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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.

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.

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.

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.

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.

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.

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.

Transcript:

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00:03
Speaker 1
All right, it's morning huddle time. Good morning. I'm not saying it works. I wish you God speed. Godspeed with all of that. I think that's really nice. You know, I'm not sure what kind of success you're going to have with that today because the world, my friend, has changed. Right?

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00:19
Speaker 2
A lot of American construction workers, they have different needs.

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00:23
Speaker 1
They have completely different needs.

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00:25
Speaker 3
These awards have a huge, like, criteria that you have to fill out and they usually community service or community relations portion, you know, the most productive with a high performance value. And, you know, sometimes it's 11 o' clock at night.

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00:43
Speaker 1
Funny, isn't? Yeah, not for me. Not for me. At 11 o', clock, I am guaranteed to be snoring.

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00:50
Speaker 3
So.

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00:50
Speaker 2
So.

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01:00
Speaker 1
Good morning. It's morning time. I'm Chad Prinke here with my co host and producer, Stacy Holzinger. Stacy, how are you today?

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01:09
Speaker 3
I'm doing great. How are you guys?

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01:13
Speaker 1
So far, so good. So far so good.

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01:15
Speaker 2
It's.

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01:15
Speaker 1
We're inches away from Thanksgiving. Our house is teetering on the edge of sickness, and we're hoping to be able to actually see family. So that's what's going on in my world. We have today, we have a good friend and guest, Mead Rhodes, who's with us from the NHP Foundation. He heads up construction for the NHP foundation, which is an affordable housing developer and an operator of affordable housing properties. Mead, thank you so much for joining us today.

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01:48
Speaker 2
How are you doing? Just fine. Glad to be here. Look forward to this chat.

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01:54
Speaker 1
Yeah, same. What's, what's exciting in your house heading toward Thanksgiving?

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02:00
Speaker 2
We're headed down to Pinehurst. It's typical plan, right? We head down there, meet some family down there, look forward to it. One of my favorite holidays. Right? Just a lot of food. Too much food.

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02:17
Speaker 1
Yeah, it's the best. An entire holiday that is actually geared around the idea of giving thanks. I think is. Gratitude is such a valuable thing. It's. I think if we can all stay there and not get into politics, then we will have a good holiday, I think, in our house. Stacy, what's. What's going on in your world heading into Thanksgiving? Oh, Stacy, we're not hearing you.

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02:49
Speaker 2
Shoot.

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02:51
Speaker 1
Stacy, with the technical difficulty. Oh, no, it's all good. It's all good. She'll get it straight. I'm confident. I do know that Stacy has not had Thanksgiving dinner with her extended family for three years due to the flu. Every time she's had, you know, Thanksgiving in the past three years and this year, their fingers crossed, gonna actually make it to a Turkey Day dinner. I'm hoping, I'm hoping for Stacy that turns out again. I'm sure she'll be joining us back. She just had some sort of glitch, but me, let's jump into it. So the purpose.

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03:30
Speaker 2
Sure.

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03:31
Speaker 1
The focus of today's conversation. And, and I, I've actually talked to a handful of people leading up to this that are really excited about this conversation to actually talk to a developer or somebody on the developer side of the multifamily building community about what matters from a developer's perspective. And I think you actually bring a unique combination to the table, both as a developer and as a construction guy. So let's start with your story.

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04:04
Speaker 2
Sure, sure. So I was that kid who used to stand on the corner watching the backhoe. Right. So even at an early age I was interested in it. And, and then in college, I got a real estate license when I was a sophomore and spent the summers on the business end of a hammer. Right. So I, in the summertime I was banging nails.

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04:28
Speaker 1
We have that in common. Yep.

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04:29
Speaker 2
Yeah.

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04:30
Speaker 3
Right.

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04:30
Speaker 1
All through high school and college.

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04:31
Speaker 2
Yep. Well, I haven't gotten too far away from it because I'm on a farm. I don't know whether you know it, but I live on a farm and so I still the business end of a hammer every now and again. So. Yeah. But, but anyway, in terms of my career, I started in property management and I, I've come to believe that they're some of the hardest working folks in the real estate industry. They're just, they're, they have to push rents with the tenants and then at the same time not spend any money with the owners. Right. So it's just you kind of caught in the middle in the balancing act. It's. Yeah, it sure is. Takes a little bit of another go between and then, let's see. So I figured out that was just some kind of all kinds of hard work.

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05:20
Speaker 2
And so I ended up going back and getting an MBA up in D.C. at GW and then got into asset management and property management at a REIT in Richmond. And we bought a lot of properties and left there and got into residential development with a regional development, regional developer in and around DC and spent. Worked on both ends of the spectrum. So I worked on the tax credit end. Right. But then on the other end of the spectrum, we also did luxury apartments and so and not so much in the middle and then got into commercial development, mixed use development, was a partner, a development partner in Northern Virginia. We did mixed use, commercial, residential and then, and now I'm on traction side and I'm, I work at NHP. We do mostly tax credit work predominantly.

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06:31
Speaker 2
We've got 190 million in work under construction, under active construction now. And let's see what else. I'm a licensed contractor and I already said that I've got a broker's license.

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06:47
Speaker 1
That's awesome. I mean it's an extremely varied career, really comprehensive experience surrounding professional real estate organizations. And the construction end is where you started, it's where you even are today, but inside of a development firm. So I think what you stand to bring to our audience and what I'm hoping that we can get into is helping us to put ourselves in the shoes of the developer community. And I think before I start asking you those questions and putting you on the spot to be a representative from the development community, I'll also say that it's possible that some of the stuff that you personally do or believe in may be somewhat different than what are the norms in the industry.

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07:49
Speaker 1
And I think it's throughout the course of the conversation valuable to kind of differentiate between those two periodically where you might say hey, this is what's normal, this is what I've seen, it's not what I do. And then, you know, vice versa along the way.

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08:04
Speaker 2
So that's fair.

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08:06
Speaker 1
I think at the core of people's desire to understand when I say people, I'm just going to go ahead and say general contractors and subcontractors have a deep desire to understand why developers procurement processes appear to work the way they do. So let's start if you would, in your shoes as a developer, what has been your experience with a typical procurement process for the general contractor?

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08:45
Speaker 2
Sure. So let's see. I've never, I've never had the luxury of working on a product where we had 100% complete plans and were putting them out to bid and you know, the RFP bid, you know all. I think the only people that are really able to do that are schools and the government.

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09:14
Speaker 1
People building that stuff might argue that even then, even though. Okay, yeah, but no, but I, I'm hearing you loud and clear and there is something really, there is something really, I don't know common about that in multifamily. Whether it's affordable or whether it's market rate doesn't really matter. That that seems to be a trend. I hear that almost all the time. So, so as for starters, you're saying we're starting off with incomplete plans, we're going through procurement and we're starting off.

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09:46
Speaker 2
With incomplete plans and running full tilt. So I've been in two worlds, right? We talked about the market rate world that I've been in and I'm currently in the tax credit world. And in both worlds we often, and I can't think of an instance when we haven't had a GC in the mix early on. Right. And there is a tremendous amount of value that a really good GC brings to the table.

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10:26
Speaker 1
How do you select? So if I'm hearing you right. Yeah. I didn't hear you say multiple GCs. I heard you say GC involved, AGC involved early on. How do you determine which GC to involve in that early stage? Are you, are you creating some sort of competitive process between GCs early?

