Imagine if your son or daughter brought home a report card without a score above D. Did you know that the American Society of Civil Engineers (ASCE) has graded our infrastructure sectors with mostly Ds? According to experts at Onvia, Inc., a Seattle-based company that tracks and reports government spending, the report card reads like this: Aviation, D; Drinking Water, D-minus; Energy, D-plus; Roads, D-minus; Transit, D; and Wastewater, D-minus.
The Association of Equipment Manufacturers (AEM) reports that “across all sources, we (the U.S.) invest only $85 billion annually in our transportation infrastructure. However, estimates show in order to properly maintain the current system and expand it to meet future needs, we need to invest $225 to $340 billion annually.”
On September 30, 2011, the surface transportation reauthorization update (the highway bill legislation) will be up for a long-awaited vote. The outcome of this vote could have serious implications for the construction industry. AEM estimates that 35,000 jobs—many of which are in construction— are created every time $1 billion is invested in our infrastructure. Though there is much debate about how to fund the bill, most agree it would help stimulate construction growth.

Where do you stand on this issue? Let us know!

I think it is important that business owners never stop learning, so I read a lot of books to further my education on how to make my business the best it can be.  One of my favorite books is Good to Great by Jim Collins, which crystallized our mission to make contractors’ jobs easier, characterized by the quote, “When better is possible, good is not enough.”  The book discusses a 5-year study performed by a Stanford Business School professor and some of his graduate students focusing on eleven Fortune 500 companies that were identified as businesses that had evolved from good companies to great companies over 15 years.

So what were the common characteristics of the great companies?  They go something like this:

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. Leverage technology to enhance what you already do well
7. Generate momentum that accelerates your growth over time

I want to focus on the last point here.  Business owners should consistently look for ways to improve their business, and generating momentum is a huge part of this.  Take Foundation Software, for example.  We have a very strong payroll module in our construction accounting software FOUNDATION for Windows.  For years, I tried to generate momentum with my managers to get them on board with starting a payroll service just for construction.  But no one would buy into it.  “Too risky,” they said.

But I knew that we could do it, and I knew that a payroll service just for construction would be successful.  Finally, I told them, “We’re doing it!” and in 2006, our sister company Payroll4Construction.com was born.  Now, in 2011, I can tell you that it was one of the best decisions we’ve ever made.  We leveraged one of our strengths to create momentum in another area of the construction industry.  Heck, the payroll service is now creating a momentum all its own!

Business owners, I urge you to identify the strengths of your company, and see where they can take you.  You may be surprised at all the opportunities that could help you to grow your company.

Who is Running the Asylum at Foundation Software?

The answer is NONE and ALL.

I’m going to let you in on a little secret. At Foundation Software, we try to avoid inmate takeovers by first assigning a lead analyst to oversee design for each project. We then provide a design methodology to follow. This methodology can be best described using an acronym I coined called ROPE. ROPE stands for Research, Organize, Plan, and Execute.

1. Research to gather information. This phase consists of consultation with Customers, Sales, Client Services, Quality Control, Programming and Management. Internet research, reading and analysis of our competition all come into play. Design considerations are not relevant at this stage.
2. Organize the research. Our lead analyst organizes information into logical components and processes. This may involve continued consultations with those people previously interviewed. Features are prioritized as well as added and eliminated based on the benefits they will provide to the end user.
3. Plan. The planning phase begins when our analyst designs the application from the user’s perspective. Usability and the correct application of features and benefits dominate the process. Depending on the nature of the application, there may be one or more review meetings for clarifications and revisions.
   
4. Execute. Finally, the programmers that do the actual coding will receive the final specifications document. They will study the document and then meet with the analyst to thoroughly review all aspects of the specifications. Concerns, questions, and suggestions will be made. There may be fine-tuning at this point, and then programming begins.

Although the entire design process is time consuming and intense, it has three major benefits. First, it results in an application that specifically addresses the users’ wants and needs and does it in an extremely efficient manner. Second, it reduces the overall time it takes to release the application to the market. Finally, it stands the test of time.

Well-designed software provides a more powerful solution. It also allows itself to be continually enhanced while remaining clean, efficient, and powerful. The inmates may not like this, but our construction clients sure do!

As a secondary schoolteacher in the 1970′s, I taught math and business courses to more than 160 students each year. I coached cross country, wrestling and track, attended numerous extra-curricular activities and parent teacher conferences, and just plain interacted with other teachers, counselors and administrators. I had to deal with a wide range of people with different backgrounds, personalities, and communications skills. Since joining the business world in 1981, some things remain the same. From employees and customers to professionals, vendors and competitors – I have met, talked, worked and socialized with literally thousands of people in the business community.

