Masonry Magazine February 2007 Page. 69
Less-than-fair markups always end up diluting your company's profitability.
We informed the CM, in writing, that we would allow their request this one time only. We did not agree with their take on things, and told them that, for the sake of the project, our company was agreeing to "make this donation" to the city.
We informed the CM-in writing - that on any future work like this, we would discuss each new issue on a case-by-case basis. At the conclusion of each discussion, it would be agreed specifically that our company would do this future work only if everyone was in complete agreement - in advance and in writing - as to how our company would bill for each new issue, including markup. We also reminded them that this is exactly the procedure called for by their own specs! In the event that the CM found such a procedure not to be satisfactory, then the CM should find another contractor to do their out-of-scope work, because doing it any other way would conflict with the requirements of the project specifications written by the CM.
Gutsy maybe, but it works for me, and it will for you too. Let me tell you why: We're telling the CM, early on in the project, that we understand what's going on. We don't like it. We don't intend to go along with it again, and we won't. Doing this sets us apart from almost every other contractor. We are approaching project management from a leadership perspective: We know our stuff and we're good at it. If you want us to help you, here's how we're going to do it. When you take command like this, you will earn the respect of even the most difficult CM.
Less-than-fair markups dilute your company's profitability, and if you continue to allow them, you delude yourself. Set your standards early. Know your scope and your specs. Be firm. Be fair. Be polite. And smile big!
Gary Micheloni is a working project manager, consultant, author of the new book, "Get Paid for a Change", and speaker. For further information and insight on the Full Contact Project Management approach, simply send an e-mail to: coachgary@fullcontactPM.com.
Copyright © 2007, Gary Micheloni and Full Contact Project
COACH GARY'S PLAYBOOK:
Go to www.fullcontactPM.com and get some immediate help with RFIs and other PM tools.
Safety is an Asset to Improve Your Bottom Line
MASONRY NEWS CONTRACTOR TIP
How much are you spending annually on OSHA fines, lost-time workdays, and workers' compensation? Would implementing a company-wide safety program and giving your employees an additional incentive check actually save you money? Take a look at what it has done for my business. Lang Masonry Contractors.
Lang Masonry's safety program was implemented in 1995 after the company's workers' compensation rate soared as the result of two workers falling off scaffolding. Both men were good friends, foremen and still hold management positions with our company today. One of these men fell from a height of 15 feet and broke both his heels to recuperate, he laid in bed for six weeks with his heels straight up in the air. The other worker fell 22 feet off of a chimney.
As you can imagine, these incidents almost put my company out of business. By the mid '90s, our workers' compensation rate had risen to 18 percent of payroll. When your payroll is nearly $250,000 a month, that's $45.000 a month just for workers' comp. I had to do something!
After these two accidents, I thought long and hard about our safety record. I wondered why the employees didn't follow our safety procedures. Then, my safety manager told me that I was the problem. He said, "You go to the job sites and see men not using respirators, and even when they don't have the guardralls up, you act like you don't see it. I know you're busy, but the men know you see the infractions, yet you let them go due to other pressing issues."
He was right. My employees believed that I wasn't serious about safety. I told the men that we had safety programs, but I didn't enforce them adequately. When we, as leaders, say one thing and do another, our workers believe that we really care about what we say, not what we do. The saying "Do as I say and not as I do" never worked with our employees.
So I came up with a safety program backed with an incentive check for every field employee. As a result, our workers' compensation rate is presently at 86 percent. That's less than 1 percent! We estimate that this lower rate is saving us approximately $300,000 per year. More importantly, we haven't had a serious accident and only a couple of minor OSHA fines during the last 10 years. It's also a nice bonus that when OSHA inspects our job sites, they focus their attention on other contractors instead of us.
If you don't have a safety program in place, I encourage you to start one. The safety policies you implement will meet some resistance, there will be some employees - often your very best ones who will be reluctant to follow the new policies. Address and redirect those employees immediately. If they still refuse to follow the new policies, you must let them go, even if they are top production workers. I can tell you from experience, that's not an easy situation: but once people realize that you care about safety, and the rules apply to everyone, the morale of your entire company will improve. And, even with the cost of our incentive program, our bottom line is much healthier. Safety has gone from a liability to an asset for Lang Masonry.
Next month, I will discuss how we actually set up our safety plans, measure the results, and pay incentives based on them. Stay tuned!
Damian Lang is the author of the book "Rewarding and Challenging Employees for Profits in Masonry." To order a copy of his book, or to attend one of his seminars held specifically for mason contractors, call Kemi Huck at Lang Masonry at (800) 417-9272.
Provided by Damian Lang, President of Lang Massory Contractors, Inc., and EZ Grout Corp.
CIRCLE 314 ON READER SERVICE CARD