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10:55
Speaker 2
It's not competitive. I mean it's competitive in the sense that we may talk to a couple GCs about a project, but it's not competitive in terms of like I just. It, it's what we look for is somebody who's got availability, who's got capacity, who can add value. We're about to get into a discussion about a three legged stool, I think. Right. At some point. So the three legged stool being the owner, the architect and the GC and assembling a team that can work at a high performance level.

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11:44
Speaker 1
And so I think what I'm hearing you say is that it's the competition, if you will, at that early phase is really about finding the right fit. It's not about. That's exactly a pricing exercise at that phase for you, right?

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12:04
Speaker 2
That's. Yes. And that's one of the conversations that happens very early on. Like we've got these schematics and we're trying to figure what it's going to cost to build. But we're, but you're looking for somebody who can come in and help with estimating and, and then make decisions around more efficient structures and substitutions and maybe even bring subcontractors or at least have good dialogue with subcontractors about concepts that are being pushed around and alternates that are available. And so there's definitely a value add with a good gc, the design process.

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12:56
Speaker 1
So does that general contractor at that time know that they've been selected? And is there a way for them to not to lose that at that phase in the game, you know, is it, is it a given that they're definitely going to be your partner through the course of the project if they've been brought in at that phase of the game? Like so to rephrase, do they know that they're the guy or they're the company and is that a given?

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13:27
Speaker 2
Yeah. So in my experience, yes is the answer. I mean we select some, we select somebody and they participate in the design, the refinement of the design and they're actively engaged in pricing and there's a target like we know what we want to spend. And so managing the design process so that we end up with a construction number that works is important. And so it just doesn't work to have multiple people, you know, having multiple discussions. You. Part of it is getting a contractor who's invested in the process.

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14:17
Speaker 1
Yeah, yeah. I as. So I have to say it. I'll be on a soapbox for roughly 30 seconds. Time me. I'm sorry. But one of the things I see that drives me crazy are situations in which developers create a competitive budgeting process on extremely early stage plans.

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14:45
Speaker 2
Yes.

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14:46
Speaker 1
And make their general contractor selection based on the lowest budget from the gc. At a phase in which there's so much ambiguity and so many questions about how plans can be interpreted and what they're begging for, literally begging for in that instance, is for general contractors to interpret the plans in the least expensive way.

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15:15
Speaker 2
Yeah, that's exactly.

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15:16
Speaker 1
Which may or may not be constructible, which may or may not meet design intent. Which may or may. Right. Like all those things are up in the air. And the earliest phase of the general contractor developer partnership is forged in lies, which is a terrible way to start a relationship. It's just a terrible way to start. And it's in there constantly digging out of it. I lay that responsibility directly at the feet of the developer. Creating a procurement process that is inherently flawed.

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15:51
Speaker 2
Well, even worse than that.

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15:53
Speaker 1
Things differently.

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15:54
Speaker 2
Yeah, even worse than that is not communicating that's what's going on. And have. Having multiple conversations with contractors. Right. And, and, and that inevitably they're talking to the same subs. And it always gets at and back and you do nothing but undermining, you know, what you're, what you're trying to do, which is to build a great high performance team to get this job done. So totally.

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16:19
Speaker 1
And by the way, word, we haven't even started construction. We're about to get married for about 24 months.

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16:24
Speaker 2
That's right. Right.

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16:26
Speaker 1
And imagine starting off, you know, marriage knowing that your spouse just cheated on you. You know, that's the way it feels for, that's exactly for both parties, I think. And again, the person driving the bus there is the developer. They have to take more, a more responsible approach to procurement. It really sounds like you and NHP are. I applaud you for that. Let's. I want to go to this idea of the three legged stool. I want to go in particular, I want to talk about the role that you want to see your contractor partner play with your architect partner. Describe maybe what a healthy dynamic looks like there. Because the way that you're doing this, with that early involvement, they really do need to be partners. What does a good partnership look like there?

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17:19
Speaker 2
So I think the best projects are projects where you've got the three legged stool. Right. So going back to that analogy, you've got the. An owner and an architect or design team and a contractor who are all high performance individuals and companies. Right. Just operating at a high level. And the goal should be to assemble a team that outperforms. And if things are done correctly and the process is good, then the outcome will be good. And the outcome, the good outcome will involve a higher level of design efficiency and quality plans, better costing because the GC actually understands, because he's been involved in the dialogue, understands what the design intent is and can help provide clarity to the subs as they're pricing things.

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18:30
Speaker 2
And then the owner is really is the conductor and should be the one assembling this team and setting the bar and making sure that the plans are tight and that the GC is, is, you know, pricing things appropriately and if the process really works, the outcome is a fairly high level of trust with a fairly high level, you know, group of individuals.

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19:03
Speaker 1
I think it's that term that you just tossed out at the end, trust is something that I, it's a topic I'm obsessed with. It's something that I spend a lot of time researching and exploring and trying to create on the teams that I work with. In your experience, what are the high trust behaviors that you see from general contractors that when they do these things, it cements that trust that you have for them as an owner?

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19:53
Speaker 2
God, that's a hard question.

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19:58
Speaker 1
Now.

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19:58
Speaker 2
So I think it may be easier.

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20:00
Speaker 1
To focus on the things that cause you to lose trust.

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20:04
Speaker 2
Yeah, that's, that's Maybe the. Yeah, but I, I like to think about the glass being half full. But it's a hard question because it's just, it's those behaviors that. So what is it? It's, it's perseverance, it's thoroughness, it's thoughtfulness, it's honesty. It's, you know, it's having the hard discussions before you're married, not after you're married. It's. Yeah, it's, it's taking responsibility, the things that you should be responsible for. But then if somebody stumbles, you know, one of the three legged, going back to the stool. If, if you've.

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21:02
Speaker 1
You, you.

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21:02
Speaker 2
Can still have a project that is successful, right? If you, if, if you have two really strong legs of the stool, it's awfully hard to stand one leg for 18 months. But, but if you, if somebody stumbles. We had it. We had a situation where we had an architect who ended up having some health issues and just evaporated. Right. But the project, the process and the project continued. Right. And, and then they were able to rejoin. And having two really strong players who could step in and carry the project makes a difference. And so, you know, high trust, I mean, it's all those things.

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21:51
Speaker 1
Love it. I love it. I think the, If I could share one thing that I, I share frequently when it comes to high trust behavior, it is to call out, call yourself out proactively for the errors, minor mistakes, accidents and things that you're trying to do to repair and put those things on the table and share your action plans for recovery. If anybody ever gets caught having made a mistake, the extent to which that damages trust is so much worse. And in fact, if you lead off by saying, hey, Meade, we just identified an issue that we had in pre con, we're going to own it. It's not your problem. But I wanted you to know that we have a bust. We're going to figure that out and try to create a solution with these three trades to see if we can recover it.

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23:07
Speaker 1
I'm bringing that to your attention just so that, you know, we're trying to figure out a collaborative solution that doesn't in any way change your expectations for the product.

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23:16
Speaker 2
Right.

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23:18
Speaker 1
It may even motivate you as an owner in that situation to say, really appreciate you sharing that with me, Chad. Just tell me what the damage is. We'll work through it together. Maybe it's something we can pull out of contingency, you know, or something along those lines. And we can work on that.

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23:33
Speaker 2
To do that, there has to be some level of self awareness and it just, it's, that's, it's beautiful. It happens and it elevates the whole team.

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23:45
Speaker 1
So yeah, I, I, I, I warned you when were preparing for this that this time would fly. And here we are at 9:25 almost already. I'm gonna pull Stacy in because I know that we've had a ton of questions rolling through our chat this morning.

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24:04
Speaker 3
Hey.

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24:06
Speaker 1
So glad to know everything's okay. In my brain. Your house was like hit by a missile and I was really worried and, but now here you are, you're back in your city.

