How to future-proof the use of social media for your business

You can combine your business savvy and common sense so that social media supports your overall goals now and into the future.

Whoever coined the phrase “the only thing certain is change” must have been talking about social media. For those of us who use social media to support business goals, it can be challenging to keep up with best practices and strategies amidst all the ebbs and flows across the various social platforms. 

Despite ongoing changes, I come bearing good news! Regardless of nothing staying the same, you can use social media confidently – and effectively – by holding to some key strategies and tactics that never change. You can combine your business savvy and common sense so that social media supports your overall goals now and into the future.

The ideas you’ll find here can be applied to your endeavors on just about any social media platform. These days, our industry is most active on Instagram, Facebook, LinkedIn, and Pinterest (maybe in that order), but down the road, that mix may change. Even if it does, these core strategies will likely translate so that you can keep going strong with social media.

Make every post and interaction point to true north (your business goal)

What is your goal in using social media? While there can be many good and reasonable answers to that question, you’re ultimately aiming to get customers to purchase from you. This goal is the proverbial true north, and your “posting compass” should always point to it as you engage with followers and create content for business purposes. 

Every post shouldnt be directly selling something. Social media is about SHARING – not selling.

IMPORTANT: This does not mean that every post should be directly selling something. Social media is about SHARING – not selling. With social media, you’re getting customers to know, like, and trust you, so that they’ll prefer to work with your business now and in the future. And, actually, it’s this subtlety that makes the need to remember your ultimate goal so necessary. If you don’t have true north solidly in mind as you create content, it’s easy to get off course and “post just to post.”

You don’t want to crank out content without purpose or interact with followers without focused intention. Always remember: you’re using social media for the professional goal of earning paying gigs. Social media works best when you opt to show in order to tell!

Go with Inspo, Info, and Get-to-Know content to connect with customers

If you’re wondering what to post on a day-to-day basis, default to “Inspo and Info” posts supported by “Get-to-Know” posts. 

While photos are a constant go-to (this industry is visual; always remember that!), video content also performs really well on social media. Feel free to use both stills and video in your posts, whether you’re sharing inspiration, information, or inviting folks to get to know you.

Inspo – “Inspo” is short for “inspiration” and is a term often used on social media. Inspirational images and videos are great for our visually driven industry. Inspiration posts can spark ideas and get customers’ minds turning as they plan upcoming projects. With ongoing Inspo posts, you can become a resource for tile design ideas – the go-to for designers who seek the unique.

Inspirational post ideas:

  • Pretty tile, of course! – nicely arranged samples, color stories, close-ups to show product details, quick video clips to show play of light over tile texture
  • Real room scenes – images of actual installations – can be pro or amateur shots
  • Theme images – images featuring tile photos that align with/are related to special days (#mosaicmonday, #tiletuesday, #walltilewednesday #fridaysfloor); images that showcase your expertise in certain applications or market segments (i.e. – our top five flooring installations, our most recent master bathroom projects, etc.)

Info – There’s so much to learn about tile installation. By sharing helpful information you can establish yourself as the ultimate expert in the industry – a trusted source for practical and important insights that help specifiers transform their beautiful inspiration into real-life installations. 

Informational post ideas: always includes a compelling image while conveying pertinent content

  • Installation tips – useful insights that help designers work with you as they make specifications, facts/info to help them intelligently and confidently spec the right tile for their projects, tips on what to ask you at various junctures during projects
  • Ideas for specific applications – i.e. – considerations for high-traffic flooring, wall tile for shopping malls, top three priorities for tile in healthcare facilities
  • Did you know? posts – posts that succinctly explain miscellaneous tile terms and interesting tile-related tidbits such as “What is DCOF and why does it matter?”
  • Technical performance features – i.e. – advantages of certain types of tiles for specific applications.

Get-to-Know – These posts are the chance to showcase your personality, as well as the personality of your business. They can be excellent when used intermittently to help customers come to know, like and trust you even more.

Get-to-Know post ideas: considered to be intermittent, filler content – tertiary to Inspo & Info posts

  • Quick intro – a post in which you introduce yourself and explain your role with the company; nice to sprinkle into your regular posts a few times a year, so people can see your smiling face and get acquainted or reacquainted with the person behind the posts
  • Industry involvement – pics from trade shows, workshops, association events, etc. – purposed in highlighting how you are always learning and staying on top of the latest for the tile installation industry
  • Community involvement – posts that showcase participation in local events, activities, charitable happenings that convey you’re someone locally connected who cares about the community at large – making you relatable and “real” to your customers
Focus on Inspo and Info posts, supported by Get-To-Know posts.

Make your socials local

Social media should live up to its name by being reciprocal, conversational, and interactive.

Want to catch your ideal customers? “Fish where the fish are…and use the best bait.” 

That’s an old adage, but it’s a really helpful reminder for the modern age of social media marketing. It’s better to catch 50 “fish” that are likely to bite than 5,000 that are just swimming by. Remembering that the true north for your social endeavors is to get more people to hire your company, you’ll want to employ all the targeting tactics possible to catch your best customers. 

