Client Comments








A Client’s Story
John E. Hall Electric, Inc. Portsmouth, VA

John E. Hall Electric has been a client of Management Consultants for Contractors for the past 3 years. The following is an interview with founder and President, John Hall.

Doug Phelps: John, I appreciate the trust you have put into “The Just Rewards Plan”. It has been a pleasure working with your management team and watching them develop over the past 3 years. Would you mind explaining what initially attracted you the most to “The Just Rewards Plan”?

John Hall: The company was not performing well at all when I first contacted you. I wanted to offer an incentive to the employees to encourage them to become more productive. I received one of your marketing mailers and felt that the components of the bonus plan, “The Just Rewards Plan”, would help me achieve that goal. Of course, I got more than just a bonus plan.

Doug Phelps: More than just a bonus plan…sounds like one of my marketing themes.

John Hall: When we first talked, you told me that it was indeed more than just a bonus plan. If you recall, I said that running my business was like driving the bus while looking in the rear view mirror. I never saw the potholes or obstructions until after I hit them. The culture that you and “The Just Rewards Plan” have brought into my company is so different from the way I used to manage. I would get frustrated with my foremen if they didn’t plan ahead on their jobs, but that is exactly how I was running my company at one time, just one day at a time. We now have a forward thinking environment and continually take that look into the future, looking out the front windshield and way down the road now.

Doug Phelps: John, I have been very impressed by the development of your management team over the past 2 years. The leadership in the company is so much stronger.

John Hall: Me too. The project management team has fundamentally changed. Prior to “The Just Rewards Plan”, there was no real focus on job costing. Sure, we looked at how the jobs came out, but we didn’t do the cost analysis during the course of the job that we do now. We have taken that next step that you told us about, which is using the cost information to try to find ways to save money for the remainder of the work to be completed. And that cost information is now being shared with our foremen since they ultimately control the daily productivity. Our productivity has definitely improved because the goals are defined and we constantly measure how we do in comparison to the goals. Yes, I now feel that there are more people driving this company than me, and that is a huge burden reliever.

Doug Phelps: What about the bonus plan component? Do you feel it has worked for you?

John Hall: Well, you know the first year was a challenge. Our internal problems were many and complex, and we fell short of the bonus goals. There was no bonus payment for the first year, and from that standpoint, I was worried that it would be considered a failure. And if I had bought just a bonus plan, I might have said it was a failure. But “The Just Rewards Plan” has so many other positive components that I just had to stay the course for the second year. And even though we had our roughest moment 2 months into the second fiscal year of the bonus plan, things started turning around and the positive changes that had and were occurring started to show up in the bottom line, and we paid out some very nice bonuses last year. And even though my current fiscal year is not yet half-way through, with the monthly advance planning we do, I anticipate paying out some nice bonuses again this year, and I will be happy to do it. I’d have to say it has worked very well for us.

Doug Phelps: I know that you were very frustrated at times, and so was I. Every client is unique with their own set of unique circumstances. But if I think back to your company’s culture when I first started working with you and your management team, and compare it to today….I have to smile at the results.

John Hall: I guess you could say we tested the bottom a few times, but once we found it, we fought our way back up. I feel so good about the company now. There are always obstacles that have to be overcome, like the run-up of copper prices this past year, but I feel like we are in control of our destiny right now, and it just isn’t me controlling it. Doug, I am one strong believer in this method of management that has resulted from “The Just Rewards Plan”. And as you know, I told one of your new clients, ACS, owned by one of my best friends, that if he didn’t like how it changed his company, I would personally reimburse him for your fees. I don’t think you can get a stronger recommendation than that.

Doug Phelps: And John, I really appreciate your efforts and recommendations. I just found out last week that you and the Controller of ACS had a bet. He didn’t believe “The Just Rewards Plan” would be of any benefit to them, and after just 4 months, he is ready to pay off your bet.

John Hall: That was such an easy bet for me, and I will happily collect.

If you and your company aren’t making as much money as you should, “The Just Rewards Plan” can help. If you believe that you are the only one who cares about the success of your company, “The Just Rewards Plan” can help.

If you would like more details about “The Just Rewards Plan”, call Doug Phelps today at 215.882.2963. Isn’t it time you began to reap higher rewards for the risk you take?

Call Doug Phelps. Call Doug Phelps today, 215.882.2963. It may be the best business investment you have ever made!


A Client’s Story
By Steve Leer, Leer Electric, Dillsburg, PA

There are parts of this business that absolutely suck—like fighting for legitimate change orders. There are times that project designers expect us to read their minds and be the “experts” and that we should know the intent of their drawings. Yet, they won't attach any value to our acquired expertise and often want it for free. I could say much more, but if you're a non-residential contractor, you already know what I'm talking about.

Now, there are also parts of this business that I absolutely love. I love watching my management team stretch their abilities and achieve goals that they wouldn't have believed could be attained two years ago. (Even I didn't think some of our recent achievements were possible.) I love the fact that the success of my company does not rest solely on my shoulders. Even in today's tough economic environment in Central Pennsylvania, I have tremendous confidence in our ability to succeed.

I have to admit that I probably would have never taken the effort to do this annual forecast if it had not been for Management Consultants for Contractors' bonus plan. The goal-driven bonus plan forces us to do this sound business practice. I firmly believe that there is as much value in the business planning that goes into our bonus plan as the bonus plan itself. The bonus plan seed has sprouted a very different company culture. There is better direction. There are more controls. There is a higher sense of urgency. My management team and field employees understand that they are responsible for the successes. It's a wonderful feeling!

Now, if I could only figure out what to do about incomplete plans and specs.


