Constructonomics Blog Has Moved!

Constructonomics has officially moved to my new construction blog site. The best way to get this fed directly to your screen is to click on the RSS for Posts link at the top right portion of the screen. You can feed Constructonomics as well as any other blogs or news sites directly to your iGoogle homepage. It's really easy.

Constructonomics Blog Has Moved!

3 Things to Think About When Starting a New Job

This post can be found at the new location of my construction blog. I'm sure you will enjoy it.

3 Things to Think About When Starting a New Job

Are the White Collar Forgotten in a Recession

This post can be found at the new location for my construction blog. I'm sure you will enjoy it. Please click the link to see the post. Thanks.

Are the White Collar Forgotten in a Recession

Sorry Kid, Construction is a Cyclical Business

This post can be found on my new construction blog on wordpress. I'm trying to switch from blogger to wordpress and I'm afraid I'm going to lose all my readers. Technology is a b*tch.

Sorry Kid, Construction is a Cyclical Business

Sometimes it's Just Better To Tell the Truth

Telling a little fib often seems like a convenient way to get yourself out of a jam. Or better yet, just lead somebody to believe one thing without actually telling the fib. In that case you can have your cake and eat it too - you get someone believing what isn't the case which of course works to your advantage, and you can also deny ever lying, because you didn't, sort of. When you can do this consistently, you have reached BSing nirvana and you can enjoy eternal enlightenment in liar's purgatory.

I know people who can lead someone to believe a pelican will swoop down and pick them out of mid-air if they jump off the nearest skyscraper. This is of course without mentioning anything about a skyscraper or a pelican. This is also of course an example of how human intelligence has manifested itself in devious and destructive ways - take that Alfred Binet.

I was working for a company about two years ago (when people actually had jobs) and right at the point where I was trying to decide if this was a company for whom I'd like to work for a while. We were getting to the end of a massive project and thoughts were flying through my mind about what this company was going to do with the Spartan army they hired for this job alone. I didn't have a whole lot of confidence that I was going to be one of the survivors, but I wasn't persona non grada either.

Then came rumblings from the heavens. Word got out that the chief operating officer who was hired to bring the company to the promise land and manage the slew of new hires and never before seen projects was leaving the company. Oh dear, what do we do now.

Construction companies are kind of weird because the majority of the people working are out on remote jobsites and the higherups in the mothership push buttons, turn knobs, and stroke their cat from the home office and nobody really gets to see what is going on.

To me, it looked like he quit because nobody would let him have his way and run things as he thought they should. This was my immediate impression and for some reason that's what I believed without any verification of it being true. I also starting thinking that perhaps there is turmoil and financial problems up above and the folks from the mothership were going to grab the gold and head for the hills. I doubt I would have been invited along.

I ended up quitting for a laundry list of reasons but uncertainty of the stability of the company was certainly one of them. I found out several months later that the COO was fired, and I wish I knew this. I'm not saying I would have stayed with the company and I would be employed with 2.3 kids at the moment, but I would have had much more respect for them if they came out and told us exactly what was going on. And between you, me, and cyberspace, I didn't really like the guy too much anyway.

So I guess this brings up an interesting question about how much information should be leaked to the little people down in the village, but I know that I personally perfer the truth. And this was an example where the truth could have ended up with me staying at the company which would have probably been much more beneficial for everyone. Probably.

Sometimes it's Just Better To Tell the Truth

Where "Good to Great" just isn't quite right

"Good to Great" is one of the highest selling business books of all-time with millions of copies sold and still about 300,000 each year. I will be the first to say that I like the book, and I am in particular agreement with author, Jim Collins' description of what he calls a Level 5 leader. However, there is portion of this book that I'm not too thrilled with, and whether you like it or not, I'm going to tell you why.

Let's first briefly describe what Collins' does in "Good to Great". Basically, Collins and a team of whiz kid graduate students from the University of Colorado determined a group of companies whose stock price outperformed the general stock market by at least 4 times over a fifteen year period.

Regardless of the fact that two (that I know of) of the "Good to Great" companies (Fannie Mae and Circuit City) have collapsed miserably with stock declines of about 80% for each, Collins and company made some useful observations about these companies that were successful for a sustainable period. However, I have a bit of a problem with their little people on the bus philosophy.

