May 7, 2025 • 53 mins
What if your workers treated every dollar of your labor budget as if it were their own money? In this eye-opening conversation, Michael Fortinberry, co-founder and president of Protiv, reveals the fundamental flaw in how blue-collar businesses compensate their workforce – and how to fix it.
The contradiction is startling: contractors bid jobs based on production rates and material quantities, then pay their workers by the hour – essentially rewarding them for taking longer. "Their incentive is linked to time, the very thing that is the antagonist toward our success," Michael explains. This misalignment creates an adversarial relationship between management goals and worker compensation.
Performance-based pay offers a powerful alternative. By sharing the savings from under-budget jobs with the workers who created those efficiencies, companies transform their culture from merely putting in time to actively seeking better ways to complete projects. The results are revolutionary – crews begin holding each other accountable, equipment maintenance improves, and quality increases as workers see a direct financial benefit from doing things right the first time.
Host Sy Kirby shares his own journey toward implementing this model in his underground utilities company, highlighting the challenges of establishing the accounting and production tracking systems necessary to make it work. Michael emphasizes that successful implementation requires mastering your numbers through solid estimating and job costing, then building transparency around budgets and goals.
The conversation explores how Protiv software manages the legal complexities of performance bonuses while integrating with existing construction management platforms. More importantly, it addresses the cultural transformation required – authentic leadership, clear communication, and patience through the transition period when some workers inevitably resist the change.
Want to discover how performance pay could revolutionize your construction business? This episode delivers practical insights that could transform your profitability and workplace culture.
Click the link above for a free marketing audit with insights to boost your blue collar business!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:09):
Hey, guys, welcome to the Blue Collar Business
Podcast, where we discuss therealest, rawest, most relevant
stories and strategies behindbuilding every corner of a blue
collar business.
I'm your host, cy Kirby, and Iwant to help you in what it took
me trial and error and a wholelot of money to learn the
information that no one in thisindustry is willing to share.
Whether you're under that shadetree or have your hard hat on,
(00:30):
let's expand your toolbox, guys.
Welcome back to another episodeof the Blue Collar Business
Podcast.
I am sitting in this wonderfulstudio in the solo room, solo
pod, today with a remote podcasthappening, podcastvideoscom.
Man, they are always upgradingtheir equipment.
(00:53):
I've been here about a year, asyou guys know, sitting on let
us know how this new camera isin the solo pod room.
I was just talking to our guestabout it and, man, the clarity,
always improving systems andhow they're treating our guests,
and I'm really proud to be apart of Podcast Videos team here
Today.
Guys, you're joining for anotherepisode of Blue Collar Talk and
(01:17):
you can find it all atbluecollarbusinesspodcastcom.
You can watch for free on thewebsite and you can listen for
free on the website.
You do not have to have anytype of subscription platform,
but if you do make sure and giveus a following and a good
rating on a podcast you dolisten to and then check out for
more Furthermore.
Guys, today I'm really excitedto be joined by a gentleman that
(01:41):
has and shares the same passionI do about the things I'm
currently going through in mybusiness and working towards,
and it's a different structurethat a lot some of you, I know
for a fact, have never heard ofit.
Some of you think of it as apipe dream, some of you think
it's fairytale land.
But this gentleman I ambringing to you guys today to
(02:02):
hear the success, some of thefailures, to get where he's at,
and he 100% has already spoken alittle bit with me and it is
pure experience coming out ofhis mouth.
So everybody, welcome up MrMichael Fortenberry, co-founder
and president of ProTiv.
Thank you so much for joiningme today, sir.
Speaker 2 (02:22):
Hi, super excited to be here, my friend.
We're going to talk about somefun stuff, for sure.
Speaker 1 (02:27):
For sure.
A little bit of backstory on MrMichael here.
Number one again, thank you foryour service, sir.
Military veteran with the USArmy, former partner I'm sorry
partner and SVP at PerennialConstruction Solutions.
That is still an active companytoday.
Construction Solutions, that isstill an active company today.
You've held executive roles intech, real estate and
(02:48):
construction from startups to500 firms and then, of course,
today, founded in 2021, yourcompany and what you're going to
be talking to us about todayand the generalizations of where
blue collarcollar companiesfail within their pay structure,
and how passionate you areabout fixing those compensation
(03:09):
systems in our industries,because we need you.
Frankly, you know what I mean.
Speaker 2 (03:15):
Well, brother, I appreciate the introduction.
It's so interesting because weserve and deal with a lot of
contracts across differenttrades and so I've gotten to
know folks from everything fromheavy civil you know kind of
space where you operate in tomom and pop landscaping
companies, to big commercialelectricians.
(03:36):
You know roofing companies andconcrete guys.
We got a company that we'reworking with that this guy's got
like 100 scuba divers thatclean weeds off the bottom of
lakes in the summer in theMidwest OK, I didn't know that
was a thing, but that'sapparently a job and he's like
an underwater landscaper Allright, that's cool.
(03:58):
And there's a lot of amazingthings out there that we do with
our hands as contractors andall of us have pretty much a
core set of challenges when itcomes to we have hourly workers
and I got a labor budget andthose two things are often the
bane of my daily existence.
Like I got guys being paid bythe hour and sometimes they act
(04:19):
like they're paid by the hour.
And how do I drive a culture inmy organization where they come
to work and care about whatthey're doing?
I I want them to.
You know.
You know it turns out you get afree brain with every employee.
I don't know if you knew thatthey come.
The free is like a gift ofpurchase, and these guys come in
(04:40):
and yet sometimes they don'tbother with it because we don't.
You know, it's just an hourlyjob, right?
They're being paid by the hour.
They do their thing, then theygo home.
What if they brought theirbrain to work every day?
Okay, sometimes that may bemore effective than others with
some of our folks, but I'mtelling you there's an
opportunity to do more withthese folks if we can get them
(05:00):
to care.
Hourly pay is not the bestmodel for doing that You've.
And get them to care.
Hourly pay is not the bestmodel for doing that.
You got to do something elsetoo, and that was the thesis we
have when we started buildingperformance pay model for our
own construction company.
Speaker 1 (05:12):
Man, you hit the nail on the head.
Paying somebody from theowner's perspective kind of
makes me sit here and wonder.
As I was sharing a little bitbriefly on the intro before we
started the show is that we areworking our way towards this
system and there's some obviouslimiters to a new company or a
(05:38):
startup.
You know.
First, zero to five years, nozero business knowledge.
But I'm sitting here going whydo I pay guys by the hour to get
the job done at the same timewhere I'm trying to cut as many
hours as possible from time andefficiency standpoint?
You know what I mean.
Speaker 2 (05:58):
So yeah, oh, I know.
So when you bid a job, you bidit by what linear feet?
Speaker 1 (06:04):
feet in some case, if you're putting pipe in yeah,
either linear foot dayproduction rate or, uh, yardage
okay, yard, yeah.
Speaker 2 (06:13):
So I kind of let's just take this thesis.
There's probably others outthere.
You've got some unit on whichyou went.
You went and bid this job.
You say, all right, I'm, I'mgoing to get X dollars per unit
square feet, yards whatever, itdoesn't matter.
And so you got a budget.
Now I got to put in 10 feet ofthis pipe and I'm getting a
(06:35):
dollar a foot.
I got $10 in revenue.
I think it's going to cost me$4 in labor to do that, which is
about we spend.
About 40% of US construction isin labor.
I got about four bucks.
I got to pay my guys to putthat in.
It cost me about four bucks inmaterials.
I got a dollar in GNA and I gotabout a buck in profit.
(06:56):
Honestly, that's roughly thefinancial model for most
construction companies inAmerica.
Yep.
So how do I take that?
But the biggest variable that Ihave and I have, you have
everybody out there, I guaranteeyou is their labor.
If you don't have your materialcosts somewhat under control,
you're probably not long forthis business anyway.
So for the most part, we getour materials marginally within
(07:19):
a range, most of our trades.
What balances around and whateverybody struggles with is that
control over labor.
How do I get my labor costs tobe beyond budget?
If I could guarantee everycontractor out there right now,
you'd always hit your laborbudget Boy, there'd be cheers.
We'd all be like man, I'm ahappy camper.
Everybody be a contractor, thenFour out of the five people
(07:42):
working in our industry are paidby the hour.
Their incentive is linked totime.
The way they make more money isto put more time in the thing
that is the antagonist towardour success is the amount of
time it takes, and that's how wereward them with actually how
they get paid, and we can'tunplug that.
(08:04):
We are stuck with hourly pay.
Structurally, in fact, ifyou're thinking about you
subcontractors, that's probablynot going to last much longer
either.
State of California, that'spretty much impossible.
Now that's happening in moreand more locations.
The answer is not move tosubcontractors.
The answer is to get anincentive in place where your
hourly team doesn't act likethey're paid by the hour.
Speaker 1 (08:24):
Answer is to get an incentive in place where your
hourly team doesn't act likethey're paid by the hour.
No, 100%, and I'm actually so.
We have two groups ofindividuals.
We talked about two differentunits.
There.
I've got yardage guys that areon the dirt side of things, and
literally this topic ofconversation that we're
discussing right now just cameup and my dirt superintendent,
who does a phenomenal job, yes,he makes mistakes, but he's got
(08:47):
a operator, that's, um, that isbeen with us, I want to say
almost three years, now twoyears, maybe two or three years,
and great guy, helps, helpsproduction, helps save us
mechanic in here and there.
Well, he brought me somethingto light that I never even knew.
I've got pipe guys.
I'm a pipe guy, naturally right, I'm thinking like a pipe guy,
(09:11):
I'm paying like a pipe crew.
And he comes to me and he goeshey boss, did you know that
so-and-so never gets anyovertime?
And I said, well, no, now thatyou say that, I'll look into it.
And sure enough, I went backthree or four months, zero
overtime.
Went back a year ago, zeroovertime, and I'm like, oh my
(09:33):
gosh.
Then I feel like I'm slightinghim, you know, of course, and so
I start weighing this out.
I asked the admin.
I'm like, hey, we need to lookat this.
And I went back to my wife andI said, hey, I think we really
need to look at this and werestructured about how we pay
(09:55):
the dirt team compared to thepipe team and sharing with them
what you're going to share alittle bit of P4P or pay for
performance and getting that way.
But it always looks a little bitdifferent and it's scary
sounding for the employer to getit set up and go through the
growing pains, because I may begetting off on a little bit of a
tangent here, but I'd like youto probably discuss, to start
(10:16):
with those guys like myself andI'll tell them myself that
didn't have the accounting inplace, the trustworthy enough
and it's not like anybody'sstealing any money never had
anybody do any of that but itwasn't locked jaw tight enough
because we were handling itin-house not saying that, it was
my wife, mainly, and Ms Shea,and we're just learning what we
(10:38):
learn as business owners, right,but we're not accountants.
And so here we are trying topay a structure.
I've always been so scared todangle that carrot in front of
them and then, all of a sudden,it comes time to pay, and I
don't have it.
That's as a younger business,and so we've spent the last year
really spending the time anddissecting that account.
(10:58):
But maybe speak to them today.
Speaker 2 (11:00):
So the problem you're addressing right there and the
fears you have.
The problem you're addressingright there and the fears you
have.
I'm so familiar with that andwe had to find a way to pull
this off and solve that fearright, Because if I'm always
afraid that, well, what if I endup overpaying or something?
You never get there.
You never end up going downthis road.
(11:21):
Now I'll start at thefundamental levels.
People understand.
There's really two things thatare going to drive your success
as a contractor.
The first is you have to masteryour numbers.
You talked about it from thestandpoint.
I just didn't know myaccounting, Not just accounting.
One you need to know yourestimating.
You have to get your estimatingdown.
You're making wild guesses,You're just flirting disaster on
(11:44):
every job.
So the better you master yourestimating, the better off
you're going to be.
