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Top Construction Accounting Mistakes to Avoid

Top Construction Accounting Mistakes to Avoid

Accounting is not one-size-fits-all. And construction accounting is especially unique in everything from the way time is collected and allocated to the way job costing and work in progress gets tracked. Because of this, John Meibers, VP of Deltek + ComputerEase, is passionate about educating contractors on what they need to know in order to keep their books accurate, up-to-date and meeting industry standards. 

This week, John joins the Mobile Workforce Podcast to share why it is important to work with a CPA that knows the challenges contractors face. John shares the top accounting mistakes inside the Deltek Ultimate Construction Accounting Guide to uncover common and costly pitfalls made by contractors and their CPAs – and how to avoid them. 

 

Key Takeaways:

  1. Contractors need to review daily reports from their accounting team. To be in the construction business means having to manage tight margins. That’s why it’s imperative for contractors to work closely with their accounting department beyond bi-monthly payroll updates. Work in progress (WIP) reporting and good job cost reports on a regular basis – even daily – ensures contractors are always working within the lines of their budgets. 
  2. Margin and markup are NOT the same thing. Contractors tend to use margin and markup interchangeably, but this is incorrect. Markups refer to the budget created for a project to allocate for profit while margins refer to the profits that are left after a project is completed. Therefore, a 20 percent margin on the job does not mean to markup an estimate by 20 percent. Instead, to get a 20 percent margin on the job, the markup would need to be at least 25 percent. 
  3. Treat the equipment you own like the equipment you rent.  A big problem that accountants see in the construction industry is not accurately allocating for the use of equipment. Tracking usage helps accountants evaluate the value of the equipment owned. This allows contractors to make educated decisions managing their equipment. They can easily see what to keep, what to retire, and what would be better to sell and rent when needed, in addition to getting an accurate job cost report on their projects.

 

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Episode Transcript:

Mike Merrill:

Hello, and welcome to the Mobile Workforce Podcast. I am your host, Mike Merrill, and today we are sitting down with John Meibers, the Vice President at Deltek + ComputerEase. Thank you for joining us today, John. We’re excited to have you in on the podcast.

 

John Meibers:

Thanks, Mike. Happy to be here.

 

Mike Merrill:

Awesome. So before we get too far into the conversation, love to hear a little bit about your background and maybe an overview of your history for the listeners.

 

John Meibers:

Yeah, sure, no problem. I’ve been working in the construction industry for a little over 32 years now. I don’t know if that’s good or bad.

 

Mike Merrill:

So been a minute, right? Been a minute.

 

John Meibers:

It’s been a long time. So I started my career in construction, I worked for a large mechanical contractor for about 10 years, helped to run that business, got associated with ComputerEase initially as a customer there, went out and purchased a ComputerEase solution to run our business, our ERP system. Of course, back then, we had a lot of manual systems in addition to that, paper time sheets. We’re going to talk a little bit about time in a little bit. I know it’s certainly a subject that you’re familiar with, Mike.

 

Mike Merrill:

Yep.

 

John Meibers:

But, back in the day, paper time sheets. We though it was really cool when we could have time sheets faxed in from the field. We had landlines out in the trailers, installed in the trailers, and fax machines in the job site trailers, and they would fax the time in or call the time in where we didn’t have fax machines. You tell stories to people today like that, and they kind of look at you like you’re crazy, “Well, what do you mean, fax machine? What is that?” But those were the days.

 

John Meibers:

So I did that for about 10 years, developed a good relationship with ComputerEase. An opportunity came to go and run the ComputerEase business for the ownership at that time, the ownership group, and took that opportunity and then did that for a little over 20 years, so helping contractors implement the ComputerEase solution. I had used it for 10 years. Now, I’m helping others implement it and running the business selling and implementing our solutions. Then, about a year and a half ago, we became part of Deltek. We were acquired by Deltek, so I came over and brought most of the team with me. It’s been a great experience, and I know, I think, Mike, we go back probably … We first met, I don’t know, a number of years ago, to say the least, so we’ve been certainly working together off and on for a good number of years now.

 

Mike Merrill:

Yeah, and you’ve had quite a whirlwind story, all the way from the field to actually the accounting company and now getting acquired. So I’m sure your journey’s been long and interesting.

 

John Meibers:

Yes, seen a lot of things over those years and see a lot of things change as far as how contractors do business. I know that’s a lot of what we’re going to talk about today. That’s why I’m real excited to participate in today’s conversation.

 

Mike Merrill:

Awesome. Well, I noticed Deltek just recently released the Ultimate Construction Accounting Guide, and there’s a lot of great information in there, a lot of points and tips, and, again, there’s about, I think, nine items that it brings out and discusses in depth. We’ll talk about some of those today, but, overall, with that guide, if there was one takeaway, what would that be, and what would you home someone would gain from that after going through it?

 

John Meibers:

Yeah, so I think the one key takeaway for me, and I make this point when I’m addressing contractors all the time, is you have to work with people and products that understand your industry. 

 

Mike Merrill:

Yeah, I love that. I always loved the statistical side of things or graphs or charts or numbers, and I know, like I mentioned before, there’s a top nine items that you guys talk about the breakdown of accounting mistakes in construction companies. Would you mind if we go through and talk about some of those real quick?

 

John Meibers:

Yeah, no, that’d be great, Mike.

 

Mike Merrill:

Great. So one of the first ones is talking about not tracking committed costs on a daily basis. What can you tell us about that?

 

John Meibers:

Yeah, so committed cost, I see this problem with contractors a lot of times. We’re writing purchase orders, subcontract agreements. They may be formal or informal. It could be a verbal agreement but nonetheless an agreement. But we’re not tracking that anywhere. So when I go out and I have a job and I have a budget, and I go out and commit to spend a percentage of my budget, I need to have that noted somewhere. I need to have that tracked. Otherwise, as the actual cost comes in, I think, “Okay, if I got a $100,000 budget, let’s say, as an example, and I’ve already committed to spend $80,000 of that, I need to know that.” I only have $20,000 left to spend. I haven’t been billed yet for the $80,000, but I may have a $50,000 subcontract agreement and $30,000 worth of purchase orders. I need to know that $80,000 is already spent and I only have $20,000 left.

 

John Meibers:

There’s nothing worse than either thinking you have more left to spend than you do, spending it only to find out that you didn’t have it, and here comes that bill for something you already committed and now you’re over budget, or getting to the end of the job and thinking, “Hey, I only spent 90 of the $100,000. Hey, we did really well in this job,” only to find out here comes that last invoice that you already committed to in the form of a purchase order or subcontract agreement, but you didn’t have it tracked anywhere. I think that’s a big mistake, and I see that all the time with contractors, typically because they don’t have the right tool to do it. I tell people, even if it’s just manually, have it tracked on a spreadsheet at a minimum, but know that you’ve committed to spend that.

 

Mike Merrill:

Yeah. That real-time feedback loop is critical in keeping up with those costs.

 

John Meibers:

And, really, kind of on that committed line, I know we’ll talk about it in one of the other points as well, but it used to be committed cost, people thought of only as material and subcontract costs. But now, really, committed cost is pending payroll or committed payroll. Time that was worked today that won’t be paid until next week, that comes in under that committed cost umbrella as well.

 

Mike Merrill:

Yeah, agree. That’s a great point, and, again, that’s the largest variable expense in any construction company, is the labor, so that would be-

 

John Meibers:

Absolutely.

 

Mike Merrill:

… the first one to rein in, it sounds like. Great. What about one of the other points, confusing margin with markup?

 

John Meibers:

Yeah, that’s probably one … Because a lot of times, contractors use that interchangeably, and it’s not the … They’ll talk about, “Well, I want a 20% margin on the job.” Great. Somebody thinks, “Okay, then I need to markup my estimate 20%.” No, to get a 20% margin on the job, you need to mark up your estimate 25% to get a 20% margin. Too many times, people hear that 20%, and I go in as an estimator maybe, and I think, “Oh, I need to mark this up 20%.” Well, not if our goal is to have a 20% margin on the job. I need to markup that estimate 25% to get the right contract amount to yield a 20% margin. I’ve had contractors, sat down with one not too long ago, and I was working with their CPA, and I was working with them, and we sat down and we looked and they couldn’t understand why their margin was wrong, only to find out, well, your margin was wrong because you were using the wrong markup. You had set a goal to have a margin of X, but you weren’t marking it up appropriately.

 

John Meibers:

It’s an easy mistake to make. You throw them around, and people throw around markup and margin, and somebody hears one and thinks of the other. But you really need to take time to make sure that everybody’s clear on the difference between those two and make sure you get everybody on the team on the same page. The estimator’s thinking of markup, “I got to markup my costs to get to a certain number.” The owner’s thinking, “I have to have a certain margin on the job to be profitable.” So you really need to make sure everybody understands and is on the same page when it comes to that.

 

Mike Merrill:

Yeah, you got to cover that overhead that it’s going to take to administer that markup.

 

John Meibers:

Right.

 

Mike Merrill:

Right. Great. Yeah, that’s a good point, and I think that one’s often overlooked. What about when companies confuse percent spent versus percent complete? What can you tell us about that?

 

John Meibers:

Yeah, this is one of my favorite topics and certainly a big part of the WIP topic as well. I do a lot of webinars and certainly seminars, back when we were able to go out in public and do things and get in front of people. But I’d always ask people, “Let me see a showing of hands of how many people have ever done a job for exactly what you estimated it was going to cost,” and very rarely if ever does anybody raise their hand. It’s not the way it works in construction. Well, then, if you’ve spent 50% of your budget, why would you ever assume you’re 50%? The fact that you’ve spent 50% of the budget has little or no bearing on the amount of actual work that’s done.

 

John Meibers:

I try to teach people that when you’re asking that question, and sometimes it’s easy for me to … Maybe you’re asking me as a project manager, “Well, how far along are we on the job?” It’s easy for me to say, “Well, I’ve spent 50% of the budget.” That’s not really what I want to know. I want to know you’ve spent 50% and you’ve done 40% of the work or 60% of the work. That’s the key. You really need to know both to be able to accurately run your construction business and manage it properly.

 

Mike Merrill:

Yeah, that’s a great point. Again, like you’re saying, if you’re short materials, obviously, you’re going to have use some of that labor money. If you’re locked in and don’t have the ability to issue a change order or if it was a hard cost estimate, then, obviously, depending on your agreement, you got to watch those things.

 

John Meibers:

I mean, it’s great to know what you’ve spent, but that’s only one piece of the equation. You really have to know how much work did I do for that amount that I spend, and it’s very rarely the same number.

 

Mike Merrill:

Yeah. Love it. What about when companies do not … You were talking about WIP reports. What about when they’re not doing those frequently enough?

 

John Meibers:

Yeah. I always tell people there’s … I’ll ask you, “How often do you do your WIP reporting?” I have a couple answers that I just really don’t like. “Not at all,” I hate that answer, and almost a close second is, “Only when somebody asks me to do it. My CPA came in, they’re doing an audit at year-end, or I’m going to the bank to get an increase in my line of credit and they’re asking me for a WIP report.” I always try to teach people you need to do it to properly run your construction business. You’re doing it for yourself to run your business. Then when people on the outside ask for it, the auditors, the CPA, the banker who’s trying to work with you on your line of credit, you’ll have that information.

 

John Meibers:

But it’s really a tool to run your business and to manage your jobs and manage the company as a whole. So I think best practice is at least monthly. I’ve got contractors that will do it biweekly or weekly, and that’s even better. But I think, at a minimum, it should be monthly. I really hate when I hear people say, “Only when I’m asked to do it,” or, “Not at all,” because I think even if nobody on the outside is asking for it, it’s a great tool to be able to manage your business and see where you’re at.

 

Mike Merrill:

Yeah, you should already have it on hand at your fingertips because that’s a part of your workflow that you regularly do, right?

 

John Meibers:

Right.

 

Mike Merrill:

All right. That’s a great one. With those WIP reports, what about making adjustments to the P&L statement when there are changes?

 

John Meibers:

Yeah, and that’s one thing, they go really hand-in-hand. I always tell contractors, without a WIP report, it’s not possible to have an accurate financial statement. Without making the appropriate entries on the P&L and the balance sheet to move the over/under billing from the P&L up to the balance sheet, you can’t have an accurate financial, which is why if you go to the bank or you go to the bonding agent, you have to get bonded on a job, then you go to the surety underwriter and you give them a financial report without a corresponding work in progress report, they’re going to say, “Well, this is useless because I need to support the revenue that you’re claiming on the financial statements.” So they really go hand-in-hand.

 

John Meibers:

Sometimes, I’ll see people do the WIP report, but then they won’t carry it through and they won’t make the appropriate financial adjustments. It’s real simple. If you’re doing WIP on a monthly basis, you’re making a monthly reversing entry in the P&L and the balance sheet to move that cost, the over/under billings from the P&L up to the balance sheet. They really go hand-in-hand. You can’t really do one without the other, and the P&L is pretty much useless without the corresponding WIP report and WIP adjustments.

 

Mike Merrill:

Yeah. I mean, regardless of what data you’re collecting, obviously, the more frequently you’re collecting it, hopefully it would be more accurate, and so you’d have that accurate data to keep those WIP reports up-to-date and run those accurate and enjoy the benefit.

 

John Meibers:

Yeah. Very true, Mike. The more frequently you do it, the more accurate it’s going to be. I don’t want to ask the PM to go back and tell me where we were on the job three weeks ago. I want to sit down and say, “As of today, where are we at?” We have a whole process where you go in and you do your field estimates. You revise your percent complete or you do your dollars to complete or units. It can be unit-based as well. There’s various methods to how we calculate the estimated cost remaining. But the timeliness of it is very important.

 

Mike Merrill:

Yeah, love it. There’s certainly certain parts of the project are always going to take longer, even if maybe the materials are 60% consumed, but you may still have 50 or 60% of the labor left to do, right? If you’re a framer and you frame the exterior walls, you’re ready to spin trusses, well, before you put those trusses up, even though you feel like you’re well on your way, you’re probably not even halfway done with the project.

 

John Meibers:

Yeah, you could’ve spent 100% of the material but only done 20% of the labor. So it’s really important that you look at that at that level and be able to report at that level. It goes to not just labor and material within a particular task but how many tasks. People ask me that all the time, Mike, and I’m sure you get the same thing, “Well, how many different cost codes, tasks,” depending on the terminology they’re using. I always turn it around and say, “Well, how many activities can you reasonably expect the people in the field to report their time to,” because that’s really where it all starts.

 

John Meibers:

A little bit easier, I could take a purchase order and fairly easily divide it between multiple tasks, but the real art is, okay, I’m going to get labor reported from the field, and how many different buckets can I expect them to accurately report that time in? That’s how many activities I should have. If I’ve got 20 activities and they’re only going to put all the time into two activities, now I don’t have good job cost reporting. I got the budget spread across 20 activities, and I got all the actual time coming into two or three of those 20.

 

Mike Merrill:

Yeah. I think they call that pencil whipping, don’t they?

 

John Meibers:

Yes.

 

Mike Merrill:

Well, I got some more budget here. We’ll just dump it over there.

 

John Meibers:

We’ll just dump it over there, and we’ll move it around. That’s not a good way to do it. I know, from an estimator’s point of view, yes, it may be more detail. But just because it’s detailed out to that level doesn’t mean we can’t consolidate that per job cost. Because if we can’t reasonably distinguish between an hour of labor here versus there, I need to have one category that covers both of those hours.

 

Mike Merrill:

Yeah. Well, and once you’ve collected that data, now you need to actually take action based on that feedback and make changes, right, and improvements, hopefully.

 

John Meibers:

Right. It’s all about being able to use that data and have productivity rates, and all that goes into real-time job cost reporting and accurate reporting from the field. The reports that come back out are only as good as the data that went in. If it’s not accurate going in, we’re going to have bad information coming back out.

 

Mike Merrill:

Yeah. I had a guest on the podcast recently, and they talked about reporting every half-day, so it was more than daily. That was interesting. I’d never heard that before, but it makes a lot of sense to me. I want to know what happened this morning sometime by early afternoon.

 

John Meibers:

I mean, at the lunch break, you’re more likely to remember what you did in the morning than you are at the end of the day, so, no, I think that’s a real good point.

 

Mike Merrill:

Yeah. Great. So we’ve talked quite a bit about labor, WIP. What about equipment and tools, things like that, assets? What about not tracking what those costs are more accurately?

 

John Meibers:

Yeah. That’s once again a big problem that we see in the construction industry, is I’m not accurately allocating for the use, number one, of our own equipment. You’re probably pretty good at charging … If you have to go out and rent a piece of equipment, you’re probably going to allocate that to the job you rented it for. But if you own equipment, either I’ve talked to people and they just think, “Well, I own it, so there’s no cost associated with it.” I’m like, “Well, that’s certainly wrong.” But, more importantly, if I want to get an accurate job cost report, if I’m an estimator taking off a job, I just know we got to use a backhoe on this job for X number of days. I don’t know if we’re going to rent it or if we’re going to use one that we own.

 

John Meibers:

But I need to be able to then report cost against that, so if I have two jobs going on and I have one backhoe and they both need a backhoe, is it fair that the one job that we rented one before gets hit with the cost and the one that we used our own gets no cost because we don’t allocate for the use of our own equipment? So I think we really need to treat that equipment as a cost, whether we own it or we’re renting it. It also then helps us evaluate the value of the equipment we own.

 

John Meibers:

If we’re charging that equipment out, basically treating it as an internal rental center where we’re renting our own equipment to ourself to use on this job, now I not only have accurate job cost information, but I’ve got information that says, “Is it worth owning this piece of equipment based on how many hours we used it or days we used it throughout the year?” It may be better off that we’re going to go ahead and retire that or sell that and only rent it for the few number of times we use it. So it allows people to get a good handle on managing the equipment they own and when it’s time to retire it, when it’s time to sell it off, or whatever the case may be, in addition to getting an accurate job cost report.

 

Mike Merrill:

Yeah. When equipment’s unutilized, you got an opportunity for profit sitting there earning you nothing while it’s depreciating. When I was a general contractor, I remember many times someone would say, “Well, can’t you just move that pile of dirt real quick and spread that around a little bit,” or, “Hey, can you just dig this quick trench for my cable line. It doesn’t need to be that deep.” But I’m consuming fuel, I’ve got somebody operating it, and now I’m liable if I hit a gas line or something else. I just have all kinds of risks and costs, and it’s important that, even if we do own that equipment, like you say, we need to attribute those costs appropriately in order to really know where we’re coming in.

 

John Meibers:

Yeah, because a lot of times, you see a contractor and maybe the type of work they do changes over time. At the time, maybe they were using this more frequently than they are today, and they just assume, “Well, it’s sitting here. It’s in the yard. We have it in case we need it.” But, come to find out, we very rarely use it. Aren’t we better off then selling that? Because it does cost you money for it to sit there in the yard, and it’s not always the best decision. I think we want to try to encourage our contractors to make intelligent decisions on the equipment. Then the job cost side of it, certainly, I want to be able to look at a job and it … It’s really irrelevant whether I used a piece of equipment we own or we rent it. That job should have the appropriate equipment cost allocated to it.

 

Mike Merrill:

Well, and often, when you’ve got extra in one place, you’re short somewhere else, so sell that equipment or rent it out and invest in something else that you’re short on or another employee. There’s ways to utilize those resources more effectively than letting anything sit.

 

John Meibers:

Absolutely.

 

Mike Merrill:

All right. So one of the other points in this great report, it asks or talks about not tracking unposted payroll, and I absolutely love that thought. What can you tell us about what that means?

