August 2019 - The Contractor's Compass

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FASA’s THE OFFICIAL EDUCATIONAL JOURNAL OF THE AMERICAN SUBCONTRACTORS ASSOCIATION WWW.ASAONLINE.COM

How to Get Construction Data from the Field

by Nathan Snow, Content Director, Raken, Inc.

Data Distortion and Improving the Human Side of Data Collection

by Chad Pearson, Director of Business Development, Plexxis Software

Mammas Should Tell Their Babies to Grow Up to Be Plumbers

by Mike Brewer, President of ASA of Arizona;Todd Sanders, President & CEO of the Greater Phoenix Chamber; Karen Fann, President of the Arizona State Senate; and Mike Trailor, Director of the Arizona Department of Economic Security

LEGALLY SPEAKING: Cyber Crime and Terrorism Threatens the Construction Industry: Contractors Must Be Prepared

by Ross A. Boden, Senior Associate, Sandberg Phoenix

Challenges and Trends in Construction Data Collection

by Patrick Hogan, CEO, Handle

A Little Bit Ikea, A Little Bit Apple

by Gregg M. Schoppman, Principal, FMI Corporation

Data Mining—Looking Back to Accelerate Moving Forward

by Stephane McShane, Director at Maxim Consulting Group

American Subcontractors Association 1004 Duke St. Alexandria, VA 22314 www.asaonline.com (703) 684-3450 communications@asa-hq.com

AUGUST 2019

Data Collection & How to Use It

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FASA’s THE

August 2019

F E AT U R E S EDITORIAL PURPOSE The Contractor’s Compass is the monthly educational journal of the Foundation of the American Subcontractors Association, Inc. (FASA) and part of FASA’s Contractors’ Knowledge Network. The journal is designed to equip construction subcontractors with the ideas, tools and tactics they need to thrive.

The views expressed by contributors to The Contractor’s Compass do not necessarily represent the opinions of FASA or the American Subcontractors Association, Inc. (ASA).

MISSION FASA was established in 1987 as a 501(c)(3) tax-exempt entity to support research, education and public awareness. Through its Contractors’ Knowledge Network, FASA is committed to forging and exploring the critical issues shaping subcontractors and specialty trade contractors in the construction industry. FASA provides subcontractors and specialty trade contractors with the tools, techniques, practices, attitude and confidence they need to thrive and excel in the construction industry.

FASA BOARD OF DIRECTORS Richard Wanner, President Courtney Little Richard Bright Anthony Brooks Brian Cooper Jack Austhof SUBSCRIPTIONS The Contractor’s Compass is a free monthly publication for ASA members and nonmembers. For questions about subscribing, please contact communications@asa-hq.com.

ADVERTISING Interested in advertising? Contact Richard Bright at (703) 684-3450 or rbright@ASA-hq.com or advertising@ASA-hq.com.

EDITORIAL SUBMISSIONS Contributing authors are encouraged to submit a brief abstract of their article idea before providing a full-length feature article. Feature articles should be no longer than 1,500 words and comply with The Associated Press style guidelines. Article submissions become the property of ASA and FASA. The editor reserves the right to edit all accepted editorial submissions for length, style, clarity, spelling and punctuation. Send abstracts and submissions for The Contractor’s Compass to communications@ASA-hq. com.

ABOUT ASA ASA is a nonprofit trade association of union and non-union subcontractors and suppliers. Through a nationwide network of local and state ASA associations, members receive information and education on relevant business issues and work together to protect their rights as an integral part of the construction team. For more information about becoming an ASA member, contact ASA at 1004 Duke St., Alexandria, VA 22314-3588, (703) 684-3450, membership@ASA-hq.com, or visit the ASA Web site, www.asaonline.com.

LAYOUT Angela M Roe angelamroe@gmail.com © 2019 Foundation of the American Subcontractors Association, Inc.

How to Get Construction Data from the Field................................................................ 7

by Nathan Snow, Content Director, Raken, Inc.

Data Distortion and Improving the Human Side of Data Collection................. 10

by Chad Pearson, Director of Business Development, Plexxis Software

Mammas Should Tell Their Babies to Grow Up to Be Plumbers......................... 12

by Mike Brewer, President of ASA of Arizona;Todd Sanders, President & CEO of the Greater Phoenix Chamber; Karen Fann, President of the Arizona State Senate; and Mike Trailor, Director of the Arizona Department of Economic Security

Challenges and Trends in Construction Data Collection........................................ 18

by Patrick Hogan, CEO, Handle

A Little Bit Ikea, A Little Bit Apple...................................................................................... 20

by Gregg M. Schoppman, Principal, FMI Corporation

Data Mining—Looking Back to Accelerate Moving Forward............................... 22

by Stephane McShane, Director at Maxim Consulting Group

D E PA R T M E N T S ASA PRESIDENT’S LETTER....................................................................................................5 CONTRACTOR COMMUNITY................................................................................................6 LEGALLY SPEAKING: Cyber Crime and Terrorism Threatens.............................15 the Construction Industry: Contractors Must Be Prepared

by Ross A. Boden, Senior Associate, Sandberg Phoenix

QUICK REFERENCE COMPLIMENTARY WEBINARS.......................................................................................... 28 COMING UP.................................................................................................................................. 28

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PRESIDENT ’S LE T TER Dear ASA Members: August is an exciting time of year. It is a time of new beginnings.

Children are headed back to school, the weather is beginning to change, and we are all ready for the new things in store for us as we get closer to the Fall months. I am personally excited for all of the work all of you are doing for the subcontractor community.

We are looking forward to the Legislative Fly In, and I want to thank each and every one of you who are planning to attend this incredibly important event. To see the American Subcontractors Association descend on our nation’s capital to fight for the issues important to all of us is going to be an amazing sight to behold.

The ability to meet with lawmakers gives us the opportunity to keep these issues front and center of our leaders.

Our membership is vital to the success of ASA, and I want to encourage you all to continue to network with each other and learn from each other. Through our ASA website and Info Hub, ASA members have the opportunity to learn from each other and grow together. I know many of you are working to engage with young talent in your communities and show them the immense value of working in the trades. ASA is currently collecting your ideas and successes in order to share these ideas with other ASA members, and I encourage you to get involved with that effort.

The future of our industry relies on teaching the next generation of tradespeople, and I personally am excited to see what the future has to bring.

As we look forward, I hope you all will mark your calendars for SUBExcel 2020, which will take place March 4-7, 2020 in Las Vegas, Nevada. This industry-leading event in such an exciting city will be a perfect opportunity for all of us to join together for the future of the American Subcontractors Association. I hope to see you there!

Sincerely, Anthony Brooks ASA President

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CONTRACTOR COMMUNIT Y ConsensusDocs Announces New Master Subcontract & Project Work Order Agreements ConsensusDocs recently published their new Standard Master Subcontract Agreement between a constructor and subcontractor, and the Standard Project Work Order. This new standard master agreement, ConsensusDocs 755 (CD 755), allows parties to negotiate the standard terms and conditions of their working relationship, and then issue multiple project work orders (ConsensusDocs 756) without having to negotiate specific legal terms. Through CD 755, general terms and conditions addressing issues such as indemnification, notice requirements, and dispute resolutions only have to be negotiated once. Project specific terms, which are often negotiated by project field employees along with insurance bonding requirements are addressed in the project work order.

