the market to sell or potentially buy one of these firms, or you simply want to understand the changing ownership landscape of the construction industry, join us for this episode. We have Eric B. Pacifici, Partner with SMB Law with extensive experience with acquisitions joining us for the discussion. He is leading small to mid-sized businesses to get smart about buying and selling in this dynamic market.

Ryan Lanser, the Dirt Jedi, joins our podcast to talk about how his company has applied GPS and Drone technology to revolutionize how site work contractors estimate and plan their projects. We'll talk about how it works, what value it adds, and the future of this exciting tech.

If you've ever been a part of a project team that doesn't communicate and where every entity acts selfishly, you may have thought, "there must be a better way." You're not alone with that thought, and you're right. There is.

The Integrated Project Delivery (IPD) method is a teamwork-based approach to construction. Imagine pulling the GC, architect, engineers, and specialty contractors together to work collaboratively throughout preconstruction and construction. Kevin Hollenbeck has experience with real-world applications of IPD and joins us to share his story to help bring more attention to this game-changing approach.

Economic uncertainty has become normal for all of us. Contractors who are busy today are just waiting for the music to stop. While nobody can predict economic conditions with certainty, smart companies pay attention to the trends and plan accordingly. Nobody may be better at reading the tea leaves for the construction economy than our guest, Anirban Basu.

Anirban joins The Morning Huddle a second time for a fun and enlightening discussion about the latest economic trends impacting the construction industry.

The Morning Huddle gets a jump start on Women in Construction Week with this episode featuring three successful women working in construction. Each of our guests has their own unique story to share. Through their stories, we’ll explore what can be done to draw more women to the industry and inspire women in construction everywhere to follow their passion.

We also hope to hear inspirational stories from our live audience during the show!

Every contractor needs an accountant, but certain relationships have the potential to become trusted advisors. As a contractor, you may want to be asking more of your accounting provider. Tim was a trusted advisor for several contractors during his time working for an accounting firm. He joins us on The Morning Huddle to share the principles that made his relationships so strong and strategic with his contractor clients, and what contractors can do to find and develop this kind of partnership with their accountant.

Advances in construction materials and methods are allowing us to achieve amazing levels of sustainable building. Passive house design is one of the latest advances toward net zero and net positive buildings. In this episode, we’ll speak with Trey Farmer, architect and owner of a passive house himself! He’ll walk us through the passive house design approach and demonstrate how it is more attainable than we may realize for residential and commercial applications.

There’s a demand for qualified leaders in the construction industry, and our guest for this episode has dedicated herself to meeting that demand by unleashing the potential of women in leadership positions. Mentors guide up-and-coming professionals, using their experience to help develop a (usually younger) mentee. Sponsors, on the other hand, advocate on behalf of their mentees and help them advance in their careers by being proactive with those in positions of power. In this episode, we learn how to be an effective sponsor for up-and-coming leaders in the construction industry to help eliminate the leadership shortage.

When most small to midsized construction companies think about Human Resources, they think of employee handbooks, PTO policies, and managing employee files. When people like Kathy Humm think of HR, they think about how investing in human capital becomes a strategic advantage for a business.

In this episode, we hear about how leading construction companies leverage their HR departments to become better places to work, minimize legal exposure, and increase productivity. Kathy has valuable experience from her time as the HR Director for Harkins Builders for 9 years before starting her new business, NTP HR.

Real estate developers drive a staggering amount of construction in the US today, and like all construction project owners, they have unique needs. Whether you are a design firm, general contractor, or specialty contractor, some or even most of your projects have a developer as your ultimate customer.

In this episode, we hear from a VP of Construction for an affordable housing developer, but Meade Rhoads has been on both sides of the table and brings a well-rounded perspective to the discussion. Join us to improve your understanding of developers as a customer and how you can improve your strategy for winning more developer-driven projects and building lasting partnerships regardless of your role in the industry.

Lean stands for reducing inefficiencies and removing waste wherever Lean principles are applied. Lean has been a buzzword around the construction industry for decades, and while some segments of the industry have fully embraced it, others have only a vague sense of what Lean is all about. Regardless of where you fall on that spectrum, this episode will invite you into the discussion in an approachable way.

Tom Hughes is a Lean practitioner who came up as a mechanical contractor, and his experience with Lean practices has led to outstanding results. He'll share stories to help us see how and why we can use Lean principles in practical ways to create better project outcomes.

We've had on a few guests with leading views about integrating more manufacturing practices with construction. It seems like a relatively new trend to most, but to people like our guest Gerry McCaughey, offsite construction is how things have been for a long time.

Gerry has been building offsite for over 30 years between Europe and the US, and he joins the show to tell us why any other method is a mistake. Join us to hear from a true veteran in a construction space that is gaining traction.

Most people don't associate the construction industry with human trafficking, but it is happening on a large scale worldwide. In this show, we learn what human trafficking really is and how we can play a role in snuffing it out.

Meg Hughey and Miranda Nehrig from Freedom Network USA are on the front lines of the issue, working to educate owners and employees on how to spot and resolve the issue.

For companies and project teams that have embraced prefabrication and other concepts from manufacturing, the results are undeniable. To bring these ideas home to more contractors, we at the Huddle want to showcase more stories!

The Queen of Prefab, Amy Marks joins The Morning Huddle to continue her mission of advancing industrialized construction. Her role at Autodesk puts her in a position to meet and interview some of the industry's most successful leaders in Design for Manufacture and Assembly (DfMA).

We get to hear her real-world stories of Prefab in action and hold a Q&A for practical tips for our audience.

Many construction companies develop meaningful innovations that create strategic advantages in their market in a crowded field of competitors. Perhaps they develop a tool, a fabrication method, or an operational process that gives them the upper hand only to have an employee leave and bring that information to the competition, diminishing a hard-won advantage.

When you think of Intellectual Property (IP), the industries that come to mind immediately are manufacturing and software, not construction! Greg Stone, IP Attorney with Whiteford, Taylor & Preston, joins us to see how construction companies can protect and monetize their IP.

Join The Morning Huddle for a timely discussion about laws governing how we hire and pay our construction workforce.

Workers are misclassified as 1099 when they should be legally W-2. Subcontractors are hiring labor subs to augment their workforce or, in some cases, to replace them altogether. These labor subs have a varying level of commitment to following the law, and now their prime subs and GCs are on the hook for their mismanagement.

Millions of dollars of penalties have been paid by contractors in the Metro DC region. Attorney General Karl Racine's office appears to be committed to pursuing more wage theft infractions in the city.

No matter where you live, take the time to hear from Hillary Ghent about how Davis Construction has reacted to the heightened focus on this issue and the recommendations they have for the entire subcontracting community to achieve compliance in a manageable way.

Demand for qualified workers in the construction industry is high, and supply is low. That's no surprise, but rather than accepting such a disappointing reality, people like Jennifer Sproul are working hard to solve the problem.

She is the President of the Maryland Center for Construction Education and Innovation, whose mission is to develop, promote, and connect career opportunities in the built environment.

Join us as we talk about the workforce development puzzle and the proactive steps we can take to solve it for the industry.

For most Americans, shopping online has become the norm for so many items in their lives. I mean, can you even remember what shopping was like before Amazon? As consumers, we have the ability to check pricing across platforms, read reviews, and buy the best available options with a click. Could we be seeing the same consumer experience developing in the construction industry?

Michael Wisnefski is working to foster the evolution of commerce in commodity raw materials. His company, MaterialsXchange is a digital marketplace for lumber.

During this show, we discuss the impacts of this kind of shopping experience on the construction industry. Who is for it, who is against it, and why? Join us as we reimagine the future marketplace for raw materials and beyond.

What is the difference between BD and Marketing, and how should they complement one another? Many construction companies get it wrong, and some don't even incorporate these efforts into their business.

Ronnie Brouillard and Taylor Tobin might have it figured out better than any tandem in the construction industry. These two have been a tandem with the general contractor, Chesapeake Contracting Group for five years, setting a high standard for professionalism in their crafts. Ronnie (BD) and Taylor (Marketing) are in lock-step with their efforts and will show us how to learn from their model.

We welcome them to The Morning Huddle to share their strategies with our audience in a fun and educational discussion.

Improving contractor procurement must remain close to the top of the list in our search for positive change. George Nash joins us to share his personal experience in 35+ years with traditional versus alternative procurement methods. We'll talk about what has worked and what hasn't, and we hope to inspire you to lead positive change in contractor procurement wherever you are in the construction industry!

In what has always been a high-pressure industry, now more than ever, teams in the building industry are facing breaking points and burnout. Everyone seems to be too busy, feeling overwhelmed, and can barely keep up with the fires from day to day. It's not sustainable and an industry with a poor quality of life won't attract the bright young people we need for the next generation.

Rex Miller joins the huddle to talk about creating and maintaining healthy construction teams that place an emphasis on mental health and wellness. Rex is passionate about helping leaders transform "the grind" into an inspired performance that leads to more energy rather than burnout. His experience with construction professionals in particular makes him a perfect fit for this discussion.

In the commercial, industrial, and multifamily construction segments, companies have the chance to work together repeatedly. As such, maintaining strong relationships with customers and service providers alike is a great strength for the companies that do it well.

Matt Bolyard joins The Huddle to talk about the value of strong relationships between GCs and Owners, and the service-oriented mindset he and the Southway Builders team use to create lasting partnerships with their customers.

Since most office-based workforce was forced into working from home over two years ago, many theories have been swirling around about "the future of the office". While the debate isn't entirely settled, today it at least seems clear that offices will indeed continue to exist and play an essential role for most companies.

Kelly Ennis is a workplace strategist and the Founding Principal of The Verve Partnership, an interior architecture/design firm. Kelly joins the huddle to share her expert views on the future of the office and what that could mean for the construction industry in terms of trends in the types of construction projects we'll see in the office market sector and other related topics.

Of all the ways the building industry is innovating and evolving, the use of modular construction methods is perhaps the most practical and promising way to increase efficiency in the field.

Nancy Novak joins The Morning Huddle to talk about her experience with Modular Construction in her role as the Chief Innovation Officer at Compass Datacenters where she brings immense experience as a General Contractor to perhaps the most forward-thinking sector in the construction industry.

Nancy's passion for creating positive change in the industry will inspire you to start thinking differently about what is possible no matter what market sectors you build in.

Not many people in the construction tech community started in the industry with a shovel in their hands like Duane Gleason. After spending several years on the physical end of construction, Duane began to master the digital side of the business.

Today, he works for Trimble, an industry-leading construction technology company as the Program Director for Connected Construction. He joins The Morning Huddle to talk about how construction companies can leverage technology to build better, more profitable projects.

No pie in the sky theoreticals here, just real examples of things companies can do immediately to drive a better result using the right technology to build their projects digitally AND physically.

The construction industry needs skilled tradespeople and not enough young people are entering the workforce with the skills we need right out of school. However, training the workforce poses significant time and financial challenges.

Chris Bybee and his company, Interplay Learning, are working to address those challenges by bringing an immersive VR training platform to the trades. Chris joins The Morning Huddle to talk about what his company and others like it are doing to close the skilled trades gap in our industry.

For more than 25 years, Mark Perna has been empowering educators and employers to unlock the tremendous promise of the younger generations. He regularly speaks to audiences of CEOs about it, and he wrote about it in his best-selling book "Answering Why: Unleashing Passion, Purpose, and Performance in Younger Generations".

Inside construction companies there can be a clash between "old school" cultures and the young people joining them. This clash can lead to companies failing to retain youth and missing out on the massive potential they can bring.

Mark joins The Morning Huddle to discuss how construction companies can strike the right balance of retaining the positives of their culture while engaging the power of the latest generation entering the workforce.

Our workforce is in dire need of capable, passionate young people with technical education applicable to careers in construction. Amy Rock is one person delivering that to Prince George's County Maryland and the surrounding region.

Matching the capabilities of construction firms with the needs of the communities in which they operate can be a huge win-win. Many construction companies highlight "giving back" as a core value, but find themselves too pressed for time and energy to follow through in the way they'd like.

Maury Peterson with Rebuilding Together Mongomery County and Molly Cape with M-TECH Mechanical join The Huddle to share their success stories of contractors engaging in community service. They will inspire you to get involved and help you to envision how you and your company can get started.

As we weather the highest economic inflation since the 1980s amidst continued construction demand across many sectors, everyone is now faced with the question, "how do we handle cost escalation from contract to project completion?"

Specialty contractors are feeling deeply exposed as they produce estimates today with prices that may be completely irrelevant tomorrow. Owners, of course, want price certainty in a totally uncertain market. Companies caught on the wrong side of this issue are risking devastating losses, and some companies are considering bowing out of the market right now rather than gamble on what seems like losing odds.

Michael Wagner, a construction attorney at Seyfarth Shaw LLP, joins The Huddle to talk about how contracts can protect everyone involved so we can move forward with confidence and keep America building.

America's infrastructure is at risk of cyberattacks, and private businesses are a favorite target for cyber-criminals looking to wreak havoc and line their pockets. As the second-largest global industry, construction is a definite target for hackers. Meanwhile, the average construction firm in the US is not taking the steps necessary to protect itself and its data from attack. Security Fanatic, Nick Espinosa joins The Morning Huddle to talk about why we should be worried about cybersecurity and some tangible steps construction companies can take to protect themselves.

Guest: Oscar Garcia

Topic: The Latin American Experience in Construction

Guest: Ayo Idowu

Topic: Change Order Management

Guest Jeremy Owens

Topic: Peer Networks

Transcript:

Speaker 1: 00:00

It's morning huddle time. Jeremy, thank you so much for being here this morning, man.

Speaker 2: 00:04

You're welcome. I think it's morning. It's still dark here in California, but.

Speaker 1: 00:07

Right.

Speaker 2: 00:09

You're.

Speaker 1: 00:09

You're. Did you do the. Did you do the all nighter, A Red Bull fueled? Just.

Speaker 2: 00:14

No, we talked about that. And to your advisement, that was not a good plan. I took a couple hour nap.

Speaker 1: 00:20

There you go. That's not bad. Couple hours a night. That's all anybody usually gets, Ryan.

Speaker 2: 00:25

Whatever. I'm a gamer.

Speaker 1: 00:27

I really appreciate you being here. This is awesome.

Speaker 2: 00:29

Yeah, no problem.

Speaker 1: 00:31

So we were talking a little bit. We were talking football. Just a little bit. I saw that helmet behind you. You're. You're begging for. You know, and I'm sorry.

Speaker 2: 00:39

Yeah, right there. Yeah, no, it's. It's one of those things, man. One and done is so difficult for football, but I know there's a lot of hurting fans right now. I'm currently one of them. But, you know, credit to the Niners, they. They whooped us and we didn't deserve to win. I'm not a, you know, whining about the call or anything like that, whatever. But it's now, now it's next season. I gotta wait till. So that's, That's a little rough.

Speaker 1: 01:03

It got really exciting there at the end, man. I was.

Speaker 2: 01:06

I like, their, Their compete in the end, I guess.

Speaker 1: 01:09

Yeah. I mean, look, it's. I'm. I'm a Steelers fan and we did not compete.

Speaker 2: 01:18

Not really.

Speaker 1: 01:19

Not really, though. We all saw that coming. That was. That was. At least. We were like, all right, we've made the playoffs one more week to, you know, to get destroyed by the Niners and by the.

Speaker 2: 01:30

By the Chiefs and to say goodbye to Big Ben, too. He's got. He's got to go.

Speaker 1: 01:34

Bye.

Speaker 2: 01:34

Bye.

Speaker 1: 01:34

Yeah, he's. He's. He's got good dude.

Speaker 2: 01:37

Yeah, he's.

Speaker 1: 01:37

He's our. He's our guy. But he's got.

Speaker 2: 01:40

He's.

Speaker 1: 01:40

He's got. It's time to hang him up. It is time. He knows that. That's good news. So we're the joys of live streaming. I just got a text from Stacy. She's got kids stuff she's wrangling through. Oh, there she is. I was just. I almost got away with not telling this story. Thank you so much, Stacy. I know it was hectic this morning.

Speaker 3: 02:02

I know. I hope I didn't panic you.

Speaker 1: 02:04

Yeah, I'm sweating, but what else is new?

Speaker 2: 02:07

Not me. Not at all.

Speaker 3: 02:09

I know, of course.

Speaker 1: 02:14

Jeremy's like, I'm way too tired to sweat. I'm good to go. All right, so we're getting started just a minute or so behind where we normally would at this point. So I'm gonna push forward and jump in. So I'm your host, Chad Frinky, alongside my partner and producer, Stacy Holzinger. I. I think you know, and we have our guest today is Jeremy Owens. And. And Jeremy has a couple of cool things going on I'm gonna let him tell you about. But today's session, or, you know, today's show that is, is geared around the importance of having a contractor peer network, a contractor peer group that you can lean on of trusted people, and the impact that that has when you do and you don't have a peer group. And so, just as always, Stacy is going to engage with our live viewer audience and. And please ask questions along the way. Engage with Stacy. Stacy's job is to capture the best and most interesting thoughts and questions from our audience and. And. And pose those in the final minutes of our session. So, Stacy, anything you want to say before I pop into my conversation with Jeremy?

Speaker 3: 03:32

I'm just excited about, you know, what you're going to bring to the table today. I know a lot of people over the years have wanted some type of community, you know, digitally or, you know, they looked for LinkedIn groups or Facebook groups for. To meet construction people, and we could not find something like that. So I'm interested to see what you're going to share with us.

Speaker 2: 03:55

Awesome. Thank you.

Speaker 1: 03:56

All right, here we go. So, Jeremy, US Construction Zone, which I know isn't your only gig, but, you know, is. Is, you know, something that is. Is obviously near and dear to you. Give us a little bit of the background. What is US Construction Zone, and. And give us a little bit of background on you.

Speaker 2: 04:14

Yeah, sure. I grew up in. In remodeling. I'm the third generation, so I own a remodeling business in Folsom, California, called Three Generations Improvements, and we do siding, windows, decking out here. It's been a awesome family business. I work with my dad. My grandpa has since retired, and unfortunately, we lost him this last year. So, you know, been a very blessed to have a family business and a dad that I totally admire. So been enjoying that part of my business and that part of my experience. And like I said, we have roots, started from the 50s. My grandpa started in 1956, my dad in 72, and myself in 2002. So it's just been a long history. It's been in my blood. Enjoyed remodeling every step of the way. US Construction Zone came kind of on the heels of. I went to a trade show and we were kind of doing a roundtable with other remodelers. And you know, on the way out, we were exchanging business cards and a gentleman from Tennessee said, hey, you know what? I wish there was a better way for us to connect through the year, you know, and chat about these things. And you know, that kind of idea popped in my head and just kind of rolled around there for a little while. Pandemic hit, you know, our connection point really went away. And I was thinking, man, we got as an executive, we don't really have a construction focus group. There's, there's everything, there's LinkedIn, there's, there's so much to do, but not really specific to us. And so I really started developing it during the pandemic is when I really ramped up development and just launched in October and it's been a fun ride.

Speaker 1: 05:57

That's awesome.

Speaker 2: 05:58

Yeah.

Speaker 1: 05:58

So, so this combination of longtime generation, multigenerational family business and then launching this new endeavor of U.S. construction Zone to create, you know, better ways for contractors to connect. Yeah. Leads to really what, what you and I are so interested in, in, you know, talking about here, you know, this morning, which is on some level the iteration of the contractor to contractor network.

Speaker 2: 06:37

Yeah.

Speaker 1: 06:37

Over the years, and you've gotten a chance to see it firsthand, I'm sure, hear about it. Countless stories and examples.

Speaker 2: 06:44

Yeah.

Speaker 1: 06:45

Over the course of time. The, the, the, the, you know, our, our parents and grandparents were so much more networked in the business community in, in a really grassroots way than, than our, I'll call it our incoming generation.

Speaker 2: 07:13

Right.

Speaker 1: 07:14

Is what did that look like when you think about, you know, your dad and your grandfather. What, what, what did their peer networks look like?

Speaker 2: 07:23

Oh man, you're right. I mean, with, with no Internet, if you weren't out, you know, skin to skin, you know, saying hi to people, you didn't have a network. So it was Rotary Club meetings, it was, you know, local community center mixers. It was multi level marketing. It was like all of these things is what I grew up. I mean that, that's just how you met people. And then, you know, it's funny, this thing probably if we have some young people listening, they had what's called a Rolodex. And the Rolodex is where they stored their contacts. That's where you would meet somebody, you'd get a business card, you would write, you know, their information, you write where you met them, and you would say, hey, call this person if you need X advice. And that's how they, that's how they had their contacts and they had a daily planner and they, you know, it was just so strange because watching what they did to, to hustle was so much more different than what we do to hustle. I mean, it was, you know, like I said, you had to be actually face to face with somebody before you had a network connection. I mean, unless you went to a trade show, you had to get involved in the community. And unfortunately, I don't think there's a lot of involvement anymore. Like just, you know, from a, from a local mixer standpoint, I don't really see that.

Speaker 1: 08:42

Yeah, it's, it's. I mean, I, I'm close with several different associations in the, in the building industry. There's no question that associations are talking about the importance of engaging the next generation and you know, the, I guess, sort of natural pushback that the younger generation has toward these types of what I'll call grassroots, you know, in person, physical local networks. That. Yeah, it is different now that, that, that in, you know, your grandfather, if he wanted to, if he ran into a challenge in his business, whether it was in the field or whether it was, you know, a business oriented challenge, he picked up the phone, he flipped through the Rolodex.

Speaker 2: 09:40

Yeah. Yeah. Without hesitation. Yep. Yep. Yeah. How weird is that? That the phone was the only way to connect, really? I mean, unless you, you met, you had a coffee meeting, it was like you had to pick up the phone to set up anything. Right. I mean, the funny thing too, I would ride with my dad on calls and he had a bunch of quarters in his pocket and there was quarters in his car. And you know, you would have to, he'd know where all the best payphones were. You know, I gotta stop off and make a call. Like, how weird is that? Like just, just, just the roll of quarters. I mean, he didn't, we didn't have cell phones and he had, he had the first, you know, giant brick phone, you know, in the, in the car. And that was wild. But it's just so strange how in three generations the business looks that there's nothing that looks similar.

Speaker 1: 10:29

Yeah, it's. Evolution did not prepare us for this. Speed. No, for, for the, for the, for what we're dealing with now and adjusting to. So for all the benefit, for all the upside that we get from technology. And the benefit that I can just pull out my, my new, my new phone is this is not a phone like, like our, like, you know, this is a, this is a device that attaches us to the world and it's a powerful tool. It's a wonderful tool. This is, you know, absolutely not technology bashing. But, but what I that same situation, I run into a business problem today, I'm much more apt to Google it.

Speaker 2: 11:09

Yeah.

Speaker 1: 11:12

And when you think about the number of questions that are just totally inappropriate to try to get answered by a search engine.

Speaker 2: 11:29

Right, right.

Speaker 1: 11:31

That's where the value of the peer network still exists. Right? Like that's where, that's where, you know, so yeah, if, if, if I'm interested in, in how am I going to convert this, you know, metric measurement to, you know, an empirical measurement, you know, system. Google is fantastic for that.

Speaker 2: 11:51

Yeah, perfect. Yeah.

Speaker 1: 11:52

Or any number of your apps are fantastic for that.

Speaker 2: 11:54

Yeah, yeah.

Speaker 1: 11:55

But if I'm interested in when is it the right time for me to hire a VP of operations.

Speaker 2: 12:02

Right, Totally. Right. I mean I, Google for me is, is, is so much more salesy than it used to be. And, and there's a lot of search engines. Right. I mean, using Google loosely. But yeah, you go to Google for, for some of these executive questions we have and you're going to get sold. It's going to be businesses, it's going to be apps, it's going to be things basically you have to, to pay for to get what your, your question is. And you're not going to get a peer that's going to come out and say, hey, I got, I can help you with that. You know, ping me. You know, there's, there's no people on there. And so this is really the idea is like we need that people connection and a personal thing is as close to personal as you can get without, you know, skin to skin thing. And that's where I'm, that's where I'm headed.

Speaker 1: 12:51

Okay, so, so enter social media now. Social media has, has, you know, obviously, you know, blown up in the past two decades. You know, how has social media filled the gap? And, and what are the, what are some of the, the I guess risks associated with trying to, you know, fill that peer network need in a social media platform.

Speaker 2: 13:12

Yeah, it was strange. 2003, MySpace was invented and it completely changed the landscape from then on. It was like a mad dash and obviously, you know, the writing was on the wall that we were going to change the way we communicated and that's when it just. The in flood of all the other different social media apps came out and really it was unfortunately it was a mad dash to get connections. It was like, I want as many connections. I don't care what industry, I don't care if we have any like, you know, similarities at all. It was just like I want to have a thousand people, you know, and so what happened was with wherever you went in socially, you just wanted to get a lot of connections and whether that was LinkedIn, Facebook or whatever. And unfortunately what that did is that did not prepare us for a pandemic. It did not prepare us for having political discussions. It, it prepared us to fail. It just, we set ourselves up to have this fake social media Persona and unfortunately that's not real and I think it's crumbling right now and I think that I'm frankly, I'm kind of glad it's, it's changing a little bit. So I think it was not a great way to network.

Speaker 1: 14:25

The. I've, I've had some visibility into speaking about the building industry. There's, there have been attempts and I think, you know, with varying levels of success, there have been attempts to create, you know, communities, online communities within these social media platforms. Heck, we're in one right now. Right. Which is that in, on LinkedIn in Stacey and my, you know, sphere of relationships, we, you know, I think if you looked at my connections, it'd be 94%, you know, building industry people that were, we, we've got these very, I think, personalized kinds of communities inside these broader social media outlets.

Speaker 2: 15:17

Sure.

Speaker 1: 15:19

And, and I think there have been some that have been successfully created. I think there have been some that, you know, fizzled. And at the end of the day, I think one of the biggest challenges that people have in social media is sorting out who is credible. You know, so when I need advice and I want to turn to an online peer network, where do I turn and who is actually credible? So, so talk about how us construction zone fills a different kind of need. It just give us a little bit of a. Yeah. Context on that.

Speaker 2: 15:54

Sure. Yeah. I think you're right that there's, there's groups everywhere. I think that it's been hard to get traction. I think part of the, the difficulty is that social media in itself is very distracting. So you know, you, you have a subset group in there and, and before you know it, you're getting all these pop ups and there's messages flying at you and it's just hard to focus. It's just a Very broad group. And so when you're with, you're within, like LinkedIn for example, you know, you have real estate agents, you have building industry, you have your mom, you know, all these, all these people that are, that are out there and pining for your attention. And unfortunately there's a lot more ads, there's a lot more push, there's a lot more bots and things that are coming your way that aren't even real people. So I think that that's distracting. So what I wanted to do with US construction, I would say, you know what, it's for all aspects of the construction industry, all, you know, really executives, management level people to come together in one place. And then eventually I want to have the members enough where we can create those subsets of, hey, you know, I want to create a siding and window group or I want to, you know, get a little bit more personal with these folks. But to the credibility piece, it's just going to take time. There's no way you're going to get a message from someone and just go, I trust it. You're going to just have to get to know these people on a personal level. And that's going to take a little bit of time. That's going to take a little bit of back and forth and, and before you, you take that as, you know, as a good vice or bad advice. But ultimately you just have to spend some time and invest in other people. And I think that's what needs to happen if you're really going to have a robust networking group.

Speaker 1: 17:32

Awesome. Awesome. Yeah, I agree with you. I think, you know, I'm excited about what you're doing. I think, you know, creating a space where I know this is for people who are trying to accomplish the same things I'm trying to accomplish, that we're not going to get on there and end up having a political discussion or we're not going to end up on there, you know, arguing about sports or whatever. But, but this is, it's a very specific place where can go to get a, you know, get my needs met. So when I want to talk about what kinds of insurances I maybe should be carrying or I want to talk about how people are navigating new compliance rules in my jurisdiction or fill in the blank that this is a place where I could potentially go ask my questions and, and, and find people, you know, who, who have a high likelihood of, you know, experiencing those things, caring about those things. And, and then when I see the advice, you know, credibility to me is like it's such a fascinating concept that I know for me, when I have, I, when I have anointed someone in my own brain. Right, right. With just ultra credibility. Like whatever they say on a certain issue, I won't research, I won't. I, like, I'm just gonna do it.

Speaker 2: 18:52

Right.

Speaker 1: 18:53

And there are people, I think if all of us think about it, we have people like that in our lives. And that's a gift. I mean, it's such a gift because it accelerates our ability to make decisions and to make right decisions, you know, and things along those lines. So, so what I'm hearing you say is as it relates to credibility, it's not, you know, that's something that has to be earned. There's no fast forward button on earning credibility. And I, and I happen to agree with you.

Speaker 2: 19:20

Yeah, I mean, you said it perfectly. I mean, I struggled myself with a network when I was, when I was coming up. I mean, being a business owner, I felt alone a lot. I'm on an island. Right. I, I have this decision to make and I look to my left and my right in my business, I can't really ask them. So. I have struggled with having real mentors. Really. That's what it was. The word for me is I want mentors. I want, like you said, if it comes to marketing, I want to call this guy. If it's an HR thing, I, I know I have this galaxy. So now it's like you have an actual network of people supporting you in your business decisions. And if you don't have that, then you have Google and then you have you learning it yourself. And I just don't have time, especially now, to, to go learn something new. I don't, I don't want to. I just want, I'd rather ask somebody that's been there, done that, and, and have actual people that I can network with to make decisions and, and so.

Speaker 1: 20:18

If we do it right. If we do it right. I think what you're saying is that instead of using, rather than thinking of technology as I use technology, instead of going to, you know, rotary events and, and, and building a network. Right. What, what I think we're saying is that if we do it right, we can actually use technology to accelerate that process and, and not to replace it. Right, Right. Because at the end of the day, having person to person, individual, highly trusted relationships of mentors, partners, friends, advisors that you're able to surround yourself with is the actual human beings behind it, not Google searches is something we desperately need.

Speaker 2: 21:06

Right. Yeah. And it's cool. Almost everybody that's, that's in the network now. I've had a zoom call with like that. That's been one of my strategies is when someone asks or I ask them, I take every meeting, I take every meeting and I just meet people and I don't know if I don't really know them, I don't know if they're going to bring me any value, but every single time they do, they say, hey, I'm gonna, I want to put you in touch with this person or, oh, this idea. And then I've been able to network people together. I've been able to say, I have someone for you for that. And so I, that's part of the strategy is I am investing a little bit in people. They're investing in me, and it's just creating all these win wins around me and it's super rewarding.

Speaker 1: 21:46

So obviously you're the founder of this thing and, and, and while I do, I think that's an impressive step. I'm also not surprised to hear that you're making that kind of investment right in, in, in your network. But I have a, just a, a, as a, as a member, how do I be a good member? How does somebody be a good member of a, of a peer community, of a peer network?

Speaker 2: 22:10

Yeah, I think, like I said, you got to show up, you got to spend some time, you gotta, you know, ask questions, answer questions. I think they're, they're seasoned veterans in construction that have a lot to offer and they're in a, maybe in a different position than a lot of us are, where maybe they have, they can carve out 15 minutes a day to be helping a fellow contractor to, you know, get to the next level. I think there's some of us, like, and maybe in my generation that I'm still need to soak up more knowledge. I'm not there. I'm not a finished product. So I'd rather, you know, I'd rather ask questions right now, but I think everyone's in a different place. But you have to spend some time and like I said, invest in some people and I think you'll get it back. I'm certain of that.

Speaker 1: 22:56

I'll say this one last bit, and I want to bring Stacy in because I know we've had some great engagement from the audience this morning. I try, and anybody in my personal life knows that, that it's something that I talk about privately a lot. I try very hard to stay a learner and to stay, you know, and to recognize there are so many things I don't know. One of the ways I think I really appreciate when people engage in, in a peer to peer environment is with humility, where they're sharing their experience, where they're sharing their perceptions, where they're sharing how they view things, but where they also have the awareness to recognize that, that that may not be universally true and it may be unique to their experience. And I think anytime I hear somebody give advice myself, chief among those. Right. Anytime I hear me give advice and anybody give advice, I always try to. It always resonates best with me when it has that layer in there of, you know, room for error and recognition that, you know, it's an opinion or a personal experience and not a hard and fast, you know, mathematical equation.

Speaker 2: 24:23

Totally. Right. I have a.2 teenage daughters, so 100% I can't just give advice anymore.

Speaker 1: 24:30

Yeah, you've got to get very artful with how you do getting teenagers to care about what you're saying.

Speaker 2: 24:36

Yeah, exactly.

Speaker 1: 24:37

That's awesome. Stacy, I know we've had a lot going on in the chat this morning. I think you've, you got more than you bargained for with some of those questions. Great work. I, I'd like to, you know, hear some of the things that we have going on from the audience.

Speaker 3: 24:51

Yeah, I have a couple questions. So residential, commercial, they're kind of two separate worlds. Does your platform cater to both of them or does it geared towards, you know, one or the other?

Speaker 2: 25:07

Yeah, so. Good question. I. This is for all aspects of construction. So any, any field, you know, if you're commercial, you're residential. I, I want them all because eventually, like I said, I want to be able to create, create more of those private communities. So I have the ability to create private groups as well. So for those trade organizations or those, you know, maybe it's a, maybe it's a business or that wants to have a private community as well. That's invite only. Then you can have that too. So I want to get to the point where really we're talking about executive things and you'd be surprised how similar a lot of those things are, no matter what part of the industry you're in. I mean, you could be in distribution or you could be a remodeler and you're having problems with employees. You know, there are very similar things that's going on right now. Labor shortage, you know, supply issues. Those are all work common. So I think that there's a, a little bit of a, it's, it's just the construction industry right now is so fractured with like, hey, I need to be a member of this trade organization and then I can get in that forum or I need to buy this software and then we can get. This is inclusive. And so I want it to be inclusive to start and then be able to narrow down into that private community as we go.

Speaker 3: 26:24

So another question is this comes up a lot before when people were trying to find communities online. Just as you're doing, the groups end up getting spammed with like tons of just sales pitches. So how do you filter that kind of thing? So you know, we're actually focused on thought leadership.

Speaker 2: 26:43

Yeah, it's a good question. It's very explicit in my communication with people is that this is a peer network. This is a person to person thing. There, there's not, you know, there's no bots that's possible. There's no, you know, if, if we find somebody get there and luckily I haven't had that yet, then I'm going to have a personal conversation about, hey, if you, if you have something to offer then you just need to, you need to, you know, maybe ask it in a different way. You need to say, hey, hey, I would like to get some feedback on this I'm working on or you know, instead of it being like, you know, you spamming people. And so far it's been really good because my, my communication has been like, I don't want it to be like LinkedIn where you feel like you're being, you know, partly sold by, by a large amount of the audience. I don't want that. So it's very explicit in my communication with people that this is really about a person to person, people to people conversations.

Speaker 3: 27:38

Another question too. We were talking in the chat about, you know, there's various types of software up there and people like to search on the Internet for problems and how to come to a resolution. And this1extra, CAD.com I believe is a forum for everyone that uses this particular software so they can. I don't know if your platform has like a search engine where if I'm struggling with something I can put in keywords and then find a conversation where someone solved the problem already or.

Speaker 2: 28:10

Yeah, yeah, that's what's cool about this is going to be a little mini construction Google. I mean once we have. And not only that I have, I have articles from all different aspects of construction in there in the feed constantly. So you're being fed information and then yes, there's a search engine that says hey, I'm, hey, does anybody use HomeAdvisor or whatever the question may be? And you will get articles and you will get comments already about that topic. So I do want it to be very useful. And then eventually this year we're going to be having, you know, education pieces come. We're going to partner with people who are, who are educating business owners, and we want to make it so that it is valuable. This isn't just a social thing. This is something that I want people to leave and say, hey, you know, that helped me, that helped my business. That's really what I'm looking for.

Speaker 3: 28:58

Cool. That's all I got for questions.

Speaker 1: 29:02

I, I just wanted to comment that, you know, there, there's. And I can certainly fall prey to this. I don't know if, if our parents would have fallen prey to the same traps or if this is something that is, you know, newly developed. This for as much for. As reliant as we've become on, you know, Google, as an exam, that's obviously, you know, a generalized term for utilizing the Internet to search solutions to our own problems. As reliant as we've become on that, what it's also given us to some extent is a sense of independence that, you know, I'm doing my own research and I'm, I'm identifying solutions to my own problems and I'm reading up on these things and I'm becoming qualified to solve these problems. And as a business owner, or frankly, anybody, but as I, in the context of being a business owner, one of the things that cracks me up is, you know, you're solving pro. You're taking all this time to become an expert to solve a problem that has been solved thousands of times before.

Speaker 2: 30:11

Right.

Speaker 1: 30:11

By really, really smart people.

Speaker 2: 30:14

Right.

Speaker 1: 30:15

And, you know, I really appreciate the gusto that you're, that you're out there trying to solve your own problems.

Speaker 2: 30:22

Yeah.

Speaker 1: 30:22

But for the love of God, you turn to the geniuses around you.

Speaker 2: 30:27

Yeah.

Speaker 1: 30:27

And, and, and, and save a massive amount of time.

Speaker 2: 30:32

Right.

Speaker 1: 30:33

And have the humility to just steal somebody else's stuff.

Speaker 2: 30:36

Yeah, exactly. I mean, and nine out of 10 of those people failed. They learned with failure. They did not learn because they figured it out. They learned because they stepped in a giant landmine.

Speaker 1: 30:46

And, and I, I think there is, you know, a, a big lesson that entrepreneurs today need to learn. And, you know, not everybody, obviously, this is, you know, I don't want to make my problems Everybody's. This is clearly one of mine is just, you know, having that awareness of what, what you are and are not expert in and what it does make sense for you to invest on becoming expert in and what it just makes sense to. To. To just find out what the experts do.

