Speaker 1 (00:00):
So I know for me, those difficult conversations, they can be hard to have, but I also have realized through the years that they’re very important to have, and they may just keep your business from failing. On today’s show, we’re gonna talk about how and why to have those difficult conversations so your business doesn’t suffer. Shout out to all the4 General Contractors Baton Rouge.
Speaker 2 (00:27):
Hey, welcome back to the K-Cup episode 26. Uh, tough act to follow. Last week we had, uh, in episode 25, we had our first interview with, uh, Philip Kern from Current Architects. That was pretty awesome. Yeah, it was a good shot. Yeah. So this week we’re talking about a topic that is, uh, really critical. Uh, it’s something that you need to learn early on in business. I know that, uh, you’ve had your experience learning this uncomfortable truth that we’re gonna talk about as the title says. But this uncomfortable truth that we’re talking about for this episode is having difficult client conversations and the fact that they really are your business lifeline. If you’re not having these conversations, your business is gonna suffer. And, uh, so anyways, we’re gonna dig into that a little bit. Uh, not only talk about, uh, the why you need to have ’em, but we’re gonna talk about the how to and share some of our, uh, you might call it our difficult conversation framework, you know, that, that, uh, we try to put in place for, um, you know, addressing our own, you know, projects with, you know, our clients.
Speaker 2 (01:34):
So anyways, uh, let’s jump in here. We’re gonna talk about this first main point, John. And, uh, we call that the hidden cost of avoidance. You know, avoiding these conversations. And really, there’s two areas that, uh, just avoiding, you know, this situation altogether, uh, is gonna affect one, it creates what, what we call the compound effect. Whereas, you know, say, say there’s some scope creep happening on the job, and we kind of know that we should be addressed, but, you know, we’re maybe working with a client for the first time, trying to have a, you know, set a good impression for them or whatever. Just trying to, you know, really, uh, knock it outta the park for ’em and make ’em happy. So, you know, we, we don’t really mention anything at first. You know, we think, well, we’ll address it later, but then another, you know, bit of scope creep perhaps. I’m sure General Contractors Baton Rouge have ever had to deal with this situation.
Speaker 2 (02:24):
And then another bit of scope creep perhaps. And next thing you know, you know, now we’re maybe looking at a significant amount of money and time and labor, and maybe materials too, where now we need to have a conversation, but, but we’ve kind of avoided having it when we should have, and now it’s very uncomfortable to think about having this conversation. So that’s, that’s one area where, uh, you know, you could get into a real pickle is in the area of scope creep and not addressing it right away. And then the other, uh, part of that, you know, that hidden cost of avoidance is, you know, the issue of respect. And I know that we were discussing this subject yesterday, just sitting around the office talking about it, kind of, you know, comparing notes for this episode and everything. And you had mentioned it’s not just a loss of respect that the client might develop for the contractor, because they seem to be kind of, you know, easy to push around and, and, you know, you feel like you can take advantage of ’em.
Speaker 2 (03:23):
But there, there also may be a loss of respect for the client, the fact that they’re, you know, feeling obliged to do this to the contractor and putting the contractor in this kind of uncomfortable, uh, situation. I wanted to use that word untenable. ’cause I’ve heard people smart suffered, smart people on TV shows use that, you know? And I was like, man, I don’t know what it means, but I’m gonna stay there someday if I ever get a chance. But anyways, so they put the contractor in this untenable situation, <laugh>. Anyways, uh, so those are two areas. We’re just avoiding this, this situation altogether can create some problems. So share with us, if you would, some of your experience about these two points. And, you know, I know over 17 years you’ve had many difficult conversations and a lot of, there’s a lot of nuance to then based on, you know, the project and the client. You know, I’m sure no two difficult conversations are exactly alike, even though they may be addressing similar things like a needed change order for scope creep and stuff like that. It’s still probably different based on who it is and what it is you’re talking about. So maybe you can share a little bit of that with us.
Speaker 1 (04:32):
Yeah, I mean, I, I like today’s show. I like the, uh, the thought of the difficult conversations, even though they are ha uh, you know, hard to have and, and nobody likes to have ’em. Yeah. I think today, you know, we’re mainly gonna be talking about, uh, you know, client difficult conversations and that kind of thing. Yeah. Uh, but just when I think about difficult conversations such a big subject. I mean, there’s a lot we could talk about here on, on multiple shows, but anyway, sure. Uh, to get to your point, you know, I remember early on, uh, as a general, as a general contractor, young general contractor, uh, when these type of situations would come up, I would have an honor that wants to do something a little bit additional. Or there might, there might be something that’s a little bit of a gray area that, that I didn’t have in my scope.
Speaker 1 (05:15):
Uh, I know that I always wanted to be the guy that would just say, you know what? I’m gonna get it done. I’m gonna take care of it. Uh, and didn’t wanna have the conversation that, man, this, you know, this is not in our scope, or you’re adding scope and this is gonna cost more money. Yeah. But through the years as I leaned into that more and more, I just started to realize that, that it was really taking a hit that I shouldn’t be taking, you know? Yeah. Really eating costs that I shouldn’t be eating. And, you know, once I started to realize that, and once I started to, uh, have these conversations with the owner, yeah. You know, sometimes it was smooth, sometimes it wasn’t. Uh, but what I realized is it typically worked out better for both parties. I usually ended up in a better position.
