The Contractor Operating System Step 3 (Part 4): Preparing Your Company for a New Hire

In this episode of Contractor Cuts, Clark and James break down the final four core processes in Step 3 of The Contractor Operating System — the systems you need to build before you hire.

If you’re getting close to bringing on your first project manager, office support person, or leader, this episode is about laying the groundwork the right way so growth doesn’t create chaos.

They cover:

• why your first hire is usually a project manager, not an admin
• how POW/PAL meetings create accountability, support, and early problem-solving
• how to build a goal and compensation system that gets employee buy-in
• the boring but critical office management processes that protect your company
• why leadership development is the last and most important layer of scaling

This episode is all about preparing your company to duplicate yourself without losing control, culture, or profitability.

Struggling to grow your contracting business? The Foundations Program is designed to help contractors break free from the chaos and build a business that runs smoothly. You’ll get a customized training program, 1-on-1 coaching, and access to a full paperwork database—including contracts and the Client Engagement Agreement. Join the Foundations Program today! 🚀

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Transcript

Welcome To Contractor Cuts

SPEAKER_01 0:01

Welcome to Contractor Cuts, where we cover the good, the bad, and the ugly of growing a successful contracting company.

Level Three Process Roadmap

Why The First Hire Is PM

SPEAKER_00 0:12

Welcome back to Contractor Cuts. My name is Clark Turner. And I'm James McConnell. Thank you for joining us again this week. So we have taken a little uh detour for the past few weeks, diving deep into some core processes for level one and level two. Um there's total eight core processes that we want documented in a construction company when it's fully formed. Um so today we're picking up for level three, which is the final four processes that we want you to document. Uh and so we're picking back up into the second part of level three of seven steps with four different processes. It feels and sounds confusing. It's not if you're walking through this slowly. And what what our goal is, is to have everything in front of you that you know we got to get done. Uh, and then we're gonna slowly start developing it. So today's level three is when we are prepping for a hire. Uh, I'm gonna walk you through all four of these. James is going to kind of give us some definitions of them and best practices of what we've been doing, kind of real life examples of them. Um, but these are processes that we start six months out from hiring. If you're looking at hiring a project manager, that's usually the first hire that you're doing in construction um is bringing on someone to manage projects so you can duplicate yourself out in the field. Um News Flash, your first hire is not an admin. It's not. It it really shouldn't be. It really shouldn't be. Um if you if you are, that's fine. Come talk to us. But oftentimes it's I'm hiring and when people hire admins, it's because they're trying to solve a problem that they don't know how to solve themselves. And I just want someone to deal with this because I feel like I'm wasting my time on it. It's not how we do it. So number one, usually hire is going to be a project manager outside of if you are a trades company, you're an HVAC company, your first hire is probably going to be a tech that's going to be out in the field, um, and you're gonna be the secondary tech and kind of running him. But anyways, that's a whole different setup. Today we're talking more general general uh contractors. Uh, but some of this also applies to techs. Uh and so it listen in, duplicate what we're doing, but also how do we change it for the job role you're hiring?

SPEAKER_01 2:28

Let's put it this way: if you want to own a sausage factory, you need to know how the sausage is made. Aaron Powell That's right. And I've always said that.

SPEAKER_00 2:37

Your goal is the McConnell Sausage Factory.

SPEAKER_01 2:46

Let's riff on this for a minute.