Number two, you really have tounderstand your job costing and
you just need to get a masterclass in job costing.
If you go to the biggestcontractors, the most successful
guys out there, they aremaniacal about their numbers.
They are not guessing, theyknow their numbers.
(12:05):
They are deep into job costing.
That is one of the definingelements of success, because we
operate on tight margins ascontractors.
All of us do.
Nobody understands that and wetake a lot of risk associated
with that.
Right, we think that we don'teven always control.
They can throw a job off andall of a sudden we're upside
down on a project.
So we've got to do everythingwe can to be on top of those
(12:41):
numbers and control.
The other thing you have to doto take financial control on one
side.
The other side is culture.
You have to build a culture ofan organization.
Every company has a culture.
Your company culture is justyour company.
Culture needs to be strong ifyou're going to scale, or the
inefficiency that comes from apoor company culture will eat
all of that success you had.
Financially, you would estimatea job really well and you've
got a team out there that justdoesn't care and so they don't
pay attention to detail and getreworked.
(13:01):
It didn't matter that youestimated it great, it didn't
matter that you bid it well,that you're on top of all your
spend, that you got yourmaterial costs under control.
If that team just didn't careenough to pay attention to
detail and they put that trench,you know, two feet left of
where it's supposed to be, Idon't know whatever kind of
crazy crap happens in your space.
Speaker 1 (13:20):
You know what I'm talking about.
Speaker 2 (13:22):
What did we do?
We did something wrong.
(13:45):
That's six and five.
Why the hell did you?
Good quality work, being ontime, you know, using our PPE,
doing all the right things sothat we can be successful.
That's culture, right.
That's how you become anemployer of choice.
You get the best people to wantto work for you.
You keep your best employees.
You're not churning people out.
(14:06):
That's say, you deliver a greatproduct to your customer.
A lot of people say well, we'rea customer forward.
Customer comes first.
Organization.
Honestly, you should beemployee first.
You put your people first.
Your people are going todeliver your product and that
product is going to take care ofyour customer.
Customer takes care of yourprofit.
I didn't invent that.
Smarter people made it.
So dive deep into your people,care about them.
(14:26):
Build a great company culture,Know your numbers.
Parts one and two building agood contracting space, good
contracting business.
So our belief is that apay-for-performance model starts
at this foundation.
I've got some sense of mynumbers.
I'm dialed in there.
Now what I want to do is I wantto build a culture of
(14:49):
performance.
So what pay for performancedoes?
It says I'm going toincentivize you when we
overperform as a company.
So one of the great things isyou don't have to worry about.
I'm nervous about putting thecarrot out there and not having
the money, because the onlycarrot that goes out there is
the savings that we create,because the only carrot that
goes out there is the savingsthat we create.
(15:09):
So Cy goes out there and hebids this job for the city.
He says I've got this $10 job.
I'm going to spend $4 in laborto get this job done and if I
get that job done in $3 insteadof $4, I've done it right.
Customer's happy, we're safe.
I've got a dollar left over.
I am happy to share that moneywith the people who worked on
(15:34):
that job.
That's the easiest money I willever spend, 100%.
My problem is I don't want togo to $4.10.
I want to be at $3.90.
So I want to find a way to getthat crew in the field to want
to do that job right the firsttime, want to be efficient, want
to bring that job in underbudget Because if they'll do
that I've got money left over.
I can always afford that checkbecause I had planned on
(15:54):
spending more anyway.
So that's why we find that it'snot a big leap to get folks to
be able to afford a performancepay plan, because the
performance pay part of it comesfrom savings.
Right, that's the key.
You want to build a sustainablebonus program.
You got to build it where it'scoming out of savings.
Speaker 1 (16:13):
No, it 100% is.
And I think the biggest thingin my space as I was learning
again, I'll tell myself is thatthe guess you hit the nail on
the head again with estimationand production and how we
analyze those things isaccounting.
So they have to meet all threetogether and so you have to have
(16:38):
an estimator that's analyzinghis stuff from the back of the
house into the front of thehouse.
Get him some good, solid,consistent numbers.
And then production we have tohold them accountable enough to
what's happening in the fieldper those numbers.
Now, if he screwed up, that'sfine, let's find out where he
screwed up.
You know what I mean.
But setting those productionrates and giving that crew in
(17:01):
the field hey guys, look, we'rean underground contractor, stuff
is going to happen, whatever'sgoing to happen, but we have got
to get in 50 feet a day, nomatter what.
I don't care if you're slapping700 feet in a day.
If there's one day that comesnow I will also tell them this
(17:22):
like, hey, if you get out onthat job and you're beating your
production rate, that bad daythat does happen is not as bad
as it was if we weren't meetingproduction and they were, you
know over-subsceeding it, andthat's where it all washes out.
But man, it took me some timeto figure out, okay, my
(17:42):
estimation's here.
That's driving this rate atthis footage per day.
Let's give them this footage,let's give them these rock
numbers, let's give them thisamount of pipe and give them
that information.
And as a small young businessowner mid-market now, but as I
was growing I was so scared todeath to let my team in on all
(18:06):
the information and I'm like itwas like just screwing myself
from the get go because I'mgoing to be the answer guy, no
matter what If I don't let themin and share a little bit of
this information of why I'mmoving the way, I'm moving way,
(18:28):
I'm moving anyways, but thoseproduction rates are so key to
they got to have a base goal forall any of this to work with.
So I just wanted to add on toyour point here.
And the other thing was was knowyour cost?
I'm going to drive that homeeven more before we get past
here, because KeyWit has a signwhen they were anyways, I know
the backstory of it, but theyhave a sign that they put on
(18:49):
some of their projects.
Literally it says know yourcosts.
It's an orange constructionsign.
I'm getting one made for mydaggum office, because you have
to not just me, not just theadmin and the estimator and the
PM, but the superintendent andthe foreman and the guys in the
field should have anunderstanding from day one.
(19:09):
We've got to hit a hundred foota day or this job is hosed from
the get-go.
And as long as they're at leastadhering to our production
rates or giving us justifiablereasons of, hey, I can't adhere
to this because of this sitecondition or this pipe or
whatever, where we can push itback on that admin team and go
(19:30):
hey guys, really need you tofind out what's going on here.
This is halting this.
Or hey, did you guys not catchthis?
Was this not on the drawing?
We're really screwing the poochand this one's going to cost us
.
Speaker 2 (19:42):
But production rates, man going to cost us, you know,
but production rates, man.
The step after that is to getthe team to care about it.
There's one thing for them toknow, and I'm a big fan.
I now oh, some people okay,open book management.
I'll give you that's adebatable thing.
I actually like it, but somedon't, maybe different reasons.
I'll tell you what needs to beopen book.
(20:04):
Is your labor budget?
Maybe different reasons?
I'll tell you what needs to beopen book.
Is your labor budget right?
So so let's the labor budget.
Is their money right?
I want them to feel ownershipof it.
So take that labor budget andwe actually in our, with our app
, we actually put it on theirphone.
They see it yeah, same here seethe labor budget.
I want them to see every daywhat they've used so they know
what's left, so they kind oftake.
I want them to feel like, okay,this is my money, cause they
(20:26):
don't really care about yourmoney.
Cy.
Speaker 1 (20:27):
No, they don't.
Speaker 2 (20:28):
Took me years to figure that out, but they do
care about their own money andthey're actually somewhat
accountable to their peers.
So what you want to do iscreate this environment where
they feel like that labor budgetis their money Cause then
they're going to treat itdifferent.
All right, so now, now they're.
Now, once I've shown them thelabor budget, I say look, you
guys have four hours to do this.
You got $4 to do this.
Whatever it is, you have 5,000hours to do this.
(20:50):
How are we doing?
You know, and what I'm doing isI actually?
There's this fun conversationyou can have where you go to the
job site.
You get the team around and sayare you guys making any money
on this job, this job?
You think about that concept,right, because right now they
get paid by the hour.
So what do you mean?
(21:11):
Making money on the job?
No, are you making money onthis job, or are you guys just
only making your normal hour?
Are you only making your hourlywage?
Are you guys making any money?
Like, yeah, I'm paying you 30bucks an hour, but who cares
about that?
Don't you want to make 35?
Don't you want that as bonuses?
So are you guys making anymoney on this job?
And talk to them Like are youtracking towards the goals that
you set?
(21:31):
You know you guys set that goal.
You want to beat this budget by10%, this job, are you on track
for that?
You ahead, you behind.
So what we found is, when youcan engage the team, show them
the labor budgets, talk to themabout it, and then what we
believe is you have to have atransparency to it, where they
can see it, and a simplicity tothey understand what they
(21:51):
personally get for performingbetter.
So we use our app to show them.
This is the dollar amountthat's going to be in your
pocket when this job is over.
If you hit this goal, based onhow you're performing, this is
how much money is coming to you.
When they can see the dollaramount, it becomes very real to
them.
You begin to get this buy-in tothe behavior shift that we're
(22:15):
looking for.
The goal of an incentive plan isnot to pay bonuses.
The goal is to actually getbehavior change.
I want behavior change.
I want the teamwork, I want thecommunication, I want the
attention to detail.
Those are the things that makeme money as a contractor, not
time.
So I want to incentivize thatand then I'm happy to share that
savings.
So that's where.
That's where it was really born.
(22:37):
It was born out of a need for,in our own construction company,
to get our guys to finish thejob right the first time and be
out of schedule.
If they could do that, frankly,I'm happy to share this.
In fact, I'll give you most ofthis money that's left over.
You know, I'm just already ahappy guy at that point.
Speaker 1 (22:55):
My problem is being an underground guy and I can't
even.
That's what I used.
That excuse for years, rightwas oh, I'm an underground guy,
you know, but it's.
It is a little bit morechallenging to be consistent, um
, on things you can't visiblysee.
Okay, okay, check mark, cool.
But at the same time, it's upto me as the leader to go.
(23:20):
This is unacceptable.
If they could literally come inevery single job under budget
and under time, there's alwaysgoing to be leftovers that I
would love to sparse across.
Speaker 2 (23:32):
But you guys have the extra advantage You're saving
money on equipment time too, Igot a $40 an hour guy driving a
$300 an hour piece of equipment.
Those hours are worth a lot.
Yeah, and I want to feel allthose hours back I can and yeah,
this is real money.
Speaker 1 (23:49):
Exactly, and so my struggle and I know a lot of our
audience members are the sameway is that they're in that, you
know, maybe they're past thatscale point of that one crewed
into two crews and they'resitting here thinking in their
head all right, I'm adding thisthird crew, or I have one crew
(24:10):
that just absolutely kills it.
And then I've got another crewthat I'm literally just paying
the bills to have.
And I was there not too longago with the crew that needed to
dissolve and one of my longertenured employees too, like that
knows the difference and it'sstill kept happening and I had
(24:31):
to.
Once you buy into this systemas a leader, you can't detour
off of it for the people belowyou.
Like, if you truly want toshare your money, you got to
make sure, as a leader, there'sgoing to be money for them to
have.
So that's kind of where I wasgetting at with that, because
there's I know there's guyssitting out there that want what
you're talking about, butthey're struggling to find the
(24:53):
scalability to, and that comeswith production rates and
setting good estimation.
I can get that, but I was therethe same way as like well, it's
like they'll settle, I think, isthe word.
They'll settle for a crew justto get the work to say, or just
to do the work to say that theyhave.
You know what I mean, insteadof trying to be absolutely
(25:17):
proficient with everything theytouch and turn it into a
money-making opportunity.
I have as well, personallysettled to have three guys out
there, kind of laying pipe, butI know I'm going to have to go
back and I'm just it's not theway to be thinking and I maybe
speak to those individuals,because I know there's a couple
(25:37):
of guys out there strugglinglike I was.
Speaker 2 (25:39):
We've seen organizations deploy performance
pay and start to build thisculture.
