The myth of “whatever works”: Why proven systems outperform scrappy hustle every time 

Charley:

What is up everybody? Welcome back to another episode of The Building Code. Special episode today, we have Brad and Tim here in office, we just got done doing a panel over lunch, so hopefully they’re not too sick of me yet. How are you guys doing?

Brad Leavitt:

Great.

Tim Coughran:

Doing good.

Charley:

Perfect. Well, as always we always like to start things off with just kind of quick intro, who you are, where you came from, how you got into construction and a little bit about your business today. So Tim, maybe let’s start with you.

Tim Coughran:

Yeah, so Tim Coughran, we’re based out of Denver, Colorado. So my background, so I started Alderview about 10 years ago. We focus on custom homes, luxury innovations, right in about the $8 million to $10 million to $12 million range depending on the year. I got a team of about six employees. Background, came from commercial construction, so that helped a lot coming from that into residential.

Charley:

Got you.

Brad Leavitt:

You spent some time down in Arizona, didn’t you? Doing commercial?

Tim Coughran:

We did, yeah. So I spent time in Arizona working on airport project down there and so that was my background out of school. I went into commercial, I was in commercial for about five, six years and then started my own thing.

Charley:

Awesome, and how long have you guys been doing Alderview?

Tim Coughran:

10 years.

Charley:

10 years.

Tim Coughran:

Coming up on 10 years. Yeah.

Charley:

Okay. When is the anniversary? Brad and I need to fly out help celebrate.

Brad Leavitt:

He’s an old-timer.

Tim Coughran:

Yeah. February.

Brad Leavitt:

Old-timer in business.

Charley:

February, okay.

Tim Coughran:

I know it’s like your age, you always go lower as the company go higher. Right?

Charley:

Awesome. Brad, how about you?

Brad Leavitt:

Yeah, so I grew up in San Diego as electricians, so grew up in the trades, did construction management in college, moved to Phoenix a little bit before Tim. I give him a hard time about old timer, but I’m much older I’m sure than him. So moved down to Phoenix. But I think what’s unique to both of us is we both did commercial for a long time before starting residential. I think there’s a lot of advantages in some ways to do that just from a general contracting perspective-

Tim Coughran:

Yeah, for sure.

Brad Leavitt:

… because going through documentation systems, even though we don’t have it all figured out now, it definitely gave us an understanding of what that looks like when you’re working for a big company with 300 employees. The company I worked for was smaller than Tim’s, but still similar background in that commercial. So long story short is, I ended up starting AFT Construction. We started that in 2013 in March, so we just had our, this year as our 12 year anniversary.

Tim Coughran:

Awesome.

Brad Leavitt:

So around the same time as Tim, and here we are, we build in Metro Phoenix, Scottsdale area and now we have 26 employees. And have some pretty unique projects that definitely challenge us, for sure.

Charley:

Yeah, it’s funny hearing you guys talk about coming from commercial businesses, understanding how processes and systems could work. I feel like I say this all the time on the podcast, I learned so much about my role here at Buildertrend, which is our head of operations from our customers that we talk to. Buildertrend experience, a very similar what I would imagine growth story to a lot of small residential contractors that are scaling, where we didn’t have a whole lot of operations or systems, it was kind of do whatever you can quick, scrappy, get shit done as quick as possible.

Then you start hiring another a hundred employees, another a hundred employees and growing, growing and it’s like, okay, there’s probably a right time to dial this in and start establishing some of these SOPs, making sure we have clear expectations for all of our different roles, who’s responsible for what, goal setting. So I talked to customers about what they’re learning from their businesses, even stuff that you guys set on stage today, I’m writing that down. I’m like, “Yeah, that’s something I can roll out to my team, for sure.”

And that’s kind of the name of the game for the podcast today, we’re going to talk about why proven systems outperform scrappy hustle every single time. So let’s maybe start with a myth itself that every builder has to figure it out on their own. Why do you think that belief is stuck around in the construction industry for so long? I feel like everyone I talk to, you hear the same old story every time. Is like, “I felt like I was on the island, I felt like I was trying to figure it out for myself.” And we know that that doesn’t work. There are people to learn from things to do, systems put in place, but why is that such a prominent myth in industry?

Brad Leavitt:

Well, I think, I mean I’m sure Tim would agree to some extent. I mean, when you’re going into construction, people feel like they have the trade secret, they have it figured out. They don’t want to train their competition, they don’t want to give them information because they feel like, “Hey, I’m going to train someone that’s going to take business development.” Construction’s hard. It’s hard, a lot of the jobs we work on, I mean these are a year, two years in pre-con, if I’m awarded a job today, I won’t start for 12, 24 months from now. It’s a long time. And so there’s this hidden side that even from a trade partner side that if you’re teaching someone how to build a staircase and they’re going to be a better framer and they’re going to go do this now.

And so there’s this misnomer, and with how that plays a role for us as builders is, I looked early in my career, I remember five, six years in business at this kind of tipping point. “Can people make money as a builder? What am I doing? I need to change careers. I don’t know how I’m going to do this and support my family. I don’t think I can do this.” And I think timing’s part of this. You realize social media networking, Tim and I are very much of the mindset collaboration over competition. Tim’s doing an event where people are going to shadow his company. I mean, he’s full on having people shadow him. We’ve done the coalition summit and partnership with Buildertrend to teach other builders.

Bottom line is, I realized early on that if I could tap into other builders who have been in business a long time and understand them and fortunately being a builder at 20 and understand how people are running a successful business, then I can apply those things and really for the benefit of my team, for my family, for us as a company, stay in business and weather the storms, that why do I have to figure everything out myself and spend all this money building other people’s houses? Why not be profitable at the same time?

Tim Coughran:

Yeah, I think a big part of it’s short-circuiting stuff. I think your original question is, I think ego is a big part of it. We have this ego and we have this mentality of like, “I got to figure this out and I’m the only one dealing with these type of problems.” And then you step back like Brad was saying, you talk to other builders and get in a network and you realize everyone’s dealing with this stuff, everyone’s dealing with the same issues I’m dealing with, so why not tap into people who have already gone down that road before me and see if they have a different system or a process that I can tap into and then better my experience for my clients. So I know it’s a challenge and I don’t know if that’s part of it stems from you have a lot of people who, I started off in the trades as well and then I kind of deviated and then went to school for construction management then later on went into the commercial route.

And I don’t know if some of that comes from people being trade-based, which I have so much respect for the trades, the trades are the foundation of all we do. And then at some point you’re like, okay, I guess I could do this on my own and make more than my boss and so I’m going to start with my own company. So they start more with that craftsmanship mentality instead of creating a business. And I think that’s the thing is then you’re trying to reverse engineer and be like, okay, now actually I need to create a business where sometimes it’s like maybe it’s the opposite. It’s like you need to create the business first and then the craftsmanship and everything else will follow.

Brad Leavitt:

Well, it’s tough too. I mean, you bring up a good point, Tim. The issue is that you’re in an industry where craftsmanship is such an important part and so many people are really good at their craft, but the business side is not taught. I mean, first and foremost, I mean most of our education, you’re not going into high school or college learning how to be an entrepreneur, run a business, so you don’t have any business acumen coming in, but yet you may have a skillset and it’s low barrier for entry.

