Call it ironic, but the industry that builds and fixes things may be in desperate need of a renovation. At least, that’s what Gianluca Pascale, former CEO of Centrecon Inc. (a construction management firm), and now Head Curator of the Constructors Guild™ (the premier construction professionals’ platform, where High-Level Construction Experts converge to unlock their next BIG breakthrough), thinks. He believes that prioritizing speed and output over relationships and craftsmanship has led to a harsh, unsustainable system, where GCs and subcontractors enter into long-term, million dollar project partnerships without knowing each other.
As it stands, the industry is held together with scotch tape and gum, and Pascale is advocating for change. Billd spoke to him about his refreshing take on what construction is doing wrong, and what it can do better.
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A Broken Industry Foundation
The current state of construction, where everything is rushed, cost is king, and the needs of tradespeople are swept under the rug, wasn’t intentional. While GCs and subs were trying to do their job, unrealistic demands from clients, regulatory entities and the government stacked up like jenga blocks. To survive, the needs of subcontractors were deprioritized.
Subcontractors are the foundation of the construction industry. And the current state of the industry is eroding that foundation. Pascale believes no one ever went back to strengthen the structure, and now it just leans in the wind like the Tower of Pisa, eventual collapse inevitable. People point fingers, but nobody can organize and fix it.
Imagine a thousand cracks spreading across the foundation of a building. On any project, GCs, subs and suppliers wouldn’t patch the cracks with duct tape and tie wire. They would mobilize, and through ingenuity, collaboration and grit, they would do whatever they needed to do to fix the cracks. Now, imagine if they banded together just like that to fix the cracks in the foundation of the entire construction industry. Not as easy to conceptualize, but still incredibly necessary, according to Pascale.
Pascale asserts that two things will be instrumental in correcting the state of the industry: relationship building – from GCs to subs, from GCs to Owners, and beyond – and deceleration. For all the material shortages that have battered the industry, considerate relationships may be its most serious shortage.
How the “Need for Speed” Hurts Subcontractors and GCs
“Society is in a rush to go nowhere” Pascale notes. It’s that impulse to rush, to hurry up and wait to move faster and pay the bill for employee burnout and sloppy work later, that is poisoning the industry. As Pascale puts it, “Nobody looks around and says ‘Wait.’” Because how could they? There’s no time, and that’s part of the problem, which manifests in a few ways.
Contracts Signed Too Quickly
If subcontractors are the foundation of the industry, contracts are the foundation of a project. When they are misunderstood or neglected, the project is at risk. Pascale notes that some subcontractors don’t read their contracts as carefully as they need to. Or, they are forced to sign a contract that does not align with their interests because of the intense pressure to get the project started and win work.
Mistakes Aren’t Caught in Time
Moving too fast costs everyone more money down the line. For example, someone will lose money off the minor mistakes in a drawing. Pascale brought up a report produced by the CDAO (Construction Design and Alliance of Ontario) with the help of 18 other Canadian associations that investigated the cost of mistakes in construction. A $10 design change could cost $10k by the time it gets to the job.
Client Demands Go Unchecked
Speed isn’t the only culprit that makes construction messy, but it relates to another problem, which is saying yes to clients too often. GCs either find themselves bending to unrealistic client demands, then passing those massive tasks to subs; or they don’t listen to the clients needs enough, and wind up having to make changes to realign the project with the client’s vision.
But make no mistake – GCs aren’t the only ones who need to put their foot down. Subcontractors are just as guilty of saying yes when better expectation setting is needed. Winning the job and figuring it out later is a recipe for schedule and budget overrun.
Sacrificing Quality for Cost
The impulse to sacrifice quality workmanship for cost savings only adds to the mess of inefficiency Pascale has seen. Thinking it will get them the job, a lot of people want to be the low bid (which most GCs end up choosing), without considering the quality sacrifices they’re making to achieve that cost. And that applies to subcontractors and GCs alike.
The industry puts pressure on subcontractors to shave down their prices in order to compete, and commit to more than they can deliver in order to maintain a GC relationship. Pascale thinks many GCs put subs on a figurative treadmill and dangle a carrot of ‘the next high-paying job’ in their face. He encourages subs to avoid GCs who put them in that position, and not be shy to pass on work they know they can’t do for the price they’re being offered.
A Wake Up Call for GCs
Pascale believes that GCs need to reframe their view of subcontractors, and start treating them with the value and respect they deserve. “We need to understand that without our sub trades, what are we? Without them, how can we execute the project? And if we need them, we need to treat them right. We need to make them feel appreciated for their efforts.” He thinks that the act of GCs giving into unreasonable client demands can break relationships between GCs and subs.
How Subs Can Find the Right GCs
Both GCs and subs are conditioned to sell themselves, but Pascale believes they have to start playing the role of a buyer, as if they’re buying the right client. You should want your client to have discernible integrity, share some of the same core values, and, of course, have their sh*t together.
