Reimagining Your Company
During the Pandemic Crisis
Getting upset, angry or fearful over the business interruption caused by the current public health crisis is a form of futile resistance. Resistance to an event that has already occurred is often referred to as insane. The pandemic is upon us. That is a fact. You can’t change what has already happened, you can only manage your response.
If we try to think of this government mandated cessation of business activity as a public health “disruption” in the business cycle, we could see it as an opportunity to do some deep thinking about our business. At the War College in Washington D.C. after World War II, veteran military commanders were taught to imagine their perfect military force. The professors at the War College posed this question to the generals: “How would you reorganize your army, corps, division, brigade, regiment, battalion, or company to fight efficiently in this new military environment of advanced weaponry and international power structures?” In other words, the generals were being asked to “reimagine” what an efficient fighting force would look like in the new world their victory had created.
What Reimagining Looks Like
Not long ago, Tom Schleifer, a Simplar Institute research professor, interviewed James Murphy, CEO of Willmeng, a Phoenix Construction firm, who had actively reimagined his business as he steered a course through a number of up and down business cycles. This CEO and his team “reimagined” contracting beyond the world of low bid, cut corners, make it up in contentious extras type of contracting that used to be common in our industry. They transformed their outlook on what it meant to be a contractor and how they would conduct business. Let’s listen in to Tom’s interview to experience how this “reimagining” took place.
“We are no longer “hungry” to get any business we can by submitting the lowest bid. First, we identify clients worth having. Then, we price what the customer wants and expects and deliver it. Once we get a customer, they stick with us. We never lose them unless we walk away from them.
“We spend a lot of time pricing our work. We believe if you get the right price for the work, the execution is not that difficult. If something goes wrong, we do not try to make it up at the client’s expense. We eat it and deliver as promised.
“We select customers who are good at what they do, are in the top of their field, preferably top 10%, because that means they know that construction costs are not the biggest issue–on time and quality is. They focus on execution. Therefore, we can focus on execution and price accordingly.
“We tell our customer there will be less cost to them finishing on schedule without hassle than low bid will ever get them. We usually do some form of CM at risk, but when we bid, we bid only for customers who restrict the bid list to contractors that can deliver because they price their work like we do.
“You never let any outside issue affect your price. I once priced a job because I wanted a project for our best superintendent. We broke even and he went to work for someone else before the project even started. The lesson—as a company we have NEVER since let any outside influence impact pricing. We would rather do less work than take cheap work.
“We are obsessed with the planning cycle. Top management retreats for three days annually to get it right. We know we need to learn from mistakes. We have learned from every mistake and problem. Everyone wants to gloss over it. It is human nature. But we determine – who could have known—the owner, the engineer, etc. How can we find out in the future? The answer, relationships. Relationships of truth and trust. We teach that to our people. We screen, to the extent we can, hiring honest, trustworthy people. We ask for and welcome feedback and complaints.
“Complaints, criticisms, and grievances are there. However, they can only do harm if you don’t get them out in the open quick enough and deal with them. We discuss what could have prevented the complaint, even if not plausible. We list all ideas and determine what we will now do going forward (always) in the future. We gather people and spend time on this, and then teach everyone else what we learned and the new processes and procedures.”
Pause and Reimagine
This CEO’s reimagined company is a million miles away from the old low-bid contractor who populated the industry for many years. We see this pandemic pause as an opportunity for contractors to take a break and reimagine their business much like the one above.