And then there’s something about construction where you don’t have years in the industry, you don’t have white hair. There’s something about, I remember being young even in the trades as an electrician and not getting the respect because I’m like this young punk kid on the job site. There’s something to be said about weathering the years of the industry. And so there’s all these misnomers, there’s low barrier to entry, there’s again the business acumen. And so there’s a lot of layers to why there’s, I don’t want to say this myth, but why there’s probably a lack of transparency in education and partly why we’re here at Buildertrend is when you look at it, even as much as Tim has a successful business, we’re trying to run our business, our businesses are so different, the region’s different, the climate’s different, the building specs are different, the codes are different.

And so you’re working in different areas and so many of our businesses maybe similar in nature, but they don’t overlap. And now you’re dealing this complexity of are you a remodeler or do you self-perform, do you cost plus, do you do fixed price? And so you have all these variables and that’s why it is tough because there’s really no standard algorithm or process for all of us to follow.

Tim Coughran:

Yeah. No, good point.

Charley:

Especially starting out too, I think something I’ve seen talking to customers is so many of them have this entrepreneurial mindset where they like figuring stuff out, they like solving problems, they like being scrappy. That’s what fills their bucket. And so I’m curious if you guys could speak to maybe a tipping point that happens or that either yourself or what you’ve seen other peers where I would actually argue scrappy does work to start out. You do kind of have to throw the kitchen sink at stuff, get jobs wherever you can, get your business up and running. Like Tim today you spoke about the 80/20 rule about choosing what sort of jobs you’re going to be working on. Is that tipping point something that you guys experienced of okay, the business is running now, how do I make it run better?

Tim Coughran:

For sure.

Charley:

Or is that something that everyone kind of organically comes across at different points in their business lifecycle?

Tim Coughran:

Yeah, I think you definitely hit that tipping point. I mean for me, the tipping point is once you start hiring employees and you try to grow and you realize it’s one thing when you’re doing it yourself and you’re like, this works, it’s very successful. I got a good system down, a good process down. But then when you’re trying to explain that to a new employee, coming on board is a totally different thing. You see, you talked about with Buildertrend and the same thing. It’s at first that works, but all of a sudden try to scale it up to a hundred, 200 employees and it’s like, okay, this is not a good system. So for me, the tipping point was yes, I hired my first person and he was more of a superintendent field guy and it’s like, okay, this is still working, this is still kind of working.

But once I hired my first office person that was a true office person full-time handling all of our project coordination, that’s when it was the tipping point, I’m like okay, what’s in my head makes sense in my head, but explain to somebody else, it doesn’t make sense. And then I was like, okay, I need to go back and really try to get what’s out of my head onto paper so I could explain it. I always use the methodology to my employees too. I’m like, if we can’t explain this process or system to a ten-year-old child, then it’s too complicated. If it’s on multiple, multiple pages and we can’t explain it and I can’t simply explain what we do, if I can’t explain our workflow in a couple of different diagrams, then it’s too complicated.

And I think sometimes in construction we build these such complex structures, and I don’t care if you’re remodeling a bathroom or you’re building a multi-million dollar home, they’re complex. There’s so many moving parts and pieces and the finishes and so many things you’re trying to account for. It’s easy to make it complicated, it’s another thing to try to simplify it in such a way and be like, okay, there’s five steps. So in our company we use a rule of thumb where it’s five like fives everything, you count on one hand.

So our pre-construction is five steps. Our construction process is five steps and it’s like we break it up into chunks of five so then it’s easy to remember, and it’s like if we’re sitting cross-explained to a customer. So I like networking with other builders because you get to talk about your process. If you’re doing stuff in a vacuum, it sounds so good. You’re like, this sounds so good and you’re so biased in your opinions, but as soon as you start explaining it to other people or other builders, you’re like, that’s actually not that great. Or I like what Brad said, I mean so much I’ve learned from Brad and from other builders, and you incorporate into your thing, you’re like, okay, that makes some sense how Brad says this, but not so much in this area because this other builder deals more in the mountains or whatever it might be. And so you kind of incorporate different parts and pieces.

Brad Leavitt:

But to Tim’s point, I mean you brought up the systems and how that played a role when you were hiring. I mean, there came a point in my career where I just thought, you kick people off the pier, that’s how I was taught. You either swim or you drown, and if you swim then yeah, you figured it out and now you can be a contractor. But the reality is, a lot of us don’t have systems or processes. And so point being is, I had a trainer out of college my first year when I was doing production. And he knows construction. I mean, he knew construction, he taught me great mentor. And so I was fortunate to hire him five, six years in business and he lasted like two months. And it wasn’t because he couldn’t do it, it’s just we had no systems operations.

He came from a production company doing 400 homes a year, but they had systems and organization and yes, our product’s different. A custom home’s only built one time so it’s a different methodology. But the point being is even with that being said, we didn’t have any processes and so the burnout, the frustration, the lack of organization, all those things that we had, he left. And so here I am hiring kind of a dream candidate from somebody you know, that you know you can trust, it’s going to be a great, that wanted to be part of the brand and they’re gone. And so then I’m hiring Paul who a lot of you know, and Tim knows and he’s in Colorado and here’s Paul with nine kids relocating to take this guy’s spot and move his entire family to Phoenix. And for me that was really where-

Tim Coughran:

It’s a career choice for Paul.

Brad Leavitt:

It’s a career choice for Paul, where he had a cabinet company, he had a trim company and now he’s kind of taken the bags off and he’s moving it to a whole new thing where he had never been a superintendent project manager. And at this point it was like, okay, I had employees before, but I realized this is serious now. Someone’s relocating their whole family, they’re changing, making a career choice, they’re selling their home, selling their business. We need to get our ducks in a row and get dialed in if we’re going to make this work. And that really was a tipping point for me to spend time and fortunately, Spencer comes in and he’s a great system guy. And so you start getting the core people that you start learning and creating that SOP and it allows you to the growth and time and flexibility you may have now.

Tim Coughran:

I like what you said, Brad. I remember years ago we were in California visiting. We were at In-N-Out. We were In-N-Out as a family. I got five kids, we’re sitting at In-N-Out, sitting at the drive-through and I’m watching these 16 to 18 year olds and they’re all have their own tasks, they’re all doing it. I’m like, you have this In-N-Out as a newer location. So In-N-Out just started up and I’m like, how can you have an In-N-Out where you have these kids that are in high school still? It’s probably their first time job a lot of them, and they’re creating my go-to is the double double animal style. So I’m like, how can you create a double double animal style the same exact if it was in Arizona or in California or Colorado and it tastes the exact same. And it comes down to a system.

So for me that was a light bulb moment where it’s like, not that we’re creating hamburgers but we’re creating a home, and I think sometimes we use excuse “What’s custom, everything’s different.” It’s like that’s kind of a cop out, there’s certain things that it’s a process and it’s repeatable each time. Yes, the scope kind of changes. So for me that was the turning point sitting at In-N-Out. I’m like, okay, if In-N-Out can scale and open up in new markets and say, okay, we’re going to open up in Utah. We’ve never been to Utah before, but we’re going to take the system and we’re going to go there and we’re going to hire new people. Then all of a sudden a light bulb turned on for me. I’m like, okay, well we can do the same. So currently what we’re doing is we’re getting ready to open up an office in Vail, Colorado.

And so it’s taking a lot of the systems and we’re doing a test market right now. We have a project that’s in pre-con right now and it’s like, okay, let’s see how good our systems actually work. Can this apply into another marketplace? Can we hire local trades, local vendors, apply our same thing, utilize some of our skill sets and then see if it works. Coming from Hensel Phelps, a company I used to work with, is that same thing. I mean, they get awarded a project out in the middle in the desert, a place they never worked before and all of a sudden they can hire local trades, local craft and still produce the same exact quality over and over.

