A Roomful of Elephants
In the last couple of weeks our industry has seen examples of the good, the bad, and the ugly.
1.) Good: The St. Louis Council of Construction Consumers held a workshop on “Partnering: Best Practice from the Construction Industry Institute and Practical Industry Applications.” It included successful partnering applications here, a partnering expert from Norway communicating by Skype regarding his experience in the North Sea oil industry, and a consultant to DuPont telling of how owners and contractors from around the globe have collaborated for over 20 years.
2.) Bad: A union bannered the jobsites of a $755-million-dollar contractor over a couple hundred thousand dollars worth of fringes. The contractor responded by firing all the subcontractors who employed members of that union.
3.) Ugly: A minority inclusion activist fired off an email that urged a boycott of a GC in colorful terms, the most printable of which is “Uncle Tom.”
During that same two-week period I was involved in a series of meetings with a number of industry leaders to discuss the concept for a St. Louis Construction Leadership Forum – an idea I proposed late last year after almost a year of legwork. While there has been broad support for the idea, there has also been the concern that this concept would duplicate the efforts of some our industry’s existing efforts, such as PRIDE’s in the labor area, or SLCCC’s in education.
One of the leaders that I met with recently suggested that I needed to revisit the column that I wrote proposing the forum: ( http://www.stlouiscnr.com/columns/article/we_need_a_construction_leadership_forum/ ).
I thought about what the purposes of the forum would be, and I realized that I could boil it down to a single phrase: “To point out the elephants in the room.”
Here is what I would see as being the deliverables of the forum:
Labor
Deliverable: A candid assessment of the competitive effect of labor issues that can be used in resolving conflicts and/or moving contractors and owners in a direction that will allow St. Louis to develop more work.
• Mirror: Cut through the politics and rhetoric and compare St. Louis with other union areas and merit shop areas of similar size and composition. Qualify this assessment by including all of the various impacts – job creation, economic, political, etc. – in making these comparisons.
• Data Collection: Assemble and compare information from industry analysts, unions, associations, and real estate analysts regarding labor issues and labor costs, locally, regionally, and nationally. This data collection could involve the university construction programs in conducting primary research on construction users, contractors, and owners.
• Taking the Broad View: Develop a far-reaching, no-holds-barred consensus, on the order of the Construction Users Round Table’s groundbreaking 1983 industry report “More Construction for the Money.”
Project Award Environment
Deliverable: A clear picture of the current bid environment, a prediction of the short- and long-term effects of current practices and a yardstick for owners to use in determining their procurement practices.
• Mirror: Look at the project procurement methods in St. Louis now and prior to the recession. Compare to other areas of the country. Compare to other models for procurement.
• Data Collection: Gather primary research on bid margins, number of bidders on lists, numbers of change orders. Build a model of how construction is being bought – select lists, large lists, open bid, reverse blind auction. Collect information on contractor failures and changes in market focus due to recession. Engage large buyers of construction who are using strategic sourcing models for information about how they arrived at their current systems and how those systems are evolving.
• Taking the Broad View: Combining research on IPD, LEAN construction, case studies, etc. with the primary research and present the case for the “best” ways to procure construction in this market.
Political Divisions
Deliverable: A balanced look at what non-intersecting and overlapping governmental agencies add to the cost of construction here. A look at how the government picture affects what gets built here. Suggestions for streamlining the interface of the construction process with government.
• Mirror: Look at other metro areas of similar size and composition – both with similar political infrastructures and streamlined structures.
• Data Collection: Gather primary research on costs to construction and development in terms of fees, delays, and conflicts. Gather primary and secondary research on how the political environment affects what gets built here.
• Taking the Broad View: Develop some short- and long-term suggestions that improve the interaction between contractors, developers, owners and governmental agencies. Produce tools that might be used in communicating to the general public the cost in terms of business development and job loss of the current political environment.
Inclusion
Deliverable: A realistic statement of what is possible now, what could be possible, and what it will take to get there .
