Happy New Year!

As you know, I’ve been reading Steve Jobs’ biography.  I think there are some pretty good lessons in there, particularly for the start of a new year.  While I was reading, I came across Jobs’ explanation for why he wore a black mock turtleneck and a pair of blue jeans almost every single day:  because it was one less decision that he had to make.

Photo via Farhad Manjoo on www.fastcompany.com: Clay McLachlan/Reuters ('98); Getty Images ('99); Gabe Palacio/Getty Images ('01); Justin Sullivan/Getty Images ('04, '05); Peer Grimm/dpa/Landov ('07); Paul Sakuma/AP Images ('08); Robert Galbraith/Reuters/Corbis ('09); AFP/Getty Images ('10)

Now I’m not telling you that you should wear the exact same thing every day for the rest of your life, but why not make your life easier by minimizing the amount of decisions you have to make?  As a construction business owner, you put a lot of time and effort into making critical decisions.  Additionally you sometimes get drawn into trivial matters that should really be handled by others in the company.  To get to the point, you have to simplify by getting two things in place:  people and processes.

First, get the right people in place.  This is easier said than done, and comes in two parts.  Invest the time in finding people with the aptitude to do the job, and the right attitude to fit into your company.  The second part means getting rid of people who do not fit these requirements.  As hard as that may be, having the right people in place will increase simplification.

Second, get your processes in order.  Create a plan that makes sense.  In the mid 1990’s when my company was growing, I hired a president.  As fortune would have it, this person was an incredibly good manager and truly organized our daily processes.  This created new opportunities for the business and for our vision because I was able to focus on the big picture.

Getting people and processes in place is like Jobs’ wearing the same basic outfit—it eliminates minor decisions and troubleshooting so that you can focus on bigger decisions, ideas, and growing your business.

Now that the holidays are over and all of the massive amounts of breads, cookies, candies, and pies have suddenly disappeared (at least they have from my office) it’s time to make those New Year’s resolutions. While the majority of personal resolutions aren’t kept, I came up with three attainable resolutions construction operations professionals should make this year.

1. Evaluate Bidding Strategy

It’s tough out there. There are fewer projects to bid and what projects are available are being bid by more people. Consequently, the bidding climate is very competitive with some work going to people bidding below cost. One way to bid more work, without giving your estimator a quick trip to the funny farm, is to identify additional sources of project bid lists. Check out McGraw Hill’s Dodge Plan Center and their Network Express site. There are also local, regional and even national plan centers that have bidding project information that might help.

2. Project Team Communication & Effectiveness

A big part of the bid process is assembling the team you want, and getting them the information they need to prepare competitive bids. Keeping track of the team (especially one in the bid process) can be a lot like herding cats (very independent cats at that). Develop strategies to keep track of the information your team members need and make sure they’re getting it in a timely fashion.

3. Stay Connected

When you do get a job, running the job efficiently is more important than ever. In many ways, communication with your team members is one of the keys to a successful, efficiently-run project. Communication has gotten better with the introduction of cell phones and the internet, but this increased communication has also created new issues. Everyone’s day is full of information that needs to be processed and tracked – email and voice mail alone have caused serious information overload. Keeping track of it all is difficult, if not impossible. But if you don’t track it, you can lose money or, worse yet, get sued.

I hope these ideas help as the year starts and we get closer to the construction season. In the meantime, keep in mind that spending a little time planning now can pay off in increased efficiency and better job performance later.

www.dexterchaney.com

Happy New Year! As we begin the New Year, many of us are also starting new resolutions – lose weight, exercise more, spend more time doing a hobby, etc. I know I’ve noticed a lot more people at the gym in the last few days. There are numerous personal resolutions to make, but have you ever considered the resolutions that your business should be making? I started thinking about how business owners can better manage their companies, and so I created my own short list of New Year’s resolutions for better construction management.

Close the Budget vs. Actual Gap

It’s often easy to bid on a job, start work, and miscalculate how far along in the project you are versus the amount of money you’ve spent. This year, I encourage you to close the gap between your bids, your projections, and the actual cost of the project. Know your cost to complete and keep track of how far along in a project you actually are. Carefully monitoring these numbers will help you preserve profit and build more accurate bids on future projects.