Speaker 1 (05:59):
And, and the owner, you know, the owner also, uh, you know, ended up, it wasn’t a situation where the owner was mad all the time, ’cause all of a sudden we’re hitting him, you know, with all this stuff. Yeah. So what I realized is just starting to have those conversations really worked for both sides. I stopped, stopped having to, uh, you know, eat a bunch of costs that wasn’t necessarily mine. Yeah. Uh, and you know, when I had that conversation early, obviously the owner was more appreciative. Uh, so it just, as a young contractor, I learned slowly but surely that the difficult conversation works out positivity. If, if you had it, you know? Absolutely. And then as far as, you know, the reputation goes, you know, I have a situation or or an instance that I can think of where, you know, there was a, there was a client and, and they, and we were doing, they, we were adding stuff to the job the whole time this thing was going. Great point I hope all the General Contractors Baton Rouge are tuning in today!
Speaker 1 (06:55):
Yeah. And we were continually having the conversation that, you know, this is additional cost, this is additional cost. Yeah. Uh, you know, and and outside of that conversation, there was a better way to handle it. We’re gonna talk about that in today’s show, but at the end of the day, the client wasn’t really necessarily surprised by the cost, uh, at the end of the job. Yeah. But, but what we end up finding is, is they just didn’t have that allowed in their budget. So while they were fully intended on paying us, uh, at the end of the job, the funds weren’t available. So at that point we were asked to, you know, kind of work with ’em and do whatever. And for extended amount of time there, uh, we weren’t able to get paid for a number of months. And, you know, had we had a conversation early on Yeah.
Speaker 1 (07:43):
About, you know, when we were talking about the additional cost, and, you know, maybe the client says, look, you know, we’re willing to do some of this, however, we don’t have that allowed in our budget. We have to work through it. Yeah. It may not have been a surprise for us, but at the end of the project when we couldn’t get paid, uh, it was a little bit of a blow up, kinda, I mean, you know, we didn’t understand, the client almost didn’t understand our frustration. Yeah. Uh, but it ended up being a problem. And it ended up, you know, there ended up, I don’t wanna say you lost respect for the client, or the client res lost respect for us, but at the end of the day, neither one of ’em probably wanna work together again. Yeah. So, in fact, we probably did lose some respect for each other, you know? Great lesson for General Contractors Baton Rouge to get under their belt.
Speaker 1 (08:22):
Yeah. And, and the sad part is, is, I mean, I think we’re a great company and, and you know, that company’s probably a pretty decent company too. Uh, so it’s just unfortunate that that’s kind of the way it unfolded and maybe are likely, you know, some good hard conversation in the beginning. Like for us, yeah. Like, you know what, we really want to do this work for you, but there’s, there’s some red flags here. Like, yes, you know, there’s some additional costs. Let’s get that signed off on. Let’s understand that you can afford that. Yes. Or, you know, since there wasn’t any red flags on our part, it would’ve been nice for the client to say, look, we wanna do this extra work, however, we are gonna need a little more time to figure out, you know, the financial side of it. Is that something you can work with us on? We probably would’ve said, yeah, we probably would’ve said, let’s figure it out. Yeah. Uh, and at the end of the day, we did figure it out. I mean, the client, the client did pay us, and, you know, we made it through, but it just made for a rough patch of waters and, and probably kind of doled that relationship. Definitely dulled that relationship,
Speaker 2 (09:22):
You know? For sure. Yeah. So that’s what we’re gonna talk about next in our next point as far as like what you’re saying, maybe had there have been some things in place to handle it more on the front end when it was happening in real time, instead of letting things go too far down Yeah. The path before you addressed it, uh, maybe it would’ve, you know, it, it still would’ve happened probably, but the expectation would’ve changed. It would’ve been more agreeable. And, uh, so yeah, we’re gonna talk about that, having a framework for setting up the opportunity in advance to have difficult conversations. So, like you had mentioned red flags, and when red flags do show, show up, the, those are really just indicators that it’s time to communicate, it’s what they are. It is really not a sign for con it’s time for confrontation. You know what I mean? Yeah. Which I know you know that ’cause you’re not about con confrontation. You’re about, you know, figuring out a solution. But that’s really what those red flags are. They’re just indicators that this is solution making time, you know, we need to have a conversation. So, but, uh, anyways, do you wanna move into part two and talk about that framework a little bit? Are you ready to move on? Yeah.
Speaker 1 (10:30):
So
Speaker 3 (10:32):
Do you have a construction project but you just don’t know where to begin? Let us show you the steps that are necessary to make your project a reality. I’m John Kelly with Kelly Construction Group, and I wanted to jump in here for just a second and let you guys know that here at Kelly Construction, we’re more than just a builder. We’re your one-stop solution. We want to help you with planning, design, permitting, and construction. If this sounds like a solution, you need, reach out to us today. We’ve left the links in the show notes, set up a call. Now let’s get back to the day’s show. And hey, I hope all you General Contractors Baton Rouge are still listening.