Per ConsensusDocs Executive Director Brian Perlberg, “the document will allow parties to spend less time revisiting subcontracting terms and will reduce the transactional costs of hiring outside counsel to review project work orders. I expect that these two new documents will be two of the most used standard contracts within our catalog of 100 best practice contracts due to the interest and need that I see throughout the industry.”

For more information on CD 755, please visit: https://www.consensusdocs.org/contract/7552/?utm_source=informz&utm_ medium=email&utm_ campaign=informz_email

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ASA Continues to Support Section 877 (Miller Act) of the FY20 NDAA On July 24, 2019, ASA joined the members of the Construction Industry Procurement Coalition (CIPC) to urge the Senate and House Armed Services Committee Leadership to include Section 877 as enacted in H.R. 2500, in the 2020 National Defense Authorization Act Conference Report.

Specifically, Section 877 exempts the federal Miller Act bond threshold from the required indexing of all federal acquisition thresholds for inflation. The Miller Act has required federal infrastructure projects to be bonded for over 90 years.

The payment bond protects subcontractors and suppliers against the risk of non-payment. They rely on the payment bond in case the general contractor does not or cannot pay them. Subcontractors cannot lien public property, so the payment bond provides them their only protection. Subcontractors and suppliers often are small businesses on federal projects and the risk of non-payment can be catastrophic to their businesses.

The performance bond protects taxpayers by ensuring completion of the contract. In the event of a default, the surety steps in to complete the construction contract, saving the federal agencies and taxpayers from costs of stopping, reletting, and restarting the project. The performance bond assures the public contracting entity that the construction contract will be completed for the contract price.

The Miller Act bond threshold is scheduled to increase from $150,000 to $200,000 by 2020. Industry data shows that the federal government’s annual exposure to loss from contractor defaults in just this one class of small contracts is $300 million annually. Assuming an average contract price of $175,000, over 1700 contracts/year are affected. Each adjustment also will increase the payment

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bond threshold, so more small subcontractors and suppliers will not have payment bond protection on increasingly larger federal construction contracts.

Indexing of all federal acquisition thresholds was added to the FY 2005 NDAA report. A few thresholds were exempted at time, such as the wage law and trade agreements. Moreover, the Miller Act was enacted as a remedial protective statute, and as such, the Miller Act should also be exempted from these inflationary adjustments.

Senate Environmental and Public Works Releases Transportation Bill On July 29, 2019, the Senate Environment and Public Works (EPW) Committee released America’s Transportation Infrastructure Act of 2019, which would reauthorize transportation programs at a level of $287 billion over five years. The current authorization, the FAST Act, is due to expire September 30, 2020, and the Senate EPW proposal would increase transportation and infrastructure funding by 27 percent compared to the previous bill.

However, the Senate Finance Committee may consider an increase to the gas tax or a move toward a VMT (vehicle miles traveled tax fee) and the RUC (road use charge). Tempering expectations, the Senate Banking Committee is working on a transit title, the Senate Commerce Committee is working on a rail and safety section, and the Senate Finance Committee is working on a finance mechanism. The House Transportation and Infrastructure Committee may not release a bill until next year, and the House Ways & Means Committee will seek to solve the funding puzzle on the House side. Further, the current authorization expires at the end of September 2020, a month before the presidential election. This timing suggests a temporary extension into the next year will probably be necessary.

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F E AT U R E How to Get Construction Data from the Field

by Nathan Snow, Content Director, Raken, Inc. Construction data is experiencing a boom. We’re not talking about construction statistics -- like how much money the U.S. construction industry made or spent in the last fiscal year.

That kind of construction data is definitely valuable in its own way from a big-picture perspective. We’re talking about construction data that subcontractors can use to make sure their projects are moving forward smoothly, that everyone is getting paid, and that the hundreds of moving parts on a typical construction site are all operating according to plan.

Unfortunately, that sort of data has been the hardest to get -- historically speaking. There are a dozen services, books, and market research sources that will give you the big picture of construction data in the U.S., but there hasn’t been an easy way for the actual subcontractors to get a reliable, accurate, steady source of data from the construction field back to the office. We’re here to offer an explanation of why that is, and what you can do to fix it.

That means they are answering questions, tracking materials, and managing their crews. Then, from about 3:00-4:00pm they are hunting down their guys, asking questions to put into their report for the work that was done that day. Then they take all those reports back to the trailer and submit them to the Project Engineer or administrator who will then type, collate, and organize the daily reports -- unless the superintendent did it themselves.

So why is construction data collection such a hard task? The difficulty comes in the hours that the superintendents and foremen spend filling out a pen-and-paper daily report or typing up a report into a spreadsheet. These data collection methods are time-consuming and inaccurate. Because they take so long, they run a high risk of not being done at all. If they are done, they are done in one swoop at the end of the week, and are full of inaccuracies because it’s hard to remember exactly what happened days after the fact.

David Whitt, a Project Engineer from Swinerton Renewable Energy, told us why he wasn’t getting the data he wanted from the field. He said, “One of the jobs I had early on was collecting all the dailies that our foremen generate.” Whitt told us, “Oftentimes these dailies are written in the field, and they can get messy dealing with things like water or even just penmanship in general. It can be pretty crazy to collect all that information in a timely manner.

Then, just to track it all, I would create spreadsheets and all sort of complicated stuff to make sure I was getting all that information. It could take a lot of time, consolidating it all and making sure we had it. With anything that’s physically written up, you usually have to type it up as well, so either I or an administrator would do that to make sure we have it all online.”

Already you can see how collecting data from the construction field was hard for not just for Whitt, but for the subcontractors he was working

Why Construction Data is Hard to Get A construction jobsite is a naturally busy and complicated place. The typical day usually starts as early as 5:00 a.m. when the foreman or superintendent spends an hour catching up on paperwork from the previous day.

That paperwork is related to a number of workflows, like daily reports and time cards. From about 7:00 a.m. to 3:00 p.m. they are out in the field managing the day-to-day activity of the jobsite, which is their primary function.

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with. Because they are out there in the field, these reports are often a bit messy with water damage and scribbled handwriting. But the difficulty didn’t stop there. Whitt told us “It’s just hard to remember with the dailies the next day, and if guys forget they are way less likely to do them because they have to think ‘okay, what was I doing last Wednesday, or what was I doing three days ago?’ It’s just hard to remember and it’s not usually as clear, so a lot of guys are all-or-nothing, so they wouldn’t do it if it wasn’t the day of.” It’s a completely understandable event: there are plenty of events to track throughout the course of the day, and when you are expected to sit down in the trailer at the end of it all and perfectly recall what you did onsite that day, it’s easy to see how some things can be forgotten. If you remember to do your report throughout the day, then you run right back into the illegibility problem. Seems like getting clear reports and data from the field is a lot more complicated than previously thought.

That is precisely the sort of problem that makes construction data hard to get: if the guys in the field forget to do it right in the moment, then it more than likely doesn’t get done; or if it does get done, it’s inaccurate because time has made the details vague.

to do all that.” Whitt said. He then went on to describe a typical reaction he would get when he finally succeeded in tracking down one of the noncompliant foremen either on the radio or the phone, having them stop what they’re doing in the field, come into trailer to talk to him, or go out into the field himself to track them down. He described it as “tracking that person down and saying ‘hey you didn’t fill out your daily...’ they might say ‘David, why are you on me for this? I have other stuff to do....’”

