Tag Archives: USA

Why Construction Fails to Keep Up with Other Industries

We’ve seen industries jump leaps and bounds in terms of profit, scale and growth. However, the construction industry seems to be on a slower progress compared to others. Why is that? Why are we lagging behind? Let’s dive in. Apart from labor shortages, increasing regulations and problems in lot availability, there is one issue that leaves the entire construction industry behind the dust of other fast-growing industries. That issue is productivity. 

In an interview with Fortune magazine, Brendan Bechtel, President and COO of global construction giant Bechtel, said that “stagnant productivity levels in construction” are one of the things that haunt him at night. According to a recent World Economic Forum study, productivity gains in the construction industry have been “meager” when compared with the advancements of other industries in the last 50 years. The study further states that the lack of significant productivity advancements is costing the industry billions of dollars each year.

The study said that reducing construction costs by even just 1% through productivity improvements would save the construction industry approximately $100 billion each year. That’s a serious amount of cash! However, the study also pointed out that another challenge in productivity is the “fractured” aspects of construction. It said that these fractured and segmented operational processes would in fact, negate whatever benefits would be brought about by new technological advancements.

The Lack of Collaboration and Cooperative Efforts

Experts say that one of the key reasons on why productivity in construction is declining, is the inherently combative nature of construction today. The functions and goals of architects, engineers and contractors often clash, and most of the time, they are separate entities that don’t work with each other right at the get-go. For example, your house will be designed by your chosen architect, checked by a different engineer, built by a separate company- which often has people that they just contracted as well. All of these individuals have to claw their way into getting heard, and for their ideas not to get junked. Instead of a smooth relationship, what you have are adversaries that try to out-win each other. It’s a highly individualistic environment. It’s a system that is not at all designed for effectiveness nor efficiency. Collaboration is forced when it should be the norm.

Intimidated by Technology

Another hurdle to work efficiency is the aversion of construction veterans to technology. A lot of seasoned professionals (Construction Managers, Site Inspectors, Supervisors, etc.) are not proficient in using desktops, laptops, mobile tablets, and smartphones. These are the people with the most impact to project efficiency. The ones who are directly out in the field.
It’s a known fact that a lot of the advancements in productivity these days are brought about by new technology, whether it be for communication, collaboration, or documentation. But unfortunately, what we have is an industry that is slow to change, slow to trust, and slow to adapt. And if your critical personnel are not up to date, and hesitant to changing how things get done, you can expect that growth and speed will indeed be stunted.


Get Comfortable, Get Mobile

The time for easing your way into technology has passed. What the industry needs is to radically integrate tech into your everyday processes. Have a serious talk with your key people and educate them about how construction programs, mobile apps, and even social media can make their jobs easier. Let them see how it would lessen their headaches and speed up their build-times. We can’t stay dinosaurs in the information age. In order for construction to keep up, we have to shake things up.

Start today! Click here to learn about how SAM- the Superintendent’s Automated Manager can make mobile collaboration and task management much easier. There’s nothing to lose, and plenty to gain!

First-time Buyers, Significant Chunk of Housing Market


August 2015 Homebuyers Trend

According to data from The National Association of Realtors, 32% of existing-home sales in August 2015 came from first-time buyers. In fact, first-time buyer share increased by 4 percentage points from July 2015. Their buyer share also increased by 3% compared to last year.

When we say first-time buyers, this means, first-time homeowners. A demographic that is relatively young. This group is typically composed of young couples, young professionals, and people who are just about to start a family. Previous renters, who now have the capability to buy their very own house, are also part of this demographic.

So what’s the reason behind the powerful spending power of first-time buyers?

This increase in the spending habits of first-time buyers is due to sustained net job creation, a low interest rate environment (with 30-year fixed rates at below four percent for most of 2015), and better pricing of FHA-insured mortgages.

Low Interest Rates for the Rest of 2015

Rates are expected to remain around 0 to 0.25 percent at the end of 2015. The Federal Open market Committee announced today that the benchmark interest rate for short-term lending will remain at its current target level of 0 percent to 0.25 percent. According to Zillow Chief Economist, Svenja Gudell, “The federal funds rate, and in turn mortgage rates, remain low and will likely end the year roughly where they started it.”