Brad Leavitt:

It’s impressive. It’s funny you bring up the In-N-Out because I worked at In-N-Out in high school for [inaudible 00:15:44]-

Charley:

Did you? Nice.

Brad Leavitt:

Yeah.

Charley:

You can make me a double-double.

Brad Leavitt:

But what’s funny is you think about that we actually, we had one of the In-N-Out managers come in and speak our production meeting about the systems organization. So it’s funny that Tim picked up on the same thing we did and we’ve never spoken about this till the podcast. But we did an activity in our production meeting, how do you build a peanut butter and jelly sandwich? And Spencer created the set of plans of how to properly do it and then we had a plan set and a design book of how to build the sandwich. And on the plans it said it had to be on a porcelain plate and the design books had a paper plate.

And the whole point is there were all these, do you cut a diagonal square? Do you cut the crust off? And so there’s all these things that differentiate. Point being is that In-N-Out, how do you cook french fries? How do you clean the shake machine? There’s a set of steps you follow and same thing, how do you do a change order? What supersedes design book or architect? Well, in some cases we don’t know. That’s why there’s an RFI. How do you do an RFI? Request for information. We’re teaching them that by the peanut butter and jelly sandwich demonstration because then in real life ideally we have a set of instructions to do a change order.

How do you deal with trades that aren’t performing and what’s the process to set a notification and per our contract? And this is Tim’s point is that if you can outline them and give them a set of steps, this is what we define as processes, that you actually have stuff written down that people can just grab and follow and not be in the dark, be like, “How do I do a change order? How do I do this on Buildertrend again? How do I get the QR code onto the job site?” And you actually create a step-by-step that allows people to perform.

Tim Coughran:

And don’t you think it removes fear? For me, it removes fear. I think in the beginning when I started there was so much fear based in if that employee leaves me, that superintendent has all this information knowledge. And when he left and when we had to fire that superintendent, it was a big hole in the organization. It was like, “Oh, how are we going to do this? I got to put my bags back out and get back out in the field.” But then when I started creating the system, this is all of a sudden like, okay, I love all my employees, we have such a great team right now, but heaven forbid somebody gets another job or an opportunity and they move out of state, they move to Arizona and work for AFT or something like that.

But then all of a sudden it’s like, okay, yes, that’s a huge loss, but we know the role, we know the responsibilities, we have the tasks and now I know exactly who I’m looking for to fill that role and all my IQ wasn’t in that one individual, it was in the systems, in the process. So now I can have someone else and I can put them into that organization and they can flourish within that same role.

Brad Leavitt:

It’s funny you bring that up because there is fear as a business owner, if I lose this key person, I’m dead in the water. How am I going to perform? But if you have systems, turnover’s going to happen and I mean there’s a lot of reasons why, as you mentioned, it could be relocation, it could be family circumstance. I mean, things happen. But the reality is the systems do give you a backbone that you can hire and really not lose a beat as someone comes in.

Charley:

Yeah, I think, and it’s funny you guys bring this up, an analogy I heard just today was like, “You don’t want to slow down the river of creativity. You just want to put some guardrails around it.”

Tim Coughran:

I like that.

Charley:

Which ultimately speeds up the river, it doesn’t have to zigzag across these different things, you’re just streamlining that creativity, and I feel like you guys mentioned some of the pushback that doing custom homes brings up every single one is different. But it shouldn’t be, there are pieces that are consistent across every bill that you do, whether it be something as simple as the way you structure your files so that you can only find the picture that you’re looking for or something as simple as SOPs around how you create a change order and things like that.

Brad Leavitt:

Yeah, I mean to that point, Charley, I mean you think about we do some very complicated builds. Some are 10,000 square feet, some are 25,000, some are modern, some are traditional, but you can still put in there when the trust calcs have to be ordered. And what are the steps of the trust calcs? Are we layering it with our mechanical plants so we don’t have soffits and we know where the vents are going to be, and are we using linear diffusers and are we laying out everything with our trust calcs to make sure lights are in the same line, fire sprinklers are in line? And so what problem, if you get to framing, it’s too late. So something that’s technical, even though the house hasn’t been built, you can get very technical to understand what stage of the process do we do this valuation with the architect, the engineers to make sure we’re dialed in before we hit order on those trusses and now there’s a ton of costs to do trust repairs in the field.

Tim Coughran:

And then also, you touched on this a little bit, but it cuts down your finances too, because you look at your overhead structure and it’s like, okay, if I had one role and I needed four people to fill these different roles, but I can look at it and say, okay, if I create a better system, now I need one person and they could do these four roles and then it’s not overburdening them, because all of a sudden, yes, they could take care of it estimating and they could do an estimating for this custom home, but it’s like you’re just following this template, you import all, every single cost code and you go through cost code by cost code and you’re coming up with the numbers and soliciting bids from the subcontractors. And all of a sudden I think that’s powering. I think a lot of people, me including in the beginning, it’s like, okay, we’re growing as a company and we’re always like, I need to hire more people.

We see this in our trades all the time. It’s like feast or famine. It’s like things are growing. I’m growing my team, I’m going to hire all these people. And it’s like, is that really the best solution? Maybe you need to get leaner and get a better system. Maybe the guy that could only handle two jobs before and is a tile guy, maybe he can handle four jobs if he had a better process and a better system in place. So me as a business owner, I always look at that. I’m like, okay, what’s the labor of my crew, my staff that I have right now and are they overtaxed on certain things? If they’re overtaxed, I look internally and I’m like, okay, maybe it’s because something I’m putting on them and I don’t have a clear process for that and then it gets me excited because I’m like, okay, well then we can actually take on more roles with less people and it cuts down our overhead structure and makes us more profitable.

Charley:

Yeah, both sides of that coin are kind of dangerous mindsets to get into. It’s like, I need to grow and scale, so I need to hire as many people as I can to do it.

Tim Coughran:

Yep, [inaudible 00:21:21].

Charley:

Or I need to do more with less, so I’m going to ask my people to do a million different things and wear a ton of different hats, which ultimately is going to slow stuff down as well too.

Tim Coughran:

Totally. [inaudible 00:21:29] Careful.

Charley:

It’s like how do you systematize and operationalize and offload the annoying things that you don’t like doing to systems and tools and let people focus on what they’re truly passionate about doing and excel there, which ultimately is going to maximize your throughput and get more done with the same amount of people.

Brad Leavitt:

Well, it’s funny you bring that up because you speak to, fortunately I’m like both of you able speak to entrepreneurs all the time and they often say if someone could perform at like 60%, I’ve heard some say 80%, but everyone comes down to 60%, if they’re performing at 60% hand that task off. And you’re like 60%? That’s not even close to how I’m performing, but not even the micromanagement. But the whole point is that the only way you can pass that off is if you have directions for them to take it over, but that does for you up to work on the business and now to focus on things that probably is your strong suit and that does allow you to scale and get to next level.

Tim Coughran:

It’s funny, out of college I went and worked with this big general contractor, a multi-billion dollar company and the roles I didn’t know any different coming out of college and working at this and working all these roles and tasks and you’re learning, you’re a college student coming into this, you don’t know anything about this stuff. You’re building these multi-million dollar huge facilities, airports and hospitals and they’re putting you in charge of these big tasks and you’re like, I guess I’ll figure it out.

Charley:

Figure it out.

Tim Coughran:

Make one mistake. And it’s like, well, there’s a million dollars. You just made a mistake on that. I worked with that company for a while and then I switched and went to Colorado. I went with a more local GC, but they’re still a big company. They still do large commercial buildings. It was a huge contrast between the two. When I worked at the first one out of college, they were so big and had eight different offices all throughout the US. The task I was doing there when I went to the new company all of a sudden it was like four people that did the job of me at the other company.