Whitt describes the shift that had to happen to start collecting good data from the field: realizing that the foreman in the field wasn’t wrong. The “other stuff” that they were doing is precisely what they were hired to do.

Whitt, and could be tempted to blame their lack of clear construction data on the foremen and superintendents not being organized enough. To these professionals we would say that it isn’t that foremen and superintendents aren’t organized or hardworking, it’s that modern construction is requiring more and more reports out of the field - reports that they can no longer reasonably keep up with using the penand-paper or spreadsheet that was handed down from their predecessor.

So, instead of blaming the guys in the field, getting into arguments every day, and spending hours tracking down reports, Whitt decided to implement a certain kind of technology: one that focused on making the experience as easy as possible for the end user.

Stop Blaming the Field The situation that Whitt described probably isn’t new to anyone familiar with the flow of information between the construction field and the office, nor is the frustration that usually comes from the lack of communication. Whitt confirmed to us that “one of the biggest time sucks is tracking the information, hunting down my foremen to find out where they are and where their daily is, and even remembering

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They weren’t slacking on their daily reports because they wanted to slow things down or out of a sense of stubborn pride: they weren’t filling out their dailies because a jobsite is a busy place and they had plenty to do.

However, there are project managers or engineers out there who probably aren’t as patient or understanding as

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An Easier Way to Collect Construction Data from the Field We don’t say “construction data collection made easy” because it sounds like a catchy slogan. It’s actually the key to getting better data from the field: you have to make inputting the data as easy as possible, that way the

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guys in the field will actually want to do it, and you’ll get greater quantities of accurate data you need to keep the project moving smoothly.

Whitt had a number of conditions to meet before deciding to introduce a technology. He told us “One of the reservations I had in the beginning was ‘okay, is this going to be a new system?

Is this going to be complicated? Is this even going to be worth me learning it?’” These are smart questions to have, because the only thing worse than pen-and-paper or a spreadsheet is an overly-complicated, expensive piece of software that the office dictates the field needs to use, and they never do because it’s too complicated. Not only are you not getting the data you need, but you’ve spent a bunch of money on software no one uses.

That’s why Whitt decided to go with a daily reporting app that foremen can install on their phone, and that automatically relays important information back to his desktop in the office.

Since that day, he reports “Definitely daily compliance has gone up. I’ve worked with foremen of all different age groups, and everyone’s been very well adapted to it,” he said, “they like it because they don’t have to sit in the office and do their dailies to turn into me so I can verify it’s all done. They can go home and do it either at home, or if they’re commuting with someone else, they can do it on the ride. It’s really nice for them to get out of here quicker.”

By making field data collection easier, more accurate data is collected right in the field as the foremen are walking the jobsite. No more trying to remember on Friday what happened on Monday.

And it’s not just the foremen in the

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field that are saving time. Whitt and his team in the office are saving time collecting and collating the data. “It’s been really great for penmanship. I don’t have to worry about how people’s handwriting looks,” he remarked. “And now I can track who is turning in dailies, when they’re turning them in, and I can make sure I’m collecting all the information: weather, man counts, it’s all in one spot for me. We use it to track man counts and weather, but we also use it to make sure that each activity has someone responsible for that daily report and someone is getting eyes on it and is reporting what they’re doing as far as progress goes, and it’s all in one spot. I get a daily email that shows how many reports I got and how many people are on site. Even if I’m not on the project necessarily, I can keep a pulse on it now.”

With daily report PDFs emailed to him along with the real-time dashboard, everyone involved with a project can know what’s happening on the jobsite as the data is being collected in real-time. It all hinges on a user experience that was designed, from the ground up, to be easy for the enduser to use. When foremen have a tool that lets them get their reporting done faster it will not only help them save time doing their reports, but the office gets more accurate construction field data as well. It’s a win-win for everyone involved.

And of course, this goes for more than the daily report. Foremen all over the country are spending too much time filling out timesheets only to forget them one day, and then have to remember when he and his crew came in, how much overtime or doubletime they clocked. If he remembers, he then has to scan or take a photo of

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the timesheet and email it to the payroll admin, who then has to collect and collate individual time cards - plus look them over for mistakes. If they find one, they have to chase down workers for missing information, manually enter everything into one document once they have all the information, then review it again and process payroll.

Just like Whitt and the daily reports, you can see how such a complicated, time-consuming process can break down.

But with the right app, foremen capture time cards right in the field, and can even rollover time from the previous day to the current day for an entire crew, and make individual changes as needed. Payroll then gets an automated report and can send text notifications to anyone who hasn’t submitted their time card yet. They can then upload a file of the information into their system for quick review and processing. Once again, getting better time card data from the field is simply a matter of replacing an inefficient process with technology that is easy to use for the end-user.

For more, watch David Whitt’s full construction software case study video or check out our latest eBook on how you can implement construction software quickly and easily to start getting better construction data for your own project.

Raken provides innovative mobile technology to streamline field workflows for construction workers. Raken’s “digital toolbox” connects the field to the office with daily reports, time cards, toolbox talks, photos, and more.

Thousands of the world’s top construction companies use Raken to solve their field reporting needs. For more information, please visit www.rakenapp.com.

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F E AT U R E Data Distortion and Improving the Human Side of Data Collection

by Chad Pearson, Director of Business Development, Plexxis Software

If your projects look financially fit until they reach 80%90% complete - when the wheels fall off the cart and profits plummet - this article is for you.

And if you have invested significant time and money into clever spreadsheets, custom reports, consultants and technology that connect the field and office, yet STILL have this problem, this article is definitely for you.

You may want to look beyond technology and process to the human element, and consider a drastic shift in culture as a solution to your unreliable data and poor job visibility.

Hang with me and I’ll break it down….

regardless of how good your technology is. The two human trends are: 1) Price’s Law and (2) our increasing addiction to distraction.

Trend #1 is Price’s law, which says that 50 percent of the work is done by the square root of the total number of people who participate in any project. It’s an unfortunate equation that is accurate more often than not. For example, if your company has 25 people involved in administrative tasks, approximately 5 people do 50% of the work. If your company has 100 people, only about 10 people do 50% of the work.

Therefore, as companies grow, the number of people who grossly underperform grows exponentially.

This lack of performance and care destroys the quality of data collection.

Trend #2 is our growing addiction to distractions. Productivity expert, Chris Bailey (http://chrisbailey.ca/), has shown beyond doubt, that the barrage of distraction through our connected devices

People touching data is likely the cause of distortion There are thousands of ways humans distort data, but we’re going to focus on two that create an environment that makes it almost impossible to get accurate data,

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overstimulates the brain so much, that attention spans can shorten to as little as 40 seconds. In short, more people are becoming addicts of distraction and less capable of being productive.

This lack of focus results in a growing risk of people lacking the attention to detail needed for quality data collection.

The solution We do not believe there is a quick fix to this problem.

In the future however, technology will solve this problem by collecting all data passively without humans.

(Thank you, Captain Obvious... how then do we fix the problem until technology frees humans from data collection and entry?) As we all wait for technology to evolve, we recommend a drastic change in culture that few companies will consider.