• Mirror: Compare this metro area with other metro areas of similar size and composition in terms of what has been accomplished in terms of construction inclusion. Talk with national buyers of construction about how much the diversity issue affects the decision to build here.
• Data Collection: Use the AGC diversity study as a jumping-off place. Conduct primary research with owners about what their commitment to diversity is. Conduct research with contractors about the state of their diversity efforts. Collect secondary data about the impact of an area’s diversity on facility location decisions.
• Taking the Broad View: Strip diversity of the “it’s the right thing,” or “it’s a farce” rhetoric and present some steps that might improve the situation short- and long-term.
Individuals who I consider to be true leaders representing St. Louis owner, contractor, labor, design, supply, and higher education organizations have expressed strong interest in this concept. This Leadership Forum is not about forming an organization, or an association, or holding one more meeting for already-busy people. It’s about holding up a mirror that let’s each of us see ourselves clearly. And if we look in that mirror impartially, over our shoulder we’ll also see all the elephants in the room.
Old/New Media: Making the Connection
What will be the role of “Web 2.0″ and “Social Media” be in the construction industry, and why should you care?
In the August 3rd issue of Engineering News-Record there was an article on Textura, a construction e-commerce firm with 38,000 users, including 25% of the ENR Top 400, that’s venturing into social networking.
The firm, which GCs use to facilitate payments, will now offer a Facebook-like component that will allow contractors to distribute their resumes, balance sheets, and other supporting documentation online. Owners and GCs can decide who they want to “friend,” to borrow a term from Facebook, and allow to bid on a project.
The construction industry is one of the strongest industries in terms of communication, connection, and the importance of relationships. It is also an industry that struggles with implementing new technologies, particularly when they relate to communication or marketing.
A couple of months ago there were two excellent pieces on the transition in media on CBS Sunday Morning.
One was a “Fast Draw” piece Blogging Through History. The video traced the evolution of participatory journalism from America’s first newspaper Publick Occurrences which had a blank last page for people to type comments and pass the paper along, through the growth in newspapers to today’s blogs.
The second was a commentary by Nancy Giles on Twitter entitled Tweets, Twits, and Twitter, Oh My! . You should listen to the second piece just to get her punchline at the end.
Part of the problem with “Social Media,” “Web 2.0,” or anything that came before or after it is that the public discussion and the buzz focus on the medium, rather than on the end result.
Having spent a large part of my career in business media, I am fascinated as I read in e-newsletters, blogs, and magazine articles about the ways in which business publishers are struggling to “monetize” social media.
Somewhere in the midst of the focus on technology there’s a total lack of understanding of the reason that people use any form of communication: to connect. They want to connect with an idea, with a friend, with a business, with a solution to a problem, with a good laugh. Anything else but human connection might be technology, or noise, or commerce, but it’s not communication.
When I was beginning my career in the early ’70s, the phrase “The medium is the message, coined by communication theorist Marshall McLuhan received great attention. McCluhan meant the form that we use to commuicate embeds itself in the message, and directly effects the way in which the message is understood. He also noted that the actual words or images of a message may be less significant than the impact of those visuals, sounds, or text – in other words what the overall package communicates.
In Understanding Media, the book that he wrote in 1964 to explain his theories, he pointed out that we could reread any page of a book but that a movie needed to be re-screened to study it. (Who knows what he would have made of the thousands of clips from vintage movies that now reside on YouTube.) His point was that the medium through which a person encounters a particular piece of content would have an effect on the individual’s understanding of it.
A piece I wrote this week for the St. Louis CNR Weekly Enews pointed out, “There’s currently a lot of buzz about Web 2.0 and social networking. But St. Louis construction companies are also networking in tough times with proven technology: a cold beer and a good story.” The article talked about the high popularity of informal networking events as a way to connect and gather information in tough times.