 

John Meibers:

Yeah. A lot of times, people talk about real-time job cost report but not really knowing what that means. Well, if you really want real-time job cost report, I want to look at the job report at the end of today and I want to know where I stand on the labor because that labor today may not be paid for seven, eight, nine, 10 days. If we start on a Monday and our pay week runs through Sunday and then we’re going to maybe pay on the following Wednesday, well, you’re 10 days behind getting that job cost report to reflect today’s labor. If you’re tracking units, unit productivity, once again, I don’t want to be 10 days behind and know that, for the last 10 days, we’ve been underproducing based on our budget. So the unposted time needs to come in from the field on a daily basis so that I can track that. That’s a committed cost. Unposted labor is no different than the committed cost we were talking about earlier for POs and subcontracts.

 

John Meibers:

The other thing, if you put time in daily, it’s going to be … We talked about half-days just a few minutes ago. But even if it’s only daily, it’s much more accurate if we do it daily than if we wait until the first of next week to report the time for this week. I go back to my history at the top of the show here and go back to my early days in construction, it was on Monday. Monday, everybody was faxing or calling their time for the week before. I’m looking, I’m like, “Well, you’re just making this up as you go. You don’t really know what your crew did a week ago.” We’d have a running bet going on that on the week of a holiday, they’re now reporting a week later, how many people would actually put that they worked on a holiday because they’re going through the motions. They were saying, “Oh, last Monday, I did this.” No, you didn’t. You didn’t even work last Monday.

 

John Meibers:

So the accuracy, number one, and then, I think, certainly, getting that real-time, on-the-job cost report. Because if you’re a labor-intensive contractor, if I’ve got a crew of … I don’t care if it’s a crew of two or five or 10 or 20, and, certainly, the bigger the crew, the more labor dollars. But if I’ve got a crew of 20 people out on the job site today, I don’t want to wait 10 days to know how we’re doing as far as my cost goes. I want to see those numbers today.

 

Mike Merrill:

Yeah. So you’re talking about shortening up that delay of reporting those hours and planning on that expense ahead of time instead of just in 10 days when I have payroll due.

 

John Meibers:

It wasn’t practical years ago. It wasn’t practical when we had to call it in or fax it in or physically bring the time sheet into the office. But with the tools out there today like WorkMax, it’s very easy to report time on a daily basis. So I think that’s one of the great things with technology. It has really made that easy to report that time real-time.

 

Mike Merrill:

Yeah, you can actually enjoy live field data live as it happens, which is a far cry from weekly or monthly reporting, of course. We talked about hours, but there’s also burden, there’s insurance, there’s work comp, liability, other costs. So we not only need to worry about those hours spent but the burden rate for all of those hours, even if they’re not posted yet. There are some gotchas in there if you’re not really watching all of the numbers closely when you’re trying to estimate and know really where you’re at on your WIP.

 

John Meibers:

Yeah, because you really need to see that fully-burdened cost. Certainly, actual once it’s posted, but even when it’s pending, I need to know. I always recommend you put an estimated burden rate on it that covers both the burden and the fringes, the total, your fully-burdened rate once … And ComputerEase, once we post it, then it’s going to show labor, burden, fringes, and give you a fully-burdened rate, which is the combination of those three, and it’ll certainly give you the breakdown because, certainly, a $20 an hour pay rate costs a heck of a lot more than $20 an hour.

 

Mike Merrill:

Yeah. One other point to bring up is maybe overtime or premium pay, double time, right? That could grow exponentially if you’re not keeping a finger on that through the week.

 

John Meibers:

Yeah. I mean, you think of some of the cost of … Once again, you talked about the uniqueness of construction. Everybody has worker’s comp rates, but nobody has worker’s comp rates sometimes that are as high in the construction industry, so that’s a big piece of the … The worker’s comp for you or me sitting in an office, Mike, is nothing, is really immaterial compared to the worker’s comp rate for somebody that’s out in a ditch or up about 30 stories high on a building. So that’s a big part of that labor cost, is the burden. The fringe benefits, whether you’re a union contractor and the fringes you’re providing, whether you’re a non-union contractor doing prevailing wage work where you’ve got a substantial amount of fringe benefits that you’re required to provide, those things all add up in a hurry. So that $20 quickly becomes significantly more than $20, sometimes double, two and a half, three times the $20, in some cases, you could be spending an hour.

 

Mike Merrill:

Yeah. Yeah, agreed completely. You talked a lot about the WIP report stuff. It sounds like that’s definitely one of the areas you really like to preach and harp on a little bit because it’s probably a gap for a lot of contractors. What are some things that companies can do to maintain a more proper WIP report?

 

John Meibers:

I always tell people you want to start … If you’re one of those that is doing it not at all or only doing it when asked, think about starting small. You don’t necessarily have to, day one, “Okay, we’re going to change from that. We’re going to start doing it weekly.” That’s probably a recipe for disaster. Maybe you’re not going to do it on every job to start. Maybe find the key stakeholders within the organization and get the buy-in from the project manager, who’s probably going to be the one sitting down with the finance team to report the information. Start and put a plan in place. Typically, you’re going to get to where you’re going to have … Most companies have weekly production meetings and reviewing the status of all the jobs. You incorporate this into that. You’re going to review the WIP. You’re going to review where we’re at. You’re going to review the projected cost remaining. Quickly, you start to build that into your process, but it is really a culture change. You really got to change the whole organization and the way they think about all these things.

 

John Meibers:

We’re all working together. I’d go back to my early days in construction. It was like, okay, accounting didn’t understand why the project management team didn’t want to work with them to give them this information, and the project management team thought, “Well, you’re just bugging me for this information.” But, no, really, we’re on the same team here, and we’re working to the same common goal, which is we need this information to effectively run our business and make sure we’re as profitable as we can be, and it’s the best opportunity we have to see something that’s going to happen before it happens. In there, if we’re doing it right, we’re able to spot things that are trending the wrong direction in time to fix it. We can always look after the job’s over and look back and say, “Well, we should’ve done this differently,” or, “Maybe we could’ve done this differently.” But wouldn’t you like to have the opportunity to say, “Well, hey, if we make a change now, we can still impact the final outcome on this job?”

 

Mike Merrill:

Yeah, if you wait, it’s too late, right?

 

John Meibers:

Yeah. The information after the fact is good. It’s good information, and maybe we’ll use it on the next job to better our process. To me, job costing, the whole WIP process, to me, it’s like not doing it would be like going to a sporting event and not knowing the score, not knowing what to do if I’m managing the game. Am I ahead? Am I behind? Do I need to make end game decisions to help affect the outcome? To me, if you’re doing the WIP reporting and have good job cost reports, you can make those real-time, in-game decisions to ensure a profitable outcome.

 

Mike Merrill:

Yeah, that’s great. I like that analogy. So you kind of touched on something there that I wanted to ask you a little bit more about. You talked about the cultural change and maybe some approaches you can take. Do you have any other tips or ideas on helping invoke change within an organization from a-

 

John Meibers:

Yeah. I think the big thing to me, Mike, is I want to make sure that everybody understands we’re on the same team. I’ve seen it too many times where it’s … I guess I mentioned, accounting and project management, it seems like they’re in two different organizations and they think it’s one against the other. I always want to bring everybody to the table. I want the accounting team sitting in on those production meetings because they’ve got a big say in the numbers. They’re the ones that are responsible for making sure we have accurate numbers that we can look at. I want them to be a part of that and not, “Okay, get off my back and let me go do my thing.” Too many times, you see that, and I think you got to start with the top-down approach and change the culture of the company and make sure, from the ownership on down, that we’re all on the same page. It’s not an us versus them mentality.

 

John Meibers:

You still see it today a lot of times. I’ll go in, and it’s like, “Oh, those accounting people,” or, “Oh, those project management people.” It’s like, “No, no, no, wait a minute. We’re all on the same team here. We’re all after the same common goal.” I think you really got to push that down from the top and make sure everybody understands that we all have a different role in the organization, but we all have an important role. One doesn’t work without the other, and it’s not that one is more important than the other, that we all have to work together.

 

Mike Merrill:

Yeah, I love that. I think it is important, from the office perspective, too, to remind them, obviously, the field, they’re out there in the elements, the weather, and doing things that are difficult in a different way. Most office people wouldn’t necessarily prefer to be out in that trench.

 

John Meibers:

No.

 

Mike Merrill:

Maybe some of the trench guys wish they could be in the office. I don’t know. But understanding and having empathy for your coworkers is-

 

John Meibers:

Yeah, I think understanding that they’re very good at what they do in the field and the office is very good at what they do with the numbers and putting everything together. Get everybody on the same team. I think that’s really important. I see more of that today than maybe in the past. Maybe it was a little old-school mentality years ago, where it was, “We’re the most important part of it, and you’re just insignificant.” Now, I think it’s not quite the same today. I’m encouraged to see that we got more people working on the same team and towards that common goal.

 

Mike Merrill:

Yeah, I would agree. I think technology has helped advance that cause, too, and connect the field and the office in a more meaningful way. So what one does directly impacts the other, and they both got visibility as those things happen then.

 

John Meibers:

I would agree. I think that technology’s a really good point, Mike, because you think about back … I go back to my early days in construction. It was like, “Oh, man, you’re not calling your time in on time, and you’re really making my life difficult because I got to get payroll out the door by tomorrow, and you are making my life difficult because you’re not calling the time and you’re not faxing it in. I got to chase you down.” Well, now, with technology today, as a site superintendent, I’m sending time in every day, so it’s no longer a problem. I don’t have to rekey it. I just have to prove it when it comes into the system. So I do agree, especially when it comes to time-keeping, technology is really taking down some of the walls between the two because you’re no longer a pain to me because you’re not getting the time in and not giving me time to rekey it because I no longer have to rekey it. It’s coming in from the field, and it’s coming in real time.

 

Mike Merrill:

Well, yeah, and in the field, it used to be, “Hey, I’m finishing concrete in the dark here. You think I’ve got time for stupid paperwork?” Now, if they can hit a pin number and clock out on a mobile device and be done in five seconds, then there’s really no burden.

 

John Meibers:

No. It’s really completely changed the amount of burden we’re putting on the field staff to turn their time in when it’s a simple click of a button, like you said, type of pin-in or clock-out. Or even if you’re not using the clock-in, clock-out, even if you’re just hitting and putting in eight hours, but the list of the jobs and the activity codes are all there and you’re punching in the hours and hitting submit and you’re done, that’s far less burdensome than what it used to be in the past when you had to figure out a way to get the paper time sheets filled out and faxed in or called in and I’m chasing you down from the accounting office to, “Hey, I don’t have the time,” and you’re thinking, “Man, I’m out here busting my butt and you’re bugging me about time.” Well, now we’re able to streamline that process significantly.

 

Mike Merrill:

Yeah. I love that you went down that path a little bit. Speaking with the labor costs, we’re talking a lot about payroll and getting payroll in, but what about the effect on more timely billing?

 

John Meibers:

Yeah. Not only the payroll comes in, if I’m doing time and material billing, that’s going to be more timely. If I’m doing service work, most contractors have service departments, I can turn the bills around the same day. I got the service bills going back out the day that the work is done, and I still talk to people that don’t have a good system and they’re, “Well, we’re 25, 30 days behind in getting our service bills out.” I’m like, “Wow, that’s horrible for cashflow, number one, but just the experience for the customer, that you came out and did service work and I don’t even see a bill for 30 days, is just not something we want to have today.” So, yeah, really allows you to get real-time billing out the door, and, once again, because you have real-time information to work with.

 

Mike Merrill:

Yeah. The other thing is it’s a great visibility tool and a reminder on a lot of companies in the past that didn’t have these tools, they would forget to bill something, and now it’s been months, and when it gets brought to their attention and they submit a bill, they say, “Hey, that job’s closed out. I’m sorry.” Now, you’ve got an argument, a conflict and a dispute.

 

John Meibers:

Yeah, it’s really hard to go back after that job’s over, Mike, you’re right, really hard to go back two months after it’s over and say, “I forgot to bill you.” That’s a bad experience. Even if you manage to get paid, you’ve now created a bad experience for your customer and maybe lessened the chance of them being a customer in the future.

 

Mike Merrill:

Yeah. We hear that not only with the labor side but equipment and materials, other things, too, that a lot of things end up going unbilled because the documentation process has lagged or delayed or depends too much on a human doing something after the fact that they just never quite get back around until it’s too late. I guess, just to kind of wrap up this part of it, overall, what would you say are maybe some best practices for implementing an in-depth job cost accounting system like ComputerEase?

 

John Meibers:

Yeah, so I think you want to first evaluate the processes you have in place today. How many things are we doing outside of our current job cost accounting system? A lot of times, typically, you may have disconnected systems. You got Excel spreadsheets tracking certain things. You got a system maybe you’re paying your bills with. Taking inventory of those systems and processes, and work with a technology provider that’s willing to go through that and understand your process. That’s the most important thing to me, is I want to understand what you do today if you’re a contractor. Only then can I determine whether we might have a solution for you. But I really need to start with understanding what you do today and then making sure I understand your needs and then explain to you what’s available.

 

John Meibers:

You really need to work with somebody that’s willing to take that time to go through that with you and understand where you’re at, what your pains are, and where you need to be, and then help you come up with a process to do that. Then understand that it’s not an overnight solution. You’re not going to magically wake up tomorrow and you’ve implemented all these things you’ve never done before. I always tell people that the first thing we’re going to do is we’re going to get you out of what you’re doing today and we’re going to move that over to our solution. Then we’re going to start to layer in all the other things that you weren’t doing before because to try to do it all at once sometimes can be disastrous. So first replace what you’re doing in a system that has more power and more flexibility and then start to layer in the other things that you’re missing today.

 

Mike Merrill:

Yeah, I love that. I’m picturing a doctor’s visit or something and a diagnosis, really, before you can prescribe what’s required to fix those ailments in their business.

 

John Meibers:

Yep. And if there’s more than one thing wrong, they’re not going to fix them all at once. They’re going to say, “Well, we’re going to do this first. Then we’re going to do this, and then we’re going to do this.” It’s the same way here. We’re going to evaluate where you’re at, and then we’re going to put together a game plan that ultimately will get to the ultimate goal, which is implementing all the new things.

 

Mike Merrill:

Yeah. If there’s something really unique or specialized, then, yeah, you may have to go to a specialist for a certain thing. But baby steps first and build on that foundation, and you can bring up the health of the business, just like you could somebody who’s having personal ailments.

 

John Meibers:

Absolutely.

 

Mike Merrill:

So just have a few more questions here at the end more on a personal level. What are some skills or what’s a skill that you feel like you’ve mastered in your business life that you could share with us?

 

John Meibers:

I think, for me, it’s the ability to listen to the customer or potential customer. I’m not here to tell you what we can do. I try to train my team this way. We’re here to listen to what their needs are and be able to understand that. You listen a lot. You ask questions. Because, a lot of times, somebody will ask me a question, well, I don’t have a canned response. I’m listening to the question. A lot of times, I have to answer the question with a question because I really need to understand what it is you’re trying to do and not just take it at face value based on what you said.

 

John Meibers:

I got to dig a little bit deeper, and you dig deeper by listening to the contractor tell their story, how they got to where they are, what they’re doing, where they want to go, what type of work they do, what their current processes are. I think that’s one of the things that I always take great pride in, is I think I listen to that and am able to piece that all together then and come back with a proposed plan that makes a lot of sense.

 

Mike Merrill:

So you try and listen to understand and not to respond, is that what I’m hearing?

 

John Meibers:

Correct, yes. It’s important to understand, and you can’t just listen, “Oh, here’s a response.” No, I really want to understand what you’re saying. I want to understand your business so that I can help you effectively.

 

Mike Merrill:

Love it. So if you could go back, rewind the clock of time and go back to a day and time where maybe you made a mistake earlier in your career, is there something that you learned and would do differently today that maybe the listeners could take some advice from and maybe avoid a pothole or two?

 

John Meibers:

Yeah. I think probably the first one is early on I learned that I didn’t listen. I didn’t listen. I was responding, and I wasn’t listening. Maybe early on in my career, I don’t know that I fully understood the value of getting everybody’s buy-in and getting everybody on the same team. I talked about how important that is, but I can remember early on it was like I could’ve been on either side of that. I could’ve been on the project management side that was those accounting people were a pain, or I could’ve been on the accounting side and those project management people were a pain. I wish I would’ve understood a little bit earlier on the value of these things. But it’s never too late. You learn as you go. I learn something every day. I think the day I think I know it all will be the day it’s time to stop then because I don’t think that’s ever going to happen.

 

John Meibers:

But I think it’s important that you realize the value of teamwork, and it really is. To get to the common goal, we all have to be working on the same team. Even here at Deltek + ComputerEase, whether you’re in sales, you’re in implementation, you’re in customer care, you’re in admin, we’re all working towards the same common goal, which is to make sure all of our clients are taken care of. I stress that to the team all the time, is the importance of teamwork and understanding and respecting what everybody does.

 

Mike Merrill:

I love that. That’s great. Good for you. Last question, last thought. What would you prefer that the listeners walk away with after hearing our conversation today? If there’s one main point you want to echo again, what would that be?

 

John Meibers:

Yeah, so I think I’ll go back to probably what I said at the top of the show, is make sure you’re working with people that understand your business and are willing to listen to you, and that’s from your technology providers to your CPAs to your insurance agents to your bankers. If you’re the only contractor that they’re working with, that’s probably not a good idea, or whatever business. It doesn’t even have to be construction. I use construction because that’s the business that I service. But work with people on the outside, trusted advisors that understand your business, because everybody’s business is unique.

 

Mike Merrill:

Love it. That’s great. Well, I very much enjoyed the conversation today. Appreciate you joining us today, John, and look forward to continuing our longstanding relationship into the future.

 

John Meibers:

Absolutely, Mike. I appreciate you having me. Yeah, always great, and love working with you and your entire team, so look forward to doing that well into the future.

 

Mike Merrill:

Thank you, and thank you to listeners for joining us today on the Mobile Workforce Podcast sponsored by AboutTime Technologies and WorkMax. If you enjoyed the conversation that John and I had today, please give us a follow on Instagram, @workmax_, or on LinkedIn, @workmax. Also, give us a rating and a review on your favorite podcast platform. Those five-star reviews and ratings help us to bring these valuable conversations to other teams like yours in hopes to help them improve not only their business but their life.

Construction Succession Planning and Business Exits

Construction Succession Planning and Business Exits

Being prepared for the unexpected is part of success on the job site. And yet most business owners haven’t thought about what it takes to eventually sell or pass down their own business. According to Dan Murray, the Coach at Your Restoration Coach, that’s a big mistake.

In this episode of the Mobile Workforce Podcast, Dan shares the serious repercussions that stem from not planning a business exit in advance. He dives into the financial implications, including how most construction business owners have a big portion of their retirement savings locked into their business. He also discusses timing and explains why planning should begin years in advance. Finally, Dan breaks down action listeners can take now, including actionable steps that make a business valuable to potential purchasers.

 

Key Takeaways:

  1. Take time to determine a business’s worth. A common saying is sellers should get five times EBITDA, which gives a baseline of predictable future profits. But what a business is worth is based on its consistency with the price decreasing if it has a lot of variances from one year to the next or big swings back and forth. The more predictable and solid a business’ financial performance is; the more confident a buyer will be – and more willing to pay more.
  2. A sale doesn’t have to interfere with daily business. An owner’s goal should be to work themself out of a job. That’s because prospective buyers are wary of taking on companies that depend on one person to run everything – or risk things falling apart. The most successful businesses are the ones that run fairly autonomously from the owner in day-to-day business matters, which increases the likelihood of a smooth transition when a sale is made.  
  3. Selling a business comes at a cost. When business owners focus on the final dollar amount of the sale, they’re not seeing the full picture. There are a number of costs involved, including fees to brokers, lawyers, and accountants. On top of that, it’s important to consider how much will be taxed on their earnings. As a general rule, a third of what the business sells for is what the owner keeps in their pocket. 