And it was like you looked at how many people were needed on one crew and I looked at the team before and I’m like, our office trailer had four people in and we were running this huge project. And then the other construction company had a team of 10 people on it, because they subdivide everything so far. So it is interesting to see the difference of how that can change your profitability just by tweaking systems a little bit.

Charley:

Yeah, you you’re sitting there thinking, “What the hell? This is an option the whole time?”

Brad Leavitt:

Four people, 10 people is a big difference in your bottom line.

Tim Coughran:

Yeah, it’s huge.

Brad Leavitt:

And then the point being is what’s interesting about that, breaking that example down is, not only to your bottom line, where, some people may say, well, you could bill it to the job or it’s a cost and it may not come for your bottom line. But you may lose jobs too expensive because you have that much overhead. So you can be more competitive having less if you have the organization to get the job and then perform at the end.

Tim Coughran:

I think we have a huge advantage. I think sometimes small businesses, we think that it’s not advantage, but I think it’s a huge advantage being a small business. We hear this time and time again where we have clients that hire us because we’re a small business. They’re like, “Yes, we could hire this other company and maybe they’re more a national company, but we like you because we’re hiring a family, we’re hiring, we know who Tim is, we know who Brad is. We know that you have children behind this business and we like that.” And it’s like a competitive advantage in a lot of ways for these people that you’re building an intimate setting, like a custom home or doing a large renovation.

Charley:

Yeah, absolutely. I am going to go off script a little bit here because both of you guys have referenced this in your answers. I know we’re talking about systems and processes, but as we’re talking about people and scaling your team and establishing these systems and processes, I’d love to hear how you guys think about proper expectation setting and really clearly defining roles, because these systems processes only work if the people running them have a good understanding of what they should be doing and what you’re going to measure them as successful for? I think you even brought up an example on stage of opening up the books and tying direct bottom line to your employee performance, but how do you guys go about setting those proper expectations with your team, making sure they have good understanding and guardrails around, if I do this, I will be successful and if I do this, our business will be successful?

Tim Coughran:

Brad, does a good job with this. I’ll let you go first Brad.

Brad Leavitt:

So I think there’s a few things. It’s funny you always learn that for, people are like, well, what gives companies the best company culture? And as they do these studies, it always comes down to two things. One is they believe in the product or they believe in the company, the brand, whatever you’re producing. But more importantly, the studies have shown that it’s people, the people that work there understand their role. They understand their tasks, their scope of work, who they’re accountable to, who their leadership structure is, and again, how they’re compensated because of that. And so to your point, Charley, as you kind of teed that up is that, as a business owner, as we understand that if we can create an organizational chart, if people understand when they come into the office, what’s expected of them, how’s that baton passed through the organization. So if they have clear understanding of what they’re doing day-to-day, they don’t get frustrated, they don’t get overwhelmed, they don’t get overworked.

What happened to me early on is I saw a lot of crossover, people doing the same work. There was no clear distinction on where that handoff is. And so it just having that delineation so that people understand, yeah, they can come and they can perform and then they know how financially, which I’m sure Tim will speak to, how that plays a role at the end of year, which at the end of the day, salary doesn’t make or break retention, but it has, it’s one of the most important icings of the cake. So the core of the cake is believe in the product and having accountability and knowing what your scope of work is, but then you have these add-ons that really solidify it.

Tim Coughran:

Yeah. And I think it’s like who do you want to attract to? If you’re trying to attract people who are Career-minded, you have to think of what do the career-minded people want? So career-minded person going to be, I have people in my company who have owned businesses before, so they’ve been down that road before, they don’t want the burden of owning a business anymore, but they like to have the autonomy, they like to have the leadership, so a career-minded person for us, they’re going to want a good benefit package. They’re going to want simple things like 401(k) and health insurance. I know that’s scary for some builders to think, I need an insurance plan, I need this.

And sometimes it means bringing more people on your team, not necessarily that you’re hiring, but it’s outside resources where it’s like, okay, before we didn’t have a tax strategist, now we have a company, our tax company, they don’t just file our taxes, but they’re looking at all our different businesses and they’re looking at our strategy of how we’re doing that. And so if you want career-minded people, you have to think that, okay, they’re probably getting higher salaries at other companies, they have benefit packages at other companies, they have big goals or they own homes, they have families, they have different things like this, they have a lifestyle that they’re trying to keep up.

It’s different than saying, okay, I’m just going to hire somebody from the trades. Nothing against that, but it’s hiring somebody that maybe that they’re just looking for a job, they’re looking to get a couple more dollars an hour, and it’s like those are the people that I don’t want to attract. I want to attract the people who are moving from a different state and they want to relocate their family. And that puts a lot of pressure on me as the owner. It’s like, I need to have a company that’s a safety net for all of them where I could take care of these people and people ask me, what do you lose sleep over?

It’s like I lose over that, of how do I keep this team intact because there’s lives behind this team, there’s families behind it, there’s so much invested in Alderview Construction that it’s like I have to have a system. It’s not a matter of like, oh, this is cool and it’s the trendy or sexy thing to do. It’s like, no, if there’s not a system, these people will go somewhere else and they’ll go somewhere else that has the system because they’re career minded people and they need to support a family.

Charley:

Yeah, I think that was one of the biggest lessons I learned as kind of a young people manager, is understanding what fills their bucket, what motivates them, what makes them happy to show up for work. I thought everyone was just built like me and wanted to advance their career and take on the next biggest better thing and work long hours and make a lot of… There are people that don’t want that. One of the highest performers on my team, I’m constantly trying to move her into leadership roles and she’s like, “I don’t want to do that. I like what I do right now. I’m really, really good at what I do right now. I’m able to log on at 8:00 and log off at 5:00. I’ll take a 4% raise every single year for continuing to do a good job, and I’m plum happy with that.”

But treating that person differently than someone that comes in is, I want to be a VP at Buildertrend here. Let’s not talk about what I’m doing right now. Let’s talk about what I’m going to be doing next year, the year after that and the year after that, are drastically different one-on-one conversations and career roadmapping with them. And if you don’t have that level of granularity and relationship with your people, you’re going to miss the mark on both sides.

Brad Leavitt:

And that’s mean. That’s what you’re speaking to, Charley. I mean, that’s a different aspect for sure. I mean that’s the value of leadership and understanding, really it goes two ways. Some of the best leaders I’ve seen, they’re able to see your super power in a way. They can see not who you are today but who you can become. And in some ways, to your point, some are like, “Hey, yeah, I can still become this person, but it doesn’t mean I want to be a manager or manage people. I’m super happy with where I’m at.” So understanding what their career goals, where they’re at, I mean that starts getting into right people on the bus, right seat and how that’s going to work out for them to move, either stay in their position or move around the company.

Tim Coughran:

I like what you said, understand your employees. I think for us, reviews are so huge. Doing reviews, not the tasks like technical stuff. Yes, that’s part of the review, but personal views like, as a business owner, if I’m having success and I’m the only one in the organization having success and none of my teammates have it, then I’m like, I failed as a business owner. If I get to the end of my twilight of my career and I’m finishing everything up and whatever that looks like in whatever capacity and I’m the only one that has success, whether that success is measured by financial or freedom or whatever it might be, then I’m like, I failed As a business owner, I’m constantly asking my employees. I’m like, “How can Alderview Construction be a vehicle to bless the lives of the people that I’m working with?”

