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Risk Aversion vs. Risk Management

March 1st, 2013

JJ Levenske, President of Construction

In construction we manage risks every day, from on-the-job safety to building engineering and maintaining budgets and schedules. While risk cannot be eliminated, it most certainly can be limited through common sense, experience, and good old-fashioned communication.

What ever happened to a meeting over coffee, a firm handshake, and a simple contract anyway? I challenge myself and others to take a step back and simplify the processes we all work within. Instead of typing a two-page e-mail, pick up the phone and call the person you are trying to communicate with. The simple inflection in the voices will transcend all the risk aversion you second-guess yourself with when sending those “tough” emails, guaranteed.

Don’t lose sight of the difference between risk aversion and risk management, but let’s concentrate on what we do best — taking care of customers.

Farewell, Friend.

January 10th, 2013

Steve Northway, Chief Operating Officer

Just wanted to publicly thank my business partner, my nephew, my friend for his years of commitment and service to Northway Construction. For those who haven’t heard, Ed Northway has left Northway Construction to pursue another business venture. We wish him the best of luck in his new endeavor!

Here is the news release that ran in the Brainerd Dispatch:

BAXTER — Steve Northway, a pioneer in the Brainerd lakes area construction industry, will become Chief Executive Officer at Northway Construction Services in January of 2013.

Steve will remain Northway Construction’s Chief Operating Officer as well, leading the Baxter-based construction company he started with his nephew, Ed Northway II, in 2006.

“We both had a passion to create a great company that would build the highest quality homes, provide world class customer service, and take the best care of our people,” said Steve Northway. “And that’s exactly what we did.”

Ed Northway, who currently serves as Northway Construction’s CEO, is transitioning from his position to start a new business venture outside of the construction industry.

“I’m excited to use the leadership, sales and marketing skills I’ve gained at Northway Construction in my new endeavor, but it’s bittersweet to be leaving,” said Ed Northway.

In the last six years, Northway Construction built Minnesota’s first Leadership in Energy and Environmental Design (LEED)-certified home, meaning it was the first home in the state to meet the U.S. Green Building Council’s benchmark for the design, construction and operation of energy efficient, environmentally friendly buildings.

Northway Construction also completed the state’s first LEED-certified whole-house remodel project, converting a drafty outdated cabin on Agate Lake into a modern day Nordic-looking getaway.

Last year, another remodeling project gained Northway the national Excellence in Construction Eagle Award from Associated Builders and Contractors as well as the Contractor of the Year Award by the Minnesota chapter of the National Association of the Remodeling Industry.

“I’m proud of our company’s growth and everything we have accomplished in the last six years,” said Ed Northway. “I’m looking forward to what lies ahead, both for me and Northway Construction.”

Northway Construction specializes in building and remodeling homes and commercial buildings throughout the Midwest.

“Did you find everything you were looking for?”

November 5th, 2012

JJ Levenske, President of Construction

We have all been asked this question in the checkout line at a retail store, but it only really sank in with me just the other day.

If someone at the checkout is asking “Did you find everything you were looking for?” it is obviously too late in my buying decision and actions to change course, even if I didn’t find everything I was looking for. Let’s put ourselves in the construction consumer’s shoes and think about this more.

Are we asking the right questions at the wrong time? I will openly admit that I too have been too late in asking the appropriate and timely questions to potential clients. Why do we do this? The more I thought about it, the more it donned on me that we all take the knowledge of what we respectively do for granted.

Have you ever noticed that in certain professions the same protocols or questions are asked regardless of your experience or perceived knowledge? I had an open discussion about this with my doctor the other day and the response I received was so simple, “We do it because we have no idea how much that person knows about what we do.” BINGO! With all the stresses and decisions during the construction process, perhaps it’s time to get back to the basics and assume everyone knows nothing about construction. We can easily avoid any gap in communication by explaining the different processes and procedures in the most rudimentary way, from beginning to end.

So, next time someone in the checkout line asks “Did you find everything you were looking for?” let that serve as a reminder to make sure your clients are finding what they’re looking for, at the very beginning of the construction process AND at the end.

Quote or estimate? What’s the difference and who cares?