Speaker 2: 31:20

Yes.

Speaker 1: 31:21

And so I, I love what you're doing, man. I think, you know, creating this kind of online forum, you know, gives us opportunities to create some individual relationships. I know that Stacy and I have both created some wonderful individual relationships as a result of doing the Morning huddle. Yeah. Where you know, people who have engaged, you know, through the, you know, the online community have become, you know, one, one to one, you know, in person friends. And, and so I look forward to, you know, your success story on putting more of that stuff together. And, and I think it could be really complimentary with some of the stuff that my company, well Built is doing with. We have, you know, in person, peer group environments and I, I'd be really interested in finding ways to. To, you know, link up and, and you know, find ways to complement.

Speaker 2: 32:16

Sure. I know. Networking guy.

Speaker 1: 32:20

Awesome.

Speaker 2: 32:21

Thanks.

Speaker 1: 32:22

All right, great. Yo, thank you so much for being here. Any. Any parting words for us, Jeremy?

Speaker 2: 32:26

No, I just, you know, I appreciate the opportunity. Like I said, you know, taking every meeting and being very present for people. It's been, like I said, it's been so rewarding for me. So whatever happens with U. S Construction Zone, I'm already feel like I've gotten more out of it. So I'm, you know, like I said, I'm just like on this weird ride and it's like a roller coaster. But I'm having a good time, so I guess I must be doing something right. Very good.

Speaker 1: 32:53

Thank you so much. Stacy. Anything that you want to say before we jump?

Speaker 3: 32:57

Well, we have one more episode left, right?

Speaker 1: 33:00

Yes. So next week we're going to be. Next week we're going to be talking about change order management and it's going to be a fascinating discussion with a company that actually gets hired with. With the head of a group of a company that actually gets hired to manage change orders and you know, project controls actually for, for. For, you know, large scale commercial projects. It'll be fascinating discussion about how to simplify the change order process, how to avoid conflict and probably most importantly to everybody who watches, how to get paid. So, you know, let's, let's make sure that you visit us for that final episode of this season. We'll be taking two months off and we'll be back at the beginning of April, so we'll be, we'll be wrapping up here next week. Thanks again, Jeremy. Thanks, Stacy.

Speaker 2: 33:54

Thank you.

Speaker 1: 33:55

We'll see everybody next week.

Speaker 3: 33:57

See ya.

Speaker 2: 33:59

Bye.

Speaker 1: 33:59

Bye.

Guest: Eric Tievy

Topic: Innovative Client Management

Transcript:

Speaker 1: 00:00

Foreign huddle time. I'm psyched to be here with Stacy and Eric. We were just talking about the fact that this is episode 12. We've got what, Stacy? Three episodes before we go on vacation. Stacy and I are going on vacation.

Speaker 2: 00:18

We need a break. We have a lot of good stuff coming for the season two.

Speaker 3: 00:24

Are you guys going on vacation together?

Speaker 1: 00:26

Yeah. No. And unfortunately, vacation just means having to work in our regular jobs and not being able to play around and make our show. But we're going to take at least a couple of months. I think we're going to get back in action in April, but we're going to, we're going to take off. But Eric has been. You, you, you've been here for every single show, man. That's.

Speaker 3: 00:51

I am. Thank you. I'm a loyal supporter. It's been, it's been fantastic. The topicality has been over the top. Good. I'm hoping, hoping that this one measures up to the past performances. Everybody's been terrific.

Speaker 1: 01:04

I am confident that it will. I'm fired up to get into the discussion. So officially, welcome to the morning huddle here this morning. It is 8am Eastern for those of you who are joining us live. And if you're not joining us live, consider doing that on LinkedIn Live, if that's possible. If you're not, you know, in Hawaii and this would be happening at like 2 in the morning. So please, let's just take a moment. I want to introduce Eric tv. Eric is our guest today. Eric's with Sorensen Gross. He is here to talk with us about their unique take, his personal unique take on client management and what that means in the market. So thank you for joining us, Eric. Welcome.

Speaker 3: 01:53

Chad. Thanks so much for having me. It's really awesome to be able to give back. I've been in this industry now in the Washington, D.C. area now for, I hate to say it, but 30 years now. If I had hair, it would certainly be gray, but as you can see, it's long gone. I think this industry does it to me, but at the same time, it's awesome to be able to share some insights.

Speaker 1: 02:20

Thank you. Yeah, I like that. If I had hair, it would be gray. I noticed a lot more. My wife actually kindly noticed a lot more gray hair over here on this side over the holidays. I'm considering my options. Stacy, good to see you this morning. How are you today?

Speaker 2: 02:43

I'm doing great.

Speaker 1: 02:45

Awesome. What's I'm going to ask you what's going on in your world this week?

Speaker 2: 02:49

What's going on in my world. Lots of planning, working with some really great, amazing clients, and a lot of them are fans of the morning huddle, which is awesome.

Speaker 1: 03:00

That's great. Yeah, I'm always hesitant to, like, do I send out the invites to everybody or do I wait until somebody says I've heard about it? I don't know. I'm a bad advertiser. I'm going to have to over the break. We're gonna have to sort that out because I think there's a lot of people that I. That I hang out with that would probably like to be here, but that I haven't invited because it makes me feel weird. But anyway, as always, Stacy is going to be interacting and engaging with the audience during the course of our show today. So please ask questions, interact. Stacy will be collecting the coolest and most interesting questions to pose to us in the final 10 minutes of the show. So with that, Stacy, we'll see you with about 10 minutes left.

Speaker 2: 03:46

Okay, great. See ya.

Speaker 1: 03:47

Thank you. See ya. All right, Eric, let's get into this. You know, as we think about this idea of client management, I think one of the things that I was really interested by whenever we were talking about the possibility of having you join us is this idea of how many, you know, how do we think about everybody in our world as a client? And so for a little context, you're a general contractor. What does it mean to treat everyone like a client from your perspective?

Speaker 3: 04:27

Yeah. So, Chad, you know, that's something that we talked about is something that's really, really near and dear to my heart. And that is we always think of our clients as the folks that hire us, the folks that pay us to do work in whatever capacity that we do work. We think of our clients solely as the folks that pay our bills. And the reality is everybody that we interact with, everybody that provides an input to what we do, really are our clients. You know, at Sorensen Gross here, we think of four, four major clients. And the first one is the obvious one. They're the owners. They're the ones that hire us to construct the projects. But we also consider our, our AE partners. The folks that do the designs for, for the work there. They're our clients as well. They have a lot of say in who gets work. They have a lot of say in how our projects go. And for that reason, we treat them as partners and as our clients. We treat them as a client, our subcontractors. We're a general contractor, and at the moment, we self perform Nothing. We rely 100% on the subcontractor community to help us construct the projects. And like everybody else, and this is, you know, this is something we talked about. It's something that we sort of advertised on the moniker here. Everybody wakes up in the morning and has a decision as to whether they're going to work for somebody or not work for somebody. And that holds true for subcontractors. We have to answer the question to all of them is, why us? Why work for us? Why offer us work? Why help us as architects and engineers? Why help us to get more work? And so every day we wake up and we have to answer that question. And when it comes to subcontractors, again, they have a choice. The fourth client. I said there are four major clients. The fourth client is probably the most important of all of them, and it's probably the one that we overlook as clients the most. And that's our people. It's our internal clients. It's the folks that come to work. Our project managers, our superintendents, our support team. All right? All of those folks are our clients, just like our clients that we talk about proper. The folks that pay our bills. Our people wake up every day and they have a choice as to whether they want to continue to come to work for us. Okay? Just like you and I and everybody else in the industry right now. We get multiple calls a day from. From the headhunters that say, hey, I've got a better opportunity over here. Why don't you come and explore this? We've got to continue to answer the question for our people, why us? Why to continue to work for us?

Speaker 1: 07:20

Yeah, I love it. I think. So if we use that as kind of the bar that anybody that needs to choose us is our client, that really helps to reframe the topic of client management for the sake of our discussion today. So as we're thinking about the client, we're thinking about anyone who needs to choose us. And that includes in your list of four major clients, architects, engineers, owners, subcontractors, and employees. And if you're a sub, then your mix changes a little bit. But it's essentially the same concept, right? Maybe your suppliers can get tossed into that. So, all right, how do you do it? Right, so what are some of the. You know, when you think about this, there are books on, you know, hundreds of books, if not thousands written on the topic. When you really distill down your approach to making sure they choose us, how do you do it? What. What. What are the priorities for you? How do you Pull that off.

Speaker 3: 08:39

Sure. So you, Chad, you referenced lots of different books out there. I can't see what's on your shelf. I'm not sure if it's because I need a new prescription for my glasses or just the camera, but be that as it may, these are fake.

Speaker 1: 08:57

All right? Yeah, they're real.

Speaker 3: 08:59

So there's a book out there that, that it's. It's not unique to me or the Sorensen Gross. There's a lot of other kinds of companies out there that follow the same methodology, and that's Raving Fans. And Raving Fans does an excellent job of setting up the framework for what we're talking about today. And the real way to understand your clients and make sure that your clients remain your clients is to understand their needs. Okay. What's important to them, because what's important to them is going to be important, needs to be important to you in ensuring that they remain your clients. And the only way to understand what's important to them is to ask and to continue to ask and to continue to understand whether you're doing a good job in meeting those needs.

Speaker 1: 09:55

So treating someone like a client fundamentally equates to understanding what matters to them and delivering on that consistently.

Speaker 3: 10:12

That's it. It's not more complicated than that. You know, I'll give the example of subcontractors. And for those of you that I've worked with in the industry for a long time, you know that I have a background in estimating and purchasing. And probably 15 years ago, I wanted to ask that question, really wanted to understand from the subcontractor standpoint what makes a great general contractor. What makes a general contractor a preferred client to them surveyed over 200 subcontractors, and the answers converged on three things. And what I found is really, really, these. These answers do come in threes. They come in threes for all the other clients that we talked about earlier today as well. But for a subcontractor, it's pretty simple. One, they want a general contractor that pays the bills, pays the bills for the work performed on time and for the complete amount of the work performed. If we do that, we're all ready. We're already in very good graces. The second thing is get the change orders negotiated and paid for when the change order work is being performed. Okay? If we do that, we're already approaching rock star status. We do those two things consistently. All right? It's probably better than most in the industry. Payment is one of the toughest things to accomplish in a reasonable amount of time. And so again, do those two things. You're getting close to rockstar status now. You're really, you're really a lister rock star status. If you do the third thing, and it's the most basic and that is run an efficient job, okay? Run your schedule, manage your work proactively so that subcontractors can get in, make their, their, their productivity that they assumed in their estimate and get out and actually make some money on the job. And I used to joke with subcontractors that, that if the company that I am working for does those three things consistently and well, it doesn't matter. I'm the biggest. And I won't use the word that I used when we talked about this before, but the biggest, you know what, you're going to call me up and say, eric, I want more work and you may even send me a bottle of scotch for Christmas, right?

Speaker 1: 12:36

Yeah, that's exactly right. I think, you know, it's funny. Pay the bills in total, deal with change orders in real time. Don't string me out on change orders. And by the way, on that second point, every subcontractor client that I've ever worked with, I can really echo that second point is huge when it comes to maintaining long term trust. It's a really scary thing if you're a subcontractor performing work on a promise and feeling that you're getting more and more and more extended. And you know, it starts to, it starts to really create a leverage imbalance and put the general contractor in a position of power and make the subcontractor feel really scared and nervous. And that is not how you would ever treat a client. It's not how you would ever treat a client.

Speaker 3: 13:24

That's correct. And Chad, you really, really hit the next point on the head there, the nail on the head in that none of these, none of these hold water if there's not trust involved. You say that, you know, subcontractors are working on a promise. None of this matters if there is not a trust relationship. And that goes for, you know, any client that we talk about, whether it's our people, the architects, the owners, trust. Trust has to be the foundation of anything that we build upon.

Speaker 1: 14:01

Well, and if we're doing a good job as a general contractor, if you're doing a good job of the third point, running an efficient job, the other two become much more possible. Right? So if you're, if you're run, if your job's a mess, very difficult to get you to get Everybody paid on time. It's very difficult to handle. Right. If you can't track change orders effectively, if you're, if you're not doing a really good job of just running a good, efficient, you know, well organized project, those other two points become, you know, more painful. So it's, as a general contractor, I'd almost think about inverting it so saying we've got to focus on running an efficient job so that we can pay the bills on time and handle change orders in real time and not leave anybody hanging. But maybe I'm not a general contractor, so that's just my theory.

Speaker 3: 14:44

Yeah, absolutely, absolutely.

Speaker 1: 14:47

So, you know, is there, it's important to treat everybody like clients, Right. But at the same time.

Speaker 3: 14:58

You know.

Speaker 1: 14:59

It'S important not to be a doormat. And as a general contractor, you definitely can't be a doormat to your subcontractors, you know, nor your owners, quite frankly. So it, but is there such a thing as a client that is a bad client from your perspective?

Speaker 3: 15:17

Of course there is. And if we look at it from the, the global perspective that, that we talked about, and it's always a two way street, but we certainly think about it in terms of our team members, our employees, and when we have an employee that is not performing, I hate to use this term, it's harsh, we let them go. But we oftentimes have to fire our clients. And again, we think about it downstream, we have to fire an employer, we fire a subcontractor for not performing. But the reality is, if we think about it in terms of what we talked about earlier, that everybody are our clients, sometimes we have to fire our owners. We have to make a choice moving forward that our client is not somebody that we want to continue to work for because it's not good business. Because if we think about it in terms of the subcontractor, in the example that we used earlier, if you've got a general contractor that doesn't run an efficient job and you don't make money on their jobs, or you've got a general contractor that doesn't do a good job of getting you paid on time, or if they allow the change orders to build up until the end of the job, and then they look to take the owner, or the general contractor gives the subcontractor that 50% haircut on the change orders, they're not a good client. And sometimes you have to fire your clients. You have to say, you know what, it's not a good business proposition and I'm not going to work for you anymore. You can apply it to any of the above clients that we talked about earlier.

Speaker 1: 17:08

Right. And you mentioned this term earlier and then you also use this term two way street. And it made me think of what you said earlier, which is partner. And I really do believe that the most effective way for us to think about any client relationship is as a partnership.

Speaker 3: 17:32

Absolutely. It's understanding. It's a two way street. And it's understanding the basic needs of each other and making sure that they deliver. I told you that subcontractors want three things. General contractors want three things from subcontractors as well. You know, we want folks that support us on bid day, help us win work. Okay. We want subcontractors that help us provide value add propositions to our clients so that our clients in turn give us more work. And we want subcontractors that perform out in the field. We want them just to do what we hire them to do to, to get their materials purchased and deliver them on time and to put the work in place in the amount of time that we allowed for in the schedule and help us to be, to perform and make our money as well.

Speaker 1: 18:25

All of us have free choice.

Speaker 3: 18:29

That's it. That's it. We wake up every day and we have a choice with our clients and our clients in turn have a choice with us. And we all have to answer that question every day. Why us?

Speaker 1: 18:41

That's right. We have to choose the people we're working for. We have to choose the people who are working for us and vice versa. And if you're an employee and you're currently working inside an organization, one of the things that, I don't know we've seen, I don't know the hard numbers, but I know it's in the millions and I believe in the tens of millions across all the labor market, you know, labor segments. But certainly in the building industry, it's, it's been rampant where over the past 18 months we've experienced what, what's, you know, been come to be known as is the great reshuffle. It started with the great resignation and, and now everybody's moving, you know, essential. It's fascinating staying in the same role, but moving from one company to the next. And I think a part of what's happened is that they've realized that their freedom of choice employees realized their freedom of choice has expanded. They've got more options than ever. And all of a sudden they're looking at the equation of being in their current employer and saying, I Can't answer why I'm here in a way that makes me satisfied. What do you think is happening there?

Speaker 3: 20:05

So what's happened is that folks, needs have changed. Obviously, the situation that has been brought on by Covid, where folks have been working remotely and thus their family situations have also changed. And so they've started to refocus on what's important to them. And we talked earlier about the fact that we need to continue to ask what's important. If we truly ask folks and listen to them as to what's become important to them, it's changed. Okay? Suddenly, flexibility has skyrocketed up the chart as far as importance in their work situation. And if we're listening to them and understanding what their primary needs are, we've got to adapt and we've got to adjust, and we've got to make sure that we're addressing those needs. You know, Chad, we talked about it before, and if you look online, people don't leave because of money. Okay? People don't leave because somebody offered them another 5,000 bucks to come work somewhere. People leave because their needs are not getting met. And those needs are things like professional development. It's company culture, and it's a. And it's appreciation. Those are the three big things that impact folks. And I sort of put that. That flexibility that we talked about earlier under the. Under the company culture. It's sort of a subset of that.

Speaker 1: 21:49

Yeah, it's. It's fascinating to me when. When I'm. I'm watching, you know, employees entertain offers from other companies, and they eventually just kind of get, you know, they've been ignoring the recruiter for four years, but they've gotten so many calls, and to your point that there's some need that is not being met that makes them say, you know what, what the hell, I'll hear you out. What do you got? And as they hear that person out, they start to compare what they have with what they're being offered. The next thing you know, they walk in, you know, after, you know, I'm sure lots of thinking and conversations with their loved ones. They come walking in and they say to their boss, I'm out, you know, giving you my two weeks notice. And it's then, right, it's then that the company starts saying, well, what do you need? How can we keep you? What do we need? And that is precisely the opposite of how you need to be thinking. And I think this is what you're saying, how you need to be thinking about understanding your employees needs, adjusting to Your employees, needs. We need to be talking to our employees openly, regularly, all of our clients, Right back to this concept of clients need to be talking to all of our clients openly, regularly about how we're performing in relation to their needs. And are there any new needs, is there anything that's being unmet? How can we make sure that we constantly stay in alignment so that we're delivering on your expectations and we're servicing you effectively as a client? That's the, that's what has to be done to keep people. So by the time you get that two week notice, it's too late, you know?

Speaker 3: 23:38

Correct. You know, I say that at that point in time, the toothpaste is out of the tube, it's very difficult to put it back in. And if we sort of follow again what we were talking about earlier, that trust is broken when you jump through hoops. When that team member comes and tells you they're giving their notice and you jump through hoops to try to retain them, that trust is broken. The team members looking at you and saying, why didn't you do this earlier? And the point that we have to get across today is we need to listen to them and understand what their needs are earlier and make sure that they feel like their needs are being met consistently.

Speaker 1: 24:23

I love it. I wanted to bring Stacy into the mix here. I know we've had some good communication happening live. For those who are joining us via the chat channel. Stacy, what kind of questions do we have from the audience that we could toss at?

Speaker 3: 24:39

Eric?

Speaker 2: 24:40

Yeah, feel free to pop in your questions here. But we do have two for Mark Jury. So one is, let's push this up a level, Eric. How do you vet the owners who work, whose work you pursue? The general contractor can strive to do all of the right things, but the owner can never make it. But the owner can make it impossible to get there.

Speaker 3: 25:03

So I think what I, what I'm hearing from Mark is how do we, how do we evaluate our clients maybe for the first time and you know, just like you can apply it to any situation that we talked about, you've got to do as much homework as you possibly can on them to understand. You can find out from other folks in the industry how do these folks treat their, their contractors. You can, you can talk to architects and engineers and understand their perspective on a particular client.

Speaker 1: 25:39

But I'm hearing you say, I'm hearing you say you're doing a background check.

Speaker 3: 25:42

Yeah, that's exactly correct. It's no different. Again, if we apply all the Concepts that we talked about today, that everyone is a client. And it's no different than if you're applying for a job as an individual. You want to know as much about that employer as you possibly can before you make that, that career decision. And so again, if you take it up to the, to the owner level, we do evaluate our clients. We want to know, you know, how do they pay their bills, what are their payments, how are they on change orders. We want to know, you know, what their contract looks like and if it's a tough and or reasonable or unreasonable contract. We want to do as much research as possible so that we can make a good business decision for our company.

Speaker 2: 26:31

Good. And off of that. So how, how often do you suggest that we survey our clients, our employees, architects, engineers, everyone, subcontractors that we're working with and when's the best time to do that?

Speaker 3: 26:47

So the first thing to do is to establish with your clients that you're going to do it and certainly with, with a new client, introduce it right out of the chute. Okay. Let them know, walk through it with them that you're going to be doing these surveys because their needs are important and we want to know on a regular basis how we're doing. And so once you get on a job, you know, within the first 30 to 60 days, survey and find out how we doing. And the same, the same holds true for a subcontract. The same holds true for team members. You bring a new team member on board, check in with them, you know, set it at 60 days. You know, it's often folks check in at 90 days to do a 90 day evaluation. Make sure it's a 360 degree evaluation. Make sure you get the feedback from them as well.

Speaker 1: 27:45

Great.

Speaker 2: 27:47

So for the clients, when you're talking about your projects, do you suggest that the project, project manager reach out or who would have that role in being charge of getting that feedback once you're on board with the project?

Speaker 3: 28:03

So we often talk about relationships. It's really about relationships as well. And it's a matter of ownership of that relationship. And it's different for every company and their structure and how they deal with the relationships. You know, typically a project executive will have a relationship with the officer of the, of the client and perhaps the project manager has a counterpart. That's day to day. And so both of them are responsible for introducing the concept to their respective counterparts.

Speaker 2: 28:42

Okay, great. Then we have one more question. Sorry, Chad, go ahead.

Speaker 1: 28:46

No, I was just going to comment briefly on the. You Know, frequency of survey, how do we, how do you gather the survey? One of the things that I've noticed in working with clients to implement this type of, you know, method is that when you just ask people, how you doing? You tend to get, you know, all good. Yeah, no, we're good. If we had problem, we'd let, you know, you know, kind of answers. It's not to say, don't miss the opportunity to just ask, how we doing? I'm not saying, you know, don't, don't do that. But the more organized and you know, thoroughly you've considered the questions that you want to ask and the more targeted those questions are, where you're actually maybe forcing people to rank, forcing people to rate, forcing, you know, those different types of things. Personal provide much better insight than just the general blanket. How we doing?

Speaker 3: 29:46

That's an excellent point. How we're doing is not going to elicit the feedback that you really need. If you ask subcontractors, again, ask them what's important, we know what's important. If you ask them, how we doing on payment? Are you feeling good about payment? How are we doing on change orders? How are we doing on the job site with respect to schedule? How are we doing as far as the site logistics? If we really drill down into what's important, we'll get much better feedback.

Speaker 2: 30:22

I like it. So be more specific when you're asking questions. The last question we have is how do we get owners to change their low bid mindset?

Speaker 3: 30:36

So the, you know, that's a, not all owners have that low bid mindset. Let's, let's understand that. And right now we're seeing a shift in a really positive direction in the marketplace. Right now we're seeing a lot of the traditional low bid clients, the jurisdictional clients, shifting over to a best value because they're understanding the benefits, they're understanding the quality of the projects that they get in a low bid environment versus a best value environment. And so, you know, without calling too many names out, but there are several jurisdictions in Virginia and in the last five years have switched over to the best value, the CM at risk type procurements. And I think they're seeing a tremendous increase in both the quality of their projects as well as the final price of their projects.

Speaker 1: 31:30

Yeah. And just because you. So just for the audience that's checking this out, they're like, well, I know some CM at risk jobs that aren't best value. Yep, those exist too. So just because it's CM at risk doesn't Mean it's going to be best value procurement. But the. If you have a mentality of best value procurement that is one of the project delivery methods or contracting methods that will enable you to do that.

Speaker 3: 31:53

Sure. Sure enough we sort of put a bow on it and finish where we started. We all wake up in the morning with choices and we can choose to pursue those low bid projects or we can choose to not pursue them. And if they're not good business propositions for them, we have to make that decision to not pursue them.

Speaker 1: 32:18

Agreed. I love it. You know, one of the things that, as I think about my biggest takeaways from this conversation, Eric, I love the idea of taking the time to understand what matters to your client, being committed to delivering on that and then constantly checking in, regularly checking in on your performance in that area and also probably checking in on that list. Has anything changed with your, with your needs and your values and so, so it, you know, crystallizing that. One of the things that I'm planning to do and to also recommend to companies as a result of this is that when you're starting in a relationship of any kind, right. If they answer, if they have to answer the question why us? Right. When you're starting a relationship of any kind with that start by establishing the criteria for their, for meeting their needs.

Speaker 3: 33:20

Absolutely. Absolutely understand what's important.

Speaker 1: 33:24

Yeah, I love it. It really lays the groundwork for everything else that has to follow. This has been a fantastic conversation and, and you know, yet yet another in a long line of conversations that, that are, you know, have me wondering if we should be going longer than 30 minutes. But I love leaving people wanting more and, and so, you know, Eric, we'll, we'll circle back at some point in the future, I'm certain and, and you know, look forward to continuing to build our personal relationship and you know, want to give you an opportunity to say a last word here to the, to the group if you have anything for the audience before we go.

Speaker 3: 33:59

No, you know what, it's just really a thank you to, to you and Stacy for the opportunity to share and maybe give back a little bit and also as well and congrats to you guys for putting on one heck of a great, great series. This has been phenomenal. I told you before we went live, I'm a weekly listener. I haven't missed one yet and gonna try like hell and not miss them in the future. This has been fantastic.

Speaker 2: 34:24

Thank you. Appreciate that.

Speaker 1: 34:26

Thanks so much Stacey. Anything before we go?

Speaker 2: 34:30

I'll do a wrap up post of anybody who has missed anything. And then we'll get this episode posted on YouTube. And the only thing I want to say is we only have three episodes left for this season, so we're going to pull our listeners and ask you guys some questions because we want to keep improving for season two. So look out for that.

Speaker 1: 34:52

Yeah. Love it. Agreed. I would echo that. And you know, if there's somebody who wants to give back like Eric just did today and like so many of our guests have done up into this port point and and would be willing to commit the half an hour to this conversation, about a half an hour of conversation leading up to it. And you have a compelling story to tell. You're somebody that wants to create positive change in the building industry. We'd love to talk to you about potentially joining our lineup for season two, season three, and who knows beyond. Right. So thanks so much. Keep spreading the word. Look forward to seeing everybody soon.

Speaker 2: 35:31

See ya. Bye.

Speaker 3: 35:32

Bye. Awesome.

Guest: Marissa Bankert

Topic: Attracting Women to the Trades

Transcript:
Speaker 1: 00:00

It's morning huddle time. 2022. I'm excited to see you guys. So we were just talking a little bit about 2022 goals. Stacy, what are you trying to accomplish in 22? You got any New Year's resolutions? Any goals?

Speaker 2: 00:15

Yeah, I just want to read more books. So I just joined a book club with three of my girlfriends that I grew up with. One does it with friends and has for quite a while. So we decided we're going to do our own and meet, like, you know, once a month. So that's awesome. I need accountability for that. I'm so busy and I just never have the time. So this will help.

Speaker 1: 00:39

I love it. What about you, Marissa? What kind of goals for you?

Speaker 3: 00:42

Well, so I've decided to reframe the kind of resolution something and call them lifestyle enhancements in the hopes that that's right, like, because that's really what you're trying to do. You're trying to, like, make your life a little bit better. So one of my, like, minor lifestyle enhancements, I would say, is so I work out every morning, but on TikTok, they have, you know, like, I'm on the fitness side of TikTok, and so they'll have these kind of, like, workout challenges. So I'm trying to do every day a workout challenge in addition to my workout, just for fun. Like three to five minutes, something fun, easy, like all of that kind of stuff. So, so far so good. And that's like a. On commercials, as I'm doing laundry, anything like that, you know, kind of addition to that.

Speaker 1: 01:19

I love that. Lifestyle enhancements.

Speaker 3: 01:21

Yeah, there you go.

Speaker 1: 01:22

It's good stuff. Have you. Have either of you ever read the book Atomic Habits?

Speaker 3: 01:27

They haven't. Is that a good one?

Speaker 1: 01:29

So, Stacy, in terms of goals of reading books and then things that relate to what you're talking about, Marissa, Atomic habits. One of my favorite concepts from that book is this idea of habit stacking, which is to take these good habits that you already have and attach other good habits around it, which, you know, make them easier and more logical to do. So the fact that you already have a morning workout routine makes it really easy for you to tack on three to five minutes of an exercise challenge kind of thing that'll enhance your existing workouts. So, like, you know, if you, if you're, you know, if you like getting together socially, Stacy, with your girlfriends and talking about, you know, you know, getting together socially with your girlfriends once a week or whatever, doing a book discussion when you're doing that, is A really good way of, you know, positive habit stacking. So anyway, it's atomic habits. Great books, really fun. There you go.

Speaker 3: 02:24

Add that to your book club.

Speaker 1: 02:28

I am not. I don't think I qualify to be in Stacy's book club. A little too intense. Not nearly nice enough. I've got. All right, so. Good morning. Welcome to the morning huddle. It's our first huddle of 2022. I'm Chad Franke alongside my co host and partner Stacy Holzinger. Stacey, how are you doing this morning?

Speaker 2: 02:48

I'm doing great.

Speaker 1: 02:50

She loves it. I asked the question every time she's like, I'm fine, dude. Just a little much. All right, all right. This morning we have Marissa Bankert on with us and I'm really excited to kick off the new year talking to Marissa about attracting more women to the trade. So Marissa is the executive director of the Central Pennsylvania Independent Electrical Contractors. She's also the president of her local NAWIC chapter, the North American Women in Construction Chapter 386 in South Central Pennsylvania. And as Marissa and I have gotten to know each other leading up to this, you know, she's also an absolute pleasure to be around. So Marissa, can you tell us a little bit about your story, give us a little background?

Speaker 3: 03:37

Yeah, thanks so much. I really appreciate it. So as Chad mentioned, I'm the executive director of the Central Pennsylvania Independent Electrical Contractor. So that like my pleasure to have to say my name and that super long title every time I introduce myself. And in general that is we're an association of Merit Shop electrical contractors and we run an apprenticeship program. So that's a big piece of what I do every single day. In addition to providing resources for all of the electricians that we cover here within 20 counties in the state of Pennsylvania. In addition to that, as you mentioned, I'm on a lot of workforce development stuff. I really work within that space pretty heavily to kind of make sure that people understand the viability of construction careers and especially people of col women, which is why I'm the president of the, you know, South Central PA chapter of, of NAWIC and really kind of engaging women in construction, letting them know the options that are there for them and, and really providing resources for people as they move through their construction careers kind of no matter where they are coming from. I am not in construction myself in the sense of like coming from the field or anything like that. I'm really from association management. That's my background. But I have a real passion for it now that I'm in Here. And Chad and I were talking the other day kind of about the wonderful nature of the construction industry and how it really is kind of a great space for people to be in. And I think that that's why I'm so interested in making sure that women know that that's a big part of that as well.

Speaker 1: 05:00

And today we're going to really get into some of the, you know, the meat of how we make that happen and why that hasn't happened and those different types of things. So I'm really excited to do it. Audience, you know, if you're joining us here live on LinkedIn live this morning, please type in your questions, engage with Stacy. Stacy's always trying to create and engage in the conversation throughout the course of the show. With about 10 minutes left, Stacy is going to pose your questions to Marissa. And so please take advantage of that opportunity that's posed here for our live audience. I'd love to really get your specific, unique questions on the table. And, Stacy, we will see you with 10 minutes to go. All right, thank you. All right, so, Marissa, let's get into this. As soon as we talked, as soon as we got the opportunity to have you this morning, I started immediately asking myself, why, why aren't there more women in the trades in the first place? And, of course, that led to me naturally putting together my, you know, straight white male approach to the world and telling the story, at least in my own mind, of. Of why there aren't more women in the trades to begin with. That. That, you know. You know, for starters, if we go back, you know, over a century, women weren't generally in the workforce much. And then if we fast forward a half century later, they're in the workforce, but they're kind of over in this. In this women's occupations category, doing jobs that are supposed to be, you know, sort of earmarked for women, whether that's, you know, school teacher or secretary or whatever else. And. And here we are today. And those barriers, societally at least, again, from my perspective, seem to be knocked down. And I do see more women in more roles across the economy. Obviously, we see female CEOs, we see females in leadership positions, and that's fast growing, and it's continuing to happen. Why is construction lagging? That's the question that I have. And I think that you're kind of uniquely positioned to talk about why is construction behind?

Speaker 3: 07:28

Yeah. So I think that one reason that construction is behind is because we don't do an effective job of promoting it as a really Viable career for women. Right. Like, and, and one of the things that, what I mean by that is that we're not out there specifically targeting women for these positions. And so I kind of have this, you know, like, list of ways that we can engage women a little bit more in that. And like, one of them is you're probably not making a good ad. You're probably, when you're, you're looking for people to fill those spaces for you, and you maybe want women to be a part of that space with you. But the ad that you're creating is really driven towards men. And I know that people are like, well, what do you mean? I'm just using these words and that they're non, you know, they're non gender related and all of those things. But the truth is that we speak in languages a lot that are directed towards men or towards women. And so I say that because I am guilty of it too, right? Like I say all the time, like, oh, my guys. Well, what I mean is the collective group of my people, but what I've just done is gone towards a gender, which is men. And so a lot of times what you'll see in ads, especially kind of within the construction space and kind of like this is this hip language, right, where we're saying things like, hey, we're looking for a rock star. We're looking for someone to dominate the industry. We're looking for things like that. And when you're using those types of words, you don't know it, but you might be excluding people, women specifically, because they're not maybe attracted to those words. There may be. Look, when they read that, they're thinking, oh, you're looking for a man. Got it. I've read the subtext. I understand. So there's great resources all over the Internet to kind of help you create an ad that does not have a gender bias, you know, towards it. And the other thing is, like, make sure that in the ads that you're saying that you're, you're interested in equity and diversity, that you want to have, you know, these types of roles filled by people. And there's nothing wrong with saying that in your ad. If that's true, then you should be saying all of that kind of stuff. And the final thing that I would say when you're thinking about creating a better ad is target your ad, right? So nawic, the national association of Women in Construction, literally has a job board. So you can just. It gets sent out to all the members. Why would you, why wouldn't you do that? Why wouldn't you put your ad on a job board targeted towards women?

Speaker 1: 09:44

Right, right. So much of. So when I asked this question, and like, and I know that there's probably more depth to it than just this answer as well, but when you. When your answer comes back and it's like, because you're not even advertising to them, and I'm kind of like, ah, ah, okay. So we're just dumb. Okay, understood. Whoops, we made that mistake. No, but I. But I think there's. That's obviously words and images matter, and like it or not, there's. There are subtexts to. To those things. And so you have to do that intentionally rather than just the way you would normally do it. Because the way you would normally do it maybe accidentally reinforces some gender bias.

Speaker 3: 10:26

Yeah, that's exactly right. I mean, if you like what you're getting, then keep doing what you're doing.

Speaker 1: 10:30

Right. Okay. Okay. So now that leads actually to an interesting sidebar, you know, here, which is we don't have time to go into it as much depth as I'd like, but which is, you know, sort of, why should we want women in construction? Obviously, I do. Okay, but. But I'm just asking, like, so why should we be in pursuit of that?

Speaker 3: 10:50

Why is it so much? Because it's statistically shown that organizations that are more diverse with women and with people of color make more money. Do you like money? Because I do. So, like, that's the, that really should be the only reason that should be your driver. We live in a capital society, and if you want to make more money, you should want more women and people of color in your organizations. Period. The end.

Speaker 1: 11:12

Right. So there's empirical data that say, do this and you have better financial outcomes.

Speaker 3: 11:19

That's right.

Speaker 1: 11:20

And, and so, you know, again, we could get into why that is, but I have found the same. And I'll tell you just a couple of quick things that I've noticed on teams with good diversity. When I say good diversity, I. Same. Same as you, you know, good combination of, you know, gender representation, you know, ethnic and racial backgrounds. I find that teams with high levels of diversity, they don't get trapped into groupthink. They don't get trapped into doing things the way they've always been done. They challenge each other. And there's a little bit of an environment where it's kind of, you know, you're asking for people from different, with different perspectives to chime in. And that what that does, it creates a better, more Thoroughly discussed and better thought out outcome. That's what I see.

Speaker 3: 12:17

Yeah, that's exactly right. So one of my very favorite expressions, and anyone who truly knows me knows this, is that I say like, well, you don't know what you don't know, right? So when you have other people that have had more experience or different experiences, come from a different background, can come from a different perspective, that only helps you and your organization because then you, you don't get into that group think mentality. And what you're also doing is you're really kind of going into that. Huh. I never would have thought of that. I have that all the time when I'm in meetings, you know, and I love that moment where I go, man, I would have never even thought of that, let alone understood kind of like how to move forward with it or to do something like that. And it's all based on someone else's experience and you know, where they're coming from when they're suggesting those types of things. So, yeah, so that's why people should definitely want to have, you know, some diversity within their organization.

Speaker 1: 13:08

The bottom line is it turns into money on the bottom line. If you want to write, if you want to figure out how. I think a part of the reason that how is that diversity of thought and challenging actually does create better decisions. Right.

Speaker 3: 13:19

Well, and imagine if you didn't have to go out and like hire a consultant for every single thing because you kept coming back with the same ideas. I mean, I get, but I'm more saying organizationally if you, if you have some of those things within and then maybe you hire the consultant to make sure that you're, you know, doing those things, but you're kind of coming up with those inside of that, you know, that that's really, really powerful to be like, oh wait, yeah, let's challenge what we've been doing because we're ready to move on to something else. And I think that the construction industry, one of the things that I often say about COVID so like, I'm not a huge, huge fan of how it's, you know, impacted our society and our economy, but one of the best things that happened out of COVID specifically to the construction industry was we had to adopt technology at a certain super high rate. Right? Like that was just. That happened. And so having said that, now you can have new people with new ideas who have these kind of like technology backgrounds as a part of the construction industry. And a lot of those people maybe are coming from different perspectives, different roles and different Genders and racial, you know, racial ethnicities as well.

