I have a friend who is a forensic pathologist. He claims he can tell almost everything about a deceased person from his analysis; their dietary behavior, lifestyle habits, degree of alcohol and tobacco consumption, drug use, and other details about how the person lived and how they died. This kind of investigation is called a “post mortem” (after death) analysis.

The practice of conducting a post mortem has its parallel in the construction industry. When you finish a project you have the opportunity to do the same thing.  The advantage you have is that you can take what you learn form a post mortem analysis of your efforts and apply it to your ongoing and future work, without anyone having to die!

This sounds like a “no brainer” right?  Think of the benefits this could provide your company! So, why don’t you do it more often?

If you’re like most contractors, you spend a great deal of time and effort working on the bid, analyzing the plans and specs, reviewing estimates for materials and labor costs, looking for ways to reduce the cost of doing the work so that you can be the successful (low) bidder.

If you’re one of the smart contractors, once you get the contract, you tear the bid apart and look at everything again, devoting more resources to see whether by other means and methods you can reduce the estimated cost even more to maximize your anticipated profit on the job.

Finally, if you’re part of the “cream of the crop” you will continue to do this exercise periodically during construction, with your field supervisors and project managers, as they tackle each new phase of work, analyzing the information and conditions as the project evolves.

It only stands to reason then, that once the project is over, you would want to learn from the errors and failures that took place which cost you money on the job.

Even if your project was a success, and you met your profit target, it still makes sense to look at it critically to gain the wisdom that comes from the vantage point of 20-20 hindsight. After all, if you’re honest with yourself, you know that there is always room for improvement.

In order for you to gain the benefits from the post mortem analysis it is essential that you do the following:

1. Involve all key project participants.
2. Encourage everyone to be objective.
3. Ask everyone to be critical, even of their own performance.
4. For all major issues and problems that were encountered, ask what alternatives could have been taken and what other options were available that could have produced a better result.
5. Take what is learned from the post mortem to implement in your company by adjusting procedures and practices to take advantage of what is learned for current and future projects.

Whenever you finish a project that went bad for you, it’s natural that you would want to put it behind you quickly and move on. I urge you to take a different approach. Considering the fact that you’ve already paid for the experience, why not learn to profit from it?

Make it a practice to learn from your mistakes, do a post mortem analysis of all your projects.

“We do not learn from experience…we learn from reflecting on experience.” – John Dewey

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

I remember always being in a hurry when I was a young boy, impatient to get wherever I wanted to go. On those occasions my mother used to say to me slowly, in a deliberate and gentle voice, “dress me slowly, because I am in a hurry.” It sounds counter-intuitive, I know, but it worked!

The origin of the expression is attributed to Napoleon Bonaparte, the famous French emperor and military leader. It is reported that when he was preparing to lead his troops into battle, he used that phrase with his “dresser”, the personal aide that helped him into his uniform. The point Napoleon was stressing was this; when preparing for an important and urgent task, you must slow down enough to be methodical, careful, and deliberate. You need to operate at a speed that will allow you to focus on the details as you prepare.

Over the years, I can’t tell you how often I’ve repeated that phrase to myself; as I get dressed for an important function, as I gather my files for an urgent meeting, when I approach a work deadline, or even as I get ready to leave for vacation with my wife.

Mistakes are part of life, no one is perfect.  In my engineering classes long ago, I learned about error rates in human and automated processes. There is one thing you can be sure of, the more you rush your work, the more you are apt to make mistakes. Consider that to be a universal constant.

In business, as in your personal life, mistakes can be very expensive. Estimating the cost of a project is a complicated undertaking involving many factors. There are interpretations, assumptions, decisions, and deductions which must be made concerning a limited amount of information, facts, and conditions that are known. There never seems to be enough time for you to prepare the estimate. However, rushing an estimate can produce the kind of mistakes that could be very costly to your business.

Detailed, analytical or accounting work is another area where rushing the work produces expensive errors.

On a managerial level, critical or important decisions should be thought out carefully, after considering all the facts and weighing the options available. Rash decisions, made in haste without the necessary information, usually end up being regrets or disappointments.