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24:14
Speaker 3
I'm back. Lots of great questions. Let's start off. How do you see the multifamily residential industry pivoting in response to the rising cost of money, inflation and materials and increased cost of labor?

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24:31
Speaker 2
Holy smokes. So everybody's scrambling to the answer, right? Trying to figure out how to make it work. And so the opportunity is to sit down, take a closer look at these projects, you know, figure out how you can skinny them up and, and make the scope work. And, but it's hard. I mean, it's, it's hard. Yeah.

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25:03
Speaker 1
Are you, are you seeing, and you know, if you can't answer, it's okay, but are you seeing tax credit deals, futures being thrown into question right now? And are any tax credit deals stopping making sense in our current cost to build environment?

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25:24
Speaker 2
We haven't had any that operated. They just get a little bit harder. And so I don't know whether that, I can't speak for others. Right. For us, we haven't had any that have evaporated. We just, that's great to hear. You just dig a little harder. And you know, there's such, there's.

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25:45
Speaker 1
There'S such an incredible unmet need, undermet need, I should say, for affordable housing in the country, in this country. It makes me feel really good to hear you say that your tax credit deals haven't evaporated. I'm sorry they're getting harder, but that it is nice to hear that they're not going away. That would be, that would be a tragic situation for large population. So thank you.

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26:08
Speaker 3
Have you, were just talking about off site construction in our last episode, but have you explored off site manufacturing of modular units at all?

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26:18
Speaker 2
Okay, so we've looked at this and it's Hard with tax credits. They're front loaded. They take, they take dollars up front and we've just not been able to figure out how to make them work. And really the benefit is the quality. You just get higher quality product. But it's, the design is more complicated. It's six dimensional instead, you know, four dimensions. Right. The walls, you get the floors and you got to make verticals all work. And it, so that just, that's a degree of design that in the affordable world, as fast as we're moving, we haven't been able to get to. And then the footing of the funds is another computation that just, we haven't been able to figure out.

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27:10
Speaker 3
Are you moving towards integrated project delivery?

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27:15
Speaker 1
Yeah. This is an interesting question. I think about, you know, as you were describing the way that you like to operate, Mead, this idea of pulling in your architect and general contractor partners early, selecting people based off of their fit, not necessarily their price, and then conducting that exercise. There are formal contracting methods, you know, integrated project delivery being one of them, where, you know, you're pulling everybody together based on those themes, not just the general contractor, but most if not all of your specialty contractors, and really pulling everyone in for essentially a collective design build effort in which they're financially tied to project performance metrics and everybody's operating in an open book. Is that a topic that has entered the mainstream at all in affordable housing in nhp in your world? Where do you stand with that stuff?

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28:11
Speaker 2
Gosh, we definitely try to make sure that our design team is fully integrated and we focus on the coordination of how the architects work with MEPs. And oftentimes you get disconnects in the fans. And so we focus on making sure that process is tight. We focus on bringing the contractor into the process. Right. So that, so that they're involved in the process. But that's, I mean, today that's where our focus is and you know, wish I had a better answer.

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28:53
Speaker 1
Yeah, I think it's that I would, I love integrated project delivery as a concept and I love it in practice. In some really specific examples that I've had the ability to go through. Very, very cool. I think the learning curve is something that is intimidating to a lot of folks and if I can, I'll editorialize again yet again, maybe like for the 12th time today. Sorry about that. But the, the reality is that for owners, the willingness of the MEP trades, for example, to provide free design assist as a part of the process has removed a lot of the necessity to look into ways to make that happen. If I have a good GC partner who's got a good MEP partner that they feel, you know, confident in the process, everybody's.

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29:55
Speaker 1
That the GC is not charging you for any additional design assist on the upfront collaborating with the Arc deck, I'm assuming. And you know, same goes with the trade contractors. So I think that's a part of the reality is if, if we want to, if they truly want to change the way that happens in the market, they've got to stop offering the service for free. They've got to start saying this is how this ought to work. And, and developers will. Developers are just doing there. I think they're just buying the way that everybody else is telling them to buy. It's like you're bringing your service to me in this way. So anyway, I'll shut up. Stacy, More questions.

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30:36
Speaker 3
From Casey. So I know there's a lot of issues with subs getting paid on time. Do you think prepayment for change orders is possible?

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30:47
Speaker 2
Not, not in the world that I operate in today. And oftentimes the lenders and funders actually require reviewing change orders and yeah, not in the tax credit world. Not anytime soon anyway.

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31:07
Speaker 1
So I think if I can expand on that question. Ike also tosses in this note where he's asking is, can you suggest any strategies for subcontractors to avoid having to finance change orders? Is there any. Is there anything? Because, I mean, you get it. I know, I know you understand that if you were a trade contractor working in tax credit affordable housing deals, what strategies would you be thinking about to protect your cash position and make sure that you weren't floating in financing change orders?

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31:42
Speaker 2
Wow. I haven't thought about it from that perspective and I, I just, I'm focused on getting them funded, you know, and getting things funded and getting the approvals and I just haven't flipped it around to think about it. I don't have answer today. Not in the world I'm operating in today.

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32:05
Speaker 1
Yeah, I don't think there's a very elegant one in any case, I will share that one. One select strategy I've seen work, it's very back of the envelope, but it's still. It goes to trust is if you're a specialty contractor and you know that you're going to struggle to float some particular change order, preemptively going to the general contractor and talking about anything they can do to help you to absorb that. And I've, and I've worked with, I've had the good fortune to work with several general contractors that understand where their subs are coming from and will go ahead and cut them loose on that portion and float it themselves. But it just, it's hard, it's hard accounting and there's no elegant solution to it. It's nothing that I've seen.

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32:52
Speaker 2
Yeah. I just had a conversation yesterday with it with the GC and the conversation was we've done this, we've done 13 draws and. It's been 44 days. What it's been taken to get on this project, to get it done. And if we're not able to fix it, at least we can communicate about what it is and manage expectations so that people know what to expect. That's, it's just a, you know, having the hard con is what it is and you know, we just need to plan it accordingly. Awesome.

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33:40
Speaker 1
All right, Stacy, what else?

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33:44
Speaker 3
Just a couple more comments here from Paul and Jeff. Paul was just saying the federal mandates reporting, labor rates, insurance, except etc on the government's money is a huge issue. I don't know if you have any comment on that.

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33:58
Speaker 2
Can you say that? Can, can you?

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34:00
Speaker 3
Sure. Paul said the federal mandates reporting, labor rates, insurance. Oh, government's money is a huge issue.

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34:12
Speaker 2
Yes, yes. And, and it's a challenge for the developer. Right. Because make commitments on these projects, on these funded projects that we're going to make and have certain participation.

‍ ‍

34:29
Speaker 1
Participation.

‍ ‍

34:30
Speaker 2
Yeah, I just, it wasn't working. Right. And, and so we make participation requirements or promises and we really, I mean it's the Fed. Right. That's around. I mean we need to make them and we need to report them accurately. And so tracking that stuff is important, really important.

‍ ‍

34:55
Speaker 1
The, the best thing that a trade contractor can do, I think is to be bulletproof on their reporting requirements on a, on a, you know, tax credit job. You're going to have all these reporting requirements and also collaborating with your fellow specialty contractors to make sure everybody is also going to be successful. Because if, and I think maybe what Paul's alluding to, particularly as it relates to change ordered payment delays, is that one trade, if one sub doesn't have their stuff together and it can hold up the payment of a whole change order, not because anybody's trying to be a jerk, but because literally there's federal requirements that they will not release the money is not going to be cut loose and. Exactly.