Speaker 1: 14:25

Yep. Makes sense.

Speaker 3: 14:26

Yeah.

Speaker 1: 14:27

All right, so we talked about five different tips or five different thoughts for how. How we ultimately change the. The current situation and how we attract more women to the trades. Walk us through those and. And, you know, hit on the ones that you think you know.

Speaker 3: 14:46

Yes. So the first one there is like, creating that better ad, right? Like, you got to get people to even be interested in the role, to know that it exists to do all of that kind of thing. And that, again, goes to kind of think about where you're placing ads. Think about how it is that you're attract. Like, find out where women are reading ads and go and place ads there. That's what makes sense to do that. The second thing is start aligning yourself with organizations that women are invested in, or even better than that younger girls are invested in. Because then you're starting to create something, a seed that is planted that says, oh, well, when I go to college, I want to major in construction management. Because I remember that, you know, these types of things, I was aligned with this or, you know, great construction company when I was in middle school kind of or something. So obviously, nawake, national association of Women in Construction. But your workforce development groups, trust me, there is a ton of money coming into your workforce development boards and workforce development groups specifically targeted towards diversity. You should be aligned with them. You should be sitting on their boards, you should be going to meetings and to those types of presentations and things like that to get your name out there so that when they're thinking, hey, like, I have this great candidate, how can I, you know, connect them with something they start thinking about? You think about groups like Girls on the Run, Strong Women, Strong Girls, STEM groups that are geared towards girls and women. Those are the types of organizations that you want to start aligning yourself with so that that way you can start to grow your, you know, your crop of potential employees from a female perspective at the very beginning. Girl Scouts. Why are we not talking about Girl Scouts? Right? Like, Girl Scouts is a great nationwide organization that has STEM camps and really focuses on things like that. And the construction industry is missing out on that because what they're doing is they're focusing on things like coding and on things like, you know, computer analytics and things like that, which are great. But STEM is also construction. Right. Like, I have this argument all the time.

Speaker 1: 16:52

So I've got better ads, I've got getting involved in organizations where women, and better yet, girls.

Speaker 3: 17:00

Yes.

Speaker 1: 17:00

Are going to get visibility into you know, to your brand, to the building industry in general. Not everything's got to be a commercial.

Speaker 3: 17:09

That's.

Speaker 1: 17:10

It's. Right. Sometimes it's just, you know, constant awareness of the familiarity of the normalizing of the industry. Right. That could make it seem more accessible, more normal of things. Good. Others, what are some other things we should be doing?

Speaker 3: 17:30

Yes. So one of the main things that you should do. So now let's say you've got. You've made a great ad, and now people are starting to come in, and women are starting to come in. You should be including women in your hiring process. So I know that part of this is like, you might be like, well, I don't have any women in my organization, so how can I include them? But I challenge you to think about organization wide. Do you have women that could be included in the hiring process? Right. So. So statistically, we know that women make up about 10% of the construction market. And out of that, probably only about 4% are in the field. So that other 6% are in administrative roles. So when you're thinking about that and you're thinking about the hiring process, reach out to the people that are a part of, you know, your administrative team that are working in accounting or they're in, you know, a CEO position and they're a woman, they should be a part of the hiring process. And the reason that that is, is so that the women coming in see that other women actually work there. Right. So, I mean, I don't know about you, but, like, it's very. It's challenging sometimes to walk into a room where you are the only. Right. So to sit at a table where you are the only. So if you walk into a room, Chad, and it's a room full of women, you're kind of like, okay, like, not like you can't deal with it, but you're like, oh, I'm the only. Like, what?

Speaker 1: 18:47

Certainly isn't a normal state of affairs for.

Speaker 3: 18:50

Right, yeah, yeah, totally. So. So include women in the hiring process. So that, that way the women that you that are coming in and applying for these jobs know that women are a part of your organization. If you literally have no women in your organization, reach out to some of those other groups that we were talking about and see if they will just come and sit in. See if they will come in and listen and hear all of that kind of stuff, if for nothing else to provide you feedback. So that, that way you can kind of start to learn about, well, why aren't we. Why aren't we having, you know, we're getting past the ad, we're getting to the interview. Why are we not getting to the close of actually hiring them?

Speaker 1: 19:26

I love it. Good. What else? So I got. I got better ads reaching out to organizations, including women in the hiring process. What's number four?

Speaker 3: 19:34

So one of the things that women specifically really like, but it also goes generationally, is to show them that advancement exists. Right. So when you show that there's training, when you show that there's the opportunity to move forward in their career, things like apprenticeship, things like, you know, professional development, when you show that they can go and network with other women and that that's important to your organization, they will be attracted to that. So when you're talking about, you know, benefits packages and things like that, that should be part of your spiel. Part of your spiel should be, hey, we believe in allowing people to be, you know, excel through our organization based off of the work that they do. And here are some of the ways that we show that and that that should be from conversation number one.

Speaker 1: 20:24

Why this might be particularly because I'm sitting here, I'm kind of going, well, yeah, I would. I would have that exact same conversation with a male candidate as I would with a female candidate. But I think one of the things that may be so important about doing that with a female candidate is that you are explicitly addressing one of the implicit concerns that women have in the building industry, which is that they're kind of can, you know, confined to menial roles. You know, and so you're. You're explicitly saying, here's your path for advancement. We believe in this path for advancement, and you will qualify for that path for advancement, which, you know, kind of removes that implicit fear. Is that right?

Speaker 3: 21:07

Yeah, that's exactly right. Right. So what we don't want to do is we don't want to bring women in and then kind of give them the, don't worry, it'll be fine. You know, kind of a. Something we want to say directly, hey, we. We hire based off of, you know, quality of candidate. And here is the exact pathway that we have mapped out in order to facilitate the getting the most out of each one of our employees. And we want you to know about it the same way that we want Andrew to know about it. Right. Like both of those things. I think that that's a really, really important point is to. It's true, you probably do it for all employees, but as a part of the hiring process, when you're saying, here it is here's what we believe. Here are the organizations that we are allies with, so that. That way you can understand that this is something important to us from the. From moment one, I think, goes a long way in actually hiring women into the. Into your organization.

Speaker 1: 21:59

I agree. I agree. Okay, so let's hit on number five, and then I'm sure we have some questions from the audience.

Speaker 3: 22:04

Yes. So the fifth thing is one of those things where I can't believe I have to say it, but it's 100% true, which is, can you please make sure that you have equipment and facilities that are appropriate for women on the job sites? So PPE is typically designed for men, but it's unsafe to have it be designed for men. Right. Like, I can't wear a man's small because it's too big for me. So I need something that appropriately fits me in order to be safe on the job site. So if you're not investing in things like PPE for women, that's a problem. You have to have those types of things. In addition to that, please have bathrooms on the job site that are appropriate for women. Like, that is. It's different, and we have to acknowledge that it's different. But you need to make sure that whatever restrooms and facilities and rest areas that you have are either completely gender neutral or that they are applicable to women. And I think that that's, like, one of those things that people kind of go, oh, it's fine. Don't worry about it. It's like, no, it's not fine. We need to make sure that it's 100%, you know, open for everyone, so that whomever is using any type of facilities or whomever is using, you know, this ppe, that it fits them appropriately.

Speaker 1: 23:21

Yeah, yeah. And. And. And this. Okay. You know, there's. There's the facilities, and there's equipment, but then I think, if we're being totally honest, there's also culture of creating an environment that is welcoming, you know, and comfortable, you know, for women, that feels truly inclusive. And, man, I would love to talk about that for a pile of time. I really would. But I also want to make sure that we have some time for our questions from the audience, and if we have any additional time. Marisa, I'm gonna circle back.

Speaker 3: 23:59

Yeah.

Speaker 2: 24:01

Okay. We have a couple questions in from Blake Radcliffe. So what about what happens once women are on the job? How do you create a fair environment for women at the job site?

Speaker 3: 24:14

Man, I love it, Blake. It's so great. You. You lined it so so, well, so I think that that goes back to what Chad was just saying, which is you really have to have a culture that actually supports wanting to have women on the job site. So I think that this is actually probably the number one reason why people are, why women are not in construction. They do not want to be in an environment that is toxic and is unsafe for them in any way, like emotionally unsafe or physically unsafe. They don't want to be involved in that type of environment. So really that is a kind of a bigger question in the sense of saying that you need to make sure that your culture supports having women and, you know, people of color and diversity overall before you even go to hire women. That's what you have to do. It cannot be like, well, we're going to hire all of these women, but then we're going to put them in this super toxic work environment where people can just say and do whatever they want and we're just, they're just supposed to be happy with their job. That is just like not reality. And it's not something that you would want to do. So why would you have the expectation that women would want to do it either?

Speaker 1: 25:21

Yeah, so, so, so what? It's the, I think the thing that is the most challenging. Again, so here I come from my straight white male perspective again, you know, but, but I think one of the things that is most challenging for employers in accomplishing that is maybe it's. I know this sounds ridiculous, but not knowing what creates a toxic culture and being accidentally toxic as a culture. Right. Creating this environment that like, so, so that, so that I guess, you know, they need to know what, what the, what the do's and don'ts are. And then, and then I guess lastly on this point from, for me is that there is a perspective that they, that because there are so very few women in construction that we're not seeing or hearing enough to normalize, you know, that is not okay. Or that. Right, that that's the way things should, should be or shouldn't be. So anyway, expand on that.

Speaker 3: 26:40

So, Chad, I think your first point is really valid, which is that sometimes we don't know that what we've created is toxic. Like, I don't have the belief that like men in construction wake up and go, well, I am just going to create a toxic work site today because that's going to be super productive and make me a lot of money. So like, I get that that is not what's happening every day. But what has happened is, you know, like we get These kind of cultural anomalies that happen within niche cultures and construction industry is, is not immune from this, where it's like, well, we've always done it that way. We've always kind of joked around in this way and that that's been an acceptable something. But then when you introduce a new, you know, kind of group into that, that means you probably maybe need to examine your behaviors, right? Like, it might have actually not been appropriate even amongst the group that is all men. Like, you don't. You might not realize it, but you probably have a couple of people on your job site who are like, they're eye rolling every single day because they already don't like it. So then let alone having a woman be a part of it, it creates this new dynamic. So that's why I'm a huge, huge, huge proponent of just doing some unconscious bias training ahead of any of this kind of stuff. And if you already have women within your organization, just go ahead and still do it. Because a lot of times you don't know what. You don't realize what's happening. You don't know that you're doing that. Like, I am originally from the south, so I am a big, like, honey, sweetie, like all of that kind of stuff naturally, as a part of my language. So I don't find that to be offensive, but I understand how other people do, and it is something that I do unconsciously. And so again, when you have that kind of training where you can look and say, like, oh, I didn't realize it, but every time I see sue carrying a box, I say, hey, can I help you with that box? And it's an. You just don't realize that you're doing it. And. But you're not asking Chad the same thing. You're not asking Chad, hey, can I help you with that box? And there's nothing wrong with helping people. I'm more just saying you don't realize that you're only always doing it for this person and not doing it for other people. So those are the types of things that really get uncovered through, you know, an unconscious bias training. So I'm a big, big fan of that.

Speaker 1: 28:49

There is a book called Blind Spot. And not having thought about the fact that I would mention this book, I don't know who the author is, but there's a book called Blind Spot that I read on this about, I don't know, a year and a half or two years ago. That is a fantastic way to learn about your unconscious bias. And we all have them. It's not just a problem that. Right. It's not just a problem that, you know, way. So. But, but, you know, to your point, and I, and I, and I really do think this is something that we have to confront and be honest with ourselves about, is that we can't be so dug in to the idea that I shouldn't have to change.

Speaker 3: 29:39

Yeah.

Speaker 1: 29:40

That you create this unconscious or that you create this toxic environment for others. And, and you said something yesterday to me that I wrote down, you know, when you said it, which is, you know, it was, if you like what you've got, then, you know, keep doing exactly what you're doing. And that's, that's, you know, but if you'd like to attract more women to the trades, I'm giving you the freaking template.

Speaker 3: 30:01

That's right. That's exactly right. That's exactly right. And I think that there. I really like what you just said, which is like that, you know, I think that we get to this point where it's like, it's okay to not know. It's okay to have ignorance. It is a hundred percent okay. But it is also your due diligence to examine those ignorances. And once you know, then you need to start making change. Right. Like, it's okay to be in that position. I'm, I'm not a perfect person. I don't have the expectation that other people are perfect people. But I think it's really important that if you want to invest in attracting women into the construction trades, you have to do that first word, which is investing. And that means doing things like bias training. That means changing the culture of your organization. That means making those types of shifts once you know that they might be problematic to ensure the success of your organization moving forward to make more money. Because now you have more diversity because you're attracting more women and people of color into your organization.

Speaker 1: 30:58

I love it.

Speaker 3: 30:59

Yeah.

Speaker 1: 30:59

Yeah. Makes total sense. And, and, and, and, you know, I think what I'm also picking up from what you're saying is your. Is, is that we, if we can allow some grace with the idea that people aren't doing bad things on purpose, then we eliminate kind of the gotcha culture that can, you know, really, frankly polarize people. Right. When people feel like they're under attack, you know, even if they were the ones doing something wrong in the first place, if you attack them for it and they weren't doing it on purpose, think of how they react when you do that. So you have to allow that space for a little bit of grace for people to be just ignorant. But then you got to meet each other more than halfway, which is that you have to have. You have to realize that it's your personal responsibility as a leader, as a business owner to explore your blind spots and to seek, eliminate ignorance. And once you don't have that blind spot, now it's on you. Now you got to behave like, you know, you've just learned. You have to.

Speaker 3: 32:11

Yep.

Speaker 1: 32:12

And. And we see stories about it every day, you know, in the news where, you know, people are learning this lesson the hard way rather than being proactive and right and preventing the. You're learning the right way to do things.

Speaker 3: 32:27

Yep, that's right. And I, I love the concept of grace. I'm a big, big fan of it. I think we should give ourselves more grace. And I love the idea of giving grace when there's ignorance because I think that that's one of those things that we, we don't do a good job of kind of as you, you know, you know, alluded to kind of across society. Like, again, if you don't know what you don't know, you. You can't be better. And so when you know, then you can be better. And you have to make steps to do that. Yep.

Speaker 1: 32:53

Agreed. Awesome. My gosh. We're going to have to continue this conversation in a future show, but we are already at and slightly over time, which is on me. Stacy, is there anything that we didn't catch on from the audience that really we want to call to the front here before we jump?

Speaker 2: 33:15

We got everything from the audience, but I just wanted to ask Marisa real quick, can you direct our audience to where they should learn about more. More about NAWIC and what resources. Like, is there resources just for women or is there, you know, courses or anything like that that men can, you know, jump on with?

Speaker 3: 33:33

So I would say with NAWIC, I mean, it's really geared towards women. NAWIC.org so N A W I C.org is the national website and they can definitely help with, you know, kind of helping women with resources. They provide a lot of professional development and things like that. And your local chapters will do the same thing. So that's what I kind of in regards to that as far as helping organizations to, to grow into this. There's a ton of resources online in regards to that kind of like unconscious bias training or look at your other organizations. So I'm going to give an association plug in the sense of, like, associations are probably going to be like one of your best resources within the construction industry. So look at the associations that are around you and they're going to be able to provide you a ton of resources. Classes, local, online, all of that kind of stuff. And in regards to helping you navigate some of this kind of stuff. And please feel free to message me on LinkedIn. I'm happy to kind of connect further on all of that as well.

Speaker 2: 34:27

Great. Thank you.

Speaker 3: 34:29

Yeah, of course.

Speaker 1: 34:30

That's awesome. Thank you both so much. You know, Stacy for being always there to keep an eye on, keep an eye on, communicate with our audience, and Marissa for bringing what you specialize in, what doing, you're passionate about today's program. I certainly, you know, felt like it's an important topic and something that, you know, perhaps our follow up could be. Now that we've talked about attracting women to the workplace, how do we make sure that they stay in the building industry, which is a different, you know, which, which I do think organizations like nawic, you know, particularly specialize in.

Speaker 3: 35:14

Right.

Speaker 1: 35:14

Which is like, how do I surround the women who are in this industry with support and with that kind of, you know, environment, like, hey, we're in this. We're all going through similar stuff. We're all trying to create positive change and. Yeah. So at any rate, thank you so much. Marissa, any parting words for you?

Speaker 3: 35:31

No, I mean, I just want to encourage people to really start to think about, you know, what they're doing. And again, if you want to be the change, then start looking at the organizations that are around you and how you can partner with them to think about adding more women and more girls into the construction trades. Because, let's face it, we got a massive workforce gap and these are some of the populations that can help to fill that.

Speaker 1: 35:53

Love it. Love it. Wonderful. Okay, so real quick. Next week we're going to be on same normal time. That's January 11, 8am Eastern. We're going to be having Eric Teavey, who is vice president of the Mid Atlantic region for Sorenson Gross. He's going to be on to talk with us about account management best practices and strategies for making sure that we keep our clients over the long haul. So I'm really looking forward to that conversation. And obviously, if anybody's joined late, you can get the recordings. And if anybody wants to get a weekly email rather than relying on LinkedIn to tell you when this is happening, shoot me or Stacy your email address and we'll get you on a weekly mailing list that we have. That makes it easier for something to hit your inbox and you click to register for for this. Thank you again so much, Stacey, Marissa, have a great day, audience. We'll see you soon.

Speaker 2: 36:47

You too. See ya.

Speaker 3: 36:48

Bye.

Guest: Kevin Fleming PhD

Topic: Purpose Driven Education

Transcript:

Speaker 1: 00:00

So Kevin, when you, you've got a. We were just talking about this YouTube video of you. How, how much of your time do you spend in front of audiences? Like, you know, how often is that a thing for you?

Speaker 2: 00:18

It's a side hobby that's just, that's evolved. But I'm still full time community college vice president, so I do maybe 15 to 20 keynotes or speaking engagements a year. So it's definitely not my full time gig. But, but I love it. And at some point, maybe those two roles will, will reverse. Like for many of our kids, sometimes plan B becomes plan A and vice versa. But I love, I love working with schools and with districts, colleges and students, just kind of helping them navigate life after 12th grade. So I do, I do a little bit of it. Some of the animation videos take a chunk. And right now I'm working on my fourth book. So that takes a chunk of time. So like all of us just spinning, spinning plates and still trying to be a good dad.

Speaker 1: 01:01

I can relate. I know that drill so well. So welcome to everybody. It's showtime. We've got a slightly delayed show this morning. We're doing a holiday special time mostly to make sure that we can accommodate our guest, Kevin Fleming. We had this conversation about bringing Kevin on. It was like, we really want to have Kevin on. Kevin is located in California. Yeah, California.

Speaker 2: 01:28

Southern California.

Speaker 1: 01:29

And in California, it's weird, they follow this different time zone thing and, and Kevin was like, look, I can try to be on at 4:45, but I don't know that that would go well. And so, so for Kevin right Now it's still 6:45, still bright and early on the west coast. But I'm sorry, now. Yeah, sorry, 7am on the West coast, but 10am here on the east Coast. Thank you, Kevin, so much for, for making this happen. It's awesome to have you here.

Speaker 2: 02:00

Oh, my pleasure. Thanks for having me.

Speaker 1: 02:02

Yeah, this is great. So, Kevin, I actually. You just said you're finishing your fourth book. Talk to us just a little bit about your books, your authorship, what's your. What have you been writing?

Speaker 2: 02:15

Yeah, I, well, thanks, Chad, for asking. I consider myself a recovering academic elitist. So I did the traditional educational pathway and got a bunch of degrees and then realized I couldn't get a job. And so a lot of my research and work is really fixing that, that chasm in helping people prepare with intentionality for what they don't want to do with their life and not just to get degrees for the sake of getting them. So my first book was called Redefining the Goal and that was written for an audience of educators to help them really understand that commencement is not the goal, but it's a milestone. And the goal is really what happens after that and what people do with their lives and in their communities. My second book was on a really niche area of higher education. It's called program discontinuance and viability. Really helping faculty and administrators change their career technical education programs over regularly. My third book was a children's book. My daughter's now five and so I read a lot of children's book and nothing really hit the mark for our field and talking about all the different careers they could have. So, so that's a children's book called There's a Hat for that. And you follow Little Monkey through all the different industry sectors and trying different hats. A construction had an engineering hat, of course. And then my fourth book is going to be for parents and it's tentatively titled Life After 12th.

Speaker 1: 03:30

Love it. That's exciting. Do you have a target release date for that?

Speaker 2: 03:35

November 2022. We just got the first draft is being refined right now. And then you got to go through the whole production cycle. So I'm looking at a pre Christmas release next year.

Speaker 1: 03:43

Wonderful. That's exciting. And you know, so, so purpose driven education, that is our, you know, topic for today. And you know that, you know, this is an audience, our audience, Stacy and I, every, everybody that joins us, you know, either a contractor, an engineer, architect, or services the, you know, construction community in some way, maybe a developer. And so that is, I know that your experience is outside of that as well. Right. You're bridging all different types of occupational settings in your educational background. But bearing in mind that we're going to be talking about the building industry, I want to invite the audience as always, please shoot in your questions. You should have some great ones based on the topic today, which I think is extremely relevant to the building industry. And Stacy, engage with that audience as you always do and make sure that we gather great questions that we can pose to Kevin in the final 10 minutes. And then one quick heads up is that Stacy and I have planned a couple of giveaways through the course of the conversation today. So keep your eye on the chat. Stacy's going to be hitting you with a couple of quiz questions. First person to answer wins. And we'll share with you what what the opportunities are for for the giveaway today.

Speaker 2: 05:15

Am I eligible?

Speaker 1: 05:17

Yeah, Kevin, no, you're out. You are, you do not qualify yeah, but you get two points for asking. I think that took, uh, that was good.

Speaker 2: 05:27

Points don't matter. All right, good.

Speaker 1: 05:30

All right, cool Stacy, we'll see you with 10 minutes to go. All right audience, we look forward to hearing your questions. And uh, and you know, hopefully uh, a couple of you guys get our quiz questions right so we can send you some cool st. See you soon, Stacy.

Speaker 3: 05:42

See ya.

Speaker 1: 05:44

All right, so Kevin, let's, let's dig in. I think, you know, we, in conversation leading up to this interview today, we talked about this idea that there's, you know, a message for educators and there's a message for students and there's a message for employers. And I think for our, for our audience today, it makes sense to focus on employers and students, you know, families, if you will, parents, which I think we can all, many of us can relate to. And you know, if maybe you're not a parent, maybe you're actually a student and you're checking this out, it'd be relevant. You know, questions along those lines would be relevant as well. So you mentioned earlier, how do we help students to realize it's not just about commencement. Give me more on that. How do we help students to realize that?

Speaker 2: 06:40

Yeah, so we, we have a whole educational system and I'm in that system so I can poke at it with a fair amount of love and affinity. But we have a public educational system in America that is really set up for commencement and for university baccalaureate attainment. That's primarily what this system was always set up for. So first, as, as employers have to acknowledge that that that's what the system's going to get. If you look at how they're funded, if you look at what are the metrics, education, it's, it's very much directed towards a couple very specific outcomes and they're not often in aligned with what the labor market needs. I've spent at least 10 years worthy in the manufacturing, industrial automation, robotics, space. And our systems are just not set up to help students engage, hands on and have work based learning and to really tease out some of those other outcomes other than commencement. And so a part of this structural challenge we have is we all have the same ultimate goal. We want our students and our children to have a great educational experience. We want them to find a career they love. We want them to be productive members of the citizenry in our community. We define that success differently. So the first I think maybe aha moment is for employers that want to bridge this gap. They want to work together with schools, the first thing is really to realize that they have a different set of metrics that they're trying to fulfill that motivates them. And it's not the same metrics we have. Schools are not rewarded by actually creating a large pipeline of trained workers. Shocking. That's what we want, but that's actually not what they're designed or incentivized to do.

Speaker 1: 08:13

Right. Yeah. There's this. The love of education, and I love educating. I think the pursuit of knowledge, the pursuit of learning is a very, very worthwhile endeavor. And, you know, personally read all kinds of books that I'm not going to necessarily use in my occupation, but I think that maybe the appropriate space for that kind of learning is maybe in books on your free time. But when you're going to school, as you're, as you're, you know, you're spending, you know, when it's your job to be a student, on some level, we have to be, I think, considering the fact that once that's done, you're actually going to have a job.

Speaker 2: 08:52

That's right.

Speaker 1: 08:53

And so, you know, what is it that you're learning that is going to be applicable? And I think there's the Purpose Driven education piece now. So you mentioned I'm gonna get it wrong, but you and I, yesterday you said a word. I was like, I'm gonna get him to say this publicly. Oh, ika guy.

Speaker 2: 09:13

Yeah, Ika guy. All right, so I learned about this last year. So here's what I want you if, for all those listening, if you're on the treadmill or if you're driving, don't do this. But if you're in front of your computer, if you can go to your phone, open up a new tab and Google image this word. It's called ikigai I k I G A ikigai I K I G A I And if you Google image that, you're going to see this image of a Venn diagram with four circles. And ikigai is a Japanese philosophy of getting that intrinsic motivation, and it's a reason for living. It's poorly translated as the thing that wakes you up in the morning. We might loosely define that in Western culture as purpose, but that's a poor translation of it, but it really aligns four different things. And so the concept of ikigai says you want to identify what can you get paid to do, what do you love to do, what does the world need? And what are you actually good at? And if you can get those overlapping circles, if you can find the thing or the few things that hit the bullseye in all four of those dimensions, you're going to have a reason for getting up in the morning, you're going to want to labor, you're going to want to contribute. You're going to love what you do. And imagine if I like a lot of what ifs, Chad. What if our school system actually focused on helping students find their e. A guy instead of helping them just go through commencement and graduate? It'd be a whole different structure in helping students learn what they love and what they're good at and what problems the world has that needs solving. Instead of get a degree in philosophy like I was initially taught to do.

Speaker 1: 10:40

As a parent of three, I am really, really glad that there are people like you out there fighting the good fight, trying to make sure that our educational systems do that. But I'll tell you what I'm going to do right away is I'm going to start to weave that thought process into my conversations with my kids.

Speaker 2: 10:55

Awesome.

Speaker 1: 10:55

Right? And I think, I think that's something that all of us can do. But, but meanwhile, I think there's that. I mean, that's, I've all my. You know, when I was a kid, my dad always told me, if you do something that you're passionate about and that you're really good at, chances are pretty good that money is going to find you as long as you're doing something that people care about.

Speaker 2: 11:18

That's right.

Speaker 1: 11:20

That was the, that was the X factor. And you know, turns out, you know, I. I missed my calling. I should have become a professional video game player. Evidently that, in fact, is a thing.

Speaker 2: 11:32

It's a thing now. You were just a decade too early. That's awesome.

Speaker 1: 11:35

I was just a decade too. You nailed it. It's exactly how too early I was.

Speaker 2: 11:39

And the thing I love about ikigai is. And you have children. A lot of the, the people listening are kids. My daughter's 5. She loves to build. She loves blocks, Legos, like her first erector set. She loves to build things, and frankly, she loves to knock them down with as much tenacity. She might be a future demolition supervisor or something, but she loves to create and build what kids don't. Right. Fast forward 10 years and how many teenagers are playing with blocks and building as much? Something happens in that span, but looking at ikigai, they love it and they're. And they're good at it, then we don't keep reinforcing it. So, yeah, I think as wearing our parent hat and Then also wearing our employer hat, I think it's important to say, okay, how do we give people the opportunity in the space to practice the things they love to practice, the things they're good at so they can get great at it. And that includes of course, building an engineering design.

Speaker 1: 12:28

Yeah. And Lord knows they can get paid to do it and there's a need for it. That's right. Let's talk about what it is to be an employer. How can employers play a more meaningful role in driving the student population to consider the building industry?

Speaker 2: 12:52

Absolutely. There's a short term game and there's a long term game. So what a lot of people think they need to do is just go visit a classroom, give a presentation and get to know the principal and all of a sudden you're going to have this trained pipeline of workers and that's insufficient, that's not going to work. It's really a three to five year game and that's a short term game. To change the structure of the system a little bit, we have to change the DNA of the school. And it goes beyond just one interpersonal relationship. The long term game, the ten year game. For those that are in this for the long haul, we actually have to change state policy. And that's, and that's the answer. And the example I can give is South Carolina, they changed state tax code to incentivize apprenticeships and over a 10 year period they saw a 20 year, 20 times increase rather their formal apprenticeship programs. And that's union or non union. And so that's, that's a longer term play. So I'd say short term we have to build the actual programs into the school. And here's one way to look about it. Think if everyone can think about the two closest high schools to you. Do they both have strong construction trade programs? And if the answer is no or I don't know, then that's where you start. And you start right there by getting a bunch of employers to show up at the school board and just say we have great paying jobs, we provide great standard of living, there's a needle. You have students that have this desire, how do we partner? What do we have to do to start a program? That's a three to five year dialog that's not going to happen overnight. So that's like your short term. The long term is having that same conversation with elected officials and actually looking at tax incentives and education code to prioritize hands on construction trade programs in at least 51% of schools. And that's both middle school, high school and community college. That's a, that's an eight to 10 year game.

Speaker 1: 14:30

It's a really difficult proposition, I think, in, in particularly for the, the vast majority of construction companies that are, you know, less than 100 employees, that are not rolling in millions of dollars of profit every year that they can reinvest into their businesses. It's a very difficult proposition, I think, to get these employers to act. I would even say, I think you kind of have to act unselfishly to do this. I know that it's, it's, it's long, maybe it's long term selfish, but, but you have to go into this idea that I'm not just setting up this pipeline for me, I'm setting up this pipeline for our industry and that may benefit my competition.

Speaker 2: 15:23

Well, I would say it's okay to be selfish. I'd say you show up and you say you need, you want to make sure you have a trained workforce for the next five to seven years.

Speaker 1: 15:29

Right.

Speaker 2: 15:30

And if that's you, if that resonates, then this is actually it's okay to be selfish. This is you getting the best employees that you can out of middle schools and high schools and community colleges so that you have a bench of great folks to choose from. I'd say be selfish about it. And everyone's busy. A lot of listeners there. You're running your own business. There's, you know, there's small contractors, maybe 50 employees or less. I'd ask just for two hours, give two hours in 2022, go to two board meetings, one hour each in 2022. That's my ask. That's the initial call to action. Go to your local school board for one hour twice this year. And if you can have even just 10 or 15 employers show up and do that at the same school board every single month, there's two contractors filling out a little card to give your 30 seconds at the podium that says, I need your help and we have great jobs. Eventually they will hear you. But if everyone just did two hours a year, that's how we change this.

Speaker 1: 16:20

Wow. I love that. I mean, I think it's, there's a power, there's, there's, you got to do the math on that. I think exponentially, it could be massively impactful if everybody did that. I just wrote it down. I'll be, I'll be making that step. I'll be taking that step this year for sure for the building industry.

Speaker 2: 16:40

That's what makes a difference. And you know, I've met a lot of school board and a lot of, you know, university trustee members. They're good people. They want what's best for their students. They're typically not malicious. 99% of them are altruistic good people. Right. So, so when, when they have this steady stream of information coming at them, they only know what they know. And they may not have been in the construction trade. So when you start pinging them every single month with tenacity and with fidelity, over time they're going to, they're going to hear you and eventually they will respond. And that, that's the, that's the three year game.

Speaker 1: 17:10

So, so back to speaking as a parent here. You know, in, in I have to put my, what I know about the building industry off to the side and all the opportunities that exist for, for just, just for a moment to ask this question. I think a lot of parents fear getting their children involved in the building industry because there's some sort of mindset or mentality that these jobs are bad, that they are going away, that they are right, that everything's going to be automated, that these aren't the ideal kinds of jobs, you know, that people should want. What would you say to parents who fear getting their children involved in the building industry?

Speaker 2: 17:58

Well, first they can call my brother who did the inverse. He got his bachelor's degree in TV and film production, only to later become a general contractor. So sometimes you can want the best thing for someone and then they go down this path and realize it's not in alignment with who they are. And I think every parent would agree with the philosophy of Ikigai. And I would say to them, well, don't your child, don't you want them to do what they love and what they're good at and what they can get paid to do that solves a problem the world has no parent with any conscience can say, no, I don't want that at all. I just want them to get a piece of paper in psychology because that was no.

Speaker 1: 18:29

Right.

Speaker 2: 18:29

So, but I would say we can historically look at automation and robotics. The example I like to share is the ATM in the financial services industry. I tell parents this and I wrote about my book. Do you remember back in the 90s when ATMs first came out? Late 80s, early 90s, there was this big scare that all the tellers were going to get fired and we were going to automate the banking industry. Well, if you look before ATMs and after ATMs, there's more workers in the financial services industry, when you walk in now, they're doing a lot more than just being a teller. They're helping us with financial investments and getting a mortgage and a Roth IRA and all these other things. Right. But there's more employees. Even if we get 3D printers on the job site that helps us build, we're still going to need people to set up, maintain and clean up and do quality control on these builds. So automation is not going to get rid of the headcount or the number of jobs in the, in this industry. It's just going to increase the number in a different skill set in a different way. So, so we might have to learn new things about artificial intelligence and robotics and, but it's not, it's not going to change the fact that there's still a great industry with a good workforce. It just might change some of the hands on skills we need to adopt along the way.

Speaker 1: 19:37

What changes what the skill set for preparing for a career in the trades might look like as the, as technology and innovation changes what building looks like. But it doesn't change the fact that again those, those, those students that, that love building, are passionate about doing it, are good at it, that, that if we can train, if we can, you know, leverage that passion and get them trained up so that they can be prepared. Maybe it looks totally different 30 years from now, but I think what I'm hearing you say is don't be afraid to, to get your. Look, any industry is going to change.

Speaker 2: 20:23

That's right.

Speaker 1: 20:24

Every industry is going to adapt and it's all going to look different, you know, and, and you know, for, for that's what progress looks like.

Speaker 2: 20:31

That's right. We don't want it to look the same.

Speaker 1: 20:34

Right.

Speaker 2: 20:35

Every industry, I mean just look at the last year and a half, how many industries because of the pandemic have completely changed and adopted new technology and different ways of operating that we, there was a recent McKenzie report that says we as a society evolved 10 years in the last year in terms of our technological, you know, advancement and adoption. Every industry is going to change. We can't fear automation and robotics, is it not being. But I'd also tell parents that this is one of the few industries you can't outsource. You know, my doctor outsources reading the X rays, my accountant outsources filling out some of the tax forms. You can't outsource many elements of construction and engineering. And so this is actually more resistant to at least that economic force than other industries. I'd Be more fearful of my child going into accounting in the next 20 years than I would at the construction and building trades.

Speaker 1: 21:23

Love it. I totally agree with you. So we have, in my opinion, and I think many others, we have this really interesting paradox that has to be solved. And what we've been discussing today, I think, is the path through it, both the short game and the long game, as you've described, where we've got. We're not at 0% unemployment in the United States.

Speaker 2: 21:50

That's right.

Speaker 1: 21:52

So roughly how many Americans are today without jobs, American citizens without jobs?

Speaker 2: 21:58

As of Yesterday, it was 6.9 million Americans, 4.2% unemployment rate. So from a labor market perspective, we have about seven. Let's round up from 6.9 million. It's called seven million. There's seven million Americans.

Speaker 1: 22:11

We have seven million Americans sitting at home who don't have work.

Speaker 2: 22:17

That's right. And I'm going to bet, Chad, a lot of them when they were kids like to build, and a lot of them today still might like to create. And they might want to have a legacy that outlives themselves and supports things beyond even their vitality of life. And I think a lot of them, we failed as a system, as a community, as an educational contract. We failed those seven million human beings. I think we were designed to work. I think we were created to labor. I think we have something in our DNA that we want to produce and give back and make things. And I think we failed 7 million people by either directly or indirectly convincing them that this isn't a viable opportunity for them. And I think we vilified hard work. As I like to quote Mike Rowe, who speaks a lot about this. And so there's a labor market answer to this, is that you could look out in any state, any region, look at the unemployment rate. There's a lot of folks out there that could benefit from a better understanding and changing the way they perceive the opportunities in this industry. And that's a marketing that goes right back to Marketing 101 and just, you know, getting associations, not necessarily individual employers, but associations out there to get the information out there about what the benefits are. What the. And not just about pay. I'm talking benefits about. In alignment with your eco guide. I'm talking about the benefits of being a contributor to community and be an example to your kids, not just be a taxpayer.

Speaker 1: 23:37

Yeah. And. And create that clear entrance, that clear path that makes it obvious for people how to get involved.

Speaker 2: 23:50

And.

Speaker 1: 23:50

And I think meanwhile, every day I'm talking with you know at least five, maybe six different construction companies every single day, 50 to 75% of them are falling all over themselves to bring talent in at every level in their organization. And, and we have 7 million people who aren't, who aren't, you know, successfully finding jobs.

Speaker 2: 24:16

That's a great.

Speaker 1: 24:17

Imagine how many other people who hate what they're doing.

Speaker 2: 24:22

That's right. They call it now the great reshuffle. You know, there's a lot of people that are cashier somewhere and they don't want to be a cashier anymore. They'd much rather be outside and doing so. So yeah, we're in the middle of that great reshuffle right now. There's never been time to get out new messaging or to dust off the old messaging we abandoned 10 years ago and really start promoting with tenacity the opportunities we provide, the well being and the self efficacy, self confidence we can give to people. And for everyone listening, if you're not out there at least doing, you know, at least once a quarter, volunteering for things like Habitat for Humanity and getting out there, those are the opportunities that middle school kids sometimes will go to. We need to get if our king of the world chat and my wife likes to remind me I'm not, but if I were, every middle school kid would go out there and do Habitat for Humanity so they can see geometry actually being applied and they can get excited about erecting a wall and running pipe and running wire and understanding how that, that those systems all work together and those, those experiences can really light a fire inside them and create a desire to go into this industry. So I'd say anything you could do to make sure everyone in your community does something like Habitat for Humanity, that also is part of the long term game that will pay dividends down the road.

