Meeting with more than one hundred contractors personally, it was quite refreshing to hear of their willingness and desire to tight their “money belts” when it came to running their business. In fact, as more than one contractor told me, “Hey Mate, when you live on an island, you tend to be a bit more organized and a better steward of your resources as there just isn’t as much to go around like you ‘Yanks’ have.”
After addressing that sentiment about us “Yanks” with several contractors, I was still impressed with many of their practices as business owners. Here are some interesting, but applicable lessons.
The Season of Pavement Maintenance
Like many American Pavement Maintenance Companies north of the “Mason-Dixon” line, having a shorter season for work is not uncommon. Most of New Zealand practice similar seasonal methods and practices. For instance, asphalt and striping has an eight-to-ten-month season, and that’s stretching it depending on how late their fall weather (Fall for the Kiwi’s is about February through roughly May or June. Thus, our summertime is their wintertime).
Therefore, the Kiwi contractor pushes hard during the temperatures that allow for their work to be completed. Interesting, there is very little, if any, seal-coating completed in the country. I heard several reasons for this including the fact that their season are not as brutal as in the United States. Their temperatures rarely exceed ninety degrees farenheit and even more rare, fall below zero to ten degrees. They get their share of rain, thus they are very primed to ensure they have a good base, and can use “petro-mats” to help prevent water from getting down into the asphalt.
Concrete is used a lot in New Zealand and they tend to follow much of the same processes of the concrete placed in the states. However, with much of New Zealand covering areas of volcanic activity and a great risk of earthquakes, most of anything placed on the ground must be aware of soft areas, often needing reinforcement before placement of concrete or asphalt. I did notice a greater attention to this detail than most U.S. Contractors are focused on.
Winning the Cost of Doing Business
Just as our own domestic costs continue to escalate, the Kiwi Contractor continues to see increases in asphalt, paint, concrete, crack filling, etc. The have seen even the few rock quarries prices escalate; much due to increase in fuel costs. I did find that even the smaller contractor is more disciplined than many American contractors are with many negotiating with materials plants for locking in on prices for fuel, asphalt, and concrete. Many contractors are building buyer groups to provide a more inviting acceptance by material providers since more quantity of material can be leveraged for better financial deals.
This is a good point for those US Contractors not involved with any group who are negotiating everything from tools, equipment, even tires, PPE, oils and lubricants, etc. * Please contact me if you are interested in joining a buyer’s like group of contractors.
Annual Accounting & Quarterly Review
Another impressive effort shared with me was the move to monitor their inventory levels, maintaining only what they really need and perhaps a smidge more. Returning to an earlier comment about tightening your “money belt” due to the limited space and resources as a way of life, several contractors did share that they do an extremely deep dive into exactly what they have, what they need, and what is their market dictating they will need. Then, when they have made the decision on what is needed, there is a quarterly update on monies spent, equipment and tools condition, growth potential, and what season are they moving into.
This doesn’t sound any different than what some contractors do in the US market, but the difference comes with the discipline to perform a quarterly review. It’s important to do an annual alignment for needed items but the real execution is enhanced four-fold when you follow-up with quarterly reviews and adjustments.
Temps to Full-Time Investments
Another cost control that several contractors shared with me is the short and longer termed contractor workers. Again, we have such access here in the US market but often just to fill gaps in our worker headcount. The insight I received from these Kiwi Contractors that they almost exclusively recruited the temp-worker, still training and working with the employee to see if the relationship was one that could move to a full-time status with the company.
As contractors in seasonal markets know, the roller-coaster like relationship with temporary workers can be full of headaches and paperwork. BUT, there are some upsides also with not making a full-time commitment upfront with an unknown worker. There are ups and downs in any model. The main point is that we may need to be out of the box when it comes to looking at building teams of people who are committed to our company. I’m not sure that we are on solid ground about hiring the right people as surely as we did fifteen years or more ago.
As you can see, the ideas are not necessarily world changers but when you are looking at maximizing the output with minimizing the costs involved, we may need to do business a bit different than in the past. Before you blow by some of the ideas, give the New Zealand contractors another look over as it may be just what you need to do.
Next in this short series, moving to a more female workforce.