The following are 3 steps we promote for building a culture of truth & transparency that promises the highest levels of productivity and quality data. That may sound simple, but remember, truth hurts! If you want a culture of truth, prepare for the pain. Let’s begin....

1. Step up or step aside, you decide: Step up: If you decide to step up as a leader, get ready to invest more time than anyone else and lead by example. You’ll need to start saying “no” to things in your life that do not align with the mission, so you can stay focused on protecting the culture.

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Step aside: If you’re at a stage in life where you want to slow down and are not willing to sacrifice more than you already have, you should step aside and pass the torch to your replacement. Consider part-time roles such as a board member or advisor, as your wisdom and guidance will be invaluable.

Leading cultural change is more than a full-time position, it is an ‘allthe-time’ position, so you should decide if you want to step up to the challenge, or step aside and help mentor an emerging leader. BE the change the company needs.

2. Choose the core and no more: With the understanding of Price’s Law, identify the core group of people who drive 50 percent of your business, and then evaluate which people in that group have the integrity needed to build a culture of truth & transparency (some people may have great work ethic but terrible integrity).

After identifying your core group of talent with integrity, come together to define the new culture and develop the strategic plan to create it.

NOTE: You may need a professional in this area to complete this.

3. Courage to slow down, so you can speed up: Once you have a plan in place, it’s time to pony up and execute, which means you’ll need to make decisions that most people could not make.

Here are some examples: • Unforgiving policies around addictions with technology and distractions that you likely have C O M P A S S

yourself and will need to overcome. (Chris Bailey shares some great tactics anyone can use to improve in this area.)

• Begin coaching people outside the core group and set strict deadlines for them to change patterns of behavior that hurt the new culture.

• (here is the toughest one) Replace people who do not show progress, regardless of who they are, their skills, or how badly you need them.

This may hurt the company in the short term, but replacing those who can’t adapt with people who can, is the catalyst to building a team where high performers are the majority, rather than the minority square root of the group.

Consider building a culture of truth and transparency through courageous and attentive leadership. It may be the best way to overcome Price’s law and addiction to distractions so you can finally have real time data without distortion and the productivity you have always hoped for.

Chad Pearson brings a unique perspective to the industry combining 12 years in construction technology with 30+ years in combat sports and law enforcement.

He is currently the Dir. of Business Development at Plexxis Software, which creates estimating, accounting, project management and mobile app solutions for specialty contractors. For more information, please visit www.plexxis.com or call 866-PLEXXIS.

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F E AT U R E Mammas Should Tell Their Babies to Grow Up to Be Plumbers

by Mike Brewer, President of ASA of Arizona;Todd Sanders, President and CEO of the Greater Phoenix Chamber; Karen Fann, President of the Arizona State Senate; and Mike Trailor, Director of the Arizona Department of Economic Security In 1978 Waylon Jennings and Willie Nelson topped music charts with their classic, “Mammas Don’t Let Your Babies Grow Up to be Cowboys.” The memorable tune urged parents to keep their children focused on becoming doctors and lawyers, while avoiding careers that might have them “drive dirty old trucks.” More than 40 years later, the duo’s words and the societal stigma developed around jobs requiring “getting your hands dirty” still echoes at kitchen tables across the country.

The chief challenge for building a larger workforce pipeline for the construction industry is battling negative perceptions. For far too long, the idea that parents should encourage their children to strive for a college degree and white-collar jobs only— and consider careers short of those as a letdown, has taken hold of the collective consciousness.

Given the starting compensation, ease of entry and immediate availability of well over 155,000 construction industry jobs in Arizona alone by 2021, the American Subcontractors Association of Arizona, Greater Phoenix Chamber Foundation, Arizona Department of Economic Security, and elected policymakers across the state, are working hard to dispel these notions.

The construction industry offers a solid entry point for people looking to build a career. With minimal training and certifications, and zero college debt, people can start a career in construction trades by turning a wrench and earning their way to the top, ending their career as construction executives or owners of their own companies.

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An entry-level construction-trade job can provide steady work and a fruitful career. More importantly, in Arizona, the average starting wage in the industry is $49,000 per year, with some positions paying into the six figures. For perspective, this is higher than our state’s average salary across all industries. Construction jobs represent more than just a wage, they represent opportunity.

With industry partners such as Brewer Companies, Arizona’s largest plumbing contractor, Sundt

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Construction, and Lennar Homes, we are bringing the business community, educators and government together to collaborate on a multi-pronged solution to Arizona’s construction trade workforce crisis.

Our approach involves: • Realigning community perspectives of construction trades. Many of these positions require highly skilled people (who can learn on the job) and are highly paid, given that their specialized skills are in

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high demand. To put it succinctly, many of today’s construction industry employees are highly soughtafter community contributors. And that’s how we should be referring to/advocating for them.

• Increasing access and awareness of high-quality training opportunities. Whether it’s Career Technical Education Districts (CTEDs) across Arizona or industry leaders collaborating with our highquality community colleges located across the state, or Registered Apprenticeship programs, we are working to expand the number of well-developed training programs for prospective tradesmen and tradeswomen across the spectrum.

Arizona’s registered apprenticeship programs, for example, allow novice workers to earn an internationally-recognized certification after earning an income; all while being trained on-the-job by experts in their field. Furthermore, apprenticeship graduates earn an average starting annual salary of $60,000 because of their newfound skillset.

• Launching Build Your Future Arizona. Later this fall, the Greater Phoenix Chamber Foundation will launch a career awareness campaign for the construction trades.

Supported by the construction industry, this three-year campaign will promote the high-wage, rewarding careers available in the construction trades.

The work that organizations have already done in this space has yielded valuable insights on how our community should support this effort.

First, developing a sufficient supply of qualified talent requires multiple strategies in order to be successful.

Second, we need to increase awareness of the benefits of construction careers to challenge the negative stigma associated with these positions.

Third, our business community has a strong responsibility to support our schools, especially those specializing in career and technical education (CTE), ensuring they have the most up-to-date equipment and qualified teachers to inspire students. Meeting these needs requires engagement and

strong support from employers.

While Waylon and Willie’s song may have struck a chord back in the late 1970s, times have changed during the four decades since, yet the sentiment stubbornly remains. While still requiring hard work, the skills needed for the construction industry careers of today run the gamut. And the majority of those careers enable employees to provide for themselves and their families. Opportunities for advancement and are open right now.

We believe that Waylon and Willie would encourage the moms of today to tell their children to grow up to be plumbers, carpenters, and construction trade business owners. Fortunately, through collaboration between the American Subcontractors Association of Arizona, the Greater Phoenix Chamber Foundation, and policymakers across Arizona, Arizona’s construction industry offers an immediate path to prosperity. We encourage you to join us in promoting the thousands of these jobs available right now.

About the Authors

Mike Brewer is President of ASA of Arizona and CEO of Brewer Companies & Benjamin Franklin PlumbingPhoenix. He may be reached at mike.brewer@brewercompanies.com.

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Todd Sanders is President and CEO of the Greater Phoenix Chamber.

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Karen Fann is President of the Arizona State Senate.

Mike Trailor is Director of the Arizona Department of Economic Security.