Speaker 1: 25:34

Outstanding. Stacy, I brought you back on. We've got a little over five minutes. What do we got?

Speaker 3: 25:41

Okay, so I had a question for you. You were talking. I love the actionable plan because I sit in a lot of these workforce development discussions and we're so stuck on just Career day and having volunteers represent our industry and Career Day because we don't know how to go above and beyond that really. So I love the tips that you gave and the fact that it's a three to five year game or a ten year game with the state policy. So I'm thinking what the contractors would want to know who needs to sit on the school board meetings is it. We have a recruiter that usually works with a contracting firm, workforce development person or the owners or all three. I don't know, like who would you assign that role to?

Speaker 2: 26:30

All three. You each take a month, have the CEO in January, the recruiter in February, of the HR person in March. I mean, I would say everybody there's. Imagine how powerful it would be. You're, imagine you're a school board member, you want your, you know, you're running your local school. Imagine if a CEO came to the podium one night and said, I have 18 jobs that are going unfilled in our community and you're not producing from your school. Workers that are interested in my field and I pay 30 bucks an hour. Like, how piercing is that? When they hear that month after month after month after month repeatedly from, from one industry, eventually they're going to get. So you're going to browbeat them kindly and always be kind, right? But you're, you're going to, eventually you're going to guilt them and embarrass them into responding, at least having a conversation about what they're doing to prepare students for, for the billed trades. I think every high school should have at least two apprenticeship programs. Every single high school, union or non. Union. And, and if your high school doesn't, that's a really easy thing to point at and say, hey, we got thousands of jobs in the community. Why don't you have even one apprenticeship program in your school district? That's hard for them to defend. And eventually they're going to start getting people galvanized around that to figure out, okay, we should have at least one apprenticeship program. The apprenticeship model is not. Knew Jesus Christ was an apprentice. This is not a new model. So why doesn't every school in America have at least one apprenticeship program? When you start asking those kind of poignant but polite questions, then they start to respond. So I would say great questions, Stacey. I'd say all of them. Everyone take a turn with a slightly different angle at it. And you get five or six of your other company buddies in the same community do the same. Don't let a school board meeting go by without someone being at the podium asking them to respond to the industry. And I bet about four to six months in, that's when you'll see some traction.

Speaker 3: 28:13

Nice.

Speaker 1: 28:15

So I just read. Stacy, I'm sorry, I just read a comment that I had to call out. So I read this comment that said some of us should go back to high school and be guidance counselors. I love that.

Speaker 2: 28:29

Yes, Gregory, yes. Here's my thing about guidance counselor. I love school counselors. I love their hard working, warm people, but I think less than 10% of them have ever had a job outside of being a school counselor. So we have to recognize who they are. They went to school, they got their bachelor's, they got their master's in counseling, then started working at the school board or the school district. They don't know what they don't know, so they're incentivized to get them just to commencement. I think maybe we should have a. Buy a school counselor, take a school counselor out to lunch day or something and help them see what's going on in the world and help educate them because again, hard working, good people, but they don't know what they don't know. If. If you're looking to retire, I would absolutely encourage you to go back and be a school counselor. That. That's certainly one way to infiltrate the system. You can't change the system if you're not in the system. As a mentor of mine used to.

Speaker 1: 29:17

Say, you can't change the system if you're not in the system. Yeah. And that's. I mean, that's my biggest takeaway, you know, in terms of personal involvement as a parent. Very easy to make a presence at school board meetings and, you know, get an opportunity to speak. I think that makes a ton of sense.

Speaker 2: 29:36

Two hours a year. That's all we're asking, Chad. Awesome.

Speaker 1: 29:39

Stacy, what else we got? We got probably time for one more.

Speaker 3: 29:43

I don't see any questions. Lots of great, great comments. We can get into the three giveaway questions.

Speaker 1: 29:51

Thank you. Yes. All right. All right.

Speaker 3: 29:53

I want to do it during the discussion because it was so good and I just thought it was inappropriate, but good call.

Speaker 2: 30:00

I don't.

Speaker 1: 30:00

I have my gauge on what's appropriate. Stacy is terrible.

Speaker 2: 30:04

I'm with you. I'm with you.

Speaker 3: 30:06

I don't want to take this off topic, so let's do the first one. Kevin has generously said he would give away one of his children's books that he published. So with that being said, the first person to respond to this question, how many books has Kevin Fleming actually published?

Speaker 2: 30:26

Someone had to be paying attention for that one.

Speaker 1: 30:28

Yeah, I like that. There's a little trick in there, too.

Speaker 3: 30:31

I don't know how many people joined us in the very beginning.

Speaker 1: 30:34

Yeah, you had to be there for the first 10 minutes.

Speaker 3: 30:36

Might as well just guess.

Speaker 2: 30:39

Some educated guesses. Let's see. Well, they know it's at least one or else you wouldn't ask a question. Right?

Speaker 3: 30:47

Exactly. Nope. Not two. Try again.

Speaker 2: 30:59

Good guess, Mark.

Speaker 3: 31:03

Very close, though. Come on, guys. Hey.

Speaker 1: 31:06

Oh, there it was. Caitlyn's got it.

Speaker 3: 31:08

Come on. Caitlyn's got it. So. All right, Caitlyn, I'll contact you and you have one of Kevin's children's books. And then remind us again, Kevin, when is your fourth book going to be published? November, right?

Speaker 2: 31:23

Yeah. Next fall it'll be called tentatively entitled There's a life after 12th. And that'll equip parents with the conversation points to help their, their child really have success in alignment with who they are with life after commencement.

Speaker 3: 31:37

Okay, cool. Two more questions.

Speaker 1: 31:40

So, Stacy, Stacy, I apologize, I'm gonna have to, I have to call this one thing out. Is it. I totally forgot that we have like a solid 30 second delay from the time we say something to the time that we. The time that people see it and then the time that they type. So here's, here's what I'm going to propose is that you pop them in the chat afterward just so that we don't have two minutes of awkward waiting. And so, so watch, watch the chat box right after this, guys. Watch the chat box right after this. Stacy's gonna pose two questions. The first two accurate answers. We will be hooking up with your choice of giveaway. Stacy, what are we doing? We're doing mugs.

Speaker 3: 32:28

Yeah, mugs. Some swag we'll give you from the morning huddle. But the next question is the first person to name two guests that we had on our first season so far.

Speaker 1: 32:38

All right, cool, good. So we'll pop them in the chat. We'll handle. You're going to put those questions in the chat, Stacy? Yes, yes, I just put it in the wonderful. All right, Kevin, I can't thank you enough for being here, spreading a really, really important word. It was wonderful to have you. I hope that we can do this again maybe in November next year. The timing would be good.

Speaker 2: 32:58

I like where you're going with that. Yeah, let's, let's, let's, let's plan for it. Thank you, Chad. Thank you so much, Stacey. Appreciate you both. Yeah.

Speaker 3: 33:04

Thank you.

Speaker 1: 33:06

Thank you so much, guys. We are off next week. We are taking off the weekend between Christmas and New Year's. We're gonna reload and get ready to rock for the first week in January. Our guest the week in the first week in January is Marissa Bankert. She's the executive director for Central Pennsylvania's Independent Electrical Contractors association, who's going to be joining us to talk about attracting women to the Trades. So, you know, similar kind of theme here, which is how do we get more awesome people involved in the building industry specifically? Marissa's got a great story of her success in attracting women to the trade. So don't miss it. We look forward to seeing you. Happy holidays. Stacy, anything to say as we wrap up?

Speaker 3: 33:53

One more question. Which topic haven't we covered yet? The first person to respond correctly, A, acquisition B, small business, C, cybersecurity, or D, contact roles. And there might be a little bit of lag here.

Speaker 1: 34:11

There will be. We'll get it. We'll get it in the chat.

Speaker 3: 34:15

So my husband tried to respond to the one question, but, no, he does not get a prize. So, Libby. Yes. You won.

Speaker 1: 34:25

All right, Libby. Awesome. All right, guys. Stacy, do you mind? Do you want to hang out? Is that what you want to do?

Speaker 3: 34:34

Yeah, I just want to wait for the last one.

Speaker 1: 34:37

She has to give somebody. Yeah, I get it.

Speaker 3: 34:38

I have to. So which topic haven't we covered? A, acquisition B, small business, C, cyber security, or D, contract contact roles?

Speaker 1: 34:51

Oh, we got Matthew.

Speaker 3: 34:53

Correct. Matt. Matt won. All right, Matt, you got some goodies coming your way.

Speaker 1: 34:59

All right, guys.

Speaker 3: 35:01

All right. Thank you so much for joining us. Happy holidays. And we'll see them in January, right?

Speaker 1: 35:06

Yeah, January, January, whatever that is. Fourth. The first two back at our normal time. Same bat time, same bat channel.

Speaker 3: 35:12

Okay, great.

Speaker 1: 35:13

Thanks, guys. Thank.

Topic: The Story of a Successful Acquisition

Transcript:

Speaker 1: 00:00

So there's Bruce and Steve. You guys back at your home base? Where's the home base? What's a office location?

Speaker 2: 00:12

Hanover, Pennsylvania.

Speaker 1: 00:13

Got it. Hanover. So back in Hanover, you've got a team, the JFR holdings team. From what I understand, you said there's an event of sorts going on this morning, huh?

Speaker 2: 00:24

Yeah, they're having a watch party, and I think they've got friends associated with the business. And. And Tim Kick brought the lunch truck in a little late, so they had breakfast. And so this is the acknowledgment to the. To the watch team party going on in Hanover.

Speaker 1: 00:39

That's awesome. Hey, Hanover Watch team party. Are they. Is it. I don't know the rules in Hanover. Is too early to drink or what?

Speaker 3: 00:47

What's the story in Hanover? It's never too early.

Speaker 2: 00:52

Hopefully.

Speaker 1: 00:57

There'S. Yeah. Okay, so there's boundaries, not because of Hanover, but because of company policy. And I think that's okay. There's nothing. There's nothing wrong with that. Good deal. So we were just talking holiday parties and things along those lines. Stacy and I, I think, are going to the same spot tonight. We'll be down at Congressional Country Club for the WBC event. Stacy, is that true?

Speaker 4: 01:19

That's true. That's awesome. There'll be a lot of people there tonight. It'll be fun.

Speaker 1: 01:24

Yeah, it should be a really good time. I'm looking forward to it. I. It's. That's. It's like, you know, the one time I can get on at Congressional.

Speaker 3: 01:37

Hey, Chad, while you're there driving in, check out the job. We just. We just framed a new professional center there.

Speaker 1: 01:43

Oh, no kidding. Yeah, actually on the, on the campus or in that area?

Speaker 3: 01:49

On the campus. It's on the course.

Speaker 1: 01:51

That's awesome.

Speaker 4: 01:54

Cool.

Speaker 1: 01:55

That's really cool. All right, good. It's 8:00 Eastern. That is. Let's go ahead and get rolling. My name is Chad Prinke. I'm alongside my partner, Stacy Holzinger for the morning huddle. Today is episode nine. We're meeting with Steve Yellen, Bruce Jones. We're here to talk about what has been a really interesting success story that, that I want these two to share with you guys about a successful acquisition. So hopefully we've got business owners who are trying to learn the lay of the land, looking forward on acquisition. We've got employees and, and, and, you know, potentially acquirers who are all, you know, interested for their own reasons. And can everybody can take something valuable away from this? Obviously, just like Every show we're 100% dedicated the building industry. And. And this is an interesting story about a framing contractor. But before we get rolling, I do want to check in on Stacy. Stacy, what's good? What's going on in your world today?

Speaker 4: 02:54

What's good? You always put me on the spot.

Speaker 1: 02:58

My favorite part of the show. I can't skip it.

Speaker 4: 03:01

Oh, thanks. You know, just working today and then going to the party.

Speaker 1: 03:08

This is the best. This is my favorite. See, she knows it's coming, but she still doesn't prepare something hysterical to say or any. In fact, I think it's better. I think it's the best part. All right, cool. Something.

Speaker 2: 03:22

She said something good, Chad. Because she talked. She acknowledged Christmas in the Christmas spirit.

Speaker 4: 03:26

Thank you.

Speaker 1: 03:27

Thank you. That's right. See, that's what we did. That. So. All right, so Stacy and audience, we, as you guys know, we take questions. We want to hear from you, so please fire in questions throughout the course of the conversation. Stacy will come back with about 10 minutes to go, and she will consolidate those questions and. And, you know, get some good interaction going between audience and. And guests here. So with that, I'm gonna go ahead and switch gears, and Stacy will see you with about 10 minutes to go.

Speaker 4: 04:02

All right, sounds good.

Speaker 1: 04:03

Thank you. All right, so Bruce and Steve, let's get at it here. I. I think as a starting point, it would be helpful for the audience to just kind of orient themselves to the situation. So maybe give us a little bit of the lay of the land of the business today just so that we all have context. Tell us about Bruce Jones today.

Speaker 3: 04:32

We were very fortunate. I was able to get with Steve and sell the company in August of 2017 with an exit strategy in mind. I agreed with Steve when he bought the company to stay on for five years to help mentor everybody in the leadership roles. And we're winding that down now into the last 10 months of the relationship there. When Steve bought the company, we were about 45 employees in house and 25 subcontractors that work out in the field for us and represent us out there. Type of projects we do are nursing homes, apartment complexes, medical centers, hotels, restaurants, additions. Everything is a prefab. So we're a turnkey wall panel manufacturer. And so we're supplying the labor and everything to do everything wood related.

Speaker 1: 05:25

Awesome. Yeah, that's a great rundown. So for the. For those in the audience, I think, you know, what Bruce Jones is doing at least here in the. In. In the metro Washington and Baltimore region is, you know, relatively unique. Right? There, there. There aren't many, if any. I'll let you guys chime in on it. But there aren't many framing contractors who have embraced the manufacturing aspect of actually you kind of fabricating the wall panel, bringing it to the field and installing it there. Just out of curiosity, number one, Bruce, how many other contractors in the area are doing that at scale at this present time?

Speaker 3: 06:19

That number is increasing. I know, at least in the Mid Atlantic region. 10 other companies right now at one time I was one of a select few. I started doing that back in the 80s very early on and we've kind of perfected it. So we've been. When I go to all these new events and seminars and people talk about component manufacturers as the way of the future. Future. We've been doing it for a long time.

Speaker 1: 06:44

Awesome. That's great. Percentage wise in the market, I would. I'm going to take a guess and say that, that of framers who actually manufacture their own wall panels. Even though the group is growing, it's still probably something like, you know, 10% of the market is that.

Speaker 3: 06:59

Yes. It's very few of us that are successful at it.

Speaker 1: 07:03

Yep, understood. So let's. And just again, one more piece for context. Steve, you're over top of a holdings company, is that right?

Speaker 2: 07:18

Yes.

Speaker 1: 07:21

Your company purchased Bruce Jones in 2017, but you're not Bruce Jones. Is that, is that a fair.

Speaker 2: 07:34

That's. That's right. So the kind of the history of the business goes back to J.F. rohrball Co. Started in 1880. I'm a fifth generation family member running that business. We've always been involved in wood products. 1960 we started to manufacture pallets and have been doing that since in. I guess it was probably 2014, something like that. We purchased a second company in what I call industrial wood products. And then, and then in 2017, as Bruce stated, we. We purchased the construction products businesses.

Speaker 3: 08:13

We.

Speaker 2: 08:13

We kind of categorized it within our holdings company. So we have three operating entities working underneath the JFR holdings umbrella.

Speaker 1: 08:20

Got it. Makes total sense. Okay, good. So I think that helps for context for the group. Let's talk about the acquisition itself. Bruce, why did you want to exit in the first place? It's take us back. I understand that the acquisition happened in 2017, but. But why did you want to exit in the first place and when did the wheel start rolling on that?

Speaker 3: 08:40

Well, when I hit the mid-50s, I started have to think about well, how am I going to wind this down? I spent 35 years building my company and I Had a lot of family members and friends that I went to school with working for me. My son was not interested in being part of the. The company went another direction. I had key employees that really wanted to be leaders in the company, but they didn't want to have any ownership in it and responsibility that way. So I just had to start researching out and figuring out, well, how do I market my company? You know, you always get those emails, hey, want to sell your business, that things like that. I don't recommend going maybe that way. I want a different approach and I just needed to find an exit strategy. I wasn't ready to quit myself, but. And so I was there to offer myself to stay for quite a few years and it just kind of started to fall in place as Steve and I, you know, got to know each other.

Speaker 1: 09:35

So you got into your mid-50s, you started to say, how am I going to get out of this thing? You start comparing options, you're saying, hey, I don't have a family succession plan in place. I don't want to chase after one of these guys that's emailing me, hey, do you want to sell your business? Instead, I'm going to start laying some lines of communication in my network and explore to see if anybody within my network might be somebody interested in buying the business. Is that right?

Speaker 3: 10:01

Correct.

Speaker 1: 10:01

Awesome. So Steve, how did the two of you come together?

Speaker 2: 10:06

Bruce and I were connected through a vendor sponsored annual event golf outing that they typically do, kind of destination resort. And so Bruce and I had gotten to know each other, I don't know, over a 10 year period. And really the credit goes to Bruce. I mean, as a company, we had done an acquisition. It had been a successful acquisition for us. We weren't actively out looking for another acquisition. Bruce came to me and said, hey, and told the story. He just told you that he was possibly looking to get out and he knew the legacy owner in the business we had just purchased. And he had talked with him about that process and his thoughts on it. And Bruce said, if you're interested, I'd be interested in showing you what I've done with my business and hopefully what together we could continue to do for years to come. So that was really the kickoff point that said, hey, he's interested. And so we went back and made, met internally and said, let's look at this and started the process.

Speaker 1: 11:14

So my biggest takeaway from that whole story is watch it. Anybody who says business doesn't get done on the golf course, that's it.

Speaker 2: 11:25

Well, I think there's a lot of truth to that too, because networking, wherever it is, it doesn't have to be, it doesn't have to be in a formal environment. And I think in a lot of ways that really helps the process because there's a trust factor that's developed in that less formal atmosphere.

Speaker 1: 11:41

Yeah. Much more natural, organic kind of conversations get created. And Bruce, you were seeing an opportunity to tell your story, and it doesn't sound like it was a hard sell, just kind of invited them in and so it started to materialize. So Steve, once you did that, why were you interested in being a buyer? What happened that kind of got your interest rolling?

Speaker 2: 12:06

Well, I think that at that point you really start to probe a little further about what the success of the business is. So, I mean, you know, at some point when you get to the formal process, you're really looking for the financials and you want to look at a five year history to kind of really see how the business has been run and whether it's from a profit loss perspective, whether it's a, whether it's a good fit. But I think outside of that, you start to expand those relationships and to meet some of the people that Bruce knew through his professional career, whether it's the people working for him or his customers and vendors. The vendor piece was kind of a natural fit because the vendor was already sponsoring an event that we were both actively involved in. So, you know, the vendor was Bruce's biggest supplier and was our biggest supplier of lumber. And that was kind of the common denominator for us too. I mean, it kind of, you know, even though it wasn't pallets and wood packaging, it was, there's, there's the wood common denominator. And so that, that was from a sustainability perspective, that was something that is a company and a core value we're very interested in. Yeah.

Speaker 1: 13:16

So on one hand it kind of fit your niche, if you will, you know, in terms of wood products. On another hand, it was appealing financially, I'm hearing you say. Right. They had their, they had demonstrated proof of financial viability and success. And then, and then third, between employees, customers, vendors, everybody in the market, it was clear that they had been doing something that was in, in line with your core values. Relationship wise.

Speaker 2: 13:47

Absolutely.

Speaker 1: 13:48

Yeah. That's awesome. And as the reason I keep on like, kind of, you know, summarizing these things for, is for, you know, our audience to hopefully take, you know, specific nuggets. If you're taking notes, if you're, if you're walking away from this, and you're saying, like, what are some of the things that we should be doing to get sale ready to be attractive? You're listening to a buyer, you know that, that he's describing what mattered to him. So, so, so some of the audience might be just trying to understand the process of an acquisition a little bit deeper. Bruce, how long did a negotiations take? Like what, how, when did the, from the time it started to the time it wrapped up. How long was that process?

Speaker 3: 14:26

Well, from the time I pitched it the idea to Steve out in Utah, it was almost a year process until it took him about two months to think about it, get back to me. And then we kind of dated each other for about 10 months. Putting all the, all the paperwork together and following up with the process and doing all the research on both ends. Yeah, on that. So it was a 10 month, about a month period.

Speaker 1: 14:49

And I have heard about so many of those that ultimately fall apart. So I'm going to ask Steve here, from your perspective, were there any key steps along the way that kept that process together from your perspective, rather than just dissolving?

Speaker 2: 15:09

Well, I think, Chad, the communication piece is the most important piece. So I think you have to, you have to be honest with each other. I mean, Bruce certainly had an expectation of what he wanted in what he wanted to get for the business. I think oftentimes a legacy owner, I call it, or an entrepreneur, they have a thought of what that value for their business should be. And then when you run the numbers, there's the, of course, we're the buyer, there's the number, and we're going to try to get the most economical deal that we can get. And so, you know, you have a, you have a, you have a gap and you have to kind of work together, be willing to give and take during the process to get to that point somewhere in the middle that, that you agree to on price. So I think, you know, the, the, the important thing for Bruce was that he was willing to, he was willing to look at it as a negotiation. He wasn't hard and set like, you know, I have to get this number because really when you, when you run the numbers, the numbers are what they are. And, and so you have a, you have, you have an EBITDA and a multiple that you have to come up with. And that's going to, that's going to set the price. And then there are other things too. I mean, you have the asset of the property. So are you going to, are we going to buy the property? Are we not going to buy the property. And so we just have, you just have to communicate, work through all those things. I mean, there are attorneys involved in the background, but it's really important that the, that the parties that are going to work together going forward communicate and work together. In this case, it was Bruce, myself and the two management teams.

Speaker 1: 16:39

If you're, what I'm taking away from that is if you're looking for a deal, continue to look for a deal. Meaning if you want to make it happen, you got to continue to look to make it happen at any point in time. When you draw hard lines as a negotiation tactic, if that's an all or nothing tactic, and this type of thing can fall apart. And, and so, you know, what I'm hearing is that, that you keep the lines of communication open. You stay in a deal making mindset rather than, you know, being, being demanding, Allow the process to play out, allow the numbers to kind of, you know, start to become formal as the process, which, which should be fair, dictates those numbers.

Speaker 2: 17:21

So yeah, and I think, I think another piece of it, Chad, was Bruce, Bruce was motivated to sell. And so not everybody, when they, when they're in that, in that mindset is motivated to sell. So you have to get to the point as a, as a, as a legacy owner or a seller that you're motivated to sell. So.

Speaker 1: 17:37

Yep.

Speaker 2: 17:37

And you have to be comfortable with, with, with the buyer that you're talking with.

Speaker 1: 17:42

I cannot tell you how many times I've seen people, you know, become more motivated to sell after their best opportunities to sell have gone away. Right. And it's.

Speaker 2: 17:58

Yeah.

Speaker 1: 17:58

So. So at any rate, post acquisition, I want to talk about some of the immediate challenges you discovered post acquisition. So. So Bruce, you were in the business. It was, I mean, you were central to the business, day in, day out. So right after the acquisition, what were some of the most crucial steps to maintain continuity in those early days? As you're trying to say, hey, we just got bought. Bruce, you there?

Speaker 3: 18:28

Everybody in the company's morale understanding. Don't be scared. Yes.

Speaker 1: 18:34

Oh, sorry, there was just a little bit of lag or something. You're good. Keep going, buddy.

Speaker 3: 18:38

I didn't do anything. Okay. Okay. Well, once keeping everybody in the company at ease, did not hear the new management and new ownership after that was learning how to turn over were some of my duties to the new. Some of our people and some of the new people we brought in. So letting go of your baby that you raised is hard. That was a Hard challenge. And then after that was the next thing was for me to learn their new processes and accept them and be able to start sitting back and trusting the people that we put in place.

Speaker 1: 19:13

Yep, got it. Steve, as you prepare for transitioning Bruce out of the business, which I think Bruce gave us the timer on, it's something like a 10 month Runway. As you prepare for transitioning Bruce out of the business, what are some of the most important aspects of preparation that you've been undergoing, you know, over the past four years and in this final year?

Speaker 2: 19:35

Well, number one, Bruce isn't going anywhere. So he, he uses that number. But he'll still be, he'll still be connected to the business. Maybe not day to day operations but, but he'll be connected to the business hopefully, you know, for the, for the long term and at least the foreseeable future. But I think Bruce hit the nail on the head. It's really people in process. I mean the people. You're going to have turnover as you go through this process. I mean, it's just inevitable. And there are many reasons for that. But we want to develop the people that want to stay with the business long term. And so there's, there's obviously changes in process. The way that Bruce ran his business for 20, 25 years and the way we're going to run our business going forward, there's a little bit of a difference there. And so you have to build that trust with the people that are going to stay with you that they can see that the process changes are all about improvement and streamlining. Because we're working within three, three entities and under one umbrella company. So the financial reporting mechanisms, how we look at financials, all those things have to be streamlined. And once we get through that process, and that's not a six month process, I mean that takes time to do that. And once we get to that, then we've kind of hit the point where we can move forward smoothly.

Speaker 1: 21:04

Yeah, that makes, that makes all the sense in the world. And I think the big, well, a couple, a couple of items that I take out of that, number one, just, you know, this comment that Bruce isn't going anywhere. And I know that that's not news to Bruce, right. Just based on his reaction, he's like, yeah, probably not what that. I mean, to me there's, there's some, there's something really cool about, you know, having a situation where the company that acquires a legacy business welcomes the, the ongoing involvement from that legacy business owner to the extent that they want to continue to have that involvement and that, that they're, that the relationship or the, you know, kind of the trust and friendship that's established, you know, between you guys. I mean that's, that's kind of special. And, and not every owner wants that. But, but I would say that any acquirer in your situation, unless they're just rolling it under an existing brand. Right. There's a difference between an acquisition and a roll up, if you will, in that, in that sense would want to have, you know, somebody that spent 25 years building a business relationships community to continue to be in touch, you know, in, in the environment. Though, Bruce, I hope that for you it's about to get a whole lot just, it's about to get way more fun and a lot less like work.

Speaker 3: 22:39

Yeah, I made sure I brokered in enough vacation time. Trust me.

Speaker 1: 22:44

Very good. And then the other thing that I'm pulling out of that, you know, Steve, is that when you're, when you're coming in and look, it's been four years and, and I'm not gathering that it's been, you know, this really aggressive, you know, our way or the highway kind of move over the course of four years you've been learning their business, adjusting and adapting what, what you know, you need them to do under the, the holdings company under JFR holdings to fit your model. But, but that there is ultimately this. If you're going to make it work, if you're going to make the transition work, the team has to, the existing team has to buy in to some process change and they have to kind of go along with that. And I'll just ask one quick question along those lines. How has the team done in terms of embracing change?

Speaker 2: 23:43

You're asking me or Bruce? You might get two different answers. I think, I think that, I think they've done pretty well. I mean it's, again, it's about communication and we just need to give them an opportunity to work through that process of change. And you know, I mean, Bruce came from a small family held company and so he didn't necessarily, he didn't necessarily share his financials with his team the same way that we would talk about gross profit and net profit. And so I think when you back up that process change with the reason that we're trying to streamline those changes, it makes it a lot easier to tell the story, to get people to buy into the change. And so again, it just really all comes back to communication. I mean, you have to be able to effectively communicate with people because they're. Their personal feelings. They're, you know, they have. Most of the employees have long term ties to Bruce. And so we just have to. We just have to work through all that.

Speaker 1: 24:53

Awesome. All right, good. We have about seven minutes on the board. Sorry, that's on me. But, but I do want to pull Stacy into the mix here to get some questions from the audience. Audience, just another reminder, if you haven't sent in questions but you have them, please do. But, Stacy, what do we got? What kind of questions?

Speaker 4: 25:14

So the first one is from Mark Jury. You spoke of being an innovator and manufactured framing assemblies who once had limited competition and now sees rapid competition joining the market. What are you doing to stay in front of competition? Is it technology, retooling, volumetric, modular?

Speaker 2: 25:35

You want me to answer it, Bruce, or do you want to answer it? Can I start to answer it? Then you can go. I think the biggest change, Mark, is to again, bring some process to the sales and how we approach sales. I mean, Bruce was very much, when he was running the business, he was hands on and talked to guys and went out into the market. But I think we're using Salesforce as an example. And we have a business development Jacob, business development manager Jacob Knott that we brought on board. And that's his focus, to go out and develop that business and nurture those relationships beyond the core customer relationships that Bruce had developed over his 25 years. So I think. And then the second piece of it is, you know, we're looking to move the plant to a new facility that'll be 85,000 square feet and we have the property. We just got to get to the point of getting the building built. But we'll automate some of the process that they're doing today in Hanover when we get to the new facility in New Oxford. Go ahead, Bruce.

Speaker 3: 26:46

No, that pretty well sums it up. It's just do what you tell people you're going to do and deliver your product, a good quality product and get your job done or other people might fail and you'll stay busy.

Speaker 1: 26:59

Yeah, there's this aspect of the answer to what are you doing to maintain your edge? That always goes back to the blocking and tackling of make your customers extremely freaking happy. Like, it just kind of, you know, goes. Goes back to that. And then, you know, Steve, I'm hearing some significant investment in your manufacturing capacity and. And some automation that should extend your. Your strategic advantage that you already have on that front on. Yeah, that's awesome. All right, Stacy, what else we Got.

Speaker 4: 27:35

Yeah, two simple short questions, but we'll start with Bruce. So advice overall, advice for owners.

Speaker 3: 27:43

Plan ahead when you want to do this. If you, if you're waiting to, when you have no choice to sell, you're not going to get as much out of it. Do the, do the work. Reach out to friends, advisors, other people in the industry. Just do your research and it will make it so much easier to help you sell your business.

Speaker 1: 28:03

When would you start, Bruce? Like, you know, and it maybe not be the exact, you know, age or whatever, but how would I know that it's time for me to start? You know, obviously you were running your business, growing your business for, you know, 35 years. How far in, if you could go back in time and plan it perfectly, would you have started planning your exit?

Speaker 3: 28:29

I started two to two and a half years before I was really ready to go because I had an offer originally and we kind of both walked away from that deal. But I learned through that process to get better and be ready the next time.

Speaker 1: 28:43

Interesting. Okay, so maybe that's another aspect of things. If there's, I mean, maybe testing the market to some extent is a, is an interesting way as an owner to, to get ready.

Speaker 2: 28:58

Huh?

Speaker 1: 28:59

Interesting. That's pretty cool. So, sorry, go ahead back, back to you, Stacy. What was the next one?

Speaker 4: 29:05

Yeah, and Steve, what advice do you have for buyers?

Speaker 2: 29:12

Well, I think it kind of goes along the sense of what we talked about for the last half hour. I mean, you know, you've got to, you've got to, you've got to get to know the company and the owners of the company you want to buy and the people that are involved in the business. I mean, you know, you may or may not choose to involve the legacy owner of the business going forward, but even if you're not, and even if you are, you have to know the people and you have to build the trust of the people that are in the business. So I mean all the other stuff, the financial stuff and the analytics that you look at to buy business are important, but I think the most critical is the people. And, and the, the people would include vendors, your, your, your employees and, and your customers. And you got to know that they're, they're committed to the long term success of the company.

Speaker 1: 30:00

So, so I can't help but I kind of have a follow on question to that. Steve, in your situation, obviously you were fortunate enough to have the legacy owner, Bruce, where the two of you were getting along, where he had a willingness and interest in staying in the business for a five year stretch. That made that an easy kind of decision for you guys. But what if Bruce had said I don't want to you buy it, I'm out day one, I am out. Would you have moved forward with the transaction?

Speaker 2: 30:25

Probably not. Because we didn't have the expertise in the construction business to move forward in that manner. We wouldn't have had the trust of the employees to do it. So I think that that would have probably been a non starter. We've looked at other businesses over the last 10 years and there have been businesses because of that that we just felt wasn't going to be a good fit for us moving forward. So I think, I think to answer your question, you've got to know, you've got to know when to move forward. You got to know when to cut bait and say, hey, this just isn't a fit for us. And there are Certainly we bought two businesses in the last, in the last 10 years. We probably walked away from five other businesses that we've looked at in that, that time frame.

Speaker 1: 31:08

Yep, yep. And, and the X factor there, what I'm hearing is, is beyond the financials. Right. You know, it's you, you also have to know what, what your, the reasons for walking might be beyond that, you know, the financial implications. So that, that makes all the sense in the world. Stacy, do we, do we have one more, can we squeeze one in?

Speaker 4: 31:32

Just the last one was for Steve. What's the vision for the company into the future?

Speaker 2: 31:41

Well, I mean we want to, we want to, we want to grow this thing. We think there's a, the potential to grow this thing. So, so we'll, we'll continue to invest money back into the business. To, to do that and investing money back into the business is investing in the people that we, that we retain and we hire and investing in facilities and technology and investing in, in our business development activities as well. Whether it's golf outings or, or the events that we, that we try to bring customers and potential customers together so that we're, we're, we're talking about where we're winning and where we're losing and where we need to improve.

Speaker 1: 32:23

Well, but being in wood frame and serving what is largely a residential market sector, based on every economic report and study that I'm seeing, whether that's you know, affordable housing, market rate, apartments, senior living, single family homes, we are still very under building our actual demand. And I think there's, you know, recent article I just read in Barron said residential housing is going to be rolling for the next 10 years. So it's a great time to reinvest. Steve, I think that's, it's an exciting, it's an exciting opportunity for you. So thank you guys so much for being on. Thank you, audience for, for joining us this morning. Steve, Bruce, any final words before we, you know, wrap up with you guys?

Speaker 3: 33:16

Everybody just stay healthy, get through these tough times and enjoy the holidays.

Speaker 2: 33:23

Yeah, thanks for the opportunity to do this. It was, it was great. And if you ever have any questions or want to reach out, you can find Bruce and or I on LinkedIn. So happy to answer any questions outside of this half hour that we had this morning, if you have any.

Speaker 1: 33:39

That's really cool of you guys. Very generous to the audience. Thank you so much. I'm gonna take a moment and tee up next week. So next week we have a special holiday time. We're not running this at 8am we're running it at 10am next Tuesday. We have Dr. Kevin J. Fleming, who is author and speaker dedicated to changing the way that our institutions and our families are thinking about education and employment. He's coming on to talk about purpose driven education, the impact that that's going to have on the future of the building industry's workforce. That'll be a lot of fun. We'll have some giveaways. Guessing Stacy will be wearing like an elf hat or something. I don't know. Guys, thank you so much. We look forward to having you join us next week. And then we're gonna be off the week in between Christmas and New Year's, so, you know, next week will be our last show of the year. Thanks so much, everybody. Have a great one. Happy holidays.

Speaker 2: 34:40

Happy holidays.

Speaker 1: 34:41

See ya.

Topic: Economic Trends Impacting Construction in 2022

Transcript:

So it's morning huddle time. We'll give everybody a minute or so to. To get live with us. But, Anubon, you were just telling me you started your morning. You got in last night at what. 

S

Speaker 2

00:13

Time I got in last night? It's about 1am from Las Vegas via Detroit. But that means bed at 2am so that's. It's too much. I'm too old for this. I don't know if you remember those Lethal Weapon movies, but I think Danny Glover had a quote that he said repeatedly, I'm too old for that. And I. And I am. 

S

Speaker 1

00:40

Yeah, now I get it. I. For whatever it's worth, I'm too old for that too. And I don't think that's, you know, technically I shouldn't be able to say that, but I think I'm too old for that. I had a week a few weeks back where I was in, what was it, Houston and then Louisiana, and then New York, and then had to speak the next morning at 7:00am in Baltimore. And after I got home from New York and I thought I got home on that afternoon and just kind of cried. It was like, that's it. I can't do it. 

S

Speaker 2

01:15

I just want to be in my house. I wanna. I would like to tend to Marlon Humphrey's injuries if I could, if they would allow me to just fix him up for week 14 or 15 or something. But, you know, I have an economist. 

S

Speaker 1

01:27

Somebody's got to. 

S

Speaker 2

01:28

Somebody's gotta do that. Somebody's gotta fix that gentleman up. 

S

Speaker 1

01:33

All right, let's. Let's jump in. So. Good morning. Welcome to the morning huddle. I'm Chad Brinky alongside my co host and friend, Stacy Holzinger. Stacy, how you doing this morning? 

S

Speaker 3

01:44

Good. I'm doing great. 

S

Speaker 1

01:45

Awesome. Glad to hear it. Stacy, what's something good that's going on in your world this week? 

S

Speaker 3

01:50

We have all our holiday parties in the next couple weeks, so that'll be fun. 

S

Speaker 1

01:54

Have you gone to any this week? 

S

Speaker 3

01:56

No. Tonight as W. Yeah. 