Organizations deployperformance pay and start to
build this culture.
You might have.
You know, maybe you got 20people out there in the field.
Two of those people areprobably going to quit in the
first 60 days because they don'twant.
You know where they quit from.
They quit from the peerpressure, because what happens
is Bob looks over at you andgoes what are you doing today?
(26:01):
We're trying to build this,we're trying to get this done so
we can make this.
No, we've got a bonusopportunity here on this job.
Yeah, we've been doing good sofar and all of a sudden you're
screwing around the day and likecome on, man, let's go.
Like, why were you late thismorning?
Why is the equipment done?
They're not on the feel likeI've got a chance to make more
(26:22):
money.
I start to spend it.
Right, you know, maybe you needshoes.
Come on, let's go.
And so now you get peerpressure down.
The other thing that can happenwith performance pay is, if
your equipment is part of theproblem, why they're not being
efficient.
Now they're like okay, well,whatever, I kind of deal with it
because it's not my money Onceit's their money.
(26:43):
All of a sudden, now they're insize here.
They're like I told you thisthing you can't dig a hole with
this excavator to save your life, you know, and, and so I need
you to get this fixed.
If they see that hydraulic leak, they're like I got to fix this
because this equipment goesdown.
We're never going to get thisjob done.
I'm going to miss my bonus,right?
So I want them to take somemore ownership of what's
happening around them.
(27:03):
I want them to be upset becauseyou order the wrong pipe.
The four-inch pipe shows up it'ssupposed to be six and they're
like boss, get your act together, man, you're talking with money
, accountability, structure Upand down the organization.
Now, the difference is they canonly go to their base wage,
right, the way we approach it isthere's a base wage.
They get paid their base.
That's their floor.
(27:24):
You can go below zero.
That's the risk for the owner,right?
That's the challenge.
That's the price of fame.
So what we're trying to do isget them to take some ownership
of it, say okay, we want to besuccessful on this job.
I'm going to hold myselfaccountable, I'm going to hold
my peers accountable, let's go?
Speaker 1 (27:43):
No, and you keep saying it's buy in, buy in, buy
in.
Speaker 2 (27:46):
And.
Speaker 1 (27:47):
I will tell you.
I thought, and you know, as anowner, hmm, you can buy, you can
set up the wrong culture in,yes, the way that you're
thinking of, the obvious way ofyour, you know, a complete dick
to your guys.
Nobody wants to work for you inthat regard.
(28:07):
But I'm telling you, I swungthe other way and I told you
exactly, michael, why I builtthis business with my wife was
because I wanted to be better tomy people and I was taking them
on fishing trips and I wastaking them to be like I would
do anything for them, but at thesame time, they weren't
tangibly incentivized to getthere.
(28:29):
So, yes, it's cool, boss isdoing this, but at the same time
, it's like they earned it.
They worked their ass off allyear, there's no doubt about it.
But did we really make money?
Or did we just throw that on acredit card or what did we do?
You know what I mean.
Speaker 2 (28:44):
And so it's a combination You're trying to
wrap.
These two things are notmutually exclusive.
I want to build an environmentwhere my team can earn more
money by helping me besuccessful.
Yeah, I want to give them somepower.
At the same time, I want tobuild a great place where you
(29:06):
want to be just because you likethe people you work with.
We're social together.
So that's why we're going to doa team lunch, we're going to go
on a fishing trip, and thosekinds of things are built on top
of this performance culture,right?
So now we've really createddepth to the culture of our
organization and that's a reallywinning position where people
are going to want to come workthere.
You're telling me I've gotcontrol over my bonuses and my
(29:27):
incentives and I can earn moreBecause I'll come in and tell
you I'm the best excavatordriver on earth and I want you
to pay me more.
Well, I don't know, but we'regoing to find out because our
best guys make more becausethey're really good at what they
do, and that's because we havethis performance culture here
and we reward our teamautomatically.
(29:48):
You don't even have to ask forit.
You guys deliver this job.
We all make more money.
The crazy part is that sometimesjobs don't come together.
You go out and do this job.
You didn't know there was 300yards of solid granite.
You're going to be goingthrough that.
Nobody knew was there for somereason.
Okay, we're not going to make abonus on this job, and that's
(30:11):
you know what.
Sometimes that happens.
We're all on the same page,right?
And if you order the wrongmaterials, they may come in and
say well, don't we get our bonus?
It's not our fault.
Actually, no, you don't getyour bonus because we're all on
the same page.
It's the same thing.
We're all.
If I don't make money, you'renot making money.
We're all in this together.
We all have to do our job.
Estimating has got to be strong.
(30:32):
We've got to get our permits in.
We've got to make sure theweather's got to cooperate right
.
We've got to not run into agiant boulder.
You know the where.
Don't crash my truck into atree All the honored things that
have to happen for us to makemoney.
All of that has to cometogether and then we all make
more money.
Speaker 1 (30:49):
That's right.
Speaker 2 (30:50):
We're sharing, we're in it together and that I like
building a company like that.
Speaker 1 (30:54):
Man, I, I really have strived to put culture first,
but it needs to be anincentivized structure to put us
all on the same.
You know, the same goals, thesame milestones.
We're hitting them together,not owners got an idea, labor
(31:14):
pool's got another idea andwe're just playing this
teeter-totter to keep each otherhappy.
And I've been there and it'snot fun, but it and I'm just
telling guys if this issomething that's encouraging to
hear we're fixing here just alittle bit more past the points
of hey, we've got to get okay,we've got to get this accounting
(31:34):
.
You may be sitting there goingman, this sounds awesome, but my
accounting is trash.
Well, I was the same way.
Guys, take the time, go, sitwith a different CPA, find a
fractional CFO, put the time inso you can get here.
This isn't some fairytale pipedream.
Yes, it is going to take monthsof hard work.
If you didn't have the rightaccounting and structures in
(31:56):
place, you're going to have tounscrew that and then start over
and then eventually you'll gethere, but one day at a time,
right.
But I got to jump in here andtalk about my guys at Blue
Collar Performance MarketingReal quick.
They have been unbelievable towork with here as of late, in
the last 90 days, sycon'sYouTube side and they've also
(32:18):
been integrating the podcastvideos team.
They have been doing such agreat job.
And if you guys are looking forsomeone to help you in the
marketing space, you're lookingto start building a website,
need a discovery call.
Just don't know where to gobcperformancemarketingcom
backslash bcbpodcast, or clickthe link in the description and
(32:39):
you can schedule up a discoverycall and they're giving you a
free comp.
They'll take a look at yourwebsite and your marketing
program and get you on the righttrack.
Just like we're talking aboutincentivizing your guys, make
sure you're marketing to be ableto sell enough work for them.
So hit them up for that.
But to continue, say, I'm in theseat, michael, now I'm fixing
(33:00):
to be there, I'm fixing to havemy accountant, I'm fixing to
have production rates and theguys are starting to jive along
and things and everything'sgoing in the right direction.
Of course I'm estimatingcorrectly and I'm maybe losing a
job or, you know, not winningon a job, but you know we're
starting to really consistentlyproduce some profit here.
Tell us about that next stepthrough ProTiv.
(33:22):
Tell us a little bit aboutProTiv and what it can do and
how it does it.
Speaker 2 (33:29):
So ProTiv, the software that we built, this is
something we again.
We built this internally forour own company and it just
worked really well.
So, you know, now we have asoftware company, but it was
originally it was just designedto, you know, to link the
production, the budget that wehad, back to the actual time and
manage the distribution of thesavings to the people who worked
(33:50):
on the project.
Simple idea what we've donewith it since then is we've
built it in a way where weintegrate into the operating
platforms that most of the folkslistening here probably used,
so the builder, trends and thepro cores and all these
different platforms that are outthere miters and QuickBooks and
(34:10):
all that we integrate intothose systems.
We can pull your labor budgetand we're going to take your
time tracking from whereveryou're tracking time QuickBooks,
time, pro core, busy, busy,clockwork all those types of
systems.
We pull in your time data andwe show the budgets in the
actual to your crew in the fieldon their app and they can set
goals and track how they'redoing.
If there's money left over, thesoftware will allocate what the
(34:32):
savings were out to the peoplewho worked on the job, prorate
it out and then based on wagerates, et cetera.
However, you want to distributeincentives.
That's what we do.
The basic level is what Protivis, and we found one.
We were stunned that nothinglike this existed in the market,
like we just want a bonusprogram for hourly guys that's
linked to the budget.
I mean, it seems like thatshould be there, but it wasn't,
(34:55):
so we ended up building it.
We found the app was reallyimportant.
It's really critical for themto see it on their phone.
That's a big part of whatchanges behavior, and the real
first step for a lot of folks,though, is just that decision
that you want that culture.
The software itself is prettystraightforward to use.
The big step is always theculture step.
(35:16):
How do I have conversationswith my team about budgets?
Most of the folks listeningprobably never talk about
dollars with their workers.
Now, you got to start doingthat.
You got to go out there andtalk to Bob about the fact we've
got four grand to do this job.
Bob, how much is it going tocost you guys?
Right?
No Different.
Speaker 1 (35:37):
No, it's so funny On one of our goal lists right now
is working towards anincentive-based structure.
So we are 100% going to lookinto it ourselves and excited to
hear more about it.
But it's kind of funny, isn'tit, how every software company
(35:59):
in the dirt game I know there'sother companies out there that
have already been more softwareintegrated, but a dirt
contractor and a pipe contractor, you wouldn't necessarily.
Maybe we got a first-timelistener here.
They wouldn't really thinkthere's much software involved.
Boy, would you be wrong?
And the software line itemevery year drives me crazy.
(36:20):
I'm like we're a dirt company,guys.
Why?
Speaker 2 (36:23):
is it?
Speaker 1 (36:24):
Why are we spending 60, 70, $80,000 a year and
commune, you know, compoundedsoftware?
This doesn't even make sense tome.
But you said the word that I,in the seamless process that you
integrate with the timetrackers, and you guys already
know, because you've done it foryourself, you guys know that
time tracking and documentationin the same spot can be very
(36:48):
hard or clunky for one or theother, because we've done the
same thing.
We're going through trying tofigure out mitigating the
software line item of why do wehave five pieces of software to
do two things.
So we've been really navigatingthat down.
So we've been really navigatingthat down.
(37:27):
But the number one thing, asyou said, is having that app and
that transparency and clarityfor your guys out there in the
field to be able to see it.
And we actually you hit thefirst two on the nail on the
head.
Procore, we did that for twoyears I am not a Procore
advocate at all, We'll skipright over and I went over to
Builder's Trend for about asixth of the cost Come on back.
And we actually saw utilizationfrom the guys out in the field,
because it's not this formatthat.
Anyways, I'm also a tier onesubcontractor.
They're also going oh, you're aheavy civil guy trying to.
Well, I'm just trying to beproactive with documentation.
(37:47):
With the baby steps of acompany, as most companies look
at it, they're just like, ohwell, that's, you just have to
do that.
Well, you don't know what youdon't know.
Hell, I didn't know I needed todocument everything I did until
I got into a lawsuit andfigured out that, oh well, I
don't have any of my ducks in arow, let's put this into place
and it's just 100% experience.
(38:09):
But no, you.
Speaker 2 (38:10):
Actually you did bring something up right there.
You talk about the lawsuit side.
The legal side to performancepay is actually very specific.
Good, we do this programnationally Canada and in
California, which is thetoughest state, and we spent
quite a bit of time and moneyand legal dollars to make sure
it's buttoned up so it isauditable correctly to the way
(38:34):
that what's called anon-discretionary bonus has to
be paid under Fair LaborStandards Act and California
regulations.
So if you're out there runninga bonus program, a performance
pay program, today, I would behappy to describe to you and I
can get into it with you guys,with someone who wants to call
us and talk to me about how ithas to be done legally, because
(38:56):
there are specific rules.
