You Covered It, You Bought It! Part 3

Doug Bellamy / January 2016

We are going to wrap this up, place a bow on it and leave it to those of you who are ready to pull the ribbon, tear into it and see what remains in this final package. I promise to be as succinct as possible, finalizing the necessary points and then (believe it or not) promptly conclude. I’m completely disinterested in wasting anyone’s time, mine or yours.

    
Now, I’ve made you a promise and it’s time to make good on that promise. The following quote from part two of this series should serve as sufficient review and provide adequate context: “As a business, when it comes to problem solving, any fair-minded business practice should include five critical components. It must serve to eliminate the root problem, foster continual improvement, hold those responsible, responsible, protect the innocent, and set a standard that is applied consistently. I’ll be telling you why, quite convincingly, why YCI/YBI fails to provide all five components.”
    
So then, how does YCI/YBI fail to provide each of the aforementioned five components, all of which are necessary to problem-solving? Let me unpack them individually and explain.

Another Letter
What follows is an actual letter written during the Great Recession.

Good morning, Rick.
    
This is not an attempt to single out any ABC superintendent. I am addressing a general issue that has become increasingly common over the last few years and speaking generally organization to organization. I’m appealing to you as a general superintendent regarding a policy matter, one that is rooted in what I believe to be fundamentally wrong thinking and management style. From my perspective it is not only wrong, but also counterproductive.
    
Don’t get me wrong, I’m not implying that you or your management style is wrong. I know it’s not you personally. I happen to admire and respect you as one among very few exceptional superintendents I’ve had the pleasure to work with. I believe that you and I have the type of relationship that is typified by mutual respect for one another and that you will receive this in the spirit in which it is sent, heart to heart, as colleagues and business professionals.
    
At BestWall Inc. we understand that we are responsible for typical pickup (minor repair work) as long as it is not excessive. Part of the problem we’re experiencing is in the varying definition of the word “excessive” between ABC and BestWall Inc. When we write up work orders it’s because we believe that the work is excessive. When a superintendent signs the work order, we believe he is in agreement. However, oftentimes over the last few years, ABC kicks signed work orders back after the fact, and we are left to absorb the loss. This has cost BestWall Inc. thousands of profit dollars, which are already rare enough in today’s environment.
    
We work for you. I get that, and the work is always much appreciated. We count it a privilege to have worked with ABC for many, many years. We understand the benefit of being a part of your build team. What I don’t understand is the rationale behind failing to compensate us for significant repair work that is caused by another trade’s errors. All too often, we are simply told, “you covered it, you bought it.” In spite our best efforts to carefully inspect, identify and document numerous problems prior to installation and finishing, we continue to encounter that six-word litany. How can ABC hold us responsible for issues neither ABC nor the responsible trade or we ourselves were able to detect prior to installation and finishing?
    
I am a firm believer in holding the responsible party responsible. That’s the way we operate organizationally. I think that is in the best interest of minimizing problems going forward. In doing so, the responsible trade bears the cost of their mistakes and is forced to face them and do what it takes organizationally to improve and eliminate them in the future. The cost actually gets their attention and motivates them to change the behavior that creates the problem to begin with. We need to get at the root of the problem, not take a shortsighted, quick and easy approach by expecting trade partners to pay for them. I’m certain you recognize that. I’m not telling you anything that you don’t already know intuitively.
    
When BestWall Inc. (or any disadvantaged trade) simply absorbs the cost and is forced to pay for the mistakes of others, the responsible trade learns nothing. Nothing, that is, except that they weren’t held accountable, which in my view serves to perpetuate problems. As I’ve already mentioned, money talks and when it does, people listen, behaviors change and progress is made toward reducing future issues.

 

Times are tough. Margins are thin. If we factor these costs into our bid, we don’t get the job. As you might imagine, Purchasing is requiring us to be very competitive during the bid process. For us it’s a Catch-22. When ABC (or any builder for that matter) takes this approach, it doesn’t make sense to me. How is that approach promoting continual improvement? If trades aren’t being held accountable and there isn’t any consequence when they negatively impact another trade, I don’t think it’s fair, reasonable or wise. I hope our position is crystal clear. We sincerely believe that those responsible should pay for their own mistakes, not mistakes made by other trades.
    
With all due respect, I appeal to you to reconsider ABC’s position and encourage ABC (top to bottom) to reconsider this approach. Thanks in advance for hearing me out.
Respectfully,
Doug Bellamy

Eventually we managed to get the contract changed, which was fueling the plethora of unfair back-charges and unfairly forcing responsibility for repairs generated by others on us. It was a long and steady battle to change the customer’s mindset, and it took the economy turning around and us getting some additional leverage to get it done, but it did happen.
    
We have slowly but surely influenced contract language and added language like, “Bestwall Inc. shall not be held responsible for repairs and defects that were not obvious in a production setting and willfully covered by sheer neglect. The cost of repairs that were not obvious to Bestwall Inc.’s personnel or management and were only noticed after the fact, when they were accentuated by finish trades, will be borne by the trade responsible for the issue or defect.”

The Personification of Proactivity
Throughout this article you will note repeated references to our DOQS booklet. DOQS, our “Definition of Quality Service,” is used to provide both employees and customers an overview of our entire process, informing both employees and customers precisely how we operate. It makes certain our intentions and our customers/employees expectations are aligned. It also provides an organizational chart, contact info, chain of command and several sample forms commonly used as we interface with employees and customers as well as some defensive measures describing our position with regard to problems caused by others—problems that we find ourselves repeatedly having to defend ourselves against. It clarifies what we are and aren’t responsible for as well as ferrets out issues that might otherwise come up later and result in disputes and or monetary losses. It also clearly defines TTD, Typical Trade Damage, included in the contract, and ETD, Excessive (and therefore chargeable) Trade Damage.
    