S

Speaker 1

02:01

Nice. That's awesome. So you said American Subcontractors association of Washington, D.C. Correct. Wonderful. All right, good. I won't be at that one. I want to be at that one. But, you know, we all have our limits. I'll be around next week, though. Good deal. So I want to introduce our guest, Anibon Basu. Aniban is the CEO of Sage Policy Group, an economic advisory firm in Baltimore that helps clients around the country. Anibon is the chief economist of the Associated Builders and Contractors, along with several other associations and is extremely well versed in the building industry and looked to as an authority in the industry, certainly by me and many others. He is a storyteller extraordinaire and has a knack for really making complex economic concepts attainable for the likes of me. 

S

Speaker 1

02:57

And therefore, I hope you I'm pleased to share with our audience as well that Sage Policy Group works in partnership with my firm, well Built Construction Consulting, as we collaborate to help one another's clients to build their strategic business plans, making data backed decisions for how and where and when to invest in growth. So with that as kind of the intro with so much to discuss and so little time, let's get to it. Anibon, thanks so much for joining us. 

S

Speaker 2

03:28

Oh, my pleasure. Absolutely, Chad, this is great. 

S

Speaker 1

03:31

So let's get right down to it. You know the question that's on everyone's mind anytime that they talk to you, which is what can we expect, you know, as we look ahead and you know, when we look into 2022, what do you see coming for the building industry? And let's focus first on the hottest and coldest market segments, you know, the sectors of the economy that we expect to be, you know, hotter and less hot when it comes to the building industry. 

S

Speaker 2

04:02

Well, I think the obvious answer in this case because we just passed this major infrastructure package, this Infrastructure Investment and Jobs Act, $550 billion of new monies on top of what had already been authorized to be spent, is that it's public segments that will lead the way going forward. We'll start seeing some of that activity next year, perhaps more of it during the second half of the year than the first half of the year. But segments like roads and highways, water and sewer, I think school construction, some of these segments are going to be red hot. Another couple of segments, but more private sector and orientation that will be hot. Data centers and fulfillment centers that also is obviously backbones of the e commerce economy. 

S

Speaker 2

04:42

And then finally, I think one of the dark horse candidates for a really strong segment next year in terms of construction is multifamily. And I would not have expected that. The pandemic has cost us today 3.9 million jobs, shrunk our labor force. So one would think that the apartment market would be in pretty bad shape, especially after all those units we constructed during the previous decade. But I am seeing pretty significant interest right now in apartment construction. So I think that'll be one of the segments that'll be pretty strong too. 

S

Speaker 1

05:11

So infrastructure, multi, residential the multifamily space. Why is it surprising to you that has demand? Why is that, you know. Yeah. Why is that a shock? 

S

Speaker 2

05:30

Oh, it's a shock to me because the fuel for leasing activity is job creation and we've lost jobs during the pandemic. And as I say, we built a lot of apartment units, very nice ones, by the way, high end units. You can see them in downtown Baltimore, but elsewhere during the previous decade. So one would think that market would be pretty well saturated. And also during the early stages of the pandemic, rents collapsed in many communities. Less in Baltimore than, let's say in Washington or New York. But it is still the case that rents were under some pressure. But right now there's so much liquidity working its way through the economy. So many people looking for yield in the context of a 10 year treasury that closed yesterday, a little bit above 1.4%. 

S

Speaker 2

06:09

And one of the segments that's been identified by investors is that multifamily segment, a segment that generates income. People are looking for income. And so that's, among other things, is translating into more apartment construction. 

S

Speaker 1

06:21

Got it. So more of a. This is a really good place to put your money to continue to get a return in comparison to other options in the market. Is, is what may be fueling the continued multifamily investment. Is that what I'm gathering? 

S

Speaker 2

06:39

Yes, that's right, Chad, but it could be a bad bet. In other words, when you look at a lot of these investments, these investors are scooping up apartment buildings at extraordinarily low cap rate. So they're paying a lot for the income that's being generated by these apartment units. And then in many cases, investors are also financing the construction of new apartment units. And one of the reasons this has worked out so far is the economy has come back in large measure. Also, home prices are so expensive that many younger families can't find homes that they can afford in their various communities. And so they're leasing up apartments, often very high end apartments, because they're trying to mimic the lifestyle of home ownership. So a number of factors here, but I suspect that we're going to ultimately get to an overbuilt multifamily market. 

S

Speaker 2

07:25

But again, I've been surprised with the strength thus far and the way that occupancy rates have held up in the face of job loss. 

S

Speaker 1

07:32

So a couple of follow on questions. One, I want to talk about affordable housing. To what extent. This is something I've been reading a lot about that seems to Me, like, as much as we've done to keep up with or maybe even, you know, overbuild a demand for apartments, we still haven't gotten up to the point where there are enough affordable homes available in areas of all types, but particularly in urban areas. Is that, is that the same thing you're hearing? Is that, you know, what do you anticipate for the affordable housing sector? 

S

Speaker 2

08:17

Yeah, that's what I'm hearing. It's what I'm seeing. There is not enough affordable housing in this country. So what that means is that many American households spend well over 30% of their incomes on housing and in many cases over 50%. And there's a structural issue here. Policymakers don't want to necessarily do what's necessary to create the opportunity for affordable housing. Now the, you know, Department of Housing and Urban Development, you know, helps subsidize developers often to site affordable units, but it's never enough. I mean, there's almost an infinite amount of demand for affordable units in many communities. In other words, if a developer successfully cites affordable housing, a community, it will almost immediately be leased up. And I think that's going to persist because there just isn't enough interest from the private sector and providing affordable units. After all, where's the margin? 

S

Speaker 2

09:04

It's the most high end units and there's lots of zoning restrictions and other restrictions on density, for instance, that make it impossible to really create more affordable units. 

S

Speaker 1

09:14

That HUD money is absolutely necessary to fuel that type of development, otherwise it just simply doesn't happen. Politically, do you think there is the will to make those types of investments over the year ahead, in the few. 

S

Speaker 2

09:31

Years ahead, there is the will to stop those types of investments. So many communities are really restrictive in terms of development. In fact, even single family home builders building three bedroom or four bedroom homes with two and a half baths, that kind of thing, they meet resistance from communities. You know, people say, we don't want any more growth. We didn't come to this community for, you know, a suburban lifestyle. We want it to maintain its rural character. All those things. I'm not saying those considerations are not valid. This is democracy. People are entitled to their opinion, but often the approach is we made it to Howard county, now let's lift up the ladder because we're the last ones in. Or we made it to Queen Anne's county or we made it to Talbot county and that's it, no more development. 

S

Speaker 2

10:12

And, and policymakers are elected. They hear that kind of, of expression and so they institute policies that keep, you know, keep there from being more development, including of highly dense units. 

S

Speaker 1

10:26

Wow. And this is the term we hear, nimbyism, right? The not in my backyard thing. 

S

Speaker 2

10:33

Yeah, yeah. Not in my backyard. Now they moved into somebody else's backyard often, but now that they have that backyard, they don't want anyone to move into theirs. And so it's really deeply unfair because what it does is that it's one of the factors that keeps America very disparate in terms of income and wealth inequality because the first movers end up having all the gains. I mean, think about all of the housing equity created during this pandemic. Home prices have shot higher. Who benefits from that? Homeowners. Who's the loser? People who would want to aspire to homeownership. And so that's one of the factors that's further widened the socioeconomic disparities. 

S

Speaker 1

11:12

Awesome. I mean, I see that you've helped to make it more clear and I appreciate that. So the second thing that I want to get into related to multifamily is the, you know, remodeling of existing spaces. I would imagine that with all the new construction that has occurred, that there's got to be a lot of pressure on existing units to become more competitive. Right. Existing properties to make investments to become more competitive. Otherwise it's going to be, you know, this massive gap between the new place around the corner and our 20 year old apartment complex that is paling in comparison when it comes to amenities and things like that. We're not going to be able to, you know, get the kind of rates that we need. Are you seeing, do you have any input on that sort of remodeling market? 

S

Speaker 2

12:10

Yeah, I mean, the remodeling market is hot during periods like this. And you're right, there are those competitive pressures. So if there's a new building, for instance, at 414 Light street at downtown Baltimore, an owner of a competing property might feel the need to try to upgrade their units. But here, Chad, it's not so obvious what's happening because this, there's price differential. So, you know, I may not be competing for the same kinds of tenants that you might get at, you know, at Anthem or 414 Light street or some of these higher end, newer developments. I might be trying to attract a more income fixed or income constrained crowd. In other words, if I put too much money into my units, I'm going to have to raise rent to make money. 

S

Speaker 2

12:53

And it may be that I'm trying to attract a group of renters who don't have that much money. And so my point is that this is part of the bifurcation of the country. You see it in the quality of the housing stock as well. You've got these shiny brand new units, beautiful with views of the water. And then you've got these other units where the H VAC systems don't work very well. There might be a rodent issue, so on and so forth, but that's where you get your affordable housing often is through that lack of investment. So it's a real problem. And again, to the extent that our socioeconomic disparities are widening in this country, you'd see that in the housing stock too, wouldn't you? And in fact, that's exactly what we observe. 

S

Speaker 1

13:32

Makes total sense. Yep, got it. Let's. I want to push pause here real quick. I didn't do a good job in my haste to get rolling. I didn't do a good job reminding our audience to please fire in your questions through the chat. We are going to take the Last minute, last 10 minutes or so of our time this morning together to get your specific questions answered. And Stacy is there to field and organize and, you know, prepare your questions for us in that last 10 minutes. So please, just an encouragement to get those typed right into the chat and we will get to addressing those throughout the course of the conversation. I'm going to shift gears with you on Iban to the underperforming market sectors. What do we, what do you know? 

S

Speaker 1

14:15

If, if were gonna, you know, try to, if I was heavy in these markets, I'd be diversifying in 22. What are some of those market sectors from your perspective, that are going to be kind of slow? 

S

Speaker 2

14:30

Yeah, I think there's three that come to mind. First, we had a wave of retail bankruptcies and store closures during the pandemic. Of course, you know, the likes of True Religion, Pier 1 Imports, Neiman Marcus, JCPenney, Brooks Brothers, Lord and Taylor all went bankrupt. Francesca's Guitar Center. So we have this wave of vacated retail space. I think that's one of the more challenging segments, therefore. And of course, under constant pressure from Amazon and other e commerce giants, Amazon continues to scoop up market share. Best performer during the pandemic thus far in terms of retail sales. Worth has been the Internet. And so that's one segment that's problematic in my mind. Second office. And what is the reason for this? Well, we've lost jobs as part of it. But the more important factor is the way in which people choose to work. 

S

Speaker 2

15:17

So one of the things that we've learned during the pandemic is that many people are as productive or more productive working from home than in the office. But who cares about productivity? Employers. But who has negotiating power? Right now it's employees. We only have about 75 unemployed people for every 100 job openings in this country. So it's really the employees who got the negotiating leverage. And many of them are saying, we prefer to work from home. We don't want to go into the office, we don't want to commute, we don't want to see our colleagues. We don't like our colleagues. In fact, we don't even like our job. But at least it's tolerable if we're at home with our cat and a computer, of course. And so that's not good for the office segment. 

S

Speaker 2

15:52

In fact, a survey came out recently indicating that 68% of Americans would prefer to work remotely. Third, the hotel sector. Now I'm not talking about high end resorts. The rich got richer during this pandemic. And so high end resources will be fine. But those hotels that address the commercial or business market, where there's a lot of space for meetings, for instance, business gatherings, you know, business increasingly is conducted by Zoom and GoToWebinar. And here we are on LinkedIn, so on and so forth. And so one's got to think that's a weak segment. In fact, if you look at the 16 major categories of non residential construction, the one that suffered the most in terms of new construction investment has been the lodging segment. Again, new hotel room construction. 

S

Speaker 1

16:35

So retail office hotels, if you're heavy in those markets, you might be thinking about creative ways to, you know, diversify in the year and in years ahead. Let's talk about geographical winners and losers. We have, you know, our audience comes from all over the place. Yes, you and I are both based here in the mid Atlantic, but our audience is all over the country. So. So who are some of the geographic winners and losers and why? 

S

Speaker 2

17:04

This is South. The south wins. It's Florida, it's Georgia, it's Texas, it's Arizona. These are some of the states that are performing the best during the pandemic, but they also have the most favorable long term demographics. Baby boomers are on the move. Of course, many of them have retired. Many of them retired early during the pandemic. As it turns out, about one and a half million of them. And there's another wave of baby boomers set to Retire. And let's face it, a lot of people like warmer weather. It's good for the joints. And so when you look at states like Florida, Georgia, cities like Nashville, Austin, Charlotte, Tampa. Tampa is booming. It's blowing up the, you know, that Tampa, Orlando corridor. It's fantastic economically. 

S

Speaker 2

17:44

If you like growth, if you like growth, if you like stagnation, you know, if you like stagnation, then there's probably some markets in the Northeast that can probably satisfy your desire for a lack of activity, and you can just watch the grass grow. But if we're talking about geographic advantage in terms of growth, it's the American South. 

S

Speaker 1

18:00

Wow. Yeah. So I. And. And I do know several companies in. In this market and also in other markets across the country that I work with that are making investments and into pushing south because they're seeing an unmet need. 

S

Speaker 2

18:17

So. 

S

Speaker 1

18:18

So that's. That's happening. No question. All right, shifting gears another time here. Between the two of us. Let's. Let's talk about materials prices. What the hell's going on? 

S

Speaker 2

18:31

Unbalanced global economy. So we, you know, shut down the economy, of course, globally. In America, it begins in March and April. That's shut down. And so what happened is, Chad, that a lot of firms, sensing that this could be a very lengthy episode in American economic history, shut down their capacity. So they laid off tons of workers. Some of those workers, by the way, asked to be laid off so they could collect more generous unemployment insurance benefits, set that aside. But they might have mothballed ships, they might have shuttered factories, including sawmills, whatever it happens to be. And then all of a sudden, after we lose all those jobs In March and April, 22 million of them nationally, we reopen the economy and fits and starting in May of 2020, the economy comes roaring back. Demand comes roaring back. 

S

Speaker 2

19:16

With all the stimulus, the supply is not there. So what do you get? You get shortages of goods, shortages of inputs, and much higher prices, you know, across the board, including with respect to materials prices, whether it's natural gas or other forms of fuel, whether it's steel or aluminum or copper. And, of course, softwood lumber has attracted much of the attention during the pandemic for various reasons. And so now software lumber prices have come back down a bit, but they remain well above what they were pre pandemic. So it's the reopening of the economy, it's the stimulation of the economy, and it's the fact that the supply chain has not been able to rise up to meet that challenge in Part because the labor market is supplying fewer workers right now. Our labor market has shrunk over the course of the pandemic. 

S

Speaker 2

19:54

For instance, in the US we have a shortage of 80,000 truck drivers in this country. So all kinds of factors at work, but that's what's happening. 

S

Speaker 1

20:00

To what extent does consolidation of providers in the global supply chain contribute to an opportunity for a relative few competitors to control the market? 

S

Speaker 2

20:16

Oh, yes, absolutely. Another factor, which is market concentration. So, you know, for instance, back in 2017, a group of global shippers came together to form a consortium. And even though there were only like 10 or 12 of them major shippers at that time, they further consolidated the market effectively. You know, we know that we have OPEC and OPEC plus, we have a limited number of oil producers. So we've got real concentration in certain markets. You know, you look at the American airline industry, for instance, four major airlines. It's much more concentrated than it used to be. And almost every segment, you see private equity and others trying to roll up firms and consolidate and create market power. You've seen this massive mergers and acquisitions market for years. 

S

Speaker 2

20:57

And so we have really gigantic businesses, and they have market power, and that usually causes prices to remain higher than they otherwise would be. So that's part of this inflation story. 

S

Speaker 1

21:08

Yeah, yeah. I don't think you or I are going to get to the bottom of it, but I wonder if there are some really fascinating discussions that happened, you know, six months ago, eight months ago, nine months ago that really helped to fuel a massive price increase that time that the market has had to absorb. So, you know, we're already there with 10 minutes left, and I can't believe it. But I do want to open up the conversation for questions from the audience, so I am going to pull up. Stacey, Stacy, if you could help us to organize the discussion here. Questions that are coming in from the audience and audience, please keep firing those in. We'll do our best to get to as many of them as we can in the next 10 minutes. Stacy, what do we got? 

S

Speaker 3

22:00

Sure, we have one question here. Supply chain issues are currently the single biggest impediment to maintaining construction schedules. When might you predict the supply chain pressures will ease? That's a tough one. 

S

Speaker 2

22:13

That's a tough one. It's speculative, but I think some point later next year, you'll start to see some semblance of normalcy. Now, you know, we've got this Omicron variant now floating around. It's highly transmissible, and so it would happen sooner, but for that. But I think sometime later next year and there probably will be some interruptions in supply chaining disruptions into 2023. So I'm not completely naive, but you know, we economists like to say that the cure for high prices is high prices. And so with prices so high and demand so high, producers have an incentive to expand capacity, add shifts, make investments in equipment, which in fact they are doing in large numbers. I'll give you an example here, Chad. Globally, we had more container cargo ship orders this year in 2021 than in any other year in history. 

S

Speaker 2

23:03

So suppliers are trying to bulk up their capacity and that should provide some benefits to consumers of various goods sometime next year. 

S

Speaker 1

23:13

Awesome. That's extremely interesting to hear. Stacy, what else we got? 

S

Speaker 3

23:20

What do you think about the term the great resignation? Can you comment on that and how people, the unemployment, like when are people expected to get back to work, that kind of thing? 

S

Speaker 2

23:33

I have no idea. You know, when the pandemic began, labor force participation in this country was 63.3%. And I thought that people were pretty happy. Not with the politics necessarily, they just, you know, but they were happy with the economy and some people were happy with the politics, I suppose. But the point is now no one seems to like their job. No one seems to want to come to work. I hear so much complaining, so much resignation among educators and construction workers and many others. The so called quits rate hit a record of 3% during the most recent month, which we have data. 4.4 million Americans quit their jobs in one month, many of them leaving small businesses behind. Any restaurateur you talk to says, where are my workers? I can't get them back. 

S

Speaker 2

24:14

And it's very hard to hire help wanted signs everywhere. So, you know, my thinking is that there's a semi permanence to this. People have rethought what's important to them. And one of the ways to deal with this is through stepped up legal immigration. You know, I'm a big fan of legal immigration. I mean, look at this. What I got going on here, it's no secret. And so I'd love to see America step up and bring some of that fresher blood in that motivated blood back. Because I think that's when America is at her best, is when you've got those really hardworking immigrants working alongside Americans who have been here creating a really dynamic marketplace. But we just don't seem to have that dynamism in the labor market right now. 

S

Speaker 1

24:55

I think that's 100% right. And I'll toss another. In addition to increased legal immigration. Another. Another thing that feels particularly relevant to me is that in. In an effort, I think, to help people, Really. I think in an effort to help people, policymakers have a desire to expand the social safety net. But I feel like every time the social safety net exp. It reduces the responsibility of the economy, the American corporation, the. The, you know, small businesses, the large businesses to, you know, incentivize people to, you know, move into the labor force. So it's kind of like, you know, the more social safety net we're providing, the more problems, like, we perpetrate, perpetuate. I mean, on accident. What's your response to that? I know I'm crazy, but what's your response to that? 

S

Speaker 2

25:53

You're straight up nuts, Chad. But what you've said is correct, I think, which is that I think that some of our work ethic has been dulled, in fact, during the pandemic. So people got lots of checks. 68%, for instance. 68% of workers who lost their jobs earlier in the pandemic were making more on unemployment, thanks to those federal subsidies, than they were prior to the pandemic, I mean, at their previous job. And so when you pay people to not work, then they get used to it, and they want that. They prefer it, you know, and my guess is that the Chinese government loves it when we pay Americans to not work. We need to get back to work. 

S

Speaker 2

26:30

And work is one of the ways that we contribute to this country, that we grow our gdp, we grow our tax base, we contribute to each other effectively. We help finance our national security, our homeland security, our, you know, our infrastructure, all that, you know, investment in education or human capital formation generally. I mean, and we just do not have that right now. And so, you know, it's often said that millennials strive for work, life, balance. That's code in my mind, for not much work, much life, you know, And I want to have. I don't. You know, I would like to not work so hard and have more life, too. But to have my life that I have, I've got to work. In fact, I've got to work really hard. And that's. That kind of motivation is good for America generally, I think. 

S

Speaker 2

27:14

You know, larger economy, more powerful economy, more influence globally. But there are a lot of folks out there who are not pulling the rope. 

S

Speaker 1

27:22

Thank you, Stacy. We probably have time for two more quick ones. 

S

Speaker 3

27:26

Okay. The pandemic has forced change across the board. What do you think the growth will be in the Prefabrication, volumetric modular construction and manufacturing practices in the construction process over the next year. 

S

Speaker 2

27:43

Yeah, I think the pandemic has been an accelerant to modular construction and prefabrication. Again, a lot of this relates to the workforce dynamic. So it's just hard to find construction workers these days. Many people don't want to work outdoors. They prefer to work in a controlled indoor setting. And modular construction offers that and therefore offers greater opportunity for flex time and other kinds of things, just more comfortable. And the workforce seems to be really concerned about comfort these days. And so I've been surprised that module construction has not gained even more market share in recent years than we have observed. But I think that you'll see significant market share gains going forward. And the pandemic is part of the reason for that. 

S

Speaker 1

28:22

Yeah, I would just echo that. You know, I hope that the industry and that the audience watching doesn't look at large scale events like the collapse of Katera as an example, that modular and your volumetric building isn't going to happen. It is, it's happening right now. And in fact, I would, you know, posit that there are thousands of amazingly qualified people who worked for Katera who are going to be doing some incredible things in that world, you know, more on a localized, regionalized, in small business way. So I definitely see that trend continuing and stay very plugged into it myself. All right, one more. Stacy, what do we got? 

S

Speaker 3

29:03

Okay, this one's from Brewster. Do you see any technology disruptors ahead of the construction industry? 

S

Speaker 2

29:10

Oh, many of them. I mean, you know, construction is famous for not generating meaningful productivity improvements over the course of decades. So we've seen utter transformation of financial services and retail trade and of course logistics, so on and so forth. Just have not seen that in construction. The typical construction job site probably looks a lot like it might have looked like several decades ago. And so lots of technologies, 3D printing and drones. And obviously on the design side, we've seen the effects of BIM and other emerging technologies. But yeah, the revolution is yet to occur. We just talked about modular construction, for instance. But you know, robotics, you know, robots that can lay brick, for instance, they're coming, driverless vehicles to drive materials to job sites, all those kinds of things. And so yes, the revolution is coming. 

S

Speaker 2

29:56

And I suspect that the strongest technology companies, or I should say the strongest construction firms, will be the strongest technology companies as well. And by the way, technology can be expensive and training people on technology can be expensive. So that's another one of the factors that will drive more industry consolidation going forward. So if you see, if you think you've seen a lot of industry consolidation in the last few years, I don't think you've seen anything yet. 

S

Speaker 1

30:17

In our conversations on iban, one of the things that really sticks out is I remember talking about just this topic and I said, you know, if you were a construction company today making a strategic plan for five years from now, would you be planning to get bigger? And you said something that I thought was, you know, exactly what I felt and told my clients, which is, only if you plan to be in business. Right. Only if you plan to be in business. In other words, if you're. If you. It's totally reasonable and acceptable to look at the current market circumstances and say, you know what, now is actually a pretty good time to exit. Things are about to get. It's a. The revolution wave. It is coming. There are a lot of major investments that I'm going to need to make. 

S

Speaker 1

31:02

And if I'm not prepared to make major investments in my company to buy those, buy that equipment and expand my presence and all these things that I'm going to have to invest in, getting out is a reasonable option. But if I'm not getting out, I should be making a plan to grow. 

S

Speaker 2

31:19

Yeah, it is a good time to get out. I think it's a good time to sell business. Business valuations are generally quite high. Again, people are paying a lot for net income. But, you know, there's a sort of notion, go big or go home. And I think basically that defines construction during the years ahead. Go big or go home. Because again, technology is expensive and recruitment is very difficult. How do you induce the greatest talent to work for one's firm? While often a lot of people are looking for that financial stability that comes with a large established firm. And so go big or go home. I think that's part of the mantra going forward for the US construction industry. 

S

Speaker 1

31:57

This has been the fastest 30 minutes that I've spent all month. Anibon, thank you so much for being here. I hope you don't have something right on the back of this. I hope you get a chance to relax. I'm sorry to pull you in so early, but I'm really glad that you were able to do it and I think provided a ton of value to the audience here today. And so thank you for being here. 

S

Speaker 2

32:20

Thank you very much, Chad. 

S

Speaker 1

32:21

Yeah, so I'm gonna just briefly intro next week. We have. Please join us on December 14th. We have Steve Yelland and Bruce Jones, two very good friends of mine. The first time that we're gonna have two guests at once, they're gonna be on talking about a successful acquisition that occurred. Steve's business bought Bruce's business about four years ago. That provided a bunch of lessons learned that we're going to talk about. When it comes to exiting your construction business, I think this is relevant for the people who want to exit. This is relevant for the people who are thinking about getting out. This is relevant for people who are a part of a business that was just rolled up and also just going to be generally a lot of fun discussion about merging cultures and, you know, being successful post acquisition. 

S

Speaker 1

33:11

So we'll look forward to talking about that. Stacy, anything that you want to say before we part ways today? 

S

Speaker 3

33:19

Well, I look forward to seeing a lot of you this evening and we'll get this awesome episode up on YouTube in the next, like 30 to 40 minutes. So if you need to rewatch it or send it to somebody, I'll send a link. I'll post it on LinkedIn so you guys can find it. It was great discussion. 

S

Speaker 1

33:38

Thanks so much. Yeah, spread the word, guys. Please spread the word. If you know anybody that wants to speak, if you know it right. That would love to join us that you. If you know somebody that should join us, please pass their information along. We'll reach out to them. And, you know, if you want to make sure that you're on our email list, send me a private message with your email. I'll get you added to our email list, which goes out every week with a YouTube link to the previous week with a registration for the upcoming week. And we're going to keep on doing this through the end of this year into next and look forward to seeing you guys next week. Thanks so much. Have a great week. Thanks, Stacey. See you. 

Join Host Chad Prinkey (Well Built Construction) and Co-host, Stacey Holsinger, (Steel Toe Communications) every Tuesday morning at 8 a.m. EST. on LinkedIn as they interview top A/E/C industry experts. Guests can participate in the conversation live!

Transcript:

So we're two days before Thanksgiving for the morning huddle. And, you know, it gets to be this time of year, and, you know, it's. At least for me, today and tomorrow is cram everything in before Thanksgiving. What's today and tomorrow look like for you guys? 

S

Speaker 2

00:26

Pretty busy for me. This is actually usually my favorite week of the year. Wednesday is like a half day kind of feel. But not this year. It's gonna be. 

S

Speaker 3

00:38

Yeah, not for me either, unfortunately. Me and Josh just realized we're both headed to Philadelphia to visit family in Bucks County. This is the first year that me and my brothers are taking over Thanksgiving and cooking for my mom. So my mom gets to relax, but we're using her house still. So is. 

S

Speaker 1

01:00

Do you think your mom will actually relax? Because I know if. Like, that sounds like a really cool theory for my mom, there's zero chance she would relax. 

S

Speaker 3

01:07

Exactly. I'm sure she's. You know, she says that she's going to be busy with my son, but I know she'll be popping in the kitchen checking. 

S

Speaker 2

01:16

And for the record, I said I was excited to go see my family. Stacy, I didn't say that. 

S

Speaker 3

01:23

Butts. 

S

Speaker 2

01:25

It was. 

S

Speaker 1

01:25

She just didn't. She didn't say. 

S

Speaker 2

01:27

I didn't hear it. I didn't hear it. 

S

Speaker 1

01:28

That's all. 

S

Speaker 3

01:30

Well, I have heavy responsibilities this year, so. 

S

Speaker 2

01:34

So. 

S

Speaker 1

01:34

So I got. I. I started on total accident. I started a little bit of family drama yesterday. We've got, of course, the obligatory family text thread, and I saw this article on how to prepare, like, the best Thanksgiving turkey, and I was like, oh, I'll send this along. And of course, it was like, my mother was like, sure, we can change the way that I do Thanksgiving turkey. Evidently, that's not good enough for you. And I'm like, no, I'm. So there was no agenda? No agenda. 

S

Speaker 2

01:59

It was awesome. 

S

Speaker 1

02:01

All right, let's go ahead and get rolling. For Tuesday, November 23, 2021. Welcome to the morning huddle. I'm Chad Prinky alongside my partner and producer, Stacy Holzinger. Stacy, how are you today? 

S

Speaker 3

02:20

Good. Great. 

S

Speaker 1

02:22

What? 

S

Speaker 2

02:23

So. 

S

Speaker 1

02:23

So going. Going to Bucks County. Is that, like, the standard? You always go to mom's? 

S

Speaker 3

02:28

Yeah. She would not give up her holiday for anything. For. I mean, she's an excellent cook, so I don't think anybody really wanted her to give it up. But this year, she's like, I'm taking a break. You guys got the kitchen. 

S

Speaker 1

02:41

So, you know, it. It's. It's. My best recommendation is to screw it up that way next year you get to return back to traditional. 

S

Speaker 3

02:49

That's a good idea. 

S

Speaker 1

02:51

That's my. That's what I do with the dishes when I'm given that task, you know, Anyway, so. All right, cool. So, Stacy, you know, Stacy's role, as always, is to come in that last 10 minutes and capture all of the awesome questions that come in throughout the course of the session. So for those of you who are viewing live right now on LinkedIn Live, please make sure that you get comfortable with that chat function. Fire your questions across. We want a chance to address those throughout the course of the session today. So, Stacy, we'll see you with 10 minutes to go. Thank you so much. I know you'll come locked and loaded with some good ones. See you soon. 

S

Speaker 3

03:33

See ya. 

S

Speaker 1

03:34

So today my guest is Josh Hauserman. Josh. Josh is a good friend of mine personally, but he is the head of the bonding group for HMS Insurance Associates, where he leads a team of 11 agents and three other support staff that help to make those agents successful. And Josh is also always behind the scenes to help not only his own clients, but the teams, the rest of his team's clients, to solve complex business and construction problems, you know, to help these contractor clients to get things done. I actually knew Josh before I ever met Josh through my clients, who anytime in a conversation over the years, you know, I've been serving the construction industry for 12, 13 years. 

S

Speaker 1

04:23

Over that time frame, I would get into conversations with contractors and talk about their most trusted advisors, you know, their lawyers, their accountants, things like that. And I would hear Josh's name a lot. So we shared a lot of overlap with our account base. And eventually I just thought, I gotta meet this guy. People talk about him. My clients speak about him the way I hope they speak to others about me. And so Josh and I got to know each other. He and I share so many views about the building industry. He's taught me a lot personally so that I've been able to better serve my clients as an advisor. So when I invited Josh to join, I was really excited that he accepted. We're here to talk business, and today's topic is Common Threads. 

S

Speaker 1

05:07

The most bondable contractors, from the view of someone whose team writes somewhere around $8 billion in bonds a year. So, Josh, before we get rolling, give us any additional intro on yourself to give some context. Who are you beyond what I've laid out for our audience. 

S

Speaker 2

05:28

Yeah, you nailed it. First of all, thanks for having me. And also thanks for hosting our client seminar last week. For additional background, I've been here for close to 17 years now. I started out just handling house account leads and basically supporting our producers. I was in that role for about five years and gave me a great deal of experience. I have my master's degree in accounting, which helps a great deal, as you can imagine, in this field, and ever since then been off and running. 

S

Speaker 1

06:03

Awesome. 

S

Speaker 2

06:04

So. 

S

Speaker 1

06:04

So I don't want to take for granted. There are going to be some people who are watching this morning or listening, you know, on the recording that are construction and bonding gurus. They know what they're talking about. Right. They've got years and years of experience in the industry. There are other. Also going to be some people who are kind of get the concept of bonding, but they don't. You know, they're not, they're certainly not experts. Could you give us like the 1 minute overview of what is bonding just to kind of give context to the remainder of our conversation today? 

S

Speaker 2

06:39

Yes. So I'll answer it as it relates to the construction industry specifically, but basically it's a credit transaction to give you like the Bond 101 answer. It's the underwriting is based on character capacity and capital. Character, meaning you're going to do what you say you're going to do. And you know, your references will check out, you haven't had a bankruptcy. Things like that. Capacity, meaning you have the labor, the equipment, the experience to handle the jobs in your backlog. And capital, meaning you have money. 

S

Speaker 1

07:14

Got it. And so a bond might be defined. 

S

Speaker 2

07:19

As what I would say. A bond in this context is synonymous with a guarantee. So you have a bid bond, which is a guarantee for your bid performance. Bond guarantees your performance of the contract. And a payment bond guarantees payment of subcontractors and suppliers. 

S

Speaker 1

07:36

Excellent. All right, cool. So with that as the backdrop, it's this, you know, question of credit worthiness. You know, that's going on. Capacity, character, capacity. And what's the last one? 

S

Speaker 2

07:50

Capital. 

S

Speaker 1

07:51

Capital. Character capacity and capital. Okay, good. 

S

Speaker 2

07:53

All right. 

S

Speaker 1

07:53

That's a good backdrop. So I think most. What bonding means to me. I think most contractors want to be able to brag about their bonding capacity. Most, most contractors, my impression is it's a way of sort of humbly communicating their financial stability, strength, trustworthiness, etc. As a bonding pro, what do you think high bonding capacities really signify when somebody says, you know, we've got X, you know, desirable bonding capacity? 

S

Speaker 2

08:28

Yes. First I would agree with you. I think it's a status symbol within the construction community. And really what it represents is staying power. And I would argue that the underwriting process is effectively a construction best practices checklist. You kind of, you get into a contractor's operation and you see, you know, look under the hood and see how they perform and, you know, all the upside, the downside, and everything else. 

S

Speaker 1

09:01

You mentioned best practices. Best practices in what way? What are some of the examples of best practices or the checklist? So if I were, if I'm a contractor, this is valuable information because there's a. There's clearly a list of, you know, are you doing things right that, you know, that underwriters are using? What are some of the things that are included in that kind of best practices? 

S

Speaker 2

09:28

Yeah, I mean, I would say it's in a word or two words, operational excellence. And that's in every department and throughout the organization. So that starts with, you knowing your costs and having a accurate accounting system, bidding, you know, having checks and balances in your bid process, obviously having the experience in the field, having the labor to support the projects that you're bidding. Good subcontractor relationships, whether you're a GC or a subcontractor, identifying risks on projects. And I think the biggest thing is you can tell in a conversation with a contractor if, when you bring up, you know, potential pitfalls or things that could drive a project to go sideways, if that contractor has a backup plan for their backup plans, I think that's the best way to put it. 

S

Speaker 2

10:21

So in other words, if, you know, I've been in meetings where there's concern about labor and, you know, we have a great crew here, but what if the next contractor over comes over and offers, you know, field labor $2 more an hour and, you know, they disappear one day, what do you do? So you have to think about scenarios like that. You know, how are you going to manage your subcontractors on the critical path? Yeah, just, you know, evaluating contract terms. You have to have controls in place and really just vetting not only project risk, but operational risk within your organization. 

S

Speaker 1

10:58

Interesting. I'll tell you one thing that I want to zoom in on is this idea as I listened to your checklist. Okay. Things went from in my mind, kind of, you know, basic to more and more complex as you kind of went down the line. So I'm, you know, just going through, like, knowing your costs. Gosh, I, I betcha that there's a substantial number of contractors that can't Check that box, you know, fully. So when somebody. And then there's, and then there's maybe the contingency plan for the contingency plan being that one's, you know, sort of really advanced. So if you've got knowing your costs as a foundational item, then there's contingency plans for contingency plans as something that is, you know, do you think about this at all in any kind of hierarchy? 

S

Speaker 1

12:00

Is that something that you know, look at or is that just my interpretation? 

S

Speaker 2

12:05

You know, I wouldn't necessarily look at it in that way. I would look at it more along the lines of you're only as strong as your weakest link. So if you think about it, if you, if there's 20 boxes to check and you check 19 of them, that one unchecked box could be the shortfall that takes a company under. So I, in my opinion, I think it's, you know, you try to have as much depth as possible in each line item. 

S

Speaker 1

12:32

Got it. So what. One of the things that I know, certainly most contractors spend a lot of time thinking about, and rightfully so, for lots of business reasons and personal reasons, is profitability. But what role does profitability play? Is it just one of the checkboxes? What role does profitability play in a company's bonding capacity? 

S

Speaker 2

13:02

It's huge, but it depends on the metric. So, for instance, I'm going to dig in deep and then I'll walk it back a little bit. But obviously profitability is paramount in the bond underwriting process because ultimately profitability enables a contractor to build their balance sheet. And once you have the working capital and equity, basically that effectively means that you do have staying power, and that's what getting bonded is ultimately all about. The caveat to that is you want to best practices relative to profitability. Except I'd argue one item that is counter to bond underwriting as it relates to profitability, and that's the return on investment metric. 

S

Speaker 2

13:50

Because basically you can drive that metric higher with a leaner balance sheet, which is counter, like I said, it's counter to bond underwriting where, you know, it's bond underrated based on balance sheet metrics and having the wherewithal to, you know, whether a bad job or, you know, weather downturns in the economy. And obviously all that starts with profitability. But that's one carve out that I'd say is ROI isn't necessarily a metric. But to answer your question, yeah, profitability is paramount. 

S

Speaker 1

14:28

At the risk of Going into real bonding. Geek land. Talk more about the ROI metric. 

S

Speaker 2

14:37

So we actually. Yeah, we wouldn't. Right. It's. So return on investment is basically net income relative to your equity or, you know, starting capital in the company. From my perspective, that's not, you know, it's cat. I say it's counter to our underwriting metrics because if you came to me and said you were going to start a construction business and you gave me two scenarios, one where you were going to put in a million dollars to start and another scenario where you're going to put in $2 million to start, I would probably recommend the 2 million, obviously depending on what you wanted to do. But that makes that checks that staying power box in a more effective manner, if that makes sense. 