Connect the Field to the Office

Yes, I know this buzz phrase has been around for a long time. But, much like the majority of resolutions, we can end up talking about it rather than doing something. Implement technologies and processes so that project managers and other field staff are better connected to the financial side of your business. Better connections will result in projects that are tracked with greater accuracy and regularity.

Prepare for Growth

I heard a number of years ago that roughly half of the buildings that will exist in 2030 will have been built after 2000. While 2030 may be a number of years away, we have a lot of building to do between now and then. The current state of the construction industry may seem dismal for some, but the fact is, the industry will rebound. When it does, construction companies need to be prepared with work processes, trained workers, and an understanding of where the industry is headed.

I wish you all the best this coming year, and good luck keeping those resolutions. What are some other resolutions you’re making for your company?

www.dexterchaney.com

There’s a lot I could say here, but mostly, I just want to wish everyone a very Merry Christmas and a Happy New Year from everyone at Foundation Software.

See you in 2012!

I’m pleased to once again introduce David DeVita as this week’s author. David is a construction safety expert for Carolina Safety Consultants with over 20 years of experience.

Some project managers tend to think of safety in the workplace as one of those things that we do “when we get a chance.” Production and quality are generally put first with safety generally being an after thought.

In fact, project managers should worry about implementing more safe practices because it can affect the way they bid on jobs. A safe work environment is one of the most straight forward ways to decrease workers compensation expenses. Fewer accidents also mean lower insurance premiums, which mean lower labor costs. You have to figure labor costs into the price of a job, so when your costs are high, it can mean the difference between winning and losing a job.

Another reason to look at cost savings through safety improvement is to keep overall job costs down. The more accidents and safety violations you have on a job, the more the job is going to cost; and the last time I checked you can’t submit a change order just because your team got hurt on the job!

The first place to look at how you can save money by implementing safer practices is by first looking at your Experience Modification Rate or EMR. EMR’s are calculated by comparing a company’s actual losses to industry average losses. Companies who perform average in their EMR industry generally rate around 1.0. Companies who have more claims than average will have a higher than average rate, for example, 1.6.

If your companies EMR rating is 1.0 or higher, then it might be time to consider implementing a comprehensive safety plan to try and reduce your workers compensation insurance costs. Take a look at your work safety manual and see how you can improve current work processes. Implement mandatory employee training for all OSHA requirements and require drug testing and pre-employment physicals to create a safer work environment. These are just a few of the things that should be taken into consideration when considering safety improvements.

In addition to lower insurance premiums, you will also take advantage of a safer workplace which will decrease safety violations, increases quality of work, and ultimately keeps employees safe (which means less time spent off the job for recovery), which in turn strengthens your bottom line. Lower insurance costs mean project managers can submit more competitive bids on a job because they are no longer worried about higher employee costs-a win-win all around!

To learn more about how to calculate your companies EMR, please visit your State Department of Labor and Industry site. For Washington, please visit the Washington State Department of Labor & Industries.

www.dexterchaney.com

Last week, I discussed how the Internet is becoming a utility via common applications. This is all well and good, but I know from the emails I received, I left some of you thinking “how does this affect me?” Well, there are three very important reasons to care, but I’ll get to those in a minute.

Remote Business Software

Until recently, most business software was delivered on discs in packaged boxes, or downloaded onto company servers and workstations. Now, as the Internet becomes more and more of a utility, access to software only requires an Internet connected device and a subscription login.

In an effort to make access easier for their employees, some companies are moving all or most of their software and computing resources to an outsourced hosting service. While there are advantages to this type of so-called virtualization model, it is not a true browser-based or “Cloud” solution. </P

The following explains three significant benefits of moving to the cloud.

3 Reasons to Move to the Cloud

1. Access: Browser-based software provides anywhere, anytime, any-device access to business applications. Unlike virtualized environments, browser-based software typically only requires that the device – computer, tablet, smart phone, etc. – have the ability to launch a browser. With this technology, management can access up-to-date business information anytime, anyplace and field staff can stay better connected to the office and to each other.

2. Usability: I think most Internet users expect anything in a browser to run quickly and easily. This means that the user interfaces of browser-based applications must be designed for ease-of-use, and information must be presented in an easy-to-understand format. Vendors moving their software to the Internet are redesigning the way the software is used, creating smarter, easier to use products.