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L E G A L LY S P E A K I N G Cyber Crime and Terrorism Threatens the Construction Industry: Contractors Must Be Prepared

by Ross A. Boden, Senior Associate, Sandberg Phoenix The construction industry is a leading target of cybercrime. The necessity of remote network access on job sites and the use of shared networks among vendors and contractors have made the construction industry a vulnerable target and a notorious entry point for major security breaches. According to cybersecurity firms, one in every 382 e-mails in the construction industry contains malicious content, and nearly forty percent of construction industry employees are considered susceptible to cyber scams. Given that cybercrime will only get more sophisticated and difficult to detect, failing to implement a cybersecurity plan is a serious gamble.

According to the National Cyber Security Alliance, 60% of small businesses survive less than six months following a data breach. However, contractors can improve those odds by increasing security measures, training employees, and purchasing cyber insurance policies. Furthermore, contractors without cybersecurity plans may fall behind competitors and fail to qualify for certain jobs, especially government projects.

Importantly, recent cybersecurity studies put the construction industry on high alert after showing how cyber terrorists could hijack heavy equipment or manipulate structural calculations. Thus, there is far more at stake than data and competitive edge. Contractors big and small must be prepared to curb these cybersecurity threats.

Cyber Criminals Attack Contractors of All Sizes If you believe cyber criminals target only large contractors, think again. Cyber criminals attack contractors of all sizes, and in fact, construction firms with less than 250 employees face the highest rate of cyber-attacks. Furthermore, the potential exposure includes not only the contractor’s own data but also any data to which the contractor has access. This is why it is imperative for all contractors to improve

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cybersecurity preparedness. Hackers need only one weak link for a massive security breach.

A prime example is the infamous data breach at Target in 2013. An HVAC contractor had access to Target’s networks for the purpose of installing smart thermostats in Target stores. Hackers penetrated Target’s network through the HVAC contractor and stole data from approximately 40 million customers. The breach cost more than $200 million, an insurmountable liability for most contractors.

Common Cybersecurity Threats to Know About Implementing sound cybersecurity policies requires a basic understanding of common security threats. Hackers constantly change methods, but there are common cyber scams that every construction professional should know about: Ransomware: This is a form of malware that prevents access to computer systems, e-mail, and data until a ransom is paid.

The ransom is typically low enough ($1,000 to $25,000) to make it cheaper than the

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business interruption, negative publicity, and repair costs. Hackers usually demand the ransom to be paid in cryptocurrency (such as Bitcoin), which is difficult to trace.

Even if the ransom is paid, hackers may destroy the data or attack again until the security breach is cured.

Phishing: These scams often try duping employees (or customers) into revealing sensitive information or diverting payments. Like all cyber scams, it is continually more sophisticated and difficult to detect.

A classic example is an e-mail from a customer, a reputable source, or a superior with an urgent request to provide sensitive information, click on a malicious link, open an infected attachment, or visit a fake website to enter login credentials for a sensitive account.

Denial of Service: This attack comes in many different forms which are designed to disrupt or flood the targeted server, website, or network until it crashes. These attacks generally do not include a theft or loss of significant information or data, but they are costly and disruptive.

Spyware: This is a form of malware designed to monitor the target’s device

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activity or gather information on the target’s device. It can monitor keystrokes, clicks, and internet activity. It is a common way to steal usernames and passwords.

Sabotage, Manipulation, or Terrorism: In the construction industry, a few possible examples could include sabotaging designs, manipulating structural calculations, or taking control of a crane remotely.

with vendors and other contractors Keep in mind that thwarting all cyber threats is not possible. The goal is to minimize vulnerabilities with the most costeffective use of resources and to be prepared when a cyber-attack hits.

Cybersecurity Practice Tips

Purchasing cyber insurance is a crucial part of being prepared. Cyber insurance policies and coverages vary significantly, and many general liability and property insurance policies do not provide coverage for losses or liabilities caused by cybercrimes. Contractors should discuss coverage options and limits with their insurance agents and cybersecurity advisors.

Contact a qualified attorney if you need help interpreting the policy, and be sure to know whether your policy covers: (1) data breaches (including recovery and replacement of lost or stolen information or data); (2) attacks originating from anywhere in the world and not just the United States; (3) attacks of your data in the possession of vendors and third parties; (4) damage to your computer systems, servers, and network; (5) acts of war (some cyberattacks come from government actors and could be deemed an act of war, which is a common exclusion); (6) terrorist acts (another common exclusion that is becoming increasingly prevalent); (7) attorneys’ fees to evaluate your notification and regulatory obligations after an attack; (8) attorneys’ fees to defend you in a lawsuit, any regulatory investigation, and responding to any regulatory inquiries; (9) fees for public relations or crisis management assistance; (10) forensic expert fees to investigate and fix the breach; (11) fees for customer notification assistance or call center services; (12) cyber ransom and extortion fees; (13) fees, fines, and penalties incurred from the attack; (14) payments to consumers or customers affected by the attack; (15) any damages, judgments, or settlements

A robust cybersecurity plan has many layers. While it is highly recommended that construction leaders educate themselves as much as possible and remain actively involved in the implementation, this is not a do-it-yourself task. Engage a professional team to explain the options, requirements, costs, and risks involved. The plan should be a collaborative effort of cyber security consultants, insurers, software vendors, attorneys, and other professional advisors. Synthesizing their different perspectives will achieve better results. Common components of cybersecurity protection include: • Training employees and controlling access1 • Installing firewalls, antivirus, and data encryption software • Requiring privileged account security on all devices and cloud access • Backing up data with daily updates • Advanced threat detection • Requiring complex passwords • Regularly updating security systems, software, and passwords • Developing specific procedures for reporting and responding to attacks • Designate a response team and point person • Cyber insurance (more thoroughly discussed below) • Attorneys drafting favorable contract provisions to reduce potential exposure

Cyber Insurance Is Highly Recommended

paid for any claims or lawsuits; (16) all litigation costs and expert witness fees; (17) losses or liabilities related to defamation, copyright, or trademark infringement; (18) payments made by employees duped by a phishing scam; (19) losses or liabilities stemming from cybersecurity system or software failures; (20) broad definitions of Personally Identifiable Information; and (21) lost business income. Additionally, determine whether the policy requires any annual testing or minimum security measures for coverage to be effective.

After a cyber-attack, always consult with your attorney before contacting your insurer. Your attorney can help secure coverage and guard against making statements detrimental to your insurance coverage.

Responding to Attacks When an attack hits, follow your cybersecurity response plan. Presumably, your response plan will include notifying your cybersecurity professionals, attorneys, employees who need to know, insurers, and law enforcement. If included in your cyber insurance policy, the insurer will hire forensic experts, crisis management teams, public relations advisors, and attorneys to assist in the aftermath.

It is highly advisable to speak with your attorney promptly after an attack. There are deadlines to report certain scams and data breaches to government agencies, and your attorney can advise on applicable requirements. Cybersecurity threats will never be eliminated, but well-prepared contractors may reduce the negative consequences.