One of the biggest action items coming from this book was that you need to get the right people on the bus and if you don't have the right people on the bus, get rid of them. We have to remember that people are lazy, and if they read, skim, or just browse this book, they want to leave with items in their head to take back to the conference room. If the image in their mind is of a bus with a bunch of people that they like sitting quietly in their seats, well, that is what you are going to get.

While Collin's doesn't explain exactly what he means by getting the right people on the bus, I do know that there are going to be plenty of managers that think this means they need to break out the guillotine and get to work. Isn't that what managers do? If they ain't hirin', then they better be firin' or new career opportunities they'll be inquirin'.

I don't think this is what Collins' meant. I think he meant that great companies hire great people that are aligned with the core values of the company. And while this is excellent advice, it is not a remarkable discovery.

What I'm trying to say is that just because a manager doesn't like someone (for personal or professional reasons) or they are not the typical type of employee the company would hire, it doesn't mean that they should be kicked off the bus. The bus is full of a diverse group of skills, talents, and personalities. I don't think Collins should suggest that we get the right people on the bus, but rather, work toward figuring out the right mix of people to have on the bus.

I think the "Get the Right People on the Bus" mentality that people may walk away with from this book encourages autonomy and biased hiring and firing choices. I like what Collins has to say about Level 5 leadership, but this bus stuff is just a little bit off.

Where "Good to Great" just isn't quite right

Blown Budget

Blown Budget

The Great Recession Ain't Bad for Everyone

Sure unemployment is at a staggering 10.2% in the US and while this seems like a horrifically high number (and it is), there are in fact 89.8% (give or take) of the people in this country that have jobs and while they feel sorry for the pour souls trying to live on unemployment checks, they aren't doing too bad at all.

I just read a CNN.com article about how after a tough year in 2008, banker bonuses will be up 40% in 2009. Thank God! Of course this includes banks that received tax-payer funded bailouts in 2008 and were largely responsible for the economic collapse that is affecting 10.2% of the population much more than the other 89.8.

The reality of the situation is that during recessions companies run very lean and cut costs wherever possible. They also may be paying less on financing, credit, and goods and services that they need to run their business. All of this can actually lead to a net increase in profits with workers putting in extra time and working more productively for fear of losing their jobs.

If you are one of those folks who is lucky enough to have a job right now, this recession could be the greatest thing that ever happened to you. Never owned a home? Go buy one and get an $8000 tax credit from the government. Hell, even if you own a house you can get a new one and rake in a $6500 credit. But if you don't have income, you don't get mortgage. If you don't get mortgage, you don't buy house. If you don't buy house, you throw your money away to landlord.

And by the way, the folks that have jobs and are buying houses right now are buying in one of the most beaten down real estate markets ever. So while first time home buyers are pulling in an $8000 credit, they are also buying a house that is 20-30% below its highest value. Not a bad deal.

And you know what is better than having a job right now? That's right - owning a company. Owning a company is like being the captain of a sinking ship - you just bail water or throw people out of the boat to keep it above water. And if you're not floating high enough above the waves, just throw more people off. I'm not sure what the numbers are, and I really don't feel like doing research on it because I'm scared of what I may find, but I'm sure there are plenty of organizations that are actually more profitable during the recession because they have plenty of excuses to cut costs. Isn't this a beautiful country?

I will concede that there have been more than a fair share of banks and other organizations that have gone belly up during this whole thing, and I doubt they walked with very much money (although perhaps they did). But if your organization was strong enough to survive and you were strong enough and had enough connections to keep your job, then The Great Recession could be a very financially advantageous time. So I guess you should take full advantage.

However, if you are in the minority of folks that is burning through savings, racking up credit card debt, and throwing money away to landlords, The Great Recession frickin' sucks.

The Great Recession Ain't Bad for Everyone

How to Manage Your Manager

The relationship between employee and boss is a touchy and at times complicated relationship to negotiate in the workplace. Like any relationship, it takes work, time, and effort by all parties involved in order to make it successful. While conventional wisdom may tell us that the manager should take the lead in fostering a better relationship with their employees, the reality is that leadership without authority is required in order to produce better relations among the manager and managed.

In order to fully understand what is going on in the mind of a manager we must put ourselves into their high priced dress shoes. We have to realize that they are under pressure for the performance of their team. The manager is the single point of responsibility for the team beneath them. So while they may come off like a ruthless thug, this is most likely a result of pressure put on them from above. However, in my experience, most managers want to be "cool". Meaning, they don't want to be a heartless, micro-managing, clock-watching, tyrant that blows up at the smallest of mistakes. This is a balancing act that goes on in the minds of managers that, honestly, takes a lot of education, experience, and talent to master.