3. Affordability: Browser-based software should not only make users jump for joy, but management should be pleased with the lower costs of ownership. Companies generally have the option of purchasing the software or purchasing on a subscription basis. Regardless, the user enjoys a significant reduction in hardware and IT infrastructure costs. Figure 1 shows the leading reasons why companies adopt cloud computing solutions, and cost is clearly a primary motivation. Browser-based software is “zero-footprint,” meaning that no server and no special user hardware are required. From an IT perspective, there is no software to install, update, and maintain.

Better Business

The growing wave of business software over the Internet holds particular promise for the business of construction contracting. Unlike many other industries, construction occurs in remote and varied locations, every project is unique, and nearly every new project involves a new collection of project partners and vendors. In addition, project information is constantly changing, it must be shared with many individuals in many locations, and there is always a lot of it. The benefits of browser-based software help share this information by keeping everyone connected.

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Steve Jobs was no doubt a great businessman with many valuable lessons to teach.  In his commencement speech to Stanford University graduates in 2005, he references The Whole Earth Catalog from the mid-1970’s:

On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: “‘Stay Hungry. Stay Foolish.’  It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Stay Hungry.  Stay Foolish.  My take on this idea is very simple:

Stay Hungry. As a business owner, you can never be satisfied. Even if sales are booming and you’re doing better than you ever have before, you can never be satisfied.  You must maintain a hunger to be better, to keep moving forward, and to grow your business.  In order for your business to survive and thrive, you must maintain that hunger.  Because as soon as you’re satisfied, you become too comfortable and stop evolving.

Stay Foolish. This leads right into what it means to stay foolish.  In running a business, there must always be a certain amount of risk that you’re willing to take.  Risk is healthy; it keeps things fresh and gives you the opportunity to evolve.  Take marketing for example.  I  took a risk in 2005 and dressed up as Superman for a marketing campaign.  It could have been a horrible flop, but almost seven years later, people still remember it and bring it up at conferences and tradeshows.  Or you could take a risk in offering a new product.  In 2006, we started our sister company Payroll4Construction.com as one of the few, if not the only, national payroll services just for construction.  At the time, we weren’t sure what was going to happen, but it ended up being a great risk to take, and the company is growing every day.

Never settle and take some measured risks.  You’ll be surprised what it does for your business.  Stay Hungry.  Stay Foolish.

This week I’m pleased to turn over the blog microphone to my friend and colleague Curt Westberg. Curt is our heavy/highway industry expert and has some thoughts to share on a topic that affects all of us – fuel prices. If you’re a project or construction manager reading this blog, this information may not pertain directly to you, but the information is still good to know. Feel free to pass along the knowledge to your friends and colleagues.

If you’re like me, a trip to the gas pump can cause a lot of anxiety, not to mention visions of the good ol’ days when gas was under a dollar per gallon. Alas, those days are long gone, which means we’re left to manage our fuel consumption or lose profit margins.

Recently, some of my colleagues attended a seminar on fuel management by Eric Newton of Comdata. They shared these tips and tricks with me on fuel management. Hopefully you’ll find them as helpful as I did.

Tip #1: Negotiate Fuel Costs

Fuel spending is the second highest recurring cost to most construction fleets, so if you can create some amount of stability, you’ll be able to control this expense. Before you go down the negotiating path, be sure you know your overall consumption by gallons. You’ll also want to identify where you purchase the most fuel and if there’s an efficient way to centralize those stations.

Tip #2: Increase Your MPG

I’m sure we all wish we could get better fuel mileage, even if it’s only a few extra miles per gallon. Every little bit counts, right? Consider the following:

1. Driving 55 mph or less can use up to 20% less fuel
2. Idling burns about 0.8 gallons of fuel per hour
3. Driving with the engine RPM too high wastes several gallons of fuel each hour

Unfortunately, there is no magical way to double your mileage per gallon. There are, however, a few things you can do it better you mpg:

1. Educate your workers on fuel saving techniques
2. Outfit your equipment to be more aerodynamic
3. Create engine restrictions with governors.

Tip #3: Fuel Smartly

When you have to fill up your tanks, just remember these tricks when fueling.