Perhaps the most common and costliest of all mistakes occur during the physical construction of a project. Failure to note required details or to adhere to the mandated standard can result in non-conforming work that must be removed and re-installed.  The additional cost and time to correct work in the field can be multiples of what it should have taken to install it correctly in the first place.

The lesson to be learned here is this, when you are faced with an important or urgent task, tell yourself “dress me slowly, because I’m in a hurry”.

——— A Personal Note ———-

On July 9, my dear mother’s life expired after 95 years. She was a wonderful mother of 7, and a loving wife to my father with whom she shared her life until 1996, when he passed away. Although I am saddened by the loss of both parents while still being “relatively young” by today’s standards, I am fortunate to have many wonderful memories to enjoy. Most importantly, my parents’ love endures with me and will continue to sustain me.

The collective experiences and life examples from my past that were provided by my parents, have helped mold my character and greatly influence who I am today.  They continue to serve as “Lessons Learned” from which I will benefit for the rest of my life.

If you have also lost one or both of your parents, I urge you to take some time to re-visit the memories and take stock of everything which they taught you directly and by example. That is one of the ways I have found to continue to honor my parents now that they are gone.

Rita M. Farach 1919 – 2014

My mom in 1936, the year she met my dad.

 

 

“Dress me slowly, because I’m in a hurry.” – Napoleon Bonaparte

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

I can still recall seeing the young man wearing a t-shirt with that slogan. The shirt had an image of a basketball player taking a shot, with the ball still in the air. Though it referred to the game of basketball, the broader message of course, was that in life, you don’t want to miss any “points”. You need to make everything count, there are no “do-overs”.

I think about this message each year during the NBA finals. Despite our disappointment in the fact that the Heat did not win this year, one has to agree (if one is to be objective) that the team that missed the least number of “points” won.

As I thought about this further, I found myself making the connection to the construction industry. I thought about how a “point” could represent “TIME.” So it was that I came around to the idea that “once you lose a day, you never get it back.”

Sure, you can try to make up for the lost day; but those efforts will not come without cost and the use of resources that were probably dedicated to other projects.

Over the years I have watched many projects begin to lose their flow, as problems develop, forcing the schedule to drag out. It seems that the work force and those in charge adjust to accept the ever slowing pace that results. In the industry, we call it “loss of momentum.” Due to the nature of my work, I have walked through many of these jobs to observe and record the problems and the corresponding impacts on the progress. In most cases the sensation is palpable; you can literally feel the drag of the project that has lost its mojo!

It is natural to assume that in the face of those circumstances, management must take charge to lead, motivate and set the examples that will help turn things around. However, that can be an insurmountable challenge, whenever the conditions have persisted for a long time. There is a real, psychological component to the slowdown of work on a project.  As long as human beings and not robots are doing the majority of the work in the field, that will be the case.

In my experience, by the time that most projects get to the stage where the “wheels have come off” it is too late to make any meaningful change. The inertia that has built up by then is too great to overcome. Even by employing a Herculean effort, at a tremendous cost, those projects typically result in financial losses.

The lesson to be learned here is clear, you need to adopt the attitude at the beginning of the job that “once you lose a day, you never get it back.”

Chris Bosh, Game 6 – June 12, 2014

A Message To My Readers

I have shared my views on a variety of subjects in these pages for more than a year now. The positive feedback that I’ve received from many of you has been encouraging and continues to motivate me. It’s especially pleasing when you share your thoughts with me. In fact, one of the best compliments I received was from a contractor who said “of course I read every single issue, why wouldn’t I, they are short, to the point and you’re giving me free advice.”

Those were my main goals when I first started Lessons Learned.

I urge you to take advantage of this platform I’ve established by reaching out with your concerns on topics that you would like me to discuss. I will entertain any suggestions that are relevant to construction management, project documentation and other administrative challenges. Please send an email with your comments.

©  Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

Perseverance can help you accomplish what might first appear only to be a dream. I am excited to announce the publication of my book “Construction Management: Document to Reduce Risk”.  I first drafted a rough outline of the concepts for this book 22 years ago.  Getting it published after all this time is proof that through perseverance anything is possible.