POW PAL Meeting Framework

SPEAKER_00 2:49

On to number one process in level three. All right, so getting back into the processes. Uh Thanks for keeping it clean. Uh the first process that we start doing, we were looking at making a hire, we call our POW meetings and employee accountability. POL meetings is something that we termed forever ago, which was originally the project manager action list, and we jokingly called it a PAL. This sounded real corporate y. Real corporate, real cheesy, and uh you know, 15, 12 years later, whatever it is, it's still called that. Um so that's what it is. It's a You ready for your PALs, bud? Hey, be a pal. Come to the PAL. So the the PAL is where we sit down once a week on Fridays and review every project that's on your play as a project manager. There's also what we call them a GM accountability meeting. It's the same thing as the PAL, it's done differently, but it's when we'll talk about that towards the end of this podcast. But when you're developing the general managers and the head of constructions that come in and manage project managers, it's the same meeting, just done differently about different topics. Um but the POL meeting where we're starting is how we assess every single job. Our goal is to find red flags before an issue happens, instead of three weeks later, we've lost money, we've lost a reputation, we're just finding out about something. And the POW meeting is where that happens. POL meetings can be two different ways. They can be a principal's office meeting or a support therapy meeting. And what we won is that second one. If it's going well, if it's healthy, if you got a great employee, it the POW meeting is where they come to rest, where they come for support, when they come to help, where they leave out of there excited, uh answers uh to the questions that they have. And it also eliminates seven phone calls Monday, Tuesday, Wednesday, Thursday, because they've got a spot on your calendar where they get your brain for an hour and a half to go through these questions. Obviously, there's going to be questions throughout the week, but if we can go from seven a day down to two a day, that's a win with efficiencies. Uh so the POW meeting is really a 30,000-foot job support coaching and accountability meeting. I'm going 30,000 foot and I'm a second set of eyes on your job. So let's kind of run an example. James is uh my project manager. I am, I've I've hired him in. On this meeting, he has prepped. He knows the questions I'm asking. And and kind of our PAL spreadsheet, our PAL worksheet, I'm not going to go over, um, but it is a grading system to where everything that I need done in the software to make sure my clients are happy and that the job is is progressing has a has one of three results. Either he did it, he gets a one. He didn't do it, he gets a zero, or it wasn't really applicable this week. We leave it blank. A one get builds your grade, a zero hurts you, a blank doesn't does nothing because it doesn't count. So out of the twelve items that he can be graded on this week, he gets an eight out of ten. And so he got an eighty on his power grade this week. There's two that he got zeros on, eight that he got a one on, and then another two that were not applicable to him this week. That makes sense.

SPEAKER_01 6:02

Yeah, and if you want to get really cute, you can do 0.5.

SPEAKER_00 6:05

Yeah, like two emails a week to the client. Did you do one? Did you do okay? I'll I'll give you 0.5 for sending that communication, but I uh we promised two emails a week, and you did one, right? So there's a 0.5 on that one. So the whole goal or not, or you you you failed. You just did one. Yeah. I'm giving you a zero. Um that being said, we take this, and we'll talk about this in the second process of how we compensate our our employees and our project managers, but this pal grade is the largest factor in how they get raises. And so there is a financial cost to them if they're not doing their job. And by doing this and by setting this up, we'll talk about this on the next on the next uh when we on the very next process we're about to talk about with employee compensation. But if we set it up well, the PAL meeting is where I'm cheering for you as my project manager to make more money, right? So we're both in this of like, okay, how do we solve these problems? How do we do it? And it's a game planning per job. All right, what about this? Have you updated your estimated completion date? If it changed from last week, did you send an email? Yes or no? Let's check. I can pull up the software, look at your emails. Yeah, you did. Awesome. You got a one on that one. Job photos. Did you upload photos this week? Let's talk about that. Let's look at that. Why? Okay, so you that you had a question about there. Let's dive into that, right? And so it's a it's not a grading session like you're in the principal's office. It is a conversation starter about all of the important things that what we're doing is building a safety net to where I know that you're communicating with the client. I know the you're bringing projection, so I know that you're thinking through next week and the rest of this month. This diagnostics check.

SPEAKER_01 7:48

You go in there, did you get the pictures? No, I didn't. Oh, why? Well, there just really wasn't enough progress between here and there, just like their pictures are all the same. Okay, uh so is our Gantt chart need to be moved? Yeah. It's it opens the door to all of the conversations that need to be had.