Ross A. Boden is an attorney in the Kansas City office of Sandberg Phoenix P.C. and can be reached at rboden@ sandbergphoenix.com or at (816) 6275536. Follow Sandberg Phoenix’s construction blog at: http://www.sandbergphoenix.com/perspectives/blogs/ construction-litigation-blog/

1 Training employees is essential. The best cybersecurity technology is ineffective without employee training. How many of your employees would respond to a superior’s urgent request for sensitive information, especially if the e-mail came from the superior’s actual e-mail account? It is a scary thought. With the turnover in construction, new hire training and periodic training is essential. Instruct employees to remain vigilant and reward them for reporting potential concerns. Remind employees never to click on unusual links or attachments; never respond to unusual requests; never open unexpected attachments; never divulge account numbers or passwords; never permit a third party to use your device; and avoid using removable media (flash drives, CDs, DVDs, etc.) received from third parties. However, the best advice is to have your security professional and attorney handle the training.

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F E AT U R E Challenges and Trends in Construction Data Collection

by Patrick Hogan, CEO, Handle The success of a construction project depends on accurate and up-todate data. All construction projects need to collect project data to improve efficiency, reduce delays, and keep operations running smoothly. Project data helps with forecasting and analytics, which will benefit future projects.

The importance of data in the construction industry cannot be understated. However, the industry is still having difficulties collecting and using data to its full potential.

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Challenges in Construction Data Collection According to McKinsey Global Institute, the construction industry is among the least digitized, second only to agriculture.

The industry is slow to adopt new processes and technological innovations. A significant portion of data collection is often done using manual methods, such as spreadsheets and even handwritten notes. Handwritten reports, in particular, are time-consuming, and this time is also doubled when

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trying to decipher messy handwriting, scanning it for digital copy, or re-entering information for online records.

However, that doesn’t mean there is no tech presence in the industry. There are several software applications currently in the market that address various aspects of construction business operations. That said, the industry is yet to embrace these technologies fully. Almost half of all construction companies spend less than one percent of annual sales on information technology, according to the 2018

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Construction Technology Report by JBKnowledge.

Unsurprisingly, the biggest challenge in construction data collection is inefficiency. Manual methods take much time to process, not to mention the errors that also need time to correct.

The lack of standardization and the use of multiple systems to store them also complicate the way data is communicated between a construction site and the back office.

Construction projects will only increase in scale moving forward. With the increase in demand for construction, new government regulations, and the increasing shortage of skilled labor, the future of data collection is not going to be easier. As projects increase in complexity, digitization and big data technology are the essential tools that are crucial to a construction company’s success.

Trends in Construction Data Collection and Use Big data analytics and business intelligence are some of the hottest trends in the industry today as suppliers and subcontractors are slowly realizing their benefits. These tools allow construction companies to collect and analyze a greater amount of data than that of manual methods. Let’s take a look at the major trends in construction data collection and how it is used.

1. Improving productivity and streamlining job processes The construction industry has a persistent productivity problem. According to a McKinsey Global Institute 2017 report, the global labor-productivity growth in construction has remained stagnant at only 1 percent a year over the past two decades, despite a 2.8 percent growth in the total world economy.

Big data has a massive role in improving construction site

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productivity. By analyzing data from job sites, project managers can pinpoint inefficiencies in the workflow, streamline job processes, find opportunities for automation, and even cut costs.

Using digital data for design documents, specifications, and project plans makes communication, brainstorming, and problem-solving more efficient. Instead of fetching documents in the job trailer or requesting them from the head office, workers can easily pull up reports and plans on the spot. Sensors also make it easier to track how supplies, tools, and equipment move around the construction site, reducing the time wasted looking for them and allowing employees to get the job done faster.

2. Creating accurate cost estimates One of the universal priorities of construction project management is completing a project within the specified budget. Unfortunately, cost overruns are the norm in the construction industry, with up to 80 percent of large construction projects going over budget.

Having access to accurate data translates to better budget planning.

Big data analytics provide valuable insights into the prices of materials, availability of suppliers, and the number of personnel required by the project. The data from past projects, such as supply levels, equipment used, and timeline, are especially useful in projecting cost estimates. More importantly, the budget information can be updated in real-time. Since project managers and stakeholders know that they are looking at the latest information, they can make faster and better decisions.

3. Reducing risk and Increasing job site safety Workplace accidents and injuries are required to be reported to

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the Occupational Safety and Health Administration, the data for which is used to identify establishments with high rates of injuries. However, this data is also useful in reducing risk and increasing job site safety.

By analyzing data related to accidents and injuries, construction companies can identify the materials, equipment, or practices that pose a safety risk to workers. This data can also help ensure that job sites comply with the strictest safety standards and government regulations. Sensor technology can also monitor the maintenance and repair of equipment, making it easier to address potential accidents before they happen.

The Future of Construction Data Collection If oil is what fueled the industrial revolution, it is data that fuels the digital age. The construction industry’s reliance on traditional and manual methods makes it ripe for disruption. The current system for collecting and analyzing construction data do not meet the needs of project managers, especially in this time where projects are increasing in complexity.

The industry is trending towards digitization. For contractors to gain a competitive advantage, they need digitized data collection and analytics processes lest they risk getting left behind.

Patrick Hogan is the CEO of Handle, where they build software that helps contractors, subcontractors, and material suppliers secure their lien rights and get paid faster by automating the collection process for unpaid construction invoices.

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F E AT U R E A Little Bit Ikea, A Little Bit Apple

By Gregg M. Schoppman, Principal, FMI Corporation Instruction manuals. For some, they bring great solace; for others they bring great anxiety. Whether one is feverishly comparing “A” bolts and that woefully miniscule Allen wrench or simply scrutinizing the location of said “A” bolts into holes that do not appear properly reamed, instruction manuals should provide support and guidance rather than palpitations. Ikea, the Swedish furniture icon that has an almost cult-like following around the world, has provided some of the most memorable instruction manuals. If you prefer the Malm to the Bekant (both desks, for the non-Ikea-ites), you are furnished with a step-by-step roadmap to create your affordable piece of Swedish accoutrements.

On the other hand, Apple makes an event of its annual iPhone release similar to the way U2 or Taylor Swift announces the latest tour. Yet, when one opens the box of these technological marvels, they receive an instruction manual that might be compared to that of a bubble gum wrapper. A device that probably has a thousand times the computing power of the Apollo 11 lunar module, completely lacks a user’s manual. However, even with an increasing level of sophistication with every release, the controls are not only intuitive, but users immediately gain access to their data and leverage the device’s capabilities. How is something that comes with no instructions have users worldwide clamoring for new options and applications with, dare we say, even less instruction?

Now think about the instruction manuals or standard operating procedures for a construction firm. Whether discussing the appropriate way a project gets kicked off or how change orders are presented to customers,

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many organizations think they are Apple. For instance, they provide little guidance to their teams “out of the box.” They also think they are providing a level of rogue-like independence by shirking the confines of structure. On the other hand, many of these same firms have manuals sitting on shelves that have stoic titles like “Brand X Standard Construction Operations Procedures E Pluribus….”

With all of that pageantry, the manuals seem better suited to a museum rather than a practical application like a construction firm.

So, which is it – management by Ikea or Apple?

A Little Bit Ikea It is a bit audacious to think that firms can survive without an operational guidebook. The first question to ponder is the efficacy of the instruction manual. Is this manual an accurate representation of your firm’s operational model? Written narratives on “How to <INSERT ITEM HERE>” fail to drive processes. Imagine if Ikea began every instruction with “Connect the irregular shaped board and insert the medium bolt – no, not the average size bolt, the MEDIUM bolt.…” Consistency in operational procedures should be an easy, user-friendly illustration. The first step to creating efficient operational models is to examine the state of the process from the perspective of a new associate. Often, leaders use a lens that provides the optics of a senior-level associate, without considering the recipe guide for that a newer or mid-level associate.