‍ ‍

35:59
Speaker 2
Right.

‍ ‍

35:59
Speaker 1
You might have, you know, the electrical might be, you know, being held hostage by the concrete sub because the concrete sub isn't tight on their requirements.

‍ ‍

36:15
Speaker 2
And then the, and the gcs just need to step in and help with the paperwork. Get it done. Right. Whatever it takes.

‍ ‍

36:22
Speaker 1
And whatever it takes. I know it's tough. Paul's like, yep, that's what we're doing. I'm sure. So we're good. What else do we have?

‍ ‍

36:33
Speaker 2
Stacy?

‍ ‍

36:33
Speaker 1
Any other.

‍ ‍

36:34
Speaker 3
That's it.

‍ ‍

36:36
Speaker 2
Awesome.

‍ ‍

36:38
Speaker 3
Yeah.

‍ ‍

36:38
Speaker 1
Great conversation. I'm thrilled to see all the communication that came in through the audience. If people wanted to follow up with you separately, Mead, what would they do? Would they just connect with you on LinkedIn and reach out to you through that channel? Is that okay?

‍ ‍

36:58
Speaker 2
That would be fun. Sure. That would be fun. And I'm glad to help any way I can. You know, if we're asking questions, we must be trying to get, you know, improve and get better and with our understanding and all that. So, yeah, we'd be glad to help in any way we can.

‍ ‍

37:16
Speaker 1
That's great. Thanks so much, Mead. Yeah, I'm sorry. Go ahead. Is there anything that you want to say in parting?

‍ ‍

37:31
Speaker 2
I wish I had some, something profound to opera right now. I've tried to lay it there, you know, I've tried to lay it bare and just shoot straight. So, you know, I'm glad to have had the opportunity. It's nice to chat with you this morning.

‍ ‍

37:49
Speaker 3
Thank you.

‍ ‍

37:50
Speaker 1
Likewise. Likewise. I think, I think you did a great job being just who you are and sharing with us exactly how you approach the world as one person with your immense background. I think it's a great example of, for our audience what people in your shoes care about. So thank you for sharing that and I hope that you'll join us again at some point in the future.

‍ ‍

38:21
Speaker 2
Thank you so much. It's. It's always nice to chat with you, Stacy. Take it easy. Hope things, Hope things stay well, you know, for Thanksgiving.

‍ ‍

38:32
Speaker 3
You too. Happy Thanksgiving.

‍ ‍

38:34
Speaker 2
We'll see.

‍ ‍

38:35
Speaker 1
All right, Stacy, we have a little housekeeping to do here. Let's, let's talk about where things stand at this point. We've got one episode left in season three, which is episode number 38 with Kathy Hum, who is going to be joining us to talk about creating a strategic HR department as opposed to just a tactical one. And I think that a fascinating conversation for business owners, for people in the HR world. Maybe there are some frustrated HR folks who are trying to get things to change in their company and they. This would be useful to, to check out. So look forward to that. Stacy, do we have a Steeltoe Communications marketing tip heading into Thanksgiving week?

‍ ‍

39:30
Speaker 3
Yeah, for, I guess, Thanksgiving week to be grateful. Just a reminder to, you know, think about your internal marketing and recognize your employees. And we always say in the construction industry, the detail or the devil's in the details. Right. So when you're telling someone, just don't say you're doing a great job. Actually put some thought into giving them a nice compliment and being grateful for what they do. That's it.

‍ ‍

40:00
Speaker 1
I love that. That's a great. It's a great idea. I recently. Oh, you know what? I won't even say where I was, but I, I was checking out at a store and I saw something that I thought the, that three women on my team would really enjoy and ran over and picked those things up for them for Thanksgiving. Just thought, you know, people used to.

‍ ‍

40:24
Speaker 3
Do that all the time. Like, you know, my dad was always great with that, like recognizing people in his organization. And I feel like we lost a lot of the years. So.

‍ ‍

40:35
Speaker 1
Yeah, I, I'm trying to. I'm a terrible gift giver. I might be the worst. Just ask my wife. It's like, bad. But I'm trying to. It's not about the gift. Right. It's just about thinking about.

‍ ‍

40:49
Speaker 3
Yes.

‍ ‍

40:50
Speaker 1
Thinking about others. So at any rate.

‍ ‍

40:52
Speaker 2
Well, good.

‍ ‍

40:53
Speaker 1
I can't wait to see you again next week. I hope that this week ahead is a wonderful one for you and for all of our audience. And if anybody that you know should be involved in season four, we're going to be starting up over the winter. We'll be starting up after the new year. And we would love to fill out the schedule with folks that, you know, I think we have eight out of our 12 guests identified. So we do have at least four.

‍ ‍

41:23
Speaker 2
Slots open at this point.

‍ ‍

41:25
Speaker 3
Okay. Happy Thanksgiving, everyone. See you.

‍ ‍

41:29
Speaker 2
Thanks.

‍ ‍

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.

Transcript:

‍ ‍

00:00
Speaker 1
We need to get back to work. 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.

‍ ‍

00:09
Speaker 2
We help finance our national security, our.

‍ ‍

00:12
Speaker 1
Homeland security, our, you know, our infrastructure.

‍ ‍

00:14
Speaker 2
I had key employees that really wanted to be leaders in the company, but they didn't want to have any ownership in it, responsibility that way. So I just had to start researching out and figuring out, well, how.

‍ ‍

00:26
Speaker 1
Do I market my company?

‍ ‍

00:28
Speaker 2
Go to your local school board for one hour twice this year. And if you can have even just.

‍ ‍

00:33
Speaker 1
10 or 15 employers show up and.

‍ ‍

00:34
Speaker 2
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. Stacy, how you doing this morning?

‍ ‍

00:50
Speaker 3
I'm doing great.

‍ ‍

00:52
Speaker 2
She loves it. I ask the question every time she sleeps like, I'm fine, dude, just a little much.

‍ ‍

01:01
Speaker 1
And I say to that owner, I said, sue, 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.

‍ ‍

01:14
Speaker 2
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 it starts going down. Morning huddle time. Good morning, everybody.

‍ ‍

01:47
Speaker 1
Good morning. Good morning.

‍ ‍

01:48
Speaker 2
It's June 14th. We started our day with a thunderstorm. Not a typical start to, to a morning, but I was like the only one in my house awake for it. Look, looks like we're in for round two, you know, as well. So hopefully on this live broadcast we don't have a power outage.

‍ ‍

02:09
Speaker 3
Yeah, we'll see.

‍ ‍

02:13
Speaker 2
So we've got Matt Bolliard here with us this morning. Matt, how are you?

‍ ‍

02:18
Speaker 1
I'm well, Chad, how are you doing?

‍ ‍

02:20
Speaker 2
Real good. Thank you for being here. So Stacy, how was your weekend?

‍ ‍

02:26
Speaker 3
It was good. I took a trip to Philly and saw my parents for a while and we did. We watched the Keys versus the Thunder games. It was awesome.

‍ ‍

02:38
Speaker 2
Oh, that's awesome.

‍ ‍

02:39
Speaker 3
Yeah.

‍ ‍

02:40
Speaker 2
That was minor league. Minor league baseball.

‍ ‍

02:43
Speaker 1
Yeah. Yeah.

‍ ‍

02:45
Speaker 2
I have not been out to a Frederick Keys game.

‍ ‍

02:49
Speaker 3
It's a blast. It's a blast.

‍ ‍

02:52
Speaker 1
Good.