And each employee is different. One employee might be like, “I’m trying to purchase a first-time home. I don’t know how to go through the finance process.” I’m like, okay, we can introduce you to a broker we work with or we can introduce you to this and here’s how much you need to save for that. We might have another employee. It’s like, “I’m trying to start a family. My wife and I are trying to start a family. That’s one of our goals to start a family.” And it’s like, okay, well, I can speak to a little bit of that. I have some children too. And so it’s like, how can you help as a business? And it’s different for each people.

I think sometimes it’s like, well, that person just needs a raise. It’s like that may not always be the answer. Maybe that person just needs a little bit of time off because they have to go pick up kids from school and every Friday they have to go pick up their kids. And you’re like, okay, well we could do that. And so I think the turning point for me is looking at Alderview Construction is like, okay, we are a steward of the money that’s coming into us from these clients and we take that really a sacred responsibility. Like this money’s coming into us, how do we allocate that money in such a way where I can help raise and elevate my entire team? And all of a sudden now they’re not working for Tim and it’s not Tim’s company, it’s not Alderview’s vision, it’s like, no, this is our vision. It’s helping me to buy a house or it’s helping me to start my family, or it’s helping me to pay off student loans or whatever that goal might be.

And I think that’s where it gets exciting as a business owner. Because then you’re like, okay, now I want to go seek out those jobs that are the 20% jobs that are driving the revenue. And it’s like, because I know I can bring on more people to my team or I can elevate that one person. That’s where it gets exciting. Then it changes from this survival mode of, okay, money in, money out, money in, money out. And all of a sudden you’re like, this is actually a vehicle to change people’s lives, which is powerful.

Charley:

Yeah, 100%. I mean, we’re going to have to have you guys back on and do a full hour on just this topic to get us back on track. I apologize for taking us down that avenue, but this is so good.

Tim Coughran:

Yeah, [inaudible 00:32:44].

Charley:

I really appreciate your guys’ insight. Yeah, so this is awesome stuff. Talking a bit more about kind of systemized processes and workflows, you guys have both used Buildertrend ind some capacity before. Talk to me a little bit about how digital workflows have supported your ability to scale and streamline a lot of the processes that you’re doing inside your business?

Brad Leavitt:

Yeah, I mean specifically the Buildertrend, I mean for us, the QR codes, I mean that was so huge that Buildertrend did. I mean, we started that a while back and for us, these projects we’re doing are very complicated working through all these design details. So the ability now where we can have much better control. I mean, we have some projects with a hundred change orders. So when you’re trying to manage that on paper in the field or electronically sending in a Google link or a Dropbox or, no one looks at it, they don’t click on them. I could barely get some of my trade partners to open their email. They’re not going to open up a link with Dropbox.

But if you can have a QR code in the field that’s there and it’s linked back to all of our documents in Buildertrend, and then when those hundred change orders happen, we just go online ourselves and we update the pages, it automatically syncs, it’s tied into the QR code. I mean, the to-do lists are huge because that gives tasks for our customers, for our designers, our architects, our team internally. On the day-to-day, you’re dealing with the constant punch lists and changes and QC. And so the digital age, I mean that’s a huge benefit, especially for us. We’ve had what? Four projects over 20,000 square feet. So I mean, it’s monstrous the amount of detail in these homes, and if you don’t have a way to track that, it’s just, I don’t know how we would’ve done it 10 years ago. So it’s nice to have some of those features now with Buildertrend.

Tim Coughran:

Yeah. As the company like my company continues to grow, it’s so much of the day-to-day tasks that I’m not part of anymore, but I still want to have a pulse of what’s going on in the company. So if a homeowner calls me, I want to be able to understand and pick up within a moment’s notice. If I get a text message that says, “Hey Tim, are you available for a call in 10 minutes?” I want to be able to have resources I can jump to real quick without this elaborate conversation with an employee, I can pull up. So for us, pulling up the PO system, if I have a call with a subcontractor, I need to kind of weigh in on the decision that’s makes, and if maybe we’re firing a subcontractor on a job that’s not performing, I want to have those key indicators that I can just go quickly pull and be able to make decisions quickly.

And so as an owner, yes, I’m not there with the inspector anymore as we’re going through a walkthrough and I’m not there for the permit process or I’m not there scheduling the dumpster delivery and I’m not there for the trust delivery, but I still have a pulse of what’s going on. I want to understand, I don’t want to be the type of owner that’s so detached from my business that I have no idea what’s going on. And so for metrics for us, the daily logs is a huge thing. Our daily logs for me, there’s power of being able to be here in Omaha and on a break, pull up a daily log and be like, “Oh, cool, they got the wallpaper installed because I know the furniture’s getting installed tomorrow.” Literally on a job, and it’s like, cool, I can-

Brad Leavitt:

Be at ease.

Tim Coughran:

… I can sit at this, the podcast and be at ease because I know that wallpaper got installed in the dining room and I know that dining room table is going to come in and it’s great. And so I like having things like that where you’re able to still have the pulse on it, but you don’t have to micromanage your team. So daily logs is a great example, the PO system’s a great example, the schedule’s another great example. And you could use these metrics to really gauge the health of a project without having to spend hours and hours digging into a project or being on site. I could be anywhere in the country or the world for that matter, and look at it and be like, “Okay, something’s going on in this job. There’s an issue here.” And I kind of have an idea what’s going on. So then when I get that surprise call from the homeowner, I’m like, okay, I know what this is about. I know what’s going on here.

Charley:

It allows you to be much more proactive and ahead of the game as opposed to constantly reactive, question search for a while, ask a ton of people answer, and just stuck in this cycle of constantly looking for things, I feel like, and just having that at your fingertips here. All of this is actually a good segue to our next kind of segment here, which is kind of Buildertrend updates. So something recently that we rolled out, as you guys are talking through expectations and processes and setting up these guardrails, it’s actually something that Buildertrend internally took a page out of your guys’ book and tried to establish for how we onboard new clients. It used to be very choose your own adventure-esque. Customers would sign up for Buildertrend because they were really, really excited about daily logs or they were really, really excited about purchase orders.

We’d say, okay, you’re excited about this. This is how you use it. You’re good to go. The true value of Buildertrend comes with the interconnectivity of all that and understanding how everything ties together and connects back and being able to link out to certain change orders from something else. And so it’s kind of similar to, I’m sure as you guys are going through the pre-construction scoping phase with your clients, they may be super, super excited about like, “Oh, what paint color am I going to put up here?” All these fancy finishings-

Tim Coughran:

We’re not there yet.

Charley:

We have a crap-ton of stuff to do before we get to that. And so we’re kind of trying to take that more prescriptive approach of like, we will get to that nice shiny feature that you want to use, but trust us, it will only work if you start here. So we’ve chunked it up into five key phases here, which is job site management, financial management, pre-sale scoping estimating, pre-construction and planning, and then post-construction process.

And actually a deliberate choice there to start in the construction phase because most of our customers that we have coming to us have jobs going on in progress. So let’s get that organized first and then for net new jobs, by the time that next one comes in, you’ll already be ready for that pre-sale scoping, estimating kind of workflow there. So I want to take through all these kind of one-by-one, just kind of quick, high-level, quick hitters of stuff that you guys have seen. So the first track there, the construction job site management. Brad, you were talking today about the importance of scheduling and more specifically how scheduling changes and that kind of being the backbone of your entire project lifecycle there. How does getting serious about scheduling, say that five times fast, change your projects or kind of stress management level of understanding when everything needs to happen, when there’s a change, how does that happen and making sure that your schedule is to a level of detail that you can feel comfortable with it?

