Construction Trailblazers: Paving The Way to Excellence

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[00:00:00] Welcome to Construction Trailblazers, Paving the Way to Excellence, the podcast where we cut through the noise to uncover what truly drives success in the building industry. I'm Samantha C. Prestige, your guide in simplifying operations and turning dynamic teams into industry leaders. We're all about embracing people focused, tech forward, lean practices that reshape the trajectory of a company, boosting revenue while freeing owners and teams from daily firefighting.

So, if you're ready to create a team that consistently delivers success, then you're in the right place. Explore our past episodes at ConstructionTrailBlazers. com and start your journey to excellence. Today, we're diving into a critical topic that affects nearly every construction project out there.

Bridging the gap between project managers And accounting. Our guest Josh Luebker [00:01:00] knows firsthand the intense pressures subcontractors face in construction. As a fractional CFO and COO who's worked with many different trades, Josh just gets it. From the stress of unpredictable schedules and contract liabilities to the struggle to balance payroll with delayed payments, he brings a calm and informed yet hopeful energy to his clients.

to help them find stability and growth. All right, so Josh, you're joining us during your paternity leave. Thank you for taking the time. Just tell us a little bit more about your journey in construction and what has led you to focus on helping subcontractors.

Yeah. Thanks, Sam, for having me. So what really got me into subcontractor specifically is I spent the first eight years of my career doing electrical contracting.

I have my master electrical license. I've worked on projects that are like government, like Langley Air Force Base, High Rises, Google Data Centers, Vanderbilt University, like all of that [00:02:00] stuff. And I've come to realize that the massive companies have kind of an advantage over the small ones. And instead of having.

The massive companies work with other GCs and stay in business while the other subs kind of suffer. There's a lot of real practical ways that subcontractors can just do the same things, even if they're small, they don't have to become corporate to do the same things.

I like that. I think that's something where, hey, we want, there's so many benefits to like that startup small mom and pop culture things, but there's also some great structure that we can learn from corporate.

I think sometimes people see a big company, especially in today's society, we're just like, Oh, corporate, like, Oh, big company, but there's some benefits to like the way that they do things. What are some of those lessons that you're trying to pull into your client work?

Yeah, so it's really about consistency.

Yeah. When you go project to project, you might have a great project manager that works with a GC. And [00:03:00] then the next you have to, on the next project, you have to switch the project manager. Something's happening, something's going on. So you want to create that consistency instead of having you have a good reputation and then instantly ruin it.

And the problem in construction for subcontractors is one project could literally bankrupt any company, even if they are a massive company. I've seen 40 million change orders get completely thrown out in court on a 200 million project. 40 million is quite a bit of money, no matter who, how big you are.

So it's just kind of where my heart is.

Oh my gosh. Yeah. I mean, if you, I mean, sometimes it is about like, where can I save on the pennies or how can I prevent millions of dollars being washed away? Right. Right. So what are some of those main pain points that could lead to these big financial losses that you see and that you try to prevent?

Yeah, it with my project management background and like what you do in operations, it's 100 percent about [00:04:00] documentation, processes, procedures, making sure that, even when you're not feeling your best, I know so many times I'd show up to work and I was just tired or whatever, but if you have that process in place, you don't have to always think clearly on what's next, what am I forgetting?

It's always a checklist of, This is next, that's next. I want to make sure that I capture everything. If I'm not feeling good enough to do a takeoff today to make sure I don't miss anything. Then maybe I do something smaller, like, set up a budget. I know that seems a little counterintuitive, because that's pretty important, but it's so easy when you have the process in place versus takeoff, you might miss 10 percent of something.

You know,

yeah, I mean, let's, okay, let's take a step back and just like, focus a little bit on that. We don't, it's not easy to always like show up with a hundred percent of yourself. Right. And like, you're going to have crappy days. I teach that to my clients of like, Hey, we are looking for efficiency and ease, but no amount [00:05:00] of process is going to mean that like, you have like no stressful days ever again.

Right. So like, how do you make it easy for yourself to fall back on some structure when you feel like crap? Right. I know, especially for you, you've got two kids. One of them is still an infant, right? You're on paternity leave. So I'm sure there's a lot of days where you're like, Oh man, like we need extra coffee today.