This is a practical manual that captures my philosophy for construction management – how through application of the “rules” contained in the contract, together with proper documentation of issues during the life of the project, you can reduce your risk.  Packed with advice, numerous examples, and case studies, this manual provides the instruction you need to prepare effective, timely correspondence regarding project issues in a cooperative, proactive manner, without confrontation.

• Create a Contract “Rules” Checklist to help manage your project.
• Overcome the fear of documenting problems.
• Learn how documentation is essential to reduce project risk and maximize profits.
• Practice the key steps in documenting typical construction disputes through case studies on extra work and delay.
• Improve your writing with simple keys for effective construction correspondence.
• Take advantage of the sample letters included in the manual to help you jump start your correspondence for typical construction issues.

They say that writing a book is like having a baby, you labor for a long time, then there is tremendous joy when it’s delivered!  I have dedicated a great deal of effort to this project and now that it’s complete, I hope you will be able to benefit from my labor.

I look forward to your comments.

“Perseverance can help you accomplish what might first appear only to be a dream.”

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

Sometimes what I see in this business makes me want to scream. I ask myself, are contractors just irrational? Is it their eternal optimism that makes them ignore common sense and act the way they do instead?

Einstein defined insanity as “doing the same thing over and over and expecting a different result.” From my point of view, the way that I see contractors manage their projects seems to fit that definition.

Before I explain myself, let me be clear and say that I’ve heard the arguments before, I get it, the business environment for contractors is very tough. Jobs are scarce, margins are extremely tight, competition is brutal. I hear this all the time; and it’s true! There is little to no leverage when negotiating a contract (especially if you’re a subcontractor). Forget about trying to negotiate good terms, you’ll be shown the door and there is a line of competitors waiting to take your place. So you end up signing the job, the way that it was presented with all the unfair clauses in your contract.

But is it smart to ignore the contract after it’s signed just because it was a raw deal that you couldn’t negotiate? Absolutely not! By ignoring the contract, you just make things worse. Once you have a signed contract to perform, you’re in a different position than you were when you were bidding to get the job. A commitment has been made by your company to perform. However, your contract, even if appears lopsided, contains some obligations that are due your company in return. Despite the unfairness of your contract, there are conditions that, when properly understood, can be used to maximize your leverage while you perform your work.

In addition, as the job progresses, your company’s value to the project should increase, as your customer realizes that there is a vested interest in keeping you on the job. Continuity of contractors is important; replacing a contractor adds time and cost to a project.

Finally, just because you have a contract that is tough on terms doesn’t mean that you don’t have any rights. Whatever fears you may have had before you signed the contract need to be discarded. You are now under contract and the rules of the game are there to be followed. In fact, if you review the contract carefully, you will find that there are rules that can be used in your favor and help to reduce the risks that you undertook when you signed your contract.

The problem as I see it is that once you are under contract to perform, you continue to believe (and behave) as if you don’t have any rights or leverage whatsoever. Problems come and go, affecting your work, adding cost and time – yet you fail to provide proper notice or to exercise your rights in accordance with your contract. Oh, you might write some emails to complain or bring your objections up in conversation, but rarely do you follow the requirements (the “rules”) of the contract.

You need to realize that you can’t be terminated for doing what the contract requires you to do. Yet, time and again, there is a failure to document the issues properly. Later, after the project is nearly complete, and all of the damage has been done, you begin the scramble, looking for ways to recover what you can in what will usually be a severe uphill struggle because of your failure to follow the rules and do what you should have done.

The lesson to be learned: Don’t ignore the “rules” in the contract once it has been signed. Learn how to use them to your advantage to lower your risk and improve your profit.

“Insanity: doing the same thing over and over again and expecting different results” – Albert Einstein

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

Last issue I discussed common problems that are encountered when applying technology to manage field operations (e.g. job costs, daily reports, issue tracking, and photographic records).

The final issue of this series will deal with the application of technology to various aspects of managing your business.  My remarks will be generic, since it is not my intent to endorse any particular vendor’s product.

I want to get you thinking about this by asking questions about the way you currently manage your work, offering suggestions that may improve your business by having technology “serve” your needs.

