Building a Win-Win Relationship – Part 2
Minneapolis, MN – 01/16/2014
What does working together mean to subcontractors (Subs) and general contractors (GCs)? What do they need from each other so that both benefit from the relationship? We interviewed numerous individuals on both sides of the Sub/GC relationship to gain insight into the elements that contribute to successful construction projects. The first article focused on what Subs want from the GCs they work with. In Part II, we address what Knutson, as a GC, looks for from its working relationships with Subs.
Perspective: Owner Needs Come First
Subcontractors often ask Knutson what is required to get on our list of preferred contractors. While there is no hard copy of such a list, we recognize that our clients consider our Subs as an extension of Knutson Construction Services. Satisfying owners is critical, and means that we need to bring in Subs we can trust to do the job needed, provide information that we can count on and contribute to the team.
To be a successful GC, Knutson must build the right team of experts on any given project. “We are literally a coordinator and assembler of Subs,” explains Knutson chief estimator Dan Ryan. When Knutson takes on a job as general contractor, we assume responsibility for completing a job on time, on budget and within the owner’s parameters. But successful projects require many parties to work together. Simply stated, Knutson counts on Subs to help us achieve our objectives, and we appreciate working with Subs that understand this perspective.
Reliability: The Bottom Line
Because the GC/Sub relationship is so crucial to our success, we must feel confident that we can rely on the Subs we choose. Since reliability is a bottom line issue for us, we often turn to Subs with whom we have already built a good working relationship. “Everyone is working to please the owners of a building project, and most owners can sense when there are good relationships with Subs,” explains Knutson’s superintendent Ron Kron. “These relationships lead to better outcomes for all parties and opportunities for future projects.”
But reliability in a Sub means more than showing up for work as scheduled. Ryan says: “Knutson needs to be able to trust their pricing, especially on change orders. We also need them to give us accurate assessments of a particular situation, rather than telling us what they think we’ll want to hear.” Adds Todd Schilling, Knutson VP of Operations: “We may not like the answer, but if the response is truthful, we want it and need it.”
Reliability becomes especially important when delays creep into a construction schedule. When problems confront a project, Ryan says, Knutson needs solution-oriented subcontractors who will help to evaluate the situation, think through the problems causing a delay and to consider: “How should we fix it?”
Cooperation: Critical to Any Job
GCs and Subs rely on each other from the day they bid on a job together. Success requires that both parties deliver on their promises. “When we take on a job, we have to work closely together with our Subs until it’s completed, says Knutson superintendent Mitch Elliott. “It’s important that we not try to beat each other up in the process.” Adds project manager Roger Hunwardsen: “We can’t afford to make our jobs more difficult.”
To Knutson, cooperation also means hiring Subs that will contribute ideas for improvement, even when the ideas don’t specifically affect their area of the project. “There are many efficiencies in cooperation,” explains Elliot. But Subs must believe that Knutson is open to those ideas, that we will consider them, and that we won’t undermine them by taking credit. “Confidence in that relationship benefits all involved parties,” adds Ryan.
Knutson seeks subcontractors who can become involved early enough in the process for the entire team to benefit from their expertise. “We like to believe in our Subs enough to get them involved early in the process,” says Schilling. “We can count on them when a job is on the line, and even when it isn’t.”
Partnership: The Best GC/Sub Relationship
Beyond past experience with a Sub, Knutson looks for relationships that can evolve into virtual partnerships. In the ideal partnership, Subs and GCs avoid doing anything that will hurt the other party and look out for each other’s welfare. According to Kron: “When there is a difficult task to accomplish, we try to work out a plan among everyone involved so that somebody is not getting stepped on. Sometimes there’s not a clear path to follow. In these situations, we expect everyone—ourselves included, to bear a little bit of the pain.”
Partnership, Schilling stressed, is the responsibility of both parties. “Our Subs need Knutson to provide them with accurate scheduling information, to keep in communication about changes and delays, and to compensate them fairly and in a timely manner.” In return, Knutson expects Subs to honor their commitments, take initiative on their jobs, provide realistic input about the scope of the project, and be solution-oriented along the way.
Knutson understands that both sides must contribute to a healthy relationship based on trust. “It requires a lot of give and take, emphasizes Elliott.” Everyone benefits from this partner-oriented connection, adds Schilling. “We have some Subs that we prefer to work with, and hopefully many of them have GCs that they prefer to work with as well.”