Speaker 2 (11:02):
Anyways, I think you made a great, uh, a great case for that first point, though, about how, you know, that’s a real world example of how you found yourself in that situation. Yeah. And, uh, and you had to find a way to deal with it. And I think you did as good a job as you could do under the circumstances where you kept it amicable. ’cause a lot of guys would’ve been <laugh>, maybe, maybe over there beating down the door, demanding their money, you know, even though that wouldn’t have really served you well. But, uh, you know, it really forced you to have to, uh, kind of scramble a little bit. ’cause it was a significant amount of cash. And the people that you had doing the work you paid, you already already paid some people and really didn’t have any idea that the reimbursement for that wasn’t coming right away. So. Right. Yeah. That’s a tough one.
Speaker 1 (11:50):
So,
Speaker 2 (11:50):
Good. All right. So moving into 0.2, uh, which is, you know, we talked about why you need to have those conversations. Now. We’re gonna talk about how you can set up a situation where you can have those in a productive way. And so we’re gonna call this our, our proactive communication framework for having difficult conversations and like dealing with private clients, for example. We, we can actually build into our onboarding package our welcome package for private clients, what we would call a difficult conversation clause. And that clause it, if you think about the idea just going ahead and having that conversation in one of your initial meetings with a client, how, how that just paves the way for when that day comes, that you need to have, you know, a realignment meeting or, or a a a project pulse check meeting. Uh, how much easier that’s gonna be because you’ve already had this conversation.
Speaker 2 (12:46):
I know, again, talk referencing our conversation yesterday, you talked about a, another project where, uh, an aspect of getting the project rolled out took a long time. It took months mm-hmm <affirmative>. And you had had that conversation on the front end, which was a difficult conversation to have. ’cause no one likes to hear, Hey, you’re, this is great. I’m great, you’re excited about your project and everything. But by the way, oh yeah. You might be impressive too. In the beginning, you don’t wanna start off with a Yeah. You know, Debbie downer right away. But, uh, but you had prepared the soil, so to speak, for the day that that conversation came. And, and sure enough, the permitting side of this project took up an extensive amount of time to go through the system, to the point where even though the client, you know, trusted you, and you guys had a good rapport, they still got to the point where like, man, you know, yeah, I wanna start this project.
Speaker 2 (13:38):
And, and, you know, and they were a little anxious about it, and you had to remind ’em, you know, I, I did prepare you for this at, on, on the front end that, you know, it could take literally months to get the permit for this project. And sure enough, that’s what it turned out to be. So that’s a perfect example of how having, you know, this, this diff difficult conversation clause, you know, you know, um, shared with the client on the front end so that when the day comes, you can have these kind of conversations without it turning into a confrontation. So talking about this, um, you know, building up this building in this, this, you know, proactive framework to communicate difficult things to clients in that, uh, that package, that welcome or onboarding package that we like to have with private clients, there’s things that we would include, such as change order policy, full disclosure on what that is, so that the expectation is set before money ever changes hands.
Speaker 2 (14:37):
They know that, look, uh, you know, when, when we submit a change order, this is what our expectation is for payment. And if it doesn’t fall in line with that, which you can fully understand by reading what that expectation is, then we’re, we need to have a conversation about that. And it is just to make sure that we’re on the same page. Uh, the second point there on, in that package, that onboarding package for difficult conversations, payment communication standards. So you’re setting a standard or a communication or an expectation rather, for how you expect communication to take place when you’re going through the payout process. For example, we, we want to know within 48 hours of submitting, you know, an invoice or a payout, when, when payment is gonna be received and how it’s gonna be received. And just, you know, even if we know what, that there’s a process in place and, and generally speaking, how long it takes, just that little bit of communication to confirm, yes, we got it. Remember General Contractors Baton Rouge, you’re only as good as your processes.
Speaker 2 (15:37):
Yes, it’s going through the process is, you know, it’s an expectation. Keeps everybody happy and not wondering. And then that last point there, the project health check-ins. You know, we, we like to set the standard that every two weeks we have a 15 minute project pulse call. So this call is not about, um, you know, anything general necessarily. It’s about, it’s for the specific reason of checking in on the health of the project. You’re gonna talk about what’s working, what isn’t, and anything that may need to be adjusted to make sure that you’re on the same page and the project is staying aligned and optimized. So those are just some, you know, very easy points. But by having those points to the client on the front end, when the day comes, and it will come, every project goes through these, seems like it goes through these phases at some point, you know, to varying degrees. Some of ’em really intense, some of ’em just mild, but you’ll already laid the foundation here to be able to have these conversations without confrontation. So, uh, give us some insight, John, on your, uh, approach to these points right here on, before we go into that second phase of this framework.