1 – Job Cost Accounting:

How much thought and planning goes into setting up the job cost categories for your projects?  Do your job cost reports provide useful information other than the current total cost?  Extensive, unnecessarily detailed breakdowns of categories, can confuse your field staff, frustrating your ability to capture accurate information on project performance costs.  Your managers should take the time to create a list of categories that will be relevant to the work on each project.  That will make it easier for your field staff to report their progress accurately, and will provide you with more meaningful reports with which to manage the work.  I’ve seen many job cost reports on projects which, as a result of being too detailed, were inaccurate and therefore rendered useless as analytical tools.

2 – Management Reports:

Have you invested in state of the art hardware and software for your business but failed to have your employees thoroughly trained in its use?  Do you find yourself routinely complaining that the reports you receive from your system fail to provide you the information you need to manage your work, or company?  Do you find that you have to create manual, custom management reports to fill in “the gap” because your systems can’t produce them?

In this economy your overhead should always be under scrutiny.  One way to minimize overhead is to maximize the use of investments you make in technology and information systems.  It’s not enough simply to purchase the hardware and software tools that you believe are needed.  Training is essential to be able to get the most bang for your buck!

Most accounting programs come with features that allow you to customize standard reports to suit your specific needs.  If reports can’t be customized to your liking, the system usually allows you to export the data requested to a spreadsheet program, where you can further manipulate the information to achieve the report you desire.  You should always strive to get management reports with minimal re-entry of data to avoid wasting valuable employee time and errors that can result from re-entering information.  Often companies create special spreadsheets for collections, and other purposes, when adequate reports may be available from the accounting system without any additional work.  Sometimes it can be lack of training or knowledge of your existing system that keeps you from operating “lean and mean”.

3 – Online (virtual) meetings:

Are you spending too much traveling to meet with customers for routine matters?  Is your work spread out geographically but you don’t have the resources to visit your managers often enough?  Thanks to improvements in technology, you are able to hold productive meetings online, share documents in real time and view the participants, much as you would if you were present with them in person.  The advantages are clear:

• savings in travel budgets
• meetings can be held with remote parties on short notice
• very little investment is required (you probably already have most of what you need)

There are some minor disadvantages with using electronic meetings:

• lack of “real” personal interaction
• can be confusing when many parties are involved
• coordinating a convenient meeting time across multiple time zones
• quality of the conference (voice/audio) may vary depending on the participants’ internet connection

Based on my experience thus far, I find this to be an excellent way for a company to stay in touch with remote projects on a frequent basis, and greatly reduce travel costs.  The benefits of holding virtual meetings with your customers should be weighed on a customer by customer basis, with consideration given to the specific purpose for the meeting.  With greater frequency of electronic communications, it is easy to lose sight of the fact that sometimes you need to have personal (face-to-face) contact with a customer to build and preserve relationships.

Summary

In this series on technology applications to construction I have emphasized the following:

1. Try to find the simplest solution – don’t overkill with technology
2. Investing in hardware and software is only part of the solution – training is essential
3. Organize before attempting to automate
4. Maximize the use of technology to minimize your overhead

“Technology is like a tool to a craftsman, you must select the proper one and learn how to use it well to get the job done.” – Paco Farach

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

Last week I introduced the topic of the use of technology in construction and mentioned three pitfalls that you should try to avoid:

1. Technology overkill
2. Failure to train
3. Improper match (square peg & round hole)

In this issue I discuss the challenges faced in applying technology to the management of your field operations.

Obtaining timely and accurate information from your field activities is essential to managing work profitably.  Software packages today are equipped with complex tools capable of providing in-depth analysis and greater detail than the typical project requires.

The challenge you have is one of proper application, or how to make the best match between the data-capturing capability of your software and the project type and skill level of your field staff charged with the task of reporting that data.  Let’s look at four main areas of application:

1. Job Cost: Although your estimate may be based on thousands of items and work activities, there is no reason to set up your job cost system to track each and every one. Here are some key factors to consider when setting up the job cost system categories:

a) type and scope of project (size, complexity, repetitiveness, duration)

b) ability to track accurately by floor, area vs. type of work (e.g. rough, finish), or both

c) your company’s real need for specific information based on its potential use in managing the work

d) likelihood that field staff will make the effort to track consistently and accurately according to the level of detail requested, and their knowledge and degree of training.