It occurred to me recently, that with the pressures and challenges of growing a company, it is the interaction with people that can be the most difficult. Human beings are a flawed species and at times, I certainly top the list! Hence, when I read the motto:  Always Be Sincere Whether You Mean It or Not – as ironic as it sounds – it made perfect sense to me.

Over the years I have met people who simply speak what is on their mind and the message is far from accommodating. You hear things like: “It’s my way or the highway,” and “That’s just the way I am and if you don’t like it…”

These are the people who claim to be authentic, but in reality, they come across as insensitive…or just plain rude. I have said things that I deeply regret. Last year I upset a client by being a little too blunt, and in more than 26 years as the owner of Foundation Software I have unnecessarily caused some employees to lose sleep over something I said. Heck, I’ve lost plenty of sleep over things I’ve said! Perhaps I delivered the message improperly.

Sure we should show respect to people we come into contact with, but there are plenty of times when the cold, brutal truth is necessary in business. One of the most brutal is when you terminate an employee. Or fire a vendor who also happens to be a friend. The more subtle occasions are when you need to reprimand a subordinate or deliver some bad news to the CEO…

There was a famous football coach who was criticized for treating some players differently than others. His response? “Well, they are different.” Obviously in business, you cannot show bias or prejudice, but the bottom line is: everyone is different and the delivery of your message may need to change with the person and the circumstance. At my company, for example, I know that there are some employees with whom I can just flat out say what is on my mind, while with others I must choose my words more carefully. The point is that the message gets delivered properly.

The most successful and greatest business people walk the perfect tight rope – they get things done, and they are always sincere, whether they mean it or not!

Fred Ode - Circa 1985

I get so tired of people asking the same questions about technology over and over again. I’ve been hearing them since I looked like I do in this picture! And they’re never the right questions. Technology has changed (and so have my looks, thank goodness), but my views have remained the same—technology is all about the next logical step.

We are at no loss for new technologies: iPads, tablets, netbooks, Droids, wireless everything, software, you name it! I can’t turn on the television without seeing something new. And they’re all useful, exciting tools—if your company is ready for them. But how do you know? I’ve created an evaluation method called, “People, Process, Technology.”

Start by making sure the right PEOPLE are in place. Evaluate whether the people who will be using this new technology have both the right aptitude and attitude. If they are not genuinely accepting of the change or its usage is over their heads, the technology, no matter how good, is likely to fail.

Next, get the PROCESS hammered out. You have the right people on board; so now give them a solid game plan to make this new technology work. That fancy new tablet to easily transfer data from field to office will do you no good if you don’t have a system to code and process the information. Don’t set your team up for failure!

Now you’re ready to add TECHNOLOGY into the mix. But be practical—the crawl before you walk approach. For example, maybe the first step for your business is switching from a completely manual or general accounting program to one focused just on construction. Or maybe your accounting is solid, but your estimating is done using spreadsheets and it’s time to look into a trade-specific estimating program. You don’t need to be a technology rock star. Simply start by technologizing (yes, I made that word up!) your basic needs before jumping into the latest and greatest trend.

I was never any good at basketball, football, or baseball. In fact, I was never really good at any of those team sports. And while I loved playing them and did so with all my heart, I never had the knack for them.

So when I discovered Cross Country running in high school, it felt good to be able to compete and to actually win. I’d found something I was good at, and I was willing to work to become an even better runner. I was offered scholarships to college for my running, and I held some records. Competition made me strive for success.

If you ask me, competition is what’s missing these days. It’s easy to get preoccupied with trying to level the playing field. Heck, you get trophies for participating in an event—not winning it. This lack of competition—or the societal taboo against it—is making us soft!

Which brings me to my main point: Competition is healthy.

Even if you’re already good at what you do, competition is healthy. Competition is what makes us strive for success, what makes us work harder and what makes us want to be the best.

For those of you contractors doing government work: relish the competition involved with bidding. Show them what you’re made of, how resourceful you are and that you’re the company for the job. And for any business owner: remember that every hardship results in knowledge and the opportunity to grow.

We shouldn’t be afraid of competition, but rather invite it. Without a challenge, we’ll never rise above where we are now. My company’s flagship product continues to evolve, and we constantly have one goal in mind: to be the industry leader in new sales for construction accounting software.

