Mark: Hey, thanks for tuning in this week. Just wanted to let you know, unfortunately, although Tim was in the office with us, there was a technical issue with his Mic that we didn’t catch until he was on a plane headed home. Normally I just throw the episode away, but this was just too good to pass up. I hope you understand.

Mark: But more importantly, I hope you enjoy this week’s episode today on PowerTips Unscripted. We talked to Tim Faller, Senior consultant and production guru here at Remodelers Advantage. Everyone wants to add more money to the bottom line right? Well, Tim’s here to tell us about the lowest hanging fruit you can pick in that quest. It’s called slippage and we’ll hear all about it in just a minute.

Victoria: Hi, this is Victoria Downing, and welcome to PowerTips Unscripted, where we talk about tips, tactics and techniques to help you build a strong, profitable remodeling company. And I’m here with my co-host, Mark Harari.

Mark: You sure are.

Victoria: Hey, Mark. How are you?

Mark: I’m doing great. How are you?

Victoria: Good. You know what this month is?

Mark: I think I do.

Victoria: You do? You know what? This. For the third consecutive year, this June, we are getting all of the tips, tactics and the techniques to the goal of eliminating slippage and every remodeling company out there.

Mark: Whoa! Yeah. It’s slippage awareness month.

Victoria: That’s right. Just think what a wonderful world it would be if we could eliminate slippage from all of our members and all of the remodelers that are in our listening audience right now. Wouldn’t it be.

Mark: Great? It’d be great. I should drop that song in right now. It’s a wonderful world. Oh, yeah.

Victoria: There you go. Louis Armstrong, I think. Right. And today is even better because we have the king of eliminating slippage with us right here in the Remodelers Advantage Studio. Welcome, Tim.

Tim: Hey, thanks for having me on. This is fantastic.

Victoria: So, Tim, you’ve been with us for about three years. I think, as an official part of our team, as our senior consultant.

Tim: Yeah, it’s been a great ride so far. Looking forward to a few more years.

Victoria: So you travel around the country working with remodeling company owners and their production staff to develop processes and procedures. Many of which have a direct effect on eliminating slippage. Is that right?

Tim: Yeah, I think most of the time people call me because there’s slippage. And then of course when I get there and start really working with the team, it’s because processes are missing that the slippage is there.

Victoria: So one of the reasons that this is such perfect timing is because you are just coming off of two days of your very first project manager intensive. Is that right?

Tim: Yeah, that’s exactly right. And and a good part of it was spent talking about their impact on profitability. And we spent a full hour making a list of all the different ways that slippage occurs and then finding solutions. And so how. One of the things I love about what I do is I get to hear solutions that other people have come up with, and they’re really unique.

Tim: And so I really enjoy it, kind of listening to the other a lot of different people that solve problems.

Victoria: So. So you’ve been a consultant in the industry for how many years now?

Tim: Oh, I think 2001.

Victoria: Oh, wow. Well, so you’ve dealt with hundreds and hundreds of Remodelers and their staffs and teams. That’s awesome. Now let’s talk, though, before we get too far on and tell me what is slippage, let’s just make sure we’re all on the same page.

Tim: Well, slippage is essentially if you have an estimate and then you produce the job and if the estimate, is greater or the produced is cost you more than the estimate, that’s slippage. And then the opposite of that obviously is grippier. If your estimate is, actually better than what you did. So slippage goes to the negative grip edge goes to the positive.

Victoria: Okay. So what are some of the most common reasons for slippage that you have seen through your many years of, working in the industry?

Tim: Okay. So what’s really important for everybody to understand is it really depends on which part of the company you talk to. So sales design estimating is almost always going to see slippage in the production process. And production is almost always going to see it in front of them in the sales design process. And so whatever you just want to say right out front that it’s usually both.

Tim: And so businesses that focus on one or the other are going to miss many of the areas where they have slippage. And so but from a production side, probably the biggest place that we have slippage is the lack of planning. And so this comes in primarily because most companies rush jobs into production. They don’t give the job manager or project manager lead.