Another recent Enews article covered a YouTube post by A. J. Ford, vice presi
dent for sales and marketing for Budrovich Crane Rental. After I posted the article with a link to A.J.’s video, 196 people viewed it a total of 248 times. The time-lapse 
video of the setup of a 550-ton crane tells a compelling story.
As we explore the use of Social Media and Web 2.0 in the construction industry we need to remember: Whether the “medium” is a cold Bud and a story or a Tweet, the important thing is making the connection.
Four Cornerstones of Branding
This article on by Tom Finan on branding for construction companies appeared in the May issue of Contractor’s Compass, official magazine of the American Subcontractors’ Association.
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Uplifting Story in Down Times
When Dan Tumminello tells you that you need to try the ribs at Pappy’s Smokehouse, you can forget about ordering the pulled pork. Pappy’s, the quirky little place owned by champion barbecue chef Mike Emerson, is located on a little cul de sac called Cardinal off of Olive near St. Louis University. Pappy’s has no street signage on Olive and doesn’t need it. The ribs are everything that Tumminello touts them to be — as close to Memphis as you’ll find in St. Louis
Every day, cops, construction workers, nurses, and executives are queued 50-deep in the fast moving line to place their order. And somewhere in the line you’ll often find Tumminello and some of the crew from Midwest Aerials, the company that he and co-founder Kevin Morrell started in Morrell’s basement 12 years ago.
Tumminello had background in the construction industry. They tried 48 banks before they finally got their first business loan.
Today, Midwest Aerials occupies a sprawling nine-acre complex on Papin near Jefferson and Chouteau in the City of St. Louis with over 33,000 thousand sq. ft. of offices and shops. The company’s fleet totals over 2,600 pieces with an employee team of 100. The company also has facilities in Kansas City and Springfield in Missouri and Bloomington in Illinois.
A separate facility on the Papin site houses MAE Parts & Service, which services customer owned equipment in the shop or on the jobsite. The concept, Tumminello, said, was that Midwest did not want its customers competing with the Midwest rental fleet for technician time.
Joe Alonzo, director of sales for Midwest, who joined the company as a partner along with Dan Martino, director of operations in Midwest’s third year, says that the principles that have allowed Midwest to continue to grow in this economy are very straightforward. First and foremost, the company is focused on man- and material-lifts. “Our mechanics aren’t working on a trencher in the morning and a lift that’s going to put somebody’s dad 100 feet in the air in the afternoon,” Alonzo said.
Midwest has an incredibly strong, collaborative, team-focused culture. You can tell that their employees actually like one another. It’s a money-making business that includes focus on families, riding Harleys, and barbecue – straightforward and no frills. Customers get to participate in that culture, with claybird shoots catered by Pappy’s and Midwest field people who are doing whatever they can to make things right.
Alonzo said Midwest’s best ideas come from the field. To be a successful member of their team, he said, you have to be ready to perform 24/7/365. He expects his sales force of 15 to be proactive with both prospects and existing customers. Cell phones are on business cards and if a team member isn’t in the office the receptionist offers the cell number. As a result customers, like the auto plant that needed 28 lifts on the Fourth of July knew that their rep would pick up the phone, jack in from his laptop and get the equipment on the road.
In a down market, the spirit at Midwest is positively uplifting. Just remember: Order the ribs at Pappy’s.
The New Newsweek: A Good Read
As recently as two years ago I received three newspapers at my front door every morning. Now the only time I enjoy the tactile, ink-smudged experience of a newspaper is when I’m hanging out at the St. Louis Bread Company with time to kill.Then there’s Newsweek. I used to read my ex-wife’s copy when she was done with it. Then I became a subscriber. Kludgy, predictable, it somehow filled a void that newspapers missed, and even the Internet didn’t totally supplant it.
But I struggled a couple of weeks ago in deciding to renew my subscription. And now I’m glad I did. The new Newsweek is everything a magazine should be. Primarily, it’s a good read. It has abandoned trying to dish up the byte-sized pieces of information that the Web does better in favor of in-depth exploration of a truly eclectic mix of issues.