‍ ‍

02:53
Speaker 2
All right, I'll put that on the list. How about you, Matt? How was your weekend?

‍ ‍

02:56
Speaker 1
It was great. My daughter and wife were away for a Girl Scout trip, so it was a boys weekend, which concluded on Sunday with a Lego festival, which was a lot of fun. So.

‍ ‍

03:10
Speaker 2
So just you and your sort of grown up friends or. Yes.

‍ ‍

03:15
Speaker 1
Sometimes they act like grown up friends, but the two boys are seven and three, so that's awesome. It was great.

‍ ‍

03:21
Speaker 2
A Lego fest.

‍ ‍

03:22
Speaker 1
That sounds great.

‍ ‍

03:23
Speaker 2
Yeah, A lot of fun. I threw my back out on Sunday, which has been exciting. I've been. Yesterday I was like, holding on to hope I play hockey in like an old man's hockey league. And yesterday I was holding on to hope that I would be able to play hockey. I didn't like, tell the team until noon. And I was like, you know what? I can't really walk, so probably hockey's off the table tonight.

‍ ‍

03:47
Speaker 3
How'd you do that?

‍ ‍

03:49
Speaker 2
I'm not sure is the hardest.

‍ ‍

03:52
Speaker 1
He sneezed. Yeah.

‍ ‍

03:56
Speaker 2
You start to. It happens. Everybody has warned me that it would happen and it's happening where you just start getting older and things are falling apart part. So it's a blast. It's a lot of fun.

‍ ‍

04:05
Speaker 1
Yeah.

‍ ‍

04:07
Speaker 2
Well, good. So. So I want to introduce Matt Boliard. Matt is vice president at Southway Builder. Southway is a Baltimore based builder. I don't know, you know, if. If you want to expand on sort of size and type and all that kind of stuff, I'll let you do that, Matt. But they're good friends of mine and I've known Matt for a long time. What's really cool is that when the reason that Matt's on the show is that I was talking to a developer client of mine that has, you know, projects going on in 14 different states and folks all over the country and obviously works with lots of general contractors. And I said, hey, I want to do an episode where we are talking to a general contractor that has really figured out how to be a good partner for you guys.

‍ ‍

04:57
Speaker 2
Do you have anybody that you'd throw in that category? And he didn't skip a beat. He said, you should really be talking to Southway builders. I'd recommend talking to Matt Boliard. And I was like, that's really funny because I know them really well. And, and I wasn't surprised. But it was validating of a lot of the feelings that I have about Southway and a lot of the feelings that I have about Matt personally. And so there's, I think I'm really interested to have our audience hear how you're approaching things and you know, as it relates to building effective general contractor ownership partners, owner partnerships, that is, you know, what you're doing that maybe, you know, made our mutual client put you at the top of the list.

‍ ‍

05:41
Speaker 1
Yeah. Well, first thanks Chad and Stacy both for inviting me and Southway on the show here. We really appreciate any opportunity to speak about this topic, especially it's something that's I think, near and dear to our hearts. Southway is getting ready to celebrate our 31st year in business. We are, depending on context, I think, a mid size regional general contractor. We, while our roots were founded in affordable housing, we have grown beyond that in 20 years ago, started a commercial group. So we're pretty evenly distributed now with commercial project as well as our multifamily projects ranging from affordable housing apartment deals to projects like Lexington Market that hopefully folks are familiar with. So I've been with Southway for 15, coming on 15 years now.

‍ ‍

06:41
Speaker 1
Started as a project manager, coming from another company prior to that and kind of stayed here and worked my way up. But it's been really great. It's a great company that has grown a lot in those 15 years and the 31 years as well and continue to grow based on a lot of the principles that I think we'll discuss today. So thank you for having us. Awesome.

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07:05
Speaker 2
Yep, we're happy to get into it. So Stacy, you know, as always, you know, making sure that we keep capture questions and comments from the audience. We'll pull you back in here toward the end, but I'll, I'll spare you needing to sit on screen and type at the same time because I know that's fun for me. So. All right, cool. We'll see you soon, Stacy.

‍ ‍

07:30
Speaker 3
Sounds good.

‍ ‍

07:31
Speaker 2
So Matt, I want to kind of, you know, pick up on this sort of thread of what creates the kind of reaction that I got from the developer that I asked. What do you think makes a successful partnership with an owner in your mind? Where does that sort of start?

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08:00
Speaker 1
Yeah, I think, you know, we're often asked, you know, what's our secret recipe? What, you know, what's, what's magic about how we approach this? And I, I don't know that there's any, it all seems really obvious. To us. Right. And, and I don't know that it's magical for us, it all begins with trust. And, and really that was sort of ingrained from 31 years ago and how the business was built. But in more recent history, we've really modeled our behaviors off of the five dysfunctions of the team. So Patrick Lencioni, Author of the Advantage 5 Dysfunctions and many other books, had created this model with a pyramid that starts with trust, goes to accountability, commitment, conflict and results.

‍ ‍

08:53
Speaker 1
And our starting point on any relationship is really coming at it with the understanding that the environment that we've chosen to be engaged in, that of construction for many years, has been rife with deceit and mistrust. You know, that's the stigma that has been developed, not unlike the stigma that follows the mechanics of the world. And I think our recognition of that is really important as we come into a relationship and understand that we have to, you know, first develop this trust and wash away the narrative of that stigma and then start building on that foundation towards achieving those results at the top of that pyramid.

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09:40
Speaker 2
So along those lines, I agree with you totally that there is this stigma, well earned stigma, quite frankly, you know, surrounding contractors. And I say well earned because I think, you know, it's very common to run into contractors that are doing whatever it takes to make the money that they need to make. And sometimes, often that comes at the expense of their customer's experience, the way that they're, you know, conducting business ethically, you know, transparency or lack thereof. It, I mean, it happens a lot, whether it's between subcontractors, generals, general zoners, heck, suppliers and manufacturers and the rest of the industry. There's, there's a lot of hiding, you know, in shell game kind of stuff going on. But anyway, because of that, I think your customers, they either are working with a general contractor today, for the most part. Right.

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10:55
Speaker 2
This isn't their first project. With the exception of those for whom it is their first project. They're working with a general contractor today or they have worked with general contractors in the past. In either case, they're coming in with some preconceived notions. How do you overcome that? How do you overcome the baggage that you're maybe walking into with a new customer?

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11:17
Speaker 1
Yeah, I think, you know, the baggage of a relationship with a customer is really not unlike the baggage of any relationship that you're coming into, whether it's a romantic relationship or new friendship, whatever it might be. Everyone's got baggage, right? And so there's an added wrinkle, I think, inherent with contracting where the starting point of most relationships, at least once it gets to a project level, you know, then we start developing a contract where all of the terms are centered around this idea of what happens when things go wrong. And the terms are really baked into this fundamental thing of not trusting the other party. And so you have to insert and create these terms.

‍ ‍

12:01
Speaker 1
And so the starting point of any relationship has, you know, baggage plus, at least in the contracting world, but similar to, I think, any other relationship, at least most traditional romantic relationships, right, you're not meeting someone or courting someone from across the room and engaging, and then next thing you know, you go to the love Chapel. In fact, some people may, but the very next day, we're often going to the chapel to get married. And so over time, over a courtship of dating, you know, we start to unwind, I think, and learn about that baggage and what that baggage effect has been on that individual or in this case, the customer. And so for us, the trust building scenario is really a project, right? So we get to the starting line and then we get into the project.