Tim: Carpenter doesn’t matter enough time to really get their head wrapped around a project and do what I call debugging of specifications and scope. So as they read through the scope, they’re finding all these things they have questions about, and they could get them answered before the job starts. Boom. You could save hundreds of hours of time on the job or phone calls or things like that.

Tim: So that’s one of the biggest one.

Victoria: And all those hours spending and asking and answering questions and taking phone calls at all translates to what.

Tim: It’s it’s direct slippage. And not only is it direct slippage, but what we see is that it’s almost always a doubling of time. So if I spend 3 or 4 hours debugging a job, it’s probably half the amount of time that when I find that mistake on the job site and I have to make a phone call, and I have to track down a designer, and I have to find an estimate on this for a new trade contractor, that’s usually double the amount of time that it would have taken to find out the answer before the job starts.

Tim: So you might as well just take those hours, multiply it by two, and say, oh, we’re going downhill.

Victoria: Okay, so let’s do the seven whys if you ever heard of that. So you talked about the slippage is caused by a lack of planning. Why is there a lack of planning.

Tim: Well it has a number of different reasons. one of the reasons is that, the jobs hand it over much too quickly. So, in other words, we promised the client we’d start on Monday and pick whatever day you want to have. And the job is actually being handed off to a project manager on the Friday before, so there’s no time for them to plan where they’ve made a promise to the client.

Tim: So there’s that reason. And the reason for that is quite often a lack of ability to control the client. And so the promise to the client to start on that Monday was made four months before when we thought we could get all the decisions made, but somebody didn’t press them for those decisions and, and documentation and all that kind of stuff.

Tim: And then there’s also obviously reasons for that. But I’ll go down a little different trail. And that is that bottom line is most of us production people, we don’t do paperwork very well. And so if you hand me a job, I’m if I’m not trained to plan, then I tend to set it aside. And when I show up on the job that morning, it doesn’t matter if you gave it to me two weeks ahead.

Tim: If somebody doesn’t help me, you know, sit down and do some planning. I’m going to show up on the job unprepared. Not because you didn’t give it to me in enough time, but because I didn’t focus on it. Now, there’s a lot of reasons for that. One is the paperwork thing, but the other thing is, if you’re a lead carpenter, you’re finishing up a job, you know, and so it’s very chaotic.

Tim: Or if you’re a project manager, you’ve got 2 or 3 other projects that are screaming for your attention. And so this one that hasn’t started yet may not get the attention that it deserves.

Victoria: Okay. So can we back up for a minute though. Give us, in your opinion, a description of the perfect planning process.

Tim: So it has a lot to do with, the turnover of information. So ideally, all the information needed for construction is handed off to a project manager or a lead carpenter from the sales design department. there are various caveats for that, but we turn that over and depending on the size of the job, but it’s 2 to 3 weeks before a job starts.

Tim: And then what I recommend to most companies is that this job manager take that information, get private in the sense they’re in an office or someplace that’s really quiet, and then totally digest the whole project, read everything, look at the scope. And I typically call it a debug. And so I like the phrase a critical eye, not a critical attitude.

Tim: So in other words, if a project manager is looking through a scope of work, he should he or she should never say those awful salespeople. They never give me the right information. What they should say is, here’s another little bit of information I didn’t get. I need to get it before I start. So I’m finding it, but I’m not being critical of my sales.

Tim: development team. And so it may take 3 or 4 hours to plan a fairly large project. The schedule needs to be built. Materials need to be built, specifications are checked. The plans are checked, contact with trade contractors right up front to get them on your schedule. All those kinds of things are part of that planning. And the bottom line, the essential thing is that by doing that, the project manager gets their head in the game, and if they don’t have their head in the game, the day they start, they’re always playing catch up.

Tim: It’s always playing catch up, and then you lose a lot of money that way.

Mark: Tim, what happens if a business owner says, well, I’m going to have all that stuff, but I already know I’m going to have it. So I just build it into my estimate and I’m all good. It’s not slippage because I’m building it in. So do they still have slippage?