S

Speaker 1

15:19

It does. So what are. Let me ask this question. I'm interested in what we can learn from the companies who consistently look the best in the eyes of underwriters. So for this audience that mostly consists of contractors and also people who, you know, deal with contractors on a daily basis, what can we learn from the companies who consistently are viewed as good risks in the eyes of underwriters? 

S

Speaker 2

15:55

I would go back to the, you know, the best practices approach. I think one of the very important things, and obviously this depends on where a contractor is in their life cycle and if it's a, you know, long standing contractor that has a, you know, long history of profitability, it's going to be a different scenario. And they might not need the level of advice. However, I mean, it comes back to operational excellence in every department. Right. So with your estimate going back to knowing your costs, I think that's imperative because you're making management decisions based on your performance. You're not going to know your performance unless you have accurate cost controls. You're not going to be able to bid accurately if you don't know all of your costs and know them accurately. 

S

Speaker 2

16:43

You're not going to know which customers to focus on or which scopes of work to focus on if you don't have those true cost figures. So I'd start there and then, you know, if you think about contingency planning, you know, having a stable subcontractors and suppliers having, you know, plan A, plan B, plan C, that also goes for capital as well. Right. Best practices would tell you to tell contractors to establish a working capital line of credit, but not necessarily use it and keep it for a rainy day. And that way if a project does go sideways or if there's a hiccup along the way, you know, you have an outlet. 

S

Speaker 1

17:22

I want to get back to this cost controls thing for a second, Josh, is that, you know, really practically, if I were a contractor and said I'm looking at myself in the mirror and I really don't have a handle fully on my costs, I get to the end of the project and I'm kind of holding my breath, and that's where I peek and see, like, did we do okay? You know, and some of them, it's even tougher, right? They get to the end of the year and they just, it's really like what's left, you know, if I'm in that boat, what are some tangible recommendations that you would have for getting my hands wrapped around my costs? Like, just what are some things that you've seen your clients do that give them better control? 

S

Speaker 2

18:05

That's a good question. Again, that would depend on the size of the contractor. But I think the easy answer is leverage technology. You know, whether it's having a project management system tied to your accounting system that ties to your bidding system and have everything integrated. From my perspective, I think doing a postmortem analysis is imperative. Right? That's how you know how your project teams are performing, how your customers, how valuable your customers are to you know, and types of work. So I would say leveraging technology. And the second thing is lean on trusted industry professionals. And in that world, it's obviously your construction oriented cpa. I think that's imperative. I think a lot of the time you'll, you can ask most CPAs if they specialize in construction. I would say most might say yes. 

S

Speaker 2

19:02

My recommendation is look at companies that you admire and companies, other contractors that, you know, you strive to be like them, and look at the industry professionals that they work with and, you know, start there for your cpa, for your attorney, for your, you know, construction consultant, bond agent, insurance agent. The whole night. 

S

Speaker 1

19:23

Makes total sense. Yep, I, I agree. I think, I think the answer, you know, said in maybe a different way is also don't. Don't try to go it alone. There's technology and there are professionals that are literally there to help you to get your hands wrapped around that stuff. And there's absolutely nothing that should stop you from reaching out to those folks. Just a quick reminder to our audience, please start firing in some questions from your perspective so that we can shift gears to that in just a few minutes while I move on to another question. So, yeah, what are the most common mistakes that you see contractors make that are most damaging to their bondability. 

S

Speaker 2

20:10

Good question. The short answer is losing money. But the situations that I've seen lead to losing money. It's any combination of trying to grow too fast, owner disengagement, lack of internal controls. A big one that I've seen is obviously jobs can go sideways. The construction industry is very dynamic. But if you see that there's a systemic problem and there's systemic risk, either on the, you know, specific scope of work that you're pursuing or a specific customer or type of contract, if you see a systemic risk and you do not address it's going to come back to haunt you. So I've seen that quite a bit. Yeah. And then just not, I guess the attitude, not having the attitude of I don't know what, I don't know. 

S

Speaker 2

21:05

I think obviously you need to be confident, but, you know, you have to have that little devil's advocate in your ear from time to time. 

S

Speaker 1

21:14

To me, it goes down to what I'm, how I'm translating what you're saying is. It goes down to, you know, working on your business. So when it comes to working on your bonding capacity, what you're not working on your bonding capacity, you're working on your business. Yeah. That's what you're really doing. And, and so if a part of what you want is to improve your bondability, which will enable more growth, which will enable more opportunity and profitability and all those different types of things, if that's what you're looking for you can't accept your things as they are today and say, yeah, this is just, it's what I know, it's what you know, this isn't what I do. I'm not going to be great at these things. 

S

Speaker 1

22:05

You know, one of the biggest problems or, you know, kind of, I don't know, nails on a chalkboard. For me when I hear is that like we don't, we don't want to overdue process. We don't. We just really don't. Like, we like, you know, kind of allowing our people freedom. 

S

Speaker 2

22:18

Right. 

S

Speaker 1

22:18

Which is to me, it's all. I'm not opposed to either of those comments, but usually when I look under the hood, what that is code for is like we like to wing everything. And, and that is a really good indicator of somebody that is. It's going to be really difficult if you have that mindset to actually work on improving, to actually improve your business because you're just Resisting adopting best practices and principles. So, all right, I want to open up the door for the questions that are coming in and toss the ball here to Stacy, who I'm going to bring back. Stacy, what do we got? What kind of questions do we have for Josh? 

S

Speaker 3

23:10

Sure. So what advice would you give a contractor looking to grow their bonding capacity? 

S

Speaker 2

23:18

The. And this actually ties into Chad's last question too. But focus on the bottom line. Don't chase revenue, don't chase the top line. Focus on the bottom line. Retain profits, establishment controls and systems. Lean on your trusted advisors. You know, you're just like we had mentioned, CPA, attorney, construction consultant, you know, bond agent, insurance agent, the whole nine, obviously leveraging technology. And I think the biggest thing frankly for me in life is just having a growth mindset and always trying to learn. You never want to be in a position to have the industry pass you by. And if you think about what it takes to maximize your bonding capacity and the goal of bonding companies in establishing a bond program with a contractor, it's staying power. 

S

Speaker 2

24:12

And I haven't talked to any contractors who tell me the five year plan and that includes going bankrupt in year five. Right. So the goals are aligned in that regard. The friction usually comes with the amount of capital that's required to retain in the company to substantiate a larger bond program. So I think that's the key. Profitability and retaining earnings and then growing from there. 

S

Speaker 1

24:34

So I have a follow on question regarding profitability. I totally agree with you that companies put way too much emphasis on top line growth and not nearly enough emphasis on what that ultimately means to profitability. But is there such a thing as too much focus on profitability? In other words, here, how about this? Are there costs that you wouldn't recommend cutting? You know what I mean? You're sort of saying don't do that, don't cut. 

S

Speaker 2

25:12

So yeah, it's a good question. So you don't want to step over dollars to reach for pennies. Right. You don't want to try to maximize your profitability this year and sacrifice your profitability the following three years as a result. So obviously, you know, it's a balance. So when I say retain earnings and focus on profitability, that still requires leaning on your trusted advisors and industry professionals. Obviously there's a cost that comes with that. Leveraging technology, there's a cost that comes with that, but that's not, those are investments in my opinion. So I think differentiate between investing in the future, investing in your company. That's obviously imperative as it relates to staying power. But if you're looking to cut costs, do you need to go to an industry event across the country and stay an extra week, something like that? 

S

Speaker 2

26:07

That's obviously not necessarily an investment in your company. So, yeah, to answer your question, I'm not saying cut all costs and pinch every penny. It's, it's, you know, invest in your company and keep an eye on the long term. 

S

Speaker 1

26:19

And do underwriters get that? So if I'm able to, to show the underwriter, if I'm able to sort of say like, okay, yes, we did not improve our bottom line last year. We did 3% in 2020. We're doing it. We're going to do 3% again in bottom line in 2021. But I want you to see here this, you know, $140,000 worth of investments that we've made that I could have let go to the bottom line, but that we actually put into this training program that we put into, you know, employee raises so that we, you know, became more durable against, you know, rising incomes. And we didn't want to lose our key people to write. Do underwriters get that? Do they, you know, can you, do you get an opportunity to tell that story? 

S

Speaker 2

27:06

Yeah, I mean, quite simply, that's our job as a bond professional and bond agent. Right. So a story like that doesn't necessarily jump off the page and, you know, it's not like it's highlighted in the financials. 

S

Speaker 1

27:19

Right. 

S

Speaker 2

27:20

But our job is to provide context around those financials. That's an easy story to tell. If a company's still profitable and making investments into the future. If it's a situation where, you know, like everything else, it's a balance. So if there's a scenario where, you know, you have a contractor who's lost money three years in a row and it's the same narrative all three years, like, it's not going to fly. So there's a balance there. But the short answer is absolutely, that's part of the story. And obviously it's an investment in the future. And, and obviously that matters. And that's ultimately what bonding companies want, is staying power and a long term view on things. 

S

Speaker 1

27:55

Awesome. 

S

Speaker 2

27:55

All right, Stacey, what else? 

S

Speaker 3

27:57

Yeah, so Blake Radcliffe asked, with so many projects running over schedule and over budget, plus rising labor challenges, how are you calculating and managing risk? 

S

Speaker 2

28:10

So I wouldn't say there's a set metric relative to that type of risk. It's, you know, let's have a conversation about how you're going to address it. So when I mentioned previously, you know, you have your plan A and your plan B and your plan C, that doesn't necessarily mean that plans B and C are still, you know, makes the. The job, whatever, you know, like a very successful job for you. But if it's something that keeps it from being a total disaster, that helps. So I think the biggest thing is just having contingency plans. So in other words, you know, with all the supply chain issues now, are you able to substitute products? Are you able to obtain supply bonds from suppliers, which, you know, in my world, it's. It's always mentioned, but I know in practice, it's. 

S

Speaker 2

28:58

It's more challenging than it, you know, than it would otherwise appear. But just things like that and having. Having access. If you're a subcontractor, having access to not only the gc, but the owner to have those conversations of, you know, contingency plans relative to specified materials, things like that, and relative to labor. You know, if you can't staff a job, maybe not bid it. If, if you have the labor at the date and it evaporates by the time the project starts, then maybe plan B is subbing it out and you're obviously sacrificing margin. But at least, like I said, it'll keep you from. It'll avoid a large problem and maybe keep it a small problem. 

S

Speaker 1

29:45

Yeah, I think that's a great point. So it's all about making sure that you have given consideration to what would be necessary if I still had to perform, how would I work through these things? What are alternate materials? What are alternate labor sources, what are alternate vendors? You know, all those types of solutions, and you still might struggle. But from an underwriting standpoint, that's what they. That's what they're looking. 

S

Speaker 2

30:18

Yeah. And just go into a job, eyes wide open, and if. If you're concerned about something where you don't have, you know, you're not satisfied with your, you know, plan C, then, you know, talk to your attorney and see if you can have an outlet in that, you know, just contractually and, you know, have an outlet in that regard. 

S

Speaker 1

30:37

Yeah, great point. All right, cool. Stacy, I think we might have time for one more. 

S

Speaker 3

30:42

Okay. So, Eric TV said, we understand the most important things to a charity is equity, history, consistency, stability, routine process, procedure, and what are the three most detrimental attributes in the eyes of a surety? 

S

Speaker 1

31:03

If you had to pick three Most detrimental attributes. 

S

Speaker 2

31:06

Ooh, I like that. Yeah. I would say it depends on where the questioner is coming from. But from my seat, if somebody calls me and says they need a bond and we start talking through that process, if in that process I mentioned the character, the first seat that I mentioned in that first conversation, I might ask how their personal credit report looks. That answer is very telling. And the statistics behind somebody who's had a bankruptcy, for instance, it doesn't bode well for round two of starting a business. So I would say, you know, character and more narrowly defined personal credit is a huge item. I would say any. It depends on the contractor. But I would say as. As the underwriting process unfolds, look for systemic items that might cause either project losses or overall operating losses. 

S

Speaker 2

32:12

So it might be as simple as, you know, we've had subcontractor failures on three projects and that, you know, tanked our year. Well, what are we doing about that process? Are we increasing your pre qualification? You know, it's always, it's the whole name of the game is identify systemic risks and understand why you aren't profitable if you aren't. So I wouldn't necessarily narrow it down to three specific items, but the bottom line is anything that prohibits you from being profitable is probably, you know, name those as 1, 2, and 3. And that depends on the scope of work and the trade. 

S

Speaker 1

32:46

I like that. I like the overriding first bullet of like, do you pay your bills? 

S

Speaker 2

32:51

Yes, exactly. You do what you say you're going to do. Good start. 

S

Speaker 1

32:54

If you don't pay your bills as an individual, that might be a problem as a business and the systemic problems. And to me, that's really maybe how I would put a bow on the conversation or wrap up the conversation that we've talked through today is that you've got to identify those things in your business that are creating negative business outcomes, period. That's what you mean by systemic issues, right? 

S

Speaker 2

33:28

Exactly. Yep, yep. 

S

Speaker 1

33:29

And having identified those, be taking proactive steps to address those issues. And then you didn't say this, but I will do, do everyone a favor and don't just throw a body at it. Okay, so, so one of the biggest mistakes I see people make is, we're getting this problem. I need a VP of ops. We're getting this problem. I need a cfo. We're getting this problem and it's it. That may be true, but. But you also have to take personal responsibility for that. As a business owner, as an executive team, personal responsibility for how that thing is happening rather than just bringing somebody else in to deal with a broken situation. Because I cannot tell you how many people I see who are hired and who fail. Because the problem wasn't that they didn't have somebody in the role. 

S

Speaker 1

34:22

The problem was that there are six other things that are contributing in that business to why that consistently happens. And that person hasn't been given control over changing those things. 

S

Speaker 2

34:31

Right, Right. 

S

Speaker 1

34:34

Anyway, we're up on time and we really like to finish on time. So, Josh, I really, again, Stacy and I appreciate you taking the time to join us today and to share your knowledge. I can honestly say that every time I speak with Josh, I get smarter. And I hope that you guys did today, too. I feel like, you know, I hope you feel like you learned something. So just a couple of quick things to wrap up. Number one, make sure that you. If you didn't catch this whole thing and you want to make sure that you get access to it. We are posting these on YouTube. Stacy and I are sending out a weekly email that has contact or. I'm sorry, that has the registration for the upcoming session and that has the link from the previous session. 

S

Speaker 1

35:21

We're getting better at that part, so. So hang in there with us. But if you want to get an email distribution, shoot us a private chat and we'll get you added to our email distribution list. That's number one. We do this every Tuesday, though. In December, we're gonna take a little bit of time off. We do this every Tuesday and next week we will be running this on the 30th. And if I'm not mistaken, Stacy, is that you and I on the 30th. 

S

Speaker 3

35:52

We need a guest to sub in for questions. 

S

Speaker 1

35:56

Yeah. Stacy and I are going to be talking about marketing best practices for contractors, which I'm psyched about, and Stacy is a real pro on. So I look forward to having that discussion. And so, yeah, 8am Eastern next Thursday, next Tuesday, if you can't join, you can always catch the recording on LinkedIn or on YouTube. And if you want to make sure that you don't have to rely on LinkedIn to send you messages, send us your email address and we'll take care of that for you. Josh, any final word for the audience before we sign off? Anything you want to say? 

S

Speaker 2

36:31

Thank you both for having me. Thanks for listening and happy Thanksgiving. Be safe. 

S

Speaker 1

36:35

Thanks. You do the same. Stacey, anything you want to say to wrap us up? 

S

Speaker 3

36:39

If we didn't get to your questions, feel free to reach out to Josh, and I'm sure he could help you with anything. And happy Thanksgiving, everybody. 

S

Speaker 1

36:49

Thanks so much. Yeah. Happy Thanksgiving. See you, team. 

S

Speaker 3

36:52

See ya. 

S

Speaker 1

36:52

Bye. 

Join Host Chad Prinkey (Well Built Construction) and Co-host, Stacey Holsinger, (Steel Toe Communications) every Tuesday morning at 8 a.m. EST. on LinkedIn as they interview top A/E/C industry experts. Guests can participate in the conversation live!

Transcript:
Speaker 1: 00:00

Man.

Speaker 2: 00:04

So, so I'm an hour behind right now. I am in Louisiana, which I, I can't figure out. Where, where is the line? Is it in Mississippi? Is it in Louisiana? When do you shift over to Central as opposed to Eastern?

Speaker 1: 00:20

Oh, it's actually, it's actually along the Alabama, Georgia border. And I know that because I used to live about four minutes from the line. I used to work in, in Eastern time and live in Central time, so I used to get home an hour earlier than I left work.

Speaker 2: 00:39

Really?

Speaker 1: 00:40

Yeah.

Speaker 2: 00:42

That's craziness.

Speaker 1: 00:44

Yeah, that's, that's the truth. I did that for, for a couple of years.

Speaker 2: 00:48

So. So it'd be like bonus in the morning and then a bummer in the evening. Is that, Is that right?

Speaker 1: 00:56

Was the other way because I was coming back to Central time, so I.

Speaker 2: 00:59

Oh, you got it.

Speaker 1: 01:00

Yeah.

Speaker 2: 01:00

Coming back to Central. Yeah.

Speaker 1: 01:02

Give me half an hour to get home. So I'd leave around 5:30 and I'd get home at 5.

Speaker 2: 01:09

Got it.

Speaker 1: 01:10

Yeah.

Speaker 2: 01:10

Stacy, are we. Can you confirm that we're up and rolling on LinkedIn right now?

Speaker 3: 01:15

Let me check. I can't send messages.

Speaker 2: 01:18

I got it. I just got a. I just got a little thing. We are. Hi, LinkedIn. What's happening? All right, we're gonna get rolling in about a minute. We'll start right on time. As per usual. When I, When I travel, I keep my computer on regular time so that. Because everything else in my world will fall apart if I don't remember what time it is where I'm from. Right. But. But my phone changes in my watch change so that I'm not late to the stuff that I'm supposed to be. I gotta tell you, it's, it's, you know, when you're, when you're doing travel, it can, it can really sneak up on you. And then, of course, I can't sleep a moment past whatever 5:30am Eastern is, so I'm just toast when it comes. Like, I'd say, okay, I guess I'm seeing 3:30 if I'm in Mountain time, you know?

Speaker 3: 02:16

Yeah.

Speaker 2: 02:20

Stacy, how was your leadership program?

Speaker 3: 02:23

It was awesome. Grinnell Leadership Jumpstart. I met eight wonderful strangers, spent a week with them, learned a lot about myself. And you know how I want to apply that to my business. I highly suggest, you know, if you're early in your career, your 20s, you're a little confused about, like, who you are, where you want to go to jump in and try to get that training, and then again taking it, like years down the road, whether you have like a life changing event happened personally or professionally, to get some more clarity on who you are and you know where you're headed, it was, it was pretty cool.

Speaker 2: 03:05

That's awesome. I'm gonna go ahead and get rolling. I want to ask you a little bit more about that in a second. Stacy. Hello and welcome to the morning huddle. I'm your host Chad Prinky alongside my partner and producer, Stacy Holzinger. Stacy, it is great to hear that you had an awesome experience at a leadership training all week last week. You said that it helped you to learn some things about yourself. And I wonder if you could share with us something that you learned about yourself.

Speaker 3: 03:31

Yeah, one of the things was, you know, in every business, leadership wise, I liked you have to find the Ying to your yang. So someone hires someone that you know, pretty much their strengths are your weaknesses. So that's kind of what I'm looking for now.

Speaker 2: 03:51

You have weaknesses.

Speaker 3: 03:52

I know, right? No, I have plenty. I feel bad for that person actually, that I'm gonna trust me.

Speaker 2: 04:01

Whitney is. Whitney gets a sainthood dealing with me. It's amazing what she's able to do. Yeah, Yeah.

Speaker 3: 04:07

I think your go to sometime is to hire somebody that you're comfortable, that you want to hang out with, but that's not really a good business, smart business decision.

Speaker 2: 04:16

So hopefully you like them and you do want to hang out with them. But I totally agree. I think that's awesome. And so you got a little insight as to, you know, when you do make that hire, what direction you'll go. That's cool.

Speaker 3: 04:28

Yeah.

Speaker 2: 04:29

Do you want to make an announcement of who you're hiring for right now or do you want to hold off?

Speaker 3: 04:34

I'm just looking for, you know, someone that can do 10 hours a week, payroll, accounting, that kind of thing.

Speaker 2: 04:42

Awesome. Very cool. The word is getting out as we speak, so that's awesome. Good. So as always for the audience joining us live, please type in your questions throughout the course of the show and Stacy will select a handful of those questions to cover at the end. Stacy, we will see you with about 10 minutes left. I'll drop you off so you can take notes.

Speaker 3: 05:06

Okay.

Speaker 2: 05:06

All right, thanks, Stacy. Justin. Our guest today is Justin Panzer. Justin, thanks so much for joining us.

Speaker 1: 05:13

Sure. Thanks a lot.

Speaker 2: 05:15

Justin is a friend of mine, somebody who spends a lot of time in the construction technology space. And. And Justin and I were talking about the possibility of him coming on probably what, like three months ago when we first had the notion of this program. We wanted to get the word out. So Justin, if you would give us a little bit of background on yourself.

Speaker 1: 05:37

Yeah, sure. So I'm Justin Panzer, I'm the director of marketing for Jack Solutions, which is based in the Baltimore area. My background is about almost 30 years now in mobile technology, mobile communications, wireless business, and you know, not so much the consumer grade phones and tablets that you may be familiar with that everybody might be watching this on today, but more enterprise grade, you know, business to business solutions that are highly customizable, that we put in a lot of construction, manufacturing, logistics, really sort of challenging conditions, you know, harsh environments, real heavy workload kinds of applications. And you know, here, here at JAX actually we customize those things right down to the, the bits and bytes so that they fit perfectly and whatever it is that you're doing out there.

Speaker 2: 06:41

So you're so, so, so, so just so the audience is clear, I think what you're saying is you make like custom devices, you know, so you're, you're literally, you know, like a competitor iPad or whatever, right? Like when you're making customer custom devices for, for specific applications.

Speaker 1: 06:59

Yeah, to an extent. I mean if, you know, just to, you know, put it into that kind of context because everybody's familiar with iPads and Samsung tablets and things like that where you know, you can buy one of a million of those right off the shelf. We don't do that. We still sell tablets and devices of that type, but one is not like the other. And, and you're never gonna find anything like this off the shelf. It's usually very purpose built for a specific application, specific customer need.

Speaker 2: 07:36

Awesome. So, okay, so with that as our context for the conversation we were talking about, this episode is all about your field technology strategy. We talked about reducing costs, we talked about reducing risk, you know, and, and that, that's sort of, you know, some of the things that we want to get into today. But, but I want to take it all the way back to that first term of strategy. What do you mean by technology strategy when it comes to, you know, the field?

Speaker 1: 08:09

Yeah, that's, it's a good point and a good question. I mean, I think the first, first thing is, you know, have one, have a strategy. And, and what that means is that I think everybody knows we need to be connected. The, the way that we work is a lot different. And thinking about what do the devices look like that I need to incorporate into my work, what kind of functions are they going to perform? How can I put tools in the hands of my people or the people that maybe sub for us, that keep us connected, that are reliable, that are secure, that, you know, offer the kinds of automation. And, you know, we hear terms all the time like digital transformation. I mean, those kinds of things are not just about, you know, putting a phone in somebody's hand or putting an iPad in somebody's hand. It's really more about thinking holistically about the technology and how it all connects everything together.

Speaker 2: 09:16

Yeah. So, like, I. Now I'm feeling guilty because I can. I can think back to at least a dozen situations where I've come back in my role as a consultant, where I've come back and told a client, you know, you need to up your field tech. And they say something like, what should we do? And I'm like, I don't know. Put iPads in their hands. I'm not a technology guy.

Speaker 1: 09:37

And they go out and they buy.

Speaker 2: 09:38

60 iPads, and they're like, all right, we did it. And what I'm thinking is just. Just. Just hearing that sort of background is that that's. That that's not a strategy and that. But. But I. I would say, by and large, and that's what I see. So. So, you know, I mean, the nature of the construction industry is most of the companies are small companies, right. It's, you know, small businesses. And. And, you know, there might be some people saying, hey, I'm not small. Okay, but if you have several hundred employees, you're not small in the construction world, but you're a small business. You know, when it comes to the total economic environment. Right. Compared to, you know, auto manufacturers or, you know, fill in the blank. So in that small business environment, it's not surprising that, you know, usually what has happened somewhere along the line is somebody said, let's. Let's get devices in the hands of our field. And whether that was phones or iPads or Samsung tablets or whatever, it just sort of started and wasn't necessarily a thoroughly considered strategy. So, so. So put yourself in the shoes, right, Of. Of. Of the, you know, 150 employee trade contract or electrical contractor, you know, concrete company. Fill in the blank. What are some of the benefits to our viewers of developing this type of strategy? Why. Why should we take the steps to, you know, go into the. To the tech strategy realm?

Speaker 1: 11:12

Yeah. Well, I'm gonna kind of hone in on one of the things you said and that was, you know, you talked about the economics of it. Right. And total cost of ownership is. Is something that's not often really thought of when you're you're thinking, okay, I've got to put devices in the hands of everybody or I've got to get some software or I've got to connect everything. You know, think about again, maybe like an off the shelf, consumer grade tablet. They're pretty cheap entry costs, right? I mean, you could probably do something in the $300 range, put one in everybody's hands. But you know, if those things are, you know, you're carrying those around a work site, you're putting them on a forklift, you're, you know, it's in the cab of a tr. Chances of those things getting broken are pretty high. And when those things break, we're, you know, then we're replacing them. The, you know, the high failure rate in dusty, dirty areas, you know, maybe these things get wet, they get, they get dusty, they get, they get left places in the heat or the cold. I mean, there's a lot of ways that these things can fail that you maybe didn't really think of. It was cheap to get into, but now the replacement, the repair, not to mention the downtime and productivity and all those kinds of things. I mean, you can put all of that into the total cost of ownership equation. And I'll throw one other thing in there too, is like how much stuff is on a off the shelf tablet when you buy it, for example, right? What can be installed in that thing? What's it taking away from day to day? So again, it's not just about devices, which, you know, that's kind of my bread and butter and where I live every day. But you know, think about the software and even I don't know how technical some people in the audience are, but you know, we talk about firmware which is really getting into the operating system and starting to lock down some things. So, you know, people aren't installing YouTube and Angry Birds and whatever else and just, you know, basically distracting from work all day. There's a lot that goes into that.

Speaker 2: 13:37

So as you were talking, I literally last week visited a client job trailer and had I, I feel like, I feel like this scene plays out all over America all day, every day, where, you know, the cracked screen, the shattered screen, you know, a tablet that the superintendent's trying to show somebody on, you know, and they say, screw it, let's go into the trailer, let's go to my computer. And you, and whatever efficiency gains you thought you were getting from the, from the technology you're losing in that moment until they, you know, get new technology. So I'm seeing what you're saying. And I, I, I, I don't disagree. I think there's a, I think that the, oftentimes the hardware isn't up to the, to the, to the task, if you will, you know, out, out in the field for these guys. So that, that clicks together and as you started to talk about unnecessary software on, on devices, that's got my mind going a little bit. Tell me more about that. Maybe not so much from, like we want to keep people from, you know, playing Angry Birds. Though there's, you know, probably some relevance in that. But, but what are, what are some examples that you see of, of unnecessary software?

Speaker 1: 14:58

Yeah, I mean, you know, there's, there's software and then there's also a level down which like I mentioned before, we call firmware. So, you know, when you get a, any kind of electronic equipment, whether it's your PC, your Mac or a tablet or a phone, I mean, you've got the operating system that comes pre installed with a bunch of things. And how many of us on here have had woken up to get that message that says, hey, your device has been updated or your device is updating or something like that? A lot of what goes in there is what we call bloatware.

Speaker 2: 15:34

Did you say bloatware?

Speaker 1: 15:35

Bloatware, yeah. Bloated code and all kinds of things with, I mean, a lot of the stuff that comes in these, these updates, it's great, it looks nice. It's, you know, it adds some conveniences, but they're very consumer focused. It may be a lot about design, it may be a lot about animating the, the, the, the haptics and the, the, the touchscreen, you know, gestures and things like that. It's not anything that really benefits us in an enterprise environment or in a, you know, a work environment. And those things add a lot of, they take a lot of processing power. They, they also take away, you know, they may impact the bandwidth and the throughput when we are transmitting data. So, you know, there's, there's just a lot of stuff that's sort of built in that we can do away with or not just we, but lots of providers like us can do away with and make sure that those things are keeping the, you know, the work flowing and you know, not taking the valuable bandwidth. Especially, I mean, if you're at a site where Internet access is a little difficult. Maybe it's somewhere a little bit rural. Maybe you're in the midst of a project where you're surrounded by cinder block. I mean, you can't be wasting bandwidth and, and, and fighting with unreliable access just to make some of these unnecessary things work.

Speaker 2: 17:16

Makes total sense. And, and, and I'm now having flashbacks to my 1998, you know, top of the line Windows laptop that, that five years in, took, you know, 20 minutes to start because it had to do the big groovy animations before it got going. And I was like, come on, just get straight to the. I just need Word right now. I just need Microsoft Word.

Speaker 1: 17:37

Yeah, that's, that's a, that's an awesome point too, is that, you know, you, you said top of the line, right? And if you see a Verizon commercial, T. Mobile, AT&T. Whatever, there's all discussion about 5G and the, the broadest 5G network coverage and things like that, which is actually, you know, that's great technology for a lot of reasons. But think about back to the strategy. What is the application that you're running? What kind of bandwidth do you need? What kind of security do you need? 5G may not be necessary and it may be more expensive than what you need. Back to the total cost of ownership. I hate to use the term good enough, but sometimes a, you know, more legacy technology or a more established technology is good enough for what it is that we need to do. And it allows us to do those things more cost effectively and more efficiently.

Speaker 2: 18:41

So this gets to the return on investment. So, so if I'm, if I am. All right, let me give you, let me give you kind of a scenario and maybe paint, paint a little bit of a picture for the audience. So I'll. Let's say I'm, I'm a trade contractor. You know, maybe I'm a, you know, masonry company or a plumbing company, doesn't matter. But I've got, you know, folks out in the field and let's pretend it's an outdoor trade just for, you know, kicks. So, so they're spending. I've got, I've got 30 people out in the field. My 30 people are dealing with the weather conditions on a daily basis. Gets hot in the summer, gets cold in the winter, gets wet. You know, all those different types of things. And they, they, they're running a software platform like Procore, you know, that I need them to be able to access from a mobile device, run me through, you know, some of the, like, just, just hearing some of the things that I just went through, some of the things you'd recommend they consider and, you know, just come up with a theoretical diagnosis like you should get these types of Devices, you should focus on this type of firm. Just lay out a theoretical, if you would.

Speaker 1: 20:00

Yeah. I think from a hardware perspective, you're looking at things that are either, maybe you've heard the terms ruggedized or semi ruggedized. Right. And those things are built to withstand drops, vibrations, temperature changes.

Speaker 2: 20:14

Can't I just get a case?

Speaker 1: 20:17

Sometimes, but more often than not, I mean, those cases, they, they break as well. They come off, they come loose, they, they prevent the, the charging cable from sitting properly. You try and mount them. We have people all the time, they mount our devices in, in machinery, in trucks, in cranes, in forklifts. You put some of these cases on and, and now you've taken away all of the like Visa mount screws and all the access. You can't mount them any longer into the vehicle sometimes.

Speaker 2: 20:55

All right, fine, you got me. I'm going to semi ruggedize, get back to it. I'm sorry about that, I just.

Speaker 1: 21:01

No problem. Sorry, that was a bit of a tangent, but it happens all the time. So. Yeah, I mean, I think that's the, that's just kind of the form factor in the hardware. There's other things too that maybe if you're working with somebody who can customize a device. And to your point about working outside, there are special customizations to a backlight, for example, so it's always going to be visible. Maybe you're working in places that need special speakers so that you're able to hear over the loud equipment all the time. Take it down a level. And then we'll look at like the software applications. And right now if you have a device, you can go out to the Google Play store and get whatever application you want. Maybe, but maybe your team has developed something in house. What's nice about those things, or maybe a partner of yours developed it, is that you're not necessarily subject to the constant updates. Right. So I mentioned the updates to the operating system, but the updates, when there's one to the operating system, you have to retest and make sure that your software is then backwards compatible. So now there's additional costs, there's additional time, there's additional loss in productivity to go and, you know, rework that app that you've been using with no problem at all. But now you have to do it because there was some other update that you're, you're chasing down. And then the last thing that I'll mention on this is, you know, look for something that has the security profile that you require. Right. That may be in some instances very high security. But in a lot of cases, if you're just maybe sending photos of a, of a site back to someone, or you have to send a blueprint or maybe it's just a time card even, do you need like, you know, military grade encryption and all kinds of things like that built into, to your firmware or built into your device? Probably not. So, you know, you think about things that's three different levels, hardware, software and firmware, where you can kind of look at what, you know, what your technology is going to look like. That's rolling out to the field.

Speaker 2: 23:30

Makes sense. All right, that's, you've given us a lot to think about. I mean, you know, for me so far my big takeaway is that, you know, frankly that there are options that aren't sitting on shelves. And I'm just going to ask you candidly, you know, our price point. When I hear custom device, I'm like, oh man, I probably can't afford to do custom device do, do just quick comparison to consumer grade just for the audience to wrap their head around that.

Speaker 1: 24:02

Yeah. And I, I think that that's, that's not an easy one to always answer because the customization options are so broad. But for the most part, again, remember, you know, we're thinking about things like it's not the absolute latest, greatest technology. Sometimes, sometimes good enough is good enough. Maybe you can scale back on some of the, you know, 5G modules and you can focus on the software and you can get something that ends up costing you about the, an off the shelf consumer grade product would.

Speaker 2: 24:31

But your point is we're not talking about doubling and tripling your cost to get custom, you know, devices which, which, you know, I don't know, I don't know how many companies that are watching this have actually considered custom devices, but I would wager probably not a ton. And, and so that's, it's, that's great. So I'm going to shift gears just because we're, we're running into about eight minutes here remaining. And I want to hear from Stacy. Stacy, what kind of questions do you have for us?

Speaker 3: 25:01

What do you think is like the average replacement cost on a tablet or something like that?

Speaker 1: 25:07

Yeah, well, most of the time it's a, it's a brand new tablet. So I mean those are 300 to 600 to $1,000, depending on what we're talking about. So I mean, it's going to be just replacing outright. It's a whole lot easier, especially with consumer grade stuff to just replace it than to try and repair.

Speaker 3: 25:32

Okay, so for technology wise, is there, do you factor in training, costs and all or I guess for strategy, when someone comes to you, do you put together like, do you come in and analyze all of their techno technological devices?

Speaker 2: 25:56

Right. What's the starting point? Yeah, yeah, yeah.

Speaker 1: 26:01

You know, again, it kind of depends on how we come into the equation. Sometimes we're, we're a sub or sometimes we're a prime. In these, in these sort of contracts with our customers, we may look at the entire device portfolio and what's in place now and then make recommendations about what the, the technology is that can better enable those things. Or we'll identify where there are some productivity, some, some cost issues. You know, we're, we're pretty good at looking at those things and saying, you know, right there is where, you know, you're going to have connectivity problems that are going to keep your people offline or is going to affect the reliability of your, your connectivity back to your, your headquarters or wherever else you're trying to get everything back.

Speaker 2: 26:54

So, so you mentioned being, sometimes being the sub and sometimes being the prime. Pardon me? When you're a sub, the picture I have in my mind is you're working underneath maybe a holistic technology consulting firm that is in there looking across their entire tech stack and making decision, you know, in advising and then they identify this need for custom devices and they, and they come, come out to a company like, like Jacs. Like Jax?

Speaker 1: 27:23

Yep. Yeah, very much so. You know, we get pulled in all the time by, you know, somebody that's doing that kind of top to bottom review and you know, then we'll, we'll work on, on hardware, we'll work on firmware, we'll will just help build out the end solution.

Speaker 2: 27:42

Awesome.

Speaker 1: 27:43

Cool.

Speaker 2: 27:43

Stacy, Sorry, what else do we have?

Speaker 3: 27:46

What is the turnaround time from contract to implementation?

Speaker 1: 27:51

Again, it's going to depend on the degree of customization. But we can do some things in six to eight weeks, some things in 16 weeks, some things take a year or more.

Speaker 3: 28:04

Okay. And then for the audience, which is comprised primarily of contractors and subcontractors, someone had asked what are the three most important things for us to consider with respect to field technology?

Speaker 1: 28:20

Yeah, in the, in the field, I'd say one is what is your access to a network? What type of network connectivity are you using? Are you going to use cellular? Are you going to use a private network? Are you going to use WI Fi? That goes a long way to determining what your technology selection is going to be. The second thing is the security. I would always put that really close to the top of your consideration is how secure do you need your data to be and your transmissions to be? And I would also say the, the, the, the form factor, the ruggedness, the, you know, the environment and the conditions that you're going to be working in. You know, do you need, look, rugged ruggedization costs money. There's no question about that. If you don't need it, we don't want to give it to you. Right. We want to make sure we, we give you what you need. Think about that. Because we've talked a lot about the hardware, but it's not always about that. It's, it can be about those privacy.

Speaker 2: 29:30

And connectivity issues as it relates to connectivity. For, for a moment on that, you mentioned private network. So I can picture setting up a WI FI network. I can picture working off of the, of whatever, you know, whatever networks or provide. Right. Public networks. When you say private network, what does that mean?