It's easy to run afoul of thoserules.
It's very hard to do, almostimpossible to do with Excel.
For perspective, if you're justrunning one in Excel, you're
probably not doing it right.
Just sharing legally it'sprobably not correct.
We can help folks with that.
The way we manage it is legallycompliant.
I'm happy to share with peoplehow to do it legally compliant.
(39:18):
So the specific calculationshave to take place.
But it's awesome when you canget it right.
You can really drive thatbehavior change.
We encourage people to reallylean into the bonuses as a thing
to celebrate Guys, we did greaton this job.
We're you know.
Here's the checks, here's themoney.
You know we're going tocelebrate this.
(39:39):
We're coming out.
Here's exciting days Every timewe finish these jobs up.
We're paying bonuses monthly.
Whatever you know, rewardeverybody.
Talk about it.
Who made the most, let's go domore next month.
Build that in deep into thatcompany culture, into those
moments of celebration.
Speaker 1 (39:57):
And I know there's guys sitting there like myself.
They go, I can't wait to getthere.
I can't wait to get theremyself.
They go, I can't wait to getthere, I can't wait to get there
.
But, guys, you are going tohave to go.
20% of whoever's working foryou right now will not be there
through halfway through thischange.
It is if you've been doing itoff of one structure for so long
, and that's why I'm nine yearsin the game and I'm literally 10
(40:20):
, 11 years.
I'm really from 10 to 15, readyto see this structure.
You know what I mean.
And really let these guys flyand make some money.
Nothing would see me more happyas an owner.
Why I designed this is to helpthe people that helped me build
it.
And how do you help them?
Well, money or time off orwhatever they care about.
Speaker 2 (40:42):
And we like that layer on other things.
We think that you need to startwith dollars, like that needs
to be fundamental to yourincentive comp structure is
paying people more for doingwell.
But you can layer other thingson.
You can build in things liketime off and other types of
non-monetary rewards.
We think that's great.
Speaker 1 (41:00):
No, I've always been big on money as a tool to buy
time Me.
I was not a money motivated guy.
I just told you I was running30 people for $18 an hour and
all the documentation andeverything else.
I'm loyal to a fault when itcomes to that and I've had a lot
leave me because I'm notdesigned to do 70 hours a week.
(41:22):
We didn't design this companyto do 70 hours a freaking week,
guys.
I'm sorry, that's just not here.
I didn't design it for 55.
I didn't design it for 60.
I designed it for 45, 50 hoursa week.
We get done what we're supposedto get done in a profitable
manner and then you go spendtime with your family and I know
(41:45):
there's guys that want to chasethe 70, 80 hours a week.
But think about just maybe, ifyou're listening to me for just
a minute, think about tradingthat 70, 80 hour work week for
45 or 50, making just amount ofsame amount of money and having
more time.
Owners buy into the concept.
Speaker 2 (42:05):
So you've done all the time.
You've done all kinds of trades.
Performance pay is always abetter model.
It doesn't mean it's easyalways to put in place, but it
is always a better model thanjust straight hourly pay period.
It's really.
There's no structure in whichit's not.
I can incentivize quality, Ican incentivize safety, I can
incentivize the overallproduction Time performance.
(42:27):
The KPIs that you have to compget you a better outcome.
It's a human nature thing, sowe love to help people get there
if folks are interested ingoing down that road.
Speaker 1 (42:39):
What do you think the timeframe is for a contractor
like we keep hitting aroundabout to switch from the
standard hourly structure towhere you know on the backside
just an average of what you'veseen.
Speaker 2 (42:53):
So it depends on the size company and the length of
cycle time of your jobs.
Too right If you have jobs thatlast six months to a year.
Sometimes the absorption of thistakes a little longer.
It's more complexities to it.
I've seen companies launch thisand being up and running the
next week where they're full ondeployed.
I've seen other companies takea couple of months.
Some of it is driven by howquickly you adopt it culturally.
(43:15):
Are you ready for thecommunication level that that
takes?
We're pretty adept at helpingcustomers to navigate that path.
That's kind of what ouronboarding teams do every day.
So you know.
But from an implementationstandpoint we can often get our
software up in 20 minutes.
It's more.
You know it's getting ready forthat cultural adoption.
(43:38):
The communication around itsometimes takes, you know, a
little bit of time it sometimestakes a little bit of time.
Speaker 1 (43:48):
What are two things that folks can be working on
outside of?
Maybe they're like myself andthey're super early stages and
their culture's all over theplace.
What's two things that you cansee commonly, that folks can
start right now?
Speaker 2 (44:00):
One is be really authentic in your cultural.
When you develop your culture,make sure it's authentic to who
you are.
If you are oh, how to put thisOkay, if the most important
thing to you Cy is that wefinish our jobs on time.
That, culturally, is that'sgoing to be our rock.
(44:20):
When we tell our customer it'sgoing to be done on Friday, it's
done on Friday.
And if we're not sleeping, ifwe're here all night in the rain
, it doesn't matter.
We're completing our time.
If your culture and now let'stake side number two Side number
two says the most importantthing to me is that you have the
right balance with your family.
If your kid's got a baseballgame on Thursday at 5.30.
(44:42):
I'm going to make sure you'reout of here by five so you get
your kid's game.
That's actually the mostimportant thing to me.
You need to be authentic tothat version of you, because you
can only fake it for so long.
Authenticity in your culture iscritical.
I'm not saying one of thosecultures is better than the
other.
No yeah, you need to know whoyou are and what matters to you.
(45:18):
When you no, yeah, you telleverybody it's get to your kid's
game.
It won't ever work that way andnow you will have a broken
communication chain with yourpeople, lack of trust.
Just be genuine.
This is who we are.
This is what it takes to workhere and this is the kind of
thing we're going to honor andrespect and reward in terms of
you know the people we bring inand the way we're going to treat
(45:39):
them.
That's it.
And then run with that man, go,go, build on that.
And when it means a lot ofpeople talk about.
Communication is central toculture.
I want to emphasize that.
That's bi-directionalcommunication.
It's not that you just are goodat telling people what to do
and what's going on and givingthem information.
(46:01):
It's you're listening back tofrom them and you actually care
about what they say.
Speaker 1 (46:06):
It doesn't mean they're always right, but you
make an effort to care aboutwhat they say and it matters man
, I actually it's funny you saythat because, as you can see me,
I was reaching for that earbecause, uh, it hit me, oh, I'd
say probably eight months ago,and we were just over
communicating just every littlething to everyone email written
(46:28):
and I'm like, are we just notlistening, guys?
Like are we just, do we justnot care to listen to each other
?
Because if Sally Sue doesn'tget her answer about Bobby's
pipe, she can't do anything toget her job paid, to get her job
done, to get us paid, so shecan pay Billy Bob.
You're like we're just not evencaring.
(46:48):
And I, literally, in a Mondaymorning meeting, I was just like
this has got to quit.
We got to answer each other, wegot to like what is going on,
and it was one of those meetingswhere, you know, a couple of
people came not bosses, ain'tgonna work for't going to work
for me, deuces, you know, andI'm like, well, I'm sorry, where
we're going isn't whereeverybody wants to go, but
(47:09):
there's a large majority of ushere that really want to do it
and don't.
I will tell you guys that aresitting there.
Before we ask Michael one lastquestion, the guys that are
sitting there going.
Well, this guy, and this guy isnever going to buy in.
Good, get rid of them.
Get rid of them now, right,freaking now.
Because if they can't see tothe end of where you're going,
(47:32):
they'll never make it to there.
Number one, number two, whenthey get there, they're going to
be the first ones to say, ohwell, this isn't working.
I told you so.
And jump, I'm telling you guys,it is a little bit of a long
transition and I'm in the middleof it with you guys.
I'm literally got guys.
I was talking with Michael man.
I've got these guys leaving.
(47:52):
Yes, trust the process.
There's a reason this is allhappening.
Because where you're going,you're going to take those
people that have been workingbehind the scenes for you, doing
every little thing you've askedand you haven't even seen that
they are yet.
And I'm literally starting tosee that myself through my own
experience.
(48:12):
I'm like, oh my gosh, how howdid I not see this guy before?
Like the last six months,paperwork is boom, boom, boom,
boom, boom, boom, boom, boom,boom jobs, coming in on time
every time.
Like everybody likes him, likewhat am I doing, cy?
And?
But I would encourage you youleaders as well man, just take a
(48:34):
minute.
Look inside my and I, michael,hit it have the purpose designed
of what your company is.
We are a family first company,Always have been, since day
freaking one.
I've had a lot of these guys oryounger guys with me.
They've had younger babies andmy office manager she stayed at
(48:54):
home, we paid her.
I've always anything aroundfamily.
Your kid's sick, bye, we'lljust jump in and we'll take care
of it because that's anextension of us.
We're here feeding them, we'rehere protecting and providing
for them, like that's our numberone thing.
And we've got to understandthat and it always has.
Now there's people that alsotake advantage once they find
(49:16):
out.
And I understand you guyssitting there, you don't
understand what this guy andthat guy Listen, you don't
understand what from familyblood, non-blood.
Anybody that's done this we dounderstand.
Anybody that's done 10, 20years of dealing with people and
building teams has hadeverything done to them that
could possibly understand.
So we do understand in thatregard.
Speaker 2 (49:38):
Just be genuine to who you are.
Be authentic to who you are asa person.
Your company, you know, sodon't don't try and fake it.
This is who we are.
Be authentic to who you are asa person.
Your company, you know, sodon't try and fake it.
This is who we are going to be,and trust in that, and go build
a team around you that buysinto that vision.
Speaker 1 (49:52):
It'd be great Dude.
Last question, mr Michael, Iask everybody that's on the show
what's the takeaway for theblue collar worker?
Anybody from the guy justwalking into the trade day one
to the owner himself is beingstuck in the mud and that can be
absolutely mentally, physically, emotionally.
But just being stuck in the mudand tomorrow is going to be
(50:16):
tough.
Speaker 2 (50:18):
You just want one thing Get up early, early.
I've always found that if Ijust get up a little earlier
than I was planning on and usesome of that time to get my head
straight in the morning for me,I go to the gym early in the
morning, it's my thing and it'sjust nobody else, just me, I
think.
I tend to find we need a littlebit of time to let our brain
(50:39):
process everything we got to do.
That's not before I go to theoffice forum, you know.
Talk to my wife, what's goingon, whatever I just I need that
time for me.
If that means I need to get upat 5 30, give father and you
give a five, you know five,whatever that, wherever that
half hour is going to come fromearlier an hour, whatever you're
going to need, just start,start sooner.
But the the day's yours.
(51:00):
Go, start sooner, you know, andget more, get, just be more and
go further and go harder thaneverybody else.
Get more done.
You know the morning, george,and I'm a big fan of get up and
get at it.
Let everybody else sleep in.
Speaker 1 (51:16):
That's right.
Own the day, own the day, man.
And man, I really can't tellyou.
Um, it's just funny.
Our paths crossed right now,because I'm in the midst of it
right now, fixing to get thereand be looking for a phone call
from us, no doubt.
But if there's somebody that'sin here would love to reach out
(51:37):
to you guys, Tell us a littlebit about how we get a hold of
you guys website, et cetera.
Speaker 2 (51:42):
Yeah, I mean Prodiv P-R-O-D-I-V.
Prodivcom is our company.
Michael at Prodivcom is mydirect email.
Feel free, man, email me.
Look me up on LinkedIn, dude,just reach out Whether you want
to use our software.
You just want to figure thisout, whether you got a question
about you.
Know guys out there, besuccessful.
Speaker 1 (52:04):
Well, guys, there you go.
A little blue collar businesspodcast exclusive.
Reach out to Mr Michael.
Ask him some questions aboutbonus structure.
If they did it for themselvesand they're seeing success, and
it's repetitive, repeatableenough that we can start selling
it and it's legal and itintegrates with every software.