Such documents are the personification of proactivity. We have found the effort involved, extremely valuable and well worth the time and money invested to develop, maintain and update them, keeping them current. They are living documents, even if you have them; you can let them die of neglect. Kept current, they go a long way when it comes to fending off back-charges or dealing with YCI/YBI, and they are extremely helpful and informative, both internally and externally. Do yourselves a favor and take the time, invest the money and put forth the effort to prepare such documents and then fully utilize them.

Defensive Measures
Be sure to do a thorough inspection prior to starting every project. You will have to facilitate that. I am told that the word “facilitate” actually comes from a Latin word that means “to make easy.” You need to make this as easy as possible on the field, and you need to pay qualified personnel to do it.
    
We’ve developed a very thorough form called JPCN, “Job Problem Courtesy Notice.” I call it a courtesy since I’ve never really bought into the YCI/YBI concept, and I want customers to know that we’re here to help, not do someone else’s job. We are participating in a shared responsibility to provide a quality product to the end user. But, make no mistake about it: We aren’t taking full responsibility for anyone’s work but ours, nor are we managing their project.
    
This form is a checklist that covers every imaginable problem our field might encounter and is required on every project, house, remodel, TI and anything else we do. It starts with safety and goes through every preceding trade, listing the common problems we may or may not encounter. It is mandatory organizationally, prior to job start. It is job number one. We provide a copy to the construction manager and require him to sign acknowledging receiving it. If it is done personally, face to face at a minimum, we email it and require a read receipt. The original is returned into our office and kept on file. They come in handy when needed—trust me on that.
    
In summary, give it to them hard, fast and thorough. Put them on the defense, respectfully—with detailed documentation in a written format, and keep a copy for your records. If they want to know what’s wrong? Tell them! That’s your best protection! YCI/YBI is deeply embedded, and I don’t expect it to go away anytime soon. So, at least for time being, we’re going to have to deal with what is.

Game Changers
Another flaw in the concept of YCI/YBI is that it isn’t enforced consistently. I realize some of you are also painters and even offer full services—framing, hanging, finishing and painting. This section may not be as meaningful as it is to a residential contractor who merely installs drywall and finishes it, true enough, but well worth mentioning. Read on and take it for what it’s worth. I’m sure you will find some value in the following thoughts and observations. Find your own application. It’s somewhere hidden in the text.
    
If we are working in an environment where YCI/YBI is strictly enforced on us, I don’t expect to see any back-charges from painters or anyone else whose work is subsequent to ours. Didn’t the painter cover it? Why should the rules of game change once drywall is installed? They are going to have to get over it just like we did, even if we have to force them to recognize the obvious. Where’s the fairness in this double standard? If the expectation is to trap us in the middle and hold us responsible for everyone, I respectfully disagree, and you better re-think your version of fairness, because I don’t think you have one!
    
I tell customers straight out: “If you are going to hold us responsible for the preceding trades, don’t change the rules in the middle of the game.” Trades following us should be held to the same standard, and I don’t want to see back-charges from them. Typically, they blush and back away. It’s a fair point and undefinable fact. Once challenged, they generally have an epiphany and immediately come to their senses. After all, what right do they have to change the rules in the middle of the game (as flawed as those rules may be) and trap us with responsibility on both sides of the fence? Dear GC, please? Play the game if you must, but don’t change the rules when it’s our turn to be protected.

Schedule versus Quality, Dichotomy?
Another observation that has become all too apparent when it comes to YCI/YBI is the inordinate attention on schedule, manifesting itself in the effort to force the job forward, ready or not. There is enough guilt and blame to go around when it comes to this avoidable, obvious pitfall. Let me say this about that: Don’t let it happen. Don’t allow yourself to be forced forward in situations that undermine the ultimate quality of the project. Sooner or later the quality is going to be the priority. My suggestion is that you make that the case, sooner rather than later.
    
The word “dichotomy” means a division into two mutually exclusive, opposed or contradictory groups; for example, a dichotomy between thought and action. One may either think, act or be paralyzed in the dichotomy of passivity and do nothing. Both thinking and acting, as is quality and schedule—in that order—are absolutely necessary. Proceeding under the wrong conditions is acting without thinking. It won’t work. The only time you can safely proceed is when you know the conditions are right. You must only try building on soils improperly prepared or framing on a poor foundation to come to that realization in a hurry. Unfortunately, sometimes too often, management gets this bass-ackward. In our zeal to make it happen, too often we leave something critical out by taking the next step without ever had proper footing to begin with.
    
This can easily happen during our stage of the construction process. The focus, the priority, of construction management becomes a myopic gaze, a fixation upon schedule. Sure, everyone knows the quality has to be there, ultimately—right? However, at the moment we are running behind or someone else has fallen behind and we need to get the project back on schedule.
    
“Hurry up” becomes the mantra. We don’t have time to waste. “Quit stalling” quickly becomes the falsest accusation ever. Why? The answer is simple. Something is wrong, and it takes time to correct it, and in the meanwhile you simply cannot, must not, should not and will not proceed. Will you?

Don’t Cover It and You Won’t Buy It!
Although both quality and schedule are critical to any project, if it comes to an either/or situation, quality trumps schedule—every time, all the time. Hold your ground and get it right. Quality must be “built in” and it is nigh unto impossible to add it later without costing even more time and money. Do it! But do it right and do it right the first time, or you will most certainly pay a dreadful price. This timeless truth applies to all of us, every builder and every trade without exception.

Doug Bellamy is former president of Innovative Drywall Systems Inc. dba Alta Drywall, Escondido, Calif. He is available for consultation, business management seminars and training. Visit him on LinkedIn or contact him at doug@altadrywall.com.