  • Use local hashtags – The social media hashtag is fundamentally a search tool. It was born as a way for people who have a shared interest in a topic to easily find and follow posts about that topic within social platforms. To that end, choose words and phrases in the same way you would determine key search terms for a website’s search engine optimization (SEO). 
  • Be topical, but also be geographically specific in order to increase chances of connecting with people who could actually come into your showroom. For example, “#dallas” has 17 million hits on Instagram, while #dallasdesigner has 88K; however, it’s a pretty sure bet the most targeted audience is following the latter hashtag. 
  • Do a little research to determine the top hashtags being used by your local customers and relevant audiences. Use those hashtags in all your posts – every time you post – to help attract more of the right eyeballs to your content. 
  • Insider tip: Create a note on your phone with your collection of “always include” hashtags. Then, you can simply copy and paste them in your captions each time you post from your phone. 
  • Tag other accounts – Tag brands, designers, and customers any chance you get when posting. This will help ensure that the relevant parties will see (and possibly share) your content. 
  • Include geo-locations – Whether you’re posting from a job site or your office, include your location in the post. The social platforms are typically more likely to “show” content to followers who are in your area, so be sure to include where you are to potentially increase targeted views. 

Make your socials, well, social! 

Social media should live up to its name by being reciprocal, conversational, and interactive. As much as the content you post should hit the right marks, you should also be present in other ways on social media, as well – for best results.

Follow strategically 

  • Find the right fish” – Identify the folks and firms in your area that you know…or want to know, and follow or connect with them. Even if you never posted anything, you could still get lots out of your social media simply by following and then watching what these strategically selected accounts share. It makes for excellent market research; in the marketing biz, this is known as “social listening,” and it can be a great source of ideas and insights to help you grow your business.
  • Be comprehensive – In creating your follows and connections, start local by targeting interior designers, builders, A&D firms, installers, media outlets, design influencers, partner brands (such as manufacturers and setting materials companies), sales reps with partner brands, and regional chapters of associations in your area. 
  • Follow suit, so to speak – Every now and then, take notice of the accounts that your top followers are following and follow those accounts, as well. This is a useful tactic for expanding your targeted circle.

Engage regularly, meaningfully

  • Comment and like – Take a few minutes each day to show some love and pay attention to those you’re following on social media. Like others’ posts. Comment on what they share. Chime in if you have an idea that might be helpful or can answer a question they might have. 
  • Be conversational – Social media works best when treated with the standards you’d expect in an actual, in-person interaction. By keeping a conversational tone that invites response/back-and-forth interaction, you are more likely to keep a connection going and, over time, deepen the relationship. One kind word or question that shows genuine interest and curiosity can go a long way to winning over a customer and earning her loyalty.
  • Share others’ content – See something wonderful that is relevant/fun/offers inspo or info? Share it (make sure you have permission to do so), and give lots of acknowledgement to the account/person that posted it first. People love it when their content really resonates, and they often are thrilled that their posts are deemed “regrammable” or shareable. This is a great tactic to employ when someone has tagged you or the brand in her post; it’s a great, easy way to amplify the message.

Seek support and suggestions anytime

Please feel free to reach out to me if you ever have questions about social media or digital marketing. I have 22 years of experience in the tile industry, and through my digital marketing agency, Msg2Mkt, LLC, I lead marketing strategies for a range of clients. I’m more than happy to offer specific insights. Find me at [email protected].

Why Tile is your ceramic tile education resource

Three years ago, the ceramic tile industry leaders came together to create what is now Why Tile. This initiative is the tile industry’s joint effort to promote the use and benefits of ceramic tile. In the past three years, with contributions from leading industry organizations and manufacturers that regularly add to Why Tile’s already-robust content, Why Tile has become the tile industry’s key educational resource for free informative tools, inspiration and tile related assets.

Kathy Meyer, TCNA’s Director of Marketing, explained that
WhyTile.com offers information on where and how to use tile, explanations on why tile should be selected over other materials; plus, the site is a rich source of design and style inspiration. Meyer added that the Application and Industry tools are produced with architect/design professionals in mind. 

The Why Tile tools can help professionals create designs using ceramic tile for a wide range of purposes. Much of the information is sorted by industries, such as using tile in retail, corporate, and healthcare environments, or by application, such as using tile for the bathroom, kitchen, and roofing.

For those searching for inspiration, Why Tile offers a robust design gallery created to help users envision the beautiful spaces they can create. The ever-growing gallery now boasts over 800 photos that can be filtered by residential, commercial, industry, project, tile style, décor, and color. 

WhyTile.com also offers a variety of case studies and videos to be used by the industry professional. The site showcases over a dozen case studies that detail the advantages of tile in real scenarios, including commercial, industrial and residential applications. The videos include nine videos on ceramic tile as a safe choice, eight videos on ceramic tile as ideal for any application, and seven videos discussing qualified labor. Why Tile also offers a resource library that includes tile maintenance tips, common terms and definitions, tile schematics, and various guides and educational information on topics such as sustainability and EPDs. 