Right?

Yep. Yep.

Yeah. So what are, if we look at that of like, what are like the processes in place that we can have to, Hey, we can lean on this. Even when we feel kind of crappy, what are some of those like just rudimentary fundamental things that every subcontractor should definitely have in place?

Yeah, so just we'll go through the whole project lifecycle cycle really quick and point out maybe three or four that are really important.

So when you go from estimating to project management, you need to have a process of a handoff meeting of some capacity because between business development, the estimator, anybody else who's involved, I'm just doing takeoff if they're [00:06:00] just maybe a new intern or something. You want to make sure all of that information that somebody has been conveyed, you all sit in the same room, the superintendent knows what was said, the project manager, and then that way, whenever you go to negotiate contracts, everything is captured the way it was told, because, you know, the project is, it's a starting point of this is what we agreed to, and maybe things change, so that's totally fine, And maybe you don't have to price everything, but you want to make sure that if something changed, like if nobody ever told you that you had to have one person for every 10 people you had on site to do composite cleanup, you know, that's 50 grand by the end of an a year project.

If you were never told that you're going to eat 50 grand if you just sign the contract, but you should be able to negotiate those things. So that's one major process. You move past that, then you start looking at budgets and how everything's entered. You want to have a process to make sure that you can see it, how [00:07:00] quickly you can see it, and then forecast it every month.

It gives you just the clarity. Where are we winning? Where are we struggling? What's causing the struggle? I was on a runway and we had to make, I think it's 95 percent compaction. What was taking 10 times the amount of time because of the soil, it was so wet. So instead of. Doing compaction, we decided we're going to cut our costs.

It's going to cost more, but we're going to reduce our labor, how long it takes. We just use concrete to backfill everything. That way it was a hundred percent compaction immediately. We never had to worry about, okay, it's too dry. It's too wet, needs more sand. Like it gets into a nightmare, especially on a runway when you're doing overnight shifts.

Yeah. And the last thing is, You want to have a feedback loop that's consistent. So when you have all of that accounting, when you get to the end of the project, after three years of projects, depending on how many you do a year. You're going to [00:08:00] have that historical data of who did we work with? How much did we make?

What did we do? Well, are we good at rough in, or are we really bad at rough in, you know, how do we improve that? What happened? A lot of companies nowadays just don't take the time to analyze their data and that's kind of where I try to help interpret it from the project management side to the finance side.

Yeah. I mean, we were talking right before this episode of saying like, we got to know how to interpret the data. So whatever data you are tracking, what's the point of it? What are the decisions that you're going to be making? And so you're, highlighting these in a really great way of like, Hey, you want the clarity, you want to know where you're winning.

You want to know where you could be better and really what you should be focusing on and leveraging these data points to. Make the best decisions for the company and for that sustainability. And also we're hearing again, like, Hey, we opened with consistency. We're bringing it back. Like you gotta have that feedback loop and consistently be reviewing things.

I think that's a tough place for a lot of [00:09:00] people. And this is where I, like, I try to pull in some sports analogies of. Look at great football teams or great basketball teams or whatever your sport thing is. After every game, they're reviewing the tape, right? Like it doesn't matter if you won, you're still sitting down and looking at where you could do better.

And we got to like pull that into our businesses more often, right? How do you, I'm sure that you've had some clients that are really uncomfortable with kind of sitting down with those numbers, maybe the first few times, or really getting some constructive feedback. How do you navigate that?

You know, the biggest trouble I have with the accounting is everybody views it so differently.

Some people view it as it's just bean counting and, I don't need to do it. I, you know, it takes what it takes you. I'm sure you've heard that from a superintendent or a project manager, but at the end of the day. It's data, it's numbers, it's not, it's, you have to create that culture of, it's, numbers are not, [00:10:00] mean, they're not, I'm not using it as a weapon, right?

It's, this is what's happened, how do we improve it? And if until you get to that point where you have culture where people are honest and they're not hiding money because you can hide money in a budget really easy to make it look great. And the example I always give is you run those projects where everything looks fine until the last 10 percent and then somehow the last 10 percent takes 50 percent of the budget, right?