Do you want to make more moneyor not?
(52:25):
Guys, come on, I mean it's,it's that simple.
So, mr Michael, thank you somuch for your time and, uh, I
look forward to hopefully maybehaving you back in a couple of
years and maybe we can talkabout the, uh, the benefits of
what Prodo has done for cycloneexcavation and utilities.
Speaker 2 (52:43):
You just never know, boss Never know.
Speaker 1 (52:46):
All right, my guy.
Well, until next time.
You guys, be safe, be kind andbe humble.
If you've enjoyed this episode,be sure to give it a like,
share it with the fellers.
Check out our website to sendus any questions and comments
about your experience in theblue-collar business.
Who do you want to hear from?
Send them our way and we'll doour best to answer any questions
(53:09):
you may have.
Till next time, guys.
Hey, guys, welcome to the Blue Collar Business
Podcast, where we discuss therealest, rawest, most relevant
stories and strategies behindbuilding every corner of a blue
collar business.
I'm your host, cy Kirby, and Iwant to help you in what it took
me trial and error and a wholelot of money to learn the
information that no one in thisindustry is willing to share.
Whether you're under that shadetree or have your hard hat on,
(00:30):
let's expand your toolbox, guys.
Welcome back to another episodeof the Blue Collar Business
Podcast.
I am sitting in this wonderfulstudio in the solo room, solo
pod, today with a remote podcasthappening, podcastvideoscom.
Man, they are always upgradingtheir equipment.
(00:53):
I've been here about a year, asyou guys know, sitting on let
us know how this new camera isin the solo pod room.
I was just talking to our guestabout it and, man, the clarity,
always improving systems andhow they're treating our guests,
and I'm really proud to be apart of Podcast Videos team here
Today.
Guys, you're joining for anotherepisode of Blue Collar Talk and
(01:17):
you can find it all atbluecollarbusinesspodcastcom.
You can watch for free on thewebsite and you can listen for
free on the website.
You do not have to have anytype of subscription platform,
but if you do make sure and giveus a following and a good
rating on a podcast you dolisten to and then check out for
more Furthermore.
Guys, today I'm really excitedto be joined by a gentleman that
(01:41):
has and shares the same passionI do about the things I'm
currently going through in mybusiness and working towards,
and it's a different structurethat a lot some of you, I know
for a fact, have never heard ofit.
Some of you think of it as apipe dream, some of you think
it's fairytale land.
But this gentleman I ambringing to you guys today to
(02:02):
hear the success, some of thefailures, to get where he's at,
and he 100% has already spoken alittle bit with me and it is
pure experience coming out ofhis mouth.
So everybody, welcome up MrMichael Fortenberry, co-founder
and president of ProTiv.
Thank you so much for joiningme today, sir.
Speaker 2 (02:22):
Hi, super excited to be here, my friend.
We're going to talk about somefun stuff, for sure.
Speaker 1 (02:27):
For sure.
A little bit of backstory on MrMichael here.
Number one again, thank you foryour service, sir.
Military veteran with the USArmy, former partner I'm sorry
partner and SVP at PerennialConstruction Solutions.
That is still an active companytoday.
Construction Solutions, that isstill an active company today.
You've held executive roles intech, real estate and
(02:48):
construction from startups to500 firms and then, of course,
today, founded in 2021, yourcompany and what you're going to
be talking to us about todayand the generalizations of where
blue collarcollar companiesfail within their pay structure,
and how passionate you areabout fixing those compensation
(03:09):
systems in our industries,because we need you.
Frankly, you know what I mean.
Speaker 2 (03:15):
Well, brother, I appreciate the introduction.
It's so interesting because weserve and deal with a lot of
contracts across differenttrades and so I've gotten to
know folks from everything fromheavy civil you know kind of
space where you operate in tomom and pop landscaping
companies, to big commercialelectricians.
(03:36):
You know roofing companies andconcrete guys.
We got a company that we'reworking with that this guy's got
like 100 scuba divers thatclean weeds off the bottom of
lakes in the summer in theMidwest OK, I didn't know that
was a thing, but that'sapparently a job and he's like
an underwater landscaper Allright, that's cool.
(03:58):
And there's a lot of amazingthings out there that we do with
our hands as contractors andall of us have pretty much a
core set of challenges when itcomes to we have hourly workers
and I got a labor budget andthose two things are often the
bane of my daily existence.
Like I got guys being paid bythe hour and sometimes they act
(04:19):
like they're paid by the hour.
And how do I drive a culture inmy organization where they come
to work and care about whatthey're doing?
I I want them to.
You know.
You know it turns out you get afree brain with every employee.
I don't know if you knew thatthey come.
The free is like a gift ofpurchase, and these guys come in
(04:40):
and yet sometimes they don'tbother with it because we don't.
You know, it's just an hourlyjob, right?
They're being paid by the hour.
They do their thing, then theygo home.
What if they brought theirbrain to work every day?
Okay, sometimes that may bemore effective than others with
some of our folks, but I'mtelling you there's an
opportunity to do more withthese folks if we can get them
(05:00):
to care.
Hourly pay is not the bestmodel for doing that You've.
And get them to care.
Hourly pay is not the bestmodel for doing that.
You got to do something elsetoo, and that was the thesis we
have when we started buildingperformance pay model for our
own construction company.
Speaker 1 (05:12):
Man, you hit the nail on the head.
Paying somebody from theowner's perspective kind of
makes me sit here and wonder.
As I was sharing a little bitbriefly on the intro before we
started the show is that we areworking our way towards this
system and there's some obviouslimiters to a new company or a
(05:38):
startup.
You know.
First, zero to five years, nozero business knowledge.
But I'm sitting here going whydo I pay guys by the hour to get
the job done at the same timewhere I'm trying to cut as many
hours as possible from time andefficiency standpoint?
You know what I mean.
Speaker 2 (05:58):
So yeah, oh, I know.
So when you bid a job, you bidit by what linear feet?
Speaker 1 (06:04):
feet in some case, if you're putting pipe in yeah,
either linear foot dayproduction rate or, uh, yardage
okay, yard, yeah.
Speaker 2 (06:13):
So I kind of let's just take this thesis.
There's probably others outthere.
You've got some unit on whichyou went.
You went and bid this job.
You say, all right, I'm, I'mgoing to get X dollars per unit
square feet, yards whatever, itdoesn't matter.
And so you got a budget.
Now I got to put in 10 feet ofthis pipe and I'm getting a
(06:35):
dollar a foot.
I got $10 in revenue.
I think it's going to cost me$4 in labor to do that, which is
about we spend.
About 40% of US construction isin labor.
I got about four bucks.
I got to pay my guys to putthat in.
It cost me about four bucks inmaterials.
I got a dollar in GNA and I gotabout a buck in profit.
(06:56):
Honestly, that's roughly thefinancial model for most
construction companies inAmerica.
Yep.
So how do I take that?
But the biggest variable that Ihave and I have, you have
everybody out there, I guaranteeyou is their labor.
If you don't have your materialcosts somewhat under control,
you're probably not long forthis business anyway.
So for the most part, we getour materials marginally within
(07:19):
a range, most of our trades.
What balances around and whateverybody struggles with is that
control over labor.
How do I get my labor costs tobe beyond budget?
If I could guarantee everycontractor out there right now,
you'd always hit your laborbudget Boy, there'd be cheers.
We'd all be like man, I'm ahappy camper.
Everybody be a contractor, thenFour out of the five people
(07:42):
working in our industry are paidby the hour.
Their incentive is linked totime.
The way they make more money isto put more time in the thing
that is the antagonist towardour success is the amount of
time it takes, and that's how wereward them with actually how
they get paid, and we can'tunplug that.
(08:04):
We are stuck with hourly pay.
Structurally, in fact, ifyou're thinking about you
subcontractors, that's probablynot going to last much longer
either.
State of California, that'spretty much impossible.
Now that's happening in moreand more locations.
The answer is not move tosubcontractors.
The answer is to get anincentive in place where your
hourly team doesn't act likethey're paid by the hour.
Speaker 1 (08:24):
Answer is to get an incentive in place where your
hourly team doesn't act likethey're paid by the hour.
No, 100%, and I'm actually so.
We have two groups ofindividuals.
We talked about two differentunits.
There.
I've got yardage guys that areon the dirt side of things, and
literally this topic ofconversation that we're
discussing right now just cameup and my dirt superintendent,
who does a phenomenal job, yes,he makes mistakes, but he's got
(08:47):
a operator, that's, um, that isbeen with us, I want to say
almost three years, now twoyears, maybe two or three years,
and great guy, helps, helpsproduction, helps save us
mechanic in here and there.
Well, he brought me somethingto light that I never even knew.
I've got pipe guys.
I'm a pipe guy, naturally right, I'm thinking like a pipe guy,
(09:11):
I'm paying like a pipe crew.
And he comes to me and he goeshey boss, did you know that
so-and-so never gets anyovertime?
And I said, well, no, now thatyou say that, I'll look into it.
And sure enough, I went backthree or four months, zero
overtime.
Went back a year ago, zeroovertime, and I'm like, oh my
(09:33):
gosh.
Then I feel like I'm slightinghim, you know, of course, and so
I start weighing this out.
I asked the admin.
I'm like, hey, we need to lookat this.
And I went back to my wife andI said, hey, I think we really
need to look at this and werestructured about how we pay
(09:55):
the dirt team compared to thepipe team and sharing with them
what you're going to share alittle bit of P4P or pay for
performance and getting that way.
But it always looks a little bitdifferent and it's scary
sounding for the employer to getit set up and go through the
growing pains, because I may begetting off on a little bit of a
tangent here, but I'd like youto probably discuss, to start
(10:16):
with those guys like myself andI'll tell them myself that
didn't have the accounting inplace, the trustworthy enough
and it's not like anybody'sstealing any money never had
anybody do any of that but itwasn't locked jaw tight enough
because we were handling itin-house not saying that, it was
my wife, mainly, and Ms Shea,and we're just learning what we
(10:38):
learn as business owners, right,but we're not accountants.
And so here we are trying topay a structure.
I've always been so scared todangle that carrot in front of
them and then, all of a sudden,it comes time to pay, and I
don't have it.
That's as a younger business,and so we've spent the last year
really spending the time anddissecting that account.
(10:58):
But maybe speak to them today.
Speaker 2 (11:00):
So the problem you're addressing right there and the
fears you have.
The problem you're addressingright there and the fears you
have.
I'm so familiar with that andwe had to find a way to pull
this off and solve that fearright, Because if I'm always
afraid that, well, what if I endup overpaying or something?
You never get there.
You never end up going downthis road.
(11:21):
Now I'll start at thefundamental levels.
People understand.
There's really two things thatare going to drive your success
as a contractor.
The first is you have to masteryour numbers.
You talked about it from thestandpoint.
I just didn't know myaccounting, Not just accounting.
One you need to know yourestimating.
You have to get your estimatingdown.
You're making wild guesses,You're just flirting disaster on
(11:44):
every job.
So the better you master yourestimating, the better off
you're going to be.
Number two, you really have tounderstand your job costing and
you just need to get a masterclass in job costing.
If you go to the biggestcontractors, the most successful
guys out there, they aremaniacal about their numbers.
They are not guessing, theyknow their numbers.
(12:05):
They are deep into job costing.
That is one of the definingelements of success, because we
operate on tight margins ascontractors.
All of us do.
Nobody understands that and wetake a lot of risk associated
with that.
Right, we think that we don'teven always control.
They can throw a job off andall of a sudden we're upside
down on a project.
So we've got to do everythingwe can to be on top of those
(12:41):
numbers and control.
The other thing you have to doto take financial control on one
side.
The other side is culture.
You have to build a culture ofan organization.
Every company has a culture.
Your company culture is justyour company.
Culture needs to be strong ifyou're going to scale, or the
inefficiency that comes from apoor company culture will eat
all of that success you had.