 

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Episode Transcript:

Mike Merrill:

Hello and welcome to the Mobile Workforce podcast. I’m your host, Mike Merrill and we are sitting down today with Dan Murray. He’s a coach and a consultant with Your Restoration Coach. Dan has worked in the disaster and restoration sector for about 25 years and spent the last 12 years as a consultant serving contractors across Canada and the United States. So, today he’s going to share a little bit about the process of transitioning your business and eventually setting it to sell maybe to the next generation or to move on to retirement. So, hello, Dan and thank you so much for joining us today.

Dan Murray:

Hi Mike, is awesome to be invited in to participate in this podcast and it’s great to reconnect again. We haven’t seen each other in quite a few years and it’s great to see what you’ve been doing to help different contractors and other service providers. And kind of I’ve been watching your progress as you have been moving along and what you’ve developed and offered and it’s just great to connect again.

Mike Merrill:

Great. Well, I’m looking forward to this too. So, thank you again, Dan. So, before we kind of get going into the conversation, can you kind of share with our audience a bit about how you got into consulting from the restoration industry?

Dan Murray:

Well, that could be a long story so I’ll try to keep it as brief as possible. But I did get into the service business and doing first in the early 1980s when the earth was young and dinosaurs roamed the earth kind of thing. And I first got into it as a carpet cleaner and a water damage contractor. And we did quite well, we operated that way for a couple of years. And then I had the grandiose vision of thinking that well why don’t we start off with janitorial services? 

So, we started the janitorial company and thinking that quite often doing water damages and starting to do a little bit of firework back in those days, we would have lots of peaks and valleys in workload so we did is that I thought that we could have our janitorial staff do fire work in the daytime and we help each other that way but it just didn’t work. I had two really good days in the janitorial business. You probably can guess what those two days are Mike.

Mike Merrill:

Yeah, the day started and the day you hung it up?

Dan Murray:

There you go, absolutely. What we found was that the definition of clean is completely different when you’re doing a fire damage job versus doing a janitorial job. In the old janitorial expression used to be ash trash and dash, you just give the top of the desk a quick clean or give the traffic lane of a carpet a quick clean and it’s clean. Well, you have a smoke damage, it’s far from that you have to do deep cleaning and clean every surface, clean furniture up and down and everywhere else.

Anyway, three years later, we sold the janitorial, we start really focusing on doing full service restoration. And from there, our business just took off and we did build it from basically scratch, from nothing to a multimillion-dollar business. Then in the ’90s I started doing catastrophe losses. I was involved with a franchise network and I was on their task force to develop a large loss division which I headed up in Canada for several years. And I also traveled to the US doing large losses. And a large loss in those days was considered anything over $250,000 single sight loss and the largest loss I was on we did $2.3 million in three weeks. The largest single loss that I did on my own was a little over a million dollars, cleaning and painting and we had a 45-day timeframe to do it and we finished it in 43 days. 

So, then I had some good successes there for a few years and then the franchisor that I was with asked me to come on board corporately and I ran the Canadian division for them for four years. Had about 70 franchises across Canada and that’s where my passion for training and coaching and advising business owners really started to take foot and then I switched over to buying into a company in my area. And I did that for six years as a franchisor and operated a couple of the franchises and we build it up to 15 offices and then had a really, really bad parting of ways with our business partner and I took a few months off. And then in 2009, we started full-time consulting and incorporated a company to do this in 2010 and we haven’t looked back.

Mike Merrill:

Oh, good for you. A lot of history and bumps and bruises I’m sure also.

Dan Murray:

Yeah, that’s what I always tell my clients is that I do have structure, of course. I have programs that I’d like to take people through but a lot of what I do is just helping people through the life lessons that I’ve learned. I’ve made every mistake you can make, I think. I don’t know, I still make the odd one. But my goal is to be that little on someone’s shoulder say, “No, well, you could do it that way but you may want to think of this and this and this.” Part of being a coach is that you help people make the decisions whereas as a consultant you do things for people. And lots of times I’m doing more advising than coaching and so it’s really pretty awesome to get paid to do something that you love for an industry that you really have spent your whole career in.

Mike Merrill:

Yeah, good for you. And I know you’re very respected and revered within the industry and the space. So, it’s been harder, of course.

Dan Murray:

Yeah. Well, it’s a great industry. What’s been interesting is when we started in the early ’80s, it was just basically just a baby. We used to go to the local hardware store and buy the little dehumidifiers and buy those axial fans and the square fans. There’s no equipment manufacturers out there today, there was no testing procedures. And it’s just really been a fun ride to see it from where it is now to see where it came from. And it’s really almost a commodity business now in that there are so many disaster restoration firms. 

We’re all doing things based on the same training to the IICRC organization. There’s only maybe half a dozen equipment manufacturers, there’s only one remote timekeeping system we should be using but we all know who it is. And there’s one main software, there’s a couple other ones on the side but for doing estimates and everything on, so estimating. But it certainly has its challenges now from what it used to be and it’s a much larger business than we ever thought it could be.

Mike Merrill:

Yeah, and I think to your point, it’s interesting because kind of like the topic that we’re talking about today, lots of companies have to look into the future and kind of decide what that transition might look like when they either retire or sell a business. What do you think in either of those situations that companies can do today to prepare themselves for that eventual outcome that they have as a goal?

Dan Murray:

Well, you said a key thing, Mike, is that they need to prepare because I’ve seen some really sad situations where a business owner hasn’t. And it is not nice to get a phone call from the widow saying that had a heart attack or to get a call from the owner and I just had a meeting with my doctor and you can fill in the blanks. Those are not nice calls to get and at that point is too late to maximize the value for the business. It’s just basically how do I get out of it? It’s a fire sale type of deal, right? And it’s sad, it really is sad because most… 

And I think I could say this, okay, most business owners have the biggest chunk of their retirement in their business. Real estate certainly is partly a big point, especially if you own your own building that you’re operating out of. But as far as your net worth, what you have for savings to retire, it is what you’re thinking you’re going to get out of your business when you sell. And if you start thinking about that three months before you want to sell or have to sell, is too late. So, you have to prepare financially and get your business ready. I say a minimum of two years but three to five years is the best. 

And so this is where I transition my business in the services that I do in consulting and advising and coaching is to help people get ready for this transition. This has been the last six years, it’s been my main focus in business. I’m not a business broker, I don’t do business brokerage services, I have worked with other business brokers or with business brokers, I don’t do it. But what I do is I help with the getting ready to get it ready for sale. 

But quite often, the sale never happens. And the reason is that the same principles that make a business valuable to a potential purchaser, are the same standards in a business that make it easier to run more profitable, less stressful for the owner and help building a team. So, several my clients say, “Well, why would I sell when it’s starting to make this kind of money and it’s running so smoothly? And now I can enjoy and have a regular work schedule and enjoy the benefits and let it accrue.”

Mike Merrill:

Yeah, that’s the double-edged sword. I think of… I’m in business and have been for most of my adult life as a contractor originally and then helped start this business back in 2003. And so 95% of my life has been full throttle, pedal to the metal, I’m not thinking about, oh, eventually, I’ve got to use some brakes or maybe the engine brake, if nothing else and figure out how to… 

I guess if an analogy might be, get off the freeway to an off-ramp because at some point as much as I love this and being a business is fun, it’s also scary and difficult and challenging. And like you said, the last thing you want is to leave your wife with a mass because your health fails or you get too stressed. And so those things are real challenges. And that’s great that there’s individuals like you and companies out there that are helping educate and coach.

Dan Murray:

Yeah, you’re absolutely right. And you made a good point there, Mike, is that you’re doing something that you love. And most entrepreneurs I would hope, are doing what they love. But what happens and I’m guilty it happened to me, is that you get so enthralled with your business and it’s all encompassing that you forget about your personal life, you forget about developing hobbies. And one of the things that is really come about to me in the last five or six years of working with so many entrepreneurs and contractors mainly, is that they have to prepare themselves personally for the exit.

And I know what happened to me when I sold my a couple of my businesses back and then in the ’90s, is that you need to have a vision for what you want to do personally after the sale, right? So, we have an exercise that we go through with clients or potential clients. What do you want to do? What do you want to do when you grow up? What do you want to do when you get free from this business? Why do you want to exit? Those are questions and I don’t always need to know the answers that they come up with but I’ll ask them the question is and go ask them to talk it with their spouse or with themselves, talk them with their family. Because I know what happened to me when especially the first business I sold because I work night and day in it for five years. And I sold it at that time, it seemed like more money than I would ever had in my life. But nowadays it’s a pretty small sale.

One day I was walking down Main Street and hey there’s Dan who owns this business and oh Dan, I’m getting calls to come to this luncheon, the Chamber of Commerce and this and that and people networking, dropping by my office. Next thing you know, I’m just setting home, I took three months off when I was in my ’30s and kind of revamped where I was going before I started my next business. And for those three months, I started realizing, I’m not getting the calls, I’m not getting the invites, I don’t have an office to go to. My self worth was tied up in my business. So, I’m always cautioning entrepreneurs to be careful because you have to really work at developing and keeping a life outside that is tied into your family. And so yeah.

Mike Merrill:

So, it sounds like if I were to kind of list off some checkboxes or have a list of items that somebody should be aware of or be looking at to prepare, sounds like having some personal goals and kind of a transition plans to next steps established before you sell your business. Are there some other things that would make that checklist that a company should be thinking about?

Dan Murray:

For the company or for personal, Mike? I can go either way here.

Mike Merrill:

I mean, maybe a little bit of both. I mean, what are some of the more important things in both of those areas? You identified maybe having some personal goals but what else would be on that list?

Dan Murray:

Well, one that kind of crosses both, personal and business is what’s the value? What do you need after the business to retire? What is the business worth? Most people don’t realize the terms make a big deal on a transaction, right? People say, “Well, let’s just use a simple number, that’s it.” Or, “Well, my business is worth a million dollars.” Well, how is that paid? If the purchasers aren’t going to pay you 50% on upfront and you got to do an earn out over, say, five years, if you hit all these benchmarks, you may or may not get the other or want to get a portion of it.

So, I say in those deals, you got to be happy with the initial amount. If you can live off that, then the rest is a bonus. That’s where you… So, the terms is a big thing and sometimes the more aggressive you are with the terms, the shorter the… How much you paid up front and in the shorter any term is usually it means that your amount of money that you’re going to get shrinks a little bit, right? So, but really what is your bottom line is what you got to be wearing because…

And when you put your hat on from being the purchaser which and I’ve helped a couple of companies do acquisitions, tuck-in type acquisitions to expand in their local areas, what’s a financial buyer buying? You got to put your hat on and just think what the other guys how they’re thinking, right? And really what they’re buying is your future profits but even more important of that, how reliable those future profit estimates are. That’s really what you’re buying. And that’s why when you see people say, “Well, get five times EBITDA, I get six times or eight times.” Every industry is different. But really what you’re doing is that you’re buying predictable future profits and is discounted if it has a lot of variances up and big swings back and forth. It’s got to be fairly predictable.

Mike Merrill:

Yeah, that’s a great point. Also, I know, we’ve worked with consultants too in our business and one phrase that has stuck in my mind is, one consultant told us good companies sell, great companies get bought. And so making yourself attractive where people are pursuing you because of predictable profits, branding, market recognition, future potential, all those things, is an important factor aside from just the EBITDA and other things that are maybe mathematical equations. There are other factors that can lead to that value.

Dan Murray:

Absolutely. I’m going to steal that phrase. I like that one, Mike. What I have used in the past is you’re either going to get pushed out of the business or pulled out of the business. Decide which way you want to go. Because being pushed out of the business isn’t fun and not very profitable for the most part, right? But you said it much more eloquently than I did. So, I’m going to steal that line and we’re going to-

Mike Merrill:

I had to steal it from someone else to give it to you, so no problem. 

Dan Murray:

Fair enough. So, but another point you said is you have to think about… I think most of the audience listening to this are probably in the service-based business, right? Whether it could be-

Mike Merrill:

Yeah, the trade so to speak, yeah.

Dan Murray:

Yeah. So, what business are we really in? And you’ll hear people say, “Well, you’re in the business of creating and keeping customers?” Well, I always like to say, we’re in the people business. So, when it comes time to start thinking about selling, you have to think about your team. And in all my correspondence and all my stuff that I’ve written over the years, whenever I mentioned team in a business, I always use a capital T because I think they’re so important that your team members need to be recognized. And so how will they be treated in a transition meant a lot to me when I did some of my deals in the past.

I’ve talked to other business owners where they weren’t all that concerned. They were looking after themselves which is fine. I can’t judge there’s no right or wrong, there’s no absolute decisions, it’s whatever is right for you and your personality but I do think that your people need to be treated right, you need to… And there’s different ways that other people involve or not involve their team members in a potential discussions on a sale. Some people will make it very transparent, others will keep it very close to the chest. 

When I sold my first business, I don’t think anyone knew until the day I announced it. But since then, I’ve different vibe is that sometimes being transparent is good. Whether you transition your business to an employee team who’s going to buy you out that’s an option that can work really well or have them minority partner so that you can have the freedom to do what you want because they have a vested interest is another option. So, again, there’s so many ways you can go and there’s so many different paths. Is according to your team that you have, how skilled they are, how passionate they are about the business and where you are in your life and in your needs.

Mike Merrill:

I’ve heard said many times by other guests on the podcast, one of the important things in making sure that your business is scalable is making sure you have layers so that when you do exit the business, the business can still function for the most part without you And I think there’s more value to a potential purchaser if that can happen. 

Dan Murray:

Yeah, absolutely. The more… Sorry. The better a business can run without the owner, the more profitable it will be to the owner on a sale, you’re absolutely right. If the listeners take anything from this podcast today it should be that, if they can reach a point where they work themselves out of a job in their own business, they’re doing a good job. And from a personal perspective, there is nothing more satisfying, it was at least to me in my career, was in seeing people grow and develop as leaders and managers in my company and see them come to a point where they could take over responsibilities and do things that they never thought they could. That is very self-rewarding as a manager as you help other people develop.

Mike Merrill:

Well, and I think for many of us that are entrepreneurs, that’s one of the most challenging things is handing those reins over. I mean, this is your baby and so to leave your baby in somebody else’s arms for any amount of time is a bit of a hurdle and you have to figure out how to get over that really. Otherwise, you’re going to be too connected and it won’t end well, probably.

Dan Murray:

Yeah, one of the eight drivers that we always work on with our clients and I told you we have a bit of a structure that we work on is what we call the hub-and-spoke model and I think I’ve heard it on your podcast before listening to other guests. And really, the more the owner is totally in control and that all the major customer decision sales and market decisions, supplier decisions, sub-trade decisions, all those are made by the owner, he or she is the hub and it’s a very stressful and tough position to be in. 

And when I started many years ago, when I had a bit of hair, working my way out of that position, one of the things… I may be getting ahead of myself a little bit on what we want to talk about towards the end but one of the tips that I have for the listeners is, when someone comes to you with a problem and you know the answer and a lot of times your team members, your employees will come to you simply for the fact that they’ve never been given the liberty to make a decision where they’ve worked before. They’ve never been counseled that way or given… When I go to work, I do what I’m told, right? I don’t do what is right, the company culture is developed by somebody if it has not developed by you, it’ll be developed by some other part of your team, it may not be the culture that you want. 

But what happens is that when someone comes to you and says, “Hey, Mike, should I go to Mrs. Smith’s job and start that today? Or should I go clean up the shop?” I’m just using a silly example. But when someone comes to you with a question like that, you can start coaching and developing them to make decisions on their own by saying or instead of just barking out the order which most of us do, you can say, “Well, what do you think we should do, Joe?” Or “Mrs. Smith, what’s the conditioner? What was it her expectations, yo?” And then when they give you the answer that you like, you say, “Yeah, I agree, that’s a good decision. Go ahead and do that.” And you do that enough times or if they give you a silly answer, “I think I should go wash the truck, instead of going to serve a customer.” You can say, well, “Let’s stop and think about that for a minute. And here’s the three reasons why you may want to reconsider.” But have them involved and after a while, they’ll start making decisions on their own.

Mike Merrill:

Yeah, I think that’s great. One analogy that popped into my mind, I’ve used this in a sales environment before but we’ve all used a navigation system, GPS. And when I’ve traveled a lot like you do and I’m in an unfamiliar city, I lean heavily on that GPS and I’m waiting to be told where to go and what to do and it’s difficult to navigate until you hear that voice tell you where to go. But if you don’t have a GPS and you’ve got to pay more attention then you can usually get along just fine. Also, it’s more just knowing that you can depend on your own ability instead of waiting for somebody else to tell you what to-

Dan Murray:

That’s right. And there’s one benefit, I guess. When we are recording this, we’re in the middle of the COVID, the pandemic and travel is really come to almost a screeching halt and I was doing 35 weeks a year on the road for the last 10 years visiting clients and a few months ago, I came to a screeching halt. And I do everything on Zoom now and Loom. I use another service called Loom but Zoom is my main one for two-way videos. And I don’t know whether I’m going to go back to travel, this is working extremely well. I wouldn’t want to be in the air carrier business or hotel business right now. I don’t think.

Mike Merrill:

Yeah, it is amazing what we can do when you hear the phrase where there’s a will there’s a way and when your options are limited and you’ve got to figure it out. There’s a lot of different approaches that you can take that might be equally or even to your point more effective.

Dan Murray:

Absolutely, absolutely.

Mike Merrill:

So, with this topic of discussion, what are some things that business owners can do to sell their business or hand it on to a future generation, a son or a nephew or somebody else that you’re mentoring with no regrets? Because I think that would be one of the bigger challenges and it’s one that I hear about quite a bit once companies do sell or do pass things along, there’s all the reasons that they wish they wouldn’t have or that they wish something would have been different?

Dan Murray:

Well, really the old adage is really depends, it depends on the owner what they’re doing. But there’s a personal attachment to businesses for the most of us, right? So, when you detach from the business, what are you going to do with your life? I guess a short and simple answer to that question I tell people is that, a happy accident is meaning that you have a happy life. In other things beside business, whether it be coaching your kids at sports or traveling or doing whatever. And the other thing is, the big thing of course, really why are we in a business it’s really to have financial resources to be able to live the life that we want. 

So, again, the first driver of the eight company drivers that we work on with people that number one is the financial performance or your business. Your financial performance has to be good and it has to be improving all the time. And while you own the business, it allows you to be remunerated properly and when you go to sell, it’ll also do that as well. Because you got to remember, when you say five times whatever or four times, whatever the multiple is, you’re getting paid on your EBITDA is basically if you can make an extra $100,000 a year by running a good business and keeping things tight. If you get five times that multiple, when you sell, that’s half a million dollars and I don’t care who you are, half a million dollars is probably going to make a little bit of a difference on your enjoyment.

Mike Merrill:

Sure.

Dan Murray:

Can I make another point on this, Mike while we’re-

Mike Merrill:

Yeah, absolutely.

Dan Murray:

One of the big things I see people not considering when they sell, they always think about the big dollar amount they can get, they don’t stop and consider all the costs that are involved. Lots of times especially if you go to brokers and other professionals, you’re going to have lawyers and accountants and you can spend tens of thousands of dollars on lawyers and accountants really quick just getting your business ready to deal with the due diligence and all this sort of thing. Then if you get brokerage fees, so you can have eight to 10%, easily in fees on what you’re going to pay for a transaction.