So bring it on. We’ll take anyone up on that challenge.

Using spreadsheets in construction is a lot like a gravedigger using a shovel. It gets the job done, and it’s a useful tool, but it takes a lot of time. Especially if your company grows, and there’s a lot more, well, digging to do. Chances are that a shovel is just not going to cut it, and you may need to invest in a backhoe.

I know a lot of construction business owners (especially contractors who have grown their small businesses into medium-sized companies) who were once “digging graves with a shovel.” Their reliance on spreadsheets for financial data and reporting morphed into a complex, inefficient mess.

Despite the wonder and awe that spreadsheet users feel about their worksheet creations, these applications (gasp) might not be (horror) the best tool for up-to-date, accurate information, or flexible reporting capabilities.

Sure. We all love how quickly spreadsheets perform calculations. And how great they are for ad hoc queries, and what-if scenarios. But should you rely on spreadsheets for accounting and jobs analysis?
“Dig out” that data with software alternatives.

Today, new software applications – in job cost accounting, project management, estimating, etc. – give you the horsepower needed to handle large amounts of data. They do it faster and with greater security than spreadsheets. And costs for construction-specific systems are relatively inexpensive (especially when you factor in improved productivity and efficiency).

Most importantly, construction-specific technologies provide what spreadsheets can’t. They offer unlimited reporting capabilities, better analysis and quick consolidation/integration of data.

In general, the larger the size of your data (i.e. your increasing payroll, jobs, inventory, equipment, etc.), the more likely it is that you have outgrown what spreadsheets can provide. More likely your needs will be better met by mid-level construction-specific software.

How do you spot spreadsheet trouble?

Here are a few signs of overdependence on spreadsheets:
· Staffers spend more time on the manual process of building and maintaining spreadsheets than they do analyzing the actual figures.
· It’s impossible to get specific real-time information on the fly.
· There is no centralized source of data.
· Accuracy of the data is always in question.

Once you’ve identified your spreading spreadsheets, it’s time to do what all smart gravediggers do: Rev up that backhoe! In construction, your construction-specific accounting software is often the most efficient tool you can use.

26 years old. Well on our way to 27! It seems like just yesterday that Foundation Software was newly incorporated. Since then, I have turned over the daily operations to a younger generation lead by Mike Ode, that can keep up with the demands of a burgeoning company. Which means that I’ve accomplished my one of my many goals: I am no longer needed on a day-to-day basis. Foundation gained its own identity, and we have the right people in place for the right jobs. It’s like finally being able to sit back and watch your child learn to navigate the world.

Once in awhile, I’ll close my office door, sit back with a cup of coffee and compare the Foundation Software of today with a snapshot of the company several years prior. Financial statements, marketing literature, people, management, processes, clients, partnership, and the software itself are all pictures of what my “child” looked like when it was younger.

I do this exercise because I am a proud “parent,” and because I can casually view our progress from a long-term perspective. It has always been a primary goal of mine to create a business that will continue to improve and stand the test of time when I am no longer here to guide it, and I’ve succeeded. Without exception, my periodic paging through the FSI scrapbook verifies that we are on track.

My favorite time period for comparison purposes is 3 years, but this is a “soft” number, and depending on the nature of your company, philosophy, and the economy, it may change. However long, it should allow you to look at long and short-term trends. The last two years have been very rough on the construction industry, so it helps to give yourself enough time to look at how you weathered the storm. Did you successfully set the stage for the future?

I encourage all construction business owners to do the same. Look back on where you were a few years prior, and really give yourself a chance to look at how far you’ve come and where you’re going.

Sure, mistakes have been made along the way. It’s naïve to think that growth can be achieved without hitting a few obstacles. But Foundation’s mission is clear: “When better is possible, good is not enough.” The challenge ahead is to make that leap from “Good-To-Great.”

Parents always dream of what their children will do, and I am no different. I dream about Foundation, and I make plans for its future. That’s not to say that they always turn out the way I plan. But based on our obsession for continuous improvement, I am optimistic that the snapshot in 2011 will show an even stronger, more powerful, and dominant force in our industry.

I can’t wait to see what a 30-year-old Foundation Software will do!