Financially, you would estimatea job really well and you've
got a team out there that justdoesn't care and so they don't
pay attention to detail and getreworked.
(13:01):
It didn't matter that youestimated it great, it didn't
matter that you bid it well,that you're on top of all your
spend, that you got yourmaterial costs under control.
If that team just didn't careenough to pay attention to
detail and they put that trench,you know, two feet left of
where it's supposed to be, Idon't know whatever kind of
crazy crap happens in your space.
Speaker 1 (13:20):
You know what I'm talking about.
Speaker 2 (13:22):
What did we do?
We did something wrong.
(13:45):
That's six and five.
Why the hell did you?
Good quality work, being ontime, you know, using our PPE,
doing all the right things sothat we can be successful.
That's culture, right.
That's how you become anemployer of choice.
You get the best people to wantto work for you.
You keep your best employees.
You're not churning people out.
(14:06):
That's say, you deliver a greatproduct to your customer.
A lot of people say well, we'rea customer forward.
Customer comes first.
Organization.
Honestly, you should beemployee first.
You put your people first.
Your people are going todeliver your product and that
product is going to take care ofyour customer.
Customer takes care of yourprofit.
I didn't invent that.
Smarter people made it.
So dive deep into your people,care about them.
(14:26):
Build a great company culture,Know your numbers.
Parts one and two building agood contracting space, good
contracting business.
So our belief is that apay-for-performance model starts
at this foundation.
I've got some sense of mynumbers.
I'm dialed in there.
Now what I want to do is I wantto build a culture of
(14:49):
performance.
So what pay for performancedoes?
It says I'm going toincentivize you when we
overperform as a company.
So one of the great things isyou don't have to worry about.
I'm nervous about putting thecarrot out there and not having
the money, because the onlycarrot that goes out there is
the savings that we create,because the only carrot that
goes out there is the savingsthat we create.
(15:09):
So Cy goes out there and hebids this job for the city.
He says I've got this $10 job.
I'm going to spend $4 in laborto get this job done and if I
get that job done in $3 insteadof $4, I've done it right.
Customer's happy, we're safe.
I've got a dollar left over.
I am happy to share that moneywith the people who worked on
(15:34):
that job.
That's the easiest money I willever spend, 100%.
My problem is I don't want togo to $4.10.
I want to be at $3.90.
So I want to find a way to getthat crew in the field to want
to do that job right the firsttime, want to be efficient, want
to bring that job in underbudget Because if they'll do
that I've got money left over.
I can always afford that checkbecause I had planned on
(15:54):
spending more anyway.
So that's why we find that it'snot a big leap to get folks to
be able to afford a performancepay plan, because the
performance pay part of it comesfrom savings.
Right, that's the key.
You want to build a sustainablebonus program.
You got to build it where it'scoming out of savings.
Speaker 1 (16:13):
No, it 100% is.
And I think the biggest thingin my space as I was learning
again, I'll tell myself is thatthe guess you hit the nail on
the head again with estimationand production and how we
analyze those things isaccounting.
So they have to meet all threetogether and so you have to have
(16:38):
an estimator that's analyzinghis stuff from the back of the
house into the front of thehouse.
Get him some good, solid,consistent numbers.
And then production we have tohold them accountable enough to
what's happening in the fieldper those numbers.
Now, if he screwed up, that'sfine, let's find out where he
screwed up.
You know what I mean.
But setting those productionrates and giving that crew in
(17:01):
the field hey guys, look, we'rean underground contractor, stuff
is going to happen, whatever'sgoing to happen, but we have got
to get in 50 feet a day, nomatter what.
I don't care if you're slapping700 feet in a day.
If there's one day that comesnow I will also tell them this
(17:22):
like, hey, if you get out onthat job and you're beating your
production rate, that bad daythat does happen is not as bad
as it was if we weren't meetingproduction and they were, you
know over-subsceeding it, andthat's where it all washes out.
But man, it took me some timeto figure out, okay, my
(17:42):
estimation's here.
That's driving this rate atthis footage per day.
Let's give them this footage,let's give them these rock
numbers, let's give them thisamount of pipe and give them
that information.
And as a small young businessowner mid-market now, but as I
was growing I was so scared todeath to let my team in on all
(18:06):
the information and I'm like itwas like just screwing myself
from the get go because I'mgoing to be the answer guy, no
matter what If I don't let themin and share a little bit of
this information of why I'mmoving the way, I'm moving way,
(18:28):
I'm moving anyways, but thoseproduction rates are so key to
they got to have a base goal forall any of this to work with.
So I just wanted to add on toyour point here.
And the other thing was was knowyour cost?
I'm going to drive that homeeven more before we get past
here, because KeyWit has a signwhen they were anyways, I know
the backstory of it, but theyhave a sign that they put on
(18:49):
some of their projects.
Literally it says know yourcosts.
It's an orange constructionsign.
I'm getting one made for mydaggum office, because you have
to not just me, not just theadmin and the estimator and the
PM, but the superintendent andthe foreman and the guys in the
field should have anunderstanding from day one.
(19:09):
We've got to hit a hundred foota day or this job is hosed from
the get-go.
And as long as they're at leastadhering to our production
rates or giving us justifiablereasons of, hey, I can't adhere
to this because of this sitecondition or this pipe or
whatever, where we can push itback on that admin team and go
(19:30):
hey guys, really need you tofind out what's going on here.
This is halting this.
Or hey, did you guys not catchthis?
Was this not on the drawing?
We're really screwing the poochand this one's going to cost us
.
Speaker 2 (19:42):
But production rates, man going to cost us, you know,
but production rates, man.
The step after that is to getthe team to care about it.
There's one thing for them toknow, and I'm a big fan.
I now oh, some people okay,open book management.
I'll give you that's adebatable thing.
I actually like it, but somedon't, maybe different reasons.
I'll tell you what needs to beopen book.
(20:04):
Is your labor budget?
Maybe different reasons?
I'll tell you what needs to beopen book.
Is your labor budget right?
So so let's the labor budget.
Is their money right?
I want them to feel ownershipof it.
So take that labor budget andwe actually in our, with our app
, we actually put it on theirphone.
They see it yeah, same here seethe labor budget.
I want them to see every daywhat they've used so they know
what's left, so they kind oftake.
I want them to feel like, okay,this is my money, cause they
(20:26):
don't really care about yourmoney.
Cy.
Speaker 1 (20:27):
No, they don't.
Speaker 2 (20:28):
Took me years to figure that out, but they do
care about their own money andthey're actually somewhat
accountable to their peers.
So what you want to do iscreate this environment where
they feel like that labor budgetis their money Cause then
they're going to treat itdifferent.
All right, so now, now they're.
Now, once I've shown them thelabor budget, I say look, you
guys have four hours to do this.
You got $4 to do this.
Whatever it is, you have 5,000hours to do this.
(20:50):
How are we doing?
You know, and what I'm doing isI actually?
There's this fun conversationyou can have where you go to the
job site.
You get the team around and sayare you guys making any money
on this job, this job?
You think about that concept,right, because right now they
get paid by the hour.
So what do you mean?
(21:11):
Making money on the job?
No, are you making money onthis job, or are you guys just
only making your normal hour?
Are you only making your hourlywage?
Are you guys making any money?
Like, yeah, I'm paying you 30bucks an hour, but who cares
about that?
Don't you want to make 35?
Don't you want that as bonuses?
So are you guys making anymoney on this job?
And talk to them Like are youtracking towards the goals that
you set?
(21:31):
You know you guys set that goal.
You want to beat this budget by10%, this job, are you on track
for that?
You ahead, you behind.
So what we found is, when youcan engage the team, show them
the labor budgets, talk to themabout it, and then what we
believe is you have to have atransparency to it, where they
can see it, and a simplicity tothey understand what they
(21:51):
personally get for performingbetter.
So we use our app to show them.
This is the dollar amountthat's going to be in your
pocket when this job is over.
If you hit this goal, based onhow you're performing, this is
how much money is coming to you.
When they can see the dollaramount, it becomes very real to
them.
You begin to get this buy-in tothe behavior shift that we're
(22:15):
looking for.
The goal of an incentive plan isnot to pay bonuses.
The goal is to actually getbehavior change.
I want behavior change.
I want the teamwork, I want thecommunication, I want the
attention to detail.
Those are the things that makeme money as a contractor, not
time.
So I want to incentivize thatand then I'm happy to share that
savings.
So that's where.
That's where it was really born.
(22:37):
It was born out of a need for,in our own construction company,
to get our guys to finish thejob right the first time and be
out of schedule.
If they could do that, frankly,I'm happy to share this.
In fact, I'll give you most ofthis money that's left over.
You know, I'm just already ahappy guy at that point.
Speaker 1 (22:55):
My problem is being an underground guy and I can't
even.
That's what I used.
That excuse for years, rightwas oh, I'm an underground guy,
you know, but it's.
It is a little bit morechallenging to be consistent, um
, on things you can't visiblysee.
Okay, okay, check mark, cool.
But at the same time, it's upto me as the leader to go.
(23:20):
This is unacceptable.
If they could literally come inevery single job under budget
and under time, there's alwaysgoing to be leftovers that I
would love to sparse across.
Speaker 2 (23:32):
But you guys have the extra advantage You're saving
money on equipment time too, Igot a $40 an hour guy driving a
$300 an hour piece of equipment.
Those hours are worth a lot.
Yeah, and I want to feel allthose hours back I can and yeah,
this is real money.
Speaker 1 (23:49):
Exactly, and so my struggle and I know a lot of our
audience members are the sameway is that they're in that, you
know, maybe they're past thatscale point of that one crewed
into two crews and they'resitting here thinking in their
head all right, I'm adding thisthird crew, or I have one crew
(24:10):
that just absolutely kills it.
And then I've got another crewthat I'm literally just paying
the bills to have.
And I was there not too longago with the crew that needed to
dissolve and one of my longertenured employees too, like that
knows the difference and it'sstill kept happening and I had
(24:31):
to.
Once you buy into this systemas a leader, you can't detour
off of it for the people belowyou.
Like, if you truly want toshare your money, you got to
make sure, as a leader, there'sgoing to be money for them to
have.
So that's kind of where I wasgetting at with that, because
there's I know there's guyssitting out there that want what
you're talking about, butthey're struggling to find the
(24:53):
scalability to, and that comeswith production rates and
setting good estimation.
I can get that, but I was therethe same way as like well, it's
like they'll settle, I think, isthe word.
They'll settle for a crew justto get the work to say, or just
to do the work to say that theyhave.
You know what I mean, insteadof trying to be absolutely
(25:17):
proficient with everything theytouch and turn it into a
money-making opportunity.
I have as well, personallysettled to have three guys out
there, kind of laying pipe, butI know I'm going to have to go
back and I'm just it's not theway to be thinking and I maybe
speak to those individuals,because I know there's a couple
(25:37):
of guys out there strugglinglike I was.
Speaker 2 (25:39):
We've seen organizations deploy performance
pay and start to build thisculture.
Organizations deployperformance pay and start to
build this culture.
You might have.
You know, maybe you got 20people out there in the field.
Two of those people areprobably going to quit in the
first 60 days because they don'twant.
You know where they quit from.
They quit from the peerpressure, because what happens
is Bob looks over at you andgoes what are you doing today?
(26:01):
We're trying to build this,we're trying to get this done so
we can make this.
No, we've got a bonusopportunity here on this job.
Yeah, we've been doing good sofar and all of a sudden you're
screwing around the day and likecome on, man, let's go.
Like, why were you late thismorning?
Why is the equipment done?
They're not on the feel likeI've got a chance to make more
(26:22):
money.
I start to spend it.
Right, you know, maybe you needshoes.
Come on, let's go.
And so now you get peerpressure down.
The other thing that can happenwith performance pay is, if
your equipment is part of theproblem, why they're not being
efficient.