Speaker 1 (16:52):
Yeah. And I think proactive communication is super important. Uh, it sets the expectation, uh, it gets everybody on the same page. I mean, you’ve done a good job here kind of highlighting the, you know, the primary areas that we would see these difficult conversations arise. Yeah. You know, you talked a little bit about permitting. Uh, that can be, that can be a real touchy, uh, timeframe or whatever in the beginning of a project. Yes. Uh, any time there’s time delays, uh, you didn’t mention time delays, but anytime there’s time delays, that’s an area, uh, that, that can become contentious. Mm-hmm <affirmative>. Uh, you know, change orders, additional cost, that’s always an area that’s, you know, it’s tough, a difficult, uh, task to, to, you know, work through. Yeah. And then, you know, payment is, is another huge one. So all those areas are, are big, uh, and, and are areas that you need to be ready to have a difficult conversation.
Speaker 1 (17:47):
So if you set the expectation in the beginning with some proactive communication, uh, that goes a long way. Yeah. Uh, you know, you alluded to a project that we, uh, that we worked on, you know, sometime back and, you know, through design build and through some permitting, uh, processes, we, we realized that, you know, permitting can be a bear. It can take some time to get a permit, specifically in, in certain cities or, or parishes. Yeah. Uh, so we had a project that, that I knew that it was gonna be a really tough situation to get a permit. Yeah. And, you know, in the beginning, I set that expectation, and like I said earlier, I wanna go in there and, and be the savior, be the guy that’s gonna come out and hit a home run and do everything Right. Because I want you to come back to us.
Speaker 1 (18:32):
Yeah. Uh, but, and, and not, not kill the atmosphere, and not kill the excitement surrounding a new project. You know what I mean? Sure. But you are never ready to start next week always. Yeah. You know? Yeah, for sure. So I, uh, you know, in that, in that, you know, onboarding process, I was able to tell ’em, look, you know, we’re excited, we’re getting close, but when we submit this for prayer meeting, it, it may be some time before we actually get a permit. Yeah. And, and lo and behold, it ended up taking a lot of, a lot of work to get this permit, A lot of back and forth, and a really extensive amount of time. More than it, it should probably take. Yeah. Uh, but, you know, the owner, I would say that the owner definitely got restless. Likewise, did we also, even knowing the process.
Speaker 1 (19:19):
Sure. But through that early conversation, you know, it set the bar and, and they realized early on that, that we could be up against this, you know? Yeah. Uh, be up against this. But it, while I would say they were, they were a little restless, it never got, it never got confrontational. It never got to a point where it was even really uncomfortable because I was able to lean into that conversation. Yeah. You know, late on Yeah. And, and everybody was good. Everybody was on the same page. And, you know, eventually we got a permit and we moved on and Yeah. You know, the, the, the job keeps killing. Yeah. So that’s just a great example of, of, you know, some, some work that we did in the beginning, proactive, some proactive communication that, that really served us well. It kept the, the client at very level, uh, and it worked out. Great point, hope you caught that General Contractors Baton Rouge.
Speaker 1 (20:11):
And, and obviously we could talk, you know, more and more about this, and I think we’re gonna talk a little bit about some ways you could do it. But, uh, but that’s just a great example of, of, uh, of, you know, one of the areas that we’ve done it and, and one of the areas that we use it. And, you know, I think it’s important too to just mention this, you know, when I see some of these things that you have on here, like change order, policy, payment, communication standards, uh, even some of the ones that we, that I discussed in the beginning, all usually in a good contract, all that’s covered. Yeah. However, it’s just a bunch of legal jargon. I think that that’s right. I think that it’s important to have, sorry, uh, an everyday conversation Absolutely. Surrounding some of those things prior to, you know, to moving a project ahead.
Speaker 1 (20:55):
Yeah. So I guess what I’m saying is, is don’t just say, well, it’s in the contract. That’s how we do it. You should know it. I mean, I think that once you start pointing out a contract, and that, and it can really be, you know, if you wanna say, well, you’re not paying me on time, let’s look at the contract. Yeah. And, and I’ll, you keep pushing towards the contract, that can become a little bit, uh, contentious. Yes. Yeah. And, and I think that, you know, if you have these conversations early in the project, people remember, they, they know, they don’t forget. That’s right. Uh, and, and it’s a lot easier to say, you know, we, we submit our payouts on the 25th, you know, we, we want it approved within, you know, seven days or whatever. We expect payment within 30 days or 25 days or whatever. Yeah. Just have that easy conversation, make it plain and simple at the end of it. Wrap it up with, you know, if there is gonna be a problem with payment that month, let us know plenty in advance. We got a lot of people that we need to pay and different things. Yeah. Just have that good proactive communication in the beginning. Yes. And, and it’s going to serve you well.
Speaker 2 (21:55):
Absolutely. Uh, communication, uh, seems to be a repeating theme in a lot of these, you know, episodes that we do, regardless of the subject, it seems like communication is always a centerpiece. So, but particularly is, uh, in this regard as far as, you know, when money’s, uh, changing hands or scope is creeping, communication is key.
Speaker 1 (22:17):
I think you like to say that scope creep,
Speaker 2 (22:20):
It’s a creepy scope. Well, it’s that time of year, you know, when things get creepy, including our scope <laugh>. So, uh, and, and if you think about it, if you have these conversations up front, I, I mean, scope creep really is the result of a lot of, a lot of contractors not having these conversations on the front end. And if they are having ’em, they’re not having ’em effectively, they’re not being clear, like you said, they’re not, it’s just not a quick, uh, you know, contract review with the client real quick where you’re flipping pages and sign here, you’re actually having a conversation like, like you said, and yeah. A real world conversation with, you know, uh, easily understood verbiage that everybody can, uh, relate to and understand and agree to. So, well, let’s talk about this second half of, of, uh, our framework, our proactive communication framework.