I have seen one major point of consistency among managers that I have had through my career and can't quite explain why this is. But managers really don't like to define your role or explain exactly what it is that they expect out you. I'm not sure why this is, but I think it would take a thorough exploration into the psyche of managers to figure it out. I suspect that is has something to do with consistency. The manager wants you to work hard, and this will at times require work outside of your job description. But if there is no job description, perhaps, managers think that this is the best way to get the most out of employees. In my opinion, this is the worst, and this is where employees need to take the lead, and manage your manager.

Managers hate to confront an employee with performance issues, it's a very uncomfortable conversation and most people will avoid this confrontation like a cat avoids a room full of occupied rocking chairs. To help your manager out, you can strike up casual conversation about performance in an effort to better understand expectations. Ask them if this or that worked, or how we may be able to perform better on this in the future. Try to make it constructive and demonstrate an interest in improvement of the team. This takes a huge load off the mind of the manager because they don't have to think about how to confront these very difficult topics and chances are, you don't have a manager that is talented enough to do it well.

Another absolute necessity in cultivating a strong manager-employee relationship is the employee review. This is another one that is avoided like the swing flu section of the emergency room. The employee must again take the lead. My first suggestion is to get an employee review written into your offer letter upon hiring. If this doesn't happen, which is typically the case, you need to ask for one. Present it as a discussion of performance of the team and don't be afraid to give constructive suggestions of how you and your manager can work better and improve your relationship.

Should managers be better at bringing up expectations and performance issues? Yes, absolutely. But just as John Lennon said, we get by with a little help from our friends.

How to Manage Your Manager

Everybody Talks About Design-Build, But What Really Is It?

Design-Build is a term that is thrown around like a broken hammer on the jobsite of a wood-framed house. But do we know exactly what it is? Well no, we don't know exactly what it is, because it's tough to really define anything these days, but there is certainly a common theme among projects that are classified as design build.

Typically when an owner of land or property wants to build on it, they hire an architect who then begins design of the project. At the completion of this long and laborious design phase the job is put out to bid and the lowest price is selected and awarded the job. However, in a design-build contract the designer and builder are one entity. This is the fundamental characteristic of design-build projects. If there is one contract between the owner and the a design-build team, it is a design-build project - bottom line.

This does not mean that architects and contractors need to be working for the same company, because the contractor can hire the designer or vice-versa and this is still considered a design build project.

The design-build method of project delivery foster much more collaboration among team members than the traditional design-bid-build method. Architects may not be as in-tune with construction costs as contractors are and a lack of contractor involvement in the design of a project can lead to costs far exceeding expectations which may then require a literal "back to the drawing board" situation.

The design-build dynamic can also be achieved in a non-design build format which is the project delivery method in which I have been most involved. It entails a negotiated contract with a general contractor and a fast-track design process. So the architect will design a portion of the project and the general contract will be bought out in pieces as design is submitted. This overlap of design and construction produces a very compact schedule which can get a project on-line faster. However, the jobsite becomes a chaotic mess if designers, contractors, and drawings flying through the air like a ticker-tape parade. Sometimes even the architect doesn't know what is supposed to be built.

Design build, if done properly, can significantly improve the schedule of a project and through this collaboration can contribute to better understanding between designers, owners, and contractors. While it can get chaotic, it's certainly worth a try.

Everybody Talks About Design-Build, But What Really Is It?

How to Get Work as a New Construction Company

Being a new construction organization is tremendously difficult. I'm sure this is the case for being any kind of new organization, but construction has a unique set of challenges. These challenges become even more trying during poor economic times and in the construction climate we are in now, the likelihood of a new company getting work becomes darn near impossible.

I've been experiencing these challenges first hand over the past couple months, and I can say that it is certainly as difficult if not more than anybody could really imagine. However, the reality remains they everybody is out looking for work and there are ways to do this. The process just isn't very easy.

Above anything else, a network of potential clients is probably the most advantageous resource for a new company. If there are people for whom you have delivered work in the past while working for another company, a new firm can approach these folks and try to drum up some business. The potential client will have a better feeling about this new firm because, although they are new, there is at least some history of past performance which will establish some confidence in the mind of the client. So that's avenue number one - hit up your past clients.

