Following on from last weeks blog about "easy sales" I got some useful feedback, most of which implied if I was looking for "easy sales" I'd gone soft! Fair call!
Over the past few years we've seen many construction companies working with their sub-contractors in a way which most sub-contractors find time consuming and not overly productive. This involves things like tenders to masses of potential suppliers on the basis that the lowest cost supplier will be chosen, and payment terms with unfair retentions. Glass and Window company owners often say that when their sales team win a large contract they fear that they may have won it through an error in their quoting, and through accepting terms that others weren't prepared to. In short this could be described as an operating environment where the sub-contractor has very little power.
As an industry whose primary role in construction is sub-contracting, the glass and window industries on the whole have suffered for several years.
The trend I see is some empowerment of the sub-contractors. Over the past few weeks both myself and some others I've spoken to have been in a position where a main contractor needed them to do a job, needed it done in a certain way in a certain timeframe, and just wanted the sub-contractor to "get on with it". In one case I have been involved with the client clearly stated that I needn't even provide a quote as they would rather I spent my time getting on with it. In short this could be described as an operating environment where the sub-contractor is a scares resource which needs to be nurtured to enable the construction company to get the job done.
A power swing in our favour.
The next step from this is a move to negotiated contracts where the construction company chooses their partners and works with them in a very open book type partnership. An environment where each accepts that the other has to make a margin, but each also respects that the partnership is worth more than the current deal. There is trust. With negotiated contracts time is not wasted preparing tender responses for jobs which are not won, meaning the subcontracts become more efficient, and overall costs for the construction company and the sub-contractor are reduced.
Please let me know any examples where you see the industry moving towards this model.
(Yeah, I know there are plenty of companies out there who already work like this with their partners and have done for many years. In my opinion, you are the fortunate few, or perhaps the skillful few ….)