Construction Genius | Construction Leadership

Sean Cook, President of Cook Engineering, is my guest on today's show.

Cook Engineering is a general engineering company based in Rancho Cordova, California. Sean and his wife Shellie started the business in 2003. They've grown the business to $30m in revenue by taking care of their customers, and providing their employees with a supportive environment.

Our interview focuses on how Sean has leveraged the success of his company into having an impact not only on his local community, but on a broader level, by providing construction services to a village in Uganda.

Highlights include

• Sean's encounter with a black mamba
• Cook Engineering's decision to sponsor a village in Uganda
• How Sean built his business so that he and his top superintendent could to travel to Uganda
• The importance of living by consistent values
• How focusing on customer service has set Cook apart from other construction companies
• How to manage the introduction of new technology into the business
• Overcoming silos between the field and the office
• The importance of quality communication
• Creating a family atmosphere at Cook Engineering
• How to identify and participate in charitable activities
• The importance of consistency
• The power of answering the phone when someone calls

Sean is clear on how he needs to lead his company, and this has enabled him to have a positive impact beyond his business. If you'd like to improve your leadership, here's something that may help:

FREE Downloadable Resource: Construction Leaders Dashboard

The Construction Leaders Dashboard is one of the simplest and yet most powerful tools for leaders in construction companies of all sizes that can be used to clarify what you need to focus on in order to be a highly successful leader. It includes: Vision, Mission, Values, Edge, Initiatives, Metrics, Key Relationships, and Development Opportunities.

To get your copy of the dashboard, click this link.

Four Leadership Lessons from the Finest Soldier of the Twentieth Century

1. Display Cheerful Optimism
2. Be Selfless
3. Practice Loyal
4. Demonstrate Determination

This podcast was inspired by a letter on leadership that George C. Marshall wrote in 1920. To download the letter, click this link.

George C. Marshall (1880 – 1959) was the Chief of Staff of the US Army from Sep. 1, 1939 – Nov. 18, 1945

Henry L. Stimson, the Secretary of War, paid tribute to Marshall: "I have seen a great many soldiers in my lifetime and you, Sir, are the finest soldier I have ever known."

As Secretary of State from 1947 to 1949, Marshall advocated rebuilding Europe, a program that became known as the Marshall Plan, provided billions of dollars in aid to post war Europe to restart the economies of the destroyed countries.

This plan had a massive positive impact and has directly led to the general peace and prosperity that Europe has enjoyed for the past 75 years, and led to his being awarded the 1953 Nobel Peace Prize.

President Harry S. Truman was asked which American he thought had made the greatest contribution of the preceding thirty years. Without hesitation, Truman picked Marshall, adding "I don't think in this age in which I have lived, that there has been a man who has been a greater administrator; a man with a knowledge of military affairs equal to General Marshall."

The Essential Foundation:

Physically Strong: This is critical to success as a leader. Therefore, take care of yourself. What you eat, how much you sleep, exercise.

Studied Your Profession: Be a student of the profession, every aspect. If you run a construction company you should have a good grasp of Bid, Build, Bill, and you should be an expert at least one.

Common Sense: What is common sense? "the knack for seeing things as they are, and doing things as they ought to be done."

Resist your impulses and pride, battle your prejudices and ignorance, and allow common sense to guide you.

Display Cheerful Optimism

To be cheerful is to be "ungrudging"

Optimism: disposed to take a favorable view of events or conditions and to expect the most favorable outcome.

How to cultivate optimism:

1. Have a 20-year timeframe on everything (This one project [hopefully] isn't going to ruin the business)
2. Distinguish between the war (running a successful business) and the battle (this project, day, person)
3. Pay attention to your spiritual state. Pump up music, inspirational reading, prayer, meditation, deep breathing. Do whatever you need to do to show up with cheer and optimism.

Be Selfless

Your job is to "look after the comfort of your organization, prepare for tomorrow, inspect your lines."

1. Inspect your lines: Look at the numbers, look at the daily logs (if necessary). Look for gaps that need to be shored up.
2. Prepare for tomorrow: If you're in the field, you don't just want to show up and wing it. Prepare for the daily tailgate the night before. Make a list of the things that you need to accomplish each day. Prioritze and block out time.
3. Comfort your organization: How do you comfort?

Grab your E.A.R

E: Encouragement: You can do it! A: Accountability: Did you do it? R: Recognition: You did it!