Tim: well, it’s really difficult when the economy is really good and we are able to sell at a pretty good markup. And so some people have, you know, boosted their markup, which is business. And we should be doing that. The difficulty comes when it’s hard to sell the projects for what we really deserve. And so it’s always better to have the right amount of money in the estimate that you’re that it takes for your team to produce the project.

Tim: And so I, I don’t disagree with the idea that some lumber yard runs should be in the estimate, because I don’t think you can go through most projects without making 1 or 2, or even more if it’s necessary. But you know, 25 per project is probably unnecessary. And so there there has to be that compromise between what’s realistic and what’s unrealistic.

Tim: And one of the things that I’ve heard and I share this, that’s it’s kind of funny to me, but it’s like the older I get, the better I was. And so if you have if you have a business owner that used to be in the field, all of us, me included, we’re fondly remembering that 12 by 20 deck eight feet off the ground that only took us one day to build, right?

Tim: Yeah. And so we’re making that estimate go in there. We’re not taking into account what does it really take for our team to build something. And so getting the estimate geared to your team as well as being realistic is super critical. And then then you start looking at the slippage that occurs. Is it something that we can control, see if it if you don’t see the slippage you never ask, can we control it?

Tim: If there’s always plenty of money? It’s like there’s no need to change. All right. And so you always want to be looking for how do we improve and how do we grow. And so looking at slippage is a place where you can identify some of those problem areas.

Victoria: So we talked a lot about the pre-planning the things you do before the project starts. But what are the steps that you should be taking during the project or some of the planning steps you should be taking? Then?

Tim: Okay, so the look ahead has become, a big term in our industry now two, three week look ahead. Absolutely critical. The best way to look at it is just daily planning. If you do the big upfront planning, you do the daily planning. That helps make sure your subs get there. Make sure you have materials and so forth delivered to the job site, making sure you have the right number of people on the site.

Tim: So all those questions should be addressed every single day. What are we doing tomorrow? Two days a week, two weeks, three weeks out? Another big, slippage area is just what I call schedule creep. And so almost everybody that I deal with has a hard time hitting the schedule, And an awful lot of it has to do with not taking it seriously, for one thing.

Tim: But if you stop and do the math, let’s just suppose I had a three month schedule and that actually goes over schedule by a week. And so there’s a certain amount of overhead that’s associated with that extra week. And if we spend it on the current job, it’s wasted. If we invest that overhead in the next job, it’s profitable.

Tim: And so if you take your days per job overhead and you figure it out, you just figure every day that you go over schedule, you’ve spent overhead money that is wasted. Secondly, if you’re trying to make a profit, you actually have like how many dollars per day are we supposed to be making on profit for every job? Right?

Tim: Same thing. If you go over by a week, all five of those net profit days are wasted. Yes. And so they’re gone. And then of course, you have the labor. So how much extra? So, you know, when I was a production manager, we’d be looking at a job a week before it ended, and it looked really good, right?

Tim: Three weeks after it ended. It was terrible because we just spent so much time going back and going back and going back and finishing up. So that schedule creep is another really, really big one. And then I think one of the other ones that’s big is, is change orders just aren’t done properly. And where we could be making that money back, we don’t take advantage of that opportunity.

Tim: So it’s simple things like making sure that everything’s included in a change order. So we might have a like for I use this example quite a bit. You know, before you even frame the powder room wall, it’s not even framed yet. The client says, can we make the powder room a little bigger? Everybody looks at it and goes, yeah, no problem, no charge.

Tim: But they forget that the toilets now are going to have to be moved. The lighting, maybe we had one light in the bathroom. Now we need to, What about the fact that in the bathroom, it’s imported Italian marble that’s already been ordered, and in the hallway, it’s $35 yard carpet. You know, there’s a whole bunch of stuff that we just kind of give away because we don’t plan well on those change orders.

Tim: And then the other thing relates to the schedule creep, and that is we often get paid for the actual time that the job takes us, but that often sets the job off like 3 or 4 days of real schedule. And we don’t get paid for that overhead time. I call them disruption days. Yeah, and you may not get all of it, but it’s really smart to know that two days of labor may actually delay that job five days.