Speaker 2 (23:10):
And, uh, I like to call this one our early warning system where we can, you know, again, being proactive means being aware and, and looking ahead and trying not to get caught behind the curve with problems. And so identifying trigger points is key to doing that, key to being able to stay on top of our game. And really, it is serving the client better when we’re on top of our game. And we’re, uh, you know, addressing things before they can become a serious issue that is really a great service to the client. They may not even realize what a great service it is necessarily at the time. But really that’s, that’s proactive management that’s keeping things from becoming issues where they become hot button issues and contentious things. And so I, I really like this early warning system that we’ve devised. Uh, there, it covers three key areas. And feel free to copy this framework General Contractors Baton Rouge.
Speaker 2 (24:06):
Again, one is, uh, financial red flags. You know, you can see, obviously you can identify, uh, warning triggers in the way, you know, payment, you know, pay apps and stuff are handled by a client, or, you know, a project owner, uh, you know, pay starts getting delayed. Uh, you know, there’s a lot of additions to the scope and they’re not being addressed in a change order. Or at least, you know, they’re not wanting to acknowledge that there is a need for a change order. And, and that’s kind of made clear through, you know, how they’re communicating or how they’re conducting business. And then just payment delays that go way beyond the terms which you spoke about. You know, that project that you had where, you know, the payment delays went way beyond the terms in months and months and months. But so it does happen.
Speaker 2 (25:01):
You don’t want to be in business and think that these things, well, that’s never gonna happen to me. ’cause you know, I’m gonna make it real clear what my terms are. Well, you make it clear all you want. Things have a way of happen, especially when these entities might have their own PMs, you know, their own superintendents on their side that are management projects for them. And so you have these, you know, basically what amounts to a third party between you and the actual project owner. Things get lost in translation sometimes. So, um, so anyways, the financial red flags are there, you know, uh, you, you can see patterns forming that are, you know, if, if your gut’s telling you, Hey, that’s, that’s a red flag, then the time to address it is then right away with, uh, like one of, you know, one of those, uh, project check-in calls, you know, that we have every two weeks, the 15 minute call, where we do a make sure that the project’s aligned and optimized that we’re addressing, uh, potential issues. That next point, communication pattern alerts
Speaker 1 (25:59):
Real, real quick, you know, on the financial red flags. Sure. Mm-hmm <affirmative>. You know, that’s a, that’s a, that’s a great example too of a, uh, you know, a difficult conversation to have. All of a sudden you’re not paid on time. Uh, you wanna keep the client as one of your clients. Yeah. You know, uh, you don’t wanna seem desperate Yeah. As a contractor. Yeah. But the reality is you need to be paid on time so that you can pay everybody else on time. That’s right. And keep the project on schedule. That’s right. Because if the project gets off schedule, and now all of a sudden you’re saying, well, yeah, it’s off schedule, but it’s off schedule because you didn’t pay me and I didn’t pay them, and they didn’t show up. Yeah. Now all of a sudden it is just big to do. Yes. And, and they’re, they’re, they’re likely not gonna buy
Speaker 2 (26:39):
That. They don’t really care about all your layers of responsibility.
Speaker 1 (26:42):
But if you have that conversation, you say, look, Mr. A, B, C, you know, we have thoroughly enjoyed working with you to this point. Yeah. Uh, and, and we expect this job to continue to go great. However, we need payment timely, and we need payment in, in, you know, in what we’ve agreed. Yes. And that’s gonna keep this project moving smooth and keep it going as it has to this point. That’s right. Uh, that’s a conversation that’s hard to have. Yes. But it’s also one that you have to have. Yes, for sure. And it’s going to continue to keep things on track. But even, you know, the other side of it is don’t keep things on track. The owner says, you know what? I’m in a, I’m in a difficult situation. My financing has fell through, or whatever. Yeah. Like, I gotta figure this out.
Speaker 1 (27:29):
That’s right. Well, at that point, you have the opportunity to say, well, look, why don’t we just pause everything? Yeah. We’re more than willing to keep churning on this project. Stop the bleeding, but let’s figure out the financing. Let’s figure out whatever before we all end up in a jam. Absolutely. So, and it may be that, that the guy says, you know what? I just, I haven’t stayed on top of my account and I haven’t stayed on top of my girl that’s paying the bills or whatever. Let me let her understand the importance of getting this thing on time and next month it’ll be on time. That’s right. So it’s a conversation that’s hard to have, because like I said, you don’t want to look like you’re desperate for money. Yeah. But you’re also not a bank. That’s right. You’re out there doing four or five, six projects. That’s right. And, uh, also you, you know, you want to keep that client happy. Yeah. But that tough conversation may just keep that client happy. Yeah. Because if you don’t have it and the project falls off off the wheels a little bit, you should have had it. You know what I mean?