Accountability That Feels Like Support

SPEAKER_00 8:06

I'm looking at the checks that you submitted to be printed today, and you got 10 grand worth of money going out to the paint crew, but there's not enough progress to take pictures, but we're paying out 10 grand. Help help those two things line up in my head, right? Like why are we paying so much money when you're saying there's not progress? Why is the Gantt chart saying we're gonna be done by Tuesday and we ha can't even send an invoice at the 50% mark? Yeah. We got some issues here. Yeah, I think that's great. The it's the it is accountability and support all wrapped into one. And the great new the the way that it feels like support and not accountability is that we it's an open notes test. We give everything they're gonna be graded on and train your project manager on all of these things, and this is how we operate the software, and this is why you do these things in the software and it goes out to the client so we can monitor it. It's a way to manage without micromanaging and to see the flags before stuff happens. But my project manager knows 10 a.m. Friday morning, I'm coming into Clark's office, and he's gonna ask me these 12 things about the job. And so Thursday night, sit down in front of your computer, hold that list out that we're gonna talk about and cheat. Set yourself up. Like, you can't send two emails Thursday night on that, but you got the photos in your phone. Upload those. You know that like I've got to send an email in my second email, it's Thursday. I'm gonna go and send it right now to get my two emails in. And I'm also while I'm doing that, I'm gonna let them know about the change on the Gantt chart because I know that we have we got delayed because of the sheet rock wasn't dry, right? Whatever it is. So you've got a cheat sheet. So the POW grade is literally an effort grade. It is, did you do your, did you put effort into doing your job? It's not a gotcha, it's not a oh, we don't have to pay you. You didn't do that. It's more of like a, you knew we were gonna talk about this today. Like, what's going on in your brain? And and a lot of times you can have a week of all five jobs that that PM's running, and they're all 60, 70, and 80 grades. And that to me is not a failure. When when I get a hundred week in and week out, and all of a sudden I got a week of 60s and 80s. That's where I move the computer aside and say, What's going on? What's going on? Like, what's what's happening? And that's when the real conversation starts of like I'm in my computer's broke. Lord, I hope not. I hope that's not why didn't you say something? Well, you know, I know computers cost money. No, like that's where the conversation of like I've had guys of like, to be honest, like my wife and I talked about divorce over the weekend. I I I've just I've not been mentally here, right? And so that's where it's like the support of a like, cool. That's a good information to know for me of like, let's separate personal and work. And do you need time off? Can we take, can I take some of this burden off? That job you're looking at starting next week. What if we pass it to the other PM and give you kind of a lighter load for the next month so you can work through this? Are y'all going to counseling? Like y'all should like we cover that. We cover 80%. And so it really helps you care for them. And it's a flag of like, and it might not be that deep. It might not be marriage issues. It might just be like, Clark, honestly, like I started three jobs in the last week and completing and trying to do a final walk on two other ones. Like, it's just, I'm overloaded. I I I work 70 hours and I'm getting 60s on all of these power grades. Um, it it's our litmus test on if they're doing their job well, and it allows us to dive into the reasoning behind it of like, I'm looking, like, I don't see where you even put in 40 hours this week and you're still getting 60s. What's what's up? To be honest, like I just kind of brain fart and do anything. Like that's not an answer. Like, that's not okay. Like, let's have a harder conversation. Let's let, you know, it allows that to where it can turn into a principal's office, but most of the time, there's a good reason why they're not getting good grades. It's I've overloaded them, I haven't trained them, they got terrible crews. And so, what we're gonna do in the next 14 days is we're each gonna interview five crews and we're gonna get a couple new ones in here, and you really need a good frame or so. Let's go after that. And we're making game plans during the POW meeting on to how to really polish the process for you. And what do you need and how can I train you? And you feel like you're behind on this. Or I remember a good one of uh a guy saying, to be honest, I have no clue how to do how to pull a permit. I've never done that before. Oh, I didn't even realize like you've never done that. You've been here for three months and you've never had a project and your previous job you didn't do permitting. Yeah. Let's talk about that. Let me train you on that. Like, hey, James, come in here. Can you kind of walk him through Atlanta, City of Atlanta permitting? Like, that's the type of thing of like, oh, you were scared to raise your hand, but it's coming out because I can see it. And this would have been if I if we didn't have this pound meeting three weeks down the road, the client's sending me a pissed-off email. Why is there not any movement, Clark? And I'm saying, I don't know. Let me check with my project manager. He's still in permitting, he's been to the office seven times and still doesn't know what to do. Let's get him some help. Right. And so it's a great meeting. And everyone has a weekly, twice-a-week meeting with their employees when they hire them. It's not the problem is usually it is a let's put all of our problems on the table and just kind of war story and and talk about how terrible this client is. Right. And that isn't what your employees need. They don't need you to lead them in trash talking clients. Uh there's a a certain level of camaraderie and and shared experience, but your job as the leader is to help them lead them out of the bad experiences and double down on the good experiences. And how do we make you better this week going into next week? Incremental steps, right? So that's kind of the first thing we do. And so when you're in coaching and you're getting ready to hire, I'm gonna do pals on you. James is gonna do pals on you, and you're gonna feel what it's like on the other side of that. What are your jobs? And I need your software to be perfect. I need you to run your jobs perfect. I need you to set the bar of what a project manager looks like. And when you're getting all 100s on your pals and you're showing up to those meetings, you're ready to hire. Let's bring someone in because you know exactly the bar you're holding, holding them to, right? Um, and we we customize like we've got I've got my our general like residential, like commercial PAL meeting. We've also got one that's that's kind of the higher-end commercial. Um, that's a totally different PAL meeting when you're working with the foreman or a super than you are with a project manager. So, how do those meetings work? And what does that look like? All of that needs to be defined as to how do I give support and hold them accountable and find the red flags before the job starts. Um final words on PAL meetings. What to you was a surprising benefit of doing these? Um I mean when we started, I don't even know where these came up with. It was more I think it was me, you, and Jared, like early days days when y'all were both running jobs and I was kind of head of construction GM role, trying to put down like, hey, this what's the stuff that I should be holding you accountable for? And we kind of worked on it together. But like, what to you when you do these well, when you're getting in a rhythm with the project manager, what's your favorite part of these and what's your least favorite part of them? Like in those meetings with those guys, what's the aha moment, uh this is why we do it? And then what's also like the oh crap, I'm glad we're doing this moment.