Or how did how we only have 100 hours left? How did it take 1000 hours to finish this? That's because it wasn't tracked right and it was hidden. So yeah, you get that consistency, you start to have those conversations of we just need honest numbers and we're not going to beat you up for being honest.

It's not the project manager's job to make a ton of money. Their job is to reduce risk. And the way you do that is you consistently do it quickly, as quick as possible. You procure everything, get it stored, bill for it. That's how you [00:11:00] really create profit. It's not like there's some secret sauce out there that you use a 3D printer and it makes a building, right?

Yeah.

Yeah, What I like here is really defining the purpose of things. And I think that's what companies miss kind of in all departments, right? And I'll tell my clients like, Hey, what is the purpose of accounting? What is the purpose of HR? Like how, like, what is their value here? And so we're saying it's like even going into their project managers, like, Hey they're, not looking at All these other things, they're looking at how to reduce risk, and this is their value lane that we want them to be in.

So what else can we do to keep them in that lane while we look at these other things and really driving that transparency out? Yeah. So, okay. Let's take a little bit of a step back because I also want to go we touched a little bit on, on the personal notes here, like you don't want to show up your best, right?

And also on LinkedIn, you talk a bit about finding that balance, right? When we can have some smooth processes in our finances and we can reduce some of the anxiety we have around those [00:12:00] numbers, then we can start to move toward a better work life balance or work life blend, whatever you want to call it nowadays, which is something a lot of people, especially in construction.

struggle with like that seems non existent for a lot of people. And so I'd love to kind of understand, you know, how are you helping your clients find that? And also like you're a father of two, right? So like, how has being a dad also shifted your perspective here?

Yeah. I'll start with the perspective because when I was early in my project management career, I was single.

I had a dog. I had no responsibilities, honestly. I mean, you have to pay bills, but I didn't have to be home and go to. school events and all of that and I had plenty of energy. So I always overextended myself. I would burn myself out by working a hundred hours if I needed to get ahead on everything and it wasn't healthy.

So what I've learned, because I didn't know that at the time and I wouldn't have learned that until I had the perspective now of, well, I'm going to quit [00:13:00] at five and I have to quit at five because I have to pick up my kids from daycare, right? I have to do something. And it's really helped me understand that, efficiency isn't.

doing more revenue. It's not doing more work. It's doing the same work in less time. So what I've got really good at in my later, my last three years of project management is I don't want to work 40 hours a week, the same and do the same, Stuff that I could do in 20 hours a week. So how do I begin with the end in mind and do this one time?

So I don't have to do it again. So an example I love to give is when I'm doing takeoff of a project. I know that at the end of the pro at some point in the project, I'm going to need to know, Hey, how many lights were in this room? How many of my short, whatever. Or if there's a change order, how many lights were in this room and how many are there now?

So I know how many I need to price, right? And that makes it a lot easier [00:14:00] later. So when I'm doing my takeoff, I don't just take off how many fixtures are on the whole project or this page or whatever. I do it by room, by floor, by everything.

So

I can. Double check that data, because at the end of the day, somebody, some superintendent's gonna say, Hey, I can only do these three rooms, can you get me the lights for those from the vendor?

Cause they're stored. Instead of me recounting those then, I've thought with the end in mind, and I do it one time. That's how I've found a way to reduce and then you get higher level into executive things, like how do I start to think about that with the budget and accounting and cost codes? How do I make this process so we only have to do it one time a week and it takes 20 minutes instead of how do I have to go fix data and do bank recs and all of these things over and over?

Because there's no consistency.

We're really getting to the turtle is faster than the hare here. And like, how can you prevent those problems from coming up? We did a webinar a few [00:15:00] weeks ago on like from firefighting to flow. And the biggest thing was. Hey, like you, you are creating your own fires.

You're creating your own problems sometimes. And if you could take a step back and like really slow down to look at things, so many other things could be easier. And so it sounds like you really found that secret to success and started implementing it in your, toward the end of your PM career.

Yeah. Yeah.

