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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.