Practice Loyal

Stay firm in your support for the company

How to navigate your internal loyalty struggles:

1. You've chosen this life, no one forced you to be in this position
2. Believe the best. Don't assume that others have bad intentions.
3. See and say within the boardroom. If you have a problem address it "up the chain of command" not "down the chain of command".
4. Disagree and commit

Demonstrate Determination

Have a firm or fixed intention to achieve a desired end

Determination is displayed when things are alarming.

If you choose right ends, then that will help when things are challenging

Your job as a leader is to display determination in your cheerful optimism,

in your loyalty

And by providing comfort: Encouragement, Accountability, Recognition to others

Next Steps:

1. Ask your direct reports which of the four character traits you need to improve:
   1. Display Cheerful Optimism
   2. Be Selfless
   3. Practice Loyal
   4. Demonstrate Determination
2. Display cheerful optimism by checking yourself every day. Spend time working on your inner life.
3. Selfless: Make a note of your direct reports: Who needs Encouragement? Accountability? Recognition?
4. Check your head if your complaining about corporate direction. See and say. Talk to someone you can trust for an outside perspective
5. Determination: Keep the end goal in mind on each project and commit to overcommunicating

FREE Downloadable Resource: Construction Leaders Dashboard

The Construction Leaders Dashboard is one of the simplest and yet most powerful tools for leaders in construction companies of all sizes that can be used to clarify what you need to focus on in order to be a highly successful leader. It includes: Vision, Mission, Values, Edge, Initiatives, Metrics, Key Relationships, and Development Opportunities.

To get your copy of the dashboard, click this link.

Shifting Ownership of a Construction Company to the Next Generation

Doug Reitz and his partner are currently 2 years into a 5-year process, purchasing Mark Wilson Construction from the founder.

In this episode of Construction Genius, we discuss Doug's successes, challenges, and lessons learned as he's embarked on the process of becoming a partner in a successful construction company.

Throughout Doug's career in the construction industry, he has been fortunate to have worked in positions that span from Project Clerk to President. He has completed or provided oversight through all delivery methods in projects related to the Medical, Educational, Public Works, Industrial and Religious fields. During this time he has worked closely with Clients, Contractors, Inspectors, and Design Professionals seeing all sides of a construction project giving him valuable insight into the entire construction process.

In addition to teaching courses at Fresno State in the late 1990's and early 2000's, Doug has also had the opportunity to speak with local contractors, design professionals, and at industry events about the leadership concepts of "Listen. Plan. Build.", "Communicate & Collaborate", and "Safety, Quality, Time and Cost".

Highlights include:

• How the ownership transition drove volume
• The tension between volume, risk, and profit
• What to look for in a second-generation partnership
• The importance of sharing a common business philosophy
• How Doug got to know his partner by building a project together
• How the "earn out" model affected bonding, debt, and cash flow
• Why communication and collaboration is essential to a successful transition
• Defining and aligning each partner's "why"
• The importance of leaving your ego at the door in order to have productive conflict
• How to divide up responsibilities between the new partners
• Using the "S.O.A.P" model to build a successful construction company
• The importance of understanding financials and accounting, including cash flow, bonding capacity and debt and how they relate to ownership transition
• Worse case scenario planning
• Who makes the final decision in a 50/50 partnership?
• Handling conflict using the "listen, plan, build" method
• Start the transition as early as possible and have the new partners dig into the financials
• Communicate and collaborate to ensure success
• Action items:
  • Openly discuss the transition and write everything down before bringing in CPAs and attorneys
  • Then consult with CPAs and attorneys on the legality of the transition and new structure
  • Get the transition contracts in place as early as possible
  • Do worse case scenario planning and clearly spell out risks and how each party will be protected
  • Allow conflict, find a balanced approach, don't go to your corners.

Links

Doug Reitz Website

Doug Reitz LinkedIn

Doug Reitz Twitter

Mark Wilson Construction: Website

This episode is brought to you by the Bullet Proof Succession Assessment

Are you ready to step away from your business? Or are you stuck indefinitely?

Which statement describes you best?

• I'm secure. My hard work will pay off. My plan is solid; things are looking good.
• I'm challenged. I need to keep working in order to achieve my goals.
• I'm nervous. What if I have to work until I'm 70?
• I'm scared. All my hard work might go to waste.
• I'm sinking. My business is a ball and chain.

Take this FREE assessment. In just 5 minutes, find out if you should be confident or worried about your company's future.

Click this link to take the assessment: https://www.ericanderton.com/five

Saving time and money is essential on every construction project.

