To become a large and successful interior contractor in a thriving region takes some doing. It is a different matter altogether to achieve that success in a tough market where work is in short supply. The climb to the top can be steep.
For incoming AWCI president Ed Sellers (his term began July 1), it is a challenge he has faced at the helm of OCP Contractors, an Ohio-based interior contracting firm that succeeds well in a market that can break a company in a flash. “The Cleveland market is not a growth market,” he says. “We are so close to flatlining.”
Still, the interior construction market has plenty of competition, so separating yourself from the pack takes some know-how and determination. “You have to be smarter than your competitors to get the best jobs,” Sellers says. But even on the good jobs, margins are low—a situation contractors in Ohio and other states can identify with all too well.
OCP employs about 600 people and is the largest or second largest interior contractor in Cleveland—“depending on what day you are asking,” says Sellers. With two other offices in Ohio (Toledo and Columbus), the firm, which does a wide scope of interior contracting work, calls its bread and butter two sectors at opposite ends of the building spectrum: straightforward contracts in multifamily residential, and complex jobs such as hospitals.
In Cleveland, most of the large, complex projects—including hospitals and health-care related institutions—are performed by union contractors. With low margins and tough competition, he says companies like his turn to lean business practices from the top down to not only land contracts today but to ensure continued growth in the future.
“It is about very good planning, very good delivery and means and methods to allow the worker to stay on task to increase their productivity,” Sellers says.
That business practice doesn’t involve cracking the whip, Sellers insists. “It won’t come from pressuring them to hang one more sheet a day,” he explains. “It is more about how you prepare them to hang one more sheet a day.” Treat craft workers well and improve their delivery systems—not only for materials but also for how they build your buildings—and you have a better chance of succeeding.
Sellers suggests that improving production levels is the key going forward: “If the national average is, say, a person working 6 to 6.5 hours a day, then what does it take from management (foremen and superintendents) to position him in a manner that allows him to achieve greater time on task, say up to 7 hours a day? Over the life cycle of a job, that extra time means you would be increasing production dramatically.”
Leading Edge
But the president of Cleveland’s largest interior contractor doesn’t pretend there is an easy way to achieve greater production. “It is a huge issue but I believe there are answers to it,” he says.
Cities in similar economic straits to Cleveland could or should be on the leading edge of lean, he says. It will guide them through times; in some regions those times will be driven by labor shortages. “The Southern border with Mexico is going to get tighter … the influx of available manpower is going to get smaller,” Sellers says.
Are AWCI contractors going to get innovative and figure out how to get more work out of the people they have? That means making strides in technology, prefabrication methods and delivery systems that put fewer workers on the job site. “Let’s put it this way,” Sellers says. “If you do a job that takes 100 men and you figure out how to do it with 80, you will be a winner.”
He says there a lot of innovative contractors in AWCI who will see the way to doing more with less. Those who don’t simply won’t see the premium jobs they might have been accustomed to in the past.
Lean business methodologies are still relatively new in the construction industry, but the practice has come a long way from the 1990s when the formula for success for many contractors was simple: Get the contract, put the manpower on the job, and get it done. “We weren’t as safety conscious then,” Sellers explains. “We weren’t as regulated as we are now, and our margins were better.”
But production efficiencies were lower. “I have read articles where up to 50 percent of the labor was wasted in construction in the 1990s,” he says.
Sellers says most contractors can increase production—even by doing little things. “It could be something as basic as making sure to put a box of screws where the guy is working,” Sellers says. A disorganized worksite and poor on-site coordination can be fixed, and it often isn’t a stretch to make the changes.
So where to start? One place is at the Lean Construction Institute, which is where OCP went to train its foremen to look for ways to eliminate wasted time on the job. And it has made a difference. Part of the process is to make sure every worker understands his or her job description. Expectations of execution have to be made clear. Assuming, rather than verifying, a task’s completion is a recipe for problems.
Sellers believes in the philosophy of duplication he read about in a book by J. Paul Getty, who wrote it was a key to his success. The idea is to train employees to develop skills and abilities of top-performing workers in part to ensure that they can easily slip into a foreman’s shoes when the need arises. “Through my career I’ve tried to train people to do everything that I can do, or try to get them to understand why I do what I do,” Sellers says.
Leading Technology
Sellers stresses the importance of embracing leading technology. As a case in point, he describes “the most difficult job” of his career—the Case Western Reserve University’s Weatherhead School of Management, which was built in Cleveland in the late 1990s. For the unusually complicated building—a design by world-renowned Frank Gehry—Sellers used the multi-platform software for CAD called CATIA to create a framing system that did not exist until then, and he developed a carrier system that has never been reused.