Why Tile Partner Portal

Additional tools are available on the Why Tile Partner Portal. These partners are companies and organizations that support Why Tile to promote the benefits of ceramic tile. Partner tools include tips and tools for promoting  tile, monthly social posts that can be used on partners’ own social channels, and a Why Tile presentation that can be used to help companies promote the benefits of tile. 

Recently, Why Tile added two new resources to the Why Tile Partner Portal. The first is the Why Tile partner badge, that can be placed on a partners’ website. The second resource includes a handout on the phase one plastic-based material (PBM) flooring research results. This research discusses PBM’s popularity with products such as LVT, LVP, WCP, RCB, and addresses marketing claims with regards to waterproofness, mold resistance, DCOF, and scratch resistance.

“This research is important to help educate professionals and consumers about plastic-based material flooring,” Meyer said. “We feel it is critical that buyers and specifiers understand what they are potentially choosing when they select PBM (vinyl) flooring products.”

Meyer also noted that Why Tile is currently developing video assets to coincide with the PBM research. The videos will be available on the Partner Portal. 

Heritage/Craftsmanship tab planned for 2020

Later this year, WhyTile.com plans to revamp its Heritage tab, transitioning it to include information on the historical significance and craftsmanship of tile. The historical portion will discuss how tile has evolved from what it was in ancient Rome to what has become today. The craftsmanship portion will discuss qualified labor, provide links to association partner and training resources, and offer tile career information.

Avia Haynes, Director of Marketing & Communications for the National Tile Contractors Association (NTCA), said, “We look forward to the launch of the new ‘Heritage/Craftsmanship’ tab. It will help deliver the message that beautiful tile will withstand the test of time when it is installed correctly. Correct installation requires qualified labor.” Haynes and other NTCA staff and members are working with Why Tile to develop content for the new tab.

Meyer encourages professionals who have not used the Why Tile site to take advantage of this opportunity to provide a better service to customers. “All of the resources we offer, including the Why Tile Partner assets, are free,” she said. “We encourage everyone to become a Why Tile Partner, use the website, and promote the benefits of tile.”

Evaluate your team’s competitive advantage

It’s still fairly early in the year, with most of it ahead of you, affording you the ability to make positive changes to take you in the direction you want your company to go in 2020. To assist in that endeavor is the following checklist from Firestarter founder Wally Adamchik. He encourages you to use these questions to assess your business and make course corrections now before heading down the wrong road too deeply into the year.   – Lesley Goddin

USE THIS CHECKLIST TO EVALUATE YOUR TEAM’S COMPETITIVE ADVANTAGE IN 2020

Here are a few quick questions to ask yourself to identify potential competitive advantages or areas for improvement.

Check the box if your answer is yes.

ο Have you completed or is your annual planning meeting scheduled for 2020?

ο Do you have your annual kickoff meeting scheduled for 2020?

ο Do your teams consistently improve margins on jobs?

ο Is your overall profitability/ROI above industry average?

ο Is your safety better than industry average?

ο Is safety trending in the right direction?

ο Do you have a clearly articulated vision or mission and values?

ο Do your people understand and buy in to the vision, mission and values?

ο Are you innovating in ways that add to the bottom line and increase customer satisfaction?

ο Are you comfortable with your voluntary turnover or are people leaving that you don’t want to leave?

ο Is your bench strength solid with 75% of supervisory positions having an identified and 75% qualified successor?

___ TOTAL NUMBER OF YES

THE GRADING SCALE –––––––––––––––

• 8 or more YES answers indicate a strong team. Keep it up!

• 6-8 YES answers indicate your team needs to address some key issues.

• Less than 6 YES answers indicate some major concerns.

Need some assistance in reaching your goals? Contact Firestarter at www.firestarterspeaking.com or call 919-673-9499.


Your journey to emotional ownership

Pain and pleasure are such close cousins.  In life, it’s painful not to experience pleasure.  Too often though, it’s the holding on for dear life to familiar pain that keeps us from having what we say we really want.

In 1988 I joined the National Speakers Association, a trade group for professional speakers.  No, I wasn’t a speaker yet, but I wanted to be.  I had closed down my manufacturers’ representative company to accept a position of vice president for my principal manufacturer. Two years later, I found myself without a job.  It was now time to fish or cut bait.  Was I going to pick up another line and go to war with the manufacturer that fired me or was I going after my dream?  I went after my dream.  A decade later, I’m a nationally recognized keynoter on business alliances.

This experience, for all of the pain and pleasure, has yielded a path, my path to emotional ownership.  Since discovering this path, I have interviewed several business leaders and found that my path was also theirs.

Whatever pleasure you seek; there is usually pain in the way of having that pleasure.  I believe this path is also your path to the emotional ownership, of staying the course to having what you want in your life, both personal and professional.

In your personal and professional life you continually have challenges.  Challenges without solutions or answers generally cause extreme pain.  To solve or remove this pain, you must either move into action or simply do nothing and hide out.  Action means possibilities. Doing nothing is a formula for failure.  Doing what you have always done and expecting different results is called experiencing insanity. Nobody intentionally wants to be insane.  You will succeed at what you want through understanding and remaining on your path.

What is your challenge?  What would you like to do you are currently not doing?  What major decision would you like to make?  Your first step will be to think up ideas on how to deal with your challenge.