In an urban environment, maximizing the use of space is critical also. What if there was a way to reduce the space required for parking by 40-60%, save money by eliminating the floors of concrete needed for a traditional parking structure, and cut 30-90 days off the project schedule? All of this is achievable, and on today's show you'll find out how.

This is the first in a series of interviews that I'll be doing with CEOs of companies that are leading the construction industry forward in terms of new systems, processes and technologies.

My guest is Scott Gable, CEO of City Lift Parking, a company that is revolutionizing the way buildings are built in the United States, particularly in urban, land constrained environments. CityLift Parking designs, installs, and services automated parking systems that reduce the footprint needed for parking and can typically be done at a lower cost per space than conventional parking.

Show Highlights

• What is automated parking?
• Why automated parking is beginning to grow in the United States
• How automated parking can make building in a unique space viable
• The benefits of automated parking vs. conventional parking structure
• How automated parking anticipates a future where less vehicles are in use
• The flexibility of automated parking solutions when parking needs change
• Using traditional construction best practices when installing automated parking systems
• Lessons learned from over 2000 automated parking installations
• Why a good conceptual design is vital in choosing an automated parking solution
• The importance looking at automated parking early in the planning process

Links

City Lift Parking

Scott Gable

A City Lift Project: Hive Parking Structure

This episode is brought to you by The Construction Leaders Dashboard.

The Construction Leaders Dashboard is one of the simplest and yet most powerful tools for leaders in construction companies of all sizes.

Construction companies use this tool to get clear on strategic priorities, recruit new field and office talent who are aligned with the mission and values of the firm, and as a development planning tool to develop the next generation of leaders.

It will empower you to:

• Focus on what matters, so that you spend your time doing the things that have the most impact with clients.
• Make sure that everyone in the organization is aligned, accountable, and contributing equally to the company's growth and success.
• Attract, develop, and retain future leaders who can continue to move the organization forward.

To instantly download your copy of the dashboard, go to: https://www.ericanderton.com/cld

According to a recent Bloomberg article: "Last year was a tough one for the Swedish construction giant, with operating income hit by project writedowns, goodwill impairments and restructuring charges totaling 3.1 billion kronor ($327 million)."

To put it another way, they took on projects that they couldn't execute profitably. This damaged their reputation, and caused them to take a hard look at themselves and make some changes.

What can you learn from the failures of one of the world's oldest, largest and most successful construction companies?

Your profitability depends on:

Picking the high-quality people, using excellent processes, to build the right projects safely, efficiently, with high quality.

Highlights from the Show

• What caused Skanska's struggles
• Your profitability depends on: people, processes, projects
• Your people must be energetic, smart and ethical
• 3 ways you can maintain your energy
• Why technical, relational and strategic intelligence is essential
• How to build great teams by blending people with different behavioral and thinking styles
• How to identify and fix a broken process
• The importance of picking the right types of projects (and project partners)
• How to innovate (and minimize risk)
• What you can learn from the success of In-N-Out
• How Skanska is recovering from failure
• How to identify your "sweet spot"
• A simple tool to help you clarify "right project, right client, right location"

Your Next Step:

Take time to evaluate your "sweet spot"

Step 1: Define the CriteriaList all of the criteria that, from your perspective, define the "right client", "right job" and "right location"

Step 2: Rank the CriteriaRank by importance to the success of your company. 1 is low, 10 is high.

Step 3: Score the CriteriaUse any number between 1 and 10. 1 is low. 10 is high.

Here's a tool to help you: www.ericanderton.com/sweetspot

Click on the link and download the tool. Use it to define "right project, right client, right location".

This will help you avoid the mistakes Skanska made, and ensure long-term success and profit.

Tim Hogan is the President of Bayside Interiors, an $80m subcontractor in Northern California that specializes in:- Metal stud framing - Dry wall - Taping - Strut Work - Clean Rooms - CAB Design - Architectural Specialties - Access Floors - Acoustical Ceilings - Painting

Projects include: San Francisco 49ers stadium, the first Apple store in Manhattan, and Star Wars: Galaxy's Edge at Disneyland in Southern California

Highlights of our discussion:

• Tim's journey from Top Gun Sales Person to President
• The positive impact of mentor's in Tim's life
• The importance of establishing and maintain processes
• Why human nature makes accountability essential
• Understanding, and sticking to your niche
• The excitement of taking on high-profile, technical projects
• How to promote and sustain relationships with General Contractors
• How to avoid limping across the finish line when completing a project
• BIM Modeling: hype vs. reality
• How Bayside's culture impacts employee retention over three generations
• The advantages and challenges of being in a three-way partnership
• What Tim would do if he had to start his journey again

Links:

Tim Hogan

Bayside Interiors, Inc.