Brad Leavitt:

Yeah, I’d be honest, I bet most builders listening to this probably would be shocked if they’re going in the field and see how their Supers are running their schedules and how accurate they are. I mean, the reality is this is something we deal with. I remember being taught if I don’t have accurate schedule, I’m fired. I mean, it’s that serious of an offense. And it’s something that we’ve struggled with for many years, to be honest. Whether it’s the technical side of building the schedule, whether it’s in some cases we as GC’s are building the schedule without input of our subs or trade partners and they can’t even live by it. We created a schedule, it looks great on paper, but the reality of the field conditions are they can’t perform in that order or sequence or there’s things missing.

And so when you look at scheduling job site management, it is essential to have a schedule to be successful, you just can’t be profitable, you can’t be successful without one. And there’s so much coordination. And again, going back to Spencer, thankfully, he has a strategy where we actually bring the subs into our office that are awarded on the job, and we build the schedule with them and get commitments for durations and get commitments for tasks and manpower. And then that allows us to build a more accurate schedule that we can now put in Buildertrend and live by and update, and hopefully we’re just working through the nuance of updating and change orders that come into play, rain delays, weather. But point being is scheduling is very, very difficult and typically leads to the profitability and success of your company.

Charley:

Yeah, I remember you talking about that. I think the coalition summit in Boston about this kind of full-day workshop you guys do with all your different subs and trade partners. Talk to me a little bit more about what happens in that room. Everyone comes in all at once, you start from scratch or who’s leading it? How does it interplay?

Brad Leavitt:

Yeah, so it’s a requirement. I mean, for us, a good example would be Hillside, right? A big job, so we’re going to bring in all the subs prior to framing. So masonry swimming pool because we’re putting those in early, concrete, excavator, waterproofer, framer and so forth. And so point being is that, we require that the owner of the company, or maybe it’s their number two, who’s in charge of the company is present that meeting. And what we found is that a lot of builders have come back and said, “Well, Brad, if I require that my subs are small, they don’t have big overhead. That means they’re not making money, they’re not going to show up.” And I’m like, no, that’s where you sell them, that by them showing up, you’re going to honor the schedule so they’ll be more profitable, which is the key word there, is that if we can make our trades more profitable, they’re going to be more keen to show up to our projects, to deliver.

And so when they sit in this meeting and we have all these owners, we pull up the schedule, they actually have gone through the plans and they are like, well, I need this to happen before this, and then we can strategize this. And they’re working together with other subs that know their business better than we do in most cases. And they know what manpower, what other projects they have, other GCs are working for. And it just allows us to be together to get commitments, to exchange cell phone numbers so there’s a relationship between the trades themselves and there’s relationship with us, and so that we’re not just building an arbitrary schedule that they have to live by, in this case, they’re participating in it. So now they better live up to it because if I don’t live up to my side, Tim’s going to be screwed on when it’s time for him to show up. So there’s just more accountability.

Tim Coughran:

Yeah, I like that. For me, it’s that roadmap. A little bit ago, we had the opportunity with Sierra Pacific, a partner that we partnered with, but we had an opportunity to fly out to their facility out there. And I was talking to the pilots ahead of the flight and I was asking them about that, and I was asking about their flight plan that they go through and their checklist that they go through on the flight plan. And it’s interesting because they’re like, “Oh yeah, we study this the night before. We study our flight plan. Even though we’ve done the same course over and over, we fly this path back and forth from Reading to Denver and from Denver to Reading every single time. But we always study the flight plan.” And it’s like that same thing with construction, your schedule becomes your flight plan beforehand.

And I love what Brad was saying though. What he does is you’re laying out the flight plan for everyone. None of us would just hop into a car without pulling up the maps on our phone and going to a destination be like, well, I’m just going to start driving and hopefully this road gets to where I need to go. It’s like you’re going to have a flight plan, you’re going to have a roadmap, you’re going to plug it into your phone. But then in construction, we’re doing these projects that are multimillion, how many projects, I think we would be shocked of how many builders go out there and me included, I’ve done it too. Before we go out there without this detailed plan, we’re like,

Yep, just going to go at it. We’re going to start scraping the old house and we’re just going to go at it and we’ll figure it out as we go. And then all of a sudden you’re like, how risky and dangerous that is. And we don’t only think of the risks, I think we’re such cowboys sometimes that we just go at it and we don’t realize the risks that we’re taking on without having a roadmap. And so for me, the schedule becomes that roadmap. All of a sudden the whole team has that flight plan ahead of time. It’s like we are trying to get to Redding, California or whatever it is. We’re trying to get to the finish line of a closed out project that feels good for the client to move in and the move out date. And here’s the path of how we get there.

And if we have bumps along the road, we hit turbulence or we have to deviate our flight course. And that’s the other thing, talking with the pilots, we alternate routes. If something comes up, we air traffic control, we’ll reroute us a different path, but ultimately we’ll end up in the same thing. And it’s that same thing on a construction thing. If you don’t have a schedule, you’re flying blind on that job. You have no idea what the path is, you have no idea if you’re up or down, you’re own left or right, and all of a sudden you get to the end and you’re like, we’re not even in Redding, like we’re in Los Angeles, we’re not even close to where we need to be.

Charley:

And that’s just such a perfect example of our point earlier of templating the custom, that workshop you have with all your subs probably looks different for every single job, but you still conduct it the same way every single time. And just constantly having those guardrails to make sure that we’re doing things the same way to facilitate the customizability that’s going to come with each and every project. Moving on to track two, construction financial management here, what’s one financial process you used to overlook and what happened when you systematized it?

Tim Coughran:

I’d say for me, I talked about this earlier would be the PO system. Before it was trying to track that stuff on Excel, and trying to like, okay, I signed up a subcontractor, we’re going to enter the contract value into Excel and I’m just going to track each invoice that comes in and try to hope that my formula is right and everything’s correct and I don’t miss something on the bottom line. Once we switched over, which was not an easy thing to do. To switch over when we did this five years ago, switch everything over to a PO system, it took a lot of time. I mean it was a huge learning curve, getting everything to tie in with QuickBooks and have everything sync with each other.

But now something like going through the billing process, for me that used to be a dreaded thing that would take seriously all day sometimes, going through multiple jobs, you might have 10 jobs going at a time and it would be an all day affair going through it. Now we’ve cut that down where honestly our billing calls that we have is an hour, hour like max. Sometimes they’re 45 minutes and we can go through all the same amount of jobs in that short period of time because we have stuff like PO system where we quickly pull up and say, where are we at on that subcontract? Okay, where’s the accounts receivable? How are we charging the owner for that and tie it back and forth. So for me that was something I was overlooked in the beginning that I wish I would’ve done earlier on and I’m grateful we’re doing it now, because there was a lot of money that we were leaving on the table and wasting a lot of my time quite frankly going through that.

Brad Leavitt:

Yeah, and it’s interesting. I mean there are a few angles to take this. I think for us, we do our time cards through Buildertrend and so we’re tracking that, and one way it’s, we have burden rates and we have hourly rates that we’re giving our customers being cost plus, but also so we can track the job. How long has this job taken us? Why did this project a take 10 times on project B, like other circumstances, how can you get the clarity from building if you’re not going back and looking at this?

And the point being is that we realized that the amount of work, even as we’re keeping hours and we have burden rates, there was another way to do supervision, which we’ve changed our whole system through this analyzation of going through the financial management of it and realizing, yeah, we can still track things through Buildertrend, they are really helpful for us to understand data analysis and how we bid projects moving forward, but there’s a simpler method to work with Buildertrend where we can generate the cost each month for supervision labor that’s going to be much easier for our customers. So it’s a little two for one as we start to utilize and dive into it more.