This is good news for prospective new homebuyers who will remain to have some valuable wiggle room in terms of affordable markets.

The Builder Challenge

So, if you look at the statistics closely, it says that the 32% is for existing-home sales. This means that there is an equally ripe market for first-time homeowners who want to build their homes. Today’s generation is all about customization and personalization so there’s a huge chance that they will prefer a home that’s built specifically for them, instead of an old house that’s already out there. This is regardless of size.

In addition to this, even if they do buy existing homes, there is a huge potential for renovations and personalization. So for us builders, there is still a lot of opportunity that’s waiting to be seized.

The challenge is now up to you. How can you convince these buyers to spend their resources on building a new home instead of simply buying existing property?

How can you entice them to seal the deal with you instead of with previous homeowners?

How will you make your company stand out from other competing firms in your area? Will you charm them with unique design? Attract them with affordability? Or dazzle them with how fast you can hand-over their new house keys?

It’s up to you, dear builders. The clients are out there and the market is strong. Go get ém!

The Importance of Innovation for Your Construction Business


Innovation is Vital to Business

What is innovation? To innovate means to change something in a positive way, it’s to revolutionize, to transform, to create a breakthrough. In business application, this could be done through developing a product, revolutionizing a service, or even changing the way you do your work.

Why should you innovate or change when everything is doing “okay”? Okay should not be your benchmark. We all know how competitive the construction market is. Everyone is eyeing the same customers and everybody wants to close that deal. If you don’t do your best to stand out from the crowd, you might as well just sit back and pray for apples to fall on your lap.

Growth, Expansion, Success

Once you’ve found a way to apply innovation in your business, it will allow you to create a unique selling proposition to your customers. You can show them how much more you can offer them compared to your competition. When done well, innovation will give you a bigger piece of the sales pie and possibly even market dominance.

Lead the Way

So where does it start? The drive to innovate must come from the top. It’s the CEOs and Presidents that have to spearhead the push for innovation. Their influence will then trickle down to the very people who work in the back offices and even up into the worksites.

Great innovation inevitably requires a lot of internal “selling” of the idea in order to build political support among top management and staff.

If the owner is adamant about implementing a specific change, it will reflect even to the most casual employee.

How Can You Innovate?

Analyze the current situation and find areas for improvement. It all starts with some creativity and imagination. Find problems that haven’t been solved yet. Are there questions that have never been answered? What conventional way of thinking do you believe is not true at all? How can you challenge the norm in such a way that you will cause improvement?

For example: Business depends highly on technology. At the same time, technology also enables new business opportunities. It opens windows to new ways of operational efficiency, sales opportunities, or even progress analysis. Maybe you can utilize tools that your competition isn’t using. Maybe you can attack each project in a way that hasn’t been done before.

What about work collaboration… There are a lot of useful tools for innovative collaboration. All you need to do is explore them and test it out to see how your build process can be improved. Find ways to shorten the build time or maybe handle more projects at once.

You should also look into software that’s specifically-tailored for your type of business. These types of tools have been designed with your specific operations in mind. Construction scheduling software is a good example of this, especially knowing how big a role organization plays in project coordination.

Innovation is no lucky accident. It has to come from a dedicated push and a disciplined process which will stem out to all parts of your construction business. If you do it correctly, it could spell market dominance and thousands of dollars in increased revenue.

So today ask yourself, how can my construction company push for innovation?



BUILDER NEWS: Homebuilders Oppose New Labor Law Ruling

The vast majority of homebuilders rely on subcontractors. While larger public homebuilders do have specialty workers on their staff, a significant amount of the work still goes out to subcontractors. This is why builders from all across the nation are balking at a new labor law wherein the National Labor Relations Board (NLRB), in some cases, will now deem subcontractors as “joint employees”of homebuilders.

This means that builders may now be held responsible for for issues regarding millions of subcontractors. This includes plumbers, roofers, electricians and so on.

Tom Woods, chairman of the National Association of Home Builders (NAHB) said in a press release, “The homebuilding industry, which is primarily made up of small businesses who rely greatly on the work of subcontractors would overwhelmingly be harmed by the new standard.”

He added, “It will cripple small businesses across the country, including the homebuilding industry as it is in its fragile recovery.”