Tim: And if you can get paid for those three extra days, especially the overhead part, maybe not the labor, but the overhead part, you actually stay even if you don’t get paid for them yet, you end up losing. So there’s a lot of different ways that slippage occurs.

Mark: Tim. Schedule creep. That’s interesting. Is that something that should just be built into a budget or is that preventable as well?

Tim: Well, creep is preventable. Okay. so being realistic on the schedule is really critical. So we want to remember there needs to be some fluff in there. A lot of people make the mistake of saying, okay, the electrician is going to be done on this day. We’re going to start insulation the next day and maybe not. Maybe there’s an inspection that has to occur.

Tim: And so we need to give ourselves a little bit of that. But yes, schedule can be controlled. And it really is between the ears. That’s the place that it is all the time. And I’ll use myself as an example. Back in 2010, I installed bathrooms for a company in Rhode Island and, I was bound and determined that we set the schedule six or 8 or 10 weeks, sometimes six weeks, before we even started the job, and I hit every and date for the nine bathrooms that I did.

Tim: And the reason was because I wanted to be able to brag about it. Right. And I was bound to determine it. And so that changed the dynamic. It wasn’t like, okay, it’s no big deal. We lost a day, but I wanted to be able to get on a podcast or stand out in front of a crew and say, I hit those dates and it was all between my ears.

Tim: And so when something didn’t go quite right, I didn’t go like, oh, well, right. I would say, you know what? I have to make this work. And so either I’ve worked a little longer one day or I shuffled something around and and it worked. And so it really is a matter of people adopting this. We have to do this.

Tim: Otherwise, we end up with a problem.

Mark: So, Tim, if you would give our listeners one quick tip, some actionable item, that they could go back to the office today and put in place to make an impact on slippage?

Tim: Well, probably the big thing is get everybody working on controlling it. And it’s not an easy thing. And I mean, I have and, you know, in my head is this thing that runs around in everybody’s mind. It is what it is. And if you can get your team to start thinking that it isn’t what it is, that it is controllable, that we can actually do something about this.

Tim: For example, if your production team is always blaming it on estimating, you have to get them thinking about it’s not it’s not their fault. This is a team. We work on this together. So I’m not sure there’s one actionable, but it’s a mentality of the company and that when we do lose money, when we see slippage, we’re not content with that.

Tim: And this is another thing that just drives me crazy. People go, we didn’t we didn’t lose money. We just didn’t make as much.

Mark: So that’s okay.

Tim: Right? So and that makes it okay. You know. So instead of the 10% that we were shooting for we got five. And you know that’s a pretty good chunk of money. But it isn’t the ten that we estimated. And so that’s the mindset that defeats us right from the very beginning. So if we get the mindset that says it’s ten, we’re shooting for ten.

Tim: Actually we’re shooting for 11, right? We’re shooting for that and we’re going to do whatever we have to in the process to make that happen.

Mark: Yeah. Tim, that’s pretty funny. I hear it is what it is all the time. Are you trying to tell me it isn’t what it is?

Tim: It isn’t what it is. They are wrong. It is what we make it there and it is. It is hard to get people to buy that, you know, because number one, it’s a great excuse, you know, to blow it off on somebody else. But it but it really is. And what I was chatting with some of these production project managers the other day, and what we figured out was, this is the only part of our world where we say it is what it is, and that saying, think of it this way everybody wants a raise, right?

Tim: So if I go to my boss and I say I want to raise and she goes, it is what it is, Tim. It’s like, I’m not going to just take that right. I’m going to say, no, Rick. It is what it is when I make it right. And so we think about it and nowhere else in the world is it.

Tim: It is what it is. You go to buy a car, almost nobody walks in and says, I’ll take it for that price right there. But it is what it is. Tim. Yeah, right. Yeah. So. But it isn’t what it is. It is what we negotiate. It is what we make it. It is what we what we have in our head.

