Tag: Business

Hand in your badge and gun

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A project manager mate of mine arrived at his site office last Friday. He was greeted with the normal scene: union delegates arguing about subcontractors having the audacity to employ people who are not 100% unionised; subcontractors with not enough resources; and emails from the client’s representative refusing perfectly valid variations. He had made a decision which would upset head office and may make him a pariah as far as future promotion was concerned. He was taking Saturday off to have a full weekend with his wife.

Although his annual salary far exceeds the “average Australian” if it is divided by the number of hours he works, his hourly rate is less than a site labourer. But he has a passion for construction. That passion cost him his first marriage, drove him to the occasional drink, and evolved him into a dad his children did not know or particularly like. But his passion was a major factor in driving him to deliver project after project for his employer.

As Friday wore on, and the normal dramas of the day were crossed off the to do list, he decided it was time for his daily “walk about. However, as he reached for his hard hat, he received a text from his operations manager. Not a personal visit or a phone call, just a text which read verbatim: “Company ceased trading, get everyone off site, lock the gates, take only personal belongings report to head office immediately”. Yes the company had gone broke.

This has happened to many of us in the construction industry, we end up with broken relationships, heart attacks through stress, and the stigma that goes with having been the PM on “that job, for “that mob” who screwed their subcontractors. Sometimes the bloke delivering the project gets screwed as well.

Now he has to wait and see if he will get his entitlements, find a job, and still keep his passion for his next employer. His comment to me “Well at least I have finished paying child support, I think it is time for a spot of fishing”

So if you are reading this mate, go easy on the Johnny Walker, enjoy the fishing and it may be a good idea to take your wife with you or you might get made redundant there as well, then you will be looking for wife number 3.

by Gerry Keating

https://gkeating.com/

Back Home to Brisbane

Brisbane
Home is Brisbane

Having spent so much time working in different parts of the world sometimes you forget where home really is. Moreover, I have met many ex-pats who may have many assets but have no base – no real home. It is taken me a long time to come to the conclusion that not only is my home in Brisbane but so is my heart.

I have lived in Brisbane since 1989 but have spent more than half of that time either working overseas or in various far flung construction sites in every state of Australia. Coal mines, iron ore processing, commercial building, water treatment plants, meat works, high rise etc etc. Now I just want to live here, no more FIFO, no more cheap motels, airport lounges nor hire 4WDs. OK the construction industry here is on the slide, the boom years are over and over the next twelve months there will be even more builders going to the wall or sacking staff.

Recently I have been asked to head back to Perth, I have been approached to return to Qatar to build football stadia for the World Cup. But I declined, they can keep their money I simply want to sleep in my own bed each night.

Who would want to live anywhere else?

by Gerry Keating

http://gkeating.com

Don’t Sack the Gardener

leggoI have not looked at a household bill in years. Electricity, water, telephone, groceries etc are things which do not interest me. i spent my working day staring at damn Excel, arguing with subcontractors about variations, and with bean counters quizzing my costs. So all expenditure on the home front is managed by my darling wife. Ask me how much is a 200mm post tensioned slab per square metre and I will rattle it off. But ask me what we pay for cable tv and I don’t have a clue.

Yesterday evening my whist relaxing on the back deck after work, my wife suggested we sack the elderly gent who has been tending to the garden for the last ten years. She had been listening to the doom and gloom on the tv regarding ever increasing insurances, utility bills and the like. Even with my deft application of minimal encouragements I became drawn into the conversation. Based on the facts that I don’t own a garden shed, let alone a lawn mower, and the only items in the garage are cars, hell will freeze over before I start maintaining gardens, the pool and hedges. So the gardner has a reprieve.

But this made me think about what we decide to cut first in construction budgets. Of course it is the landscaping on the project. The majority of new apartment buildings are pretty boring. Leggo architecture, withe a few embellishments, an entry statement, and give an oxymoronic italian name. The Palazzo, the Paloma, they could be called Lambretta or Vespa, anything to make them sound better than they look. Then at the end of construction the landscape team move in. The budget has been slashed along with the height of the trees and number of plants. The landscape architects vision at the concept stage is now a nightmarish reality.

So it appears the household budget cuts are mirrored in commercial construction. I say leave the landscape design alone and keep lawnmowers away from my garage.

 

Busy Going Broke

redundancy250It is symptomatic of our industry that often companies assume being busy equates to making money. All too often it just means acceleration towards bankruptcy. Increased activity does not necessarily mean making greater profit. Nobody hold a gun to our heads to force us into signing a contract, yet we still sign up for projects with unrealistic programmes, inadequate budgets, and risks which we believe can be overcome. It is plain and simple delusion.

The warning signs begin with the tender process. In order to save development costs, clients do not put the required resources into preparing tender documentation. They work under the false illusion that “the market” will determine the best price and the contract will save them from a “switched on” builder. The reality is that “the market” consists of builders who know their game and as long as they understand activity versus profit, the tenders will reflect the completeness of the tender documentation.