The second consideration is the relevancy of the processes. For example, using the Malm guide for the Malm desk. If the last time the operations

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manual was consulted was when it was created 30 years ago, there might be a relevancy issue. Ensure that the processes have the right applications in mind. For instance, if the firm has design-build and hard bid business units, there should be guides that provide instructions for each. Similar to relevancy, there should be tools in the kit that apply across this diversity in projects. Crowbarring tools that fail to support the manager and supervisors simply leads to obsolescence of the operations, no pun intended.

A Little Bit Apple There isn’t a day that goes by that we don’t learn a new “hack” related to our smart devices. It is almost through trial and error users discover ways to leverage the capabilities of the iPhone without even reading a guide. More importantly, there is a clamor to share these newfound timesavers like that of early man discovering fire. Apple, or these various application programmers, developed these features on the phone, so it is hardly as if the user developed something new.

However, discovery creates a certain level of control and empowerment. If there was a manual, it would probably be discarded as a relic of bygone “instructionalism” (fancy word for a world predicated on massive tomes of instructions). How many individuals learn by doing and experiencing something rather than using a step-by-step guide to drive change.

For construction organizations that feel, confined by too much process, must realize that the road map provides a guideline to manage. The real power is enabling managers and supervisors to channel that creative energy into problem solving. For

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instance, if a firm was to ask for every version of a pre-construction planning agenda that existed within a firm, how many would exist? Put another way, would creating Version 6.0 be prudent or would the teams be better suited to use the better version that exists and channel the creativity into solving project specific problems. Like the iPhone, there is more reward in finding that “project hack” that will help a client, expedite a project schedule or provide margin enhancement.

Processes should exist to provide guardrails for associates to

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live between and also enable senior management something to measure against. For instance, without the Ikea manual, how does one know what success – or the Malm desk - looks like? On the other hand, once the baseline is established, building efficiencies and improvements can be achieved. If that desk was to be built again, what can be improved to build it quicker or what enhancements could be done to improve the finished product? Energy is channeled towards the right activities rather than reinventing the desk. Processes and tools in any

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construction organization should strike a balance between control and creativity. In the end, do you really want to build the Dagstorp (fancy couch) with an out-of-date app?

FMI is the largest provider of management consulting, investment banking, and research to the engineering and construction industry. FMI works in all segments of the industry providing clients with value-added business solutions. For more information visit www.fminet.com or contact gschoppman@fminet.com.

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F E AT U R E Data Miningâ&#x20AC;&#x201D;Looking Back to Accelerate Moving Forward

by Stephane McShane, Director at Maxim Consulting Group Improvements in construction software programs have allowed us visibility in transparency of performance like never before. However, many construction firms struggle with the foundational implementation steps necessary to be able to mine this valuable data easily. In this article, we will discuss what metrics might be of value to a self-performing subcontractor, how to deploy technology properly, and how to utilize this information in your strategic initiatives.

Looking at this type of information year after year might look something like this:

The Why Before the How With any initiative, it is important to discuss why this is important. In the concept of data mining, the why would be to allow the stakeholders and employees to see how the organization is performing. In addition, the performance of divisions, profit centers, project teams, individual field leaders, and project managers can be viewed. These metrics can be easily tied into performance management and incentive compensation programs in order to recognize and compensate individuals and teams for the exact metrics that we are looking for them to influence.

Looking externally, having the right information in an easy to access manner would also allow a view into which markets, which customers, which job sizes, etc. your organization performs best (and worst) in. This information is critical in evaluating market opportunities and focusing efforts on strategic improvements and expansion planning.

What Information Is Important Beginning with the big picture in mind, making the determination of what information needs to be mined is critical before starting any changes. An example of a starting point is having information surrounding revenue and margin.

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And, another view of revenue and margin by project type:

Here is some data by contract process:

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Other ways of reviewing revenue and margin might include such information differentiated by: • Delivery Method • Job Size • Public or Private • General Contractor or Owner • Job Size • Distance from the Office This list of differentiators might vary based on your type of business, average job size, and current market position. However, taking the time to define these so that they may be utilized year after year would be of tremendous benefit.

The next set of metrics that are valuable to review are margin gain and fade statistics. In other words, which jobs made more or less margin than originally budgeted. Similarly, these metrics can be further differentiated by running the data by the same types of key definitions as listed above. The below graph depicts margin gain or fade by project type. This type of information is key in making strategic decisions for your organization.

Another set of metrics that would be important might be a direct job cost analysis. Meaning, did our different direct job costs have a gain (meaning we saved money) or fade (meaning we spent more money) than our budgets said we would.

An example of this type of data would be the graph below which T H E

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depicts labor in hard bid jobs versus negotiated jobs:

Similar analysis could be run for material, equipment, subcontracts, or other direct job costs.

So, what would this type of information tell you? In essence, it would display patterns of revenue, margin and direct job costs given all of these key differentiators in order to allow a view into project performance as a whole You could similarly run this type of

data by branch, profit center, division, project manager, field foreman, superintendent, and estimator as mentioned previously in order to have data to support performance management and to utilize as a basis for incentive compensation. These are representations only

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as there are endless combinations of information that could be set up and tracked. It is critical to determine what you want to see, then set your system up in order to be able to extract the data associated.

Proper System Selection and Setup Many newer construction firms begin as entrepreneurships. With that said, many firms make their first selection of ERP (Enterprise Resource Planning) software based on the startup size. Once you begin utilizing an accounting system, making a change to a completely different system is painful. Many organizations stay with their original purchase for far longer than they should, restricting the amount of information that is available on the project level. The moral to the story is to assess your current technology to find out if it does, in fact, serve your needs. There could be a couple of different scenarios that could be playing out here. The first is quite common in that organizations purchase ERP systems and utilize just a fraction of what they can do. The second is that they have outgrown their current system, but are reluctant to make the switch because of the cost and difficulty in doing so.

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Depending on your size, your ERP system should be able to, of course, perform the core accounting functions. For firms larger than $15-20M with opportunity to grow, the generic accounting platforms will, in general, not give the functionality that you would need. In addition to the core accounting functions, you want integrated modules that would allow for items such as: • Job cost management • Labor tracking via phase/area/task codes • Project Management • Purchasing • Subcontract Management • Service (T&M) There are “bolt on” programs that can perform some of these functions if your current software does not. Be aware, however, that if the platforms do not integrate, a duplicative entry would be required in order to have the information, in some form, in multiple locations. If there is a question whether your existing platform is adequate, or for assistance in deploying the technology, outsourced assistance is a safe bet. Having someone who can look at your company, determine how it functions, calculate what your average job sizes are, and define what modules you would need would be of tremendous help. Additionally, these types of resources can determine how to best capture the types of definitions that were mentioned previously, and write reports to gather the data needed to run your monthly, quarterly, or annual analysis.

Proper system setup and utilization for construction projects require definitions and standards around preconstruction planning, budgeting, purchasing, time/quantity reporting, change order management, and forecasting. The requirements for service would include definitions of project startup and reporting for both T&M and lump sum small projects.