And then you can have some personal fees if you guys have holding companies or family trusts or whatever, you can have other fees involved with setting up all that and to save taxes. And then the big thing that where most people don’t stop and think about is how they’re going to be taxed on their earnings. So, I always say just hold your thumb up in the air and pick a number but basically a third roughly of what you get out of your business, you’ll end up keeping in your pocket. And most people don’t take that into consideration. They think of if I sell $4 million, I get a million dollars. I wish I could say it was so but it isn’t.

Mike Merrill:

That’s a great point and I think even within that framework, there are different tax approaches that can be taken too so depending on the turnout or other factor, at the end of the day, what’s really going to net you the most revenue? And I think that’s a great thing to consider.

Dan Murray:

Yeah, so there’s at least a dozen ways I can think of off the top of my head I you can structure a deal and there’s so many in zeros but I’m a big believer in that. We’ve all heard the expression win-win but I think it needs to be win-win-win, and it’s a triple win, right? We need to win, whoever is acquiring our business needs to be a winning deal and our existing team members and customers need to win. Like if everyone wins, there can’t be a win-lose scenario or someone’s going to not be happy.

Mike Merrill:

Yeah, I really like that. I think in a lot, a lot of cases, a lot of company owners, they are concerned about the long-term viability of the business, how it affects those employees and team members like you’re saying and along those lines, I’ve heard you say before, it’s important to have more than one exit strategy also. So, maybe if you’ve got a few horses in the race, whether it be different suitors or maybe some different options on how this transaction could take place and what it looks like, what wold your advice be?

Dan Murray:

Well, I always like people I’m working with to actually sit down and there’s an exercise that we go through and write down who would be potential. Could be a big multinational, it could be who just wants to do what they usually call them tuck-in acquisitions, where they want to expand or they want another dot on the map or your pain in the butt they just want to buy you out so that their local branch can grow, that can happen. You can have… 

Family members is what most people think of but that can be really good or really bad. And are the kids ready and able to run the business? Have they paid the dues? The other thing is you may want to stay on as a lower percentage owner and give some shares to two or three key members of your team and just let them run it or hire a CEO or general manager and forfeit a little bit of the annual profits and just so you can enjoy life. Go get your 43-foot diesel pusher and go have a time as your general manager is running the business. I mean, there’s nothing wrong with that. Except that you’ve got potential liability exposure that maybe you wouldn’t if you had the money in a bank.

Mike Merrill:

Yeah, yeah, that’s a great point. And I know you as a coach and a consultant, helping companies understand the health of their business and what’s in their best interest of growing profitably, I know that you’ve mentioned in the past how important data is being forward-thinking and then planning, what role does data play in all this that companies need to consider that maybe important?

Dan Murray:

Well, it’s huge, especially when you get to the transition stage, most companies want to do due diligence and you need to know your numbers before you start putting a price on it. We’ve all watched Shark Tank and shows like that and people get just nailed for having crazy valuations on their business and we’ve all seen it in dealing with contractors. But the thing with data is that, well, in the insurance industry as a vendor for contracting, we have what’s called KPIs;key performance indicators. And what these is, when they started pushing these down on us, they really made us better business operators. Because before a lot of us weren’t looking at things, we weren’t looking at the average response time, we weren’t looking at the average time a file was open, how quick we could dry a job or how quickly we could rebuild it. 

And so I always say we need to have our own KPIs not just our customers and we need to look at them on a dashboard-type basis, one page report because most entrepreneurs will glaze over if you give them a 10-page text-only document, they’re not going to read it. Most of us What do we do when we get our financial reports for crying out loud? We look at two places;top number for revenue, go to the bottom right-hand number for the profit. And goodness gracious, we would never want look at the balance sheet and figure out some things like day sales outstanding or days payable outstanding. Oh, my goodness, that would just be too hard to do. But it’s vital to the business to know some of those numbers. And it’s easy to do with different types of software today.

Mike Merrill:

Yeah, so really what you’re talking about then is live field data, live visibility, daily updates on dashboard. So, really, you’ve got a finger on the pulse of the business?

Dan Murray:

Yeah, and as far as for the contractor running in their field management, that’s becoming more live data all the time too from your employee timekeeping and job costing. Our biggest cost on a job usually is our personnel so we don’t have that number down, but we’re in trouble right out of the gate. The other thing that’s coming on, for example, nowadays is that there’s newer technology, AI type of technology where you take a piece of equipment out of your shop, put it in your truck, take it to a job site and leave it. 

A lot of our things we can charge for or at least we know it’s there nowadays, we don’t have to barcode swipe, we don’t have to write it down, it’s automatically done because there’s a little RFID or whatever transponders in each location. And you can use a GPS as well. A manager consents and say, “Okay, I’ve got 77 air movers out in the field today and 27 humidifiers, they’re all billable by the day and I’ve got it all right there live, I can see where it is. I’m not going to lose it, I am going to capture every hour I should be billed for it.” So, having live data in the field as well is extremely important.

Mike Merrill:

Yeah, I would imagine for potential purchaser of a business too if they know you’re using those types of systems, they’re going to have a lot more trust in the data that you’re presenting.

Dan Murray:

Absolutely, that is 100% right. I’ve seen that happen several times over the years.

Mike Merrill:

So, this has been a great conversation. I’ve really enjoyed it. I guess just kind of wrapping up, one of the things that I like to ask a lot of the guests is, what’s one key practice or best practice or something that’s been impactful in your entrepreneurial career that you could point to for the success you’ve had.

Dan Murray:

Always be learning. Always be learning. And it takes some time but it’s a very inexpensive way to do it. Be a reader, you want to be a leader, be a reader. You want to be an expert at something, you have an expertise you want to learn, whether it be writing code or how to do a water damage. If you read a book a month on a particular topic you want to be good at, in a year’s time, you’re going to be surprised at how much better you are at understanding whatever it is you want to get better at.

Mike Merrill:

Great advice. Yeah, that’s very wise, I would say. If you could kind of relive or do something different or change a decision you made at one point, is there anything real specific that pops out in your mind that maybe someone else can learn from?

Dan Murray:

Well, now that’s an interesting question. Is this where we get real honest or we just going to get fluffy?

Mike Merrill:

I mean, something that’s applicable to others too probably, professionally speaking.

Dan Murray:

Listen more and talk less. Really listen. And by listening not only verbally but listen to the body language of your team members, of your customers, show some empathy instead of always… No matter what kind of type of contractor is listening to this podcast, when we go into someone’s house or business to work, we’ve probably done that job function a thousand times. To our customer, it could be the first time they’ve ever had this type of job done. And to them, they’re kind of overwhelmed and they don’t understand the processes. And so we got to show some empathy and patience, listen, read their situation, understand what they’re going through so that we can serve them better.

Mike Merrill:

Well, that’s a great note to end it on. And I so much appreciate the conversation today. It’s been a pleasure to have you on, Dan and I look forward to continuing to keep in touch in the future and following your success.

Dan Murray:

Thanks, Mike. And I look forward to many years of this great podcast series that you started in the future.

Mike Merrill:

Thank you, I appreciate it. And thank you to the guests for joining us today on the Mobile Workforce podcast sponsored by AboutTime Technologies and WorkMax. If you like the conversation that Dan and I had today or were able to learn anything new and interesting, please subscribe to our podcast and give us a rating and review on iTunes or your favorite podcast platform. 

You can also follow us on Instagram at WorkMax underscore or on LinkedIn at WorkMax. And again, please leave us a five-star rating and review if you enjoyed the show. We appreciate your support and if you can subscribe and download those episodes that really helps us out to continue to bring these types of discussions to you to help you improve your business and your life.

Construction Analytics: Balancing Long-Term Portfolio Risk

Construction Analytics: Balancing Long-Term Portfolio Risk

Construction can be risky business. Fortunately, with the right information, contractors have the ability to understand their overall exposure to risk. Increasingly, contractors are turning to technology to speed up the process. Typically, people assume this process works much like understanding a stock portfolio. Contractors need insights into their projects across their portfolio to see which are profitable, which are breaking even and which are in the red. But technology today goes beyond data collection and delivers predictive insights that rely on trends to show risk ahead of time, so contractors can make adjustments as needed.

According to Viewpoint’s Matt Harris, mobile applications and live field data can be compared against aggregate data from the industry at large. This provides accurate and predictable insights into any bid or job a contractor is looking at. Thanks to this technology, contractors can gain confidence in their assessments of risk like never before.

 

Key Takeaways:

  1. Daily data collection is no longer enough. Automatic data collection allows for very refined control over how resources like labor, equipment and materials are being consumed and deployed on projects – all of which are critical to risk management. And while many companies have morning win-loss reports that show how a project did the day prior, it’s not longer enough. With margins so tight, contractors need to drill down even further. That’s why more and more contractors are segmenting their data by shifts, so they can better understand how projects are progressing morning, afternoon and night. 
  2. Passive data collection is on the rise. Data collected by employees shines light on areas like job progress, labor usage and safety. But there’s so much more data that can be collected through the Internet of Things (IoT). IoT is technology that uses sensors like GPS and motion detectors on equipment to allow data to be shared without anyone having to collect or report it. As more contractors leverage data collected directly (from human input) and passively (through IoT sources), the better they can assess their risk in the future. To take advantage of passive data collection, look for IoT options on construction equipment, and then ensure the data is included in your risk management strategy.
  3. Data aggregation and predictive modeling software is changing the bidding process. More and more data is collected and analyzed from across the industry through data aggregators. This improves predictive models that can help contractors understand their risk for future projects.

 

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Episode Transcript:

Mike Merrill:

Hello and welcome to the Mobile Workforce Podcast, I am your host, Mike Merrill. Today we are sitting down with Matt Harris, the Chief Product and Strategy Officer at Viewpoint. We’re going to discuss your business portfolio and projects and how you can use data to balance your risk and insure that you are taking the right projects to accomplish your overall business goals. Hello Matt, I’m glad you’re here joining us.

 

Matt Harris:

Hey Mike. Yeah, hey great to see you and thanks for inviting me here. You and I have known each other for many years now. I’m excited about your podcast frontier here and thanks for having me on.

 

Mike Merrill:

Awesome, yeah it’s great. And you’re hailing from sunny Portland, is that right?

 

Matt Harris:

I’m hailing from sunny Portland, yeah. One of these days we might see the sun. This time of year we don’t see it very often but yeah, here in Portland, Oregon.

 

Mike Merrill:

And I’m from sunny Salt Lake. Or snowy Salt Lake, I should say.

 

Matt Harris:

Snow Salt Lake for sure. Yeah.

 

Mike Merrill:

All right well before we jump into the conversation today, can you give our listeners just a quick introduction about your background and your experience?

 

Matt Harris:

Yeah, for sure. As you mentioned I’m the head of product and strategy and business development here at Viewpoint, and am responsible in general for the businesses of our products, our growth, our investments and insuring that we’re having expansion, not just financial expansion of the business, but making sure we have usage and adoption of our products to the fullest extent possible as well. And a lot of this includes the innovation, what are we doing next and what are we trying to improve upon. I’ve been at Viewpoint coming into my 10th year so it’s been a long and very interesting and really compelling journey for me, and has been extraordinarily fun as we’ve evolved as a business. About two years ago we’re now part of the Trimble portfolio of businesses and that’s been a very interesting evolution of our business as well. We’re doing a lot within the Trimble ecosystem of products and businesses and it’s been very exciting. We are coming through a major impact to the economy in our industry and COVID and I’m happy to say many of our customers and their employees and their businesses have been doing well and we’ve been focused on making sure we’re helping them to whatever extent we can.

Our business is doing well as well and we’re looking forward to getting out of this as quickly as possible here and continuing on the journey we’re all on.

 

Mike Merrill:

Yeah, that’s a great background and as you mentioned business really does seem to be booming in most places. Construction’s doing very well generally, despite the challenges of our time. With that thought in mind it’s almost an interesting challenge to have. It’s a good problem to have, but I think a lot of businesses are having a challenge deciding which projects to actually take on because they’ve got so much backlog they’re actually being able to be a lot more picky. So what would you advise companies to be looking at when they’re deciding which particular projects to pursue in this economy?

 

Matt Harris:

I think the first step and even before you can get to that question is businesses should be finding ways to really collect a lot of information. As much information as they accurately can about their projects and about the work that they’re doing. Clearly businesses are always, contractors are always looking at, they estimate jobs, they bid jobs, and they obviously make progress on jobs. The ability though, to accurately aggregate and pull in information about jobs on a regular basis, on a daily basis, on a four hour basis around how much labor is being consumed on a job. How productive the equipment is for those projects, how the material is being consumed. The ability to do that and collect that information in real time and near real time and compare that to your original bids to your budgets, to your forecasts is really the step one in being able to predict the future and use data to your advantage to understand the risk in your overall project portfolio.

This is where, and things that you know very well and things that we know very well, very straightforward mobile applications that the fore-people are using on the job site, that the superintendents and project managers are doing on the job site that are looking at how much time crews are spending on various aspects of the job, how productive the equipment is, how much material is being delivered to the job site and is being used in the project that day, comparing that back to your budget and really having a good understanding of how your actual costs are changing relative to your budgeted plans. That is extraordinarily powerful information. Not only to tell people, are you ahead of plan, are you at plan, are you behind plan today, but it turns out you can use a lot of that information to start to predict the future as well, and I’ll get into a little bit more of that prediction a little bit later on. But I think really step one is use some of the mobile applications that are available in the market today and make sure that not one your people are using them to collect the information but then you’re connecting that information back to your bids, back to your estimates and budgets. So you can really compare what you’re actually doing compared to what you thought you would be doing.

 

Mike Merrill:

Yeah, very sound advice. There’s a lot there to unpack, which is great. That’s what we want to talk about today. Something you mentioned caught my ear, so to speak. You mentioned the four hour mark or half day. Where did that come from and is that something new? Are companies aware of that? What are your thoughts on tracking by the half day at least, it sounds like?

 

Matt Harris:

Nowadays because the data collection can really be very automated, you can really get very refined inputs on how resources are being consumed and deployed on projects. Resources meaning labor, equipment, materials. Many companies we speak with, they have morning win-loss reports, for example. They want to see how the project did yesterday and so where they have to catch up, where they’re ahead. Some companies call these scorecards, and how they did in the week to date and yesterday’s progress or the overall project to date. Now that data can start to be aggregated really regularly you can start to really partition that into day parts. Into the morning day part or the afternoon day part or overtime and evening as well. You can really literally see how different crews or different components on the job are progressing more regularly. So it’s mobile applications tied into your cost model, you can really get more refined reporting on what’s happening. Is the morning more productive than the afternoon, than the evenings, you can start to see that information. That’s the information that’s available to us today.

 

Mike Merrill:

Yeah, I think your points are well understood by me. I guess from a statistical perspective, just grabbing a number in your mind, what percentage of your customers would you say are actively leveraging these types of tools and what percentage are still a little bit behind or way behind?

 

Matt Harris:

I would say that within our customer base right now it’s about 50% of our overall customer base have some form of mobile application on the job site where they’re aggregating data in real time. We do have a lot of great usage data on this. We know we had 75000 active users in our field productivity tools every month. That’s been really taking off in the past year, year and half or so. In fact, the fastest growing component of our portfolio right now is in mobile field productivity. It’s in strong demand and the ability to really capture data in near real time and then compare it back to the cost model and do this all paper free and automatically is a very appealing need or very strong need from our customer base right now. We, and I know you guys do have some really compelling products to help make that happen. As you know mobility right now and field data capture is on the minds of everybody in the industry and it’s a really strong growth platform.

 

Mike Merrill:

Yeah, I love that, and for those that aren’t yet there, it should be. Your competitors and the rest of the industry is utilizing those things currently.

 

Matt Harris:

Oh for sure. I mean right now the applications are so good and reasonably inexpensive that the productivity gain far outweighs the costs of manual data collection that is otherwise being done through clipboards or sometimes writing on 2X4s or whatever. To collect information and have to manually enter that in and that being once a week and inaccuracies. If you’re able to collect this in a real time basis and not only inform executives about how they’re doing against their project objectives but also you can feed the information back to the superintendents, right? So some of the things that we do is as soon as a superintendent collects crew time, for example, we tell them right away are they ahead of plan overall in the project budget or are they behind plan in the project budget. They can say to themselves, “Tomorrow I better be careful around how much overtime I use or I better have a plan to get this phase finished out.” So we can actually inform the people who are really making decisions on how to use crews and people to make better decisions and make decisions that’ll help them hit their budget targets.

 

Mike Merrill:

Yeah, I love the idea of that feedback loop that it sounds like you’re talking about.

 

Matt Harris:

Yeah, it’s really very powerful.

 

Mike Merrill:

So obviously paper and spreadsheets are out, if this is the kind of data you want to have in the timely manner that we’re talking about.

 

Matt Harris:

Yeah, paper or spreadsheets are definitely out. Paper in particular. What we saw last year and I would assume many people saw, yourselves included is that paper as a communication means is really going away and there’s more and more demand that we’re seeing in our customer base in the industry to fully digitize. Get out of paper means and really stop paper hand offs and really start and enable the digital hand off. That’s not only at productivity at the job site, that’s in employee communications, that is in a subcontractor communications, vendor and supplier coordination, everything is really moving towards a digital framework and digital communications and one of the things obviously with more and more people working remotely the ability to hand off paper and do that is harder, but also there’s just the common sense of let’s get out of paper and start to use digital means. It just makes it easier and safer for everybody too.

 

Mike Merrill:

Yeah, I love that. Migrating off of those more rudimentary or basic tools of the past allows us to collect more what I would call passive data. There’s active data, passive data, what are the differences between those two and how do they come into play together?

 

Matt Harris:

That’s really interesting and then we can start to think about how we collect data and what we do with it. Right now as a superintendent is using our products, a mobile application to collect crew time or equipment time or material deliveries, there’s actually a person who’s doing something there and they’re using a mobile app for example and they’re providing information to that mobile app, which is way better than doing it through paper or other means. That is more of an active process. Somebody is actually entering data into that application which is then feeding the model. When you think about it we can start to do things in a job site that will instrument the job site and that will actually passively collect information on the job site without anybody having to do anything.

For example, we can capture using IOT, internet of things. We can capture information on equipment that tells us where the equipment is and if it’s in the job site we know that it’s being consumed by that job without anybody having to do anything and we can also capture information to see if the equipment is running or not, if it’s being operated or not. From that information we aggregate that and create and get an understanding of the equipment, it’s use on the job and how productive it’s being on that job. And in this case, an equipment manager or superintendent didn’t do anything. It’s just automatically happening throughout the job.

There are other things that we can do just to see in terms of people and labor, when they’re on the job site through automatic clock in and clock out methods and where they’re working on a job site. We can start to look at things like that. We can understand through imaging or through other job site cameras or even drones, we can start to see where the material is on the job sites, is the material stockpiles growing or shrinking and all that data is captured automatically and then fed into the model without anybody having to do interfaces on a mobile application at all. That is, in it’s very beginnings right now, certainly equipment is further along than some of the other things and we’re doing it in some ways with material as well. Particularly with civil materials like aggregates and other types of things where we’re using drones and imagery to look at the stock piles and the inventory levels on sites for some of the more civil materials. But that’s very early on but it’s a very interesting opportunity for us all.

 

Mike Merrill:

Yeah, you mentioned the term “aggregators”, for the listeners what does that mean and also what value does that provide to have an aggregator?