This episode covers:

1. Why people get demoted
2. The emotional cost of demotion
3. How to help someone who has been demoted recover, and make a contribution to your company

Why does someone get demoted?

1. Incompetent
2. Poor Decisions
3. Lack of Compatibility

The Emotional Cost of Demotion

1. Shame
2. Resentment
3. Fear

How to help someone who has been demoted recover, and make a contribution to your company

1. Set clear expectations
2. Help them with their mindset
3. Meet regularly with them to evaluate, critique and recognize.

Next Steps:

If you need to help someone recover from being demoted, download the Construction Leaders Dashboard.

The Construction Leaders Dashboard is one of the simplest and yet most powerful tools for leaders in construction companies of all sizes that can be used to coach someone through the challenges associate with being demoted by providing a framework to clarify their: Vision, Mission, Values, Edge, Initiatives, Metrics, Key Relationships, and Development Opportunities.

To download your copy go to: www.ericanderton.com/cld

"Business has only two functions — marketing and innovation." Peter Drucker

Marketing is about creating and keeping customers

Innovation concentrates on creating new levels of performance in one of three areas: people, product, and processes.

Innovation is hard because it requires change and doesn't always work; therefore it gets resisted.

Angie Simon, President of Western Allied Mechanical, Inc. and incoming President of Sheet Metal & Air Conditioning Contractors' National Association (SMACNA), joins me again.

Today's topic, how to implement process innovation, successfully.

Western Allied Mechanical, Inc. is an $85 million-dollar mechanical contractor in the Silicon Valley of California who employs over 220 people. SMACNA, is an industry association representing over 1,800 mechanical contractors in the United States and Canada.

Three Steps of Successful Process Innovation:

1. Have one person be the "champion" of the innovation
2. Explain the "why" to all parties to get buy in and a sense of ownership
3. Show them the results and celebrate successes

Show Highlights

• The resistance to innovation in the construction industry
• How poor implementation led to the initial failure of Productivity Tracking
• Hiring an Operations Manager, and tasking him to spearhead Productivity Tracking
• The importance of proper roll out when introducing any innovation
• Pick a "champion" to drive the process innovation
• Clearly explain the "why" of the new process
• How Productivity Tracking led to increasing the amount of prefabrication
• Using Productivity Tracking to surface problems earlier, and celebrate successes more often
• How Productivity Tracking impacted estimating
• Why being willing to change is the best way to grow
• Show the results and celebrate successes

Links

Angie Simon LinkedIn

Western Allied Mechanical Inc. Website

Sheet Metal & Air Conditioning Contractors' National Association Website

This episode is brought to you by The Construction Leaders Dashboard.

The Construction Leaders Dashboard is one of the simplest and yet most powerful tools for leaders in construction companies of all sizes.

Construction companies use this tool to get clear on strategic priorities, recruit new field and office talent who are aligned with the mission and values of the firm, and as a development planning tool to develop the next generation of leaders.

It will empower you to:

• Focus on what matters, so that you spend your time doing the things that have the most impact with clients.
• Make sure that everyone in the organization is aligned, accountable, and contributing equally to the company's growth and success.
• Attract, develop, and retain future leaders who can continue to move the organization forward.

To instantly download your copy of the dashboard, go to: https://www.ericanderton.com/cld

The benefits of planning:

• Think about what you are going to do, in advance, so that when you act you may act more effectively.
• Tap into the collective intelligence and wisdom of your team.
• Minimize risk and maximize the possibility of success.
• Take into account, and maximize the use of your resources and capabilities.
• Consider past activity and bringing forward lessons learned into the present plan
• Strike the balance between prudence and boldness

In this episode we cover three things.

1. 5 Essential Elements of a Good Plan
2. The Pitfalls of Planning and How to Avoid them
3. A Planning Framework that Works

Inspiration for this episode comes from Chapter Nine, "Plan", of "Extreme Ownership: How U.S. Navy SEALS Lead and Win", by Jocko Willink and Leif Babin.