In my experience, most contractors opt for far greater detail in this area than they need, or intend to use.  My advice to clients is that for most projects, “less s more.”  Even if a simpler list of cost categories is used, you should retain the flexibility to add job cost categories as you need to account for:

• issues that arise during construction that should be tracked (T&M extras, for example),
• work activities that lend themselves to comparative analysis for productivity purposes,
• issues that need to be tracked separately, due to their potential to result in a request (or claim) for additional compensation.

2. Daily Reports: If you are a subcontractor, you need to prepare and submit forms containing information on manpower, work activities and problems on a daily basis. The importance of preparing a thorough Daily Report cannot be overstated.  As the only daily document on most projects, it can contain sufficient information to allow someone to piece together the history of the project (from your perspective).  You will need to strike a balance here between trying to record information vs. the capability (and training) of your superintendent to complete this task daily.  Push to get too much detail, and you will turn the superintendent’s job into a clerk of the works.

Typically, your office will print forms to be completed in the field by your superintendent.  Alternatively, you can have the form completed electronically (using text editing software, or a spreadsheet application).  These electronic versions are then submitted daily to the GC (as well as your home office).  I am a proponent of electronic forms for the simple reason that they can be reconfigured quickly, are easier to transmit than paper forms, and they can be saved and stored safely at the home office without the need for physical transportation.  The downside is the potential for others to modify the form after the fact, compromising the integrity of the record.  For this reason, if you use electronic forms, you should make sure that they are converted to a format that is not easily modifiable.

Electronic Daily Reports can be searchable and are easy to review after the fact in the event there are lingering issues that require you to analyze the work or explain events during the job.  This can save you great expense, if you have issues that end up in dispute.

3. Issue Tracking: If you don’t have a system for tracking issues and problems that arise during construction, you are relying on chance and memory to collect information that you will need when addressing the problem in order to request payment or to support (or defend against) a claim, if needed.

I suggest using simple methods whenever possible.  One way to track project issues is through the use of an Issue Tracking Log that can be created in a spreadsheet with categories for all of the pertinent data that needs to be collected (much like a log of RFIs or pending changes).  You should also set up an electronic file for each issue to be tracked and place a digital image of each document in its corresponding issue file. You could use hyperlinks within the spreadsheet to connect the document location to the description of the entries in the log for ease of review.  You need not have any custom software to track your project issues this way.

4. Photos – There are probably more project photos taken at job sites than ever before. Managing the large quantity of digital images can be a challenge. However, a simple digital folder for collecting them weekly or monthly should suffice. Whenever photos are taken for specific purposes (e.g. to record a field condition, problem, or issue) a copy of the photo should be placed in the corresponding issue file as well.

If you follow the simple recommendations above, you will be able to create a reliable and thorough system for gathering the essential records from your field operations.  More importantly, this system will be relatively easy to manage with some training of your existing personnel for the majority of projects.

The most essential criteria for the success of any system for collecting data is to have clearly established procedures for its consistent execution, and training of all employees who will be responsible for its use.

“Technology is like a tool to a craftsman, you must select the proper one and learn how to use it well to get the job done.” – Paco Farach

It’s ski time once again and thanks to the proper application of technology, I was able to keep my balance while going downhill at speeds that could have done some serious harm otherwise.  Of course, it helps to have adequate training and experience too…  Oh, and I should mention that it wasn’t until my second set of skis that I found the correct match for the snow conditions.

 

 

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

My wife (the CEO of our home), upon reading the title of this issue, commented “be careful, technology is here to stay” – she is absolutely right!  She should know too, as she has become quite a master of tech gadgets.  However, after you read my concerns (as my wife did), I think you might agree with me that there are times when, instead of being “served” by technology, you are actually being “hurt” by it.

I’ve been thinking about the way that most businesses don’t hesitate to adopt new technologies and products to solve their problems, become more productive, or decrease their costs.  Often, they invest a lot of capital to get the latest and greatest “tech stuff” without thinking through the changes that will need to be made in their organization in order to produce the results they were after with their new investment.

