Our Story

Building a Win-Win Relationship – Part 1

Minneapolis, MN – 01/16/2014

People who work together will win. This quote of Vince Lombardi’s applies to every sport, every industry, and every relationship. But nowhere is its message more important than in the complex and demanding world of construction. Like most challenges in life, the success or failure of a construction project usually comes down to people. And while there are many important players on the team, the general contractor and subcontractors are on the front line. When they work well together, the result is often a successful project. When they do not, everyone loses. What does working together mean to subcontractors and general contractors? What do they need from each other to have a win-win relationship? We tapped the opinions and insights of some seasoned construction professionals, from Knutson and our valued subcontractor partners, to answer this question. Part I of this two-part series focuses on five areas that subcontractors believe are critical to forming a winning relationship with general contractors. Part II addresses what general contractors need from subcontractors.

Fairness Is Foremost
At the top of the list, a winning relationship requires fairness. Fairness is essential to subcontractors (Subs) throughout all phases of the relationship with general contractors (GCs).

During the bidding process, Subs want GCs to ask for their participation only when they truly have a chance to get the job. GCs who exercise Subs through price shopping and bid passing are not appreciated. Simply put, the best GCs dont ask for a price from a Sub when they dont plan to use them.

Fairness in scheduling Subs is also an important ingredient, explains Todd Schilling from Knutson. We have to understand and respect their workload. If there are delays on a project and they are not the cause of the delay, we have to be fair and give them enough time or forewarning about what is going to be required when they do come on the job. And if we do have a change on our project, we have to plan together regarding how the change is going to affect them and their other work. Most Subs understand that GCs often have constraints that may require a very tight schedule, but they also want it to be fair.

Fairness also involves compensation. Being paid in a timely fashion is very important to Subs, and GCs (via payments from the Owner) are the holders of the money. Like us, they have a very labor-intensive business and often need to pay their people prior to receiving any payment. We need to respect that and avoid unnecessary delays, remarks Dan Ryan from Knutson.

Being compensated fairly for extra, substantive work that is clearly outside the scope of the project is also vital to building a winning relationship. In particular, additional work authorizations, which are done as an alternative to official change orders to keep the project moving, need to be honored by GCs because they require labor and materials that are not included in the base price.

Efficiency Is Essential
Efficiency is also crucial to a subcontractors success. The sequencing and scheduling of work by the GC lays the foundation for efficiency throughout the project. As a subcontractor, our success can be greatly influenced by how the project is put together. This means that if it is a rectangle or box, we need to start at one end and work our way from one end to the other in an efficient manner, explains Larry Heinsch from Gephart Electric. Subs needs a GC who builds the job in a logical, progressive manner and coordinates the work of the different trades, recognizing what the trades need from each other to perform their work efficiently. Thomas Panek from Minuti-Ogle believes efficiency strongly impacts workers morale. It is amazing how an efficient job flow affects people on the job. It creates momentum and gets people motivated to keep going because they feel like they are making progress.

Trust and Respect Rule
Good relationships are based on trust and respect. When trust is absent, an adversarial, win-lose attitude often develops. Bob Kaczke from Metropolitan Mechanical emphasizes that it takes time to build a trusting relationship, and gives an example of how trust works between a Sub and a GC. When we give a GC a number for either the change or the base, everybody knows thats the right number. And if we talk about scheduling and say we need this amount of time for different activities, the GC trusts that were giving him the correct information.

Breaking down the hierarchy is also important to forging a bond of mutual respect between a GC and Sub. Subs feel respected when they are treated on an equal level as partners versus subordinates, remarks Ron Kron from Knutson. Being there to back each other up when there are issues on the job also forges bonds of trust and respect. According to Mitch Elliott from Knutson, it is a constant give and take when there are problems and they ask for help: they know we are not going to turn our back on them, and they do the same for us.

Subs also want GCs to respect the immense personal pride they take in their work. Although they are not typically the ones to win the big awards, many owners and designers appreciate that one of the most impressive things about a finished building project is often the true craftsmanship work of the subcontractors.

Teamwork Thrives
Trust and respect are more likely to exist when there is a solid team approach. Subs sometimes feel they are perceived as commodities, but believe they can add significant value to a project if they are treated as part of the team. What does a team approach mean to subcontractors?