Speaker 2 (28:24):
Yeah. They have to understand that the project completion was that they’re looking forward to, and that they looked forward to in the beginning of your conversation and your meetings and your onboarding. That was all predicated on the terms, right. That everybody agreed to. So if you’re not holding to the terms, guess what is gonna be effective by that? The project completion. So it’s in their best interest that they stick to the terms. And like you said, sometimes it’s as simple as they just need to have a, a, a good conversation with the people on their team who maybe are dropping the ball and just not getting things processed properly. Right. And we have run into that before. I know where it’s just paperwork’s getting thrown in a, you know, a a a bin on the desk and it is just not being gone through in a timely manner.
Speaker 1 (29:09):
Yeah. Multiple times. I mean, multiple times, multiple times this year we follow up on an invoice that was overlooked or sitting, stuck in an invoice and I mean Yeah. Stuck in, stuck in somebody’s basket or whatever. Yeah. And, you know, that’s a small difficult conversation, but even our girls in the office, they don’t like to follow up on an invoice. They don’t wanna follow up and say, Hey. Yeah. I mean, they’re pretty good at it now, <laugh>, but, uh, early on. Yeah.
Speaker 2 (29:35):
Just you don’t feel like you’re the police, you know?
Speaker 1 (29:37):
Right, right. So anyway, uh, I do think that’s a good practice though. You need to follow up on invoices,
Speaker 2 (29:43):
Like for sure. Often. Yeah. Absolutely. Anyway, okay. Accounts receivable, <laugh>, get busy girls. All right. So, uh, let’s talk about that second point then. Communication pattern alerts. We also can, you know, if we’re paying attention, we can identify some red flags with the way communications change. You know, clients might, their response time to questions may starts getting long. And, and then when they do respond, it really is, doesn’t seem like it’s relevant to the, to the issue that you’re trying to get an answer on. It just seems kind of vague. Uh, you know, they stop coming to the, you know, onsite meetings or, you know, begging off ’cause they, something’s come up or whatever. So there’s typical red flags where anybody who’s, you know, whatever kind of relationship it is you’re in, even a business relationship, you identify when someone is avoiding you, you can feel it almost. Right. You Yeah. They’re ghosting you as, as, as the kids like to say, John <laugh>,
Speaker 1 (30:42):
I am a kid, <laugh>.
Speaker 2 (30:44):
Um, anyways, you, you, you just, you can see those patterns. So that’s part of our, our early warning system that we like to use. So we got financial red flags, communication red flags, and then project health indicators. You know, um, a constant, uh, you know, client feedback just becomes like, it’s not specific. It’s more, again, kind of like what I talked about with the communication. It’s just kind of a vague, contradictory, almost, maybe seems a little, uh, confrontational. Like you, you could sense there’s a lack of happiness here. Or maybe they’re, you know, you know, finding an issue where maybe there’s not necessarily a, a a, a serious issue and you’re kind of left scratching your head wondering, you know, what’s the tone is changing here? You know what I mean? Yeah. Things like that. Timeline discussions become vague, you know, whether it’s timelines about getting paid <laugh> and, and, uh, and things like that or, or, you know, processing a change order so that the, you know, this additional work that, uh, they want it done could, you know, it needs to go through that process so that you know, that one, they really have approved it, they’ve really added it to their scope and they’re really going to pay for it.
Speaker 2 (32:02):
And sometimes I think the expectation is, is, well, as soon as we talk about it, I want you to get busy doing that and keep my job moving. They don’t understand that there’s a process for that, because we have to have things in place to make sure that everyone is taken care of. Yeah. And, uh, it’s, that’s just business and that’s how it has to go. So again, making that, uh, understood on the front end would I, I would think, would lead, um, you know, a client to be more proactive on their, their end process and change orders or identify and scope creep and saying, look, do we need to do a change order for this? What’s the process? You know, let’s, let’s get this going. ’cause I really want my project to keep moving. You know, that would be a nice response to have to this type of situation. So tell, tell us a little bit if you could share some of your, uh, experience about, you know, these red flags. I know that you’ve seen these things happen. I know I’ve seen ’em happen since I’ve, uh, worked for you. And so no doubt you have too. Tell us a little bit about these, you know, this early warning system and how you’re able to see these patterns and things.
Speaker 1 (33:11):
Yeah, I mean, it’s, it’s, you know, the idea behind the, the early warning system, and it is, it is really good because you identify these things and they’re your indicators to start to have those tough conversations. Uh, and communication is huge. Again, we’ve talked about it on, on a bunch of shows. Yeah. But communication specifically from an honor or an honor’s rep or anything like that, it, it can really affect the timeline of the project. I mean, you know, we we’re asking for feedback, we’re asking for, you know, different things. And any kind of delay in that communication, uh, can really delay the project. And, and if it’s, if it’s, to your point, if the communication pattern starts to change, it’s like, okay, what’s, what’s the issue? Like Yeah. Uh, you know, what’s changing that we need to know about? Because if they’re Johnny on the spot and then all of a sudden they’re not Yeah. Uh, are, they’re a little bit slow to respond, but now they’re really slow to respond. Yeah. Like, what’s, what’s causing this? And, and, and, uh,
Speaker 2 (34:12):
And not answering the questions
Speaker 1 (34:14):
To what a point is it about to affect the project. Exactly. And, and, you know, time is a huge one because anytime that the project starts to get off from a time standpoint, it can financially impact the contractor, but it also gives the owner some leverage because it doesn’t appear that you’re performing. Yes. But if, if communication is the reason you’re not, then that conversation needs to be had sooner than later. Yeah. And, and just that slow or different, uh, communication Yeah. Is, is a good, is a good warning signal for you to say, you know what, it’s time to have that talk.