Don’t think that I’m against technological changes or the application of new technologies in your business; quite the contrary, as an engineer by training, I am a strong advocate for improvement through the proper application of technological innovations in our business and personal lives too.  The evolution of technology is both relentless and exciting.

However, as the CEO or Manager of your construction business, that doesn’t mean that you should just throw money at the latest technology that comes along without first considering its applicability to your business, the feasibility of implementation, and some sort of cost/benefit analysis to determine if it is appropriate for you.  In other words, you should establish criteria for evaluating all of the options, to choose which ones are right for you.

This is the first of three series of “Lessons Learned” on the effective use of technology.  This first part is an introduction with some observations I have made of the problems which are intended to get you thinking in the right direction.  In the second lesson, I will go into the problem construction companies have obtaining information from their field operations and comment on ways that the proper use of technology can yield the desired improvements.

In the last lesson, I will look at problems in application and the use of technology for the general management of your business.  Throughout these lessons, I will be pointing out the factors that should be considered by management before taking the leap with a new process or system.

My managerial or “systems” view of this subject leads me point out the three general problems I have observed, and my suggestions to avoid them:

Problem #1: Technology overkill – the tendency to apply the most sophisticated technology to solve relatively simple problems.

• Advice: Look first for the simplest way to solve a problem. Many challenges are more appropriately solved by a “low tech” approach.  The temptation to make this mistake increases each day as tech gadgets continue to get cheaper.  Remember, the simplest solution is most elegant, easiest to learn and implement, and usually the most cost effective.

Problem #2: Implementation without training – buying the tech product or service and expecting your organization to adjust without proper training.

• Advice: You can never train enough. Sophisticated technology is designed with specific features and capabilities with which the users must be familiar in order to get the best results.  Acquiring new technology by itself is only part of the solution.  Lack of proper training and a thoughtful plan to implement the new acquisition will result in a failed investment of valuable resources.

Problem #3: The square peg and the round hole – trying to impose technological changes to automate what is disorganized.

• Advice: There may be activities and processes in your business that need to be defined, organized, or re-structured before automation can produce meaningful results. Failure to do so can lead to additional chaos and hurt your business.

I should point out that I am not an expert in new technologies.  However, if you accept my invitation through these lessons to think about the questions I ask, look objectively at the points I make, and follow my suggestions, you will come away better prepared to make the changes that could improve how you manage your business and successfully integrate those technology upgrades that are appropriate for you.

When was the last time you had someone take an objective look at the management practices in your construction business?  Are there issues you would like to discuss with someone outside your company before taking action?  Schedule a confidential consultation.  Think of it as renting a “board of directors” for a day.

“I fear the day that technology will surpass our human interaction.  The world will have a generation of idiots.” – Albert Einstein

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

As this year comes to a close, I thought it would be good to review the subjects that I have covered in the issues of Lessons Learned throughout the year.  Below are the subject, title, a short summary and the feature quote from each issue.

1. Negotiating contracts: Sometimes it’s best to walk away from the contract. Some contracts are not worth signing and some jobs are not worth taking.  Those jobs can end up costing you more than the value of the contract.  “A wise person does at once what a fool does at last.  Both do the same thing; only at different times.” (Lord Acton).
2. Managing proactively: When traveling in the fast lane, look far ahead. The construction highway is fast-paced, you must plan ahead to get where you want, to arrive successfully at the finish.  “If you don’t know where you’re going, you’ll probably end up somewhere else.” (David Campbell).
3. Good project management: How to be a good project manager: be a “PPRICK”. Perform; be Proactive; be Responsive; communicate to Inform and be Clear; Know your contract.  “What is common sense is not common practice.” (Stephen Covey).
4. Documenting issues: Don’t let intimidation keep you from documenting an issue. Do what you know is right (and what’s required by contract), don’t back down to intimidation when it comes to communicating critical issues.  “The weak have one weapon: the errors of those who think they are strong.” (Georges Bidault).
5. Project documentation: The reasons why you don’t document. “You fail only if you stop writing.” (Ray Bradbury).
6. Negotiating claims: Sometimes you shouldn’t follow your lawyer’s advice. You need to use your business skills when involved in settlement negotiations.  “Smile, and say no until your tongue bleeds.” (Harvey Mackay).
7. Writing skills: If you don’t use it, you lose it. It has been said that writing is thinking.  We need to “think” before we write; and, through repetition, learn to make it a habit.  “We are what we repeatedly do.  Excellence, then, is not an act, but a habit.” (Aristotle).
8. Using the contract: The Rodney Dangerfield of construction documents. Applying the contract “rules” to the management of construction projects.  “I get no respect.” (Rodney Dangerfield).
9. Marketing: Your marketing objective: find the good people. Increase your profitability by concentrating on doing work with the “good people”.  “You’ll rarely have any bad business with good people…” (Pat Fernandez).

