AGC 2020 Convention presents learning opportunities for contractors
The annual AGC Convention is right around the corner. From March 9-12, contractors will be in Las Vegas to learn from industry experts and prepare for business challenges.
For many horizontal and vertical contractors, the primary challenge is how to keep up with demand. However, busy contractors should not let a strong economy lull them into complacency, says Danielle Feroleto, owner and founder of marketing and business development firm Small Giants. Feroleto, like many experts, believes the economy will eventually turn, and when that happens, contractors will need a business development plan. During the convention, Feroleto and James Murphy from Willmeng Construction will present a session on how firms can outpace their competition through a targeted plan that is measurable and supports client retention activities.
鈥淚 think many general contractors don鈥檛 have a true framework of a business development plan,鈥� Feroleto says. 鈥淎 lot of business development is just in their head. Most of their business development efforts are a little bit reactionary and are not tethered to an overall strategic plan.鈥�
During Feroleto and Murphy鈥檚 session, they will go over an essential part of a strategic plan that Feroleto calls the 鈥渮ipper model鈥� for client retention. According to Feroleto, 鈥渮ippering鈥� the relationship between a contractor and its client can align both parties鈥� business priorities.
It鈥檚 also important, she says, for a business development plan to address some key questions, such as what makes a company stand out in a particular market segment and what a company can do to make itself stronger in that sector. To the untrained eye, that could look more like than business development. Feroleto says that isn鈥檛 a coincidence, as many industries tend to conflate the two functions.
鈥淚t鈥檚 a very codependent relationship, but it really requires two different ways of thinking,鈥� Feroleto says. 鈥淏usiness development is the relationship side. That鈥檚 really the extroverted side of your marketing. If you don鈥檛 have good marketing and good brand awareness and clarity of who you are as a firm, then the BD people don鈥檛 have anything to take to market. The very best company has a strategic plan that has a one-year increment that is a marketing plan and a one-year increment that鈥檚 a BD plan.鈥�
Risk management
A major part of any business strategy has to account for risk. In today鈥檚 business climate, many believe the most valuable risk-management asset is big data. Contractors have a wealth of emerging technologies, such as wearables, drones, the internet of things and artificial intelligence, that can collect that actionable data for analysis.
Last year, 糖心Vlog Data & Analytics and Triax Technologies produced a report based on two studies 鈥� one focused on contractors and the other on insurers 鈥� that examine use cases and the implications of emerging technologies for managing construction risks. This year鈥檚 convention will feature a roundtable discussion based on the findings in the report. The session will be led by Tom Francavilla, risk manager at Turner Construction; Kevin Clary, vice president of risk management at Amerisure; and Robert Costantini, president and CEO at Triax Technologies.
As Costantini explained in a recent with SmartBrief, insurance companies are seeing 鈥渁 strong ROI and profitability link between safety and risk management technologies.鈥� Clary agrees, noting Amerisure has gone 鈥渁ll-in on construction鈥� and is 鈥減utting more money in the technology.鈥� He notes, however, that much of the technology is still in the discovery stage and that most contractors鈥� forays into tech-driven risk management are nascent. One of the key findings from the report was that most contractors do not have a specific budget for innovation and often opt to pay for new technology by absorbing costs or by transferring costs to other entities.
Furthermore, the study notes that insurance carriers need more data-driven evidence of the benefits of using new-age construction technologies before they鈥檇 consider switching premiums based on use. However, carriers and brokers are actively encouraging customers to consider technologies to help them address their more challenging risks.
What technology makes sense for me?
With all the new technologies available to contractors, many in the industry find themselves 鈥渓ooking for a problem鈥� or an excuse to try something new, Clary says.
That doesn鈥檛 mean, though, that contractors shouldn鈥檛 be proactive when seeking new technologies to improve operations, according to Kristopher Lengieza, director of business development at Procore Technologies.
His first piece of advice? Make purposeful investments in technology by narrowcasting.
鈥淚f you try and roll out four or five of these technologies about the same projects and the same time, even if the project is successful, can you really attribute the success to one or two of the technologies?鈥� Lengieza asks. 鈥淎nd did they really work?鈥�
Another piece of advice Lengieza offers is to avoid the trap of measuring return-on-investment in terms of bottom-line dollars. Construction technologies fall under a wide range of value streams, some of which don鈥檛 result in increased profit. Some solutions are valuable because they can eliminate the risk of overriding the schedule on a project or help a builder build with confidence.
In Lengieza鈥檚 opinion, the best technologies make small changes for a lot of people. While a program like DocuSign is not as sexy or new as a robot or drone, it a useful tool for almost anyone in any industry because of the transparency it offers.