One thing I've really learned is the consistency part. A lot of people think, Oh, well they're a massive company. It's a corporate company, 500 million. They can afford all these things. But what I found is it's because there's more risk, every It's not popular opinion, but every employee creates more risk because we assume people know what their job title has been.

So if we're looking to hire a project manager, I assume that they know how to read budgets. I assume they understand the trade that we're having them look at. I assume they know how to procure everything on time and use a [00:16:00] purchase order. But what you find is people have been a project manager, but maybe the company that came from.

They had completely different responsibilities. They were just on site, babysitting, going and running, getting material. They didn't actually have any responsibilities. So creating that consistency through processes, it's easy to teach a process. It's hard to teach the general concept of everything we're doing.

And then also, I think of like, okay, how can I make it easier for me as a manager, right? Like if I, the less conversations I have to have around constructive feedback and improving people, and like I can focus more on just like high level development, that's way easier for me as a manager. So why would I not?

Yes.

Yes, Provide

them with like great processes and resources. So whenever I document processes, I'm always thinking like, how can you explain these steps to the person that knows nothing about it? Even if it's VP level processes here, like we've got to get rudimentary, ignorant, dumb Basic steps down, right?[00:17:00]

And then work from there. So I know earlier we talked, you mentioned like, hey, we've got to document everything, especially like our transition processes, right? Of like estimating to project management, all these handoff processes, everything needs to be documented. I think in construction, almost also like when you look at kind of salespeople in any industry as well, documenting things is not their jam, right?

We want to just kind of assume that someone else knows it, or we want to speak in like caveman sentences because we don't have time to explain it and like move on from there, right? It's also hard to just communicate the things for then someone else to write down. So what are some of those tips and tricks that you've done with your clients to get them to document these important things?

Yeah, I always think I use the example like when you get hit by a bus, like you can't sit here and say, well, hey, I had this change order and it was signed and here it is in my email. Like, if you begin with the end in mind, that Stephen Covey principal, it's Basically, like, if I get [00:18:00] this, if I do this process, if I get an email, I save it in this spot, it's named this way, it's always that way.

So when somebody comes back and asks you, hey, you had this, right? Because that, we're, everybody's notorious for that. They ask for something, I need it immediately, and then three months later, they're like, hey, I can't find it, can you resend it to me? Then you have to go find it. Or if you're on maternity leave, paternity leave, or you're sick or vacation, you have those fires that you've created yourself because you didn't have a process.

And if you just follow the simple process of where I put things, I think where we get in trouble though, that I've seen subcontractors struggle with general contractors, GCs like to have processes, but they don't teach people why it matters. So what I run into is a lot of accounting people for GCs are like, well, my process says the PM has to approve this and it hasn't been done.

I don't care if it's been 90 days that you haven't been paid. It's not in my process. Okay. Your process [00:19:00] contradicts legal, right? You only have 90 days before I'm going to lean your project. So I'm sorry, your process doesn't align with that. And you only pay on Fridays and you've dropped the ball. We have to explain why it matters.

So people understand the urgency and how they get around their processes. If it actually becomes a problem,

processes are

good for. 90 percent of it, not 100 percent of it.

Yeah. It puts context to the problem solving as well. Right. And like you said, like, is this just like coals, smoke and embers? Like we have time to solve this problem before it's a big fire or is this a blazing bonfire that like get on this now?

And usually a payment that's that late is a bonfire. Like let's absolutely get on

it.

Yeah. So now that we've brought up accountants again, a lot of what we've talking about is kind of general perspective to things. And also we got to document, we got to make sure everyone's on the same page. But really what are, oh, and we also are touching on what is the value of accounting?

What's the purpose? Those, I think, are kind of [00:20:00] the, some of the structure or the guardrails around our bridge, but we've really got to build that bridge from PMs to accounting, right and break down these silos, build this collaboration and look at like, hey, we're all one team here. So beyond some of these process documentation, how can, subcontractors and trades really build that bridge now?

Yeah. So the last place I was at before I went on my own, they, embraced the EOS model and you don't have to subscribe to that thought, but basically what that means is everybody in the company is going the same direction. Your accounting team understands. In 10 years, this is our goal. This is how we get there.