SPEAKER_01 15:44

Um honestly, I I enjoy the I enjoy camaraderie, I enjoy cutting up, I enjoy all of that. But the pal meeting for me is like let's just handle business up front so that we can enjoy the camaraderie. And that's everybody works a little bit different. It's hard for me to want to engage with like just all of the random stuff and tell stories and this, that, and the other when I still have all these questions in my head. So I like a template to be able to sit down and be like let's go through these, bing, bing, bing, and a story starts, and like, hold on to that story, make a note or something, let's keep let's get through this. Something that gives us a uh really it's like the vision statement. It's like uh for this moment uh we're gonna get to the end of this, we're gonna go through all the jobs, this is the game plan, this is what we're doing. And then uh we can like you said earlier, though that can kind of morph depending on how that meeting's going. If there's big red flags that jump out, like the hey, we're at the second week of the month and the invoicing that you've been projecting has lagged significantly, are are should I expect you to have a crazy week this week and next week? Or are we just behind and we really need to look at the Gantt chart, or we really need to start talking to some crews because they said that they were going to be done this week, last week, and the week before, and that's not happening. Are we both just drinking the Kool-Aid or are is there an actual game plan to close this thing out? It brings up those things a little bit ahead of time, sometimes a lot of bit ahead of time, and it just gives you a a springboard to actually deal with those issues instead of having to deal with them retroactively.

SPEAKER_00 17:38

And when the client's pissed off at the PM, who are they calling? You. And so you've had three meet three the last three weeks, we've talked about this one crew lagging. And so when you get this random phone call, it's not I gotta go meet with my PM for an hour to understand what's going on. I've got a 30,000 foot view week in and week out to where I can handle that phone call and be quickly insert myself and then get out of it, right? Like I can pop in, hey, let's kind of circle the wagons. I and for a client, like I I remember when you were PMing and I was a GM. And if a client called me, for me to say, Hey, I know that Steve was out there doing X, Y, and Z. James said this, this, and this. James told me for the client when they hear that me and you are communicating about their job outside of them, they're like, Oh, cool. Y'all got this handle, like y'all thought about this stuff, and I'm I'm on top of it as opposed to, oh, what's happening? No way. What they didn't do, oh man, I let me let me call and chew James out James out and figure out what's going on. Like there's there's this distance that if you're not having these specific meetings, asking these specific things, that you are distancing yourself from the job and you're getting really out of control of your company. And so these allow you to stay like and the POW meeting isn't A, it's different every single week, and B, I might spend five minutes on the first three jobs because they're tight, they're ran well, crews are good, homeowners paying, everything's happy. And then we get to the fourth job, and it is a mess. And so we're gonna spend 45 minutes on one job to unwind it to help with this. And what about did you think about this? You haven't even have you ordered the granite yet? Like, cabinets are in. Like, what help me? And so it's like, let's take, let's deep dive and reset this and get you so next week you're killing it and feel good about it again, right? And so I think that's that's the beauty of it too of like the guys don't feel like they're on an island, um, which a lot of times PMing when you're running jobs and it's so process heavy of this is what you do, this is what I do. A lot of times it's distancing. And final point, your camaraderie that like I want to get through this, and then let's war story after it. Let's have it. Camaraderie is we're all in this together. And there's times in these POL meetings that I realize we're not in this together. You're you're given half effort. I'm giving full effort. There's not a camaraderie in that. If you've done a school project in high school where you carried the team and two kids didn't do a single thing but sign their name on it, that's not camaraderie. That's me carrying the load. And so when I'm sitting in the coming into POW meetings, there have been times where I'm like, this guy ain't doing anything. And we sit down, like, oh, you're doing so much, but you're just underwater. Cool. You're fighting for this. I like the attitudes are different. Or the other side of that, we sit down, I'm like, bro, what's what what's going on? Like, there's not a single picture, there's not a single email. Oh, they're in my phone.

SPEAKER_01 20:40

They're in my phone. They're like, Oh, let me check my outgoing, I forgot to send it. I have it written.