August 24th, 2012

JJ Levenske, President of Construction

In its most literal sense a quotation is a fixed price offer whereby an estimate is just a “best guess.” Why should a contractor or consumer care? For a number of reasons: The fundamental reason for distinguishing between the two is the final cost and who bears the risk in the process. It should be obvious that a quote is easier to achieve with more information whereas an estimate is usually provided if the information is incomplete or sparse. The clearer the parameters are up front, the more likely both sides can achieve a quotation and mitigate the unforeseen risk. An estimate is not bad though; in many situations it provides a catalyst for many people to justify moving forward with a potential project. It gives them that “security” that this is achievable. At that point the consumer and contractor can move toward a quotation for the work.

A typical process flow for the consumer is to vet their preferred contractor, enter a pre-construction contract or arrangement, conduct a preliminary estimate, finalize design and budgeting, verify with a quotation, and proceed with a contract and the actual work.

As with many things in life, simple definitions and communication can overcome a lot of uncertainties in our daily transactions. We can all do a better job of explaining this process to the countless people who have asked this question, both internally and externally.

What you do with space. . .

July 24th, 2012

JJ Levenske, President of Construction

We sold our house recently and are currently renting a quaint and cute cabin for a few months on the lake. From where we came from, it’s tiny and packed but we are growing closer as a family. It has also made me have an epiphany of sorts when it comes to the effective use of space. I’m finding myself trying to utilize more unique spaces and achieve efficiency with every square inch. It has been a humbling, but somewhat rewarding, experience.

Poor design frustrates you for life.

Good design is timeless.

Choose wisely.

On the flip side, I was with some clients last week and we toured some palatial homes so they could get a sense of space for their future home. One home in particular was huge by today’s standards, yet every square foot was thoughtfully laid out. For a family of seven, it was maximized for their own efficiency, from storage to everyday use.

Whether small or large, one of the highest duties we as contractors and architects have is to make sure our clients understand this concept and allow them to find their own “efficiencies” and best use of space. More and more we are relying on modeling to achieve this goal. It’s incumbent on all of us to make sure this is one of the core elements in our design. After all, if we can give the client “more” within “less space” the outcome is almost always a success, both financially and from a client satisfaction standpoint.

 

FATHER’S DAY.

June 19th, 2012

JJ Levenske, President of Construction

In honor of Father’s Day, I’d like to share my thoughts on something I’m passionate about — fatherhood.

“It is not flesh and blood but the heart, which makes us fathers and sons.”

 - Johann Schiller

Was I the prodigal son? Hardly, but without a doubt I always respected my dad’s position in my life as one of deity almost. There wasn’t a thing my Dad didn’t know how to fix, solve, or help me figure out. More important than any tangible skill he taught me, it was his involvement in my life that has remained in my mind since I was a young boy.

When I attend my son’s baseball game or school event I catch myself thinking, “How did my dad find the time and put up with all that I had going on?” Then I’m reminded that it isn’t necessarily the amount of time but the QUALITY of time that we can invest as fathers.

I’m sure there isn’t a day that goes by where my two boys don’t get frustrated with me, but at the end of the day I know they respect me and when they tell me they love me before going to bed I know it’s genuine.  Nothing else matters. We don’t need to be superhuman; we just need to be there for them. I hope I can instill the same qualities in my boys that my dad did with me. After all, his influence led me to become who I am today — a husband, a father, and a guy who helps people build their dreams.

Thanks DAD for all that you did for me and continue to do for me!

For all the fathers (and mothers for that matter) out there, congratulations on the privilege of being parent. Treat parenting with respect and we can all be better people.

 

— JJ Levenske, President of Construction

Emotions and buying. They can mix!

May 22nd, 2012

Wendy Jones, Chief Financial Officer

Love. It’s not a word I throw around often. But I will proudly admit, I love Starbucks. Not just the coffee either — it’s the smell, the atmosphere, and the baristas that recognize me and prepare the “usual.”

People who know me well know that Starbucks is my answer for just about anything.

Challenging day? Starbucks. Big decision? Starbucks.

I often get asked: “Why do you pay nearly $5 for a cup of coffee?”

The answer is simple: It’s emotional.

So often we make buying decisions based on emotion. Emotions are great, they create passion and bring life, but often that initial emotion wears off and we are left with a less than perfect end result.

Building a home can be a highly emotional process, but that is what should make it fun. However, the emotions can also cause unwanted and unnecessary stress throughout the process. So how do you separate the emotions and make sure you achieve the end result you desire?

