- On February 13, 2013
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Creative Tension – 2003
In 2003 it was our 15th anniversary in business, and I couldn’t believe how fast time had gone by for the company. We had our 15th anniversary luncheon at our office. I was very blessed to have two of my mentors; Otis Bellamy and Herman Russell attend the luncheon. (See pictures of them in the slide show) I was very proud to show off my office and land to both of them. What was interesting, they both had done the same thing with their office location. Both had bought the corner property and over the years, had bought as much land around their office as they could. I followed their example, bought the corner property and started to buy the land that adjoined my property. We had a number of guests attend the luncheon and I was very happy and proud but also thinking, where do we go from here?.
When you start a business and you don’t know anyone that can share with you about being an entrepreneur, you realize over time, that being an entrepreneur is hard work 24/7. For me I thought being an entrepreneur meant I would always do all the fun things of construction, and I never really thought about the future and what the company would look like down the road or how my role would change.
By now I was competing against the big boys and I loved going up against them. I still say this today, “they might be bigger, but that doesn’t mean they are better. They just have more people and more resources, but I will put my best against their best any day” I would laugh and say, “those guys are so big, they can buy my company out of their petty cash drawer, but until that day comes, we are going to keep competing against them”.
I had noticed over the years as my company grew, so did the creative tension between, estimating, accounting and the project field teams. This was really becoming a delicate balancing act to bridge these departments. Construction is a melting pot of people industry to me. You have people from so many; places, educational levels, experience levels, types of projects experience and previous company training experiences. Therefore meshing all of this together is very tedious and sometimes tiring for everyone.
When you start a company from scratch like I did, almost everyone I hired had worked somewhere else before working for our company. That means someone else had trained them and they were use to other company policies. I was also adjusting to the pre-technology crowd like myself and the new technology crowd of construction professionals, and that created tensions among teammates.
I look at the estimating department as the fuel for a well-tuned engine. It all starts with estimating the job correctly, and I was starting to build a very good estimating department. An estimator is a very unique person in the construction world. This person has to know construction well enough to know when preparing an estimate to bid, they must be able to look at the drawings and specifications and know how to build the building. They have to figure out what might be missing from the drawings and specifications. An excellent estimator must have a great relationships with the subcontractor market to make sure they will bid on the job. This is another reason a general contractor must have a good reputation for safety, quality, fairness and mostly importantly, paying the subs and vendors on time. If you get a bad reputation in any of these areas, you will get higher prices, if you get any prices at all from the best subcontractors. Fortunately we have a good reputation in these areas. Well back to the estimator, by 2003, all take offs were done by a estimating software. Now a take-off is counting every cubic yard of concrete, every brick, every ton of steel, essentially you have to know all the quantities of all the materials, and labor required to build the entire project. This is a very tedious and stressful job. An estimator has to look at those drawings and specifications every day and come up with the count for every item, then price the estimate to win the job. On a small job a single estimator might perform the quantity take off , and on a larger project an entire team of estimators might do the quantity and labor take off. Depending on the size of the project, a quantity take off can take 1 week to more than 4 weeks to complete. A huge job could be in estimating for 2 months or more. After the estimate is completed, the estimator will use historical data and experience to set a budget price, before all the actual bids come in from the subcontractors and vendors. A really good experienced estimator can be pretty close to the cost of the project before any actual prices come into the estimating department. Bid day is crazy in the construction world. If the bids are due at 2 PM to the owner, prices really don’t start coming in until 11 AM on bid day and the major trades around 1 PM on bid day. That is because the subs are scared their price might get shopped around and that is a no no in our business. It is just frantic until the 2 PM deadline, and then the wait starts on the open bid announcements. Usually by 2:30 pm after all the bids are read out loud in public, you know if you won. There is a lot of work and cost for preparing a bid, and to only win every once in a while, gets very expensive. When you lose a bid you are dejected, and do a debriefing with your estimating team. When you win a bid you are scared, because you are worried you left something out of the bid if you are the low bidder. By 2003 many owners in the commercial arena were not using the lowest publicly open bid method as much for selecting a general contractor; they were starting to use the RFP (Request for Proposal) method of selecting a general contractor. This method is when the owner takes the time to review the price, your experience and references, your proposed staffing for the project, have a presentation by the general contractors and then evaluate everything and select the best team for the project. Now this way of procurement can take anywhere from 30 to 120 days after submitting the bid, to know who has won the project. This also is very nerve wrecking on a company and their team because of the time factor. You can’t have people sitting around not earning money for the company and you have to balance having the proposed team being available if selected for the project, versus assigning them to another project.
This is when overhead cost can kill a company. Just think about the cost from what I talked about above. The estimating department can bid for months before winning a job and that cost for the estimating department is pure overhead cost. Sprinkle in the accounting department, office support, office expenses, etc. and your overhead can put you out of business real quick. It is very critical to always watch your overhead cost and to have a good work load that is profitable. A great relationship with a bank for a line of credit and nerves of steel is also needed. To me, an entrepreneur doesn’t need a MBA, but you need to understand finance, need to know how to read a financial statement and have accurate accounting reports, policies and excellent internal and external accountants.