Speaker 1: 29:49

Yeah, so I won't spend a lot of time on it because I know we're close to the end. But there, there's a shared frequency band out there that's been allocated by the FCC called CBRS in the US Anyway, it's called something else in other parts of the world. But it's. You can build a private cellular network within a campus environment, a job site, even a, you know, distributed rural environment where mobile access may be difficult. It's very small cells. You can buy the equipment and set up a private network and then only the devices that you authenticate and that you, you allow onto your network will have access.

Speaker 2: 30:39

Got it. That's awesome. So that's kind of, well, like you said, sake of time. But, but I think mega projects where there might be, you know, over a thousand people on a job site that can create like a dead spot in a regular network. Like just like, you know, I don't know, try using your device in a football stadium. It can have that effect. And so a private network may. Makes sense. That's.

Speaker 1: 31:13

Wow.

Speaker 2: 31:13

Okay, cool. So. So, Stacy, anything else? We probably have time for one more if we need it.

Speaker 3: 31:19

I was just curious. Do you. Or will you dabble in like VR and augmented reality and caption like all that?

Speaker 1: 31:26

So we, we actually don't make anything that's VR ar, but we have a partner we work with that, they make a, a very cool AR headset that is like a pair of goggles and goes around the, like a headband and we provide the connectivity for it. And those are things that you know, you can, you can be viewing instructional videos on how to operate certain equipment and you can look at a piece of gear and be downloading all the manuals to the headset. And we provide the connectivity for that through a USB dongle that includes a SIM card. It's actually really cool technology. It's a lot of fun, but it's probably its own hour long discussion. It's pretty cool stuff.

Speaker 3: 32:17

Cool.

Speaker 2: 32:18

That is wonderful. All right, cool. It's just about 30 minutes and we like to finish on time on the morning huddle. Justin, thanks so much for joining us.

Speaker 1: 32:30

All right, thanks, guys. Appreciate it.

Speaker 2: 32:32

Absolutely. Yeah. So, so word to the audience. If you're passionate about the industry, if you want this industry to be better and, and you've got a message that you want the, you know, that you want to share, please reach out to me, to Stacy and with your interest in joining us as a guest, we would love to get you involved. We're probably looking at, you know, February or, or April next year. So, you know, please reach out to us next week. We have Josh Hauserman from hms. He is a bonding guru and he's coming on to talk about what he has seen all of the most bondable companies have in common. So the companies that the bonding companies view as a great risk, aside from being huge, what do they have in common? And I think we're going to try to pull out some business best practices. If you're trying to expand bonding capacity, that is something you should absolutely be checking out and also just learn about what the best companies are doing. So please join us. That's next Tuesday, 8am Eastern, just like we have every week, 8am Eastern. If you can't join live, check out the recording on, on YouTube or whatever app you use for your podcast. One last message that I want to send out to you guys is please, if you would like to be getting an email rather than relying on LinkedIn to find out about these shows, shoot us a message with your email address. We'll add you to a weekly email distribution list. It'll have both the link to sign up for this week's new episode and a link to the YouTube episode if you happen to miss the, you know, the live experience. So that, that's it. Justin, any final word before we sign off?

Speaker 1: 34:21

I just want to thank everybody for, for tuning in. A lot of great questions. So appreciate you guys having me on and feel free to reach out if there's anything else that I didn't get to.

Speaker 2: 34:32

Thanks, Justin. Yeah, if you, if you have additional questions. Shoot. Justin, a note. I'm guessing that if you put them just into the chat here, Justin will be taking a look at the chat and he'll respond to anything. That was outstanding, Stacy. Anything. Any final word for the audience before you sign up? We sign off.

Speaker 3: 34:48

Just wanted to thank Justin again. I'm not too tech savvy, so I definitely learned a lot today, and I appreciate you being here.

Speaker 1: 34:56

Thanks a lot.

Speaker 2: 34:58

Have a great one. We'll see you next week on the Morning Huddle. See ya.

Join Host Chad Prinkey (Well Built Construction) and Co-host, Stacey Holsinger, (Steel Toe Communications) every Tuesday morning at 8 a.m. EST. on LinkedIn as they interview top A/E/C industry experts. Guests can participate in the conversation live!

Transcription:

Okay, I am updating our title here, but so. So what do you guys. What are you guys doing for. For networking in the coming holiday networking rush? What are the ones not to miss, Mark? 

S

Speaker 2

00:23

Well, WBC event is always one not to miss at Congressional Country Club. I call it the. The Electrical Contractors Reunion, because every electrical contractor in town is there, and. And you get to talk to all them, and it's usually. Usually their top leaderships there as well. So that's always good. And. And Congressional is a great venue. ABC's event at Manor is always a great event. It's rule number one. Stay mobile at Manor. 

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Speaker 1

00:58

Yeah, no kidding. Manor's got a lot of nooks and crannies. I found myself going to that event and getting trapped in the. In the. In a handful of great conversations, but in one room, in one corner. 

S

Speaker 2

01:10

Yeah, and there's. There's about 10 different rooms and venues. You can be in there also. Both those. The after parties are always good. 

S

Speaker 1

01:21

After parties, Mark. There's after parties of the holiday parties. 

S

Speaker 2

01:26

Yeah, there's after parties. 

S

Speaker 1

01:28

I had no idea. 

S

Speaker 2

01:30

So in. In the basement of each of those venues, there are bars, and they're member bars. And. And because it's a member has to sponsor the event for the. For the association have it there. Usually there are members that go down there, and the party will go on till the member bar closes. So. Well, Debbie and gang will roll up their stuff and. And Steve, Kenton and Rito roll up their stuff, go downstairs and find a bar. 

S

Speaker 1

02:01

If you go to the after party, I'm thinking that's the point at which you'd want to make sure that you've taken an Uber. 

S

Speaker 2

02:07

You want to take an Uber? Yes, yes. Or have your sleeping bag in your car so you can sleep in the parking lot. 

S

Speaker 1

02:16

There you go. All right, guys, we're gonna go live here in. In just a few seconds if you're starting to join us. Thank you. I've got some. Some folks I can see, you know, joining us on the. On the LinkedIn live stream. But we'll hold off until 8am proper to. To officially go live to allow folks, you know, to get here in that last little bit. I think for those folks who attended last week, this is what it's supposed to look like, which is a live Stream. Right. On LinkedIn, rather than having to reroute you to zoom. And all of this will naturally record and be available for those of you who weren't able to get here live. So this is what the norm is so, all right, good. It is eight. We're going to start right on time. Good morning. 

S

Speaker 1

03:09

Thank you for joining us on the morning huddle. My name's Chad Prinke. Today, our normal partner, my normal partner, Stacy Holzinger is out. She's got a whole week of intensive leadership training that she's going through right now as a part of the ABC Metro Washington experience. And so we're going to miss Stacy today. But we're lucky enough to have our friend Cody Wilcox joining us. Cody is from Malloc Mechanical. Cody, thank you for being here today. 

S

Speaker 3

03:39

Yeah, thank you. I'm excited to be here and for everybody to join us. 

S

Speaker 1

03:43

Thanks, man. How are you? 

S

Speaker 3

03:45

I'm good, I'm good. I'm getting used to daylight sabins a little bit, but besides that, I can't complain. 

S

Speaker 1

03:52

Yeah, I always like an excuse to get into my pajamas early, so that's nice. And I also like that I don't feel like I wake and go to sleep in darkness only, at least not until somewhere around February. It's nice to be greeted by the sun at least somewhat close to my wake up time, so. Well, cool. Cody, you're going to be playing the role of capturing our questions. So all attendees who are here with us live, please make sure that you're sending in your questions throughout the course of the conversation. We're not going to answer them as we go. We're going to answer them at the end. But go ahead and type them in along the way. That way, you know, while they're fresh in your mind, we have an opportunity to, you know, to get your best questions on the line. 

S

Speaker 1

04:37

So Cody, I'm gonna put you know, kind of move you to the side here until about 8:20 and we'll pull you back in. 

S

Speaker 3

04:43

Good. Okay, sounds good. 

S

Speaker 1

04:45

Thanks. Mark Drury is today's guest. Mark, thanks so much for being here. 

S

Speaker 2

04:50

Good morning, Jad. Thanks for having me. It's a pleasure to be here and join your crew. Who's who signed on here and listening and watching along. 

S

Speaker 1

05:02

Thank you so much for being here. I, you know, Mark, you and I have known one another for quite a while at this point. And you know, were, when were kicking around, you know, running this, you know, having you on the morning huddle. One of the things I'll tell the audience for weeks, this slot just said need to determine title. Because I think the truth is, Mark, you and I could talk about anything together. And in fact we have. And so when were preparing for today's discussion and Exploring topic areas we could cover. We really tried to sort of narrow things down. This idea of small business and growth and getting to the next level continued to come up between us. I know it's something that we're both passionate about. 

S

Speaker 1

05:46

So that is today's title, which is grow and balance your small business. So let's start by defining. First things first. Mark, you know, tell us a little bit about your story, give us a little on your background, like you know, in a minute or so. I know that's okay. 

S

Speaker 2

06:06

I'll give a brief. Okay. So I recently, in March I retired from employment and I started up an llc because I'm, I've got several, a few board positions that are in the industry, in the non profit sector that require me to be a business member. So I started an llc. Now for years I've mentored company owners and company leaders in different companies and I'm continuing to do that and I'm doing some consulting. So I'm talking to business owners, helping them build their business, helping them improve, helping them expand, helping them through issues. Learning the ropes basically. So I'm still doing that. 44 years in the construction industry, 18 on the general contracting side and 26 years as a mechanical subcontractor. Started Shapiro and Duncan back in 1995. 

S

Speaker 2

07:02

They're about 4 million, $4 million a year, 40 people when I left in March is 140 million a year and 400 plus people. So been in the business of building and building businesses. So that's my story and I'm sticking to it. 

S

Speaker 1

07:19

That's an awesome story. Yeah. And along the way, and what you don't have time to talk about and you know, anybody who knows Mark knows this is that, you know, Mark's had, you know, educational experiences in the design build world. You know, more leadership experiences and leadership training experiences than one could, you know, try to fit into a lifetime and all those different types of things. It's a part of the reason, Mark, that you and I can talk about literally anything together. So if I can try in our limited time that we have together. Right. Keep us focused on small business. I'd like to try as a starting point to you know, define small business. What is that? What does that mean for it as a contractor? What's a small business? 

S

Speaker 2

08:07

Well, I think it depends on what trade you're in and what your market looks like whether you're a small business or not. I mean you could be an 8 million dollar countertop company and be the Largest countertop company in your region. Or you could be a 8 million dollar mechanical contractor and be a considered a small business. So it really depends on, on what your trade is, what your work is, what you're doing. The government defines it by trade and GC etc and they have, you know, average revenues for the last three years. And some of them are pretty big mechanical. 17 million for the last three years. I'm trying to think. GC I think is 33 million for the last three years. 

S

Speaker 2

08:55

And that's, you know, if it's under 33 million, you're defined as a small contractor. Well, a lot of $10 million contractors, a lot of $25 million contractors wouldn't think of themselves as small. Possibly. 

S

Speaker 1

09:08

Right. 

S

Speaker 2

09:09

Depending on the market they're in. So I mean small, you're struggling, you're growing. Well, I'm not going to say you're growing because I think everybody should be growing all the time. But you're small and you're struggling. You don't have a lot of resources. You know, you may be a mom and pop shop, you don't understand necessary, you may not have a lot of systems and processes in place, procedures in place, you may not have brought in the right softwares, etc to do job cost tracking, etc. 

S

Speaker 1

09:40

So one of the things that I think about when I think about defining a small business in the construction industry is that in fact, while I know the government has its definition, when I think about a small business, I simply think about operating in a resource constrained environment where it's not like being a part of, you know, Coca Cola or Toyota, where if, you know you can turn and throw massive amounts of resources at a thing and not break the bank. But, but where you're operating in a resource constrained environment where you're making decisions that on a daily basis either, you know, make or break the company financially. And, and you know, almost by definite, if I use that as a definition, I would say the vast majority of the construction industry falls into the small business category. 

S

Speaker 2

10:37

Yeah. Even when you're making $600 million a year, you still make decisions day by day, correct? 

S

Speaker 1

10:42

Yeah. Because, because at the end of the day, you know, the way that the construction industry is set up is so diffuse and it's so hyper localized and. Right. You know, based on, you know, exactly what's going on in a geography that the majority of the building industry is small businesses. So anyway, I'm hoping that the content that we talk about today isn't just relevant to that company that's 6 to 8 million, but that is relevant to that company that's 250, 500 million. You know, because ultimately operating in that kind of resource constrained environment, making decisions on a day to day basis that could make or break the business, I think that relates. So, but with any, I would. 

S

Speaker 2

11:26

Say, Chad, that the discussion should pertain to any business, regardless of size and revenue, that has a vision for the future and can take a look at where they are today and establish a baseline and then create a vision for the future and then back map down to put your roadmap together your strategic plan to get to reach your vision. 

S

Speaker 1

11:50

All right, so let's, let's start there. Let's. You know, one of the things that you and I have talked a good bit about is with a lot of the small businesses, we both talk to one of the things that they, you know, mention on a somewhat regular basis as kind of like a, you know, a gut response to, you know, their vision. They talk about doubling. 

S

Speaker 2

12:14

Yeah, doubling. I want to double my revenue next year. 

S

Speaker 1

12:17

Right. I want to double my revenue next year. I want to double my revenue over the next two years. Or what, or whatever that looks like. What do you say to folks who talk about doubling? 

S

Speaker 2

12:25

Well, I say, what do you think it takes to double your revenue? Is it just a matter of bidding more work and bringing more work in? What about, what about your team? I mean, you gotta look at your team. You gotta look at your staffing if you want to double your revenue. You know, doubling your revenue when you're $500,000 a year is not that hard. You know, you might be adding one person to give you that capacity, doubling your revenue. When you're $40 million a year, you might be adding 30 or 40 people to your team to do that. Now where do you get those people? That's the resource. People is our biggest resource. You know, our people are everything in terms of building your business and executing projects. So doubling. 

S

Speaker 2

13:09

Yeah, I mean, it's a nice thought, but you need to look at what's it going to take to double and what kind of team does it take? Because doubling your revenue if you don't execute is, is the way to the back to the basement. 

S

Speaker 1

13:26

So, so you got to be ready for growth, right? How do you know you're ready for growth? What, what are some of the things that you would be really, you know, confident about to determine you are ready for growth? 

S

Speaker 2

13:44

Well, I, I think you need to be attuned to the market. You need to know what the available work is in the coming year, the coming two years. You need to know what your back current backlog is and you need to know what your pipeline is for bringing resources in. How am I going to bring in the resources to get this done? Is it hiring people? Is it subcontracting? Is it breaking it out? 

S

Speaker 1

14:16

So, so let's pause there for a second and do a little bit of a deeper dive on that topic because I think that's the one that I hear the most from contractors considering growth is the chicken or the egg question, should we achieve growth and then hire to meet those needs or should we hire to be prepared for growth? 

S

Speaker 2

14:42

Well, I'm a big proponent of hiring to prepare for growth. And it can be done in a somewhat linked environment. It doesn't necessarily have to be one and then the other, it can be happening together. I mean you can be pursuing work and have a good handle on it and pursuing resources at the same time. I mean, realistically bringing on some, a new hire, if you can bring on somebody in a month, that would be really quick. You know, you're not going to be able to bring on people in a few days. And one of the keys to success in bringing on the right people is to get them engaged in the project from the start. 

S

Speaker 2

15:30

And too many people make the mistake of they hire after they get the job and that job starts moving very quickly in terms of contract submittals, scheduling, all those items are happening quickly and then you bring on the team to get it done and they're already six weeks behind and it's not, it's not a, it's not a good formula in my eyes. 

S

Speaker 1

15:54

No, I, I, so that's answer that's very similar to one that I give, which is don't take on work and then try to figure out how to get that work done. Especially when you're at that small business stage. When I, this one, I'll go with the government definition, a small business. Right. Like you're, you really are a, you know, extremely limited in your personnel capacity. That's a, it's a surefire way to make sure that, you know, either the next couple years of your life are living hell or you know, that, you know, because you keep up with the work, you know, to Keep up with the work or you fail to keep up with the work and it's even worse, right? So it's a lose. 

S

Speaker 1

16:38

But what would you say to the companies that, that say I can't afford to make the hire before I secure the work, I need the work to make the hire and that, you know, hence the chicken or the egg. What would you say to those companies? 

S

Speaker 2

16:53

Well, I mean, if you can't afford, maybe you haven't been investing in your company like you should because as you've been going along, you need to be, keep retaining your earnings. You need to be building your capital because cash is king. And you need to make sure that you have the resources to take your growth steps. And the resources usually are capital. You need to have that capital to invest back in your company and bringing on the right people, bringing on the right software, bringing on the right process, bringing on the tools, that's all investing in your company. You know, too many people make the mistake of they get some money in the bank, they did a couple jobs, they've been in business for three or four years and you know, I got a little break in the action. 

S

Speaker 2

17:37

So I'm gonna take this forty thousand dollar vacation for three weeks to Costa Rica or wherever. You know, I'm gonna charter fishing boats. I'm doing all this stuff because I got all this money in the bank. Well, that money in the bank should be company money and it should be looked at. You know, too many owners look at it as that's my money. Instead of thinking I need to keep investing in the company. 

S

Speaker 1

18:01

That's a fan. I mean, I love that point. And I found myself, I wish I could attribute this quote, honestly, I can't. But I've used it multiple times, you know, which is if your business isn't where you want it to be and your income is where you want it to be, you're, as an owner, you're out of balance, right? If you're paying yourself like you know, I'm where I want to be, but your business isn't where you see it going, you're ultimately not going to be able to get the business to where you see it going. So I think what you're saying is have the discipline to keep the money in the business, to reinvest in the business, which enables you to make those types of investments. 

S

Speaker 1

18:46

And if you're finding that you're not able to make those types of investments, the first place to look is probably, you know, what are you taking out of the business? 

S

Speaker 2

18:52

What are you taking out of the business? Yeah. And what are you doing with it? Are you taking money out of the business and putting it in a stock portfolio? And I say to that owner, I said, so you're not willing to invest in yourself. You're not going to invest in yourself. You're going to invest in companies you have no control over, whereas your company you control and you don't have the confidence to pour the money into that man. 

S

Speaker 1

19:17

That's a really good point. We all get, you know, so in our mind, like you got to be reinvested, you got to be investing for retirement. It's really good advice. But if you're in a business owner mode and you're prioritizing, putting money in your 401k and then, you know, 501 plans for your kids and all that type of stuff, while you don't reinvest in your business, you, I mean, that could be a miss. 

S

Speaker 2

19:38

Yes. A huge mess. 

S

Speaker 1

19:40

Interesting. Is there one thing that every small business owner, every small business should be doing if they haven't been doing it already? If you, when you really think about like the, if I could give one piece of advice to small business, what would it be? 

S

Speaker 2

20:02

I would, I would say have a vision for the future. Be a leader. Look, look beyond your, you look beyond your fence lines, you know, look beyond the pasture that you're feeding your cattle in right now. Try and look towards the future. And that's how you grow. That's how you plan, be in touch with your industry and always be in a learning mode. There's a lot to learn out there every day. I mean, I learned every day. I've been doing this forever, but every day I'm, you know, I'm engaged in research and looking at things and reading articles and finding out what's new in the industry. You got to be on top of it. Things are moving fast. You need to have a, you have your finger on the pulse of where markets are going. 

S

Speaker 2

20:51

You know, if you're in the high rise residential market, you know, is it getting saturated? What's the competition like? What's your margin like? You know, if you're doing health care, all those things, and diversify your portfolio, you know, there's a lot of different ways we can apply what we do in a lot of different markets that each are affected differently by the economy and the Ups and downs of the world. So, you know, diversify. It's great that you love doing restaurants, but, you know, if you were doing restaurants 20 months ago and that was your bread and butter and all you were doing, I'll bet you've had a rough 20 months, right? If you were just doing hospitality, if you were doing, you know, just look at things like the pandemic that hit and it's not the first time. 

S

Speaker 2

21:53

We had the residential boom in 2008 when that crashed, which didn't hit the commercial market till about 2010, 2011. But, you know, it really had an effect on the industry and having a diverse portfolio of work and being able to go to different markets makes a big difference. 

S

Speaker 1

22:17

So, so if I could kind of, I don't know, summarize what you just said to my ear, I'm hearing you say, step back, take the time to like, don't just let your business happen to you. Yes, but, but evaluate your environment, decide where you want to go and you know, set a course and be intentional and make sure that course includes good diversification. Make sure that course includes plugging into your community and right into the building industry community around you. Things along those lines. I think that guys, I think that's incredible advice. Who's watching it? That, that's spot on. 

S

Speaker 2

23:21

Good. Build relationships. 

S

Speaker 1

23:23

Build relationships. Yeah, no doubt. All right, we're at that sort of 10 minute remaining mark, and I want to open up the floor to the audience, make sure that we get an opportunity to hear some questions. I'm going to pop our good friend co Back up Cody. What do we have from the audience today? 

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Speaker 3

23:46

Yeah, we've got a few questions here. I'll start with the one that will build off the conversation that we just ended there with. But you know, when you talk about working in the business and on the business mark and you look towards the future, how far ahead should you be looking as far as a timeline specifically? And when you have things that come up unexpectedly like the pandemic, how are you able to quickly pivot and change as well? 

S

Speaker 1

24:16

Well, so how far should you look ahead? Let's start with that. 

S

Speaker 2

24:20

You know, I, I, I, I think five years is a good outside vision. I think looking at five years and then what you want to do is you want to back map that back to three and one. So, you know, if you look at five years, I want to be here in five years, then back map it to, you know, if I can get there in five years, at three, I should look like this. At one, I should look like this. Okay. And then you got to go back and you got to do your market research to see where the markets are and what the prognosticators are saying, what the economists are saying, where things are going. You got to look at your relationships, you got to talk to your, your contacts in the industry about what they're looking at. 

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Speaker 2

25:06

One thing I did is I established some relationships with some of the utility folks early on. Engineers at Washington Gas, at Pepco, etc, because I had a mentor that told me that those are the folks that developers go to first. When people have an idea and there's a cocktail napkin discussion about a development, they need to go and see if the infrastructure is there. So they contact the big utilities to see if the infrastructure is available for the dream that they have. And that's when it becomes a lead and then you start tracking it. So, you know, looking further out, that's how you look further out is look for stuff that's way down the pipeline. Yes. 

S

Speaker 1

25:55

What I'm, what I'm hearing there is long range vision and then mid and short term milestones. 

S

Speaker 2

26:04

Yeah, I mean you gotta have a long term vision and then you have to map it, you have to back map it and you have to set up the milestones and then you have to fill in with all the tasks. It's like doing a CPM schedule, you know you're going to start the job and you got to finish it and you know, each of the stages that you got to get through. You know, you got top out the building, you got a bam, bam, rough in the mechanical, all those things. 

S

Speaker 1

26:27

This is such a funny, I mean like how many times have you and I said that, you know, it's like you would never start a construction project without a plan, you know, to know exactly how long, when, by when everything's got to happen. Why are you running your business that way? Right. It's crazy. Wonderful. All right, Cody, what else we got? 

S

Speaker 3

26:49

And I've got another question here. I'm sorry I'm unable to see the name, but it says, Mark, Statistics show that over 40% of all businesses in the construction industry fail annually. What do you consider to be the top three reasons for these failures? 

S

Speaker 2

27:04

Wow. The top three. The number one reason for failing in small businesses is billing. They fail to bill small businesses startups. Your Your wonderful craftsman that decides they want to be their own business person. They fail to build, they fail to invoice for their work. I can't tell you how many times I got called by a subcontractor saying, why haven't you paid me? I said, did you send me an invoice? I said, why would I send you an invoice? You gave me a contract. I said, did you read your contract? No. I said, your contract says how you bill me. You have to bill me. You have to give me an invoice so I can pay you. Well, that seems like extra work, you know, why do I got to do that? You gave me a contract. Just pay me. 

S

Speaker 2

27:45

Well, that happens to a lot of people. They don't, they don't build. The other thing is not knowing, not knowing where your costs are. You have to know what stuff costs in order to put together an estimate. You can't, you can't just throw numbers at things. You have to have some realistic view of what it's going to take to get the job done and what's going to cost to get the job done and understand where you need to be in terms of covering your overhead. You got insurance, you got all these other things you got to cover and you know what your profit margin should be. So not knowing your cost is another big failure. What I say, billing cost. The other thing is overextending yourself, taking on projects you don't have the resources to handle. 

S

Speaker 2

28:36

You know that's a quick road to failure. You know the number one business startup failures is restaurants. They have the highest failure rate. Contractors is number two, and number three is accounting firms that handle contractors and restaurants. 

S

Speaker 1

29:00

That's great. So real quick on this point, this is one, I think those are three really fantastic answers. And I think the only concern that I have is that sometimes when you think about particularly that third point, overextending oneself, that it might create, as valid as it is, it might create some fear of growth. And I don't know about you, Mark, but I see a lot contractors that are afraid of growth that they almost, you know, internally they say a lot of things like, you know, we're right where we want to be, we just want to stay right here. And you know, those different types of things. And I think that while we certainly read about and hear about the companies that overextended themselves and had a big explosion, right. 

S

Speaker 1

29:53

And that's how they went out of business, what I don't think we hear about are the multitude of contractors that spend decades providing meh jobs to people and profit for an owner at the end of a 30 year run, they look at and they're like, man, I should have worked at a grocery store, you know, and not to knock the grocery industry, but you know what I'm saying, It's just a, it's, you know, where these. So I think there's a, there's another risk that is extremely important to note that is actually not going out of business, but sucking over the long haul. 

S

Speaker 2

30:41

Yes, yes. And not having, not having a continual improvement mindset, not having a always moving forward mindset. You know, I like to say once you stop growing, you start going backwards. You know, in Montgomery county, we had the county council and everybody going for zero growth. In Montgomery county, there was a whole bunch of no growth people that were looking for zero growth in the county. And then the recession hit in 2008 and I said to the county council, I said, how's this zero growth thing working for you? Pretty good, huh? I call it recession. 

S

Speaker 1

31:20

Spot on. And so how would you respond to this thought that companies should shift their focus perhaps from focusing on revenue growth to just focusing on becoming a better company every day and allowing the revenue growth to kind of follow that? What would you think of that? 

S

Speaker 2

31:42

Well, I, you know, I've been in the business development side of the business for a long time and people always said, well, you're a sales guy. Said, no, I'm not a sales guy. I'm working on developing the business. And that's what you really need to do, is you need to make your business the best it can be and the sales take care of themselves. You know, if you're, if your folks perform and execute, if your team is professional, if you're always moving forward and taking on challenges, if you're on the front edge of, of technology and you're adopting things and you're always aggressive and moving forward, people see that, people realize that and the opportunities come your way and that's business development. Build your business, Build your business first. 

S

Speaker 1

32:29

I think that's such a different way of thinking about business development compared to the norm. I find it to be a much more rewarding look at that term. So thank you for sharing that. I think we have time for one more question, Cody, can we fit that in? 

S

Speaker 3

32:47

Yeah, of course. So you talk about growth, Mark. And I want to know, based on the question that we have here, is when you're hiring for growth for your small business. What sort of characteristics should you seek in search when hiring? Because you also mentioned, you know, your people are your resources and they mean a lot. 

S

Speaker 2

33:08

I mean, for me, that's easy because I, I, I have my rule of hiring. You know, first you go with the three A's. You want the right attitude, you want ambition and you want aptitude. I can train the rest. You know, if you come to the table with those three things, that's great. A passion for the industry. That's another thing. I mean, a lot of people miss out on young people that are trying to get into this business that went through two or three years of high school training in H vac, carpentry, masonry, whatever, and they get out and they want to go to work. And the contractor says, well, I need somebody with five years experience. 

S

Speaker 2

33:56

Well, if you need somebody who's with five years of experience, you should have started five years ago with a high school kid, right, that came out of a masonry program or came out of an electrical program and then you would have that five year experience person. 

S

Speaker 1

34:08

Oh, man, Mark, I can feel another episode or six coming out of that. 

S

Speaker 2

34:13

Work the pipeline. Work the pipeline and look for the three A's Attitude, ambition and aptitude. 

S

Speaker 1

34:19

That's, that's awesome. That's awesome. Hey, here at the morning huddle, we try to finish on time just like any good contractor, right? So, so I'm gonna bring our conversation to a close. As much as I would really like to just continue chatting with you. Mark, thank you so much for joining. 

S

Speaker 3

34:39

Thank you. 

S

Speaker 2

34:39

Thank you, Chad, for having me. Appreciate it. 

S

Speaker 1

34:41

Yeah, it was awesome. So real quick, next week we have Justin Panzer coming to talk about technology in the field. Come in and check that one out. It's going to be in particular focused on risk mitigation, cost savings, and just kind of the simple stuff that organizations should be thinking about when it comes to putting the right tools in the hands, the right technology in the hands of their folks in the field. And what else? That's every Tuesday, 8am Be here. We don't have a recurring invite, so I'll say the same thing that I said last week, which is if this is something that you want to make a part of your weekly routine, shoot us an email or I'm sorry, shoot us a private message. 

S

Speaker 1

35:34

Shoot me a private message with your email address and I will add you to a mailing list so that you get a weekly, you know, email reminder to join. You'll also get a. A link to the recording of that week's session or, I'm sorry, show so that you can, you know, refer back to it if you missed anything or what have you. So, mark, any final words for our audience before we sign off today? 

S

Speaker 2

36:02

Well, I would say continual improvement always look to grow. Don't be afraid of trying something new. Change is painful, but it's very rewarding. 

S

Speaker 1

36:13

Thank you, Mark. That's awesome. Cody, thanks so much for stepping in for Stacy this week. You did an awesome job, and we look forward to seeing everyone next week. 

S

Speaker 2

36:21

All right, thank you. 

S

Speaker 1

36:22

See you guys. 

S

Speaker 2

36:23

Bye. 

Join Host Chad Prinkey (Well Built Construction) and Co-host, Stacey Holsinger, (Steel Toe Communications) every Tuesday morning at 8 a.m. EST. on LinkedIn as they interview top A/E/C industry experts. Guests can participate in the conversation live!

Transcript:

Okay. We should be live. 

S

Speaker 2

00:05

Yep. Good morning, everybody. 

S

Speaker 1

00:07

Good morning. 

S

Speaker 3

00:08

Good morning. 

S

Speaker 1

00:09

Let's take a look and see if we are officially streaming to the. To the post here or to the event here. Want to make sure that's happening in the meantime. All right. Yes. Yes. It sure is wonderful. The tech worked. We did it. 

S

Speaker 3

00:31

All right. 

S

Speaker 1

00:32

I got to tell you, this is the easy part. It's all the stress leading up to the live stream that's the hard part. That as soon as the live stream is working, my mind just goes to its happy place, which is having fun conversations with cool people. Chris, Stacey and I are here in the metro Washington, D.C. Baltimore kind of realm. I know you mentioned that you're out in Park City. Where are you originally from? 

S

Speaker 3

01:05

I'm originally from just outside of Cleveland, Ohio. Town suburb Hudson, Ohio. 

S

Speaker 1

01:11

Cool. 

S

Speaker 3

01:12

So just southeast of Cleveland a little bit. 

S

Speaker 1

01:15

And did you. Did you live there? Like, how long ago did you make the move to Park City and from where in. 

S

Speaker 3

01:22

Yeah, so interesting. Prior life. I was a college athlete and also a competitive skier, and I lived in Park City for a little while after school and was competitive, and then I moved back to the Cleveland area. So I originally moved out here in the mid-90s and then bugged the heck out of the ski CEO from my last company and moved back to Park City in 2007. In the fall of 2007. 

S

Speaker 1

01:58

Right on. 

S

Speaker 3

01:59

Yeah. 

S

Speaker 1

01:59

So this is not. This is not like a. A Covid development like so many. 

S

Speaker 3

02:04

Right. 

S

Speaker 1

02:04

Like so many people who. Who have fled to. To remote work in beautiful areas. You've been. You've been working and living in this beautiful area for. For, you know, a decade and a half, and all combined two decades, it sounds like. 

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Speaker 3

02:18

Yeah, yeah. Was not a Covid move. And loved a mountain bike. Loved to ski and moved out here and then met a lot of people from both the east and west coast this last year and a half that are working remotely. A lot of folks from New York City and Chicago and the LA area seem to have migrated here. 

S

Speaker 1

02:43

You gotta wonder how long that is all gonna last. And. And, you know, if there's. If there's ever gonna be a big migration back, you know, because they realize, you know, if the market doesn't allow for constant remote work. 

S

Speaker 3

02:58

Yeah, yeah. It will be interesting to see, but I. I think some of them really like it, so we'll see how they're. If their companies can lure them back into their offices. 

S

Speaker 1

03:08

Yeah, no kidding. Well, cool. We're coming right up on eight. There it is. 8:00 let's go ahead and get started with this second episode ever of the Morning Huddle. Today, we've got Chris Blyk joining us. But. But for. For now, I'm Chad Prinke alongside my partner and producer, Stacy Holsinger. Stacy, how are you today? 

S

Speaker 3

03:32

Good. 

S

Speaker 2

03:32

Good morning, everybody. 

S

Speaker 1

03:34

Stacy, what's the best thing happening in your world this week? 

S

Speaker 2

03:38

Just busy. I have, God, a ton of things to do, but nothing too crazy. Just work and kickboxing and, you know, nothing crazy. 

S

Speaker 1

03:49

Just work in kickboxing. 

S

Speaker 2

03:52

My boring life. 

S

Speaker 1

03:53

That's awesome. We're gonna have to do a whole episode on your kickboxing. 

S

Speaker 2

03:58

No, no. Thanks. 

S

Speaker 1

04:01

As always for the audience joining us live. Please type in your questions throughout the show. All throughout the show, type in the questions. Get comfortable chatting with each other during the course of the conversation. If you guys have, you know, some, you know, if you're inspired by something, you want to grab that and run with it. That's what the chat channel is there for. Please, you know, engage in that, enjoy that and all the stuff that you type in the, you know, during the course of the show. Stacey will be back on with 10 minutes remaining, which is 8:20 Eastern Time here. And she'll help us to kind of go through those questions and, you know, prioritize the ones that were most common or the. Or the most interesting and what have you. 

S

Speaker 1

04:46

So, Stacey, we'll see you again with about 10 minutes to go. Cool. 

S

Speaker 2

04:50

All right, sounds good. 

S

Speaker 3

04:51

See ya. 

S

Speaker 1

04:53

All right, so, Chris, let's jump into it. Our guest today is Chris Blyk. He is with Pivot Workforce. And welcome to the morning huddle. It's good seeing you. 

S

Speaker 3

05:04

Thank you very much for having me pumped to be on show number two. 

S

Speaker 1

05:09

We're really psyched to have you. Thank you. So tell us a little bit about your background, Chris. Tell us your story a little bit. 

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Speaker 3

05:19

Okay, well, my story, I grew up in a construction family, specifically in excavating just outside of Cleveland, Ohio. I think like a lot of people that I hear that are in the industry and I grew up in it. The last place they thought they'd end up was back in the industry, but grew up running excavators and bulldozers. And I wasn't quite as talented as my older brothers brother. And after school, you know, like everybody else, I dabbled in real estate a little bit, started looking around and I found a construction staffing startup back in 1993, and I have been in the construction staffing side of the business since Then and frankly love it and just like everybody else, get a little obsessed with it. 

S

Speaker 1

06:14

Awesome. Awesome. So tell us, how did you end up starting Pivot workforce? This is a new company, right? This is months old, just like mine. 

S

Speaker 3

06:24

Yeah, yeah. So like I said, I work for one of the largest or the largest construction staffing firms in the United States or North America for almost 27 years and decided basically from a startup through a couple of private equity acquisitions and left in June of 2020 and have spent the rest of that time, the last 15 months, putting pivot together. After a lot of collaboration with people in the industry, both contractors and even some of the software providers in the industry really started to understand when asking questions about workforce demand, kind of this new niche with construction technology and also some of the more direct hire positions, that's where Pivot came from. 

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Speaker 3

07:23

Probably spent, I don't know, six months, eight months talking to, whether it was virtually or actually in person, meetings when we could do it, contractors on the MEP side about new workforce demand, and then, like I said, also some of the large software providers. 

S

Speaker 1

07:43

So you were listening to the market and the market said construction technology and you got sort of inspired to launch into this space because you were paying attention to what the market was telling you. 

S

Speaker 3

08:02

Yeah, the conversations. And frankly, I looked at other forms of staffing. I had a couple of people approach me in a couple of different niches, it, healthcare. And then like I said, you know, construction is my passion. I love it. And after talking to more and more folks as to where the industry was headed with prefab and the manufactured process and that workforce demand that was there, we decided to explore this and have dove in with both, both feet and are chasing after that and learning more and more like everybody else because it is developing rather quickly. 

S

Speaker 1

08:44

Wow. So, so tell us a little bit about Pivot. What do you do and what do you not do? What are, what are? You know, draw some of those lines for us just so that as we have our discussion today about emerg technology roles, everybody can have some context for exactly what it is that you do and don't do. 

S

Speaker 3

09:04

Yeah. So we basically focus from field supervision up into some of the C suite positions. So we do project managers, project engineers, senior project managers, and then we also are doing some like C level hiring for HR directors in some of those positions. And then we also are in the context space. So on the design side, you know, the bim, some data engineers, data analytics, cybersecurity has become a big one as far as the Conversation that's been around for a while. But yeah, we do not. We're not in the skilled trade space, but we're basically everything else but skilled trades. 