PMs understand that. Operations, HR, everybody understands how we're getting there and they align. And so there are gaps. There's always going to be gaps in your processes of, okay, well, I'm not supposed to do this. That's accounting. And as soon as you start to build those relationships, that's the underlying part, in my opinion, is go to your, accounting team.

[00:21:00] Why is this wrong? What did I do wrong? How do I fix it? So it never becomes a problem again, instead of saying. That's not my job. That's an accounting job. Right? Or the accounting, accountant saying well, the PM's just, they don't care and they don't understand money. They don't understand X, Y, and Z when the PM job is very demanding and tough.

There's so many things outside of just documenting data. That's why we want to have a process. We don't have to. firefight those, internal battles of why did this get coded the wrong job? Is it approved? Can I pay it?

Yeah. But two things I really love that you're saying here is one, like, let's have empathy for another department.

Like, you don't know, you haven't done the job. So like, don't pretend that you know how difficult it is for them. And then also too, is that is really pulling on some healthy conflict resolution skills here, right? If we're going to accounting and we can say, what can I do better? What did I maybe do wrong here?

Or where can we improve the [00:22:00] process rather than just saying like accounting, what the heck is going on? Like, why didn't you do YZ, right? And also let's back up. So for our listeners that don't know EOS, EOS stands for entrepreneurial operating system. It's the book, if you want to know more about it, the book is Traction.

And it is a bit of a beast to implement in your culture. If you're coming from a place of absolutely no structure, it definitely helps you get there. But again, it's a beast. It's not something that you can just take lightly. So if you're going to start it, like you, I think you really got to dive into all of the resources that they have.

How did you, like, were you, let me ask a little bit with your previous position that had EOS, did they already have that set up when you started with them or did they kind of migrate and slowly implement that?

So, I was a bit of an anomaly. They had it in their corporate, but when I joined this company, they had bought another company, and so I was the first hire they made in that area to implement [00:23:00] this.

So we went from a mom and pop shop using credit cards and QuickBooks and all of those, small company things and hoping that things work. The PM ate what they killed, they estimated and they did it all. To now we have a structure, we have an estimating team and we have an accounting team and an HR team and everybody has their own role.

So it was, a massive struggle to transition. I mean, people are, they're used to one thing. They don't love change, but when you have that big of a change, it was really difficult, but the, yeah, the EOS, like at the end of the day, when you think about the concepts, it's just, it makes sense. that everybody kind of works together to flow the same direction.

It's not, I'm accounting. The numbers have to be perfect. It's I'm accounting. I understand there's some outliers. Here's what we can do to fix it.

Yeah. And you know what? EOS is also, is not going to solve all your problems. If you are not getting the why behind things, like it's also really easy to get to that place [00:24:00] of like that corporate that we talked about before, where there's too much structure and people don't understand like, Well, why are we doing this?

Like, oh, this is the goal, or this is the rock for the quarter, but like, why? So again, don't dive into EOS if you're not ready for the beast that it is. Sorry, I

dropped a bomb on you.

No, that's okay. I think it's, I mean, these are all great resources. For some people, EOS works wonders. I don't personally subscribe to it, but I think that there are some great elements to it that I definitely bring in to my clients.

But again it's a beast to conquer. Yeah,

exactly.

Okay, so one more thing I wanted to touch on a little bit was throughout your LinkedIn stuff and also on your website where you have some courses, you do touch a lot on team training. I think this can touch a lot of different ways of like, how do we communicate or, you know, teaching people to communicate the why and all those different things.

And you have some more technical training as well that you offer, but what role do you really think that training [00:25:00] plays in helping contractors or subcontractors to build these resilient and stable businesses?

Yeah, I really think that when you're training somebody, you have to have two mindsets. You have to imagine I'm training this person and they're never going to leave.

They might, be brand new. They might have six months until you decide whether you're keeping them or not, but you need to treat them as if they're not. You need to extend that trust immediately for them to trust you. And then. work harder for you. That's one thing I've noticed. And then the other thing is with training you need to, start with the why.

If somebody understands, why am I doing all of these things? And that comes from everything. I've had a lot of people come from college and some people don't like this opinion, but I've had a lot of people come from college that have a master's in construction management, but they don't understand how things actually work in the real world.