 

Matt Harris:

Yeah. The aggregation of the data, what you can start to do and what we’re working on now is as more and more of this data becomes available and we look at how jobs are performing and their costs relative to original bids and their budgets, then we can start to really understand how a contractor is performing historically against all of their jobs, and actually not just the contractor but the industry at large, and we can now build some models that tell us how we think the contractor will do when they bid future jobs. This is where things get really interesting. So as we understand across thousands, hundreds of thousands and millions of projects how much was spent on labor, how much was spent on materials, on equipment. We compare that with the original bids on the jobs and the estimates. We compare that with the type of job, when it was done, where it was done. We actually build models then that can predict, that look at the overall industry and how does the industry perform? We build models that look at how does this one particular contractor perform relative to the industry.

And we can also build models that tell a contractor if you bid a job and it has the following elements to it, you intend to spend so much in labor, so much in equipment charges, so much in material, your original contract value is this. We can tell that contractor with an 80% probability of likelihood we can tell that contractor how likely it will be to achieve their targeted profit outcome. So this is where we get into some of the things you started with, Mike, around how can we help contractors better manage their portfolio and backlog? So we can inform them of bidding on this job under these circumstances will either result in a high margin likelihood of probability or a low margin of probability. Probably no surprise to us all, the endstage profit margins on a project are very, very different from the original bid. So we’re able to actually predict that difference.

 

Mike Merrill:

Yeah, 80% that’s a big number. I wouldn’t challenge that. I would imagine that’s probably the case? One question that comes up in my mind is how is one contractor able to leverage data from the industry or from others of their peers?

 

Matt Harris:

So in two ways. First in the model I described and what we’re doing is we’re working on this with a select group of our customers now. With this model that we’ve created, it compares a single company’s performance on project profit margins to the industry at large, so they as a company can see in general how did they do. Are they better than the industry are they worse than the industry. Then we also can use that data to help inform them on a project that they might be bidding on, how they’ll perform against that project and how that project is likely to perform. So that is an example, and our customers now are using this. Estimators are using it to really get kind of a help quantitatively validate some of their bids. Help them get more than a gut feel around the project. Owners are using it to start to look at is this a job, how likely could I be to lose money on this job? Should I take it on right now? If you have a backlog or the opportunities for bids are pretty substantial, let’s choose the right bids and marry some low risk jobs with some high risk jobs. So that’s happening right now. That’s an example of the things that we’re doing.

The other example of things that we’re doing is that we’re providing information back to our customers in just an overall industry benchmarking. We can look at what’s the average profitability of jobs like that for the industry at large and as I mentioned, how does that compare to a single firm? We are actually providing information on just hiring trends in the industry, is the industry and in regions and states, are they hiring more people than they’re letting go? Or are they letting go of more people than they’re hiring and get an index of labor trends and that certainly affects how quickly it would be to bring new people on board, what labor rates might be doing. We’re providing indices on just overall backlog trends. So are backlogs increasing are they decreasing, by type of project, we’re providing some indications there. So we’re really providing some now macroeconomic indices that our customers are using to help inform them around what’s directionally happening in the industry right now.

In the era that we’re in, there’s a lot of volatility right now, the pandemic, things shut down then they came back and you’re like what’s next? Having these indices is what we’re hearing from our customers is the indices are really super helpful.

 

Mike Merrill:

Yeah, I’m envisioning as you’re talking a lot of great information there and it’s actually astonishing to me, I mean I come from the industry and spent a decade or more in general construction before we started our mobile data collection company 17 years ago. It’s amazing to see the transition of the industry and that we could even be having conversations like this. I’m picturing a stock portfolio or dashboards with ticker symbol and seeing the ups and down trends. Is that a realistic comparison that companies could enjoy today with the technologies available?

 

Matt Harris:

It’s a very realistic comparison. That ultimately what we’d like to be able to do is provide an owner or a C-suite a risk profile on their projects. Just like an investor would have, at least a good investor, would have a good understanding of a risk profile of their investments and marry some high risk investments with some low risk investments so you have a balanced portfolio. What we’re able to do, and we’re in the very early phases of this now, is really provide risk profiles of a project portfolio. High risk jobs versus low risk jobs and ideally a good contractor would want to have a balanced approach of that. Obviously not have an entirely high risk portfolio, because then maybe putting more of the company at risk, but you also don’t want too of a low risk portfolio in possibilities of growth. So and that also is dependent on the phase of the company and things like that. So we’re enabling with some of this data which is very easy to get and we built the models, we’ve done the data science ourselves with a very clever group of data scientists that we have both at Viewpoint and at Trimble. We’re providing some very simple tools for our customer base to use.

 

Mike Merrill:

Wow. Truly incredible and you mentioned this is a newer evolution of where things are at. So it sounds like moving forward into the next three, five, 10 years, decade plus, companies are going to be able to compare this historical data in trending and really make more predictive long term decisions, not just which job do I take next but where do we point the direction of the company as we continue to grow.

 

Matt Harris:

Oh yeah. The application of data science in our industry right now is only just beginning. I mentioned being able to predict profit margins for future jobs, looking at the industry overall and macro industry trends, we’re also looking at individual projects the change in costs on those projects, the change in costs in last month and the month before really tell us how costs are going to change next month. So we’re building models that really help project managers look at based upon how much I spent this month and the month before, how’s that going to influence what I can expect to spend next month. So they give them warnings of a profit fade event before it happens. There’s other really simple applications as well. We can use artificial intelligence now to just automatically scan invoices, pick up all the relevant information in those invoices and then populate invoice records inside of our software for payment and approval processes. Now a lot of that is done manually through keying and so we can not only provide systems that are much more accurate than keyed entry but also three, four, five times faster as well, just through the application of some of the new AI techniques and methodologies.

 

Mike Merrill:

Yeah, I often site the statistic that 7% of everything typed is a typo of one sort or another and there’s no spell check on calculators, so when somebody fat finger’s a number or adds an extra zero there’s a lot larger consequences than just a small typo.

 

Matt Harris:

Yeah, it turns out you’re exactly right. It’s actually more than that. What we see is about 1/3 of manually entered data is inaccurate, so we’re measuring it and some of the machine AI techniques that we are using now has 93% accuracy. That’s getting better. Now 93%, some people will say that doesn’t sound that awesome, but when you compare it to people or manual entry right now is only accurate 2/3 of the time, 63% of the time. That’s a big jump. That’s kind of what we’re trying to enable.

 

Mike Merrill:

Yeah and that’s probably if someone’s having a good day. If they’re having a bad day it might be 1/3 as accurate, right?

 

Matt Harris:

Right. Yeah. I’d imagine it mixes out.

 

Mike Merrill:

Data doesn’t have any emotion.

 

Matt Harris:

Yeah. Yeah. And doing things like this not only makes it more productive that we can now enable our customers to instead of entering data, look at it. Understand it. Do things with it. We’re trying to really help them get better use out of the data. Acquiring the data should be very straightforward and that’s what we’re trying to do and enable tools like that. Then helping them use and consume the data is kind of the next wave.

 

Mike Merrill:

I always say with proper mobile tools in place you can now manage data, not drama. So to speak.

 

Matt Harris:

Yeah, well said.

 

Mike Merrill:

I mean I can tell, obviously, that mobility is probably the newest key innovation in this whole recipe. How critical is having a solid sound mobile strategy for constructions businesses today?

 

Matt Harris:

I think mobility is a foundational step in just getting job site understanding of what’s happening. In otherwise said, I don’t see how you do this without a strong mobility platform and environment. In enabling your field leadership, superintendents, fore-people, project managers, whomever, equipment managers, operators, even field service technicians as well, with a platform that’s not only going to inform them what needs to be done today, but also help them collect information on what’s happened and relay back to them how they preformed that day or that half day, relative to the budget model or relative to the forecast is absolutely critical. The difference makers are the companies who are doing that and giving their people on the ground making it happen the ability to be informed, no only acquire the data but be informed about how they’re doing on a regular basis is instrumental.

It’s almost like if you’re not doing that you’re almost doing the project with a blindfold on. Then we’ve seen it, they get the monthly reports, and it’s like, “Who, whoa, whoa, what happened? We’re way off! What went wrong?” Then they scramble and try to get into the reports and see what happened, but they’re already a month behind and on a 10 month job it’s hard to catch up. The difference between getting information with the right people at the right time for the right decisions and not doing that is really… I can’t imagine how to run a project if you’re not doing it that way.

 

Mike Merrill:

Yeah and I know you mentioned earlier it sounds like you’ve been at Viewpoint, now Trimble, for about 10 years now? Is that right, a decade?

 

Matt Harris:

Coming into my decade, yeah.

 

Mike Merrill:

Well congratulations for that, that’s awesome. What I recall from your background, this industry was new to you at that time, is that right?

 

Matt Harris:

It definitely is right. I came out of another world whereas with the technology company I’ve been in software for a good part of my career, but I came out of the world doing something very, very different in the life scientific industry, but working in construction and construction technology has just been awesome. Making an impact has really been fun.

 

Mike Merrill:

Yeah, I can imagine. I think the industry has moved more your direction from where you came from or met you in the middle at least as you’ve embarked on this journey, from the sounds of it.

 

Matt Harris:

Oh yeah. You know it’s just fun. I think we’re in a unique role, you and I, I think we have a unique opportunity to really make an impact. What we do matters and when we do it well we hear it, we understand it, when we don’t do it well we also hear it and understand it. That’s the nature of our industry. I’m very proud to be part of such an industry and we’re earnest in our wanting to make an impact. Not obviously help our business but more importantly do things important for an industry that we think could use our help and we pay a lot of attention to making a difference. When we do our job well hundreds and hundreds of thousands of people get paid and put food on the table for their families. We take that responsibility extremely seriously. The role that we play, just foundationally, is very, very important to us and I think we’re lucky to have that responsibility and we know we have to earn it every day.

 

Mike Merrill:

Yeah, we feel very much the same way here. It’s very impactful and blesses lives when we do a good job. That’s neat to be part of something that changes peoples lives for the better.

 

Matt Harris:

Yeah.

 

Mike Merrill:

So in that tenure for nearly a decade, what has been the most surprising thing to you and maybe what’s the thing you’ve enjoyed most about this journey so far?

 

Matt Harris:

I think that there’s a lot of talk in the ecosystem at large that, I’m going to say this the right way, that construction’s behind, they don’t really get technology and it’s backwards from a technical adoption perspective. What’s been surprising and interesting to me is it’s not behind, per se, it’s an industry that’s really based upon very tangible needs. To the extent that we as technology providers or anybody can solve real problems for our industry, for our customers today. There’s a demand, there’s a need for that. People just don’t want to be working in a blue sky environment so much and making bets on stuff that may or may not happen. I like the practicality of the industry and just the need to solve real problems. If we solve real problems people will use our products and our software.

So that’s been one really interesting component of it all. I think this whole, what is perhaps an overused term around digital transformation, that’s live. That’s happening, we’ve been talking about it to some extent. The adoption of cloud browser and mobile technology is to connect job sites in the field with back office and costs and the overall project environment, that’s really happening in a big wave right now. It’s exciting to see that. We call this next wave of the data transformation, it’s kind of the next thing that’s happening. So I appreciate working within the industry and really getting very clear on the value we can create, solving real problems with our products now and then the potential to solve a whole new set of real problems with our products with data in the future. And I think it’s just been a fun industry to work with.

 

Mike Merrill:

Very exciting. So in this journey is there one business process you feel like you’ve really worked on or focused on to master that’s had a larger impact than other things?

 

Matt Harris:

There’s been a variety I’d say. One of the things that we’re very, very focused on now is a new sense of… it’s kind of coming up in the software industry, it’s called product lead growth and it’s really making it very easy not only for customers or buyers to acquire the software, which we try to do in some techniques that we have here at viewpoint. But now we’re looking at it more so with the individual user mode. How can we make users come into our software as simple as possible, so that customers are getting value out of our software with their users right away. How can we make sure that not only is the software easy to use but training is very easy and simple to follow from within the software itself that the software becomes almost self implementing, if you will, and that we can point people, if they’re trying to solve problems, we can point people to different parts of our software that will help them solve that problem and it would actually give them a roadmap of different parts of our software to use.

What we’re trying to do here is create a simple user experience. So think of it more than just a customer, Joe’s Civil Contracting. Now think about it as the project managers at Joe’s Civil Contracting, the superintendent, the HR director, the payroll clerks. How do we make it very simple and easy for them to adopt more of our software? What we see is that the more people, and the way our software is used for the most part, as people adopt it, it doesn’t cost our customers more, but we just want our customers to get full value out of all the things that they could be using within our suite, and that’s a big part of what we focused on.

 

Mike Merrill:

Yeah, it sounds like individual ownership by role, regardless of what position they’re in.

 

Matt Harris:

Yeah. Making sure that individual users needs are being met and really understanding if we’re doing that or not. Some of the things that we’re doing in our products right now, tell us where are things being adopted very quickly, where are they not, how can we make it better for users.

 

Mike Merrill:

Love it. So what is Matt Harris’s super power, if you have one? What are you really good at personally?

 

Matt Harris:

I’m just… I’m a super curious person. I call myself a knowledge junky. The reason why I think I’ve been at Viewpoint for 10 years is that I think there’s always new frontiers to learn and I’m really interested in learning new things. The construction industry, how we can digitize the industry, how the data applications in the industry, how we can really be lead in a product lead growth framework where users are adopting our software as much as possible. There’s so many opportunities to learn, the evolution of the industry overall, I think that is my strength. I get super excited when I’m learning and our industry has lots of learning opportunity for me. To be honest I think that’s one of my greatest strengths.

 

Mike Merrill:

Yeah. I love that. So is there one thing you wish you would have known when you started at Viewpoint that you now know very well and what has served you? Maybe someone else can learn from your experience.

 

Matt Harris:

That’s a great question. I would say now when people come into our business and we bring people in from the software industry at large, obviously a lot of people with domain expertise in construction and other people who are just great software experience in general and great business experience. One of the things that I’ve learned over time is, and I referred to this previously, is that in our industry for contractors, what we do we have to make it immediately relevant for what a contractor needs today. We need to define things in a highly literal way, make it clear. If you use this your invoices will be entered into your system five times faster with far fewer errors. This is a problem because you’re spending so much on doing it today. If you use this your superintendents will know if they’re ahead of plan or behind plan at 4 o’clock every day. So we need to be very literal in defining and showing and proving that we can solve real problems that our customers and our users are having today and that’s what I tell our team. It needs to really have clarity on the problems that we’re solving. Literal problems that we’re solving.

When we do that well, we can see. Our products, not only our sales but our usage of the products goes through the roof. When we miss the mark on that people kind of scratch their head and go, “I’m not sure what we’re supposed to do with this.”

 

Mike Merrill:

I love that. I think it’s applicable even for our contractor companies that are listening to learn from that same advice with their field personnel, their office personnel, that clarity and simplicity of the messaging regardless of the task is critical for clear communication and execution.

 

Matt Harris:

Yeah.

 

Mike Merrill:

Love it. Just one last thing, if there is one takeaway from today’s discussion for the listeners, what would you say to them?

 

Matt Harris:

If you’re not using mobile applications for your projects right now I would absolutely, positively, take advantage of them. There are great like your company’s making, great products like our company’s making, other products. They are cost effective right now and easy to use. In most cases they are also connected to the back office. Not only can your job site people, your superintendents and fore-people be capturing information really easily but it can be connected into the back office as well. That will just absolutely, positively save time and also enable a company to begin and start to collect information as they think about the next step, which would be the data journey. How do you use that information to help you make better decisions in the future.

 

Mike Merrill:

Fantastic. Great takeaway. Well, thank you Matt. I’ve very much enjoyed our conversation today. It’s fun to catch up and see you again even if virtually, for now. I appreciate you joining us.

 

Matt Harris:

Likewise, Mike. Great to see you again, thank you so much for inviting me to this and yeah, best of luck to you, the business and the family and I hope to see you again soon.

 

Mike Merrill:

Thanks. Take care.

 

Matt Harris:

Bye.

 

Mike Merrill:

And thank you to listeners for joining us today on the Mobile Workforce Podcast, sponsored by About Time Technologies and WorkMax. If you enjoyed the conversation Matt and I had today or learned anything new and helpful please give us a follow on Instagram at WorkMax_ or on liked in at WorkMax and please also subscribe to the podcast. We love our five star ratings and reviews, when you are able to chime in and give your feedback there it helps us to bring this valuable information and insights to other businesses like yourself. Our goal is to help you improve your life and your business.

 

Analytics in Construction: Beginner’s Guide to Data Visualization and BI 

Analytics in Construction: Beginner’s Guide to Data Visualization and BI 

Every industry has trends that come and go, so it’s understandable leaders get wary of the latest buzzwords. The true test of what’s a shiny toy object versus what has longevity is the value it provides. Take Business Intelligence, or BI for short. BI gives contractors the ability to visualize data and quickly decipher it so they can recognize trends on the job site and take action. The buzz around the power of analytics is for good reason. BI and data visualization signify a huge step forward in construction technology and productivity. 

In this episode, Frank Di Lorenzo Jr. and Ben Harrison from Preferred Strategies share how to take the data you have and leverage it with the help of BI. They also share how BI can be used with other key technologies, such as machine learning and artificial intelligence, to put powerful reporting in the hands of everyone on the job site. 

 

Key Takeaways:

  1. Data visualization makes KPI tracking actionable and timely. According to Frank, visualized KPIs give a contractor the same power that the dials and instruments in an airplane cockpit give a pilot. When everything is going right, it’s hard to say if altitude is more important than how much fuel is left in the tank. But when the fuel is getting closer to the red line, the pilot is immediately alerted where to focus. Frank says data visualization is much the same. It gives insight into the analytics of a project to reveal how it is doing and offers alerts on KPIs contractors should focus on.
  2. Contractors need a data feedback loop. Labor used to be tracked by filling out time cards, only for them to be put in a filing cabinet never to be seen again. Now everyone on the job site has a phone or a mobile tablet that’s always connected and providing real-time data, like safety forms and task progress, back to the main office. This connection creates a feedback loop where the information flows from the job site to the office and back again on a continual basis. This is important because it is this feedback loop that gives BI and visualizations their power. Giving users the ability to see the data analytics from others on the same job site ensures that everyone makes the best decisions with all of the information available. 
  3. Business Intelligence far surpasses spreadsheets. In its day, Excel was a useful tool for basic tracking and reporting on a job site or business –– that has all changed with BI. BI consists of dynamic data coming from different parts of the business and provides historical, current, and predictive views of business operations on the fly. Unlike Excel, this means data only needs to be entered into the system. From there, BI will process the data instantly to deliver insight into your KPIs. 

 

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Episode Transcript:

Mike Merrill:

Hello, and welcome to the Mobile Workforce Podcast. I am your host, Mike Merrill. And today we are sitting down with Frank Di Lorenzo Jr, the client relationship director and Ben Harrison, the product director at Preferred Strategies. Today, we’re going to discuss the predictive data and data visualization. I’m looking forward to this unique conversation with these gentlemen today and looking forward to getting a fresh perspective about project information. So hello, Frank and Ben. Welcome on the podcast today.

 

Frank Di Lorenzo:

Hey Mike, thanks for having us. I know Ben and I are both really excited to be here. 

 

Ben Harrison:

It’s great to be here. 

 

Mike Merrill:

Awesome. Well, thanks again. So before we jump into the conversation too far, can you gentlemen give the listeners just a quick introduction on your background, maybe your experience in the industry, and if we can start with Frank, that’d be great. And then Ben, you can follow.