Speaker 2 (34:51):
Absolutely. And, you know, that’s why like, you know, we call it our proactive communication framework. So it’s us being proactive to make sure that things don’t get away from us. Because like you said, in the end, the leverage is used a lot of times it not in favor of the contractor because, you know, time is really our, one of our biggest, um, I guess, uh, metrics on a project is that we’re judged by. And, uh, but yet it is, you know, dealing with other parties, they can be become very casual about that time. Like Yeah. You know, it just imagine every question you have or RFI you submit, uh, it is a week getting it back.
Speaker 1 (35:32):
Well, I can tell you that owners and, and, and even some architects, engineers don’t really understand how much they can impact the timeline of a project. I, you know, slow communication. Yeah.
Speaker 2 (35:44):
I’ve definitely seen that firsthand. So, uh, I love, I love this yellow light system that I have down here at the bottom of, uh, you know, our notes on this. And it’s just a, again, like a little, uh, uh, uh, threshold I guess that you would use to, uh, um, have this conversation. And there’s a little script attached to it, but, you know, it says that, you know, when any metric, uh, when you know any of these three metrics, we’re talking about financial red flags, commercial pattern alerts, project health indicators, when any of those, uh, you know, metrics hit, uh, your threshold, don’t wait. It says you schedule what you might call a project alignment session within 24 to 48 hours. So I like that verbiage. That’s good alignment. You know, you’re not looking to be confrontational, but you want to make sure you’re aligned with, with the, you know, all parties, the architect, the engineer, whoever it is, and the project owner. And then it gives us a little script there, which, which I like the script. It just, you know, just says that, you know, look, I’ve noticed that, you know, uh, I’ve made this specific observation, whatever that is. And I, I want to make sure that we’re still aligned on whatever that issue is. So can we spend 15 minutes getting on the same page, short and sweet, not confrontational, look to collaborate and, and find a solution so that we can keep the project optimized and moving forward.
Speaker 1 (37:13):
Yeah. It opens the door in a smooth way for, for a tough conversation to do it really what it does.
Speaker 2 (37:18):
Absolutely. So anyways, that’s, that’s really our framework. Uh, hopefully those listing have gotten some value out of that. How you, you know, there’s two aspects to it. The, the first three points and, and then the second three points about, uh, how to be proactive. Uh, you know, the first sheet, of course, the first uh, layer of that is, uh, setting expectations and having, uh, you know, a difficult conversation clause on the front end. And then the second page, uh, with these three, you know, points being our early warning system. So once the project’s underway, we’re using this to, to maintain, uh, you know, that that proactive communication framework by monitoring these metrics and making sure that, uh, if we’re seeing something that doesn’t smell right or look right, we, we take action.
Speaker 1 (38:13):
So, yeah. You know, the thing about thinking about this framework, I mean, one thing that we do that’s pretty good and, and it, it is kind of almost like, it’s very similar to the conversation we had in in the beginning where, you know, you have a contract and it has this stuff in it, but you really need to have this onboarding easy conversation day-to-day wording. Yeah. Uh, you know, we do a, a daily report, or I’m sorry, we do a performance overview weekly here. Yeah. And, and what that project does is every week it tells the client, you know, what work was done, what, what guys were on site, uh, financially, what, you know, where we stand on payment. It also tells us any outstanding change orders, uh, you know, if there’s any communication needed from the owner. It shows when we made the request and it shows how long it’s been since we got a response. That’s a great, that’s a great way to, to monitor and, and to think about where your project’s at. So yeah, we’re notifying this owner weekly. Yeah. But the reality is they’re probably not in there reading it every week.
Speaker 2 (39:24):
I’m glad you brought that up. ’cause that’s what I was gonna highlight.
Speaker 1 (39:26):
So I I, I, I mean, I do think that they look at ’em and I do think that they, yeah. They, uh, you know, they pay attention to ’em. I don’t, I don’t think they diving down. It depends on the owner. Yeah. But the point is, is, you know, you talked about the yellow light system, you know, that that overview is, is it’s important for us too. ’cause we understand it’s
Speaker 2 (39:49):
Really important for us. ’cause it, it lets us, make us makes us aware of these issues we’re talking about. Right?
Speaker 1 (39:54):
Yeah. So, so to me that would be almost our contract. Yeah. And then you would need to lean into that and say, look, you know, we’ve been sending this overview the last couple of weeks, you know, we’ve noticed on our side, uh, that it’s probably time for an alignment. Like it looks like we’re a little behind on payment. It looks like, you know, you know, we need some communication from you guys or whatever. Yeah. And that’s kind of your, your backbone. That that’s something that we have. That’s, that’s historical data. That’s that’s true. Yes. And, uh, and, and it would really support you, you know, when it’s time to have these type conversations. That’s right. So that, that’s something that we do here. That’s, that’s, that’s really, really good. Uh, I think that’s a good move.