A Client’s Story
Winter 2002
By Steve Wann, Pioneer Roofing Systems, Inc., Lorton, VA

I have been on an adrenaline rush for the past two months. We have been selected to install the roofing systems on The Smithsonian’s new Air and Space Museum. This is by far the most exciting job we have ever undertaken, and it is one of the most prestigious projects to occur in the Washington, DC area for the past several decades. It is a complicated roofing project, but I am very confident that we can handle it and even make a reasonable profit on it.

I don’t know that I would have had the courage to undertake such a technically complex project three years ago (this building is a giant hangar that is all roof on the exterior). However, a lot of positive things have occurred at Pioneer during the past three years. I felt now was the time to go after this challenging job. I would like to share some of the key things that have happened at Pioneer since 1998.

Three years ago, I felt like we were almost treading water. We began to job cost about a year before that, and we could tell that we kept making similar production mistakes and we were consistently running 10% over on the estimated hours. I thought an incentive program would be the answer so I devised one on my own, but it actually demotivated many of my workers. I dropped it right away, but the message that the field got was that the management team didn’t follow through on things. And then one of my roofing friends from Pennsylvania told me about their bonus program that was designed by a guy named Doug Phelps from Management Consultants for Contractors.

Doug came to our office and described his bonus concept. I liked his ideas right from the start. Doug suggested that he conduct a confidential survey of our employees and after seeing his report of their responses, I decided to hire Management Consultants for Contractors to design a bonus program for us. We had to do things differently.

And different they are. The bonus program is driven by an annual forecast of how much work we can do, how much it costs (direct and indirect costs) us to do it, and the gross profit (which we now call gross margin on Doug’s advice) that is left over when the jobs are complete. We have an annual gross margin goal that the company must reach before we distribute any bonus money. What I like the most is that the gross margin goal protects my profitability and everyone in the company participates at some level if we reach our goals. It’s win-win. As we exceed the goals, the bonus payout grows, but so does my bottomline.

I soon discovered that we got more than just a bonus program.

  • Doug reformatted our monthly profit and loss statements so that they are more reflective of how we are operating. It is a useful business tool now.
  • The annual sales and income forecast establishes our goals each and every month. It also enables us to determine the appropriate mark-ups to recover our indirect costs and overhead expenses. We know our break-even price on every bid.
  • We now monitor our backlog from a financial aspect. In fact, we project out our sales and gross margin backlog each month to get a good picture of how the year is unfolding. I have a pretty good idea of how much profit we will make 3-4 months before the year ends. We have taken more control over our destiny.
  • My field team feels more a part of the company. We are more open and share a lot of information about the company. We have reached a higher level of trust with each other.
  • We conduct periodic company wide meetings. We show the results of our combined efforts as well as individual jobs. This gives us an opportunity to recognize our achievements or collectively learn from our mistakes.
  • Job costing reinforces the value of preplanning. We are becoming more disciplined since the results of our efforts, or lack of, are measured each and every job.
  • We are more goal driven and try to take corrective action instead of just letting things happen.

This is our fourth year of the bonus program. We raise the bar each year, and it looks like we are going to exceed our goals again this year. Over the past two years, I have paid $250,000 in bonus money to about 40 employees, and I was happy to do it. Oh, by the way, we no longer have that 10% spread between estimated hours and actual hours. We are right on at the end of the year.

The company’s overall environment is just better. While morale ebbs and flows, I think the peaks are higher and the valleys not so deep. As for the adrenaline rush, I hope it never ends.


A Client’s Story Today
By Steve Wann, Pioneer Roofing Systems, Inc., Lorton, VA

Wow! What a year! Now that I have time to reflect, I am sure that the light at the end of the tunnel is not an oncoming train. We are completing the installation of the most technically complex roofing project that my company has ever undertaken—the prestigious Smithsonian’s new Air and Space Museum.

Imagine a hangar 15 stories high and 1,000 feet long covered with an exterior skin of a thermoplastic roofing system. Imagine a fast-track construction project. Imagine the pressures of working on such a visible and prestigious project. Imagine one of the hottest summers and wettest falls in recent past. Imagine my pride in my people—I couldn’t be prouder.

This is construction, and we had our share of challenges. The shear magnitude of this project strained my organization at times. But, we met the challenges, and there is a visible, lasting monument to showcase the success of our collective efforts.

Teamwork. It’s a word I’ve used many times. There are a lot of definitions, quotes, posters, and books about teamwork. In my mind, none are as powerful as just the plain picture of this hangar and the rest of the project. It wouldn’t have happened without a concerted team effort from all of my employees. Each and every one of them rose to the occasion and helped us through this challenging year as we worked on this job, and took care of our other customers, too.

Trust. I now know that trust is the glue that holds the team together. Over the past few years we have been building a higher level of trust in the company. We have a more open environment and continually work to keep the communication channels open. The challenges that we have been able to meet this past year are a testament to the trust between management and the workers, and between each other. It’s as if one or more of us fell down, another coworker was there to help us back up, even during the most stressful times.

We implemented a bonus program designed by Doug Phelps of Management Consultants for Contractors 5 years ago. Now I won’t go as far as to say that the bonus program helped drive my employees to meet the challenges of this year, because money only goes so far. But the company culture of teamwork and trust that has evolved from this bonus program was definitely instrumental in my courage to go after this complex project and was evident by the way that we helped each other accomplish this tremendous achievement. We will make a reasonable profit on the Air and Space Museum project and for the year.

We’ve all learned a lot this year. We’ve learned that we can overcome what may seem to insurmountable obstacles as a team. We’ve learned that no other roofing project would be beyond our collective capabilities. I am very proud of Pioneer Roofing Systems.

 Doug Phelps-
The Management Consultant for Contractors…
YOUR PROFIT BUILDER
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