Okay, so far nothing bad has happened. Probably a matter of time however…

I really did not mean anything bad by my holiday greeting. I just struggle with “Happy Holidays.” Although I do understand and accept the need to be politically correct, I personally choose not to go that route for my business, and certainly not in my personal life. Cripes, I have been celebrating Christmas for 60 years and all of the sudden, I am supposed to deny something that is embedded in our culture? No, not me—not going to do it. Sorry. I am good with anyone wishing me Happy Hanukkah or Happy Anything—I promise not to be offended—really.

Live and let live. Merry Christmas is just not that big of deal…although a “Merry Christmas, Fred. You are a jerk,” may offend me, I admit.

Merry Christmas
Merry Christmas
Merry Christmas

Ok, the earth is still spinning, people are still crabby at the checkout lines and everything seems perfectly normal despite my absolute disrespect to…what? …Not quite sure where my disrespect lies. Perhaps, just perhaps, the vast majority of people are fine with Merry Christmas; it is just a hunch, but I feel pretty confident about this one.

I see this holiday greeting issue as a symbol of risk taking in America. Those of you that started your own construction businesses risked a great deal in the process. Whether successful or not, you lived the American Dream. There are other countries out there where you definitely need to be careful about what you say—and these are places where you cannot pursue your dreams. In America, I can decide tomorrow to move to another state, start another business, quit a job, look for a job, buy a new shirt or have a glass of beer.

America is a free country where we can pursue our dreams and speak our minds. In speaking our minds, we do take a chance that we may offend someone and I try to be careful not to do that. Something tells me wishing someone Merry Christmas is not offensive. However, what is offensive is that we are becoming too careful as a society. We are trying to legislate a perfect society. If something offends someone or something goes wrong, we create a new rule, law or standard such as Happy Holidays instead of Merry Christmas.

Well, for me, no thank you. I choose to live free and pursue my life as the Constitution intended. Free to start a business, free to travel and free to speak. In all of this, I will do my best to treat people with dignity and respect, and I believe Merry Christmas meets that criteria.

So in closing, have a very pleasing December 25th, regardless of your religious or political affiliation.

From my view at 60 years high, I feel compelled to apologize for my “selfish” behavior these past 25+ years.  In January of 1985, I started my business, and not a day has gone by where I have not acted in a self-serving manner.  So I’m guilty.  I think about my company all of the time; about how I can improve it in every way, make a better product, bring in more profit, and better serve our customers.  Now, with the wisdom that can only come with age, I have this overwhelming need to reconcile past behavior and apologize to those who have suffered because of my selfishness.

I guess I should have been giving all my new ideas away to the competition—you know, to make a level playing field.  I’m sure you, as a construction business professional, look forward to sharing bid information and jumping through hoops as new requirements pop up—making it more and more difficult for you to win and run jobs, but easier for your competition.

Yeah…I didn’t think so.

So, for the benefit of those who truly have the best interests of humankind in mind, and understand what makes the United States a great nation, here is my top ten list of why I am so very sorry for starting, building and owning a business:

1 ) I am sorry I set out on my own, willing to accept both the risks and the rewards.

2 ) I am sorry that I have consistently made a profit, year in and year out.

3 ) I am sorry that some of my employees have built their lives around this business.

4 ) I am sorry that all of my profits are not paid out in taxes.

5 ) I am sorry that I have taken great joy in creating something that never existed before.

6 ) I am sorry for my desire to continually improve and to never be satisfied.

7 ) I am sorry that if I live long enough, the government may potentially own more than half my business – however, I do understand that it is their due.

8 ) I am sorry that after 25 years, I still daydream about my business.

9 ) I am sorry for helping several thousand contractors run the business end of their business—kind of like “feeding the beast” if you get my drift.

10 ) I am sorry for my sarcasm in this blog. Sometimes though, I get a little cranky and need to vent.

…sorry about that.

But what does this have to do with a blog for Construction Business Owner magazine? Obviously my “10 Reasons I Am So Very Sorry” is a satirical jab at those that would deny anyone or impede them from the great opportunity of growing a business.  Whether you own a construction business or a software company, you should not have to apologize for living the American Dream.  The business owner who isn’t “selfish” is the business owner who will fail. It seems to me that people have been confusing selfishness with ambition—and I make no apologies for my ambition.

The risks of owning a business are great, but the rewards can be plentiful. The jobs you help create, the satisfaction of a job well done, the desire to be the best you can be; this is what being a Construction Business Owner is all about.

The kids – my two very bright, freshly minted college graduates – tried to kill this blog.  They argued, they begged and they pleaded, but to no avail.  So to those I offended, I just have two words for you:

…‘I’m sorry.’