Now they're like okay, well,whatever, I kind of deal with it
because it's not my money Onceit's their money.
(26:43):
All of a sudden, now they're insize here.
They're like I told you thisthing you can't dig a hole with
this excavator to save your life, you know, and, and so I need
you to get this fixed.
If they see that hydraulic leak, they're like I got to fix this
because this equipment goesdown.
We're never going to get thisjob done.
I'm going to miss my bonus,right?
So I want them to take somemore ownership of what's
happening around them.
(27:03):
I want them to be upset becauseyou order the wrong pipe.
The four-inch pipe shows up it'ssupposed to be six and they're
like boss, get your act together, man, you're talking with money
, accountability, structure Upand down the organization.
Now, the difference is they canonly go to their base wage,
right, the way we approach it isthere's a base wage.
They get paid their base.
That's their floor.
(27:24):
You can go below zero.
That's the risk for the owner,right?
That's the challenge.
That's the price of fame.
So what we're trying to do isget them to take some ownership
of it, say okay, we want to besuccessful on this job.
I'm going to hold myselfaccountable, I'm going to hold
my peers accountable, let's go?
Speaker 1 (27:43):
No, and you keep saying it's buy in, buy in, buy
in.
Speaker 2 (27:46):
And.
Speaker 1 (27:47):
I will tell you.
I thought, and you know, as anowner, hmm, you can buy, you can
set up the wrong culture in,yes, the way that you're
thinking of, the obvious way ofyour, you know, a complete dick
to your guys.
Nobody wants to work for you inthat regard.
(28:07):
But I'm telling you, I swungthe other way and I told you
exactly, michael, why I builtthis business with my wife was
because I wanted to be better tomy people and I was taking them
on fishing trips and I wastaking them to be like I would
do anything for them, but at thesame time, they weren't
tangibly incentivized to getthere.
(28:29):
So, yes, it's cool, boss isdoing this, but at the same time
, it's like they earned it.
They worked their ass off allyear, there's no doubt about it.
But did we really make money?
Or did we just throw that on acredit card or what did we do?
You know what I mean.
Speaker 2 (28:44):
And so it's a combination You're trying to
wrap.
These two things are notmutually exclusive.
I want to build an environmentwhere my team can earn more
money by helping me besuccessful.
Yeah, I want to give them somepower.
At the same time, I want tobuild a great place where you
(29:06):
want to be just because you likethe people you work with.
We're social together.
So that's why we're going to doa team lunch, we're going to go
on a fishing trip, and thosekinds of things are built on top
of this performance culture,right?
So now we've really createddepth to the culture of our
organization and that's a reallywinning position where people
are going to want to come workthere.
You're telling me I've gotcontrol over my bonuses and my
(29:27):
incentives and I can earn moreBecause I'll come in and tell
you I'm the best excavatordriver on earth and I want you
to pay me more.
Well, I don't know, but we'regoing to find out because our
best guys make more becausethey're really good at what they
do, and that's because we havethis performance culture here
and we reward our teamautomatically.
(29:48):
You don't even have to ask forit.
You guys deliver this job.
We all make more money.
The crazy part is that sometimesjobs don't come together.
You go out and do this job.
You didn't know there was 300yards of solid granite.
You're going to be goingthrough that.
Nobody knew was there for somereason.
Okay, we're not going to make abonus on this job, and that's
(30:11):
you know what.
Sometimes that happens.
We're all on the same page,right?
And if you order the wrongmaterials, they may come in and
say well, don't we get our bonus?
It's not our fault.
Actually, no, you don't getyour bonus because we're all on
the same page.
It's the same thing.
We're all.
If I don't make money, you'renot making money.
We're all in this together.
We all have to do our job.
Estimating has got to be strong.
(30:32):
We've got to get our permits in.
We've got to make sure theweather's got to cooperate right
.
We've got to not run into agiant boulder.
You know the where.
Don't crash my truck into atree All the honored things that
have to happen for us to makemoney.
All of that has to cometogether and then we all make
more money.
Speaker 1 (30:49):
That's right.
Speaker 2 (30:50):
We're sharing, we're in it together and that I like
building a company like that.
Speaker 1 (30:54):
Man, I, I really have strived to put culture first,
but it needs to be anincentivized structure to put us
all on the same.
You know, the same goals, thesame milestones.
We're hitting them together,not owners got an idea, labor
(31:14):
pool's got another idea andwe're just playing this
teeter-totter to keep each otherhappy.
And I've been there and it'snot fun, but it and I'm just
telling guys if this issomething that's encouraging to
hear we're fixing here just alittle bit more past the points
of hey, we've got to get okay,we've got to get this accounting
(31:34):
.
You may be sitting there goingman, this sounds awesome, but my
accounting is trash.
Well, I was the same way.
Guys, take the time, go, sitwith a different CPA, find a
fractional CFO, put the time inso you can get here.
This isn't some fairytale pipedream.
Yes, it is going to take monthsof hard work.
If you didn't have the rightaccounting and structures in
(31:56):
place, you're going to have tounscrew that and then start over
and then eventually you'll gethere, but one day at a time,
right.
But I got to jump in here andtalk about my guys at Blue
Collar Performance MarketingReal quick.
They have been unbelievable towork with here as of late, in
the last 90 days, sycon'sYouTube side and they've also
(32:18):
been integrating the podcastvideos team.
They have been doing such agreat job.
And if you guys are looking forsomeone to help you in the
marketing space, you're lookingto start building a website,
need a discovery call.
Just don't know where to gobcperformancemarketingcom
backslash bcbpodcast, or clickthe link in the description and
(32:39):
you can schedule up a discoverycall and they're giving you a
free comp.
They'll take a look at yourwebsite and your marketing
program and get you on the righttrack.
Just like we're talking aboutincentivizing your guys, make
sure you're marketing to be ableto sell enough work for them.
So hit them up for that.
But to continue, say, I'm in theseat, michael, now I'm fixing
(33:00):
to be there, I'm fixing to havemy accountant, I'm fixing to
have production rates and theguys are starting to jive along
and things and everything'sgoing in the right direction.
Of course I'm estimatingcorrectly and I'm maybe losing a
job or, you know, not winningon a job, but you know we're
starting to really consistentlyproduce some profit here.
Tell us about that next stepthrough ProTiv.
(33:22):
Tell us a little bit aboutProTiv and what it can do and
how it does it.
Speaker 2 (33:29):
So ProTiv, the software that we built, this is
something we again.
We built this internally forour own company and it just
worked really well.
So, you know, now we have asoftware company, but it was
originally it was just designedto, you know, to link the
production, the budget that wehad, back to the actual time and
manage the distribution of thesavings to the people who worked
(33:50):
on the project.
Simple idea what we've donewith it since then is we've
built it in a way where weintegrate into the operating
platforms that most of the folkslistening here probably used,
so the builder, trends and thepro cores and all these
different platforms that are outthere miters and QuickBooks and
(34:10):
all that we integrate intothose systems.
We can pull your labor budgetand we're going to take your
time tracking from whereveryou're tracking time QuickBooks,
time, pro core, busy, busy,clockwork all those types of
systems.
We pull in your time data andwe show the budgets in the
actual to your crew in the fieldon their app and they can set
goals and track how they'redoing.
If there's money left over, thesoftware will allocate what the
(34:32):
savings were out to the peoplewho worked on the job, prorate
it out and then based on wagerates, et cetera.
However, you want to distributeincentives.
That's what we do.
The basic level is what Protivis, and we found one.
We were stunned that nothinglike this existed in the market,
like we just want a bonusprogram for hourly guys that's
linked to the budget.
I mean, it seems like thatshould be there, but it wasn't,
(34:55):
so we ended up building it.
We found the app was reallyimportant.
It's really critical for themto see it on their phone.
That's a big part of whatchanges behavior, and the real
first step for a lot of folks,though, is just that decision
that you want that culture.
The software itself is prettystraightforward to use.
The big step is always theculture step.
(35:16):
How do I have conversationswith my team about budgets?
Most of the folks listeningprobably never talk about
dollars with their workers.
Now, you got to start doingthat.
You got to go out there andtalk to Bob about the fact we've
got four grand to do this job.
Bob, how much is it going tocost you guys?
Right?
No Different.
Speaker 1 (35:37):
No, it's so funny On one of our goal lists right now
is working towards anincentive-based structure.
So we are 100% going to lookinto it ourselves and excited to
hear more about it.
But it's kind of funny, isn'tit, how every software company
(35:59):
in the dirt game I know there'sother companies out there that
have already been more softwareintegrated, but a dirt
contractor and a pipe contractor, you wouldn't necessarily.
Maybe we got a first-timelistener here.
They wouldn't really thinkthere's much software involved.
Boy, would you be wrong?
And the software line itemevery year drives me crazy.
(36:20):
I'm like we're a dirt company,guys.
Why?
Speaker 2 (36:23):
is it?
Speaker 1 (36:24):
Why are we spending 60, 70, $80,000 a year and
commune, you know, compoundedsoftware?
This doesn't even make sense tome.
But you said the word that I,in the seamless process that you
integrate with the timetrackers, and you guys already
know, because you've done it foryourself, you guys know that
time tracking and documentationin the same spot can be very
(36:48):
hard or clunky for one or theother, because we've done the
same thing.
We're going through trying tofigure out mitigating the
software line item of why do wehave five pieces of software to
do two things.
So we've been really navigatingthat down.
So we've been really navigatingthat down.
(37:27):
But the number one thing, asyou said, is having that app and
that transparency and clarityfor your guys out there in the
field to be able to see it.
And we actually you hit thefirst two on the nail on the
head.
Procore, we did that for twoyears I am not a Procore
advocate at all, We'll skipright over and I went over to
Builder's Trend for about asixth of the cost Come on back.
And we actually saw utilizationfrom the guys out in the field,
because it's not this formatthat.
Anyways, I'm also a tier onesubcontractor.
They're also going oh, you're aheavy civil guy trying to.
Well, I'm just trying to beproactive with documentation.
(37:47):
With the baby steps of acompany, as most companies look
at it, they're just like, ohwell, that's, you just have to
do that.
Well, you don't know what youdon't know.
Hell, I didn't know I needed todocument everything I did until
I got into a lawsuit andfigured out that, oh well, I
don't have any of my ducks in arow, let's put this into place
and it's just 100% experience.
(38:09):
But no, you.
Speaker 2 (38:10):
Actually you did bring something up right there.
You talk about the lawsuit side.
The legal side to performancepay is actually very specific.
Good, we do this programnationally Canada and in
California, which is thetoughest state, and we spent
quite a bit of time and moneyand legal dollars to make sure
it's buttoned up so it isauditable correctly to the way
(38:34):
that what's called anon-discretionary bonus has to
be paid under Fair LaborStandards Act and California
regulations.
So if you're out there runninga bonus program, a performance
pay program, today, I would behappy to describe to you and I
can get into it with you guys,with someone who wants to call
us and talk to me about how ithas to be done legally, because
(38:56):
there are specific rules.
It's easy to run afoul of thoserules.
It's very hard to do, almostimpossible to do with Excel.
For perspective, if you're justrunning one in Excel, you're
probably not doing it right.
Just sharing legally it'sprobably not correct.
We can help folks with that.
The way we manage it is legallycompliant.
I'm happy to share with peoplehow to do it legally compliant.
(39:18):
So the specific calculationshave to take place.
But it's awesome when you canget it right.
You can really drive thatbehavior change.
We encourage people to reallylean into the bonuses as a thing
to celebrate Guys, we did greaton this job.
We're you know.
Here's the checks, here's themoney.
You know we're going tocelebrate this.
(39:39):
We're coming out.
Here's exciting days Every timewe finish these jobs up.
We're paying bonuses monthly.
Whatever you know, rewardeverybody.
Talk about it.