1. Idea

Some ideas are gold and some are worthless. You must constantly seek possibilities to your challenges.  Earl Nightingale would sit with a yellow pad thinking of solutions to his day’s challenges every morning before the rest of his family awoke. Dr. Robert Schuller’s idea of possibility thinking is to list no less than 20 ways to solve your challenge.  His 20th is how he started the church that is known today as the Crystal Cathedral.

2. Excitement

When an idea crystallizes, excitement sets in. Your view of the challenge is like a world of possibilities.  All is right as you are moving closer to dealing with your pain.

3. Hope

Hope is the apex.  Hope without how will get you nowhere.  From this pinnacle the slow degrade begins.  As the reality of the challenge sets in doubt begins.  Unfortunately, at this point, hope turns into nope!

4. Reality

When the reality of the steps, work and pitfalls involved in creating a solution set in, a feeling of hopelessness is not far behind.

5. Desperation

Many people are living lives of quiet desperation.  Even people who are moderately successful find it difficult to make a new decision that would position them for greatness.  When the pain is at a level so high that anything else must be better, the point of decision is near. This is where tension can help you to mobilize, but too much tension can immobilize you.

6. Purpose

Clarity of purpose allows you to see and understand the value of your struggle.  You must know you are playing in the right sandbox and for the right reason.  Now comes the promise of success.  Through example or belief, you now know success is possible and you can make a decision to go for the success.  If you are off purpose, are settling for less or see your world from the window of scarcity, you might make the decision of indecision and only move toward failure.

7. Decision

The decision to move forward or to make no decision, the choice is yours. Knowing what to hold on to and what to discard is crucial to your well being.  This is where your emotional ownership comes alive.  No decision, no ownership and a continual decline.  Yet, with a new decision, all becomes possible.  Look for your emotional strength and security rather than comparing your self to what is not real. Be cautious of not falling into the impostor syndrome, thinking that you are not really good enough.  Look for your moments of decision. A friend quit drinking, and I ask him about his moment of decision.  He told me that it was one night while he was hanging out his second-story bathroom window, about to fall out and in a drunken stupor and realizing that he should change his life.  He said that he knew if he didn’t make some changes soon, he would no longer have a life.

8. Paying the price and taking risk

This is the truth detector.   This is the point on your journey where you must internalize the intellectual ownership of your decision.  You must be willing to pay the prices.  Nothing good is free.  Having a track record of previous success and concrete examples of other successful person’s journeys will help.  It’s now time to stick your neck out!

9. Getting help

Relationship building at its finest.  Nobody goes it alone.  Every successful person seeks help.  You may end up with some unlikely partners; especially people that can help you connect with your inner strength.  Receiving help connects you back to all your previous steps.  Also, you must accept help in anchoring back to your moment of decision.

10.  Accepting success

Self-confidence and self-worth go hand in hand.  Accepting that you are worthy of success is key. When you have completed your journey to Emotional Ownership, you do it all over, repeatedly.  Additionally, you must realize that you are currently at different steps in different aspects of your personal and professional life.

Every day you are starting another journey in a different area of your life; personal and professional. Your journey always comes full circle; you can never just sit back because another phase of your total life journey is about to start. Enjoy your journey.

Go ahead, Tweet it: seven ways to capitalize on the social power of your satisfied (and not-so-satisfied) customers

We love telling people about our latest experiences, and we love hearing about what others have experienced. But author Ron Kaufman says many companies are missing out on tapping the social power of their satisfied customers.

“Companies should be saying to their customers, ‘If you did not enjoy our service, please tell us. If you did enjoy our service, please tell someone else,’” Kaufman said. “Tell happy customers to be social about their great experiences and encourage unhappy customers to come to you via social media so that you can make it right and improve your overall service.”

Kaufman notes that a lot of customer service is already being done online, customer to customer, through comments on articles, user forums and message boards.  Companies that embrace this behavior can improve their service and save on costs.

Kaufman said customers will “go out of their way to help a fellow customer find a solution, but for companies to do that back-end customer service there would be a cost. By engaging your customers to help each other, you can defray your costs, improve your customer satisfaction, and stimulate a loyal community by encouraging people in your online social space.”

How do you keep your customers spreading great things about your company while bringing their complaints only to you? Read on for Kaufman’s advice.

Make it easy for them to go social. Provide links in post-service surveys where people can share experiences and encourage them to do so. Kaufman’s website, www.UpYourService.com, offers a Spread the Word section that makes it easy for people to share their experiences.

Say thank you. Show a little love for the love your customers show you. Try a message of gratitude that says, “Thank you so much for spreading the word. As one of our happy customers, when you tell other people about us, it helps us grow and serve you better.” Don’t incentivize this behavior; it tarnishes the genuineness of the comment.

Invite them to reach out. Create a ‘Thanks for Being Social’ promotional piece that includes the company’s Twitter handles, Facebook pages, Yelp and TripAdvisor pages, helpful Twitter hashtags, etc., with a line that reads, ‘If you enjoy our service, please let the world know.’ Leave it with the customer after a job, or post it beside the cash register.

