Trends in the Commercial Construction Industry: What needs to change?
This isn’t a “gripe-fest”. We’re not macro industry experts by any means, but we do have eyes and ears, and what those tell us is that some trends in the construction industry are not conducive to shared success, and especially not to building better relationships. We’re not trying to hold the industry at large accountable either, but we are trying to hold ourselves accountable, always making sure to check our culture and make sure we haven’t adopted any bad habits just because we aren’t paying attention.
The “Me” vs “You” Attitude
Bid situations naturally create this dynamic. Contractors are eager to get the work, so they draw down their budgets as much as possible to compete against each other and win jobs. There’s a temptation to specify the bare minimum finishes and cut corners in the bid, knowing that change-orders later fill in the missing budget gaps. Once a general contractor wins the work and begins, the project may turn into an open field day.
While we do compete in bid situations within the commercial construction industry, we paint as realistic a picture as possible up front. We compete on price, but always operate with a high degree of transparency in the process. If we trim something major out of the budget to get the price down, we talk about it with the client and set a realistic expectation. Integrity should never be sacrificed just to win some work.
You can probably see, though, how awkward this can be. It puts commercial contractors and clients on opposite sides of the table, which can pull the price down (at least initially) but doesn’t do anything to build the relationship.
A better solution: Negotiated Contracts
Right off, we start in each other’s corner. A client has committed to us as a team and we commit to them. Working hand-in-hand we set realistic budgets, accurate goals and then value-engineer together. The client is able to glean our knowledge and make informed decisions about budgetary cuts with a much larger perspective and a more complete set of facts. This enhances the relationship so much more effectively and sets a standard for excellent communication during that particular project.
Ultimately, the people we work with don’t have to keep bouncing around from commercial contractor to commercial contractor. Sure Portland, Maine has plenty of them, but isn’t it so much nicer to have your go-to team? We would rather keep working with our closest relationships, using all the years of trust and knowing each other to help us build better construction projects.
Maintain the “Mystery”
We can’t figure out where this all got started. Many people think that construction is some black box of infinite complexity and only a general commercial contractor knows how to rub the lamp and get the genie to pop out. Even worse, so many companies attempt to reinforce this bullshit, talking over their client’s heads and withholding information because they don’t want anyone to figure it out.
Yes, there is a lot that goes into a construction project, and commercial construction companies add a ton of value by knowing the right process to get it done, the parameters set by code enforcement, who the best subcontractors are, general history and experience, etc. The list is long. But people have been making cities for thousands of years, so it’s clearly not “magic”. That only comes in when you are trying to get a job done on a budget and a timeline with an eye for maintaining high quality. But even that is relatively simple in nature if you take time to understand it.
Basically, there’s no need to try and make construction seem like a “mystery” to the client. As a commercial construction partner to our relationships, we know we are adding value through our application of technology, our systems, processes, and the high quality of the relationship. We don’t want to cover a client up in all the smallest details of a project, but we do have an open-book policy that no information is off-limits. If a client has a question, we answer it. The only proprietary information we have would be something contractually stipulated or an NDA, which is very rare. Otherwise, any subject is fair game. We believe in Plain-Talk, which means telling the whole truth to bring clarity and direction.
Not Serving the Subs
As we mentioned in our last blog, the tables have turned for subcontractors. Over past generations, there were too many subs and too few commercial projects for them to work on. A general contractor could easily drop one and move to another, applying pressure to keep the pricing down. But things have changed and the demand for subs and labor has exploded. But old habits die hard, and some GCs are still treating their labor force with that old “burn ‘em and churn ‘em” mindset. In this market, not being able to find the best labor will undermine a company’s quality radically and potentially lead to collapse.
So we do everything in our power to build great relationships with our subs and also run projects in ways that allow them to succeed alongside us and the client (That’s another core value by the way). We use precise project management that allows them to work unhindered, we take time to review their insurance and contracts so their business is protected, and we don’t ever get loud or yell and scream when there’s a problem (what adult does that anyway?). We’re actually encouraged that subcontractors are in such a strong position right now, and this trend will only improve their business models and allow them to innovate more quickly as they serve the clients right next to us.
We’re open to feedback
Every one of these characteristics of the industry is a temptation simply because they have been accepted for so long. It would be easy to allow ourselves to slip into these habits, but Optimum exists to build better relationships first, and that is how we will build better commercial buildings. So we run against the grain and stand stubbornly in the values that drive our culture.
But it takes accountability, so if you see anything in us that’s started to drift, we want to know, because knowing ourselves allows us to build a better company.