 

Frank Di Lorenzo:

Sure. Happy to. So Frank Di Lorenzo Jr. Thank you Mike. As he mentioned, I’m the client relationship director of Preferred Strategies but Reader’s Digest version of my background, I’ve been in the industry construction ERP-wise for 36 years. I’ve implemented just over 700 construction accounting systems, grew up with a solution a lot of folks know out there known as Timberline. That’s where I got my start. And what’s interesting is I’ve seen solutions evolve. Back then, we started early on, it was getting computers to process financial data. And then we grew from there and we started putting systems into other departments, project management, estimating, CRM and then we matured further to excellent field mobile applications to collect data in the field. Very important. 

So now just for one year, I’ve switched my career to where I think the industry’s evolving to now, which is we’ve got these systems in place. We’re collecting mountains and reams of data. How do we make it actionable information? So I’m having a lot of fun now for one year working on the data side of things, Mike. So that’s my background.

 

Mike Merrill:

Awesome. Ben, how about you? 

 

Ben Harrison:

Sure. Again, Ben Harrison. I spent about 18 years as a business analyst and then a business manager for a construction company, Heavy Highway Construction but did a lot of analysis, a lot of reports. We’ve watched the technology merge over time. But really the idea of how do you take that information and turn it into actionable data drove me in my path now to where I’m at a company that that’s all we do is business analytics. And it’s honestly an exciting job. It’s fun. We get to have fun every day.

 

Mike Merrill:

Well, that’s awesome. We are certainly in a period or an age I would say of information overload at times. So lots of data to look at and lots of things to analyze. So appreciate all that you gentlemen do for the industry. So a couple things I wanted to just ask about. So what’s the difference between front end and back end data? Those are terms that we hear. What are your thoughts?

 

Frank Di Lorenzo:

Well, I’m going to take a first stab and then Ben I’m going to ask him to take it a little bit deeper, but from a business application standpoint, we have our data sitting wherever it may be hosted. And I hope I’m answering your question, Mike, but I’ll go ahead this way, our data viewpoint or your ERP may be hosted in the cloud, private cloud, Azure, on-prem. How do we get to our data in a meaningful way to report on it? And what if I have data that is living in multiple places, some on-prem. So I’m in One Cloud, some in Azure. So how do I take all of that information, transform it into, I’ll call it a front end data cube that I could report on. 

So I think the difference is transactional data for processing, which is what all the ERPs are optimized to do and taking that data and transforming it into something that’s report friendly. So in a nutshell, that would be my first pass at that. And Ben, why don’t you add a little more color to it if you will. 

 

Ben Harrison:

That’s exactly would be my take that transformation of data from transactional to be aggregated suitable for analysis. There is a metadata layering that happens there that makes it more useful. But again, you think about data and information. I like to think of the front end data as information and the back end as all the detailed transactions. And so that’d be how I would define it.

 

Mike Merrill:

Okay. Great. So that’s a great foundation to start from. Now talking about that data, when you heard the term predictive data, how does that differ from flat data and maybe what are those differences once you have that data in store?

 

Frank Di Lorenzo:

Yeah. I have my thoughts on that, Ben, but I think you would have a deeper insight. So if you wouldn’t mind. 

 

Ben Harrison:

Sure. So often I think about what you hear these days in the articles I read about predictive analytics, right? Taking that data and understand how to predict it. And I think that has to be context, right? Context driven. When you think about what you want to analyze, you want to analyze backlog and everyone knows what backlog is. It’s your contract amount minus your earned revenue so far. But you can’t hope that the data model will discover the relationship between those. And so the predictive data is arranged in a way to where that backlog can be analyzed. The end result is that you get insights you might not have had before with predictive data. 

I know that at the company I worked for, we struggled for a long time at understanding housing stats, right? Housing was a big part of our construction business. And what you wanted to do is find what’s the smoking gun that indicates housing stats down the road. Is it on permitted land? Is it county permits? What drives that? But again, the predictive data is going to allow you to take something and use it to understand what’s going to happen. And there’s lots of ways that could be structured.

 

Mike Merrill:

Okay. So I’m thinking of the term maybe triggers, is that what you mean? Data triggers that would make you look at a certain thing?

 

Ben Harrison:

That would be it. Yeah. So predictive analytics is… So here’s another example. The company I used to work for used lots of diesel fuel, lots of it, or heavy highway, heavy iron usage heavy iron. Changes in fuel prices is a big deal, right? So the predictive data would say, “If fuel goes up so much, what’s that going to do to my cost of sales, right?” Because I know the type of work I do, the type of equipment I do, but that lets you prepare and plan for… The trigger would be the fuel price change, but the action is, should I buy futures? Does that make sense? So triggers is a good way to put it.

 

Mike Merrill:

Great. Well, all right, so we’ve got the data types, we’ve got triggers and things that are indicators. There’s another term out there, Frank, maybe you can answer this the term BI, what does that mean to a contractor for those that may not be familiar?

 

Frank Di Lorenzo:

We have our buzzwords that come and go in our industry. We’ve all lived that. It could be cloud it could be mobility. Now BI is a big buzz word, stands for business intelligence. And to me what that means and what I think it means to a contractor is being able to decipher my information and see the trends so I can act on them before it’s too late. So in other words, in construction, most of our teams still look at data in a very text printed 2D format. There’s a great book I’m reading. It’s what I could recommend. It’s called Data Strategy by Bernard Marr. And one quote in there is when you visualize data, you’ll see things that you never knew were they are right in front of you. 

So part of business intelligence I think is being able to see the data in a more meaningful, impactful way so you can act upon it. Now you take that and you’ve coupled that with some of the machine learning capabilities that AI, artificial intelligence that Microsoft provides, and there’s a lot of power that you can put in the hands of reporting. 

 

Mike Merrill:

Great. Great answer. So really in my mind, I’m visualizing maybe the difference between a paper report that’s just printed out and I’ve got to pick through the data to find out the details or dashboards and graphs and things that are more visually appealing and at a moment’s notice green or red or yellow means something to me that I can then act on is that visual.

 

Frank Di Lorenzo:

Yeah. And that’s part of it and even more. I mean, now that we’ve become truly a mobile world, just imagine having the power of all that data on your mobile device coupled with your location. Maybe whenever I’m near a certain client and they owe us more than X, I want that report to pop up on my phone and maybe I’ll go visit them. But it’s that actionable activities we can now put into play. 

 

Ben Harrison:

And I’d like to just add to that. BI is a term and it’s a ubiquitous term. But to contractors today, historically people thought about ERP systems and Frank mentioned to begin with were the financial business side of things, right? Just AR, AP, GL. But business intelligence, more and more includes operational intelligence, which is productivity rates over, under production. Right? So there’s a lot more to business intelligence. It’s a much broader thing now than it’s ever been in the past.

 

Mike Merrill:

Yeah. That’s a great insight. I think another buzz word that comes to mind is KPI or key performance indicators that you then have with that type of data. What types of KPIs or key performance indicators should contractors focus on specifically?

 

Frank Di Lorenzo:

Yeah, I’m going to answer from what I see from gaps currently clients are experiencing in their reporting and then I’ll ask Ben to take it with his actual experience a little bit further. So key performance indicators, another buzz word as you said, Mike. And it’s really a wide open loaded statement because it could be financial KPIs on our cash performance, could be operational KPIs on a project specifically. It could be productivity KPIs on how our labor is performing, how equipment is doing in the field. So there’s a number of KPIs but as an executive, maybe I want to be able to visualize a dashboard where I have several KPIs before me. I want a snapshot of how we’re doing from a cash standpoint and I want to know if we have any issues in the field, maybe from an equipment standpoint, so different KPIs but I want them in front of me and at my fingertips. Does that make sense?

 

Mike Merrill:

Yeah. Yeah. That makes a lot of sense. So to me, I’m picturing a front end and a backend to that side of the story. I mean, what do each take to be effectively managed?

 

Frank Di Lorenzo:

Well, one thing to consider is you got to get the information from the field, right? I mean, you ever hear the old adage garbage in, garbage out with all the cool stuff we have, that still applies. So provided that we put the tools in the, I’ll say the right procedures in place to collect information, make sure it’s accurate, timely. Now we can deploy all these reporting tools to establish our KPIs and our dashboards. And that’s something I know Ben, I think you’ve actually done in practice. So I don’t want to steal any thunder you may add. 

 

Ben Harrison:

No, I think that’s what I do see. You think about KPIs, think about an airplane cockpit. There’s a lot of indicators that are really important there. So it’s hard to say that altitude is not more important than how much fuel is left in the tank. But from a construction point of view, field productivity is where margins are tight. You estimate it based upon some assumptions to know whether it’s going bad or not. You can’t wait till the end of the month reports. You really need that daily productivity understanding. And then construction industry, that’s where I see the biggest benefits is that field business intelligence has given me insight into how did I do today so I can take action to fix it by tomorrow.

 

Mike Merrill:

Yeah, that’s great. I know in my world the term we like to use, and I think companies should be more focused on than they are today is live field data. And so I don’t know that that’s a buzzword yet, but if we can make it one, we’d sure love to because I think that visibility is really what everybody’s after, wants to have their finger on the pulse of the money if they can. 

 

Ben Harrison:

Yeah. 

 

Mike Merrill:

Go ahead, Frank.

 

Frank Di Lorenzo:

I was going to say, I mean, absolutely. Think about this for a minute. I could provide you the prettiest dashboard on the planet with the nicest, most vibrant colors but if it has a column that says hours yesterday, and it’s a zero, because I can’t get that information for three days, the report is pretty useless, frankly. So having that data stream in place is very important from collection all the way through to backend.

 

Mike Merrill:

Yeah. That’s a great analogy. And another thing, you talked about garbage in garbage out. One thing that we see and hear commonly is there are people putting numbers in that cell, in the spreadsheet or in the report that are guesstimated or estimated and maybe aren’t even accurate. So that could be worse than a zero.

 

Frank Di Lorenzo:

Could be worse. Because misinformation now is dangerous.

 

Mike Merrill:

Yeah. All right, well, so speaking of labor in the field, we all know today the crunch in the construction industry to find mid-level skilled labor, just everybody said, I just came from a large, the 99th annual AGC event here in Salt Lake City, just a great event. It was a live event, something fun to get to with everything that’s been going on and get back in front of people again. But that was the theme of every conversation I was in. Everybody was saying, “Our biggest gap right now is just finding enough good help. We were so backlogged. We just can’t find the labor and have a major shortage in skilled employees to come and help us work on these projects that we actually have locked in.” So how can having better data or more proper and appropriately managed data get ahead of that to a degree?

 

Frank Di Lorenzo:

Ben, do you want to take that one? 

 

Ben Harrison:

Yeah. Yeah. I think I that’d be good. So that’s a great question. And I think it’s something that every contractor struggles with as long as I’ve been in the industry and has been for a few decades now, where am I going to get the crews to do the work that’s been important. Part of that is understanding your crews and the company I came from, we had A-level crews, essentially your A-level crews, you kept busy all the time, right? If there’s no work for them, you put them down the yard cleaning stuff up because you just want to make sure they never go find a job elsewhere. Then you had your B-level crews who are pretty good and then your C-level crews. So part of that is if you don’t have good analytics, you can’t understand your true capacity. And I think contractors need to have that understanding of what’s possible and even turn work away because it can be expensive to get the wrong crew on a job that you’ve been with really tight margins. Right? So does that help? I thought that answers for me the question.

 

Mike Merrill:

Yeah. I think that’s great. And you both spoke about just getting that predictive data or that trending, the productivity ratio. So I think some of what you spoke about also would be helpful in knowing in two months we’re going to have a major shortage. We better start getting ahead of that if you’re doing that.

 

Frank Di Lorenzo:

I’ll just add really quickly. One other thing, I think it’s one thing to find quality talent but to retain it is another thing. And I think part of that retention is the employee’s experience at that company and providing them proper tools to do their job is one. I can’t imagine, some young talent in the industry going to work at a company and saying, “Okay, your reports are paper-based.” Or, “Start writing your time on this notepad and we’ll collect it later.” That causes stress that reduces that employees, I think, job experience in total. So I think data helps you enjoy a better experience on the job because you know where you are, there’s less surprises, less angst and the proper technology tools help with that retention as well.

 

Mike Merrill:

No, that’s great. You mentioned reporting and it just makes me think, I was a contractor a couple of decades ago, used to be a general contractor. We self-performed a lot of work of our own also. And the capabilities in reporting today versus back then, or I mean, it’s just two completely different worlds. So how has BI changed reports that contractors can actually enjoy today, for the last decade or so?

 

Frank Di Lorenzo:

Ben, I think you could share with us that one.

 

Ben Harrison:

Sure. I’ll jump on that. I obviously, I think the most important thing is mobility, right? The idea that technology… I can remember our first laptops we gave to Formaway long, again, decades ago. And that adoption level changed a little bit but it was still you’re filling out a time card and an Excel sheet and sending it in. But the idea that I now have a tablet, the phone or a mobile tablet that’s always connected, not only allows me to provide that real-time data back to the main office, safety data, punchless data, just anything that’s there but also allows me to see data back consolidated from other people in the same job site, so that the biggest thing to me that has changed in the last 10 years is the expansion of what we can expect to have in the hands of a foreman or a project engineer who’s out on the job site.

 

Mike Merrill:

Okay. So I’m hearing like a loop basically. Is that what you’re saying? A data loop where that’s actually getting back to the field instead of being trapped in a file cabinet in the office?

 

Ben Harrison:

Yes.

 

Frank Di Lorenzo:

Data feedback loop. I like that, Mike, I think that’s spot on.

 

Mike Merrill:

And from there, what’s the value of having the field plugged into that information to make those decisions?

 

Ben Harrison:

Well, there’s all sorts of implications. I think one of the things I saw most of the company I worked for was improving on safety, right? So we did lots of near miss recordings and you look at compliance of not safety but even environmental compliance and not being shut down for a day for whatever reason drives all sorts of things. So I guess for me, it’d be hard to say, how could you not live that way now? Right? If you’re going to be in business and you don’t have that visibility on the job site, I don’t see how you stay in business.

 

Mike Merrill:

Certainly you have to be competitive. So one of the other words that’s been floating around in the conversation, we’ve talked about data visualization, what are some options within that term that relate to construction today?

 

Frank Di Lorenzo:

Yeah. I’ll take a first pass Ben and then certainly I know you can add some more color to it. But when you’re visualizing your data and there’s some favorite charts we have, one’s called a waterfall chart. So if you’re looking for, am I above or below the line, if you will performance over budget, under budget is an example, that’s where a waterfall visualization can really help illustrate that. Visualizations are really meant to make the data pop, stand out, show trends, show outliers and think about this, when you combine some of the AI and machine learning capabilities of Microsoft with those visualizations, I can now say, “Okay, here’s all my data, Power BI, what do you think?” And it will actually draw up some visualization. Some may be meaningless but others might become part of my dashboard package. So visualizations is just a new, and I think more complete way to see inside our data, if you will.

 

Ben Harrison:

Can I add to that then as well? We are getting more sophisticated, not we me and Frank, but we as a society are getting more sophisticated on visualizations. I can remember as a young engineer, pie charts were how people thought of visualizing data. And so then there’s bar charts, there’s stacked bar charts and all of these new capabilities. And now there’s these key indicator charts that break down components that you can drill through. That brings to question some sophistication that’s not natural, not natural does not explain what I mean, it brings the idea that I need to bring to the table some willingness to understand, right? Pie charts, people got led away. Some of these more advanced charts give you really, really good insight but you have to stop and struggle with them. And so that’s what I’m seeing is that the more sophisticated visualizations provide very powerful insights but you can’t just look at them right away always and see exactly what you need to see. You have to engage in them.

 

Frank Di Lorenzo:

It’s a good point, Ben. Part of our data journey and working with clients in this whole data experience is training around that, how do you take your data and visualize it? What does that mean? Where should you start? So there’s a bit of training I think that helps with that adoption. 

 

Mike Merrill:

Yeah. And I think back to something that you mentioned earlier, Ben, now that the field has this data and they have the ability to see what’s going on in a more real-time manner, like you spoke Frank, I think the decision-making capability is enhanced and the field is now more empowered than ever to make good decisions without waiting for approval and extra unnecessary steps and bottlenecks. Wouldn’t you say?

 

Ben Harrison:

I would. And I would emphasize that one of my bosses early on wanted to measure performance and posted on the room in the lunch room, right? So that every form is rated. And I said, “Isn’t that going to de-motivate people?” And he said, “No, no.” He says, “Nobody wants to be the last person. Some of them want to be the top person, but the fact that you’re measuring people, inspires them.” People want to excel. That’s what I believe is true. And so one of the beautiful things about better analytics is that lets people be proud of the work they do, it lets them be engaged in becoming better. And that visibility drives process improvements that you wouldn’t have dreamt of if you didn’t allow people to see that data.

 

Mike Merrill:

Yeah. They say when things are measured or when performance is measured, performance improves is a phrase I like.

 

Frank Di Lorenzo:

It’s a good phrase. I like it as well.

 

Mike Merrill:

So one of the terms that I’ve used over the years too is businesses really need to try and find a way to look through a windshield to manage this information instead of the rear view mirror, see what’s coming at them, not try and figure out what the pillar of smoke is behind them, that they just pass by as the job blew up, so to speak. So in talking with that, so I know I’ve heard Frank say before that most of the data that’s used, I mean, its around 90% of the data, whatever some large number goes unused. How does data visualization help leverage and tap into more of that information that does exist within the company? It’s just siloed.

 

Frank Di Lorenzo:

It’s a great question, Mike. And I think part of it is having a better data strategy. So visualization is a part of that strategy. But if somebody out there is looking for just prettier dashboards, that means they’re thinking I need a report. If culturally they’re ready to say, “We need to be a data driven company.” The reason why so much of that data goes unused, I think is because they don’t have the bandwidth or the ability to get their arms around it in a meaningful way. So having a data strategy in place, allows us to greatly improve that, having access to much greater data, hopefully accurate data makes those visualizations much more impactful and value adds. 

 

Ben Harrison:

I’d jump on that as well. Frank, I agree with you 100% that that idea that you’ve got all this data and if it’s just unstructured and there’s no thought put to it, then it’s really hard to get insight out of it. But if you have this data and you actually put a little bit of work into creating a data model, and honestly, that’s one of the things we do as a company, that model now provides a framework so you can do the same type of things that Netflix does or Amazon does, right? So you’ve got a structured data set that now you can actually use tools that are available in something like Power BI to do some artificial intelligence, digging through it, where it’s as Frank said, and analytics is about trends, correlations and outliers. 

Machines do that really well. But they do that really well on a structured data set. So really we’re saying put 100 million records into a data set, structure it well, and then let a computer sort through that. And that other 85% of the data that you’re saying never gets used, it could be used but people probably won’t be doing that. Machines are going to be doing that. They won’t tell us the answer but they’re going to help ask new questions we didn’t think of before.

 

Mike Merrill:

So ask better questions because we got better data there. Interesting. So what I’m hearing then you gentlemen do not subscribe to the idea that Excel is BI.

 

Frank Di Lorenzo:

You know what? I would say Excel can be… Well, yes. Short answer, yes. But Excel can be a part of the BI. I mean, Excel is a great reporting tool. Where I say no, no, no is when I see Excel used as a data silo. So if I’m starting to depend on Excel spreadsheets where I’ve typed in standalone data, or it’s static downloaded from two days ago, not a great use. If I’m using Excel as a part of my data-driven strategy to work with data and visualize it and do what if scenarios, then it has its place I would say. Ben, what would you think? 