So you have to like, basically reteach them every single. Aspect but it starts with Y, and then it starts [00:26:00] to click together for him. Okay, well this is why I learned this in college, but nobody ever told me why I did it. They just said, this is what happens.

What I was going to say on that one is like, let's also not hate on people just because they went to college for something and they don't have the field experience.

I think that it's really easy to haze those people. And it's like, well, okay, they at least are showing an interest in this work, right? They've showed the dedication to get their masters in this work. Like, don't haze them. Just take the time to get them up to speed to what the real world and the field looks like.

Yeah it, goes both ways in my opinion. If, you don't have any experience in construction management, you just did the field or if you come from college, you know, at the end of the day, we all started with zero knowledge of this trade of anything we do. So just have that, that understanding that just because when we went to college, that might be just the tradition that their family does.

And that's great. At the same time, same for the blue collar side. And if you start with that, [00:27:00] why. It just lets them lean into what makes them uniquely good at being a project manager. Some people on the college side are better at the paperwork and they understand how things need to flow legally. And some people on the blue collar side, they're more, hey, I can find problems before they happen, but maybe I'm slower at doing budgets.

And you just meet people where they are and fill in the gaps, right? A project manager is like the bucket of a project. How much water can you hold? All your team is doing all the work, but if there's a hole, the project manager's job is to fill that hole so you can hold more water and do more work.

Yeah, absolutely. And something I want to make sure that our listeners catch and we don't just brush over was you talked about when someone first starts, like you're building trust right away. And that's, I think, A key here for people to understand is, hey, if you've documented your processes, you can have a longer leash style, you can build more trust and allow people to, we're not like maybe allow them to fail, but allow them to trip, but they're not going to fall on [00:28:00] their face because they've got these great resources to back it up.

And now we can focus on building trust and developing this really great culture and kicking ass on our projects and all of that. So I want to make sure people don't. Skip over the building trust aspect with your new hires and with training. It's so important. Okay, Josh this has, been a lot of really great information.

Got a lot of great practical, just down to earth grounded ways to improve things. If there was one thing that you wanted our listeners to walk away from, whether that's work life balance stuff or that bridging the gap between accounting and, PMs, or even just like, Hey, Paying attention to some of the data and interpreting it in the right way.

What's one thing that people should really walk away from with?

Something I haven't even brought up, but that I think is important is understand that everybody is coming to work for money. It's not money. Unfortunately, it's a necessary evil. We all come because it pays bills, it gets us food and everything.

So understanding [00:29:00] that cashflow. And your role and how that happens in a company and how much, how there's actual profit instead of we're spending more than we're making. Like that's so critical that you understand your role in that. Otherwise, your business or the company you work for. or the company you own, it's going to be out of business in the next couple of years.

In that stat of 91. 5 percent of businesses, construction businesses fail within 20 years. That's because you have to have a team that understands it all. And when you do, then it, it reduces so much stress and you can focus on other things like, Hey, what do we want to get into for tech? Do we want to do BIM?

Like you get to do all the fun things in construction. If you master the basic fundamental part, that money is the only reason we do construction.

Wow. And unfortunately, Yeah, it's the truth of the matter, right? Like we all need money to live, whether you're a single guy with a dog or you've got a family, you've got bills to pay, [00:30:00] right?

And actually, maybe I'm a little bit, I'm being vulnerable and admitting that I don't know something, but I haven't heard that statistic before, so let me reverse it. So the statistic here is, you have an 8. 5 percent chance of having a construction business that will last beyond 20 years. Is that correct?

That's correct.

Oh

my gosh, that is, that's goose. I mean, I know it's a tough industry, right? But that really puts perspective of like, get your shit together, right? If you want any kind of sustainability here. Oh, okay. Wow. Thank you, Josh, so much for, taking the time to chat with us today. If you liked what Josh said, you can find more about him on LinkedIn, his website.

or subscribe to his YouTube channel at Sulphur Prairie Management. All of these will be linked in the show notes for you. And as always, if you have your own trailblazing story, then we'd love to hear it. Reach out to me on LinkedIn or email us at hello at construction trailblazers dot com. [00:31:00]