1. Purchase from bulk sites or retail locations
2. Don’t top off the tank and be sure your tank cap is on tight
3. Try to buy on Wednesdays, but stay away Mondays and Fridays if possible.
4. Purchase fuel during the coolest part of the day.
5. Use the diesel pumps that are located in the back of locations where it’s sold in large quantities.

I hope these simple tips and tricks help you manage your fuel more efficiently. Do you have any tips to share?

www.dexterchaney.com

It seems like every time I turn on the television, I see a commercial for something “in the cloud.” There used to be commercials from a well-known company that proclaimed in a super-hero-like fashion, “To the cloud!” And most recently, we’ve been hearing quite a bit about the iCloud.

I’d be understating the obvious if I said that cloud computing is the latest buzzword. However, I think there are a number of misconceptions about what the cloud really is, so over the course of the next couple of weeks, I’m going to help clarify the basics of cloud computing.

Power Stations & The Grid

To begin a discussion of cloud computing, let’s draw some analogies from the world of public utilities. Take for example electric power distribution. When electric utilities were developed, power stations were first built in high population areas. Buildings and then entire neighborhoods were connected to the stations, and then the stations themselves were interconnected, beginning the creation of what we know today as “the grid.” This robust network of power allows us to turn on the lights and never have to wonder where the power is coming from. This is the essence of cloud computing – A network that serves up what you need without you having to worry about where it came from.

More Pipe Than Power

Now consider the Internet. Instead of centralized stations, the first years of the Internet consisted of network growth. From the first network connections of the 1960s until recently, the Internet has been “more pipe than power,” serving more as a network of connections than a distribution grid. To draw an analogy, imagine a situation in which individuals connected their own personal power generators to create a shared power grid. This is not a viable way to distribute power resources, but for sharing bits and bytes, it works fine. However, something was missing from this picture – namely, the equivalent of the “power station.”

A New Utility Is Born

Roughly ten years ago, the large and growing network of “data pipes” that was the Internet began to transform. Advances in technology enabled this transformation, but what really drove it was the fact that the Internet was finally becoming a true utility, taking over much of the role of traditional telecommunications. The Internet is now supporting the operation of central “power plants” – plants with names such as Google, Facebook, Amazon, and others. Internet traffic is projected to continue doubling every two years, and the driver will be the larger and larger role it will play as the information utility.

A New Breed of Applications Emerges

In addition to the “Internet power stations” that deliver communications and consumer applications, we are seeing the emergence of browser-based applications designed for business. Software applications for business have traditionally been delivered as discs or downloads installed on company servers and workstations. With the Internet becoming an application utility, this model is changing. More and more software can be accessed online with nothing more than a subscription login and a device that has one of the common web browsers. And these are not light-weight “apps” – these are powerful enterprise systems for accounting, financial management, project management, HR, and more.

Accessing and processing all your business information may never be quite as easy as flipping a switch, but browser-based software (a.k.a. cloud computing) is going to bring us closer to that idea. Has your company adopted any browser-based business software or do you plan to?

dexterchaney.com

Last week, I talked about Jim Collins’ book Good to Great, and the common characteristics of great companies.  I’ve listed them below so you can have them in front of you again:

1. “Level 5” leadership at the top
2. First people, then processes
3. Confronting the brutal facts of your business and industry
4. Do only what you can be the best at doing
5. Maintain a culture of discipline
6. 6. Leverage technology to enhance what you already do well
7. Generate momentum that accelerates your growth over time

Last week, I focused on what it means to do only what you can be the best at doing.  Today, I want to talk about #6—“Leveraging technology to enhance what you already do well.”

We live in a technological world, so much so that if business owners don’t embrace technology, they may be doing themselves a disservice.  Many contractors go into business because they’re great at what they do.

I know a successful excavating contractor that took over his father’s grave digging business when he was younger.  This is a true story—his father refused to use anything but shovels and picks to dig the graves, but once the son took over, he purchased a backhoe.  Sure, there was a learning curve, but taking the time to learn how to use the backhoe (the current technology) made him substantially more productive.  In fact, he turned his father’s small grave-digging business into a large union excavation business.

This young man took the time to think about what would ensure the long-term success of his business.  Leveraging technology is not limited to heavy equipment, though.  There is wonderful technology available for the field and for back office operations.  Take some time and look at what you could be doing better, then see if there are any technologies that could help you enhance what you already do well.