Some years ago I delivered a large coal infrastructure project in Kalimantan for an Indonesian client. To keep costs down the client believed he could set the tenders up with minimal documentation, unproven consultants and a catch-all contract. What it would have cost for proper tender documentation was less than 5% of what it cost in contractual claims, delayed production, legal fees and lost profit.

The next twelve months here in Australia will be difficult fr the construction industry, especially for employees who have never experienced really bad times. Yes I am old enough to have gone through Arab oil embargos and three day weeks. It won’t be as bad as that but large contractors will shed staff, salaries will continue their decline and there will be lack of confidence generally. The difference will be contractors will not win work at any price and make cuts in overheads earlier.

Seek.com will be in most people’s favourite bar, LinkedIn will continue its exponential growth, as we all brace ourselves for a bumpy ride.

Oh No, they have brought in a Quantity Surveyor

Budget Meeting

Builders hire external quantity surveyors only as a last resort. Usually after months of trying to convince themselves that the project bottom line will improve, they realize that they are in for a contractual fight with the client and any straw needs to be grasped.

Month after month of cost reports with ever diminishing margin, force them to consider the battle ahead. That means finding every conceivable error, ambiguity, inference in the contract documents or any slip by the client’s representative. Project managers think they are experts in construction law, directors look for blame, and the site based project team convince themselves they have a cas against the client. Delusion has set in.

Wonderful expressions are uttered, “global claims”, “unfair enrichment”, deceptive and misleading conduct” All are bandied about with as much abandon in the site office as in the boardroom. Sight is completely lost of the simplicity of contractual claims:

  • What did the client do or not do?
  • Did this cause us costs?
  • Is it recoverable under the contract?
  • What are those costs?

The client’s quantity surveyor has  either dismissed or taken a blow torch to variation claims and because builders are not in the quantity surveying club, they are forced to seek the services of an external professional – the QS.

by Gerry Keating

So we go through the very expensive exercise of our people talking to their people and if we are lucky end up with a compromise on the steps of the court.

The alternative is to start the process from the day the first variation is carved up by the client’s QS, not wait until the dire cost report forces the issue. Get in early, don’t get time barred, and do not put up with any nonsense from a QS who probably created the errors or ambiguities in the first place.

Stone Wallers

Well it had to happen, the first blog from my iPad, an early Christmas present from my beloved. But down to business:

I believe in passion, I have written about it, brought it to the forefront of people’s minds and always tried to ‘maintain the rage’. But how do you keep the passion when you hit a stone wall, have cold water thrown over ideas, have your passion misinterpreted as a threat to the status quo.

What you do is simple. The stone wall may seem immovable and intransigent but really it is just a temporary block which can be surmountable. The stone wallers are predictable and stand out in organizations. Ultimately they get left behind an they are further away from the business as Narnia.

So maintain the passion and when you want to quite – don’t. Ramp up your efforts and stay until you have laid the stone waller to waste.

My father’smotto was simple “per ardua ad astram” it worked seventy years ago and it is apposite right now.

Strengths and Weaknesses

Trajan's Column - Roman Soldiers Building a Fo...

All the successful project managers I have known have had a common thread. They have certain traits that distinguish them from other PMs or other members of the project team.

I decided to hit the keyboard on the subject as I have been talking with perspective employers about the next project. Invariably the question they all ask is what are your strengths? (easy peasy) but you know what is next – what are your weaknesses?

Now I have hire many staff over the years from Project Directors on $2billion projects to site clerks, and I have asked the same questions. The hard part is divorcing the kind of person you want as the employer and deciding on the right person for the project. I have hired people who could be the most difficult, recalcitrant and plain bloody minded but they were right for the job. I have also hired people that I thought at interview were marvelous people, and they were, but you would not put them in charge of a free bar.

Now when I am asked about my strengths I admit that I trot out the normal stuff. I will use one word for each: team, relationships, example, foresight, leadership, tenacious, focussed, driven, professional, experience etc etc. I usually add a few others that satisfied clients have used about some completed projects: the shark, hit-the-ground-running, and my favorite which I was described as by a very influential Arab developer – Mr Wolf

So how to respond to the “Weakness” question. You need to be honest. I have had people become more humble than Uriah Heap and advise them to try social work not project management. I have had some who have no weaknesses (next candidate please). The secret is be prepared for the question as it always gets asked.

But returning to the common thread and PM’s traits there is one weakness that does surface in many of us. That is we take over a team member’s critical tasks sometimes if that person is struggling. Yes as good leaders we know that people make mistakes and we council, train, “mother hen” them. We don’t let them go under. But the response during the interview is usually on the lines:

“some people may see it as a weakness but when a team member is struggling with a critical task I go out of my way to help them achieve the goal they are striving for”

My response is as Mr Wolf “I solve problems”