SPEAKER_00 20:45

Doesn't do me any good. Yeah. Yeah. And so there's there's like, there's not a lot of camaraderie coming out of that meeting because it's like, we're not in this together. Like, I'm I'm trying my hardest to carry this the your jobs all across the finish line, and you're dry, like you're part of the problem, not helping. Um, there's not a lot of war storing and hanging out and camaraderie at that point because it's like we're we're not comrades, we're not doing this together. This is not a shared experience for us to talk through. So it kind of, if done well, it's gonna bring up the performance improvement plan. Like we need to have this conversation. Uh, or the other side of doing it well is there's gonna be camaraderie teamwork. We're doing this together. This is great, like awesome job. You get all the attaboys. Um, if you have a PM that's showing up not doing pals well, not caring about it, they won't be working here very long, right? The best employees, the best project managers are excited about these meetings because they get to show their work. They get to get help, they get to dive into your brain and say, I got you for an hour and a half. I know we got to talk about all these jobs, but this one job, it's about to be a fire that's about to start. Like this is a grease fire waiting to happen. Can you like step in and help me? I need you to call the client. I need you like, cool, download. Let's do this. Let's do this. Right. It's not about catching you, it's about supporting you. So that's the POW meeting. That's number one and the most important thing on this list. Like I said, that has to be in place before day one. As we've said in plenty of other times on this podcast, with subs, with employees, however, I set the bar at the beginning is what they're going to get to. And they're going to get to about 90% of that bar. And if I set the bar as you kind of have to do it this way, I don't care that much, they're going to be at 90% of that. And so if we start with PAL meetings, week one, right? And so again, this is when you're onboarding. We're not going to cover this today, but when I'm onboarding a new employee, we kind of got the first day, the first week, the first three weeks, the first month, the first second, second month, and third month planned out. While we're in month one, you are my assistant. I'm training all this stuff and you're running my jobs with me. I do PALs month one with my new employee to where he's responsible for the software. So I'm going to do a POL on you on the job that we're doing running together. So you understand why we're doing it, what I'm looking for. And so we kind of ease into it. But if you don't have that defined, understood 100%, this is how we do it, my jobs run this way, and you hire them in, it's not going to duplicate. Well, it will duplicate. It will duplicate the crappy way that you're running jobs. He's going to run it the same way. So that's the importance of prepping for these hires. It's not like, hey, I got some extra jobs. I'm going to hire someone to help me run some of this. That is a terrible hire. We don't hire that way.

SPEAKER_01 23:34

That's when it's mo money, mo problems.

SPEAKER_00 23:36

That's Mo Money isn't always mo problems. That's your that's your side single, single podcast that you're doing by yourself, Mo Money, Mo Problems. Mo Money, Mo Problems. With James McConnell.

SPEAKER_01 23:46

Hey, it's Mo Money Mo Problems with James McConnell. All right, we're talking to Steve Jobs today, Retro.

