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Beyond "howdy" for subcontractors at SUBExcel 2023
A sign of a strong professional association is its commitment to promoting and improving the standards, ethics, and professionalism of its members in a particular industry or field. This may include providing opportunities for continuing education and professional development, networking events, resources and support for members, as well as advocating for the interests of the profession and its members.
After attending SUBExcel 2023, hosted by the American Subcontractor Association (ASA), I can tell you that ASA is a strong professional organization. Add to the definition above is the people that make up the association. Although there were many members unable to attend last week’s event, those that did showed just how important their ties with one another and their chapters are for success.
Themes to the week, beyond “everything is bigger in Texas” included leadership, business acumen, current challenges, and networking. Did I mention networking? We’ll get to that later.
SUBExcel 2023 included two amazing keynote speakers.
Thomas “Tom” Thibodeau captivated the audience with his moving stories of love and loss. As the Distinguished Professor of Servant Leadership at Viterbo University and a founding member of the Place of Grace hospitality house, Tom has been dedicated to serving others for many years. His unique style of questioning the audience and pushing them to dig deep within themselves to understand the answers was evident during his keynote.
Servant leadership is about understanding your employees and treating them with dignity.
One of the questions posed to the audience was about how many people have dignity solely because “you are able to pay them to work.” True dignity comes from being treated with respect, kindness, and compassion. He also emphasized the importance of living by the golden rule.
Every leader must realize that empathy is a superpower and that it is important to listen to others and understand their struggles. Tom ended with these words: be a "listening Tom" and to pay attention to how people are doing.
Captain Chris Cassidy delivered a compelling and insightful keynote = titled “Mission Possible: It's in You” where he pulled from his own amazing experiences. Starting as a high school student who stumbled across the Naval Academy as an opportunity for a “free education” to walking in space. Yes, he’s a former NASA Astronaut, Navy SEAL, and now CEO and President of the National Medal of Honor Museum.
Cassidy inspired members to embrace the “never-quit” mindset. Through his example he showed “how it’s in each and every one of us to recognize opportunities, shape them and take action to thrive in clutch moments and achieve more than we thought was possible as we leave our marks in this world, while bringing others up along the way.”
When he shared the experience of his first space walk, he talked about an email another astronaut, who had previously done a space walk, sent him the night before. It was simple. It said, “Loosen your grip.” As he began his space walk the next day, these words held true because he said he had never gripped anything as much as he was gripping that bar just before letting go. “Loosen your grip.” Simple. Direct. True.
He also shared “Commander's Intent” and how this has shaped much of his career. As a Seal, he was part of the submarine experience. He could not radio in even if he needed to. Understanding Commander's Intent allowed him to focus on the mission without intervention.
What is Commander's Intent? In this HBR article, it is summed up as: The role of Commander’s Intent is to empower subordinates and guide their initiative and improvisation as they adapt the plan to the changed battlefield environment. Commander’s Intent empowers initiative, improvisation, and adaptation by providing guidance of what a successful conclusion looks like. Commander’s Intent is vital in chaotic, demanding, and dynamic environments.
Captain Cassidy says, “More leaders need to take this approach.”
Signing Contracts has Consequences! - ASA Attorneys' Council
Who better to discuss the real meaning and the dangers hidden in the fine print of contract language than a lawyer who does it on a daily basis. They discussed the significant challenges of ensuring you are truly protected and at the same time managing your liability and costs while providing examples of court cases ASA has battled and won as part of their Subcontractors' Legal Defense fund initiatives.
Succession Planning Panel
When to plan, how to plan, when to seek counsel and how to place a value on your business in preparation for when it’s time to sell. The panel discussion included the pitfalls, challenges, and successes in planning their exit, while ensuring the business continues to thrive. Additionally, succession planning ensures that there is no leadership vacuum after the retirement or exit of a senior officer in the organization. In the case of a family business, it ensures that the business continues to run even after the exit or death of important persons in the business.
Lots to cover here but I’ll plug the lobbying arm of ASA because they worked in welcomes by SUBExcel host state Texas Senators, Ted Cruz and John Cornyn via video. It’s important to remember how much members need a voice in government and need a government that serves their needs to build America. All public servants need to have a pulse on subcontractors and the challenges they face because what they face impacts everyone. I won’t go on…but rather get to what’s important for StructShare and fulfilling our mission to optimize procurement and materials management in the construction industry.
How to manage the ups and downs, and what can we do contractually and through negotiation, to better our position? Can we continue to expect turbulent times and how should we reposition our bidding strategies and better manage overhead?
“...we start with our subs earlier because we need to start the material ordering sooner.”
The subcontractor took the mic and addressed his biggest challenge: being accurate with the bid. He acknowledged that it can be a challenge; however, they work closely with GCs to ensure that any issues that arise are communicated to the owners and do not interfere with the project schedule. This has allowed his company to deliver on time but the challenge is there.
An example was given - prior to the pandemic, lead times for lighting and switchgear were 6-12 weeks, but post-pandemic, lighting lead times have increased to 20 weeks, and switchgear takes closer to 12 months. While there have been some improvements in certain areas, other areas have become worse.
The supplier said they have seen materials with lead times of 50 weeks, with a return to normal lead times not expected until the end of 2023. For example, the increased demand to build data centers introduces challenges as structures are constructed quickly, but slow lead times for chillers and other materials, which prevent facilities from opening and operating efficiently. He stressed, clear communication is essential to work through these challenges.
The general contractor has changed their approach to projects and now involves their subcontractors earlier in the process: “we start with our subs earlier because we need to start the material ordering sooner.” He believes that pre-construction efforts are key and that risk is often pushed down to suppliers. Cost consultants are becoming increasingly common on projects, and the GC stresses the importance of communicating price increases to the owner and/or architect. (do you see a theme of communicating as being the MOST important variable?)
One audience member expressed concern about vendors selling directly to GCs and owners, feeling like they become competitors. Increasing costs of shipping, keeping track of cost history, and eroding collective wisdom are trending challenges. Design delegate, design assist, and cost-plus models were also discussed.
At the end, the GC shared what many agreed with and that is that “Sometimes the best deals are the ones you don’t sign.”
Show Me the Money (Supply) and economists view of current conditions and (a little) what could happen sprinkled in. Soft landing? Something harder? Whither inflation? Anirban Basu, Chairman & CEO of Sage Policy Group, Inc., provided an entertaining and informative presentation in what can be a difficult topic: in-depth analysis of the major factors shaping economic outcomes, including central bank policymaking, worker attitudes, business confidence, and geopolitics. I’ll leave this slide for your review.
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