Chairman’s Message: Contracting is a three-legged stool

Twenty-six years ago I was given the opportunity to run a division for my company. I was 31 years old and had six months of field experience, six years of design experience, and four years of estimating and project management. As is often the case, I was given the opportunity to move up to fix something that was broken. We had a division that was in bad shape and had all the classic symptoms of decline: lack of morale, exodus of talent, and indifference to outcome. Needless to say, the bottom line reflected the environment. The economy in 1991 did not help the situation. The turnaround came, but it took far longer than I had hoped. When I have a bad day I take some comfort from remembering those early days and realize it could be a lot worse.

As I embarked on that journey and in theme with this month’s publication on education, I was sent to a FMI seminar that was designed for the new managers. The emphasis was to take an individual who was not historically a manager and teach them some basics, with a strong emphasis on learning to read financial statements and financial reporting. It was fabulous and I still carry that knowledge today.

One of my favorite lessons, which I have repeated many times to associates and competitors, can be summed up with the phrase: “Contracting is a three-legged stool.” The first leg is getting the work, the second leg is doing the work, and the third leg is keeping score. Failure in any of these areas will cause your house to wobble and maybe collapse.

Most of us are pretty good at getting the work. People don’t generally jump into these contracting waters without a strong sense of self and salesmanship, or at least some line to a source of work to get the endeavor going. My experience is that most contractors are actually pretty good at the second leg of “doing the work.” Many of us came up in the field or in the office on the operations side, so we are usually in our comfort zone here. My experience has been that it is the third leg that gives a lot of contractors their biggest headaches. There is no glamour in score keeping and it takes a skill set that most of us don’t have, must learn, or we must trust in others. It takes time away from getting the work and doing the work. It takes resources that to some appear as frivolous overhead. Ignore the third leg at your peril. The end of the year is not the time to figure out your cash flow is upside down and your jobs that you thought looked good are now in the gutter.

Being a successful contractor is a combination of many things. Leadership, principles, and culture are all critical, but at the end of the day it is about people – good people applying good principles. You will never find a quality company that does not have people who reflect their own and their company’s values. Strong people hold up the legs of a successful house. Treat them well.

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Michael Meehan is the Chairman of the American Fire Sprinkler Association Board of Directors.

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