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12:58
Speaker 1
And it's not the first three months, it's the entire span of a project. We refer to the first few months of an engagement usually as a honeymoon period anecdotally. And it's stated that way for a reason, right? Because you're not going through all of the ups and downs of a relationship as you would. And so for us, we really build that trust through demonstration, I think, through the project. And that demonstration is really just founded on this unreal commitment to candor and transparency. And really, I think reflection and understanding that the other party has been burned, has had some baggage, has preconceived notions, stigma or otherwise about contracting, that we really need to unwind as we perform on a project so it doesn't happen on day one. It's a process like any other relationship, us.

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13:56
Speaker 2
I often talk with my partnering clients about this idea that you have to extend trust and that everybody is sort of waiting for the other person to earn their trust. But in that waiting period, I'm waiting for this person to earn my trust. The behaviors that you have tend not to behaviors that earn the other person's trust. And it's always at least a two way street, if not a multiple way street, depending on how many parties are involved and what you are doing to extend trust. Initially, I think, how does, I guess how does that translate for a general contractor working with an owner. What are some of the gutsy things that you have to do along the way that are like, this is a new relationship. I sure hope this doesn't come back to hurt us, but here we go.

‍ ‍

15:03
Speaker 2
What are some of those extending trust situations that you might have as an example?

‍ ‍

15:09
Speaker 1
Yeah, I think the first thing for us is acknowledging for ourselves that we're going to make mistakes. We're human. The second step is encouraging our partners, and I'll use the term customer, to be inclusive of design partners, you know, the three legged stool of client, design contractor. But all of us, I think our next step is to have everyone on the team recognize that all of us, we're going to make mistakes along the way. And you know, a traditional, I think approach in the construction process, especially in a hard bid environment, is one in which everybody's trying to shift risk and avoid the mistakes and point the finger to one of those other stools. Our approach, I think is really a little different in that we try to, I think, help everyone to be successful.

‍ ‍

16:10
Speaker 1
You know, it's, and that's rooted, really comes back into our purpose. We'll talk maybe a little bit about this later. But you know, our purpose is to serve others, to help them to achieve their maximum potential. And that goes around the board. So we approach a project in a relationship of look, we're not to use the sort of saying that's come to life here with the pandemic, but we are really all in it together. And so we approach it from a sense of look, let's lock arms here. Your problems are our problems, but the reciprocal of that is that we want you to be willing to play a role in our problems being your problem so that we can collectively solve them instead of pointing to you and saying, well, this is your problem, you need to solve it on your own.

‍ ‍

16:57
Speaker 1
I think the other side of that, maybe to cite sort of a broad example, is it comes back to that pyramid. The accountability piece on the pyramid of the five dysfunctions is a really hard piece for contractors, but I think for anyone, especially when you have an expectation of holding your customer accountable, the hand that feeds you. I think often folks feel that they're in this position of, well, I don't want to bite the hand that feeds me. But holding every partner at the table accountable is really toward, you know, focusing towards a common and greater good and having that all. You can't do that without trust. And that's why trust is it at the foundation. But when you can create an environment where you Trust each other enough to, where you can have conflict, you can have the difficult conversations.

‍ ‍

17:56
Speaker 1
And when somebody's not performing, whether it's the customer, whether it's the design partner or the contractor, that each person in that triangle, each group in that triangle can point and say, hey, that's not good enough. We need this. And you're not holding up your end of the deal. But, but often I think because of that, you know, relationship of the hand that feeds you, we're silent. And I think that's where we really strive to not be silent, but to be candid and have an open and transparent culture.

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18:28
Speaker 2
So, so there's, I mean, there's so much in the past two minutes of that answer. There's so much in there to dig into. I want to, I guess, highlight a couple of the things that really, I.

‍ ‍

18:42
Speaker 1
Pulled out of that.

‍ ‍

18:43
Speaker 2
One is acknowledging your own fallibility. And you know, I always, the term I like to use is like, bust yourself before they bust you.

‍ ‍

18:56
Speaker 1
Right?

‍ ‍

18:56
Speaker 2
Like if you've screwed up, don't let other people catch you that you've screwed up. Come running down the hall and be like, I screwed up. Just really announce that it makes a huge difference in terms of trust, right? Because if somebody feels like they had to catch you doing something wrong, that doesn't go well, right. That, that undermines trust. So that's. One is acknowledging your own fallibility and readily, you know, calling yourself out on your issues along the way. One of the things I think that buys you, if I'm hearing you right, is it buys you then the, you know, other end of that, which is the right and the ability to, in a non accusatory way, to hold your customer accountable to, you know, when you identify mistakes that they've made.

‍ ‍

19:46
Speaker 2
And it's like, it's not like, hey man, you made a mistake, so you're going to pay for it. It's, hey, we've identified this. Can we mutually agree this is a thing that we have to overcome and we're in the boat with you. Let's, let's solve it together. But because you called yourself out, it makes it easier for you to sort of call them out. And then one last thing, you use this term, candor. And I can't stress enough that I have found when people fail to tell others, shoot each other straight and say like, hey, like if you bite your tongue and you say, I really don't want to bite the hand that feeds me there, I'm gonna hold Back. I'm gonna not say what I think is the issue going on with this customer.

‍ ‍

20:30
Speaker 2
It's subtle, but it erodes your liking of that person over time. And it eventually will make it to where you don't treat them like the partner that you want to treat them because you don't like them, because they're jerks, because they've screwed you over.

‍ ‍

20:49
Speaker 1
Right? That's right.

‍ ‍

20:50
Speaker 2
But in my opinion, the truth is it's your fault. You had an opportunity to correct it.

‍ ‍

20:56
Speaker 1
Right? That's right.

‍ ‍

20:57
Speaker 2
So that's the, I mean, I don't know. Is that, is that a summary of some of those themes? Is there anything in there that you would disagree with or expand on?

‍ ‍

21:05
Speaker 1
No, I think it's great summary. I think you hit the nail on the head. You know, while trust is the word at the foundation there, it's really a version of trust. It's vulnerability based trust. And if we accept the idea of being vulnerable about our own misgivings, our own mistakes, that is the recipe. That's the trust recipe. Right. But absolutely great summarization.

‍ ‍

21:31
Speaker 2
So what are some common sense tools? If we're listening to this, we're like, okay, this is thought provoking. We want to create this two way street for accountability. What are some, what are some common sense or real world tools that you might use or strategies that you might use to create this environment of accountability?

‍ ‍

21:50
Speaker 1
Yeah, I think we have a lot. The one that I think I would hone in on here, just continuing theme of that project, demonstration of trust, is at the conclusion of that project, everybody I think gets really caught up in the motion of any one project. But we have a process at the end of every project. It's based on the Army's model for after action reviews, which is a real specific sort of construct where, you know, you review your mission objectives. In our case, the project objectives kind of figure out where you landed relative to those outcomes versus the initial desired outcomes. But the meat of that process really comes in two forms. One is reviewing collectively with the customer, again to be inclusive, the design partners what our team and project wins, losses and challenges were.

‍ ‍

22:48
Speaker 1
And then trying to reflect and understand, okay, well, these are where we lost. How can we avoid or mitigate these losses in the future with each other? But again, that requires this vulnerable trust where all parties can really say, yeah, well this is where we screwed up and be honest with each other. And if everyone isn't in there with that same level of trust and the process starts to erode from the start. So it still, it all comes back to that trust. But then going through the wins even and talking about, well, where were we successful and how we can enjoy those same successes going forward. The other part of that we often bolt on is a real 360 feedback.