It starts with planning. A win-win relationship develops when Subs have the opportunity at the beginning, before the schedule is developed or finalized, to offer their two cents on how they would like to see the project progress, how much time they need, and what the dependencies are. They realize that the GC has constraints to deal with and cannot always get what they ask for, but Subs would like their input to be considered and incorporated into the plan when possible. Teamwork early on also helps foster a sense of ownership among Subs that can pay long-term dividends on difficult projects. Bob Kaczke suggests, even in a hard-bid situation, Subs want to be involved up-front. While there might not be a lot of flexibility in the schedule or approach, they will take more ownership of the challenges if they sit down together at the beginning and work on them with the GC.

Great teamwork requires breaking down walls. Sometimes project teams are viewed as a hierarchy with the owner and architect at the top making all the decisions. But when there is open communication among all members of the team, regardless of their role or position, the best ideas and solutions often surface. Egos need to be checked at the door. We are all equal players and all bring a unique expertise to the table. But even though it is your area of expertise, you do not always have 100 percent of the answers, according to Matt Westegard from Hanson Spancrete.

Teamwork is also evident when the GC shows his support of a Sub as issues or conflicts arise during the project, especially when there are differences of opinion with the architect or owner. Subs want to view the GC as their teammate and want to be supported in asserting their position and getting an adequate resolution. They feel that some GCs are focused only on what the owner or architect wants.

Of course, winning teams not only have superb talent but great leadership. Although every Sub needs to play a leadership role at different times, the GCs superintendent is the day-to-day quarterback. Subs believe that the superintendent needs to see the big picture, but also get his hands dirty and be aware of each and every piece of the puzzle. Subs appreciate the critical role that the superintendent plays in the equation. He needs to be visionary, coach, cheerleader, arbitrator, safety director, politician, salesman and negotiator.

Communication Is Constant
Like the coach of a team, the GCs role is to make sure that everyone knows the game plan, everyone knows their role and everyone is in sync. How do Subs define good communication?

It starts with clarity. Clear expectations are fundamental to a successful construction project, starting at the bidding stage. The GC needs to provide all the critical information and communication from the design team and the owner as to what is expected. This allows the Sub to anticipate the challenges and know what and how to deliver. Subs want the GC to clarify the scope and services he requires. What services is the GC going to provide? What do they want the Subs to provide with regard to moving and transporting materials? The best GCs are meticulous about clarifying these kinds of details so there are no surprises or misunderstandings down the line.

Beyond the bidding stage, communication remains paramount. As Matt Westegard suggests, I think most often where things begin to become unraveled is when the communication stops. We are in a very physical industry, but if we don’t pay attention to communication, the whole team gets dysfunctional. Subs need to be kept abreast of any developments that may affect their installations and any potential changes in design, changes in scope or changes in scheduling. Whether it is constructability issues, budget questions or scheduling challenges, we need to be open with them if we expect them to help us solve problems, notes Roger Hunwardsen from Knutson.

Accuracy is an important element. Subs need to have accurate schedule information and realistic dates communicated to them by the GC. Often, GCs say they need the Sub on a certain date, but may not be adequately ready for them when they arrive. We need to be cognizant of the fact that Subs spend money and time gearing up, and may have taken resources away from some of their other projects but cannot move forward efficiently if we are not adequately ready for them, says Todd Schilling. Inaccurate information creates inefficiency.

Timely communication is also key. If Subs request information or clarification, they need a timely response from the GC to address a perceived problem and get it taken care of so everything can move forward. It is one of the worst things that can happen. any kind of delay in the information back and forthto be out trying to build a job and have to work around a corner of the building because nobody can get an answer or force an answer, explains Larry Heinsch.

Relationships are never simple and there is no magic formula for success, but our experts believe that when these five areas are in place, Subs are likely to feel they are part of a winning team. Since winning relationships are possible only when both sides understand whats needed, the next article will focus on what general contractors need from subcontractors.

If you have any further suggestions on building better relationships between contractors and subcontractors, please contact Dan Ryan at Knutson via email at [email protected].

Continue to Part 2 >