1. 5 Essential Elements of a Good Plan What? Why? How? Who? When? 2. The Pitfalls of Planning and How to Avoid them

The pitfalls: Ego, Inefficiency, Rigidity How to avoid them: Simplicity, Efficiency, Flexibility

3. A Planning Framework that Works

• Rally Cry
• Fierce Focus
• Critical Numbers

Rally Cry: Why, What

1. Obvious: Everyone knows it, everyone can remember it, everyone can say it, understand it, and everyone should believe in it
2. Inspirational: Tied in with the mission of the company etc.
3. Aspirational: Gives someone juice to wake up with in the morning

Clear, Energizing and Packed with Hope Fierce Focus: How/What/Who.

What is it: "What must be done in order to achieve the rally cry" Imagine that you're an Allied commander on D-Day Rally Cry: Establish the Beachhead Fierce Focus:

1. Ship to Landing Craft
2. Landing Craft to Beach
3. Beach to Cliff

Three Questions you should ask when establishing areas of fierce focus

1. How does each help me achieve the rally cry?
2. Is there a person accountable for each separate fierce focus?
3. Is the burden of responsibility spread appropriately?

Critical Numbers:

1. Tied to each area of Fierce Focus
2. Can be a metric or a date
3. How to shape a good number:
4. Is it linked to an area of FF?
5. Is it realistic and attainable in the time frame?
6. Does it help with accountability?

An Example from Construction

Next Steps:

This one-page planning process is at the heart of a meeting process I use with my construction clients: Kick-Ass Meetings I've used this process with my construction clients for over 15 years. It helps them prepare for and conduct an effective meeting, and build simple action plans that they actually implement (no dusty binders). Download a short report that details how to use Kick-Ass Meetings by clicking this link: www.ericanderton.com/kam

I welcome Jeff Hoopes, Chairman and CEO of Swinerton Builders, back to the show to discuss his approach to leading a multi-billion dollar ESOP company, why the structure of his executive team encourages healthy conflict, and how Jeff is striving to leave a legacy of teaching his employees how to make money, build wealth, and be part of a wonderful company. Click the link to listen to our first interview: Strategic Insights into Growing a Thriving Multi-Billion Dollar Construction Company

Main takeaways:

1. What it means to be a servant leader.
2. How Swinerton's ESOP structure influences Jeff's leadership.
3. The structure of, and relationship dynamic within, Swinerton's executive team
4. The power of rejecting "yes men"
5. Swinerton's approach to succession planning

Show Notes:

• A little of Jeff's personal history (Bay Area real estate was expensive, even in the 1980s).
• How Jeff built wealth within Swinerton's ESOP structure through sweat equity
• Superintendents at Swinerton retire with $1m in shares.
• Growing Swinerton into a top 10 commercial builder in the United States.
• How the ESOP structure influences Jeff's servant leader approach.
• Why Jeff turns down other companies when they offer to buy Swinerton.
• How Swinerton navigated and increased profitability during the Great Recession.
• Keeping your ego in check: Surround yourself with people who can say "no" and tell you that you are wrong
• Swinerton's succession planning matrix.
• The "four legs" of a successful executive team: Operations, Business, Finance, Sales
• How the executive team engages in open debate, prior to emerging with a fully supported agreement of how to proceed.
• Filtering the executive team culture through the Area Managers.
• The value of having a diverse executive team representing the field and the office.
• How long-term, 30-year relationships, influence the executive team's leadership.
• The difference between a short-term "dictatorial" leadership style, and long-term servant leadership.
• Jeff's goal of making the young people that work for Swinerton wealthy, and giving them the business as a gift.
• How Swinerton supports people during tough personal circumstances.
• The importance of patience in realizing the rewards of the ESOP structure.
• How the ESOP structure impacts strategic decisions.
• The danger of using an ESOP as an exit strategy for the first generation of owners, and not as a long-term wealth building mechanism for all employees.
• Why ESOPs fail.
• Jeff's desired legacy: Teaching his employees how to make money, build wealth, and be part of a wonderful company.

This episode is brought to you by The Construction Leaders Dashboard.

The Construction Leaders Dashboard is one of the simplest and yet most powerful tools for leaders in construction companies of all sizes.

Construction companies use this tool to get clear on strategic priorities, recruit new field and office talent who are aligned with the mission and values of the firm, and as a development planning tool to develop the next generation of leaders.

It will empower you to:

• Focus on what matters, so that you spend your time doing the things that have the most impact with clients.
• Make sure that everyone in the organization is aligned, accountable, and contributing equally to the company's growth and success.
• Attract, develop, and retain future leaders who can continue to move the organization forward.

To instantly download your copy of the dashboard, go to: https://www.ericanderton.com/cld