Ask how you can improve. Welcome good and bad instant feedback via social media. “Hear them out, provide them with great service, and then THANK them for sharing their experience with others via Twitter, Facebook…” Kaufman said.

Encourage them to recognize great one-on-one service. United Airlines’ “Outperform Recognition Program” encourages MileagePlus members to enter an exemplary employee’s name via a mobile app; both member and employee can win prizes in a random drawing. “Social programs like these boost employee morale, get customers focused on what employees are doing right, give employees another ‘measurable’ feedback for giving great service, and create a lot more ‘social input’ from customers to the company,” said Kaufman. Compliments received during this process can also be used in publicity campaigns.

Funnel customer questions through social media – then share the best answers. Ask customers to post questions on your Facebook wall, and answer them there for everyone to see. This shares useful information with other customers and enables your company to gather information.

Make talking about your brand irresistible. Provide service so great that customers simply can’t resist telling people about it. In a blog post on The Huffington Post, Chris Hurn, CEO of Mercantile Capital Corporation, shared how the Ritz-Carlton staff went above and beyond after his family accidentally left his young son’s favorite stuffed animal behind after a recent stay. The staff found and safely returned the stuffed animal and took pictures of its extended stay to show Mr. Hurn’s son what a great time his stuffed-animal friend had while staying a bit longer at the hotel.

“That blog post was seen by a portion of The Huffington Post’s 26 million monthly readers and was then tweeted, retweeted, and posted by many on Facebook,” Kaufman said. “Taking photos of a stuffed animal in funny situations didn’t cost Ritz-Carlton a penny, but it delivered social value in a huge way!”

“Your customers’ voices are vital to your organization,” Kaufman concluded. “Social media provides an incredible opportunity to engage those voices, to turn one customer’s great experience into an advertisement that attracts new customers and gets current customers thinking positively about you. It’s an incredibly advantageous way to address customer concerns and improve your company’s service culture in real time.”

Synergy amongst the trades: How teamwork makes the dream work

Fast-track construction projects often can be ultra-fast paced and hectic. They require industry professionals across several different trades to blend together for a common goal – getting the project done correctly and on time for the client. 

How well – or not well – trade professionals synergize can directly affect the outcome of most any project. In many instances, the vision of cohesiveness and synchronicity among these different units becomes just that: a vision never to be realized; a goal that never reaches fruition, much to the chagrin of architects and designers.

In what ways can trade professionals come together to make sure the job gets done right, to have “the big picture” be realized to the satisfaction of all? According to Karl Parker, owner/president, All American Design & Construction, Albuquerque, N.M., an eagerness to learn is just as critical as the need to work together in order for professionals and projects to realize their true potential.

In New Mexico, Parker noted, there is a different feel and respect for when work among varying trades overlap. “Big steps have been taken with plumbers and inspectors working with tile installers on complex shower installations. Everyone is eager to learn about these products and excited about the overall outcome of install performance.”

As Lee Callewaert, owner, Dragonfly Tile & Stone Works, Grafton, Wis., espoused, nothing is more critical to multiple trades working together successfully than the relationships built while on the job. “We’re fortunate to work in a specific market that brings some of the best trades together,” he said. “We’ve had the opportunity to work with some of the same people on multiple projects. 

According to Jane Callewaert, this is an example of the kind of enhancements her husband, Lee, is able to add to projects because he works so closely with the other trades. “In this case, the cabinet maker was able to adjust his drawer fronts in advance so Lee could add custom marble insets.”

“When the relationships are built on mutual respect and the various trades are working together for the same goal (making the end result the very best it can be for the client),” Callewaert added, “all the trades involved develop a positive reputation in the market. 

“We have general contractors, architects, homeowners, etc., who hire us and some of the same other trades for all their projects because they know that this group of professionals will make their job so much easier,” Callewaert added. “We will rarely come to them with an issue as we work together and solve the problems ourselves.”

Parker agreed, and noted a specific instance in which an opportunity to join a trade association brought professionals together in the same room for a common cause. “One aspect I can speak about from the trade gap is, being invited to join the International Association of Plumbing and Mechanical Officials (IAPMO). The depth of this association runs from code (UPC) to reviewing our own products for listing and acceptance for sales.

“From my very first meeting, it was all about open arms and further invitations to run CEU programs for the union and plumbing officials,” Parker explained. “It seems as though the big gap in trade is with officials and actual plumbers.”

Callewaert echoed Parker’s sentiment, saying that when the trades work together, you are better able to achieve a positive outcome for the customer, which is the ultimate goal. “When working together as a team, everyone has that same goal in mind,” Callewaert said. “The projects that involve multiple trades with mutual respect are consistently of higher quality and result in much happier clients.”

Reiterating the relationship theme, Callewaert said both he and his wife/business partner, Jane, teach their staff to get to know the other trades on the job. “Build a relationship,” he said. “Demonstrate respect. Ask what they need from us to make their job easier.

“We’re never too busy for the other trades involved,” he explained. “If they need our help to execute their job well, they’ve got it. Maybe they need to gain access to the space we are working in so they can finish. It might not be convenient, but because it helps them finish, we will figure it out. Respect goes both ways. When we need something from them, they are quick to accommodate.”

