This is Not Contracting

The subcontractor has a tough road and it’s not getting easier. I think most people work hard, but the subcontractor takes on a lot of risk and that is why they deserve good profits. Risk is also like water; it flows downhill or more accurately, is pushed down. Specialty contractors need all the help they can get and associations should be there to provide that help.

Contractors tend to be pragmatic and focused on the task at hand. While they look at construction forecasting to the future, I find they are sometimes wrong, or even if they are right, what can the specialty subcontractor really do about it? Consider your prices and submitted bids are still tied to the now, not the forecast of others. I agree you can make decisions about major purchases or selling off unneeded equipment, possibly reduce inventory, but what other control do you have? Forecasting for most small specialty contractors is short-term at best and certainly a gamble. However, there is some long-term planning that specialty contractors should pay attention to, as it can impact your future and certainly the well-being of your company.

Twists and Turns

We have all been through booms and busts and watched trade associations host meetings to discuss the future of our industry. Associations should be on the lookout for red flags. Red flags are similar to a job site where production rates are falling or site scheduling has gone off the rails. Red flags for an association are not similar. That one job going south requires immediate attention and a quick fix. This is how most contractors spend their day—putting out fires - as actions must be quick, decisive and targeted. Association red flag warnings are more about the long-term future of the overall industry.

Some contractors want to jump in with quick, decisive and targeted fixes. After all, this is what they know: solve the problem and move on. The problem is the industry is more like a giant ship in the ocean. It seems to move slowly while you watch it—but it does move. Changing direction is possible but can take a little time. But that change in course can save or sink your ship.

Word to the Wise

I would warn young newcomers to the industry to beware of catchphrases. They are enticing and sound cool (terms such as “skin in the game,” “a higher price translates to a higher profit” or even “best practices”). These phrases are bantered around and used with almost reckless abandon. Hearing the statements fill the air in a committee can open the door to even more rhetoric. They can ultimately be the driving force to a strategic marketing plan that is likely to be put away on the shelf and then perhaps revisited in a few years.

We hear about the need for training at every meeting and yet nothing is really done about it. Is it because the answer is not quick, decisive and targeted, leaving the contractors in a pool they are not familiar with?

I am known for being a bit outspoken on issues that are not easy to fix. One specialty contractor once told me, “Mark, I need to survive this year—I cannot worry about the next decade.” He was right but he is also mistaken.

You need to look ahead to what could happen. Older leaders are more a part of the status quo and you cannot blame them. They are about to retire and why rock the boat now? Committees are a big part of associations. A CEO can make a decision but it is not a committee or collaboration of people with varying agendas. Committees are hard places to move the needle. This addresses the next problem: committee solutions tend to be broad-based and not very targeted. The committee needs to be appeased and with all the varying agendas, a targeted approach can leave some outside looking in. This can scare people.

Contractors need to be contractors—quick, decisive and targeted. However, when they get in the association arena, they need to shift to long-term or industry goals. Avoid cliché sayings, follow older leaders who have respect but also one foot out the door. Look around and fill that committee with some young blood. Listen to the old guys for experience, then make up your own mind based on history, trends and the future. Not next month or even next year, but the next decade. Contractors need to focus on long-term goals, even if it is just for a short period of time. This provides direction to your association leaders and staff and shapes the future of your industry.