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Contractor Success and Succession – Two Key Ingredients

The following article originally appeared in the April newsletter to clients of Kiley Advisors, now a part of FMI Corporation.  Reprinted with permission.

Contractors as individuals come in as many varieties as people themselves do.  However, those that become successful builders have two common characteristics, regardless of the markets they serve, the size of the organizations they build, their geographic location or their ability to self-perform.  These essential two ingredients are authenticity and appreciation.  Both are the hallmarks of true leaders, and both are threshold qualities for those that will become their successors.

An amalgam of dictionary definitions state authentic means “real, genuine, not false.”  These words certainly reflect the successful builders we all know.  What you see is what you get with them.  There are no pretentions, no posing.  This quality is magnetic to other people; it reflects a quiet, understated self-confidence that allows them to take the business risks, successfully manage them and move to the next project and its challenges.  Even if they have a bad job, this quality forces them to analyze the reasons, make corrections and get right back into the game.

Authenticity enables candor and courage, true character strength.  These contractors say what needs to be said in all settings and face their current reality no matter how brutal the facts.  They have the tough, but necessary, conversations and make the hard decisions.  These attributes engender respect from people, often even from those adversely impacted by the tough calls.  Value-based authenticity, the commitment to be who they really are, all the time, leads to a consistency, a predictability, that becomes a stabilizing force in their companies.  Authentic actions also reassure and reinforce bonding companies.

The second quality is real appreciation, especially for the people who work for them.  They never forget that a building project requires a team of many people with different skill sets working collaboratively in an orchestrated sequence, usually out in the weather.  These skilled craftworkers and trade contractors respond repeatedly to contractors, especially company owners, that appreciate their craft and the training and commitment it takes to do high quality work under any conditions. The field workers sense this instantly when these owners walk the job.  This ability to “know what it takes to put work in place in the field” separates the builders form the brokers.

Multi-generational companies almost always have these qualities in their CEOs and Senior Leaders.  First-generation companies normally have these ingredients in their founders.  To pass the company to the next generation, the current leaders must ensure successor candidates have demonstrated consistent behavior that reflects authenticity and appreciation.  They will remain the essential ingredients for success.