Pascale says that subcontractors can eliminate headaches by finding the right General Contractors. He sees GCs routinely break their promises, telling subs they’ll make it up on the next project. Broken promises, even small ones, cause problems. Things don’t get done, relationships break down, and trust erodes. Needing projects and payments can propel anyone, but he thinks there are more ethical GCs out there who won’t put you through the wringer and he wants subs to find them. In order to do so, he encourages subs to take ownership of what they seek in their ideal general contractor by defining them clearly.
How to Define Your Ideal GC Profile
Pascale recommends both subs and GCs work with their internal teams to develop what he calls an Ideal Client Profile (ICP). The process would look something like this:
- Gather everyone from admin to laborers and ask them what features they think make a GC great to work with.
- Establish the ethical and practical principles you would like a GC to stick to in a perfect world. Write out the components of that ideal GC, and measure potential GCs against it, like a rubric.
- Practical – Has a system for reducing trade overlap, responds to RFIs quickly, etc.
- Ethical – Takes responsibility for their mistakes, superintendents are respectful when dealing with our crews, etc.
- When you’re being considered for a project, remember that you’re considering the GC as well. Interview them, ask them questions based on the conclusions you reached with your team, assess their reputation, ask them how they take care of their subs.
- Specifically, ask them:
- What are their core values? Do they align with yours?
- How do they treat their employees?
- Do they pay their service providers on time?
- Are they open to collaboration?
- Are they organized, resourceful, and proactive?
- Do they respond in a timely manner?
- What is their budget?
- Are they transparent?
- Do they value customer service and attention to detail?
- Do they keep the owner informed not only on the project, but on when the subs are going above and beyond for them?
- Do they advocate for the subcontractor to the client?
- What are their core values? Do they align with yours?
- Specifically, ask them:
- Front load your needs. Communicate your values and show them your vulnerability. Subs should communicate to the GCs what they need, and GCs should relay that to the owner. Things like on-time payment and documentation are great examples of needs that should be honored. Pascale thinks a good GC will make the owner understand that money is the oil of the engine, and with no payment, the engine stops.
Other tips for subcontractors who want to find the right kind of GCs:
- Find other subs who are willing to transparently share with you the good GCs they have found. (This doesn’t really happen in the lump sum world.)
- Take a trip to the GC’s place of business so you can observe the mood, culture and organization of their space. This can tell you a lot about how they operate.
- Assure your GC that you are an extension of their company, where they can turn their back and know you’re doing everything you need to do. They want to know that you stand by your word, represent the firm effectively, will take care of the client, and that you embody those behaviors in your company’s core values/code of conduct. These won’t happen overnight, however, if you pour in this type of attention to detail, you are sure to differentiate yourself from the pack. Operational excellence and client care are some of the lowest hanging fruit you can readily offer to a GC, and you should.
- Don’t go out of your wheelhouse and accept work you haven’t mastered. If you don’t have the right technicians for it, don’t do it. Part of finding the right GC is finding the GCs with the right work for you. Bigger or different opportunities will come with the right circumstances, with the right GC, based on merit, and backed by your increased results, courage and confidence.
- If you are not able to deliver in the anticipated or expected timeline, be honest, and bow out. You will gain more respect from your GCs that way without losing any further opportunities. The last thing GCs want is for you to say yes, but then fail to deliver.
- When you win a project, don’t just celebrate, interrogate. Find out why they chose you, and where your numbers stood in relation to other subs. The right GCs will be transparent with you.
And once you find the right kind of GCs, never give them a reason to look elsewhere. Do good work, stand by it and be accountable for your mistakes.
Although Pascale is aware of the ways in which many GCs shortchange subs, he also recognizes that good GCs are out there, and that it’s hard to start a relationship when people assume you’re the industry bad guy. “We’re all in this together and trying to identify the good ones in the crowd.” He says. But the goal is to find like-minded subs, GCs and owners, and slowly but surely build their own ecosystems where trust, collaboration and accountability are front and center.
As far as owners are concerned, Pascale will refuse to work with someone who doesn’t want a “seat at the table” – who doesn’t want to collaborate with the GC and work together as a cohesive team. It’s not about barking orders and paying bills, it’s about their willingness to be a participant. GCs and subs aren’t mind readers, and they should prioritize owners who clearly communicate their worries, hopes and reservations.
Remember that not everyone is meant to work with each other. If you understand that, and are appropriately selective, you’ll have less problems on site and less litigation.
Can the Industry Really Change?
Is it a real possibility? Pascale thinks so, identifying himself as a diehard optimist. “It doesn’t take 51% to change the industry, if we can get just 10% of the industry on board with a movement, we can create a separate ecosystem,” Pascale says. He thinks the change has to be systematic, not grandiose or over-marketed. If we slow things down, build stronger relationships, surround ourselves with like minded stakeholders, establish clear, concise communication, and proactively plan the project, over time we could grow the movement into the transformational change the construction industry desperately needs. He believes the people inspired by the vision will promote it organically. If everyone in the industry surrounded themselves with the right people, focused on quality, and showed empathy, Pascale thinks the possibilities would be “limitless.”