As you can see, we’ve covered a variety of topics from project management to negotiations, marketing, writing skills and contracts.  If you missed reading some of the issues, this might be a good time for you to go back to review them.

And now I’d like to offer some advice for you during the holidays:

• Take time to “sharpen the saw” (rest, relax, renew your energy)
• Connect with what matters most (families, friends)
• Extend a helping hand to those who are less fortunate and those in need
• Express your gratitude to others and to your maker in accordance with your faith
• Pause to assess the progress you have made toward your life goals and re-align yourself with your values

I want to take this opportunity to offer my sincerest personal thanks to all who have helped me throughout my journey to date: my clients, my friends, my wonderful family, from the oldest living member (my 94 year old mom), to my grandchildren (the youngest only 9 months old).

I am constantly renewed through the joy that flows from the 5 children and 5 grandchildren that I am fortunate to share with my loving and supportive wife.  I am always mindful that everything in my life is made possible through the grace and strength afforded to me by God.  May you and your loved ones be blessed with the joy and love that I have been most fortunate to receive, and may the New Year bring you good health and prosperity in good measure!

Happy Holidays,

Paco Farach

© Farach Consultants, Inc.  •  all rights reserved  •  954.434.7710

Do you ever wonder why it seems that some customers simply cannot be satisfied?  No matter how hard your company works on a job, they can always find something unacceptable, some deficiency to be corrected, or produce a punch list that never ends?  Despite all your efforts, when all the work is complete, those customers don’t pay the bill in full, finding creative ways to discount your work, submitting back charges out of left field.  Or maybe they just drag out your final payment until, out of desperation, you agree to accept less than what was due.

Working for these type of customers will consume more of your company’s resources and can often end up costing you money rather than contributing to your bottom line.  In addition, these customers are extremely difficult to deal with and will irritate your staff.

Yet despite these difficulties, you may find that your company continues to enter into contracts with these customers, only to repeat the same painful experiences.

That’s just the way it is in our market you might say.  But let me share a secret with you; it doesn’t have to be that way.

Many years ago, when I was an estimator for a subcontractor, I was seeing that pattern develop with some of our customers.  At that time, my company had a marketing philosophy that was indiscriminate; we took all of the work that came our way.  The problem I observed was that we were working with some customers that were producing bad business results for us.

One day while visiting one of my counterparts in a GC’s office, an “old timer” who I had grown to respect, I asked him “what’s your secret to staying successful in the contracting business for so long?” Without thinking about it, he shared this:

“You will rarely have bad business with good people, and you will rarely have good business with bad people. The secret is finding the good people.”

That message is as true today as it was 30 years ago!  The secret to your success is to find the “good people” and do as much work as you can with them.  Likewise, you need to avoid working with the “bad people”, as soon as you identify who they are.

I know this may sound like an over-simplification of things, but as far as rules of thumb go, it’s a great marketing objective. Think of the positive changes that could take place in your business if you were to put that advice to use.

1. You could stop losing money on some of your work.
2. Your staff would have more time to focus on satisfying the “good people” whose work contributes to your profits.
3. You could do less volume of work for the same (or greater) profit.

Try this recipe for a winning marketing strategy: “find the good people”!

When was the last time you had someone take an objective look at the management practices in your construction business?  Are there issues you would like to discuss with someone outside your company before taking action?  Schedule a confidential consultation.  Think of it as renting a “board of directors” for a day.

“You’ll rarely have any bad business with good people…” – Pat Fernandez

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