“I actually made studs for that job because the walls were undulating,” Sellers says. “They were complex, compound surfaces so you couldn’t use conventional methods to build it. As for the undulating ceilings, to get the studs on the line to ruling, I had to create a carrier system that would receive studs (not 16" on center).
“CATIA really changed my way of thinking,” he continues. “It taught me that you could build just about anything if you think outside of the box. And to be honest, that is what got me going on thinking of alternative means and methods of doing things in this business, and I think it changed my life too. “
To meet the technological gap that might exist between your company and its competition, there are a number of things you can do, he suggests. For one, think about hiring young tech-savvy people and pair them with experienced, older staff. It opens minds to new ideas and is an important part of succession planning. While often large companies take this practice seriously, Sellers knows smaller contractors that haven’t seen the light. “I don’t see how they are going to survive in the next 10 years,” he says.
A Look Back
Sellers came to OCP Contractors in 2004 and opened the company’s Cleveland office. He is a minority owner and president of the unionized firm. OCP employs about 600 people and works in Ohio and bordering states doing a swath of general trades, ranging from rough and finish carpentry to spray-on fireproofing and standard insulation.
Prior to OCP, Sellers worked for GQ Contracting through the 1990s and early 2000s. A “small and aggressive company” when he arrived, it grew by four-fold during his tenure as he rose through the ranks, taking on several executive positions there before the company was dissolved when the owner died.
Sellers says construction has changed since his days at GQ Contracting. As an example, hospital work—even new construction—is “far more complex today,” he says. “We’re doing a lot of design assist and integrated project delivery. We’re far more active on the front end of jobs than we were in the 1990s. It’s a much more sophisticated delivery now.”
Sellers got his first job in construction in 1982 when he was hired as an apprentice carpenter and went on to become foreman, superintendent, project manager, estimator and CEO.
A Look Ahead
Over the coming year as the president of AWCI, Sellers has several objectives. One is to reinforce the importance of fair contract language and to remind subs to push back when that language can hurt their business. “We have to quit being our own worst enemies,” he says. “Chasing each other to the bottom with prices that even GCs are surprised to see may get some contractors jobs, but the low margins only hurt your business and the industry as a whole.”
Another issue on his mind is the increase in poaching, a practice where employers steal talented employees from other companies. “I had a guy call me recently, asking about the AWCI and telling me he was thinking about becoming a member. It turns out he was a headhunter. I am not sure what his intent was; maybe he thought I would jump ship, but I don’t want his type in AWCI.”
In some regions, Sellers says poaching is so prevalent that some employers fear bringing their best young people to conferences and seminars. It’s not a good situation, he says, because introducing young workers to AWCI education seminars, exhibitions and meetings generates new ideas and helps to develop the young leaders of the future.
Sellers says he is honored and humbled to be the president as the AWCI ushers in 2018, the year the association turns 100. “I’ve known a lot of guys who have been president—all worthy of being in this chair when the 100th comes in. It is quite something to stand among that group. The position carries a lot of responsibility. You become somewhat of an ambassador and maybe the 100th year puts something extra in you to do the right thing.”
He says now more than ever it is a good time to be a member of AWCI because of the bountiful resources they offer. “In my opinion,” he says, “you won’t know what you are missing and what your business’s potential could be—and that could be a lot—by tapping into the resources of this organization. The people that I have met at or through AWCI have taught me a lot. The advice, sharing and camaraderie are all there. It changes your life, but it also changes your business.”
What surprises Sellers is that so few wall and ceiling contractors in Ohio choose to become members of the AWCI. “I think that there is a culture in our marketplace … that we don’t trust each other,” he says. “Yet we know from other markets where we have AWCI chapters that competitors are sitting in rooms together to develop industry programs. It is all about sharing and realizing your competition is not your enemy even though you might not like him on bid day.”
In addition to chairing AWCI’s Industry Awards Committee and serving on several other AWCI committees, Sellers’s wife of 36 years, Rosie, is on the board of AWCI CARES (Caring Action Relief in Emergency Situations). The program supports employees of AWCI member companies who have had a major illness, accident or hardship that isn’t covered by insurance. Since the program’s inception more than $230,000 has been distributed to AWCI families in need.
The Sellerses have three children—all in their 30s—two of whom work for OCP’s distribution company while the third is an English teacher. Away from the long hours at OCP, Sellers and his wife are passionate boaters, plowing the waters of the Great Lakes in their pleasure cruiser. Living on a channel off of Lake Erie with docks in your back yard is befitting. “For me, the boat is a great stress reliever,” he says. “It cleanses my brain, which is what I need as a business owner.”
Don Procter is a freelance writer in Ontario, Canada.
