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Sunday, 02 February 2014 14:28

ABC program brings contractors together to share best practices

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ABC program brings contractors together to share best practices MiBIZ FILE PHOTO: Elijah Brumback

West Michigan construction executives might relish the chance to take a three-day trip to Palm Springs, Fla. in the middle of February.

But the trip is more than a vacation for CD Barnes Construction Executive Vice President Todd Oosting, who’s meeting up with an “invaluable” industry peer group that helps members better their individual businesses.

Oosting is one executive in a seven-member peer group of similarly sized general contracting firms across the Midwest and East Coast that meets once every five months to talk best practices, financials and challenges both professional and personal. The group is sponsored by the National Associated Builders and Contractors.

“We share everything on all aspects of our businesses,” Oosting said. “These guys are my brothers, they’re my family. We have our disagreements at times, but at the end of the day, we’re still supporting each other.”

Being a part of the peer group is one of the best things he’s done for his company, Oosting said. His involvement has resulted in many benefits ranging from winning new business through joint ventures and the creation of project partnerships to receiving professional support and even simply airing frustrations from inside and outside the industry, he said.

Chief among the benefits for CD Barnes is the ability to easily collaborate on finding new work in Michigan and out of state, Oosting said.

“For a lot of firms our size, it’s hard on crews when they have to travel and are away from their families for long periods of time,” he said. “It’s also expensive and that just cuts the margins down even further. If we can collaborate with our partners or act as a conduit to operate in other geographic regions, that’s huge.”

One firm and a peer group member CD Barnes teamed with in the past is Rolling Meadows, Ill.-based Phoenix Builders Ltd. Both firms are currently joint bidding on a senior living center renovation project in Holland. The project involves Phoenix Builders’ long-time client, but if the bid is successful, CD Barnes’ crew will likely be doing most of work, Oosting said. Phoenix Builders, meanwhile, will continue to interact with the client.

“On projects like this, we take a boilerplate agreement and sit down and say, ‘Where can we combine our strengths and attack it from there?” Oosting said. “We split the risk and the profits and away we go.”

It’s likely that similar partnerships will pop up across the industry as the construction and design sectors become even more competitive, Oosting said.

“I think partnerships like (the peer group) are going to continue to be helpful because there are always new challenges coming up,” Oosting said. “And when problems arise, you’ve got six guys you can call and probably one of us has been through a similar situation.”

While the ability to access new business and more easily pull building permits is great for the firms working in one another’s backyards, many of the executives appreciate the energy they can bring back to their companies after the peer group meetings, Tom Teschner, president of Phoenix Builders, told MiBiz.

“One thing I come away with is energy,” he said. “You discuss ideas and talk about strategy and then I come back to the office excited and wanting to implement things.”

The firms involved in the peer group have built a trust that allows them to partner in unique ways that firms coming together for one-off projects could never replicate, Oosting said.

“It doesn’t always have to be about the money,” Oosting said. “If I can help Tom (Teschner) make money, I will — because sooner or later, it will come around and there’ll be another opportunity he’ll bring.”

The contractor peer group was developed by the National Associated Builders and Contractors decades ago as way to bring similar companies in non-competing markets together to share information and develop new relationships.

As of late, the ABC national organization hasn’t been promoting the program because of financial constraints during the recession. But because it’s ABC’s single most-praised program among its members, the organization is preparing to formally launch a reinvigorated campaign to increase the number of groups and link new members, said Jennifer Huber, director of national member services for ABC.

ABC plans to put new and additional resources toward the administration and marketing of the peer group programs, which are offered for all of ABC’s different industry subsectors, Huber said, noting the groups should all be seeing a significant revamp.

“We started the process just in the past few months, but it’s been a big undertaking over the last year after our previous chairman set up a taskforce to look at how to improve the program,” Huber said. “Right now, we’re working on the backlog of interested members.”

When Oosting learned of the program about 10 years ago, he said it took four years for him to get matched with the right group.

“That was typical in the past as we didn’t have the resources for the program that we do now,” Huber said. “But it’s also a personality thing.”

With limited resources and not enough administrative staff, ABC took its time to find members that would mesh together, she said. Since the goal is to put members from different markets together, there is always a lot of lag time in finding a group with an open slot and going through the interview process, Huber added.

There are currently about 100 members in the organization’s various contractor peer groups, she said.

“These types of relationships through the peer group are really important and there are certainly benefits to the sharing of best practices,” said Norm Brady, president of the ABC West Michigan chapter. “If you don’t have these relationships, you might not recognize when something is askew or has been for a long time in your business.”

The program can help firms cut costs and find new sources of revenue, he said.

“It’s not uncommon for problems to arise when firms are married up that can lead to unforeseen expenses and litigation,” Brady said. “There really has to be a lot of trust, and having these peer groups makes that easier to do.”

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