As Parker concluded, “we are currently working on filling that [trade] gap and getting everyone on the same page with wet area tile installations. When we all come together for a common goal (industry standards or above), there is a greater understanding and appreciation of everyone’s job.”

Negotiate and draft “pass through” clauses you can live with

Owners, contractors, subcontractors and lower-tier contractors must have a sound understanding of the operational details and triggers of “pass-through” provisions as their terms can significantly impact the obligations and risks of performing for lower-tier contractors. 

What is a pass-through clause?

Pass-through clauses (a.k.a. flow-down or conduit clauses), typically incorporate by reference the terms of a prime contract between owner and general contractor into a subcontract, thereby binding subcontractors to the same duties and obligations – and to the same extent – as the general contractor has to the owner. Pass-through clauses may use general “substantially as follows” or “substantially the same as” language, but, importantly they are not uniformly worded and can have the effect of imposing obligations never negotiated or contemplated by the lower-tier contractor. However, when drafted and used correctly pass-through clauses can provide protections to all parties by unambiguously flowing down specific upstream obligations of general contractors to the subcontractors who are actually performing the majority of the work. 

How are pass-through clauses implemented? 

It is in the owner’s interest to bind the subcontractor to the same obligations as the general contractor. For the general contractor, pass-through clauses provide a way of ensuring that subcontractors, suppliers and other downstream parties are required to comply with certain prime contract requirements. 

However, subcontractors may attempt to reject responsibilities flowing down to them when the pass-through terms lack sufficient clarity as to the subcontractor’s specific contractual and compliance obligations. Subcontractors will want to limit or reject overly broad pass-through clauses which – for example – make them assume responsibilities meant for other parties or that incorrectly excuse a prime contractor for its mistakes while still flowing down the responsibility for the mistakes to subcontractors. 

Other pass-through clauses may require that subcontractors be paid by the general contractor when the general contractor is paid by the owner. In such a scenario, a savvy subcontractor will want to reduce the risk of non-payment by negotiating and re-drafting terms to avoid limiting the subcontractor’s rights or remedies in the event of a claim or payment dispute. 

Subcontractors and contractors should work collaboratively to negotiate, revise or remove pass-through clauses that are of concern or to re-balance the risks. 

There are many other scenarios to which pass-through clauses can apply and where their effectiveness depends upon how well all parties can agree on their interpretation, such as: 

  • Who has authority to approve a change order, claim or delay notification and in what form it should be submitted, detailed, and supported by documentation? 
  • Who will have the responsibility for prosecuting a claim against the owner and how the recovery and attorney’s fees will be allocated – whether arbitration or litigation – and which parties will be required or permitted to participate? 
  • What happens if there are pass-through claims of subcontractors (i.e., claims the owner is responsible for) and claims that are only between the general contractor and a subcontractor? 

Importance of properly drafted pass-through clauses

As the “pass-through” language in prime contracts and subcontracts tends to “flow-down” damages, limits of liability or indemnification downstream – from the owner and general contractor level to lower tiers of subcontractors and suppliers – pass-through clauses become no less important than any other terms in a construction contract. 

It is essential that drafters review the prime contract and the complete set of the upstream documents in order to craft effective pass-through provisions. Moreover, well-drafted pass-through provisions should only include terms that already exist in the prime contract; and should not flow down the entire prime contract because doing so introduces contradictions with other subcontract terms. 

To assist parties with drafting pass-through clauses, The American Institute of Architects (AIA), in its A201™–2017 provides subcontractual relations language, used in owner-general contractor agreements, by which contractors can require subcontractors to be bound to the contractors by the same prime contract terms and to assume toward the contractor all the obligations and responsibilities that the contractor assumed toward the owner. It also allows subcontractors the benefit of all rights and remedies against the contractor that the contractor – by the prime contract – has against the owner, and requires the contractor to identify to subcontractors any terms and conditions of the subcontract that may be at variance with the prime contract documents.

Similarly, the AIA’s language establishing the contractual relationship between contractor and subcontractor in the A401™–2017, which cross-references A201–2017, passes “the duties and responsibilities of the Contractor under the Prime Contract to the Subcontractor with respect to a portion of the work designated in the completed A401–2017 document.” 

The enforceability of pass-through clauses in complex construction agreements often hinges on the perceived clarity or ambiguity to both upstream and downstream parties. In order to avoid unintended legal or financial consequences the critical drafting process should be assisted by professionals experienced in commercial law and construction law and with accessibility to all of the upstream and downstream documents.

Pass-through interpretation and enforceability can vary by state

The location of the project plays a significant role in how pass-through language may be interpreted and enforced. Therefore it’s important to understand the nuances of applicable state laws when drafting and implementing pass-through clauses. 

For example, in New York, courts have held that general “incorporation clauses” in a subcontract can only bind a subcontractor to the “scope, quality and manner of the work to be performed by the subcontractor.” While many states take the New York approach, other states do allow a generalized “flow down” of obligations via “incorporation clauses.” And still other states construe all contract documents, including the prime contract, subcontract and all exhibits, together in an effort to harmonize and give effect to all of the provisions of the contract so that none will be rendered meaningless.