SPEAKER_00 24:52

All right. So the second uh core process in level three, goal documentation and compensation pay scale. Again, that's less of a process and more of how employees get paid and how they get raises, as well as setting employee goals and assisting them in achieving it. How do we do that internally? How do I set up a goal documentation, get their buy-in, and build out a compensation package for them? We are, I mean, we can spend two hours on our compensation scale that we've built out. Um three hours. No, the the gist of it is we've built it to where I can lay out every six months you get a raise here. As my project manager, you're gonna get a raise every six months if you hit your numbers. And so let's look at what that looks like your PAL grade, your profitability, and your revenue. And those three things combine to give you raises. It's literally measuring your exact value to this company. I'm gonna pay you for it. And so we it we build it to where it grows every six months. You can get a raise if you're performing, and you should be growing and being able to invoice more six months from now than today, and 12 months from now, from then. So, how do we reimburse that? How do we pay that? Because once we lay that out, that spreadsheet lays out of how we're doing these raises, I can say, okay, James, this is let's let's look at what you believe you can do. You've been here for six months, you're invoicing$90,000 a month right now. Do you think you can get to$120,000? You think you can get to$140? What do you think you can get to invoicing-wise in this system, in what we're doing? Let's look at it. And so it's okay, well, in six months, my goal is to hit$105,000 a month on average of invoice. Great, let's put that in here. If you do that, you're gonna get an$8,643 raise if you're getting all 100s on your PALs. If you drop below 97 and a half on your pal average PAL grade, you're gonna get a$6,000 raise. If you drop down into the low 90s, you're gonna get a$4,000 raise. If you're in the 80s, you're not eligible for a raise. So the PAL is the is the multiplier for your raises. Um, and the number that it's multiplying is really how much money they're making the company. Right. And so it's a percentage of how much value they brought over the last 12 months, and we're giving incremental raises for that. What I love about this is we're not commission-based. Commission is rain or shine, and I can have some really good months, and I got paid 30 grand last month, and the next two months I got paid$12 because I didn't hit my commissions. Commission-based pay like that really makes it hard for me and my wife to get a mortgage because my pay's up, my pay's down, I don't have a steady W-2 coming in, and our and there's no like long-term thinking for a commission guy. Commission guys are a dime a dozen, they're in and out. Whoever I can make the most money with, I'm gonna go work for that company. And hear me, there are companies I think we should set up commission. Roofing companies, certain trade companies. I love the commission for a sales guy, but I don't like that in general contracting, when you're doing large scale, we can go a whole nother conversation about that. But I what I want on my compensation and pay scale is to be able to measure if you do X, Y, and Z, James, you will make this much money. Would that make you happy? Is that the carrot that I'm putting out there? It can you hit this goal? Yes, yes, I'm in. I want to make that. We had a guy, I think I've told this story before. Uh Jared managed him. He was a project manager, and he sat down for the six-month review looking at his numbers, and like we're we're laying out and and said, Hey, and where do you want to be in 12 months from now? Like, what would be good pay for you in 12 months? He was probably getting paid 60 at the time, 65, 70, I don't remember what. And he was like, I need to be making$78,650. And we're like, that's that's an odd number. That's so specific. Yes. Um, and I was like, Where where did that come from? And he said, Well, I'm gonna ask my my girlfriend to marry me. Um, I know how much she makes, I know our bills. I like he ran all of in the weeds numbers on what it's gonna take. He's like, at that price point, and with what she's making, we can buy a house, I can pay all this, I can put two grand away per month into my savings. Like he had a whole game plan. And I was like, cool, well, let's run the numbers. If you do$110,000 a month of revenue and you get all hundreds, you're gonna be making$80,000. Like, look at the look at this. And he's like, done, done. And so from that point forward, every pound meeting was not about I need to hit you with the whip and get you to do work and said, like, bro, like, I need you to get you that raise so you can ask her to marry you. Like, let's, like, what's going on? Like, you said you wanted to do this. He's bought into what the why because our whys align. They're different whys. He's working hard to get that raise. I'm working hard to build a company, but we have the same direction because he's bought into my compensation pay scale. And it's not a matter of you're doing well, let's negotiate how little I can pay you. Instead, I'm like, I need to get you to 80K. I need to get you over that 78K line so you can you can ask your girlfriend to marry you. So help me help you in this. Like, what's going on? Why aren't you doing this? And so every meeting is a support meeting to get him there. It's not a meeting of I need you to do better because this is my company and you're costing me money. That's not his problem. His problem is he needs to get a raise. And the opposite side of this, if we get to the six-month mark and they are not performing, they know 100% I'm not getting a raise because my pal grades were terrible. And I know that week in and week out that I know my pal grade is not good. And I'm talking with them, like, we got to get you up. We got to get you into the 90s, we got to get you into the 90s on your pal. Why aren't you doing this on Thursday? So it really helps with that. Now, a lot of questions around this. Whenever we get into this, this is a very long conversation with new, with coaching clients that are about to hire. Um, there's a lot of detail and and uh deep dives into this. So I'm not covering it all, but the main thing to know about this process is we want to have goals. We want to document the goals of every employee. I need to know their why, what they're going for, and get their buy-in that if we do X, Y, and Z, are you like you're you're claiming, you're telling me you're gonna invoice 110 a month. All right, I'm gonna hold you to it. What do you think your PAL grade? I'm gonna be above a 98 PAL. That's that's my commitment. Cool, let's do it. If you do that, you're gonna get that raise that you're talking about. And I need to know their goals and how they're gonna make get a raise, and they need to be able to see it transparent transparently of how they're gonna make more money. Right? Yes. Some of that goal setting too is like, I really want to be head of construction one day. Cool. Well, let's talk about that. We've had guys that have spoken what they want here and grow with our company. We've had other guys like, I just love running jobs, like I'm gonna be a project. Cool. That's great. I'm gonna hold you to a different stuff like expectation. But the guys that are trying to come in and become head of construction at our company, uh, let's start doing some leadership stuff. Your pals are killing it. Let's let's talk through the next level.

SPEAKER_01 31:59

Let's talk through what that looks like. It kind of opens the door to like the other conversations that maybe don't track for a project manager that's like, hey, as a project manager, uh your decision-making tree works fine. Like works 95% of the time. If you want me to consider you for this next role, you need a much more robust uh tool set and I need to see you thinking along those lines. Like here's this was a mistake. You shouldn't have done that. You should never have said this to that person. That's a mistake. Here's why. You should the it's a it opens up an entirely different dialogue for someone that's like, I want to be in that next seat, I want to take that next chair, and then you have a different set of expectations now that you can it's not necessarily like they're being held to that because that's not their seat yet. But if they really want to know and they really want to go there, hey, here's what it looks like.

