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Over the years, I have noticed how many people get attached to job titles, particularly in their letters and on their business cards. Some are in the game for a higher rank, and achieving their desired title is almost like wining an Olympic medal. It’s something for them to hold on to.
If I had my way, we at Stewart Perry might consider having no titles on our business cards at all.
Some of our team members wear so many hats in their day-to-day tasks that a standard business card couldn’t hold enough words to properly title them. Having said this, I suppose the reality is that we all need titles to communicate a general idea of our role to new contacts. After they get to know us, our actions and our good word should be our title.
As an example, there are two titles in our organization that are co-mingled: estimating and project management. I like a team approach where one person’s job is primarily estimating, but with the ability to negotiate subcontracts, develop scopes and create schedules. This estimator would partner with a project manager for follow though.
Our estimating team members sometimes know the market in a different way than those who have been involved in the “trees.” They see a total view of the marketplace and beyond. Estimating requires a bit more of an engineering personality – more cautious, careful and a bit more clinical.
Depending on client needs, estimating doesn’t always take the lead on a project. Sometimes our project managers will guide the estimating function of a job with a teammate from estimating. By getting involved early, project management becomes a stakeholder in the success. I’ve found this minimizes communication breakdowns.
Either way, I want the team to own or manage a project from all angles so we can we provide the best results, value and delivery to our customer relationship. The simple truth is each team member likes doing different things. When they all work together, we’ve got a winning combination.
If properly approached, it doesn’t really matter which job title is completing which task. The sum of the parts is always greater than the whole.
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Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email.
From my perspective, these tough economic times have had an impact the unwritten rules that long governed the way construction businesses operate. Case in point: the vendors employed by subcontractors seem much quicker to file liens these days, even without communicating with the contractor. Insurance limits are being lowered on aggregate and umbrella coverage to save cost. I think both are driven by credit and profit concerns in today’s financial climate. Both create undue hardship on relationships.
In Florida, if businesses provide goods or services, are not in direct contact with the owner they are working for and they wish to preserve their lien rights, they must provide a “notice to owner.” We are seeing vendors and subcontractors providing these notices in many states that have no such law. It creates a creditability question in the way the owner or the lender views the project contractor. This can lead to slow creditability question, which tends to complicate the problems further.
A few things you might consider moving forward:
Listen to what the market is saying. Know the reputation of the contractor you are commissioning to build your project. A low, low price will feel good until credit problems erode trust over the course of construction.
Sometimes, vendors may unknowingly or knowingly misappropriate funds that are received from subcontractors for their account on a specific project.
Keep communication open on all fronts. Ensure paperwork is completed promptly, but isn’t unduly burdensome for the circumstances of the project. Paperwork should match the project. I would rather have a subcontractor or vendor work on the build of our projects than the details of the paperwork…if I trust them.
Be proactive by creating tools to motivate prompt payment to the responsible parties. Don’t let the funds get sidetracked to other non-related projects.
Everyone is looking for the angles these days, so deal with a responsible contractor and subcontractors who know the project and the market.
If a subcontractor is not currently carrying the insurance limits normally required, then consider reevaluating the particular risk of that project. Maybe go with the lower limits.
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Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email.
Because of the current imbalance of supply and demand in the commodities market, the cost of construction has been trending downward over the last year or so. Some of our projects take years to develop, and before this correction, the previous several years saw 3-4% increases annually. It’s hard to come back to your customer relationships and routinely share news of a bigger bill. The tables have now turned. The projects we bid a couple of years ago are costing less to finish than we anticipated. But how long can this continue?
I watch commodity prices every week, and over the last 60 days some have increased on the order of 30% or more. This will ultimately lead to higher building costs after supply balances with demand. I am not sure when that will change, but it will change.
I have mentioned to some of our customer relationships that I believe the next couple of quarters might be a good time to lock down pricing. Of course there is also a school of thought that there’s another shoe to drop with commercial real estate values. Who knows?
To make the best decision, it’s important to educate yourself. Among other newspapers, I try to read The Wall Street Journal daily. At the first of the year, it seemed like they published very few articles reporting positive news, but now the mix seems to be about 50/50. Lingling Wei and Peter Grant published an excellent article Monday regarding the commercial real estate sector, its relation to the economy as a whole and why the downward trend might stay a while.
As a practical example, I recently visited with a friend at the Sewanee: The University of the South. In the course of our conversation, she relayed her concern about the low pricing they received for a new project. The advice I gave her is the same I would I offer you. As a developer, if the contractor that submitted the price was qualified, proceed on but have a contingency to take care of those “misunderstandings” and change orders which will occur during these times. The low price you receive initially is just the beginning of the process. Be careful to keep a reserve in case our downward commodities trend starts moving back up.
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Merrill Stewart is Founder and President of the Stewart Perry Company, a commercial building contractor based in Birmingham, Ala. Contact him via email.
We recently priced a pro ject in Atlanta (a little less than $1 million job), which had several general contractor bidders and a ton of subcontractor quotes. In fact, there were a total of 20 subcontractors competing for $70,000 worth of HVAC work. Amazing. What’s even more amazing is that our cost was exactly the same as the general contractor with the lowest price and we came
in second. The difference? The general contractor with the low bid put $0 for his overhead and profit. At first blush an owner may think that is a great deal, but in keeping with the laws of economics someone will eventually lose.
Something similar happened when we priced a project we are currently constructing in Richmond, VA. After being awarded the job, our sprinkler subcontractor said his price included reusing the old pipe, a new one for me in the industry. Everyone is looking for ways to get “low.” We are currently buying steel bar joist at the cost of the raw product—bar and angles. So basically we are getting the design cost, engineering cost, fabrication cost and the freight for free, as are our customers.
The recession has compelled many to find innovative ways to cut costs. Interesting times for sure.
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