Construction Informer

History so far has shown that if there is anything you an depend upon it is that costs of things will always go up. Lately it seems fuel is leading the charge and of course that affects almost everything since fuel is so deeply imbedded in the economics of supply and demand.

Normally prices of fuel inch up over a period of time and so everyone has a chance to adjust and gradually get used to the necessary changes, not the least of which is the increase in costs of goods and in doing business. The rapid increases are causing many in construction to re-think how they do business.

According to various news reports here are some of the ways contractors are adjusting for the higher costs of both gasoline and diesel.

• Eating the additional costs on jobs already under contract and passing them on in all new contracts;
• For contractors with service fleets many are adding fuel surcharges shown on the invoices while others are increasing their service and/or hourly rates;
• Requiring carpooling for superintendents and lead carpenters traveling to job sites;
• Paying closer attention to regular vehicle and equipment maintenance;
• Eliminating idling;
• Replacing gasoline vehicles with diesel vehicles;
• Converting diesel vehicles to vegetable oil vehicles;
• Marketing closer to the home office;
• Eliminating free estimates that are further away than a specific distance from the home office;
• Combining material runs from a number of job sites.

What’s missing here? Examining why people are driving and if the trips are even necessary, where they are driving to and if the destinations are really part of the job and identifying other ways to accomplish things that don’t require driving.

This is the future home of Construction Informer. This is an example of poor planning and low expectations on my part.

When I started my construction blog, The Construction Informer, I already had a domain so I just used Go-Daddy’s Quick Blogcast in conjunction with that domain. Later, as the blog got more popular and hits really started to go up, I got to thinking that it really ought to have the same domain name as its name so I bought the com, org, and net domains of Construction Informer – amazingly they weren’t taken.

Then I had to decide where to host the domain, create a blog shell and then import all previous posts to the new domain. Nothing against Go Daddy, I think they offer some value and ease of use that people need, but I wanted a more robust platform to publish from. I wanted more control and more options. I don’t know yet if I made the best choice but so far Blue Host and WordPress feel pretty good. I like the name – Word Press, it sounds kind of modern yet old and steeped in tradition. It conjures up experiences like stepping into an old-time print shop and being overcome with the smell of printer’s ink while a hunchbacked man with a visor squints over a board full of metal letters.

So I am making a very long project of moving the blog to here. One reason is I know I will loose my Google rating and will basically be like starting over again in a lot of ways, with the exception that I think if I do it right I can get current subscribers and readers moved over to the new domain fairly easily and painlessly without loosing any. After all, readers are what many of us do this stuff for.

So, stay tuned. Gradually The Construction Informer will move over here and be Construction Informer.

There’s nothing more frustrating than trying to plan in a hurry. Worse yet trying to plan when you are already behind is even more frustrating. In order to put short term plans into action you need to have long-term plans in place. That’s the strategic plan.

So now is the time to tackle some of those long-term strategies that actually end up driving the short term tactical decisions. You have to be realistic about these things because they touch on issues and relationships that you might not be prone to viewing objectively.

Is it a good time to diversify? Do you need to be more growth oriented in one area of the business? Are there some inherent weaknesses to the business that you should be strengthening? Are all the bases covered in terms of continuity? Do you need a partner or new business manager? Is this the year you go public? Is it time to look for exit strategies and if so how can you make the business more attractive for sale or transfer?

As you go through this process you are going to have to look closely at your partners and suppliers. Are there weaknesses in their performances? Are you still getting the value you need from the relationships? Are there processes that should be reviewed to make sure communication lines are open and clear? Are there consolidation opportunities with these players? Is it time to find some new people to collaborate with?

Ultimately your goal is to end up with a vision of what you want your business to look like at the beginning of next year. Of course this assumes that you’ve already reviewed the longer range goals of where you want to be in five years and beyond.

If you have partners and others who need to be involved in this process there are many ways to get people focused on the task. Short of scheduling a series of meetings, you might suggest a retreat where the necessary people and you gather for a weekend to map out the strategies. Sure you could include some relaxation but you better make sure you have a clearly-defined agenda and some clearly defined goals lest the whole affair deteriorate into a junket. That might be fun but it won’t get the job done.

People are notoriously adept at avoiding planning. That’s why so many people, and so many companies, look around at the end of the year and wonder why their long term goals are still just as far off as they were at the beginning of the year.

If you are really going to build it like you want it, you have to plan it.

One often overlooked area of managing a construction enterprise is the one of succession planning. This exercise identifies the people or person who keeps things rolling if main players are sidelined or die? But there’s much more to this. Ideally the person would be one that is actively involved in the business on a daily basis and would then have access to all the types of information necessary to keep operations moving. One area that’s easy to miss here is making sure the successor has the necessary computer and database and other passwords needed to get to the information.

Small companies may have to rely on a lawyer, family member or worker. If these people aren’t schooled in the company operations and locations of business information their effectiveness will be greatly compromised.

At this time of year, as you begin to turn the corner to the New Year it’s a good time to give succession planning some thought and action. Here is my short list of things you can do to minimize disruption when key people are missing.

• All of your administrative functions need to have a backup plan. Look at accounting, payroll, and job functions and put together a Plan B in case key players in those functions are out.
• Consider outsourcing to minimize the number of functions you have to backup.
• Get people cross-trained so there is an overlap in knowledge about how things are done.
• Have key people build lists of contacts with phone numbers so answers to questions like, “Who do I call to get the copier repaired?” can be easily found.
• Identify those things that can bring your business to a standstill and have a Plan B.

There is a lot more to this but just beginning to think about it is the most important first step.

We were on schedule. Things were humming along nicely and the work was coming in at quality. There hadn’t been any accidents. I had a few minutes every afternoon to analyze the schedule and make fine tuning adjustments based upon new information from subs and their availability. On top of that rosy picture, I wasn’t waking up at 3 a.m. to make notes in my Palm Pilot (I know, I know, there is newer technology, but I’m used to this).

Then, the owners said they wanted to accelerate the schedule. It had something to do with investors. I fired up MS Project, loaded the current building schedule and started adjusting things. About 20 minutes into this mind-numbing exercise everything came to a screeching halt when I came across the window schedule. The manufacturer was 400 miles away and already running behind. It didn’t matter if I could get everything else moved up since it would all come to a standstill once we needed windows. I got on the phone and after a few hours actually received a call back. No, they were maxed out and couldn’t deliver earlier. The discussion entered the realm of additional money, but still no go.

Just for kicks I finished out the exercise in adjusting the schedule only to find that even if the window issue could be solved I could only cut 5 days off the estimated completion given the current workforce. The owners were looking for 15 days and didn’t want to spend more money to hire additional shifts or otherwise fund increased production.

In a poll that is referred to in an article at Projects@Work the third most frequent reason cited for project failure is “unrealistic schedule.” The sad thing is that owners and others often operate under the mistaken perception that accelerating the schedule can save money. What often isn’t considered is that even if you can pull it off there are other factors that can end up costing additional money that wouldn’t have under the old schedule.

Suppose as part of the change the drywallers have to add a second shift and under labor law or agreements that shift gets a premium beyond regular pay. Five days saved just turned into two-days behind from a dollar perspective. It is always a good exercise to see how much you can tweek the schedule. When it is running according to plan you get the thrill of feeling like you have just improved on a fine Swiss watch. But you also have to learn to be content when the schedule is about as perfect as it can get…especially in an imperfect world.