‍ ‍

23:30
Speaker 1
And not all customers are game for this, but we find that ones who are, it really creates this deep and meaningful relationship that makes us that much more successful in future projects. But literally where we're in a room round robin, and whether it's a project engineer providing feedback to a project manager, or a project manager providing feedback to an architect or the owner, everybody gets to go around the room and start, stop, continue fashion, say, hey, these are the things that, you know, maybe we didn't do so well or we should reconsider on the next job as just leaving it behind. Whether it's behaviors or otherwise, these are things that we didn't do on this project that we think, you know, maybe you should start to consider to deploy on the next one.

‍ ‍

24:17
Speaker 1
And then of course, celebrating wins, talking about, these are things we did well and let's keep doing these things in the future. But having that 360 feedback loop, especially when we can get our customers involved and in the room with us, the results of that exercise are profound. And it just deepens again. It really shores up and codifies that vulnerability based trust.

‍ ‍

24:40
Speaker 2
There is so much courage necessary from all parties to pull that off and to regularly conduct that exercise. Not just from the executive team at, you know, Southway, but, you know, really from the folks that are in the trenches. I mean, what a.

‍ ‍

25:04
Speaker 1
That's right.

‍ ‍

25:04
Speaker 2
What a potentially really scary experience. But what you're saying, I think is so valuable is that if we do really create that kind of continual feedback loop, willingness to confront the truth, whatever that is, that has, I think you said, a profound impact on trust. So now all of a sudden we've got, despite whether the project was a home run or whether the project was fine, what we've got is a sense of partnership that's left behind. And one last question on this, and it has to be brief because I know Stacy has questions from the audience that we want to make sure that we get to. But does it ever happen where you determine at the end of that this is not a good partnership?

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25:58
Speaker 1
We haven't had a. We usually make that determination before engaging. Quite honestly, you know, the work that we do usually carries with it a really long gestation period because of the negotiated work that we do. And that gestation period allows us to really have. You know, that's a project in itself where you can.

‍ ‍

26:19
Speaker 2
Right. There's all the dating.

‍ ‍

26:21
Speaker 1
Yeah.

‍ ‍

26:21
Speaker 3
You've.

‍ ‍

26:21
Speaker 2
You've had an opportunity to date before you decided to go on vacation together. Yeah.

‍ ‍

26:25
Speaker 1
100. Yeah. Yeah. So anytime that we've recognized that it's usually been before, we've put the ring on the finger, so to speak. So.

‍ ‍

26:33
Speaker 2
Yep, Yep. That makes sense.

‍ ‍

26:35
Speaker 1
So it's.

‍ ‍

26:35
Speaker 2
It's kind of like, hey, if we've done a project together, we had enough positive signals that you were going to be a good partner.

‍ ‍

26:42
Speaker 1
That's right. That's right. Yeah. Yeah.

‍ ‍

26:44
Speaker 2
That's cool. Stacy, what do we got from the group?

‍ ‍

26:48
Speaker 3
Yeah. So IKC said, how does Matt protect his subcontractors when working with an owner has yet to earn his trust.

‍ ‍

26:58
Speaker 1
Yeah. So I think so the. Our five dysfunction. It's a great question, by the way. The 360 nature of everything that we describe, including our sort of dysfunction pyramid, is not unique to any one direction, be that upward direction to customer, you know, sideway direction, peer to peer, or in direction to our trade partners. You know, we have a similar function with our trade partners that it. That the foundation of trust has to exist with the subs as well. Right. And if we can't create that platform of trust with them, then it's no different relative to the relationship that we're trying to build with our customers. So I think the easy answer to that question would be that to Chad's earlier point, our goal is to not really enter into a scenario where we don't think there's an opportunity to build that trust.

‍ ‍

27:58
Speaker 1
So in. In the case of the question, our hope is that our subcontractors are partnering with us to be part of that trust demonstration throughout the project. And so we're doing it together.

‍ ‍

28:11
Speaker 2
Yeah, I think it's a really good question coming from Ike. You know, I can only imagine the scenarios that you run into where, you know, there's the practical financial aspect of what you need to accomplish on a project, and then the partnership aspect of what you need to balance with a subcontractor. You know, I don't envy the position, but I do in general, you know, around the market, hear very positive things about what you've been able to do there. What else do we have, Stacy?

‍ ‍

28:48
Speaker 3
We have a comment from Mark that says the traditional reward system for project leadership team members focuses on protecting the bottom line, which turns into kill or be killed in pursuit of profits. Making a paradigm shift in evaluating project success is critical to moving our industry forward and beyond our big dysfunction. Just wanted to know, I guess were talking about the guiding philosophy behind choosing to run your business this way and, you know, kind of the things that you already talked about, but if you wanted to comment on the killer be killed.

‍ ‍

29:27
Speaker 1
Yeah, yeah.

‍ ‍

29:28
Speaker 2
I mean, it's. It's Mark's spot on.

‍ ‍

29:31
Speaker 1
I always thought that Mark and I had a subliminal connection. Now he just confirmed it because that's a great question. I hope Mark as well, by the way. We haven't talked for a while, but so. So the. Our guiding philosophy is really simple and it ties back to our purpose. And it's really, you know, if you look at Simon Sinek in the Golden Circle, it's our why. And our why is to help others to achieve their maximum potential. And it's. It really starts with this position of service, which is really different, I think, for most general contractors and is probably more aligned with, you know, a nonprofit to that regard, where our focus is how we can have everyone, whether it's subcontractors, architects, clients, everyone being this idea of we're all working towards something greater, right. To achieve our collective maximum potential.

‍ ‍

30:21
Speaker 1
And so to Mark's point, our teams are not our assessment and our metrics that we have profit is pretty low on that list. Right. At the end of the day, if we have incredibly profitable project, but the owner's upset, the project looks like crap, you know, all those things, those aren't.

‍ ‍

30:39
Speaker 3
That's not.

‍ ‍

30:40
Speaker 1
That's not building trust. That's not earning work. And by doing that, it's not going to allow us to have that greater impact, to allow others to achieve that maximum potential. So for us, it always comes back to that center and to that why. And so when we're looking at teams and looking at the success of projects, we're really looking at, well, how did the team feel? Right. It sounds really weird for a contractor to talk about feelings, but at the end of the day, if we all can't lock arms at the end of the day and feel like we helped everyone, including the communities around us, the impact that we have socially, then if we can't feel good about that or feel like we've really moved that needle, then the profit, you know, what's the point? Right? For us.

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31:22
Speaker 1
So to Mark's point, for us, we're not a kill or be killed by profit company. We never have been. The profits are just something that happens as a result of doing the right things and trying to continue to do those right things. To grow bigger and bigger so that we can do more and more right things and help everyone to really come and achieve their maximum potential.

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31:46
Speaker 2
Specifically, when Matt and I were getting ready for this interview, one of the funny things that stuck with me was this idea that if a project manager did the wrong thing culturally but made the company $100,000, that would be a, considered a failure.

‍ ‍

32:16
Speaker 1
Right?

‍ ‍

32:17
Speaker 2
That would be considered a problem. And you know, I get the sense that's, you know, those are conversations you really had before.

‍ ‍

32:27
Speaker 1
It is, it's, in fact, it can be a little bit of a culture shock for folks that come from other companies because that is not consistent with most commercial general contractors. And the idea that, you know, we've had conversations where one of the members of our team, you know, they, there's $100,000 issue and you know, it's a little gray, but we have a really good set of core values. We call it qdi, which is quality, dependability, integrity. And what we say is use that as a guide on, for every decision that you have and you'll never make the wrong decision. But nowhere in those words, nothing about that talks about profits or stuffing money in our wallets. And so when there's this hundred thousand dollar issue, if the right thing to do is that's our hundred thousand dollar problem.