Speaker 2 (40:34):
Yeah. It’s a great process and it, it, it adds layers. And again, that documentation, it not only serves us well, but it serves the client well too, because we’re, they’re not left wandering. Like even if, if they haven’t read it, like you said, and I was gonna bring that out if you did mention it. ’cause people just, I mean, even email open rates, they’re saying in business where it’s critical is are dropping, you know, like off a cliff. Like people are just not, they won’t read two sentences anymore, hardly. They, if they can’t see a video or hear audio Yeah. They’re not getting the message. Pretty soon we’re gonna start doing audio emails to, to get our messages or
Speaker 1 (41:14):
Kinda like that
Speaker 2 (41:15):
<laugh>. Yeah. It’s
Speaker 1 (41:16):
A little short video for your overview. Yeah. Look, Mr. Client, I want you to know that this project’s going pretty good. That’s right. Or a little behind on payment. You’re 28 days late on three RFIs. That’s
Speaker 2 (41:27):
Right. If you want to be, if you wanna be cutting the edge, there you go. That, that’s, that’s your next move. So, uh, but anyways, like you said, uh, that documentation, when they do finally, you know, you bring it to their attention through a real conversation that there’s an issue, then they even go back and reference that. And what that’s gonna do is say, okay, here’s where we’re at. I get this. You know, so then when they call, they’re having an informed conversation, they’re not getting on there all full of a motion and ready to have a confrontation. They were able to read the, the performance over review, whatever it’s called. Is that what it’s called? Yeah.
Speaker 1 (42:07):
Performance overview.
Speaker 2 (42:09):
Yes. And inform. We
Speaker 1 (42:11):
Have that right above our yellow light system in our own onboarding part.
Speaker 2 (42:14):
<laugh>, I knew I was missing something with all this data, all these metrics, but, uh, so anyways, the, the point is, is that they can use that as well when the time comes and you bring it to their attention that there needs to be a conversation so that when they do get on the phone with you, it’s not, they’re not, you know, coming at you blind with, with no understanding. They’re gonna have an understanding of what it is you’re talking about. Which, you know, like the old saying, I always reference, you know, my old <laugh>, old cowboy sayings, you know, frustration begins where knowledge ends. So you know, the minute that somebody doesn’t know anything and you put ’em in a, in a high pressure situation, guess what comes out? Frustration and anger. So that’s gonna allay that and allow you to have that conversation. So I agree with you.
Speaker 2 (42:59):
I think that performance over review is, is a great layer of protection and supplements this early warning system perfectly. And it really should be our trigger for us on, you know, on our side on the management side that, oops, you know, I just read my review that I, I’m sending out and I got some red flags here I need to address. So. Absolutely. Yeah. So anyways, um, I I guess that’s gonna wrap it up, uh, on these two points. Alright, great, John, so that’s gonna wrap it up for this episode for episode 26. Uh, you know, hopefully you’ve gotten some benefit out of, uh, listening to the why and the how you might be able to, uh, frame these difficult conversations. If you’re in business, you definitely need to be thinking about having these conversations, uh, more often than not, and then setting them up on the front end so that when the day comes, ’cause it will come that you need to have this difficult conversation. It is not gonna be something that’s, you know, gonna be, you know, just turns into a big blow up and, and not productive. Yeah. So, any closing thoughts, John, you wanna leave with, with, uh, anyone listening?
Speaker 1 (44:10):
I mean, I just think difficult now equals easy later. Yeah. Otherwise it’s just always difficult. That’s right. Because if you don’t have the conversation, it’s just a constant fight that’s for sure. If you take care of the difficult part now it’s, it’s easy in the, in the future. So difficult now, easy later.
Speaker 2 (44:26):
Yeah, I agree. Uh, it’s, it’s more just uncomfortable, you know? ’cause no one likes confrontation necessarily. It’s not our human nature to enjoy that, but, uh, like you said, it is, I’d rather be uncomfortable on the front end instead of being a, you know, some terrible confrontation down the road Yeah. With the client. Yeah. Because that’s not our goal when we set, when we set out to do a project, we set out to, you know, to knock it outta the park and have a great result. Right. And have it turn, you know, turn the deliverables over to the project owner, uh, in a, in a great manner. So, yeah. Anyways. Alright, well that’s gonna wrap it up. Thanks for, uh, joining us here again at the K-Cup episode 26. Um, please like, and please subscribe and if you know someone that could use this information that’s in business and they need to, uh, you know, have a difficult conversation that you’re aware of and they’re just not having it, maybe you could share this with them and, uh, they can get some value out of it as well. So, uh, come back and see us again. If you’re needing further, um, uh, tools, you can go to the website. Uh, the link will be in the show notes and, uh, you can find, uh, some tools there that you can use to, uh, uh, further your business along. So anyways, thanks for joining us here, episode 26 and we’ll catch you again next week.