Office Management That Protects You

SPEAKER_00 32:58

Here's what you got to work on. And if they don't earn that seat, they can see it coming. Yeah. Like, man, I I'll tell you, every single change order you write is about 30% the price it should be. Like, you what's going on with estimating? Like, you need to figure out like how to price things better. Let's dive deep into that because as a head of construction, you gotta be a sharpshooter, like a sniper when it comes to numbers. You're not there yet, man. Like, like, let's really work on that. So every change order send to me before you send to the client. Let's look at it and try and I want to understand your brain, but like that sort of thing of until you get X, you can't grow here. And I'm here to get you to X, but you gotta you gotta put that front in.

SPEAKER_01 33:37

And then what what you'll get at that point is hey, uh, we got a change order hat. What should it be? No. No, absolutely not. You've misunderstood the assignment. What do you think it should be? Let's walk down the road. This is about understanding your decision-making process, how you got to where you're going. Show me your work. Yes. And then let's engage in a conversation.

SPEAKER_00 33:59

I will refine for you, I will not do for you. Yeah. I will not do your job, I will refine your results that you think are ready. Right. And so, yeah, that's one of my biggest pet peeves. I'm not going to do your job for you. I will refine whatever you want. Bring me an answer, even if you're just making up an answer that you think it should be. I'll tell you right or wrong and kind of dive into the thinking behind it. So that's number two, the gold document, uh, gold documentation, compensation, pay. Number three, this is a really boring one, but it's the office management, right? The all uh the processes around the office. Oh God, what again? You do all this yourself. Like it's part of just naturally happening, but it's the employee files, the performance improvement plan. How do we do that? The insurance, the insurance audits, the 1099s, and how do we store that and send that out at the end of the year? Collections, bills, vendor payments. You need to stop. Is this is this bothering you? Are you stressed? Stop right now, stop right now. I would just say office processes. Now on to the next. Yeah. This is the most boring but most important part of the next level, which is all the stuff that I hate doing that is nails on a chalkboard that I'd rather pull my fingernails out than do. We gotta have a process so we can train someone on it. Trevor Burrus, Jr. The letter to all the people out there that love this.

SPEAKER_01 35:23

Put that on your resume. I love collections and bill and audits and insurance. I just love it.