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33:21
Speaker 1
When, when someone comes from another company and they're working for us and they take joy out of the fact that they turn that $100,000 issue into a $25,000 issue, but they did it on the back of a subcontractor or the back of an owner. That's not good enough for us because that doesn't pass our QDI test. Right. So, and that's a weird thing because, you know, there's other companies out there that celebrate, oh well, we just saved ourselves from $100,000 hit by converting it or pushing it elsewhere. But they don't think about, was that the right thing to do? And so it's, you're right, it becomes a weird, I think, conversation sometimes where there are some individuals, well, what do you mean, I just saved the company $75,000? Well, that's right, but that wasn't the right thing to do.

‍ ‍

34:07
Speaker 1
And we'd much rather have had that hit in the spirit of what that means to our partners, whether it's our subcontractor partners or design partners or a customer, because at the end of the day, that's what's going to help them to achieve their maximum Potential and then. And there for us. Yeah.

‍ ‍

34:24
Speaker 2
And it's, it's funny because that $75,000 that you left on the table, I know it's not why you're doing it. You're doing it for your core values reasons. Right, I know that. Which, which I think is why it works so damn well. But just as a side note, that $75,000 is coming back to you tenfold in the future because of the integrity that you acted with, be it toward the owner, be it toward the subcontractor. So ultimately, even though it felt like you were leaving $75,000 on the table, you were actually, you know, create. Doing, making a better financial decision long term. And again, I know you would say that's not a financial decision. Right, I know that. But, but it, it still is. Yeah. So listen, we're over already and I still see questions coming in. Stacy, I'll let you call it.

‍ ‍

35:19
Speaker 2
Do you want to get one more in?

‍ ‍

35:21
Speaker 3
Yeah, I think we should get this last one and I think it's good. How do you determine on whether or not to take a leap of faith on a subcompcontractor you have not worked with previously?

‍ ‍

35:35
Speaker 1
Well, it's a great question. I think a leap of faith probably has some context to it in terms of how we might define that. Again, I think it really comes down to this sort of courtship. Right. And so, you know, we have, as most contractors our size have a formal pre qualification process and that sort of thing. But that, you know, that's kind of like the, I'm trying to go back to a romantic situation, a male and bride or something like that. I don't know. For us, the more meaningful part. Right. Is where we can really sit down and engage with that subcontractor at a more deep and meaningful, intimate level and really.

‍ ‍

36:19
Speaker 1
And make sure that we're not just engaging with their leadership, but it's that with their leadership and their, you know, the folks that are actually going to execute the job for us. And, and what we really want to have in that process is that, you know, this isn't an interview where it's just rapid fire questions, but it's really something where we're engaging, whether it's over lunch or just in a more unstructured environment to understand, you know, their behaviors and their culture. And you know, we can figure out what their expertise and technical aptitude is from references and things like that. But the important part for us is what's it going to be like, just like with the customer?

‍ ‍

37:02
Speaker 1
What's it going to be like when we're going through the ups and downs and can we get a gauge of that, you know, through a series of actual in person, just at the table sort of conversations? So, you know, and. And through that, we then elect if. If it makes sense for us to engage further or not in the same way. It's really no different than us electing to engage further with a customer. For us, a customer and a subcontractor both integral to our success and our growth and our ability to increase that impact and to achieve our maximum potential. So there's a willingness.

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37:38
Speaker 2
What I think. What I think I'd say there is that what I'm hearing is there's a willingness, and not just maybe a willingness, but actually kind of a desire, which is maybe not common as well from you and your group to actually build relationships with the subcontracting community to do the opposite of what so many people try to do, which is just kind of reduce them down to numbers and scope.

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38:03
Speaker 1
Yeah. Yeah, that's right. That's the goal. And again, look, we're not perfect with all of these relationships. We admit that we're not perfect and we're going to make mistakes along the way. But at the end of the day, our goal is, you know, just in the same way that we're talking about serving others to achieve their maximum potential. That applies to all subcontractors, all of our trade partners as well. And we don't. We don't deviate from that. But we're, you know, we'll continue to strive for perfection, but we're never going to be perfect.

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38:33
Speaker 2
All right, cool. Well, I think we'll wrap it up there. This has been a great conversation. Matt, thanks so much for taking time out of your morning to do this with us.

‍ ‍

38:42
Speaker 1
Thank you.

‍ ‍

38:43
Speaker 2
Anything you want to say before we part ways and Stacy and I start talking about next week?

‍ ‍

38:48
Speaker 1
No. Thanks for having me again in Southway. You know, we're really excited to be part of. Part of this. We're really excited to be in Baltimore and the impact that we get to have on this community and beyond every day. And. And this is just a small part of that as well, so. Good stuff. Thank you.

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39:04
Speaker 2
Thank you.

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39:05
Speaker 3
Thank you. Have a great one.

‍ ‍

39:06
Speaker 1
You, too. See you, man.

‍ ‍

39:08
Speaker 2
So, Stacy, next week, correct me if I'm wrong.

‍ ‍

39:12
Speaker 3
Yep. We are talking about mental health with Rex Miller, right?

‍ ‍

39:18
Speaker 2
Rex is. I'm really looking forward to this conversation. Rex is. He's the author of one of the most influential books on my shelf, co author, along with, you know, a team of other really smart people that has really, you know, helped to shape a lot of the work that I do. And one day, on a whim, I reached out to Rex and said, hey, man, I don't know if you know this, but, you know, your book had a major impact on, you know, me and a whole bunch of other people. And he the kind of guy that, you know, scheduled a meeting with me to say thanks and learn more and figure out how to help. And so over the past year or so, we've been developing that relationship.

‍ ‍

40:00
Speaker 2
And you look forward to digging in with him on a topic that I know is really close to his heart, which is, you know, how do we make a healthy, you know, building industry for people mentally? So that'll be a really cool conversation. And if I'm not mistaken, it's our last show of the season. Yeah, right. So, so if you're able to join us live next week, please do that. I do want to announce just a couple of quick things officially as of this morning. I can't believe it's taken us this long or taken me this long to do this. This is not on Stacy, but we're up on Apple podcasts, so we're on Spotify, we're on Apple, we're on YouTube.

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40:46
Speaker 2
And, you know, I, every time I'm out at an event somewhere, somebody will come across, be like, man, I, I, where do I find these things? So I, I want, we're gonna do a better job of you putting that out in writing and sharing links and things like that. And then, of course, as we always say, make sure that if you know, you want to be informed on what we're doing at the morning huddle, all you have to do is just email Stacy. She'll get you on a weekly distribution list. And then, you know, lastly, as we prepare ourselves for season three, which is going to get going this fall, if you or someone, you know has an important story to tell about creating positive change in the building industry, reach out to Stacy or I, we'd love to dig into that again.

‍ ‍

41:28
Speaker 2
I think we're looking for four more guests in season three at this point, so we're very interested in anybody that you'd have in mind, including yourself.

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41:38
Speaker 3
Or if there's a certain topic that we haven't talked about in season one or two, we're trying to, you know, keep the topics very fluent and diverse. Please reach out to us. Me and Chad are pretty well connected, so I think we could find someone to hit, you know, one of those targets.

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41:55
Speaker 2
Stacy's pretty well connected.

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41:57
Speaker 3
Chad.

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41:59
Speaker 2
I stay just to myself.

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42:01
Speaker 1
All right.

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42:02
Speaker 2
Thank you so much, Stacy, for all you do. And thank you to the audience, you know, appreciate you being here live. And if you're catching us on a recording, keep doing that, too. It's all good.

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42:13
Speaker 3
Have a great day. See you.

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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.