Here are a few things to consider:

1. Select a builder you have researched and trust. A reputable builder should provide references, have a solid accounting system, and employ experienced individuals throughout their company.

2. Price is important and provides a baseline for measurement, but should not be the only measurement you use to make your decision. Value is what you get. Once you have taken the time to select and commit to that builder, they will involve you in the process and help you make decisions that align with your dreams and financial goals for the project.

3. Clearly communicate your expectations. A great builder will take the time to understand your situation and needs. Once the expectations are understood and explained, it allows the builder to manage those expectations and use their expertise to deliver a successful end project.

For most, a home is the single largest investment they will make in their lifetime. The experience should be fun, enjoyable and comfortable.

You Can Listen to Jimi

May 15th, 2012

Dan Stanifer, Project Manager, Damage Restoration

One of my favorite quotes from the movie “White Men Can’t Jump” is when Sydney says to Billy, “Look man, you can listen to Jimi (Hendrix) but you can’t hear him. There’s a difference man. Just because you’re listening to him doesn’t mean you’re hearing him.” And the argument goes on . . . Little did I know when I first heard that line how true it was and how much it would apply to my present day life and career.

I remember sitting with a client at her kitchen table discussing the project ahead of us and I was trying to “hear” what she was saying but I know now that I was just “listening” to her. A pipe had burst in her cabin and it ruined the kitchen floor and cabinets. As we talked I found out the cabin was for sale and it had been on the market for the last couple of seasons. This was in April and the house-selling season was just around the corner (almost as exciting as the holiday season!).

She told me how much she liked the character of the cabin and how sad it was that they were selling it. I proceeded to try and get the job done as quickly as possible to get the cabin back on the market. I found replacement cabinets that were very similar to the existing cabinets, and asked the client to come to the cabin and take a look. Much to my surprise, she thought the cabinets did not match close enough. We ended up using different cabinets, but that wasn’t the root of what was happening.

Although getting the cabinets replaced quickly meant the project would be done and the cabin could get back on the market, that meant she had to let go sooner. This cabin was a symbol of her family. So many memories and experiences took place there, so selling it was very emotional for her, and understandably so. I finally “heard” what she was saying.

When I was listening to her in our initial meeting I heard “let’s get this done quickly” when what was really said was, “I want to show my appreciation to this place and give it the best I can before we part.”

We all have emotional ties to the physical places we have lived or experienced. If I would have “heard” what the client was telling me from the beginning, my job could have been a lot easier. So, next time you are talking with someone, try to really “hear” what they are saying, it makes a world of difference.

Thanks for reading,

Dan

5 things every home owner should consider

May 10th, 2012

Steve Northway, Chief Operating Officer

Listen as Northway Construction interviews Gord Cooke of Building Knowledge Inc in regard to the top 5 items every home owner should consider as they approach a new build or remodel.

ACCOUNTABILITY?!

May 8th, 2012

JJ Levenske, President of Construction

Why are we so afraid of holding ourselves, and those around us, accountable?

Two weeks ago I heard an inspiring speech by a retired four-star General that opened my eyes to this topic and I’d like to share the message as it relates to all of you and to the construction industry specifically.

The General talked about accountability, not only politically, but on an organizational, and more importantly, an individual level. It was refreshing to listen to his tenured past and the stories of success, but equally impressive were his stories of failure and humility.

To be accountable means to be responsible for an activity. I know I am guilty of pointing blame at others over the years. It all seems so trivial, though, after hearing the General’s stories involving the lives of those defending the very freedom that we all take for granted.

I was hit again with a lesson in accountability and humility just today.

We recently let go one of our providers because of availability and scheduling conflicts. I didn’t think anything of it until I received a call today from the owner of that company. He was generally concerned about the “accountability” of his employees and the events that led to our decision. He wasn’t rude or disrespectful in any way. It was one of the more humbling conversations I’ve had in recent months about any
topic. Impressive.

A successful business owner once told me that although a lot of people get it right the first time, it takes a special person to make a mistake, admit to it, fix it, and expect nothing in return. Those are the people who deserve second chances.

As the General reminded me, all too often our soldiers don’t get that second chance. Let’s all do our part to honor that freedom and take
the advice of my friend. When we see good people being accountable, let’s acknowledge them for their efforts and patronize the businesses
they represent.