Tim: And so we have to get our teams thinking. And you look at the successful companies and they’ve developed a culture of controlling the process and working on it and making changes so that it’s a real, that, that, that the whole culture is let’s make this really work for everybody.

Mark: What am I hate to tell you, but it’s time for the lightning round.

Tim: Oh my goodness.

Mark: And it is what it is. So, And now here’s a reminder. Advantage lightning round. It’s a draft. Okay, put 60s on the clock. Here we go. What’s your favorite business book and why?

Tim: The Oz principle. Because it talks about accountability. It’s a great book.

Mark: If you weren’t senior consultant for your mother’s advantage, what do you think you’d be doing?

Tim: I think I’d be on the ocean somewhere. Maybe, commercial fishing, maybe lobstering.

Mark: What are you not very good at?

Tim: Oh, not very good at, sitting in an office all day.

Mark: Your room, your desk or your car? Which do you clean first?

Tim: It’s got to be the desk, because the other two very seldom get attention.

Mark: How could I tell? You’re having a bad day?

Tim: I get real quiet and kind of stay to myself.

Mark: Oh, if you had a time machine, would you go forwards or back?

Tim: I’d go forwards because, yeah. I’ve had some rough times in my life and I wouldn’t want to go back and harsh.

Mark: If there were a movie produced about your life, who would play you and.

Tim: The young Robert Redford?

Victoria:

Victoria: So, Tim, thanks so much for doing this for us. It was awesome. And the timing was perfect. You’re here in the office just coming off of the first project Manager Intensive of the year, with two more scheduled. It’s been great. Thank you so much. But before I let you go, I want you to share with our listening audience your five words of wisdom.

Tim: Oh, it’s got to be. It’s never what it is.

Victoria: Well, I think we know why, right?

Tim: Yes, I think we covered that pretty well.

Victoria: So, Tim, thank you again for doing it. It was wonderful. And for all of you out in the listening audience, remember to listen to Tim’s podcast, The Tim Faller Show. Yes, yes. You might not know about it, but I don’t know how you couldn’t. So The Tim Faller Show is Tim’s very own podcast and it’s awesome too.

Mark: Good stuff. Thanks, Tim.

Tim: Yes, Join in. We have a lot of fun, but.

Victoria: So, Mark, you know what I really like about this? I love having Tim on our show because he just is so immersed in this stuff. He knows his stuff so well. It’s like nature.

Mark: Inside and out. Yeah. He is. That’s why he’s the guru.

Victoria: Yeah. I mean, think of all the different topics that he touched on today.

Mark: Oh my gosh. what do you talk about? The look ahead. Change your schedule, creep. lumber yard, lumber yard runs.

Victoria: This is a big.

Mark: Which I think is a big thing, too, because he did mention, you know, you’re not going to get away from it, right? You’re you should plan on having 1 or 2 or depending on humongous jobs. More than that, you’re going to have them. There’s no perfect project. It’s just getting them under control. Doing it all the time is just lazy and poor planning.

Victoria: No kidding. Right? So hopefully some of these tips will help you out there. Stop slippage, drop more money to the bottom line. Make more money, make your life better all around and.

Mark: Gives me chills. The hair on the back of my neck is standing there. It’s so exciting! What a great way to kick off Slippage Awareness Month.

Victoria: It’s the perfect way. If I might add.

Mark: That’s good stuff.

Victoria: And so it should be a lot more coming up for the rest of the month of June. So listen and watch and look for PowerTips, The Tim Faller Show and all that.

Mark: For more. Absolutely cool. Well, I think that was a pleasurable episode to do. Was that a good word? Yes. Pleasurable? Yeah. Fun. Unusual. Fun fun. Awesome. Exciting to all of those. Nifty above. Nifty. I’m going to stick with nifty. It was nifty. I mean, that’s kind of a way to talk to Tim. Yeah. Tim, can we totally say nifty?

Mark: Yes. Okay. So we’ll call it the nifty ist episode of the year. That was a nifty one. Thank you, as always, for being here. I am Mark Harari

Victoria: I’m Victoria Downing. See you next week.