Charley:

For sure. And Tim, I like where your head was at where you said, I’m glad I implemented it when I did because it’s saving me a ton of time and money. I think that’s the mindset that people should have when they’re listening to this. They’re like, “Shoot, I’m not doing that. I’m probably…” That’s a good thing. If you’re not doing that, that means you have the opportunity to start doing it, and you’re going to have additional time and money. It’d be a completely different thing if you felt like you already had of this in place, you had all your ducks in a row, everything was running through this and then you were struggling. If you haven’t adopted this stuff yet, great problem to have, that means that there’s a lot of room above you for the ceiling perspective.

Tim Coughran:

We’ve all been there. It’s like sometimes you got to spend money to make money and sometimes you got to spend time to save time. So it’s that same thing. I hear it from other builders, and I did the same thing where it’s like it’s so much time to learn that new system, it’s going to be so much time to integrate my QuickBooks with Buildertrend and it’s like, oh, that’s so much time and it’s like, yeah, but think how much you’re going to save on the back end if you invest a little bit of time now and maybe it does take a week or two weeks, in our case is a month-long process to try to integrate everything in, but now that that’s done, we never looked back, I never looked back and be like, oh, that was such a long month, it’s so much easier now, how did we even do it before?

Brad Leavitt:

This is why Tim told me at lunch that he has a lift with two Lamborghinis.

Tim Coughran:

Exactly.

Brad Leavitt:

No, two McLarens. Sorry, there were two McLarens.

Tim Coughran:

I wish.

Brad Leavitt:

That’s how much he’s [inaudible 00:48:28].

Tim Coughran:

I’d be a Ferrari.

Brad Leavitt:

He literally just told me this today at lunch.

Charley:

Geez, I wish he would’ve drove out here.

Tim Coughran:

Exactly.

Charley:

We’d take these podcasts on the road around Omaha.

Tim Coughran:

[inaudible 00:48:36].

Brad Leavitt:

I wonder if he’s hiring.

Tim Coughran:

Exactly.

Charley:

We have actually had a couple of builders poach some Buildertrend employees, so I just got to make sure I find the right one.

Tim Coughran:

You know the system, you’re like, perfect.

Charley:

I’m open to be poached if you got some McLarens out there.

Tim Coughran:

Here you go. Yeah.

Charley:

This can turn into a job interview. Next workflow here, kind of pre-sale scoping and estimating, and I apologize, I know we could spend an entire hour on every single one of these topics here. But as far as kind of quick hitters, something you guys said on stage today, I keep referencing that, but I was so infatuated by it is, the pre-sale and scoping process that you guys have, how do you balance the appropriate amount of speed and accuracy when it comes to your estimating to make sure that you feel good about the number on the page, but also you’re moving the client along to get something in front of them to move the progress or project forward?

Brad Leavitt:

Yeah, I mentioned this. I mean, I think vetting is very important, to get to common ground very early on and then spend the time over the next year to get to the bottom line. Point being is that using that data analysis, that job history that we have in Buildertrend from all of our costs, we have it, we can run numbers, do calculations, we use ChatGPT, they have estimating in ChatGPT that you can kick that in, upload the plans and generate a number. So between database, between ChatGPT, which again we’re not bidding jobs off of ChatGPT, but there’s a reference there to understand in our market that we can use, it’s just information to compare and contrast so that we’re going into the project setting the tone right so that when we do get to the final bill there’s not sticker shock and the project can still move forward.

Tim Coughran:

Yeah, I like leveraging, like Brad said, I like leveraging employees who, a lot of my employees, like I said, have two of my employees that worked with other businesses or owned their own business before. I have other employees who have worked with our competitors before, so it’s leveraging their skill sets as well. I mean, we’ve had employees and one of our employees actually doing this right now, where they’re going through and creating a database on information they had like, okay, here’s homes we built with this other builder, here’s the cost per square foot, here’s the cost on this.

And then leveraging subcontractors too and talking to your excavator and say, okay, this is the price we’re coming in at, is this historically what you’ve done, what have you done on other projects? Because guarantee you’re not the only builder they work for, they work for other builders and all of a sudden if you leverage that, you’re tapping into the mindsets of all these other builders and you’re realizing like, okay, so where I’m at, I might be a little bit higher, I might be lower and maybe there’s an opportunity so I can have a little bit of margin here and I can grow and charge a little bit more because everyone else is charging them much. So I think that’s cool is when you can leverage other people.

Charley:

For sure. It’s something you guys both said that I think needs to be said and screamed loudly from the rooftops is, don’t sell yourself short either.

Tim Coughran:

Yep. Way too much work [inaudible 00:51:15].

Charley:

Don’t negotiate on price. Bid and estimate what you’re worth and what allows you to have a profitable business and stop nothing short of that.

Brad Leavitt:

Yeah.

Charley:

We’re getting close to time, so I’m going to skip close to the kind of post-construction phase here. What’s your guys’ philosophy on closing out jobs and supporting clients after move-in?

Brad Leavitt:

Yeah, I think this one is something that’s evolved. We found, again, going back to scheduling and Buildertrend and how we’re managing the punch list and value, there’s always this drop-off per se and fortunately the way commercial does it like for Tim and I in the past is that when you have a final punch list, we assign a value to those punch items. And that value allows us to get the final payment from the customer. So say there’s 10 punch items and the client owes us a hundred grand, they could probably pay us $85,000. They hold, so we assign a value 150% of that item of all these line items, we create that 150% value that’s to hold back and then we get paid when that’s done and so that way the client’s not holding a huge number on us, they can pay us and then they have some protection.

And furthermore, we’ve learned that our closing date is based on 30 days after C of O. So we get C of O, client can’t move in with 30 days of C of O. That allows us 30 days to work on the punch list that we’ve walked through with them at C of O. It allows us to get the swimming pool field up, automation done in the house and programming done, final touch-ups, done get furniture and get photography done so the client’s actually moving into a finished home. So it just allows a clean transition for the client and it just allows us to be successful in that post-construction market.

Tim Coughran:

I’m going to deviate a little bit on this question from the financial aspect. I think all that’s super important and Brad touched on it so I don’t think we need to touch up more, but we’re in the process right now of focusing on the customer experience. This is the last touch point you’re going to have with that client. And so we focus recently on the branding. What’s the last branding element they have? Simple things of like, okay, how do we deliver all the remote controls to the fireplaces, to the TVs, to the garage door openers and so we have now a branded bag and it’s a bag that has our logo on it and all the stuff goes into that bag. We have a key-chain that’s branded key-chain that it’s like all their keys are now on a key-chain that says Alderview Construction.

We hand them, literally hand them the keys on a key-chain. All the manuals, instead of having a manual that’s an accordion style with all these different manuals and they different size brochures and all this stuff, now we’re like binding them in a coil binding, it’s nice and branded and it goes in an Alderview box and we hand them the box or several boxes of the big home, here’s the boxes all branded, this can go on a shelf somewhere for you. And so it’s part of that, not necessarily that if they have a problem they’re going to go to this manual in a digital world they’re going to go to, but it’s something to physically hand to them at closing and be like, “Okay, here’s your keys, here’s all your manuals.” It’s like the last touch point of how was it with Alderview Construction?