S

Speaker 1

09:56

Awesome. Got it. So you're not doing the skilled trades, but you're doing all the other sort of management roles. Field management, internal management, executive leadership, and then the technology stuff. So let's stay focus on the technology angle for the remainder of this conversation. Well, I don't know, we'll see where the heck it goes. But what are some of the fastest emerging construction technology roles? What are you seeing, you know, happening around the industry? And maybe it's inside construction companies, maybe it's, you know, around construction companies. I don't know. You, you paint the picture for us. 

S

Speaker 3

10:33

Yeah, so there I, there's kind of a few different bucks to that. On the AEC side and the MEP side, you know, you have your, the design piece. So bim, virtual design, even some of the CAD that's still being used then a lot of the industry is moving towards this data driven approach per se. So you have again, on the AEC side you have data engineers, data analytics, computational engineers. Drones are becoming a much bigger piece of the construction community, so to speak, both in renewables and the regular construction. And like I said, cybersecurity. On the tech side there's been, I think it's since 2016 or 17, there's been over $12 billion of investment in technology that just this year to date, $2.1 billion from venture capital. It's 3,500 startups in the construction space. On the tech side, 3,500, yeah. 

S

Speaker 3

11:53

So there's been a lot of investment and there's a lot of innovation going on there. So from the tech or software providers, you're seeing software engineers, DevOps, cybersecurity is another one. And then there's the client integration piece. With all this technology, they need people to be able to service a client and do the integrations for the technology that the client or contractors are buying. Then there's an interesting one, the client service side. You're seeing more and more. Some of these software companies are reaching out. I actually saw an advertisement last night looking for example, estimators to sell their software and be the link between them and a contractor because they understand the construction side. So that's, you know, they're looking for people with previous experience in the industry. 

S

Speaker 1

12:47

That's the last thing our contractor watchers want to hear. Is that right? Like, hey, your people could leave construction and go to Technology. But I think, you know, one of the other things that really struck me in our conversations leading up today was the idea that, you know, the enhanced role that a technology background is playing in your everyday construction positions. Right. So, so that now there's a project manager. But if the project manager has X and Y qualifications or technological technology capabilities, they become considerably more appealing. What, what have you seen there? 

S

Speaker 3

13:33

Yeah, so you see both sides of it. For example, senior project managers need to understand some of the different software programs to help manage the job, run the job. They have to be to collaborate with everybody. A lot of the, most of this is going to cloud based technology. And then the other side of it, to your point about the tech companies stealing an already depleted workforce from construction, in some cases it's actually lengthening a career for you know, say an estimator that was getting ready, he's burned out, he's getting ready to retire from the industry. It's giving him another option or her another option to keep going and move into a different space in the industry and keep working in the industry as opposed to retiring. 

S

Speaker 1

14:26

Yeah, it's a really good point. I think that you know, working in a company that is supporting the industry, adding value to the industry is certainly better than losing them to like the financial sector or something like that. 

S

Speaker 3

14:42

Yeah. The challenge with the construction tech stack, if you will, is even some of these, the higher end tech positions, they still need to understand that the contractor's world, the built world and finding those people is a big challenge. 

S

Speaker 1

15:00

So what do you think? You mentioned all this investment, $2.1 billion this year alone, which is amazing. What do you think that's about? Why is it, why is there so much money pouring into produce technology for the construction industry? 

S

Speaker 3

15:23

Yeah, I think there's a couple of things. I think the first thing that comes to mind is innovation. Construction is measured very much on productivity and the more that tech can help enhance that productivity and bring automation to the industry, that is one of the big drivers. So there's a big opportunity there. And obviously the venture capitalists are seeing that with all the different tech startups and frankly, you know, going, talking about the skilled trades a little bit, you know, as people, I think I saw a stat that 53% of the industry is going to retire by 2036. We're not replacing the skilled trades fast enough. This has been a couple of decades of a conversation. So bringing this automation and manufactured environment to construction will help with that. It's not going to solve the problem, but it will Help. 

S

Speaker 3

16:22

So I think a lot of it is around innovation, safety, productivity, and there's a big opportunity there. And obviously the tech companies are seeing it. 

S

Speaker 1

16:33

You mentioned productivity and obviously I think all those buckets, safety obviously also chief among them. But when I think about productivity and construction, I think about. It was a 2018 McKinsey & Co. Study that was produced that identified that the construction industry is just about as productive today as it was in 1974. 

S

Speaker 3

16:58

Right. 

S

Speaker 1

16:59

Something along those lines. And I think there's a bunch of reasons for that we won't get into during this show, but I think tech companies are recognizing a massive upside in terms of elevating productivity. Right. Compared with other sectors of the economy, it's dramatically less productive and has not grown nearly on the same stride as, say, manufacturing, let alone know technology as a market sector. So, so I think it's not a surprise. It'll be really interesting to see what starts to happen in the next three to five years, five to 10 years, as a result of these massive investments from technology and whether the lagging technology, you know, construction industry, that sort of old school, you know, we, we do things the way we do things, you know, kind of mentality, see how that impacts it. 

S

Speaker 1

18:05

Because at the end of the day, construction folks aren't going to change just to change. 

S

Speaker 3

18:09

Right. 

S

Speaker 1

18:09

They're only making a change if they can point at real meaningful improvement. 

S

Speaker 3

18:15

Yeah. What you see from a lot of the tech companies, because there's, they're all over the place, they typically solve a single problem, whether it's contracts or, you know, just getting all the data scrubbed and making sure that everything makes sense. But they still, you know, a building still needs to get built physically. So I think that, you know, the challenge is getting the minds that are behind the contractors and the tech industry to work together. And they're different. Right. It's, I think it's 41% of our workforce now are millennials, and I think it's 5% are Gen Z right now. And then by 2025, Gen Z will be about a quarter of the workforce. So there's a big transition going on there. 

S

Speaker 3

19:07

And it'll be interesting to see how the two worlds come together because that is one of the attraction points for the new workforce is having contractors that are innovative, that are diverse. So it's a big challenge for the industry and frankly for a lot of this workforce, you know, we're competing with Amazon, Apple, Google for this talent. So it's going to force us to, you know, be innovative and look at the way we're doing things on all levels. 

S

Speaker 1

19:37

Let's. I'm going to jump right on that question because you get a chance to talk to obviously the companies that are interested in hiring new talent, but also I can't even imagine how many candidates you and your team get a chance to interface with. It probably gives you a fantastic perspective on what they care about. So you talk about the, you know, sort of, and I don't care what generation they're in. What are candidates asking for when you're in those discussions or your team's in those discussions with potential, you know, candidates for your clients? What are, what are they looking for in the companies that they would come and join you talk about the vert, like diversity. Is that really a topic that is coming up regularly with a candidate? 

S

Speaker 3

20:24

Yes, particularly actually with Gen Z. There's a couple of different studies that are out there and that is they want to work for diverse companies because of, you know, what comes from that is innovation and different trains of thought. And there's a massive opportunity, you know, for the industry as we talk about losing, you know, 53% of our workforce in the next 15 or 16 years. Getting into a more diverse workforce is one way to backfill that and also bring innovation with it. But they, yeah, they do have those questions. They're big on company culture. You know, it's not all about money, but, you know, that being said, I think wages are up 7,7% in the industry and so money is a factor. But they're looking for culture. 

S

Speaker 3

21:19

They're looking at benefits and not just the standard benefits, but they're looking for, you know, like mental health benefits. They're looking for PTO that they don't, you know, they don't have to wait three years to have two weeks of vacation. So they are looking at things differently. 

S

Speaker 1

21:38

Yes, there's a higher, and I've read this and seen, you know, anecdotally seen this watch, you know, read studies about it, all that type of stuff, but there is, there really is, it sounds like, you know, from your experience a higher value being placed on quality of life issues on companies that are thinking about the whole person that they're hiring and not just the, you know, I guess the employee aspect of the person. 

S

Speaker 3

22:11

Yeah, you know, they look for a lot of the same things we all have, but they are, you know, the me time is a real thing. They also are looking for career paths. What does it look like as they come into a company, as they move through the company, have other people in the company followed a career path. I was listening to another interview the other day, and it's a big, very large mechanical contractor, I think, with 40 people in their design department, and now they have eight remotely. So that remote workforce is a, it's a thing. It's a real challenge for our industry because again, the thing, you know, buildings get built in the field, so the collaboration needs to happen. 

S

Speaker 3

22:56

But were even seeing with some of the senior project manager positions, not necessarily a remote, but a hybrid situation where they don't have to be on site all the time. And when you talk to clients about that, they, you know, it's a real challenge for them to wrap their head around doing something like that. 

S

Speaker 1

23:15

So we just have a minute or so before we shift gears into taking questions from the audience. I would go ahead and prompt the audience. I don't know what kind of questions have come in, but please, if you've been holding off on sending those in now, go ahead and fire in a few so that we can address your specific questions and thoughts while we have Chris this morning. One question that I have is when you. Let's fast forward five years. What is a position that is currently not the norm for a contractor to have, you know, on staff that you think we are going to see more construction companies, more contractors have as kind of a normal role inside their company? 

S

Speaker 3

24:12

Yeah, that's a great question. I would say this because everybody's trying to wrap their arms around data and understanding, you know, how things are happening and being able to take that to their client, to their owner. I think, you know, data and data analysis, data engineers, data scientists. I didn't even know what one of those were until three years ago. And being able to take real information and, you know, one of the challenges, I think, is, you know, what is the information a client or a contractor really deems as important and what isn't. But then also being able to go to, you know, say they built, you know, a commercial building and they're in a, they're bidding for another one. Being able to take that data and show an owner, hey, here's what it's going to look. 

S

Speaker 3

25:13

Here's what your mechanical is going to look like on this site. Here's a similar site, this is what it looked like. So I think everything revolving around data is going to be important because whether it's even on the HR side looking at data, who's applying for jobs, what posts are attracting People who wants to come to work for your company. I think that the data is going to win from that perspective because you can pull real information out of it. 

S

Speaker 1

25:43

And talk about things that can really contribute to enhanced productivity. If these construction companies are able to start capturing and doing something with this data that they monitor, they're going to be able to actually make business decisions to drive productivity. I love it. So we have 10 minutes, a little less than that remaining. And I'm sure we have some questions in from the audience for you. So I am going to pull Stacy back up for us. Stacy, there we are. 

S

Speaker 2

26:20

We don't have any questions yet, but I have some questions for you. 

S

Speaker 3

26:24

Yeah, hit it. 

S

Speaker 2

26:24

You could answer. So you were talking about all these tech startups and I was wondering, like, the only one that I can think of is Interplay and they do 3D simulations to help, you know, train people in H Vac and plumbing virtually. And their whole goal, I believe, is to try to get people trained quickly within like three weeks or something like that, as opposed to going to an apprenticeship program. So I was wondering if you could throw out some names of any tech startup companies that you know that we could just, you know, check out and look into. 

S

Speaker 3

27:05

A company called Join is. Is one of them. There's a, there's a couple of companies. You know, there's two really big companies that are buying up other tech startups. Company called Labor Chart Workforce Management Platform. But I believe they were just bought by Procore. There are, you know, some fascinating ones on the human resource side, a company called Paradox. They're, they're four years old. They're using some AI to help track who's applying for jobs. And they're using bots to, when somebody goes to apply online, they're using those, using bots to chat with people to get information and ask questions. And you wouldn't know that you're actually talking to a bot when you start asking questions about wages and benefits and where the jobs are and stuff like that. But yeah, there's a multitude of them out there in different spaces. 

S

Speaker 2

28:15

Thanks for those examples. 

S

Speaker 1

28:17

Yeah, that's awesome. Now I've got a bunch of research to do and I sincerely hope you're a shareholder and all of those Right. 

S

Speaker 3

28:28

Just here at the moment. Right. 

S

Speaker 2

28:31

I also wanted to ask, I know, me and you had conversations before, but just to tell the audience, kind of share some stories about how competitive it really is out there. So, you know, if you have a PM and you think that they're A great candidate and they get the job offer and then another company comes in and snatches them. Like, what does that look like? 

S

Speaker 3

28:56

Yeah. So one way I'll address it is addressing the great resignation that everybody keeps hearing about. So I would call it more the great transition because the numbers are, I think in the first five months of this year, 17 million people moved to different roles. They didn't leave the workforce, but they left their existing role. It was pre Covid, it was 2.5 million people a month had moved and the first five months of this year was 3.4 million a month were changing jobs. So the competitiveness in the market, you don't have days, you have hours to make decisions on people. 

S

Speaker 3

29:48

You know, we see people that are, you know, looking at project manager jobs, senior project manager jobs, and you know, whether they move, you know, we have a client that needs them, they interview them, they like them, their current employer offers them more money to stay. But then client number three or company number three offers them a, you know, 10k sign on bonus and you know, three weeks of vacation out of the gate and they end up over there. So it's, we've seen a lot of very quick decisions and I think that's the big challenge for, you know, contractors on their side are making decisions on some very important roles and they should take their time. But you know, quick decisions and really getting through the interview process is important. 

S

Speaker 2

30:43

Yeah. 

S

Speaker 1

30:44

Awesome. 

S

Speaker 2

30:45

And finally one more question. Do you have any resume tips for people that are looking for new roles in the construction industry and how that's changed because many of us have stayed with company long term, but maybe we're looking for a new opportunity. But it's been so long since we have updated our resume and so much has changed. So what do you suggest there or even researching companies? 

S

Speaker 3

31:12

Yeah, I think that what we see typically and is what, you know, people that haven't updated their resume for a long time, but also, you know, the different types of, you know, for example software they have used, integrations, they have done some real detail, you know, on the operations side, you know, being detailed about what type of projects you have been involved in and really updating it consistently is probably the most important part. And nobody likes doing resumes but you know, we'll get resumes for a fantastic candidate. For example, a project manager that is, has worked in the pharma space, which is obviously crazy right now and they'll have three bullets under their last job. 

S

Speaker 3

32:05

So really getting some detail in there and what your experience is and how many people you manage on site and the different operating systems you use is important. 

S

Speaker 1

32:17

Chris, fundamentally, just. This should probably be a 10 second answer, but fundamentally, are you seeing companies actually take steps to offer what candidates are looking for? 

S

Speaker 3

32:33

Some, yes. I think that's, you know, we're seeing, you know, a few different things happen. Some are being very innovative and I think frankly, the industry gets a little bit of a bad rap because I think we have some of the most innovative companies in any environment in the construction industry. Some are slow to adapt. We have an old school mentality in some. Understandably, some of these companies have been around a long time, but we are seeing companies look at benefits, looking at hybrid versus remote working through that because it is being asked for. But yeah, were seeing some move. 

S

Speaker 1

33:13

That's awesome. That's great to hear. All right, so that's just about our 30 minutes. And just like a strong contractor on the morning huddle, we finish on time. So if you're passionate about the industry and you have a message that our audience should hear, please contact us in with your interest in joining as a guest. You can contact me or Stacy directly right here on LinkedIn or email or whatever you like. Next week we've got Brett Harton, who is the vice president of construction at Folger Pratt. That's going to be a fantastic conversation where we're talking about, from a general contractor's perspective, the steps that Brett and his team take to treat subcontractors like partners. Please join us live every Tuesday at 8am Eastern. 

S

Speaker 1

34:02

And if you can't join live, check out the recording on our yout Channel, which I think is coming, Stacy, or whatever app you use for your podcast, which I think is coming down the line. So we're pretty excited about that. But. But Chris, thank you so much for joining. Any final words before we sign off? 

S

Speaker 3

34:21

No, I appreciate y'all having me. It was fun. A little early out here, but it's okay. And yeah, love to do it again sometime. 

S

Speaker 1

34:31

We'd love to have you. It sounds great. Stacy, any final word? 

S

Speaker 2

34:34

Nope. I think this was a great conversation. Hopefully people can take something that they learned today. And I look forward to next week too. 

S

Speaker 1

34:44

Same. Sounds good. See you guys. 

S

Speaker 2

34:46

All right, see you guys. 

Join Host Chad Prinkey (Well Built Construction) and Co-host, Stacey Holsinger, (Steel Toe Communications) every Tuesday morning at 8 a.m. EST. on LinkedIn as they interview top A/E/C industry experts. Guests can participate in the conversation live!

Transcript:

Speaker 1: 00:00

All right. Welcome, welcome, welcome. This is Chad Prinke. Welcome to our first episode of the Morning Huddle, brought to you by well Built Construction Consulting and our partner, Stacy Holzinger, the owner of Steeltoe Communications. How are you this morning, Stacey?

Speaker 2: 00:34

Good, how are you?

Speaker 1: 00:35

Excellent. Thanks so much. Our first guest today, our guest for our first show, I should say, I should say, is Kenny Mallock, who is the owner of Malloc Mechanical. Kenny, how are you this morning?

Speaker 3: 00:52

It's been a. It's been a great start with a nice morning, morning cup of coffee.

Speaker 1: 00:59

Excellent. Good man. That's exactly what we're hoping for. And I hope everybody else is, you know, enjoying their morning cup of coffee while they're joining us right now. Kenny, by way, a little bit of an intro. Kenny is a good friend of mine. We've known each other for about a decade. I've learned a few things about Kenny. He's a lifelong learner. He is constantly working on improvement. He is an incredibly straight shooter and not afraid to admit when he's wrong or when he sees something wrong. And for that reason, in that kind of sense of, I don't know, friendship and confidence in the quality of our conversations over the years, Kenny, you were a no brainer to invite as a first guest. So I want to thank you for accepting and joining here today. And, you know, with all the dozens of different things we've talked about in the building industry, the stuff that we're passionate about, the stuff that drives us nuts, I think the thing that I wanted to bring to the audience for our first conversation today is really just to get into something that you and I have talked about probably a hundred times, which is what's right and what's wrong when it comes to effective general contractor and subcontractor partnerships. So that's today's topic. Now, before we dive into the topic, Kenny, introduce yourself a little bit to the audience. How long, how long have you been doing this? How long have you been running Malloc Mechanical?

Speaker 3: 02:51

So officially, I think it's around 28 years. I've always had customers, though, since I was probably 13 years old. So in essence, it's been a long time. How's that?

Speaker 1: 03:05

Right on. When you say you've always had customers, what do you mean?

Speaker 3: 03:09

Well, it could be from, from shoveling snow, cutting grass, raking leaves, whatever. You know, growing up in good old Twinbrook, usa, it gave me a great opportunity to meet a lot of different people, and I guess I learned how to hustle.

Speaker 1: 03:26

You must have had some, some motivation to make some cash. When you were a kid, what was the first big thing you bought?

Speaker 3: 03:34

Levi's.

Speaker 1: 03:36

No kidding.

Speaker 3: 03:37

Yeah. My parents wanted to send me to high school with tough skins unless I paid for half of my Levi's.

Speaker 1: 03:43

So weren't having it.

Speaker 3: 03:44

I wasn't having it.

Speaker 1: 03:45

That's awesome. That's awesome. So what is. I mean, you've been doing it for more than three decades in one way or another. What's your favorite part of the industry?

Speaker 3: 04:01

The customers. Good customers is the favorite part of my end of the industry for me, somebody that, that, you know, that. That appreciates and values what you do, that trusts you and believes you and lets you do your thing. That's the favorite part.

Speaker 1: 04:20

That's awesome. Have you been fortunate enough to be surrounded by those folks your entire career?

Speaker 3: 04:27

No. It's a navigation. It's a navigation. It's a journey. And sometimes they're good ones and sometimes there's bad ones or not. So good ones.

Speaker 1: 04:38

Yeah, yeah, yeah, I get you. So, all right, so I'm gonna. I'm gonna kind of start to dive into the topic. I think that's actually a good lead in for you. The customer today, right, is the general contractor. And you know, that maybe has differed on one level or another over the years. And I know it's not your only customer. There's a service business involved and all that type of stuff. But for the sake of our conversation here today, when you think about the general contractor subcontractor relationship, describe how that should work from a subcontractor's perspective. Obviously a mechanical subcontractor's perspective too. Right. Because there's different nuances to every trade category and how they want, you know, the relationship to work, how ideally paint the picture of the optimal subcontractor general contractor partnership from your point of view.

Speaker 3: 05:44

Once you have a. Once you have trust established or credibility established from the organization perspective, which is. Which is another part of the journey. But once that's established, it's about a contractor that has a good customer, and that customer trusts the contractor. If the trust work, trusts the general contractor to do his job and do it well, that general contractor will engage his subcontracting community, which is basically supposed to be the experts in their chosen field, to involve and engage them in the construction, in the project itself. So in a perfect world, you know, sometimes I'm assuming a GC might meet with a client and, and, and go over a bar napkin sketch of what somebody wants to build and the general contractor gets excited about it. And they figure out how to navigate through building it first. And I'm assuming they have to go through some, through some conversations about fee structure and stuff like that. But once that fee structure stuff is established and nailed down, then we start collaborating, we start building. In a perfect world the GC is gonna, you know, maybe get, get his subcontracting community involved in projects at 30 documents and when he does, you know, our pre construction group is going to look at those documents and they're going to quantify and estimate and provide budget pricing on what they see. And then the next step is to from their knowledge is identify what's missing. But you know, it's necessary and you identify these items, quantify those, write a lot of RFIs to poke holes in the, in the project to help develop the project. And we're going to do this at 30%. The information goes back to the architect and engineer teams, they perfect the documents, we look at it again at 60%, do the same thing, the feedback gets back to the architect and engineers and we do it again at 90% all with the desired goal of reducing change orders, eliminating scope creep for the GC between the GC and subs, keep the thing on track and make it constructible.

Speaker 1: 08:17

So and what's, what's interesting is I, I, and of course we're going to be talking to some general contractors on the morning huddle in the future but one of the things that I, I wonder is how much does that differ from, from how a general contractor would draw it up? Because for, from my perspective it sounds an awful lot like what they would like too. So, so, so ultimately you know, it kind of comes down to this question sort of like so why exactly doesn't it happen that way? And, and, and what are the forces at work? And, and, and so, so before we dive into our some hypothesis about why it doesn't happen that happen that way I guess describe what it looks like when it's broken, when, when. So, so if I can recap in a sentence or two what I heard you say it's super early involvement, 30% design docs, we start partnering early. Every trade is involved in you know, pre construction assistance, you know, essentially informal design assist. Tell me if, you know, tell me if that.

Speaker 3: 09:22

Right, yes.

Speaker 1: 09:24

And, and then the documents mature, the design matures and we end up with a very efficient, extremely well orchestrated plan. That's the way it should work. Now in there. One quick question, sorry. When do you know it's your job? In a perfect world.

Speaker 3: 09:53

In a perfect world you don't know until, until all final numbers are tabulated and they present the GMP to the owner and the GM and the owner approves it and then the general contractor does the selection. And we don't expect to get a project just because you provide these level of services but you do want to be treated, you know, somewhat. You want them to remember did we bring value to the table during our pre construction services? We want to make sure in a perfect world we would have like minded competition, leveled competition. Competition is a good thing. And there's, there's time and place where we might even go to the pre con services and help develop the project. But schedule wise it doesn't work out for us at that point when the thing just starts moving forward. So I can, I can relate and I can understand why they, the contractors might have to have two or three different people running this exercise with them to have options. You never want to be in life without options.

Speaker 1: 10:52

Yep. Yeah, but and note. Right. I'll just draw a circle around that. Two or three. Right. Not like seven or eight.

Speaker 3: 11:01

Two or three.

Speaker 1: 11:02

Yeah. Yeah. And I think if it just becomes unwieldy for everybody involved past a certain point that's really interesting. So. All right, so just talk a little bit about what it looks like when it's broken. When it's, when it's, you know, really not the way that a subcontractor would want to draw it up.

Speaker 3: 11:21

That's the hard bid plan and spec market. That is a broken. That's what's broken and you know, what causes that is something different. We can get into that if you want to later. But ultimately when it's hard bid plain inspect, you know, there's, we get engaged late. You don't have the time to massage it. The, the drawings are already done. You Write as many RFIs as you can. Typically try to level the playing field to make sure that when we look at a project, even if it's hard to plan inspect, we still want to build a successful project. But the RFIs that we're writing at that point there are trying to level the playing field to make sure that other people, other, you know, because hopefully there's some transparency with the RFIs that we write and other people get them and pay attention to them to try to level the playing field and make sure that people are capturing items that are really going to be needed and required to make sure their pricing includes it.

Speaker 1: 12:20

Yeah. So the broken model is hard bid plan and spec and I think, you know, just from previous conversations I think the thing that drives both of us nuts in that environment is that there's actually a reward for dishonesty. Right. There's a reward for playing games for subcontractors in that environment. And the motivation is to look low. Right. If the motivation is to look low, there's all kinds of creative ways for a subcontractor to play dumb and look low and end up winning that work. You know, I know from talking to you that that's just. You're not going to sleep well at night if you do it.

Speaker 3: 12:59

Yeah. Now it does not feel good. You know, again, just like you said, it's a game. Some people are good at playing it. But if I was going to play that game, I would have to renovate my house here with people, you know, change orders, for example. You know, when it's hard bit plane inspect, there's, there's not the margin and you have to find the margin in it. You have to nickel and dimensional the project. You have to, you know, go aggressive after scheduled delays that you don't have any margin for error in. And I need to have a different subset of people for project managers to be able to document and chase. It's not, it's not good. The last recession, and I think it was 9, 10, 11, whatever it was, it's. We did a lot of hard bid plan and spec work, and the hard bit plan and spec work prior to that actually had margin in it that allowed me to continue to build the projects without nickel and diming things so I didn't have to chase it. But when those margins went away during that recession, I would have had to renovate this place. I was, it was, I was an unhappy person at that time because in order to survive, I would have had to again, renovate this company with personnel and hire people that are change order kings, change order hungry and trying to exploit every opportunity you can get to make a buck.

Speaker 1: 14:34

Yeah. Yeah. So I think we, you know, we know that there are some environments where the, that hard bid plan and spec, it's kind of, it's out of your control, that that's the way it's gonna work. We'll leave those off to the side. We could expl. I do believe that it's worth trying to change that over the long haul. Right. That, that, that's more of a movement to try to get, you know, funding agencies from the government as an example, to take a look at, you know, redesigning procurement models so that they don't go hard bid plan and spec, but Leaving those off to the side. Do you see that in the private development world? You know, right now? Is that happening at all?

Speaker 3: 15:16

It is, it is right now. And there's like, there's a swing and whenever that there's a swing in an economy, you know, Covid has been the example since the commercial office building market got pretty much annihilated during this thing. Developers that typically would, when things are busy and they're looking for their GC friends to sit down and negotiate a project on a GC and a fee and they're more excited about building the project and then all of a sudden the model, the market swings and now the developer market is going to go out and they're going to hard bid the same project to two or three different GCs. And that's where, that's where it starts going down.

Speaker 1: 15:56

Yep, yep.

Speaker 3: 16:00

I guess they trust, they trust their GC partners in a good economy and then all of a sudden that trust or that value goes away when they know that the general contractor and subcontractor market is hungry, looking for work. And they, I think there's some assumptions in there that, that we profiteer in those good times and, and actually our pricing goes up. That's not the case. You know, good contractors and good subcontractors, their, their cost perspective and their profit perspective remains the same because that, you don't, it's kind of weird. You don't do what you do for money.

Speaker 1: 16:42

Comes back on you. Right. I mean, hitting, hitting a home run can come back on you. Right. If you, if you think. Right. And when I say come back on, it's, it's you, you don't want to take advantage of, of the trust because the moment, the moment that happens, you have to assume that that's not going to remain private. Right. And, and, and, and so, yeah, I'm with you. I think, I think there's a, a belief that, you know, subcontractors are out there, you know, cracking heads and taking money when times are good. And I think there's some of it, I do think there's some of it. And, and, and because of that, you know, it may fuel some, some of that lack of trust or, or, or worry when times tighten up. I also think there's probably some influence from funders, right. Where it's not maybe the developer, but it's the source of the money. And the source of the money is now feeling jittery or demanding. And so sometimes it's not always that, but it's interesting. You're Seeing it right now. So I want to talk to the audience here for a second. We are going to, if, if I can manage time correctly, we're going to shift gears and want to start answering some questions. Please start typing some questions into the chat. And that way we kind of have a sense of how many questions we want to get to and still wrap up by 8:30. I'm going to ask you one more question at least though, Kenny, which is I think so much you said earlier. You know, I imagine that a general contractor is getting together with, with, with their customer and they're sitting down and maybe doing a napkin sketch and then they're talking about. There's so much value in really understanding one another's perspective. So what really happens behind the scenes with general contractors? If you can get a good clear sense of that and appreciation for that and empathy for that as a sub, I think it helps you to serve them better. What do you wish every general contractor understood about being a sub? You know, if there was one thing that could help them to gain some insight, some empathy for what subcontractors are doing. What's one thing you wish that gcs knew about? Subs.

Speaker 3: 19:13

We're here to help. Really sincerely, good subs are really truly here to help to, to make the project go smooth, minimize risk, minimize stress. One time, one budget, happy customer. And we can, if you engage us, we can help. And again, earlier I stated it's kind of weird when I'm interviewing somebody, we tell them this. We don't do what we do for money. We do what we do for the fun of the game. Money is a result. It's not the driver, the game. Which is again, there's two different games you talked about the hard bed plan and spec game. I hate that game. I would prefer to engage and actually engage my people, engage everybody around us to build a good project. That is the game. We had this company as a bus. We have a lot of different seats. If everybody that we hire is in the right seat of the bus doing the right job that they're happy and best at doing, the result is money. And the same thing goes with client selection and subcontractor selection to build good projects, money will be.

Speaker 1: 20:25

Yeah, that's awesome. That's a really, really interesting answer. And I think something that if you think about 30 seconds for me to editorialize, if you think about your subcontracting community as there to help, that that frames them up as partners. It frames them up as friends. And I think Kenny, Kenny is one of the most, again, straight shooter, one of the most realistic people I've talked to in the building industry. I asked him what the perfect world looked like. He was like, I'd compete, right? But I, but I would be, I would be remembered for the quality of my pre construction services and, and you know, those things, you know, if I was adding value, those things would translate into having a leg up on the project. But what you definitely wouldn't do to somebody who is trying to help you is you wouldn't withhold information, you wouldn't lie, you wouldn't change the rules of the game at the last minute. Right. You would operate in front of them. Even if I know you, and I've talked about this before, Kenny, Even if operating in front of them is, hey, Kenny, I need your help. Like, you're gonna win it, but I'm not. This one's not gonna be yours. That's great information for you to have. And to your point, you're still gonna help and you're gonna help 100%.

Speaker 3: 21:42

And I know that, yes, honesty is always the best policy.

Speaker 1: 21:48

Awesome. All right, cool. I'm gonna invite Stacy on to help us to sort through some of these questions and help us to, to answer, you know, questions as they come in. So Stacy, what do we got for questions? We probably have time for like three or four.

Speaker 2: 22:05

Okay, sure. So, Scott, friends said, how are you keeping up with the lead times becoming longer and the lack of resources to build the job better? Asked how have you and your GC partners been able to team up to show the owners that schedule simply can't be an aggressive right now given the current climate.

Speaker 3: 22:30

It's about laying out your, your resources. It's not, it's, it's about not over committing. You can only produce what you can produce with the resources that you have. And if you, as soon as you start going out trying to find work that you don't have resources for, that's going to be ugly. That's been the private nightmare that, you know, I probably dealt with 15, 18 years ago, when you find a job, you didn't have the personnel. Now you have to hire the personnel to do that work. And it's never a good recipe. You don't know what you're getting with.

Speaker 1: 23:02

So that's a, I mean, that's a great piece of advice as it relates to your own internal resources. Let me ask a question. Have you, have you turned away work that you would want?

Speaker 3: 23:15

Unfortunately, yes. Unfortunately, over the last month, we've had to turn away work that we were running pre con one and you know, I hate to say it, but it's. It's come down to first come, first serve with a lack of transparency, lack of communication, a lack of commitment that I picked up something else and I wasn't able to. To execute, to procure another contract with somebody else.

Speaker 1: 23:41

Well, I think it's a really important message for the general contractors who are watching this to, to, you know, pay attention to, which is, you know, buy as quick, as early as you can from the people that you really want to buy from. The faster you can get them on your team, the more. Like, to your point, first come, first serve, when you don't know whether you're going to get this one or this one, when this guy comes to you and says, hey, it's your job, you're saying yes, even if this one was a little bit better. Because it's not like you can. It's not like you can wait.

Speaker 3: 24:12

Money's not money as a result. And again, I have an obligation to my people to keep my. Keep work in front of my people. And a bird in the hand is worth better one in the bush better than one in the bush. So you gotta do what you gotta do. And it's unfortunate.

Speaker 1: 24:26

Yep. Thank you. All right, good. Other questions. Stacy?

Speaker 2: 24:31

Yeah. Tara McCarthy said, How do you rebuild trust with a client after it's broken?

Speaker 3: 24:39

Don't break it. Don't break it. You know, be honest. If something is. Something's going south, have a straight up conversation with them and, and just be honest. Trust is the foundation of every relationship. And whenever you're not transparent with things, just be honest and come at them and tell them the truth what happened. Let the dice, you know, let the chips fall where they fall. It is what it is. But honesty is the best policy.

Speaker 1: 25:06

Kenny, I freaking love that answer. There is a, you know you're gonna screw up. So the question wasn't how do you rebuild relationships once you screw up. The question is how do you build, relate. Rebuild relationships when you lose trust and losing trust is within your control, people aren't going to lose trust for you for screwing up. They're going to lose trust for you because of the way that you handled the screw up. Did you try to hide it? Right? Did you lie about it? Did you try to blame somebody else? Did you try to save a couple of bucks rather than saving the relationship? Right? That, that's the. And I love it. I think that's exactly right. You can choose whether you lose trust. And if, look, if somebody Wants to say, I'm not going to work with you again because I don't like the way that went down. At least their, their trust in your honesty and integrity shouldn't be undermined.

Speaker 3: 25:53

I get it. I get it. I'm sorry you feel like that. Hopefully we have another opportunity to, to show you something different in the future.

Speaker 1: 26:00

That's it. Yep. Excellent. Good. Stacy, how about another?

Speaker 2: 26:04

Sure. Scotch Montgomery said buying earlier is even becoming a chance, is even becoming a challenge, though, especially in a world where escalation is becoming more and more unpredictable. Where's the happy medium in buying early and mitigating escalation risk?

Speaker 3: 26:24

The happy medium. You got a job to do, you just got to do it. You got to know your own schedule. And again, the, the farther, the earlier that the owner can get you involved in it to where you can actually have the time to do your job, the better off everybody's going to be. But again, if it's hard bid plan, inspect late deadlines, they want it, you know, they bid it on a Thursday, want to start it on a Tuesday. You can't be proactive. You can't be proactive. You, especially the owners got to understand now there is supply chain disruption. So they got to get their projects engaged with early to give people the opportunity to do their job. You know, we're, we're finding ourselves, you know, documenting and timelining when we're awarded the project, when we have released our subs and vendors and documenting the whole process because there's certain things that are outside of our control, be prepared for transparency.

Speaker 1: 27:21

I think there's a, I think there's a right now an immediate world situation related to supply chain delays, you know, pricing, escalation, all those different types of things that, that have created a whole other set of challenges and questions. I would, you know, I think what, what I'm hearing you say, Kenny, is buy early regardless. Doesn't matter, man. Just get, get, you know. So have you seen any interesting clauses, contractual clauses that are protecting people against, you know, price escalation or anything like that if they do sign up early?

Speaker 3: 27:56

No, no, I haven't seen anything new come up, come out in contract reforms with this, but I've seen good general contractors engage early and, and, or through the scope process. They want to under. They want to understand what the long leads are. Good general contractors are asking the questions early. And, you know, some of the things that they're even considering doing is maybe doing an early release for a small package. Their documents might not be 100% but maybe the underground portion of it is and they'll do an early release package to get somebody signed up and working on it so they can hit the ground. Veri. With. With trying to do the best they can to avoid delays because of supply issues.

Speaker 1: 28:34

Yep. Awesome. All right, cool. You know, rather than running long with this group, I want to try to set a good expectation that we're going to wrap up at 8:30 on the dot. I just want to take a moment to thank you so much, Kenny, for taking, you know, some time this morning and joining and having this conversation. I'll talk to, you know, the audience here for a moment. I, we, we, we came up with. Yes. Well, okay, so first off, Stacy came up with this and, and I want to thank Stacy and Steeltoe for, you know, forcing the issue and, and creating this opportunity for this kind of dialogue. Without Stacy's, you know, intention, intention on this and pushing me along, we wouldn't be here. So thank you so much for that and, and for, you know, you know, producing and organizing this show. We thought we were going to do six. I think we're going to do this every week. You know, we've gotten an overwhelming response. Tons and tons of people are reaching out, asking if they can be a guest, asking to participate. I think we have guests lined up through January now. And, and, and so if that's something that appeals to anybody who's watching, if you have something that you're passionate about and something that you feel like you can add value by talking about, I'd love to hear from you and, and you know, welcome that kind of interaction. And on next week's show, we have a person named Chris Blyk. He's an expert in the industry workforce and he's going to be talking about emerging construction tech opportunities, construction tech jobs, and talking about what is new and trending and what we can expect coming up as it relates to the job opportunities that are being posed by technology and construction. Kenny, any, any last words that you want to shout out to the group that's watching here today?

Speaker 3: 30:27

Make a difference, join the show, talk about what you're passionate about it and let's fix this industry.

Speaker 2: 30:33

Thank you.

Speaker 1: 30:35

Thanks so much. Have a great day. I'll talk to everybody soon.

Speaker 3: 30:38

Thank you.

Speaker 2: 30:39

Chad, guys, thanks for joining us.