 

Ben Harrison:

Yeah, absolutely. Excel is a great slicing and dicing tool. It’s not a good database. And so use Excel one for what it does well, and it will serve you well. Otherwise you’ve got a maintenance nightmare.

 

Mike Merrill:

Yeah. Yeah. That’s a great point. So speaking of automated processes or tools, how have you gentlemen seen AI have an impact on job sites today?

 

Ben Harrison:

I think it’s just coming online. For myself, I haven’t seen it have a major impact yet. I think we’re on the leading bleeding edge of it will soon but not so much adopted yet. Ben, how about you? What have you… The successes that I’ve seen again, I think it is early still. I think construction industry particularly has not figured out how to use these tools well, but from a safety perspective, I think that I’ve seen some AI looking at what are the trends where you’re looking at a lot of data and trying to understand what are the things that work? I’ve seen a few successes in that area. But we’re just beginning with AI and construction. 

 

Mike Merrill:

Yeah. And I think maybe some steps towards that, or at least some technology steps that I’ve seen a lot more active would be BIM or maybe virtual reality, VR. Those are some things that I’m starting to actually see out on projects. And we’re hearing about from our customers. Are those things more common and a part of what you service your customers with?

 

Ben Harrison:

I’ll take that. We do see the, particularly the GCs and the AEC companies doing that. Our customer base is more of the operational install and we’ve not been seeing that as much, but I do think those technologies do slowly filter out. But that’s again, I haven’t seen that.

 

Mike Merrill:

All right. Great. So one of the things, and even it’s the same for me too, with anything new, you hear about the fear of technology especially on the lower end of the labor perspective where people are afraid, this AI or these new tools are going to take my job. We even hear that with our mobile data collection systems, people think, well, my whole job is to key in reports all day and key in payroll manually all day. If you take that from me, I’m not going to have a job. Do you think it’s justified to have those kinds of fears? Or what would you tell people that might be worried about that?

 

Frank Di Lorenzo:

Mike, it’s a good question. I think it’s understandable. I wouldn’t say justifiable but certainly understandable. Since the first time someone hit post on a keyboard and things started happening automatically, people started to be concerned about their job security. And I’ve heard that multiple iterations of new technology when GPS came out, I’m being tracked in my truck. My gosh. You’d hear stories of techs trying to disable it or take it out. They were afraid of that tracking. Now that it’s become mature in the industry, people have adopted it, they know the value of it. And I think AI is just going to be another case in point of that. So with AI, I think there’s some unknowns, fear of the unknown but as it becomes more mature in the field, it will be something they don’t want to live without.

 

Mike Merrill:

Great. So what I’m hearing if I read between the lines, change is good as long as that change is improvement.

 

Frank Di Lorenzo:

Change is good. Change can be feared. It’s okay to have a certain amount healthy but work through it for a better end. 

 

Mike Merrill:

Yeah. I like that. So speaking of these tools automated and more digital really, if we think about our cell phones or a machine and they do certain things like a robot might do. When we talk about labor law compliance, especially, I know you gentlemen, both happened to be from the state of California which is famous for some pretty stringent labor laws and compliance laws, Department of Labor, work comp, all these other things for safety, not bad things but certainly very specific. So why do you think it’s imperative that companies find technological or automated tools or solutions for their employees to record and document this data like time and labor or activities or safety out in the field to help mitigate those risks on the job site?

 

Frank Di Lorenzo:

I would say one just the pure cost of an error can be so egregious that you just don’t want it to happen. So that would be the first one that comes to mind. And then Ben, I’m going to call on you just because of your experience in collecting that data. What would you add? 

 

Ben Harrison:

Yeah. I think that the benefits and I think you’re pointing out the cost of an error is so expensive. And I can think of the types of things that I’ve seen companies try to do of, “Did you take your rest break?” In California you got those laws to do that. Those laws are meant to protect employees. In California it can be 106 degrees outside on a hot day, and you need to know, did you go and drink some water? Are you hydrated? So I’ve seen systems that are starting to put a heat sensor in a hard hat to see, is your body temperature over temperature, a heat stroke again, terrible thing to have happen but also shuts down the job site. You can’t afford to risk noncompliance. So having your tools that help you manage the compliance is important. You just have to do it. It’s the right thing to do. 

 

Frank Di Lorenzo:

Yeah. And from my experience companies, that don’t do it, it only takes getting stung once then suddenly it’s a big priority and they do it. 

 

Mike Merrill:

Yeah. Both great points. And I love what you said there Ben that it’s the right thing to do. It’s a safe thing to do. And then even from just an accountability standpoint, I know I’ve said it for years and I hear others say it in construction, we’re really risk managers, we’re data managers and we happen to build things and we need that data to help drive the revenue and to make our business run. But essentially, every day you wake up and take a step out the door, you’re at risk from a liability perspective. 

 

Ben Harrison:

Yeah. 

 

Mike Merrill:

So to just wind things down a little bit, just going to maybe do some rapid fire questions and maybe we can just alternate here. So Frank if I were to ask you, what’s one skill that you’ve really mastered or that you feel like you’ve got a great handle on and made a positive impact on your business career?

 

Frank Di Lorenzo:

Mike, I love the question. It’s a good question. And I would say it’s a skill that I continue to hone and will improve for the rest of my career. And that is relationships with my clients or with my peers, building and maintaining and earning the trust and friendship I like to call it of our clients. So to me, that’s an important skill I think that they trust you and that you can be an advisor. You have some value to convey. And that’s a skill that I’d like to think I’ve brought in a positive way to this team and continue to work on because it’s important to me personally. 

 

Mike Merrill:

That’s a great one. I’ve seen you do it for years and you embody that. 

 

Frank Di Lorenzo:

Thank you, Mike.

 

Mike Merrill:

All right. So Ben, for you, what’s one activity or something that you feel is your wheelhouse or your super power that you’ve developed?

 

Ben Harrison:

Well, it’s interesting and picking one is hard. I feel like I’ve learned a lot. I feel like I still continue to learn and maybe that’s it is that I’ve realized I don’t know all I need to know. And so if there’s something that doesn’t make sense to me, I’ve learned to stop and ask why? Try to essentially have a humility that I don’t know everything that I need to know and someone else might have some insight for me. So I guess that’s super power sounds, antithesis to humility. But if humility is a super power and I’m not saying I’m that good but being willing to question yourself and your judgements, I think is a really important thing.

 

Mike Merrill:

Yeah. That’s a great one. If we’re not growing, we’re dying, right? If we’re not learning, we’re dying. Love it. All right. Frank, how about this? What’s the most powerful thing that data has done for your business?

 

Frank Di Lorenzo:

Good question. I would say transparency because in our business, we can’t hide. We have experts with data, so everything’s in a Power BI dashboard. And what that I found has led to is no surprises, nobody thinks anything’s not being displayed or hidden. Anybody in our team has access to every piece of data that they should to stay in their lane and do their job properly. And it goes back to your superpower question. I’ll just mention this because I think the superpower I found here is the beyond the power of one, it’s the power of our team. We’re a super team, not a super individual. And having the data just makes it all the more powerful and collaborative.

 

Mike Merrill:

Fantastic. Love it. All right, Ben, one more then I can ask you each one final question. What is one mistake in business that you have made that you wish you would have been able to avoid and would like to help others avoid?

 

Ben Harrison:

I feel like Frank and I are on a similar theme here. So for me, it would be on that collaboration side, right? Of my mistakes have usually been when I thought I had a great solution, I’ve planned it carefully. I plotted it all out and I come and present it to the team and it doesn’t work. They have no buy-in to it. They didn’t understand the context. And so my biggest failures have been when I did not get adequate buy-in from the people around me so that it wasn’t a Ben solution. It was our team solution. And my biggest successes were honestly when we collaborate well, and the solution we come up with is better because more people contributed to it.

 

Mike Merrill:

Collaborated, team, solution, better, people. I heard all those words in your last sentence and that’s awesome. Well, it sounds like an incredible organization to work for and with. You guys obviously have a great team. So one final question, let’s start with you Frank and then Ben if you can finish it out. What’s one thing, Frank, that you hope that our listeners can walk away from hearing this conversation today?

 

Frank Di Lorenzo:

Sure. Yeah. I think that 2021 is the year of data for me. If you look at the investments being made by the construction industry in tools and training and procedures to manage the data that they have, it’s really exciting. So take a step back. Don’t just look at your next report but look at your data strategy from a big picture standpoint. And then the other piece of that is, it doesn’t have to be us but find a partner that’s going to treat you the way you should be that you expect, that’s going to partner with you, bring the expertise and the collaborative spirit that you need to make this work. So a multiple mic thing. Hope that helps. 

 

Mike Merrill:

Fantastic. How about you, Ben? 

 

Ben Harrison:

What I would like you guys to take away is that this is a journey. It’s not something that you’re going to buy an analytics tool and install it in a number of weeks and then be masters of it. This is something that’s going to take effort, purpose, training, budget, time, transformation. But expect that and honestly the results can be astounding but you can add to your bottom line, you can add to your job satisfaction but it’s going to take some intent.

 

Mike Merrill:

That’s great. 

 

Frank Di Lorenzo:

Put it this way, Mike. Rarely, if ever do I hear, I hear people say, geez, we’ve got to get our arms around our data and it’s going to be hard. I’ve heard that in the beginning of the journey. The clients that I’ve had the good honor to work with that have made it through that journey, I’ve never heard anybody ever yet say, “Yeah, we got to remove this stuff. This is not important. It’s not helpful to have BI and visualize our data.” Once they’re there, they don’t want to give it up for a good reason.

 

Mike Merrill:

Love it. Great stuff. Well, what a wonderful conversation. I sure appreciate you, Ben and Frank for joining us today. It’s been fantastic. And hopefully we can do it again down the road.

 

Frank Di Lorenzo:

I hope so. Thank you, Mike. We appreciate it. 

 

Ben Harrison:

Thanks for having us. It was great to be here.

 

Mike Merrill:

You bet. So thank you all for the listener for joining us today on the Mobile Workforce Podcast, sponsored by AboutTime Technologies and WorkMax. If you enjoyed the conversation today that Ben and Frank and I had, please follow us on Instagram at WorkMax_, follow us on LinkedIn or join our LinkedIn group of WorkMax, and also subscribe to the podcast on your preferred platform. If you really enjoyed the conversation today, please give us a five-star rating in review and leave a comment on what you enjoyed or learned from the podcast. And this will help us to continue to bring these types of episodes and conversations to the industry, which will hopefully improve your business and in turn your life. 

Innovation in Construction: Using Tech to Tackle Its Bad Rep

Innovation in Construction: Using Tech to Tackle Its Bad Rep

There are a lot of stereotypes about the construction business, such as all projects go over budget and delays are inevitable. Most of them are dated and untrue, but these misconceptions still weigh the industry down. How? For starters, by making it harder to attract good workers and increasing skepticism by prospective customers. The good news is there’s never been a better time to work in construction, with technology at the helm of significant changes that improve how companies budget, report progress, and track issues. Fortunately, technology and marketing are the answer to freeing the industry from outdated stereotypes once and for all.

In this special crossover episode with the Bridging the Gap Podcast, host Todd Weyandt breaks down common stereotypes about the construction industry and shares ways to reshape construction’s image in 2021 and beyond.

 

Key Takeaways:

  1. Contractors should partner with their local trade organizations on community initiatives. The industry will be able to change the general public’s perception if everyone works together for the greater good. By working together on projects that give back to the community and unify to recruit for job fairs, contractors will begin to be trusted and respected by the community and each other. Trust and respect for the construction industry and the different trades benefits the entire industry. 
  2. Promote soft skills on the job site. Construction is not a muscle-only industry. The need for soft skills and tech savvy is only increasing. On-the-job training and fast tracks for promotion give anyone willing to do the work the opportunity to succeed. As an industry, we need to show that making a career in construction is rewarding, does not require extensive college debt to get into, and has unlimited upward mobility. 
  3. Sales and marketing are a huge part of the process today. Studies show that 85% of all purchasing decisions are researched beforehand online. If you do not have an online presence with a website and social media, especially LinkedIn, you are missing the opportunity to set the expectation for new clients. But having a website and social pages isn’t enough. Show off your diverse team, the technology you use and the quality of the jobs you have already completed. 

Make sure to check out the second half of our conversation on the Bridging the Gap Podcast! We discuss actionable steps to build a new reputation for your business by promoting the processes and technology you use on the job site and online. 

 

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Episode Transcript:

Mike Merrell:

Hello and welcome to the Mobile Workforce Podcast. I am your host Mike Merrell and today we are recording part one of a specials crossover series with a host of the award-winning podcast Bridging the Gap Todd Weyandt. Thank you Todd for joining us. I’m excited to sit down with you and have this discussion today.

 

Todd Weyandt:

Absolutely. Thanks for having me on.

 

Mike Merrell:

You bet. So before we get into the conversation too deep, would you give our listeners just a little bit of an overview in your background and experience?

 

Todd Weyandt:

Yeah, absolutely. So my official title is Director of Creative Marketing at Applied Software and we are AEC and manufacturing systems integrators, so we tackle pretty much anything under the sun with AEC, whether it’s software or custom development or workflow enhancements, we probably have it covered there. And then through that, I get to host the Bridging the Gap podcast which focuses in on the innovation and the innovators out in construction and MEP. So we focus a lot on kind of what are those foundational elements to make technology adoption successful whether that’s on the culture side of things or business process side or the innovation and growth mindset that is needed to not only just survive the future of construction and the changes happening, but really thrive in that new year.

 

Mike Merrell:

Oh, that’s awesome. Yep. I applaud your efforts and enjoyed listening to your podcast episodes so far and love what you’re doing for the industry. It’s a great resource that can be really helpful to our brothers out in the field.

 

Todd Weyandt:

Thanks.

 

Mike Merrell:

You bet. So I guess kind of to get things started off, I just thought maybe we could talk about one of those quote unquote elephants in the room that sometimes happens in conversation about construction people and workers, just the stereotype that it’s grunt work and people that are less skilled in other areas end up working construction because that’s all they’re really good at. What are your thoughts on that?

 

Todd Weyandt:

Yeah, I mean it’s for sure a prevalent stereotype and I, true confessions, I have fallen guilty of that in the past myself, that it’s maybe just a job, it’s not a real career path. Some of the other stereotypes of it’s a dirty job or slow to change, stuck in the past, no tech. What I have learned though, I’ve been at Applied Software for almost seven years and doing the podcast for about a year and a half, and what I’ve learned over that time is that’s just so not true. There are so many cool new technologies coming into the construction space and there are so many people that have their arms wide open for embracing that technology, they’re just not good at sharing what they’re doing and talking about it. And that probably stems from a whole bunch of reasons. Chief among them is that the construction industry is full of a bunch of really humble people, which is great, and their head down, get the job done. That’s all they’re focused on, which is definitely, I’m not knocking that. That has its place and its advantages for sure, but they’re not great at sharing their stories.

 

Mike Merrell:

Yeah. I think I would agree with that completely. I mean I grew up in construction company industry and, did some pretty cool projects, but when I go out and about and travel throughout the country and even the world sometimes internationally, I am just amazed at some of the structures that I see and some of the architecture that’s happening in this day and age. And I really tip my hat to the trades that are able to create these beautiful structures and incredibly, just almost inspiring buildings that are also structurally sound and built with quality.

 

Todd Weyandt:

Oh for sure. Yeah. I mean some of those are pretty just mind blowing, especially when you add in how modulars coming into the industry and that the offsite bringing in manufacturing principles. I mean there’s some just really cool mindblowing stuff out there.

 

Mike Merrell:

Yeah. You mentioned a minute ago just kind of the stereotype that construction doesn’t necessarily adopt technology. What are some examples of some things that amaze you from the guests you’ve had?

 

Todd Weyandt:

On the technology side of things?

 

Mike Merrell:

Mm-hmm (affirmative).

 

Todd Weyandt:

Well I think what I just mentioned there with modular construction coming in and the industrialized construction that’s starting to overtake the industry, I think that there’s just really cool processes that they are able to get a lot more efficient, move projects a lot faster, and then really increase safety just by shifting into a different workflow with offsite and kind of pulling in those manufacturing principles and turning a construction site into a factory for all intensive purposes. Yeah. I think that’s some really cool things going on there that, it’s not a majority of jobs doing that right now, but I think that it’s going to be growing in popularity for sure.

I think another big thing is the construction industry proved over the last year especially that they can adopt technology at a rapid clip when they have to and start to put in place all those digital workflows, whether it’s as simple as getting on a Microsoft Teams application or something and having that chat functionality and collaboration within that platform. I think the construction industry has really proven that they had the chops to adopt the technology. It’s not as foreign as some might have you believe.

 

Mike Merrell:

Yeah. And these younger generations that are coming into the trades and advancing in management roles as some of the baby boomers retire, we’re seeing waves of new technologies being adopted in all types of industries and companies that I’m seeing.

 

Todd Weyandt:

Oh for sure. Well they’re demanding it. The younger generations, it’s not a nice to have, it’s an expectation here. The company would be very strange and weird if they didn’t have the technology for millennials and gen Z as they’re coming into the industry now as well.

 

Mike Merrell:

Yeah, I like that. And you mentioned something a minute ago about safety and I think that’s another area that I’m very, again coming from the trades, I’m just very impressed with not only how incredible these structures are becoming and the methodologies that companies are building these buildings and that the engineers are putting them together, but these things are being done very safely at record rates and safety percentages that we haven’t seen in the past. So amazing.

 

Todd Weyandt:

Yeah, for sure. Especially all the COVID curveballs that have been thrown the way of the construction, for them to keep the jobs going this last year I think really speaks volumes to the grit and determination of the industry, but also the can do, get her done mentality of the industry.

 

Mike Merrell:

Yeah. I think, like you mentioned a minute ago, that just generally the attitude and even the humility, the quietly just get to work, get their elbows dirty and just dig in and figure it out. I mean that’s definitely something that construction companies are good at doing.

 

Todd Weyandt:

Oh for sure.

 

Mike Merrell:

So what about when you hear things like when people talk about oh the projects are always late, they’re always over budget, you can’t trust a contractor as far as you can throw them. I mean what do you say to those types of stereotypes that also get thrown around on occasion? Or maybe shown on a TV show or something?

 

Todd Weyandt:

Yeah. I think that there’s such a broken cultural and communication aspect in the construction industry right now. One of the things that we talk about on Bridging the Gap is how to embrace those soft skills and what does that really mean. And I think, going back to the generational aspect of it, this is not a knock on older generations by any stretch, but millennials and the gen Zs are coming in expecting a little softer edge than what the industry has typically been accustomed to, which I don’t necessarily think is a bad thing. If you take it to any extreme it’s not great, but…

Now I’m not saying everybody sits around all day and just sings Kumbaya by any stretch, but I think focusing in on the trust factor and having that as an undercurrent between those different teams is a really big opportunity for the construction industry because there is bad blood, whether you’re talking about between the architect and the GC to the subs to the owner, there’s so much people talking past each other and not really sitting down and saying, alright, where are you coming from, what are you trying to get out of this project. I don’t necessarily have to agree with where you’re coming or your process, but I have to know where you are at so that then I know what I need to bring to the table and how to communicate back with you. There’s so much of the industry of it’s just easier to push it down to somebody else, blame somebody else and really contracts are set up that way as well, too. You look at contracts and it’s if something is going to fail, it’s when it fails this is what happens.