Now once the project is won, estimating hands off the estimate to accounting for creating the job cost and tracking all costs. The estimating department then hands off the estimate to the project team for buyout, writing contracts and knowing what to buy for the project. In 2003, this method was still creating creative tension. The project team would blame estimating for missing something, estimating would say the project team should buy out the job better and the accounting department was the traffic cop holding everyone accountable for staying in budget and neither department liked accounting. Well over the years I have learned and changed this process since 2003. For many companies this was how it was always done and I realized there must be a more efficient way to work together and hand off an estimate. After much analyzing, picking the brains of some people I trust that run much bigger and successful construction companies, I switched to the following: the project team is more involved during the estimating by reviewing the plans and specifications and communicating how they will build it and discussing the pricing. Once the project is won and awarded, estimating will stay with the project team until the project is 100% bought out and everyone has ownership of the buyout and contract writing. Accounting is now brought in earlier and sits in on all scope meetings with subcontractors to understand better the scope of work. This approach now makes everyone have ownership, no more finger-pointing and a much smoother process among departments. There are still disagreements among teammates, but now everyone knows if one fails we all fail. We are on a team not individual departments.
As a leader, it is situations like this that requires a lot of patience and diplomacy to bring about change. To get people who have always done something one way to accept change is tough at times. I must admit some time I felt while trying to improve efficiency and trying to get everyone to buy in to the changes, I just wanted to scream. ( some people will probably say I did scream) I also said a few times to myself, forget this mess, I can just shut down and go get a job, but that was the easy way out. When I gave up my scholarship and quit the football team my senior year in college. I tried to go back and was turned away by the coach. I promised myself I would never quit anything I loved doing again because I was mad or because of someone else actions.
In 2003 we won another 4 story building at a college. (Please see pictures above) I was excited and pleased because we were winning and building some very nice and larger projects. We were still winning construction awards and I was very pleased with our progress as a builder. I felt we were slowly but surely becoming master builders and my teams were slowly starting to buy into the process.
By year 2003 and after 15 years in business, I realized the days of me doing the things I enjoyed most about construction and being in the field, were gone for good and I better learn to love the role I now have as President and CEO of the company. I kept studying as I had since I started the business, and I was now interviewing CEO’s and getting training as a CEO. I have read so many books and attended so many seminars; they all started to sound the same now. I realized I just needed to take a little information from a few things I heard or read, trust my gut, and pay attention to my surroundings. I also needed to use my lessons learned, use common sense, and keep praying we would keep getting better and growing. I still had to balance running a business and not letting my anxiety from worrying about panic attacks getting in my way. Even though I had not had a full-blown panic attacks in 10 years, I still had to manage my PTSD from my childhood, and the triggers that causes me to have certain panic feelings, and the constant worrying that I might have a panic attack. I mention these things because I want others that might suffer from any of the effects of sexual abuse or any other trauma, know you can fight through the fear and do exciting and fun things in life. Life is great and getting through the fear each time feels even better than the first time, because you know you can do it and that you have survived and can thrive.
The year 2003 was a big year for the Moody family. My son Charles III was headed to Morehouse College, my alma mater. Now this is the cool part, he was going to be roommates with my old roommate’s son, Alan Peterson. (See the picture in the slide show). My daughter was growing into a fine young woman and staying active in drama and singing. I must admit it was weird having the first child leave for college. We told my son to act like he was 700 miles away from home. He couldn’t come home to wash clothes or spend the weekend at home; he must get the full college experience. Karla would roll quarters for him monthly for the washing machines at school. He followed orders so well, I had to call him and say please at least call your mom once week. I think my daughter didn’t like it at times being the last one at home, because daddy could now have full attention on her because she was now dating. I must admit not having any sisters, I never realized until I had a daughter how special she will always be to me, and at the same time my only son was special in his way. I am blessed to have a special relationship with each of my children. My prayer I still do today is,” Lord, let me know when to get out of their way and Lord always protect them”. Even though I made sure my kids are free to be adults and I tell them to live their own life, I know inside I want to be very protective because of my past. I know I must let them go and I do my best to stay out of their way.
In 2003 I realized I had really put on some weight since I started the business. I always worked out, but I was eating more and more carbs and sugar for comfort. When I dropped of my son at college, I decided that day, I was going to lose weight and get really fit again. I did the south beach diet and took off 27 pounds in four months and felt great. This is also when I started back to doing road races and even half marathons. Since 2003 I always pick something every year that pushing me physically and requires discipline and commitment to training. I still have moments of using carbs and sugar for comfort. ( I pray for strength from overeating carbs and sugar)
I hope you are enjoying the journey of the first 25 years in business and my life. We are down to the last 10 post before we reach 25 years. Enjoy life and don’t let fear stop you.
Next week I will talk about the Field General, the project Superintendent and the project field team. Enjoy a quick video of two funny stories about my kids in 2003. See you next week.