The first issue under the new format included an interview with Obama on his internal driving forces, an exploration of the personalities behind the fall of Lehman, and an examination of the debate around treatment of autism. It also included a piece that would have seemed more at home in Wired, an exploration of Kurt Kurzweil, the inventor of the synthesizer who has reinvented himself as a futurist exposing eternal life through robotics.
The graphics are what really floored me. Newsweek has gone to better paper stock and and open, retro layout that mixes Esquire or New York magazine from the ’70s with Good magazine. The Kurzweil article has a chart of his hits and misses as a futurist. There’s a chart that does a great job of putting in perspective the size of the stimulus by couching it in terms of a shopping list that includes such items as $146 billion to buy an electric car for every 16- and 17-year-old in America and a $65 billion bailout for all of Bernie Madoff’s victims.
The editorial and design makeover is the visible side of a complete makeover in Newsweek’s business model.
“Mass for us is a business that doesn’t work,” said Tom Ascheim, Newsweek’s chief executive. “Wish it did, but it doesn’t. We did it for a long time, successfully, but we can’t anymore.”
Thirteen months ago, Newsweek lowered its rate base, the circulation promised to advertisers, to 2.6 million from 3.1 million, and Ascheim said that would drop to 1.9 million in July, and to 1.5 million next January.
He says the magazine has a core of 1.2 million subscribers who are its best-educated, most avid consumers of news, and who have higher incomes than the average reader.
“We would like to build our business around these people and grow that group slightly,” he said. “These are our best customers. They are our best renewers, and they pay the most.”
Having spent most of my career in print journalism I’ve cringed as I’ve watched the laughable attempts of the behemoth print media companies to “monetize” the Web and to address their periodicals’ declining lack of relevancy in the print age.
Then there’s Newsweek. I used to read my ex-wife’s copy when she was done with it. Then I became a subscriber. Kludgy, predictable, it somehow filled a void that newspapers missed, and even the Internet didn’t totally supplant it.
But I struggled a couple of weeks ago in deciding to renew my subscription. And now I’m glad I did. The new Newsweek is everything a magazine should be. Primarily, it’s a good read. It has abandoned trying to dish up the byte-sized pieces of information that the Web does better in favor of in-depth exploration of a truly eclectic mix of issues.
The first issue under the new format included an interview with Obama on his internal driving forces, an exploration of the personalities behind the fall of Lehman, and an examination of the debate around treatment of autism. It also included a piece that would have seemed more at home in Wired, an exploration of Kurt Kurzweil, the inventor of the synthesizer who has reinvented himself as a futurist exposing eternal life through robotics.
The graphics are what really floored me. Newsweek has gone to better paper stock and and open, retro layout that mixes Esquire or New York magazine from the ’70s with Good magazine. The Kurzweil article has a chart of his hits and misses as a futurist. There’s a chart that does a great job of putting in perspective the size of the stimulus by couching it in terms of a shopping list that includes such items as $146 billion to buy an electric car for every 16- and 17-year-old in America and a $65 billion bailout for all of Bernie Madoff’s victims.
The editorial and design makeover is the visible side of a complete makeover in Newsweek’s business model.
“Mass for us is a business that doesn’t work,” said Tom Ascheim, Newsweek’s chief executive. “Wish it did, but it doesn’t. We did it for a long time, successfully, but we can’t anymore.”
Thirteen months ago, Newsweek lowered its rate base, the circulation promised to advertisers, to 2.6 million from 3.1 million, and Ascheim said that would drop to 1.9 million in July, and to 1.5 million next January.
He says the magazine has a core of 1.2 million subscribers who are its best-educated, most avid consumers of news, and who have higher incomes than the average reader.
“We would like to build our business around these people and grow that group slightly,” he said. “These are our best customers. They are our best renewers, and they pay the most.”