Who made the most, let's go domore next month.
Build that in deep into thatcompany culture, into those
moments of celebration.
Speaker 1 (39:57):
And I know there's guys sitting there like myself.
They go, I can't wait to getthere.
I can't wait to get theremyself.
They go, I can't wait to getthere, I can't wait to get there
.
But, guys, you are going tohave to go.
20% of whoever's working foryou right now will not be there
through halfway through thischange.
It is if you've been doing itoff of one structure for so long
, and that's why I'm nine yearsin the game and I'm literally 10
(40:20):
, 11 years.
I'm really from 10 to 15, readyto see this structure.
You know what I mean.
And really let these guys flyand make some money.
Nothing would see me more happyas an owner.
Why I designed this is to helpthe people that helped me build
it.
And how do you help them?
Well, money or time off orwhatever they care about.
Speaker 2 (40:42):
And we like that layer on other things.
We think that you need to startwith dollars, like that needs
to be fundamental to yourincentive comp structure is
paying people more for doingwell.
But you can layer other thingson.
You can build in things liketime off and other types of
non-monetary rewards.
We think that's great.
Speaker 1 (41:00):
No, I've always been big on money as a tool to buy
time Me.
I was not a money motivated guy.
I just told you I was running30 people for $18 an hour and
all the documentation andeverything else.
I'm loyal to a fault when itcomes to that and I've had a lot
leave me because I'm notdesigned to do 70 hours a week.
(41:22):
We didn't design this companyto do 70 hours a freaking week,
guys.
I'm sorry, that's just not here.
I didn't design it for 55.
I didn't design it for 60.
I designed it for 45, 50 hoursa week.
We get done what we're supposedto get done in a profitable
manner and then you go spendtime with your family and I know
(41:45):
there's guys that want to chasethe 70, 80 hours a week.
But think about just maybe, ifyou're listening to me for just
a minute, think about tradingthat 70, 80 hour work week for
45 or 50, making just amount ofsame amount of money and having
more time.
Owners buy into the concept.
Speaker 2 (42:05):
So you've done all the time.
You've done all kinds of trades.
Performance pay is always abetter model.
It doesn't mean it's easyalways to put in place, but it
is always a better model thanjust straight hourly pay period.
It's really.
There's no structure in whichit's not.
I can incentivize quality, Ican incentivize safety, I can
incentivize the overallproduction Time performance.
(42:27):
The KPIs that you have to compget you a better outcome.
It's a human nature thing, sowe love to help people get there
if folks are interested ingoing down that road.
Speaker 1 (42:39):
What do you think the timeframe is for a contractor
like we keep hitting aroundabout to switch from the
standard hourly structure towhere you know on the backside
just an average of what you'veseen.
Speaker 2 (42:53):
So it depends on the size company and the length of
cycle time of your jobs.
Too right If you have jobs thatlast six months to a year.
Sometimes the absorption of thistakes a little longer.
It's more complexities to it.
I've seen companies launch thisand being up and running the
next week where they're full ondeployed.
I've seen other companies takea couple of months.
Some of it is driven by howquickly you adopt it culturally.
(43:15):
Are you ready for thecommunication level that that
takes?
We're pretty adept at helpingcustomers to navigate that path.
That's kind of what ouronboarding teams do every day.
So you know.
But from an implementationstandpoint we can often get our
software up in 20 minutes.
It's more.
You know it's getting ready forthat cultural adoption.
(43:38):
The communication around itsometimes takes, you know, a
little bit of time it sometimestakes a little bit of time.
Speaker 1 (43:48):
What are two things that folks can be working on
outside of?
Maybe they're like myself andthey're super early stages and
their culture's all over theplace.
What's two things that you cansee commonly, that folks can
start right now?
Speaker 2 (44:00):
One is be really authentic in your cultural.
When you develop your culture,make sure it's authentic to who
you are.
If you are oh, how to put thisOkay, if the most important
thing to you Cy is that wefinish our jobs on time.
That, culturally, is that'sgoing to be our rock.
(44:20):
When we tell our customer it'sgoing to be done on Friday, it's
done on Friday.
And if we're not sleeping, ifwe're here all night in the rain
, it doesn't matter.
We're completing our time.
If your culture and now let'stake side number two Side number
two says the most importantthing to me is that you have the
right balance with your family.
If your kid's got a baseballgame on Thursday at 5.30.
(44:42):
I'm going to make sure you'reout of here by five so you get
your kid's game.
That's actually the mostimportant thing to me.
You need to be authentic tothat version of you, because you
can only fake it for so long.
Authenticity in your culture iscritical.
I'm not saying one of thosecultures is better than the
other.
No yeah, you need to know whoyou are and what matters to you.
(45:18):
When you no, yeah, you telleverybody it's get to your kid's
game.
It won't ever work that way andnow you will have a broken
communication chain with yourpeople, lack of trust.
Just be genuine.
This is who we are.
This is what it takes to workhere and this is the kind of
thing we're going to honor andrespect and reward in terms of
you know the people we bring inand the way we're going to treat
(45:39):
them.
That's it.
And then run with that man, go,go, build on that.
And when it means a lot ofpeople talk about.
Communication is central toculture.
I want to emphasize that.
That's bi-directionalcommunication.
It's not that you just are goodat telling people what to do
and what's going on and givingthem information.
(46:01):
It's you're listening back tofrom them and you actually care
about what they say.
Speaker 1 (46:06):
It doesn't mean they're always right, but you
make an effort to care aboutwhat they say and it matters man
, I actually it's funny you saythat because, as you can see me,
I was reaching for that earbecause, uh, it hit me, oh, I'd
say probably eight months ago,and we were just over
communicating just every littlething to everyone email written
(46:28):
and I'm like, are we just notlistening, guys?
Like are we just, do we justnot care to listen to each other
?
Because if Sally Sue doesn'tget her answer about Bobby's
pipe, she can't do anything toget her job paid, to get her job
done, to get us paid, so shecan pay Billy Bob.
You're like we're just not evencaring.
(46:48):
And I, literally, in a Mondaymorning meeting, I was just like
this has got to quit.
We got to answer each other, wegot to like what is going on,
and it was one of those meetingswhere, you know, a couple of
people came not bosses, ain'tgonna work for't going to work
for me, deuces, you know, andI'm like, well, I'm sorry, where
we're going isn't whereeverybody wants to go, but
(47:09):
there's a large majority of ushere that really want to do it
and don't.
I will tell you guys that aresitting there.
Before we ask Michael one lastquestion, the guys that are
sitting there going.
Well, this guy, and this guy isnever going to buy in.
Good, get rid of them.
Get rid of them now, right,freaking now.
Because if they can't see tothe end of where you're going,
(47:32):
they'll never make it to there.
Number one, number two, whenthey get there, they're going to
be the first ones to say, ohwell, this isn't working.
I told you so.
And jump, I'm telling you guys,it is a little bit of a long
transition and I'm in the middleof it with you guys.
I'm literally got guys.
I was talking with Michael man.
I've got these guys leaving.
(47:52):
Yes, trust the process.
There's a reason this is allhappening.
Because where you're going,you're going to take those
people that have been workingbehind the scenes for you, doing
every little thing you've askedand you haven't even seen that
they are yet.
And I'm literally starting tosee that myself through my own
experience.
(48:12):
I'm like, oh my gosh, how howdid I not see this guy before?
Like the last six months,paperwork is boom, boom, boom,
boom, boom, boom, boom, boom,boom jobs, coming in on time
every time.
Like everybody likes him, likewhat am I doing, cy?
And?
But I would encourage you youleaders as well man, just take a
(48:34):
minute.
Look inside my and I, michael,hit it have the purpose designed
of what your company is.
We are a family first company,Always have been, since day
freaking one.
I've had a lot of these guys oryounger guys with me.
They've had younger babies andmy office manager she stayed at
(48:54):
home, we paid her.
I've always anything aroundfamily.
Your kid's sick, bye, we'lljust jump in and we'll take care
of it because that's anextension of us.
We're here feeding them, we'rehere protecting and providing
for them, like that's our numberone thing.
And we've got to understandthat and it always has.
Now there's people that alsotake advantage once they find
(49:16):
out.
And I understand you guyssitting there, you don't
understand what this guy andthat guy Listen, you don't
understand what from familyblood, non-blood.
Anybody that's done this we dounderstand.
Anybody that's done 10, 20years of dealing with people and
building teams has hadeverything done to them that
could possibly understand.
So we do understand in thatregard.
Speaker 2 (49:38):
Just be genuine to who you are.
Be authentic to who you are asa person.
Your company, you know, sodon't don't try and fake it.
This is who we are.
Be authentic to who you are asa person.
Your company, you know, sodon't try and fake it.
This is who we are going to be,and trust in that, and go build
a team around you that buysinto that vision.
Speaker 1 (49:52):
It'd be great Dude.
Last question, mr Michael, Iask everybody that's on the show
what's the takeaway for theblue collar worker?
Anybody from the guy justwalking into the trade day one
to the owner himself is beingstuck in the mud and that can be
absolutely mentally, physically, emotionally.
But just being stuck in the mudand tomorrow is going to be
(50:16):
tough.
Speaker 2 (50:18):
You just want one thing Get up early, early.
I've always found that if Ijust get up a little earlier
than I was planning on and usesome of that time to get my head
straight in the morning for me,I go to the gym early in the
morning, it's my thing and it'sjust nobody else, just me, I
think.
I tend to find we need a littlebit of time to let our brain
(50:39):
process everything we got to do.
That's not before I go to theoffice forum, you know.
Talk to my wife, what's goingon, whatever I just I need that
time for me.
If that means I need to get upat 5 30, give father and you
give a five, you know five,whatever that, wherever that
half hour is going to come fromearlier an hour, whatever you're
going to need, just start,start sooner.
But the the day's yours.
(51:00):
Go, start sooner, you know, andget more, get, just be more and
go further and go harder thaneverybody else.
Get more done.
You know the morning, george,and I'm a big fan of get up and
get at it.
Let everybody else sleep in.
Speaker 1 (51:16):
That's right.
Own the day, own the day, man.
And man, I really can't tellyou.
Um, it's just funny.
Our paths crossed right now,because I'm in the midst of it
right now, fixing to get thereand be looking for a phone call
from us, no doubt.
But if there's somebody that'sin here would love to reach out
(51:37):
to you guys, Tell us a littlebit about how we get a hold of
you guys website, et cetera.
Speaker 2 (51:42):
Yeah, I mean Prodiv P-R-O-D-I-V.
Prodivcom is our company.
Michael at Prodivcom is mydirect email.
Feel free, man, email me.
Look me up on LinkedIn, dude,just reach out Whether you want
to use our software.
You just want to figure thisout, whether you got a question
about you.
Know guys out there, besuccessful.
Speaker 1 (52:04):
Well, guys, there you go.
A little blue collar businesspodcast exclusive.
Reach out to Mr Michael.
Ask him some questions aboutbonus structure.
If they did it for themselvesand they're seeing success, and
it's repetitive, repeatableenough that we can start selling
it and it's legal and itintegrates with every software.
Do you want to make more moneyor not?
(52:25):
Guys, come on, I mean it's,it's that simple.
So, mr Michael, thank you somuch for your time and, uh, I
look forward to hopefully maybehaving you back in a couple of
years and maybe we can talkabout the, uh, the benefits of
what Prodo has done for cycloneexcavation and utilities.
Speaker 2 (52:43):
You just never know, boss Never know.
Speaker 1 (52:46):
All right, my guy.
Well, until next time.
You guys, be safe, be kind andbe humble.
If you've enjoyed this episode,be sure to give it a like,
share it with the fellers.
Check out our website to sendus any questions and comments
about your experience in theblue-collar business.
Who do you want to hear from?
Send them our way and we'll doour best to answer any questions
(53:09):
you may have.
Till next time, guys.
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Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.