Pass-through best practices

Below are a few other examples of best practices that should be considered when reviewing or drafting pass-through provisions:

  • Negotiate pass-through terms at the pre-bid stage so that the costs/benefits of undertaking flowed-down obligations may be factored into bids. 
  • Parties should work collaboratively to address gaps in risk-shifting or risk-sharing and develop acceptable levels of risk. 
  • Limit the requests for pass-through revisions to a small group of terms or issues (and not to the prime terms) to increase acceptance. 
  • Avoid using general “incorporating by reference” language that can be misinterpreted to merely incorporate prime contract for a limited purpose. 

Creating a great culture could be your best retention strategy

Results from the People in Construction 2019 study


A recent survey asked several hundred construction professionals across all trades about leadership and culture in their firm. We didn’t ask, “Are you having trouble finding people?” We asked, “Are you happy at work? Do you feel trusted?”

In some ways, construction is just like any other industry. There are precious few exemplary companies, too many abysmal ones, and sadly, most are pretty darn average. But, average is not a retention strategy. Creating a great culture might be the best profit strategy. There is a direct correlation between great workplace culture and increased profitability.

Who responded in the People in Construction 2019 study.

Safety

Every contractor says “people are our most important asset” but talk is cheap. Even cheaper when it comes to safety. It is encouraging that 90% of all respondents reported safety as a top priority. 97% of office operations and 93% of field supervision did say safety was a top priority. The really bad news is in safety execution. Only 68% of field supervision could say they consistently work safely. That’s approximately one in three field supervisors admitting they don’t prioritize the safety of their employees. Things are slightly better in the office, with 78% reporting that they consistently work safely – but the gap between what is said and what is actually done is alarming. 

The field/office divide

This gap between field and office persists in other areas. Construction has always dealt with the field/office divide. This is the acknowledged challenge in geography and culture that creates distance and tension between project management in the office and field supervision on the jobsite. Research confirms the divide is now a chasm. The difference in perception between field supervisors and project managers is stark, and provides a major opportunity for dialogue, collaboration and unity. Any effort to bridge the chasm is worth it. 

In answering the question, “I am able to maintain a reasonable work-life balance,” only 50% of field leaders said yes while 83% of office operations said yes. Only 62% of field leaders agreed that leaders live by the core values of the organization but 83% of office personnel agreed. Research confirms that having a close friend at work increases loyalty and commitment. It is alarming then that only 50% of field leaders could say yes to this question, with the office at 83%. While the causes of the chasm may be debatable, it is undeniable that it is detrimental to profitable execution.

The office-field chasm in People in Construction 2019 study.

The difficulty of implementing change

Musician Sheryl Crow sang that “a change would do you good,” but the majority said attempts at change often fall short. On this question, the executives confessed to these failings at a level of 73%. If leadership is about change for better results, it is troubling, perhaps even depressing, that three-quarters of senior leadership (those who come up with the idea and whose job it is to spearhead the change) say their efforts fall short. This signifies a huge opportunity for those who can crack the code on implementing change. Here are the CliffsNotes: It takes longer than you think, and it requires a significant personal investment from leaders to sell the change. This “personal selling of change” is the fastest way to build trust, leverage relationships, and troubleshoot potential problems.

All is not lost; there are people who will step up. One-third of all respondents said they had more to give when asked if they were working at full capacity! These people are saying they could do more! They are not overworked; they are under-challenged. This leads to disengagement. This finding underscores the idea that, rather than blaming the employee for performance or discipline issues, perhaps the supervisor should be evaluated first. 

There is no single solution to improve culture. The number one reason people stay in a job is a good relationship with their immediate supervisor. People don’t work for an industry, they work for a supervisor. What any reader can do is look inside their own organization and ask these questions to see how they compare. Very few firms attain “Best in Class” distinction. Over 90% of employees must respond and say the culture is a great place to work to be confident it is true, but a firm need not be best in class today to be better tomorrow. 

Efforts and actions that build trust are essential. Leaders living up to commitments and sincerely talking with employees build trust. Helping people feel they are in on things and giving candid feedback build loyalty. All of these actions must be consistent and sustained. 

Excellence isn’t a program, it is a way of life. Creating a great culture is an all-hands effort that starts with key leaders across all levels of the organization working together to execute a coherent human capital strategy. 

 

How small is a small business? The answer could cost you money!

Are you a small business? That depends on whom you’re asking.

Lots of people I know define a small business in lots of different ways, with the most common being revenues and number of employees. For the most part, it’s really not that important. “Small” is in the eyes of the beholder.

However, if you’re one of those businesses looking to get government contracts or loan guarantees from the US Small Business Administration (SBA), the definition of “small” really is important. That is why a recent announcement by the SBA may have an effect on your livelihood.

This summer, the SBA announced a proposed rule to modify the method for calculating annual average revenues used to determine how big a small business is. Why the fuss? The calculation figures into whether a business is eligible to receive federal contracts and loan guarantees. Currently, the calculation uses a three-year revenue average. The proposed rule will up that to five years.