And so that is just an environment that sets it up for that mistrust and all of that has a huge impact on delaying projects and slowing projects down because everybody’s now in this super cautious cover yourself mode instead of offering and really embracing that true collaboration. So I know that’s a big buzz word that means a lot of different things to a lot of different people, but that’s because people have that mistrust and aren’t really taking the time to sit down and hear the other person’s point of view.

 

Mike Merrell:

Yeah. You mentioned a lot of really powerful things there. And I recently just came from an AGC event, Associated General Contractors, for the state of Utah and it was their 99th annual conference. So really cool, big year, a hundred years next year. And it was an in-person event so with everything going on that was a lot of fun. And we spent a couple of days up there with a lot of our team members. And one of the things that was so inspiring, in our local chapter there’s a building, I think it was between $7 and $8 million cost for an AGC training center, and the vast majority of the labor, the materials, and the money to build that facility were donated by the contractors in the state of Utah.

And so there were a lot of what I call frenemies or competitive companies working side by side in tandem donating time, labor, money, resources for the greater good. And it’s all in the name of safety. It’s a safety training center for members of the AGC. So it was so inspiring and I was truly proud to be a member of AGC and to be a technology partner for companies that are members and just to see that incredible brotherhood that existed in that environment. I think that’s kind of what you’re talking about. We need to broadly do a better job of those types of things working together for the greater good.

 

Todd Weyandt:

Oh for sure. Yeah. I’m a big proponent of just having those conversations and humanizing the other person. I think that goes a long way. And that can sound super corny, but it’s effective.

 

Mike Merrell:

Yeah. Yeah. And then one of the things too that was a big push, they have a hashtag, we build Utah was the hashtag. They had a really inspiring video clip of probably a dozen of these construction projects, highways, bridges, buildings of all the different contractors and little outsert quotes from different team members that were out there working in the trenches. And it was just incredible to realize the impact that the construction industry has on society in general. And I think sometimes we in construction even take that for granted and need to be reminded of this new term of being an essential worker. We’re all essential for sure. We all equal our part of society, but construction is just a critical component, especially the services trades and people that keep things going. And so it’s inspiring to be a part of it and we need to do a better job of reminding ourselves and others of that at times I think.

 

Todd Weyandt:

Yeah. More than agree with that.

 

Mike Merrell:

So tell me, within the industry, do you think sometimes we’re our own enemy a little bit or kind of need to be better proponents of this as we have dialogue within our organizations?

 

Todd Weyandt:

I think within the industry we are most definitely our own worst enemies there. And really the blame starts and pretty much ends within the construction industry on this marketing problem. Because if you’re not telling your story, who is? And you’re leaving that up to somebody else that does not know what is really going on. And that’s just silly.

 

Mike Merrell:

Almost like the TV sitcom persona of a construction worker?

 

Todd Weyandt:

Yeah. And they have no idea what actually goes on in construction. Most people within the industry doesn’t really fully understand the scope of what all is going on. Like what you were saying there about construction and the essential worker, maybe it stems back to that humility again, that construction is so just head down, let’s get this project where we’re all in on the specs and the criteria for this one thing that it’s hard to stop and kind of lift your head up and see that bigger picture of the impact that construction really has on society at large. With the, I’m going to get these stats wrong, but with the population booming as what it is worldwide, it’s something by like 2050 there’s going to be like a couple of hundred more New Yorks in scale and size that are being built within the world. That’s insane. And that doesn’t get done without construction. So I think being able to see that bigger picture in mind is huge for the construction industry and it’s something that, as a whole, we’re not very good at.

 

Mike Merrell:

Yeah, we’re building the homes that Google’s employees live in. We’re building buildings that Google operates or Facebook or Microsoft or Apple. We have a customer that has worked on all of those large projects in the electrical trades and it’s amazing how busy they stay in expansion of some of the world’s largest and most successful businesses that depend on them in construction to allow them to grow their business and advanced technology that we’re all enjoying today. Even that we’re recording this episode with.

 

Todd Weyandt:

Yeah, absolutely. I mean who would have thought that data centers would be the end all be all this past year, but that became an essential building because with everybody going digital and remote, it’s all about the data center now instead of office buildings.

 

Mike Merrell:

Yeah. And all the buzz with green energy and solar. We have lots of customers that do solar or cellular towers or all these other things that we’re using to power our homes and our offices, our communication systems. I mean just, there’s no end to construction’s impact on every facet of our lives.

 

Todd Weyandt:

For sure.

 

Mike Merrell:

So with what’s been going on in 2020, do you think the notion has been shattered of technology isn’t really needed on the job sites or maybe some of the old school mentality that maybe existed a decade or so ago?

 

Todd Weyandt:

Man, I’d like to hope so. But I’m really curious about it because I think in large part, yes, it has. But I’m curious if when things fully open back up, do you start to see a slow creep back to that mentality and, oh, well that was good as a band-aid for what we needed during that time, but now we can get back to the way it used to be. I think that the longer everything is happening, that probably diminishes and people get used to it. And once you’ve had that taste of tech and efficiency and you’ve learned that it’s not super scary, I would think that that’s a hard thing to give back up. But I think it’s a really intriguing open question for sure.

 

Mike Merrell:

Yeah. I know we had another episode, in fact one of our first episodes of, the very first guests that we had on our show was Brian Kaskavalciyan from a company called gFour marketing and he was sharing a sentiment that I’ve said for a long time too that we are not contractors, we are businessmen and women in the construction business essentially. And one of the most important things that can happen to advance that business is marketing our ourselves properly and appropriately. And that’s definitely one of the big gaps that I see even still in construction companies.

 

Todd Weyandt:

Yeah, absolutely. And admittedly I’m very biased in the role of marketing has that it can play, but in my mind it really goes back to what I was saying about if you’re not telling your story then you’re leaving it up to somebody else. And at the end of the day, marketing is all about storytelling. People are visual. They want videos, they want pictures, they want to be able to relate to the human success stories that are in the industry.

And in my mind, at the end of the day construction is a people-driven industry and we just have to do a better job communicating what does that really mean, what’s the impact of that? You hear all these stories of the guy going into the trades, not going to college, he’s not getting $100,000 in debt and he buys his first house by the time he’s 24, 25 and he’s doing awesome and making a killing compared to the college grad that comes out a $100,000 in debt and gets a remedial entry-level job right out of school and it takes him years to catch up to where the guy who started in the trades is. So I think being able to tell that in a more compelling way is crucial to the industry moving forward. And really with the skilled labor shortage and all that stuff, I think this is a key component to that.

 

Mike Merrell:

Yeah. There’s some very, very well paid employees in the construction industry in this day and age. No question about it. I think that’s a fallacy that a lot of people maybe don’t understand. What do you think about the younger generation coming through college and maybe coming out of high school now. What can we do to do a better job of recruiting and getting some of them involved?

 

Todd Weyandt:

Yeah. Great question. So I think being able, going back to those stories, I think that that’s huge. Find the people that have done it and help make them the spokesperson for it. Because it’s one thing to say that it’s possible, it’s another thing to show somebody that it was possible with, this is maybe controversial. I’m a Tom Brady fan. So if you would tell somebody that it’s possible to win seven Super Bowl titles and go to the Super Bowl 10 times in your career, you probably wouldn’t really believe that that’s true until you hold up Tom Brady and say, this dude’s done it. It is possible. That’s way more impactful than just necessarily saying the stats of what could be. So I think finding the poster boy, poster girls for lack of a better phrase is crucial. It humanizes that story.

 

Mike Merrell:

Yeah. And if you pick Tom Brady out of a line of football players, he’s probably not the first or even the 10th through the 20th guy you’re going to pick by stature or his chiseled physique, yet any team in the NFL would absolutely love to have him, right?

 

Todd Weyandt:

Yeah, absolutely.

 

Mike Merrell:

No. So there are, again, so we’ve talked about some of these things. There are a lot of things to be excited about that are happening in the construction world and in the industry. What are some things that you wish people were more aware of? Or if you could shine a light on something, what would some of those highlights be?

 

Todd Weyandt:

Yeah, great question. I think what excites me about the construction industry right now specifically is it’s at the start of its own industrial revolution for sure, which is really exciting. It’s already starting to take place and we’ve seen that, but there’s still a whole lot more of that curve left to go. And I think the technology leaders over the next decade, meaning what you have thought in the past of as the technology leader of the Apples or the Googles of the world, I think over the next decade or two you’re going to see construction being thrown in the mix. There’s going to be a construction company that rises up and kind of takes that mantle from one of those companies. And in my mind, construction is really the tip of the spear with all the innovation coming, all the tech that’s happening and that growth mindset and the hunger for getting better, getting more efficient, getting faster, getting safer. All of that is just an incredible soup that is being mixed in, is boiling up, and it’s just going to explode here in a little bit, which is, the potential there is what I people would latch onto more, that it’s an exciting time to be in construction.

 

Mike Merrell:

Yeah. Do you think social media has a big role to play in raising that awareness?

 

Todd Weyandt:

Absolutely. Yeah. I think. So LinkedIn is my drug of choice. I like to tease. Yeah. I think LinkedIn is huge because back to the story element and kind of raising up those poster childs of it’s possible, I mean that’s where people are going to find those stories right now, is on social media. So whether it is LinkedIn or Instagram or Facebook, whatever, telling those stories and relating to the personal aspect of it, that’s huge. And that happens on social now. Love it or hate it.

 

Mike Merrell:

Yeah. We have a local, it’s a welder actually, that did some work for my partner that’s our CEO called Yeti Welding here in Utah and he invested a while back in a drone and posts stuff every day and it’s fresh and it’s fun and it’s him rising his guys or him doing aerial shots of a really cool project they just did or some huge plasma cutting table just doing something intricate. And it’s very fascinating and entertaining. And they’ve, I don’t know how they have 14, 15,000 followers at this point and it’s just a small welding shop. They do some incredible work, but if you look at just even their Instagram page, it’s very impressive and you wouldn’t think they’re small at all by the projects that they’re doing. And so that’s an example to me of where he’s doing a fantastic job of marketing a great product that’s still maybe a little bit of a secret just because of their size and scope currently.

 

Todd Weyandt:

Yeah. And the great thing about social media is it allows you, what may have been a regional player can now spread their message anywhere. There’s no limits. And that I think is a really cool, exciting thing. Opens up a lot more competition, but it also opens you up to a whole lot more customers and clients as well.

 

Mike Merrell:

Well everybody says they have the best quality or they have some tagline that’s the same as a thousand other business cards say, but it is another opportunity to differentiate yourself. And if you believe in what you’re doing and you’re passionate about it, I think that shines through and that will resonate with them more than just another marketing slogan.

 

Todd Weyandt:

Yeah. I totally agree. And then you get to compete against the best and that’s something in and of itself there.

 

Mike Merrell:

There you go. Yeah. We actually have him scheduled to be on the podcast here in the next couple of weeks. So pretty excited for him to tell that story and share his vision of what they’re trying to accomplish and how it’s helped them win more jobs.

So we’ve talked about social media, LinkedIn, different mediums that companies can utilize as tools. I mean it used to be just, oh, we’ve got a website and you immediately were in the upper echelon of a construction company. And so I think we’re well past that, but are there some other things, I mean commercials, radio stuff. I mean, what other kinds of things do you see companies doing that you think are helpful?

 

Todd Weyandt:

Yeah. I’m a big proponent of videos. Whether you can release them on the website, you can do in email campaigns or social or a ton of variety and people are growing more and more and more to be visual creatures. And we always have been, but the video allows people to see it in real life and put themselves into that story and kind of latch onto it in a different way. So any chance that you can do a video, and right now everybody has the power to do really good videos just on their cell phones. The quality there is, that’s all you really need so don’t overthink that. Everybody can be a videographer now.

 

Mike Merrell:

Well that’s a great point. And even as a learning tool for within the trades. I built a fire pit in my backyard of my home a few months back and I just looked it up on YouTube. I had a friend that had done it and I was laying cinder blocks and running gas piping and cutting out sheet metal, every step. Grouting, laying stone. And I come from construction so I’m pretty candy with some of those things, but I’d never physically done that. And it looks like I paid somebody three or $4,000 to do something that cost me about 800 bucks in materials and some labor.

 

Todd Weyandt:

Yeah. Nice.

 

Mike Merrell:

And it’s YouTube, right? So video can be a powerful tool to get the message out whatever it is you’re trying to do.

 

Todd Weyandt:

Oh for sure. YouTube is, if not the biggest, it’s second as far as more people are searching for anything on YouTube even than Google too. I mean YouTube dominates search results.

 

Mike Merrell:

Yeah. How important do you think sales people are in construction companies? I know a lot of companies adopt that and have them and then a lot of smaller companies it’s the owner or really the upper management are the only ones really actually selling directly. But what are your thoughts?

 

Todd Weyandt:

I think that there’s obviously a place for sales reps hands down. It’s a personal business in construction and that handshake or fist bump in today’s world, virtual fist bump, that goes a long way for sure. But you see the stats of most people, like 70%, 80% of people have done 90% of their research online before they ever want to talk to a sales rep now. So if that’s the only thing that you are doing is just investing in sales reps, well you’re missing the vast majority of your people and your potential customers. So you have to, whether you like it or not, you have to have a digital presence in this world. You have to have the website, you have to have social because that’s where people are going to look for you. And if you’re not there, you might as well have your closed sign hanging out because nobody’s finding you.

 

Mike Merrell:

Right. Yeah that can only reach as far as their vehicle or an airplane can take them, right?

 

Todd Weyandt:

Right.

 

Mike Merrell:

So one of the other things, and this just popped into my head, I mean a lot of the messaging that you’re sharing and the ideology is also that everyone’s in sales, even in the field, right?

 

Todd Weyandt:

Sure.

 

Mike Merrell:

They’re all a part of that sales arm and marketing arm whether they realize it or not. How do we help the field recognize their role in establishing that reputation and helping the company look as good as possible?

 

Todd Weyandt:

Yeah. I think it’s a great, important question. And it starts with telling them that they are and having that conversation. Because a lot of times, I don’t think that it stems from the people out in the field don’t care about it or they don’t want to embrace that, but they don’t think about it. They don’t, back to the head-down mentality, they’re like that’s somebody else’s job. This is my job that I’m getting paid to do.

And so to communicate that out, that goes a long way. And then follow that up. It’s not a one and done communication, it’s a consistency effort there. And then it’s a live by and set some examples. Have people throughout the company showing what that means. And maybe going back to the culture aspect as well too as I’m thinking through it is, in order to really market it well and to represent that well, you have to take pride in the company and the brand and what it all represents, which is the culture aspect of the company and making sure people are feeling heard and feeling included and feeling like they are valued in what they are doing and know the why behind what they are doing. And when they know all that and all those boxes are checked, a lot of that’s going to happen on its own. People are going to naturally start sharing what they’re doing and naturally start posting it out and talking about it more.

 

Mike Merrell:

So what I’m hearing is start the conversation and allow that message to bounce around in people’s minds so it’s top of mind and then you sort of go from there.

 

Todd Weyandt:

Yeah. Start with something and then share it consistently.

 

Mike Merrell:

So for a company that isn’t doing a good job of this or maybe for one that is, what are some things that they can do to start really marketing themselves better? After they have the conversation, what are some steps or things that you would recommend?

 

Todd Weyandt:

Yeah. Pick a platform that you want to do. Don’t try to eat it all at once. If you’ve got a website, great. What social can you add in next? Then start sharing something. I know that there’s some people that are uncomfortable talking about themselves and putting themselves out there and that’s okay. You don’t have to. Brag on an employee, brag on a client, take a picture on a job site and share what you appreciated. It doesn’t have to be anything super complex or super intense. It takes you 60 seconds to do a post and just tag somebody and let it go from there and you’ll be amazed at how it takes off.

 

Mike Merrell:

Yeah. And I think, I mean one bit of advice I would share with the listeners, just last week for the first time I posted something on LinkedIn that I like to trail run, get up in the mountains, and I was on a trail run and I thought, you know what? I’m just going to introduce myself as Mike Merrell the trail runner today that works with WorkMax and is a part of the team here. And I actually had substantially more engagement and interaction and comments and different dialogue from all kinds of people that I’d never heard from when I just posted a normal thing about our product or what we’re doing or an event where at. It was clearly more interesting and also stood out to them to just share a little bit of me even though it was on the personal side. So there there’s maybe another tidbit that the companies could try.

 

Todd Weyandt:

Yeah, for sure. Love it. I think one of the things to think about and have in the back of your mind is what makes you stop and catches your attention when you’re on social. Chances are if it’s making you stop there’s probably something there to it to use that as inspiration and an example.

 

Mike Merrell:

I love that. That’s a great point. So take note of the things that catch your eye is what you’re saying.

 

Todd Weyandt:

Yeah, absolutely.

 

Mike Merrell:

Love it. Well great. Well so to kind of wind things up a little bit, just like ask kind of a few questions here at the end and get your feedback on. So what’s one skill that you’ve mastered or that you feel like you’ve been able to really take advantage of that’s made a positive impact on your business life?

 

Todd Weyandt:

I don’t know if I’m a master at anything. But I’d like to think of telling those stories and championing the innovation in the industry and maybe tie that with because I think they all play hand in hand with the healthy team culture.

 

Mike Merrell:

I love it. Good. What about something that you do regularly that’s become your go-to kind of your superpower, something you’re really good at? What’s your one habit that you lean on to help you be productive?

 

Todd Weyandt:

I lean into conversations. So I will sit down and talk with pretty much anybody and really seeking to learn insights there. I am not the smartest person in the room, I will fully admit that, and I want to learn from smart people.

 

Mike Merrell:

I love that. Yeah. Always be learning, right?

 

Todd Weyandt:

Yeah.

 

Mike Merrell:

Is there a mistake you’ve ever made or something that you wish you would’ve done a little bit differently that you could help steer others away from and maybe avoid?

 

Todd Weyandt:

Just one mistake?

 

Mike Merrell:

Yeah

 

Todd Weyandt:

Lots of mistakes. I think my biggest one is fighting the desire to control every aspect and details. I can be a bit of a control freak and perfectionist that I have to reign that in and learn that there’s beauty in relying on the team and trusting them to handle things even if it’s different than how I would go about it.

 

Mike Merrell:

Valuable advice. I think I could surely take a lesson from that. So the last thing. So if the listeners are to walk away from this conversation with one thing in mind, what would you remind them of here at the end today?

 

Todd Weyandt:

Perception is reality and don’t underestimate the power and potential that that holds. One of my mentors always says, “I’m not what I think I am. I’m not what you think I am. I’m what I think you think I am.” Meaning it’s all about perception. So it’s how I’m seeing the world through your eyes, which there’s a lot of gray in there, but keep that in mind. Perception is important to tell your stories. Don’t leave it up to other people’s perception. Paint that picture of what you want them to do and look for those ways to innovate even small things. And there’s always ways that you can improve and up your game there.

 

Mike Merrell:

That’s awesome. Love it. Well thank you so much for joining us today. I really appreciate the conversation Todd. Looking forward to the second half of this.

 

Todd Weyandt:

Absolutely. Thank you.

 

Mike Merrell:

And thank you guests for joining on the Mobile Workforce podcast today, sponsored by about Ten Technologies and WorkMax. If you enjoyed the conversation that Todd and I had today, please give us a rating and review on your favorite podcast platform and a five stars works great for us. Also you can follow us on LinkedIn or Instagram at WorkMax_. And also please make sure that you listen to the conclusion of this two part series with Todd on the Bridging the Gap podcast which Todd hosts also. And he’s got a lot of other wonderful episodes to share there so encourage you to check those out as well. Thanks again and we look forward to continuing to bring you these valuable episodes. Again, those ratings and reviews really help us to bring these valuable conversations to help you improve your business and your life.