Without standards, the deployment of

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technology would not cleave the type of accurate metrics and information necessary for your organization.

Utilization of the Data Strategic planning for most construction firms begins with the understanding of which markets we wish to work in, what customers within those markets we wish to do business with, and what key differentiators make us stand out from our competition. Much of our business development planning is defined by length of sales cycle and future market opportunities. That said, making the decision on which markets, which customers, and what our key differentiators are, are heavily defined by who we have been, which markets we have been successful in, and which customers we perform the best with, which aids in determining why we are better than our competitors.

Utilizing data, we can clearly see which markets we excel in and which we struggle with. Obviously, it would be advantageous to pursue work which we are proven to be successful in. For the work that is more of a struggle, an improvement plan can be put into place to produce the margins desired, or a decision can be made to reduce or eliminate those sectors.

Setting financial metrics for estimators, project managers, division managers, and executives begins with an accurate picture of past performance aligned with a clear expectation of future performance. Couple this with skill set metrics, and you have the ability to create a performance management and incentive compensation model that is truly effective, creating a pull effect that the employee owns due to its transparent nature. This type of information is highly effective to managers in identifying future leaders as well.

Summary Data mining is a practice that has been utilized in industries such as

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manufacturing, retail, and others for many decades. While its utilization in the construction industry is growing, there are still many organizations who do not have the level of information and transparency needed to drive excellence. Knowing where you are today, and having a clear picture of where you want to be is just the beginning. The real rewards are reaped when the right information is given at the right level of the organization, to those who can truly impact the financial outcomes of projects. Whether it is the deployment of standard dashboards, monthly job cost reports, labor productivity information, margin/revenue/direct job cost metrics, information is the driver of both awareness and improvements. No longer can we work in the cone of silence. Our highlevel performers demand more information than ever to provide them greater opportunity to excel. As construction leaders, it is our primary job to listen to what our teams need, then commit and execute on those needs.

Stephane McShane, Director at Maxim Consulting Group, is responsible for the evaluation and implementation processes with our clients.

Stephane works with construction related firms of all sizes to evaluate business practices and assist with management challenges. With a large depth of experience working in the construction industry, Stephane is keenly aware of the business and, most specifically, operational challenges firms’ face. Her areas of expertise include: Leadership development, organizational assessments, strategic planning, project execution, business development, productivity improvement, and training programs.

Mrs. McShane is an internationally recognized speaker, mentor, author, and teacher. Her ability to motivate, inspire, and create confidence among your work groups is extremely rare and very effective. For further information visit http://maximconsulting.com/

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The Kahua Network Leveling the Playing Field for Subcontractors in Collaborative Project Management

The Worldâ&#x20AC;&#x2122;s Only Collaborative Network for Construction Project Management Kahua provides collaborative project management solutions that help you connect field with office to streamline all aspects of your business, including new construction, service, maintenance and large program management. In addition, The Kahua Network makes it easy and profitable to connect, collaborate and grow your business with owners and general contractors.

Better Communication. Better Projects.

www.kahua.com

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2019-2020 Program A ME R I C A N S SU BCO NTR AC TOR S A S SO CIATION , IN C .

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Applications are now being accepted for many of the awards offered by ASA. Certificate of Excellence in Ethics This award recognizes subcontractors for their commitment to ASA values, such as quality construction and a safe and healthy work environment. Each applicant is required to respond to questions concerning the firmâ&#x20AC;&#x2122;s corporate ethics policies and procedures, its construction practices, and its general business practices. Each applicant also is required to submit detailed documentation, including sealed letters of recommendation from a customer, a competitor, and a supplier.

National Construction Best Practices Award This award recognizes prime contractors that exemplify the values of subcontractors, treat subcontractors fairly through use of levelplaying-field contract terms, and consider subcontractors part of their core project teams. The programâ&#x20AC;&#x2122;s rigorous criteria include the use of a standard subcontract whose provisions substantially reflect the best practices incorporated into the ASA-endorsed ConsensusDocs 750 Standard Agreement Between Constructor and Subcontractor, as well as highly favorable evaluations from three specialty trade contractors, based on 20 project management factors.

There are many more awards available through ASA, and more information about all of them can be found by clicking here. All award winners will be recognized during the 2020 SUBExcel conference on March 4-7, 2020, in Las Vegas, Nevada. We highly encourage all ASA members to get involved in our awards program. These valuable recognition opportunities are only available to ASA members.

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Complimentary Webinars

Coming Up in the September 2019 Issue of ASA’s

Tuesday, September 10, 2019 12 p.m. to 1:30 p.m. Eastern / 9 a.m. Pacific THE

Preserving, Preparing, and Presenting Construction Claims Presenter: Michael Metz-Topodas, Cohen Seglias Pallas Greenhall & Furman PC Almost every contractor hopes a project will proceed without the need to file a claim; the reality often proves otherwise. Claims come in all kinds of forms – delay, extra work, acceleration, inefficiency – but essentially involve recovering any type of entitled cost or time impact. When circumstances demand filing a claim, the process may seem daunting or overwhelming. But it shouldn’t discourage filing, especially when you follow a few key mantras: preservation, preparation, and presentation.

In this seminar, Michael Metz-Topodas will demystify the construction claims process and provide attendees with strategies to preserve, prepare, and present claims. Attendees will learn skills and best practices to ensure they are not waiving their rights, that they are creating the documentation necessary to support their claims, and that they are presenting claims in a way that maximizes their chances for success. Register by clicking here.

Tuesday, October 8, 2019 12 p.m. to 1:00 p.m. Eastern / 9 a.m. Pacific

Theme:

Safety’s #1: Why and How • Looking to Improve Safety Culture? Have Management that Commits • How Are We Doing?

• Collaborative Project Management Solutions that Help Subcontractors Connect Field with Office

Payment Clauses: What to Watch For and How to Negotiate Them

• Sidewall Protection for OTR Tires Keeps Concrete Recycling Operations Running

Presenter: James Yand and Brian Esler, Miller Nash Graham & Dunn PC

• Unforeseeable Employee Misconduct Defense to an OSHA Citation

James Yand is a partner and a member of the firm’s litigation practice team.

Jim has more than 20 years of experience resolving disputes for business owners and individuals in construction law, products liability, e-discovery, franchise and commercial law.

Clients in the Northwest and around the world know Jim as a reliable ally who practices with integrity and is focused on delivering results. Reputed for critical thinking and problem-solving, no matter the size of the case, Jim specializes in resolving high-conflict cases that often determine the continued success of the client’s interest. He seeks effective resolutions with cost-efficiency. From discovery conducted in Hong Kong to local cases filed in Seattle, Jim leverages his local-national-global knowledge. Jim is a frequently requested speaker for business and legal programs, providing guidance on legal industry protocol, e-discovery, and relationship development among attorneys.

Brian Esler leads Miller Nash Graham & Dunn’s Washington State commercial litigation team. He was recently recognized as one of the Top 100 Attorneys in Washington State by Super Lawyers magazine.

His practice emphasizes intellectual property advice and litigation, construction litigation, defense of financial institutions, and appellate advocacy. Register by clicking here.

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Look for your issue in September.

To access past issues of The Contractor’s Compass, please click here.

For questions about subscribing, please contact: communications@asa-hq.com

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