But what if your network is sparse because you are in a new area or you are working in a slightly different market than one you have worked before? Well, this is where you need to pound the pavement like a marathon runner. You also have to explain to any potential clients what features and benefits your company offers. Construction services are not a commodity, they are unique to every organization. Your company must have a competitive advantage in the marketplace in order to get off the ground. Of course low price can be one of these advantages but there also has to be more. Something creative, something new, something to differentiate yourself from the ranks of ho-hum organization doing similar work.

The next challenge becomes finding clients that have money to do construction work. In this economy finding construction projects is much more difficult than running a marathon and is more along the lines of running an Iron Man Triathlon - and it takes much longer. I recently subscribed to a construction lead service which basically does research in the market and compiles all potential work in one place. I like this in theory, because you at least know there is money available to do these projects and while I have yet to land a job in this fashion, I sure as heck ain't gonna stop tryin'.

And of course there is always the competitive bid on public projects route to obtaining construction work. This game is ruthless. I went to the pre-bid meeting for a waterproofing job about a week ago and there were probably twenty-five companies bidding this thing. The project value is probably around $100k. The owner then has the luxury of disqualifying bids of companies that they don't feel to be qualified for the work. This is of course a very subjective topic, and when they have this many bidders, their standards become much more strict. Then there is of course the problem of bonding. These projects all require bonds and a bonding company can be just as selective with who they bond as an owner can be with who they qualify.

So to sum it up, it's difficult, not impossible, but difficult. I suppose persistence is the key, but you will certainly be no stranger to a strong dose of frustration.

How to Get Work as a New Construction Company

Construction Blog - Construction Economics, Construction Management Leadership

A blog covering everything in the Architecture, Engineering, Construction and Real Estate industry - and plus a little bit more.

Construction Blog - Construction Economics, Construction Management Leadership

Yankee Stadium a product of BIM technology

Remember when a pro sports stadium would only cost about $500 million or so to build? Ahhh, they were the good old days of seven or eight years ago. Now, we're putting up ballparks reaching dollar values well above $1 billion. The new Yankee stadium which opened for business this spring complete with a martini bar and steakhouse is the second most expensive sports arena ever built at $1.5 billion, next to London's Wembley Stadium which wasn't very much more.
While the 2009 World Series may or may not be heading back to this monstrosity in the Bronx, Yankee stadium will remain for this season or next as a brilliant product of building information technology.

BIM allows builders to effectively build a facility twice. This collaborative review of the constructability of the building helped minimize costly design clashes and field coordination problems before they occurred in the field.

BIM exemplifies the essence of construction project coordination among owners, general contractors, designers, and subcontractors. And while this takes time, effort, headaches, and of course money up front in a project, the benefits in the construction process can far outweigh any initial cost.

However, it is very difficult to put a number on how much money was saved by using this 3-D, collaborative project delivery method, because you of course don't know what conflicts would have occurred in the field had you not used it. This is actually one of the biggest deterrents to BIM at the moment because there is not enough quantifiable evidence showing it's benefits. Also, subcontractors are wary of getting involved in such projects because of their lack of experience.

James Barett, the Regional Manager of Virtual Construction Technologies for Turner Construction in New York made the following comments about the implementation of BIM on the Yankees Stadium:

This was one of the first major jobs in New York that was doing this at
this level, so the subs were all learning. This was a full coordinated effort
with all the subs. It was such a high profile job it gave us some leverage to
encourage them to do this, as well. Going forward that’s going to mean a lot to
these subs on future jobs and it’s going to mean a lot to us because we’ll have
an idea of who to look for on certain jobs. And now they’re pushing us. They say
“We want this to be a BIM job.”

And what if your subcontracting firm is unfamiliar with BIM at this time?

Frank Falciani, a senior vice president with Skanska USA Builing says,

"Subcontractors should take this downturn that we have right now and invest. If money is available for anything, they should invest in this technology to be ready for the explosion that’s going to happen in 2013 or 2014 when we finally wake up and realize that it’s time to go back to work."

Man, I really hope we get back to work before 2013 or 2014, but in the meantime, I agree that this is a fantastic opportunity to implement BIM into your business operations and can give companies a large advantage over the market.

Yankee Stadium a product of BIM technology