Congress may actually get something done – and give a boost to retirement plans 

The announcement comes on the heels of 2018’s Small Business Runway Extension Act, which requires service businesses to average five years of revenues. Now, all businesses will be subject to that requirement. This is the first step of the implementation.

So is this a good or bad thing? 

The federal government believes it’s a good thing, as do some experts. “In most instances, this will give small businesses more time to compete in small business set-aside procurements,” write Suzanne Sumner and Erin R. Davis of the law firm Taft Stettinius & Hollister LLP. “The new five-year calculation will also allow those small businesses with an outlier year of significant revenue more time to sustain the growth and prepare to compete in unrestricted competitions.”

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That position makes sense. But there are a few things about this that give me pause.

For starters, I don’t like using revenues as a basis for determining whether a business is “small.” I have a few clients, for example, that generate big revenues because they sell large machines or property but each has fewer than 10 employees. They’re small, but not in the eyes of the SBA. I would prefer the rule to include other factors, such as the number of people (and perhaps contractors) employed, to really determine the size of a business.

I’m also concerned that a growing small company might find itself excluded from federal work as a result of a couple of good years. Or that larger companies that have had a bad year or two might find themselves classified in the “small business” category, at the expense of small businesses already there and competing for work.

If there’s one thing I’ve learned from running a small business, it’s that you can’t apply a simple revenue formula to determine if a business is indeed small. Other factors should be considered. Sure, it might take a little more time or add more complexity. But we’re talking about the difference between a qualified company getting the help and opportunities it deserves from the government, or potentially failing.

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This article originally appeared on July 2, 2019 in The Guardian at https://bit.ly/2Lwsktf. A past columnist for The New York Times and The Washington Post, Marks now writes regularly for The Hill, The Philadelphia Inquirer, Forbes, Inc. Magazine, Entrepreneur Magazine and Fox Business.

Do you have to pay employees like superstars to keep them?

Last year, five-time NBA All-Star Kevin Love signed a contract to return to the Cleveland Cavaliers. His new deal will pay him $120M over four years, approximately $30 million per year.

These days, it’s not uncommon to see professional athletes sign enormous contracts punctuated with a staggering number of zeros.

What is uncommon about this particular story is where Love signed his new deal.

The 29-year-old power forward signed his contract extension in front of nearly 100 construction workers who were completing the $140 million renovation of the Cavs’ home stadium: Quicken Loans Arena in Cleveland.

Imagine for a moment that you are one of those construction workers making somewhere between $50-$80K per year.

You’re busy installing new seats in the upper deck of an arena when suddenly a voice comes over the intercom inviting you to take a short break and come down to the gymnasium floor for an exciting development.

Minutes later, the team’s general manager introduces a nicely dressed basketball player (currently relaxing during a four-month off-season) who, with the effortless flick of his pen, signs a contract that guarantees him 400 to 500 TIMES the amount that will appear on your year-end W-2.

But that’s not all…

In addition to those fat checks, the guy in front of you will be cheered and idolized by tens of thousands of adoring fans all while being treated like the King of Siam everywhere he goes. He’ll never wait in line for anything, nor will he have to hunt for a parking spot. And let’s not forget the beaucoup dollars that will pour in his coffers from corporate sponsorships and endorsements for playing a game you’d gladly play for free.

After a short speech, the star disappears into the locker room signaling that it’s time for you to climb back up to the nosebleed section and go back to installing another row of seats.

Let that scenario wash over you for a minute.

Now breathe as you chew on this:

Why did the construction workers cheer wildly for Love? Why didn’t they rise up, revolt, and shake their fists in outrage, demanding more money for the much harder work that they’re doing?

I think the answer lies in the employee’s perception of fair pay.

Construction workers don’t compare their paycheck to that of an NBA superstar; they compare what they’re making to other construction workers. They won’t revolt if a professional athlete – or a cardiologist – or a mortgage banker makes more than they do, even if it’s multiples of what they’re earning.

But if that guy next to him – or even the worker across town who’s doing the same job for a competitor – is getting noticeably more dollars more than they are, you can bet your hammer drill that there’s going to be some fireworks.

There is no single factor that’s more important to an employee than the compensation they receive for the work they do.

However, if an employee feels as if they are being paid fairly, which is to say equal to another similarly skilled and experienced individual doing the same work under the same conditions in the same vicinity, then they tend to base their level of engagement and their desire to remain with their employer on other cultural factors (i.e. atmosphere, growth opportunities, autonomy, recognition, etc.).

ON POINT – While it improves your attractiveness to job seekers, you don’t have to offer higher compensation than the other employers in your market to win the war for skilled workers. If you offer wages that are deemed competitive, you can dominate the labor market by focusing on continually improving the other six cultural pillars that make you a better place to work:

  • Alignment – meaningful work for an ethical company
  • Atmosphere – a safe, positive, enjoyable environment
  • Growth – an opportunity to learn and advance
  • Acknowledgement – feeling valued, appreciated and rewarded
  • Autonomy – encouraged to think and make decisions
  • Communication – kept informed and being listened to

 

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