The NLRB however explains that the revised standard is designed “to better effectuate the purposes of the [Joint Employment] Act in the current economic landscape,”. The  NLRB board further explains that the previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances.

The NLRB’s ruling was based on a case in another industry (Sanitation), so it remains to be seen exactly how it would apply to the builders.

“It obviously depends on the facts of each case, but in the construction industry in particular, these kinds of relationships have been in place for decades, and so even before the test tightened in the 1980s not every contracting relationship in the building industry was considered a joint employer,” said Wilma Liebman, a former chairman of the NLRB.

Builders are on high alert as to how this ruling will affect future construction related cases. Subcontractual relationships are an integral part of the industry and compliance will be an entirely complicated issue.

READ MORE ABOUT THE CASE IN DISCUSSION: NLRB Ruling Redefining ‘Employer’ Could Have Big Impact If It Stands

Sometimes, You Have to Say a Nice “No”

Yes ma’am! Yes sir!

Most entrepreneurs can’t find enough hours in a day to do all of the things they want. Despite this however, we often find ourselves saying yes to even more requests. Maybe it’s because as entrepreneurs we’re optimists by nature. We believe that even the most mundane tasks can still be squeezed into a day. It could also be due to our instinct to always impress other people and avoid causing disappointment. Builders know this all too often. Clients often make unlimited requests and countless inquiries.

What’s at stake?

When you take on too much, you are putting your health, credibility and efficiency at risk. When you over reach and are not able to deliver on all of your promises, not only will it give you stress, it can also cast a negative light on you and your entire company.

Saying NO without hurting business relationships

A successful entrepreneur should be accountable for all commitments. It’s also important to manage the expectations of both your team and your clients. Here are a few things to remember so that you can say “no” without burning bridges or hurting a client’s feelings.

1. Establish boundaries – When you’re dealing with clients, give them a gentle reminder of the scope and limits of your contract and agreement.  Be professional about it. When you’re dealing with your constituents, know your priorities and limits. Don’t say yes when you actually mean no. Don’t break your own rules. Be calm and firm, but never rude nor disrespectful.

2. Ask for some time to check your calendar – It’s an acceptable business practice to review your schedule first or converse with other principals before committing to an answer. It’s not a good idea to quickly say yes when you’re not yet sure that you can deliver. A quick no on the other hand can immediately ruin good ties. Again, be professional. Check your schedule first and see if you can confidently say yes to a request before doing so.

3. Pause – Before saying yes, take a deep breath and think. What do you r instincts say? Should you say yes? Or is your mind screaming, “No you cannot possibly accommodate this!” You can also take a longer pause and give yourself some time to make a pros and cons list. Talk to the client and lay out your situation first. This can lead you both to a nice compromise. The key here is to stop briefly and assess the situation. It also buys you some time!

4. Explain your constraints – Don’t be so quick to dole out the rejection. Make sure to provide the requestor with a clear context. The task they’re asking may be too hard on your current workload, manpower, budget, or strategies. Make sure to keep things encouraging first.

5. Say YES to the person, NO to the task – Sometimes, it’s all about the manner on how you talk to someone. Make sure that the other person understands how positively you feel about them. Even if you may not be able to accommodate the request now, reassure them that it’s not a personal affront. Keep the relationship on a positive note.

6.  Sandwich the NO between a double YES – If you’re sure that you won’t be able to commit to a specific request, you can keep things positive by sandwiching the NO between two yeses. For example, if your client demands that you yourself visit the build site, and you absolutely cannot do it, give them a positive project update first, and then end the statement by saying that you will send your best man to personally inspect their concern. Give them two things to smile about so they can forego the minor disappointment.

Before anything else…

But wait, before you do anything drastic, make sure to have a good scheduling system in place. Something like SAM- The Superintendent’s Automated Manager. Use SAM to coordinate your things-to-do and your project timelines. With its instant reporting tools, you’ll find out immediately just where each project stands. It will allow you to check your schedule in an instant, as well as pass along vital information to your key personnel.

So to conclude, remember that it’s okay to say no sometimes. Delegating the request to a team member could be the better solution. Sometimes you also just need to prioritize. As a leader you have to make the tough decisions, but at the end of the day, you still need to keep your stakeholders happy.