Maybe they forgot about some of the other bumps on the road, but they’re like, you know what? At the very end, they were organized and structure. They hand us a bag that had Alderview on it, it had all of our remote controls in it. They hand us a box that had all of our manuals in. It was all branded, all coil bound, organized by trades or by what a scope of work or whatever it is. And so we’re focusing on what’s the last handouts, our last point to give one last likely hit, one last home run where it’s like, okay, this is the last impression we want to leave with our clients.

And so we focus on the client experience. For us, we want a luxury experience throughout the whole process. And the luxury experience isn’t the finished product so much, it’s the experience that’s luxury. Did it feel luxury from the pre-construction when you’ve had your first phone call with whoever it might be to the very last handing over the keys? Did it feel luxurious at the end? You look at fashion brands or luxury brands and it’s like the whole experience is a luxury. From the moment you walk into the store to like you the product, it feels luxury, to open it up, it feels luxurious.

Charley:

Yeah, and it’s a great point. You mentioned maybe the forgot about the bumps in the road and you can finish on a high note. Maybe the forgot about how awesome the last year was and now they’re pissed off because they just moved in and they can’t turn on their TV.

Brad Leavitt:

Totally.

Charley:

Right. You can’t fumble-

Brad Leavitt:

Yeah, it’s a real thing.

Charley:

… fumble the bag or fumble the ball on the one yard line. And I’d say that’s a super often overlooked part that I definitely haven’t thought about before, but I could see that going a long way from a brand recognition referral client experience standpoint.

Tim Coughran:

Seeing that idea, I love to say I take credit for that, but that came from an employee, came from an employee sitting out looking at a process and say, this is how our closeout process. And one of our employees being a female and looking at it from a different angle. She’s like, “You know what? It’s kind of messy as a female if you’re handed all this stuff and you don’t have to do with it and it’s like you’re getting a manual and has food stains on it from the jobs and all this stuff, it just looks tacky.” And I’m like, I guess never really thought of it from that perspective. And it was her idea. So letting her run with it, I’m like, “Well come up with the idea and let’s brand this and let’s come up with it.” So I think it’s cool when you can empower people and then it affects the whole business. Right?

Charley:

Absolutely. We’re getting close to time here. A couple more quick hitter segments we’re trying out here. So this is a brand new segment, rapid fire construction edition. Rapid-fire questions, short answers. First one, what’s your go-to job site snack?

Tim Coughran:

Chomps.

Charley:

Chomps?

Tim Coughran:

Yep.

Charley:

I can’t even say I’m familiar with their game.

Tim Coughran:

Yeah, it’s like a beef stick. Yeah.

Charley:

Okay. Brad, how about you?

Brad Leavitt:

It’s funny, I always have Chomps too and I don’t want to use his answer, so I’ll do something different. From a junk food, I’ll say a good bag of chips like cheddar and sour cream or something.

Charley:

I mean, I’m going home and ordering some Chomps right now, sponsored by Chomps, to see if we can get a sponsorship for The Building Code.

Tim Coughran:

Costco. Yep

Charley:

Most use emoji when texting your team?

Tim Coughran:

Mine would be the winking tongue-out smile emoji.

Charley:

Love that.

Tim Coughran:

Because it gets so serious sometimes and that’s one where you have a crucial thing and then you put that at the end and then people are like, “Is he joking? Is he serious?” You have a conversation with the employer and you might be like, “Where’s this at?” And then you put that at the end and like, oh, it Softens a little bit.

Charley:

Love that.

Brad Leavitt:

I like the kiss face. Then it really throws him off.

Charley:

There you go. Absolutely. Keep people on their toes. Worst construction trend you’ve seen lately?

Tim Coughran:

Oh my gosh. For me it would be that AI is going to solve all of our problems. AI is incredible, but we forget the face-to-face. Sometimes just picking up a phone call or meeting someone face-to-face and talking through a problem is going to solve it. AI, we think it’s going to change everything, but I’m like it helps [inaudible 00:57:42] so we use it every single day, but I’m like, man, it is not going to solve some of these core fundamental issues that we have.

Brad Leavitt:

To Tim’s point, I think there’s just a lot of things that pull us away from the day-to-day and you still have to focus on what’s important.

Charley:

Yeah, we say internally around Buildertrend, a lot of AI fluff out there right now.

Brad Leavitt:

There is.

Tim Coughran:

So much.

Charley:

When we had Sarah on stage, you could have asked her how many times someone asks, “What are we doing with AI and the product here?” It’s like some things, useful things, but ignore a lot of the fluff.

Tim Coughran:

The older generation would call it a briefcase builder. There’s a briefcase builder now. It’s like the AI builder. There’s those who are like the AI builders. I’m like…

Charley:

Love that. Favorite tool you cannot live without?

Brad Leavitt:

Phone.

Charley:

Phone.

Brad Leavitt:

Yeah. My smartphone, there’s no way.

Tim Coughran:

Mine would be, you stole mine. I’m going to go with laser level.

Brad Leavitt:

Nice, dude.

Charley:

Love that.

Tim Coughran:

Yeah. Got to be precise. I like it.

Charley:

Last one. Most satisfying part of a finished build?

Brad Leavitt:

I think when we’re fortunate to have dinner with the client after, which has happened. When they invite you back and you’re there with the family and you see them enjoying it. I mean, that’s the best part of the deal.

Tim Coughran:

Mine would be a referral, getting a referral from a client, like the ultimate testimony to how we did. We just got that one on a job, like a text message from a client. I’m like, you could have said anything else, but that was like, okay, that’s all I needed.

Charley:

Love that. As we get ready to wrap up here, we do have a listener question. I think this will probably be our last one, but I think it’s really timely to close things out. “How do I get buy-in from my team when rolling out new systems?”

Brad Leavitt:

I think the biggest thing is seeing the value, the time savings or maybe effectiveness of it, so if we can strategize to show them what that new system is, a new operation, new software, Buildertrend feature, whatever it is, when they see how it benefits them personally, then they’ll buy in for sure.

Tim Coughran:

Yeah. Mine would be having them help create the system. Similar to what Brad said about the scheduling. If you have them help create the schedule, then their buy-in, it’s their process, it’s not Tim’s process, you created it.

Charley:

Yeah. And this is how it’s going to make your life easier. Not here’s something net new that you have to do that’s going to make your life harder. Let’s collaborate on this together. What do you need to be successful and make sure that you’re successful, I’m successful. Everyone’s happy. Winky face.

Tim Coughran:

Yeah, exactly. Tongue out. Yeah.

Charley:

Tim-

Brad Leavitt:

Blow a kiss.

Tim Coughran:

Exactly.

Brad Leavitt:

Tim, Brad, thank you guys so much for joining me today. Really, really-

Tim Coughran:

It’s been a pleasure.

Charley:

… really appreciate it. I’m sure our listeners do too, but like I mentioned several times, I get so much personally out of these interviews, it’s like free college courses to me being, having the opportunity to talk to people like you. So appreciate the time. Awesome seeing you out in Omaha. You’ll be back-

Brad Leavitt:

I’ll be back.

Charley:

For contractor coalition right around the corner.

Brad Leavitt:

Yeah, we’ll be here, so we’ll be coming back.

Charley:

Perfect. Thank you guys very much. For our listeners out there, as always, make sure to like, review, subscribe, email us at podcast@buildretrend.com if you want your listener question featured in our next segment. Otherwise, until next time, peace. Good.

Brad Leavitt:

Awesome.

Tim Coughran:

Cool.

Charley:

Great.

Tim Coughran:

Thanks Charley.

Charley:

Not to toot my own horn, but one hour, one minute. That’s great.

Brad Leavitt:

Nice. Perfect timing dude.