The Bull Elephants in Our Midst

I HAVE AN INORDINATE amount of respect for medium, large and super-size contractors. Over the years I have studied them and I have come to conclusions that have been profitable for corporations and clients for whom I have worked. I have strong opinions about them, mostly positive, some of which I will share. When I say that I have studied large contractors, I do not want to misrepresent the process.

I HAVE AN INORDINATE amount of respect for medium, large and super-size contractors. Over the years I have studied them and I have come to conclusions that have been profitable for corporations and clients for whom I have worked. I have strong opinions about them, mostly positive, some of which I will share.

When I say that I have studied large contractors, I do not want to misrepresent the process. I have studied them much as a big game hunter on a professionally guided safari would study large game. I’ve looked at them from a distance and had those who knew the beast whisper in my ear what they were doing and how they did it.

I have, at that distance, managed the process of selling to them when I was in wholesaling and collected my money. I have also managed the process of learning how not to sell to them. Some of these giants are so hard to do business with that you just don’t. They roll into town and demand a buying agreement that’s not profitable. Avoiding such contractors led to a significant increase in the quality of my personal life. As one very successful medium-sized contractor said in a moment of personal sharing, “If I were a supplier, I wouldn’t sell to myself.”

To be a successful, large contractor is difficult on the best day. On the worst day, it is unbelievably so. Successful contractors are geniuses. They are focused and they are hardworking. They are dedicated to the success of their company, sometimes at significant personal cost to themselves and those who love them.

In other columns in the past, I have stressed that one of the secrets to true success is to operate your business in “turnaround mode” at all times. I would suggest that, if you are a mid-sized or larger contractor doing the impressive big stuff, have one of your underlings run out to the public library and check out all the books he can find on turnaround management.

I have never picked up such a book that did not cause my pulse to race and perspiration to pop out on my forehead. The difference between success and failure is often the difference between a turnaround manager with fire in his belly and any other type of management you might want to suggest.

Turnaround companies run lean. Their small team of buyers has little or no time for the tempting social activities that some salespeople think are a substitute for real sales support. Those buyers do not leave money on the table. If you are not careful to have your leg hitched around one of the table legs, they might even walk off with the table.

Doing the big stuff is a tough business and the game is not won on the golf course or the fantail of a big yacht, anybody’s big yacht. It involves demanding attention to details and a never-ending drive to do it better, do it faster, do it cheaper, do it safer than anyone else and, certainly, do it better than last year.

Large first-generation contractors are geniuses. I advise wholesalers with whom I work that their problem in dealing with these people is that probably they do not have, and will never have, anyone smart enough to throw up against them in a game of Odds and Evens. And worse, if a wholesaler does find someone smart enough, it is quite likely he will end up working for this contractor. Such contractors have a great amount of respect for sharp minds and a willingness to pay for them.

The best of them also know how to use the wholesaler’s money and will do so at every opportunity. They will stop by the supply house and negotiate for extended terms, and having done so successfully, they will leave to negotiate for an upgraded twin-engine airplane. You might say they financed the airplane deal with the money the wholesaler saved them. They like tools. A fast airplane is a tool because it compresses their time and, properly used, it will make them more efficient.

If they mess up a really big bid and are forced into bankruptcy, then you’ll understand why they built such a hellacious big house. You can bet on it that they will be up and running again, having learned from the experience.

If you think that I do not like big contractors, you are wrong. I like them and I respect them. Understand, however, that I respect them the same way as I admire and respect any large beast that has the power to devour me.

We can all learn from successful large contractors. They are intense managers doing what it takes to get the job done under budget and ahead of schedule. These guys adapt easily. They can take a rapidly changing job and do great things technologically in design-build. They are forced to learn new tricks with every job. They must deal with horrendous numbers of change orders and contract adjustments that would set a Philadelphia lawyer to gagging.

Certainly they do this for the money and acclaim but they also do it because they are a proud group of people professionally. They do it at the lowest bid, all the while protecting the fannies of all those suits — the multi-degreed engineers on the project who think they know it all!

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TAGS: Management