Leadership Development To Replace You

Coaching Offer And Next Steps

SPEAKER_00 35:31

I can't get enough of it. I own seven filing cabinets just so I can file things. Trevor Burrus, Jr.: I have no files in all cabinets. I'm ready for you. Yeah. You're gonna get a submission of a resume, and we're gonna be like, hire. Yeah. All right. So that that's an office management plan. Again, that's happening in the background. How are you doing sub-contractor paper? Like we we've built the software to have all of that in there. You can upload their insurance, but we have to have a process. Like one of the big processes, when you get an office manager, a part-time office assistant, whatever that first hire looks like for help at the back end of the office. One of those, one of those things are they can't cut a check out of the software until all of the paperwork's in for the vendor, because we can't assign a work order to the vendor until we have it uploaded. So the gatekeeper, the office manager, just can't put the like they aren't allowed to put a vendor in without the right paperwork. Like for me running a job a company by myself, I'll just throw a vendor in there, I'll figure out the paperwork later, I'll send him a work order. Oh crap, I've he's been here for six months and I don't have a signed subagreement, right? But if you task an office manager, they can't be input until we have these checkboxes. That's on you. If you input someone without that paperwork, your job's on the line. And so the office manager is gonna hold hold that line. Like, sorry, guys, I can't do it until you get them to sign this, but I need to send them a work order. Assign it to yourself and show it, show them if they need to see it. But like, I can't put them in the software until I have this paperwork, right? So we're making sure that all of the back-end stuff that's gonna screw you on the audit, that's gonna screw you when someone tries to sue you, that's gonna mess you up when there's an insurance claim on a job site, all of that stuff's in in order and tracked and is happening. Again, when I'm doing this and then when I'm training this, my enjoyment of the job is very low. But I've got to get through that season to really enjoy the job because now it's 100% off me. As opposed to on me, I just don't have a plan for it, right? So planning out the office management, how we do collections and bills and vendor payments and job site management of paperwork and you know, uh submittals and and you know RFIs, uh, all of those things that you gotta do in a company, how do we do it? How do you know uh when you're working for a large commercial GC and you've got to go into their software and do a submittal of invoices monthly on the first of every month? We've got to submit this this way. Who's doing that? How are we doing it? Let's write a process for that GC that we're working for, right? Is that a lot? Stressing you out. All right. So I'll move past office management for James's sake. He's he's about to pass out. Um, the final one of level three, we got PALs, we got compensation and goal documentation, we got office management. The last one is last for a purpose. The last one is leadership development. This is I've got four project managers. I'm looking to hire a head of construction to manage them. This is I've got seven techs out on the road, and I'm gonna bring in a um an operations manager that's gonna be managing all the techs doing the work. I I'm this is on the commercial side. I've you know, I've got my super and I've got my project manager. I need to bring one level up that's gonna be my head of construction, my head of ground up, my head of uh tenant improvement. Like whatever that next level is above the project managers or above your, your, your guys out there. How do we build, grow, hire, and develop those people? Uh and again, this one is our very last process. This is kind of almost level seven, the duplication. Um three, three main things: hiring, training, upper management, financial compensation plan for that person, because you know, they're they've got four project managers that they're in charge of. They can't be making 80,000 when their PMs are making 150. Like, how do we compensate them well? That there is some a little bit more of like a profit share bonus structure that we do, depending on your company and who you're hiring and and the size that you are. But there's a that's this, these uh processes, the leadership development, the accountability, support of managers, all of these, when you get there in coaching, are custom built around your company. So I don't have custom cut like we do the POW meeting. Let's do this and let's build this out. For the leadership development, we need to hire and train up our management, financial compensation for them, and accountability and support of managers. I proudly and regretfully say like the leadership development was the last thing I've added into this because I didn't do it well. Um despite my failings, you moving into moving up and and and the other guys that have moved into that position have done well despite me. But the accountability and support, what we what you do as an owner, I've been grinding for 15 years, I'm finally replacing myself, I'm moving up, and so I'm just gonna dip out because I don't want to do stuff, right? And so it's a um it's a definition of how do I stay engaged and keep a uh my thumb on the pulse of the company and understand and keep that person accountable uh while they're leading my company. And how do I compensate them? How do I manage them? And how do I not micromanage and keep stepping back in, but but have a separation of me from them to let them lead the company, yet I still have my thumb on the pulse of what's happening here. Right. So it's it's the most important final step to be able to replace yourself in managing others when you're moving in a head of construction or even a general manager to replace you. But it's such a crucial part of make or break for the company. Um, so that's it. Those are the four different processes in level three that we cover once you get in that. Again, all these processes are for executive level clients. You gotta be an executive to go into the hiring of these four processes because it's so time-intensive and we customize it around your company. Um, when you're an executive client and you're hiring people, you have the option to add on me or James or your coach coming to you in person. It's an additional cost, but it's just like you're bringing in your executive team. If you're flying me as your CEO into your into Dallas to for a company meeting, that's a company expense. So it's not a lot of money, but again, that's kind of an add-on that we do on the executive level as needed. And a lot of times it's that first hire or the second hire or the first time you're hiring with some of these processes in place. Um, that's that's kind of the in-person visit. So that is all of our core process documentation. I know it's been weeks and weeks of going through level three. Uh, we're gonna be diving into four, five, six, and seven in the upcoming weeks uh of the rest of this. But again, this is step three of our seven steps is the most nutrient-rich, full like spending years here to get this stuff developed. Um, where the other steps, you know, vision is week uh one week a year trying to trying to refine that. This is the the step three, the core process documentation is just so meaty. There's so much here. Uh, and this is what makes or breaks your company. This is how you duplicate. So thank you for joining us again this week. Uh, if you have, if you want to talk about this stuff, if you want to implement this stuff for your company, go to uh contractorcuts.com or proShock360.com, hit the contact us, set up a meeting with me. I love to kind of talk you through some of the stuff. Even if you're not in coaching and you just want some help, let's do an hour meeting. I love helping guys out. Uh, we love to align and partner with guys that are growing. And really, if we can find how we can do a return on investment, that's when coaching makes sense. If I can make you more money than it costs to do coaching, that's when it makes sense. And that's what I've got to prove before you decide to come into coaching. So have a free call. We'll do an hour-long conversation. If you want to get into coaching, we can have that talk, make sure you're in the right spot for that, make sure it financially makes sense for you to where we can build the that ROI. Um, and then we'll kind of get launched with you. Um, but yeah, love to talk with you. If you want software too, ProShark360.com. A lot of the processes that we have are built into the software. So by using the software, if you get the depth of the processes, a lot of them are built into the software. So it's a great place to start. Start building some estimates in there, invoicing, follow-ups, all the PAL stuff is tracked in there. So it's a really, really good spot spot to start. Pro Shark360.com. All right. Thanks so much. We'll talk to you guys next week. Bye. Bye.