New ways of working together can bring leads and opportunities. Learn how social networking and personal relationships - backed by trust and performance - go hand-in-hand.

"It's not about what you know, but who you know," goes the old adage. This is most certainly true in the construction industry, where project success - and business profit - depends on building extensive, interconnected networks of reliable builders, construction specialists, architects, engineers, and allied trades.

In such a heavily interdependent industry, it's crucial to be part of those networks. Ultimately, success relies on leveraging professional connections to create mutual growth - which is why experienced construction firms keep long rosters of subcontractors that have proven themselves in the past.

The importance of building and maintaining relationships has surged in recent years as increasing building activity produced shortages in key trades. Department of Employment figures  suggest that 9 of 11 construction-related trades are currently in shortage - with the exception of plumbers, carpenters and joiners - in the worst industry-skills shortfall since 2008.

Building the social network

With residential building activity easing and many builders shifting towards non-residential building , the skills required to maintain building activity are changing all the time. Given this climate, contractors always have room for new relationships that can make their lives easier. And in the 21st century, there is one great place to find them: LinkedIn®.

With more than 8 million local users  registered in Australia alone, LinkedIn represents a significant portion of the workforce. Australians have been fast adopters of the social-media platform - which links people by company, skills, common projects, and other criteria.

Significantly, construction-industry tradespeople are the third most frequently-cited profession  among Australians, ranking just behind business owner and salesperson. That's a much different result than the distribution on LinkedIn globally, in which construction doesn't even crack the top ten .
A recent LinkedIn search  turned up over 288,000 Australian LinkedIn members listed as working in construction, with roles including company directors, project engineers, welders, electricians, business development managers, and many more. If you're looking for potential new partners, you will certainly find them online.

But can you trust them to get the job done, and done right?

Despite its enthusiasm for online networking as a form of lead generation, this question explains why the construction industry remains more fixated than most on the good old-fashioned handshake.

That's why Florian Heise - a Brisbane-based architect and eager LinkedIn user with over 9200 followers - started CIDN (Construction Industry Drinks and Networking) , a social construction-industry networking event designed to help connect tradespeople and potential clients in an industry that thrives on them.

"The business is relationships, and this gives people an opportunity to generate those relationships," Heise explains. "LinkedIn is good for research and follow-up, but in construction you're generally trusting people with large sums of money or taking on responsibility for a large part of the project. You can't replace face-to-face - not in this game, and not in our culture."

Several dozen people show up to CIDN events, held on the third Monday of every month. Twenty-two dollars buys you entry and a drink - attendance is up since CIDN introduced the cover charge - and the meetings have generated numerous new partnerships between the signmakers, accountants, lawyers, and other specialists in attendance.

CIDN has also helped generate new leads for Heise's own business. "Architecture isn't a cheap product," he says, noting that engagements can often run for 1 to 2 years. "For me, it's generally part of a journey in developing relationships."

Getting to know someone face-to-face is about more than just making new mates. "We have legal requirements as a profession," Heise adds, "and that's where having a personal relationship with people you can refer to, or introduce to people, is quite important. If you can pick up the phone and ring someone at 7pm to get them to come fix the problem, that's invaluable."

You're in the business of trust 

By expanding your network and maintaining relationships, you can ensure that your name is on the tip of the tongues of the people most likely to need your services. Pick up the phone when they call and deliver what they need, and you're likely to have opened up a new pipeline that can last for years if nurtured properly.

Just don't fall into the trap of thinking that your value is just your technical skills. They're critical, but there is massive value in confidence that you can deliver an outcome.

"Contractors are effectively selling trust to their clients," explains Alex Collinson, a Deloitte Touche Tohmatsu partner and national leader for the company's Real Estate and Construction business. "Relationships between senior people in construction companies, and the various parts of the economy that need their services, are often very strong. That trust is an insurance contract."

Performance is one part of that contract, but it's not the only value a good subcontractor brings to the table. Given the primacy of safety within the construction industry, good subcontractors will also have a long shelf life if they can demonstrate consistent adherence with safety requirements in different workplaces. Builders have enough to worry about without having to shadow their subcontractors to deal with minor or major safety infractions.
A good track record plays a role over time: once a subcontractor has demonstrated they can play the game well and safely, they are more likely to be called back for the next project. Every contractor is on someone's speed dial, after all - and by finding and servicing their niche well, they'll ensure that they stay there. When those relationships are strong, the spirit of camaraderie is alive and well.

No wonder the construction industry has the happiest employees: in a TINYpulse survey of 12 different industries , two-thirds of construction workers said they had good relationships with their co-workers - compared with just 53 per cent in other industries. Fully 80 per cent of construction workers said they have the tools they need to be successful in their role, while 57 per cent said they had a clear promotion and career path.

Learn how to stand out 

If the best relationships are the ones that have already been proven to work, then, how can subcontractors create new opportunities for themselves?
Word of mouth can be a powerful tool, of course, although many builders may try to keep the best tradies busy enough that they don't need to go elsewhere no matter how many referrals they have. That may be good for you, but it can limit opportunities to try something new.

Indeed, trying something new is exactly the way to build more-profitable partnerships between builders and their subcontractors. Mutually beneficial growth is not only about bringing new leads to builders; if subcontractors can identify new technologies, materials, tools or techniques that improve existing processes, they may have a way into otherwise-closed circles of trust.

"Some of the more progressive building companies are happy to seek out the views and advice of others," says Collinson. "If you can add value, take cost out and drive improved performance from a financial perspective, a contractor will always be happy to have a discussion."

The rise in cost-saving techniques like local and offshore prefabrication, modular building designs, and other novel processes has created new opportunities for firms that have been able to deliver equivalent outcomes for lower cost.

Heise, for his part, recently set up a subsidiary venture called Point Clouds Australia , whose staff use specialised laser scanning equipment to build 3D models of rooms, internal and external spaces, and entire buildings. The capability is an extra value add that also gives Heise new ways of starting conversations and closing deals with potential clients.

Emerging areas of technology - for example, renewable energy; smart and eco-friendly buildings; the use of drones for rapid surveying or inspections; and automation or monitoring using the Internet of Things (IoT) - offer great promise as differentiators. Nearly anything is likely to gain attention if it improves upon the efficiency of existing processes: construction workers are, after all, among the most productive industries  in terms of value-add per worker.

Many require subcontractors to build specialised skill sets that can be expensive to acquire and hard to keep. Once they find a way to solve a builder's problems in new ways, however, subcontractors will find themselves standing head and shoulders above their competitors. This paves the way towards new revenue streams, improved profitability, and a more dynamic working relationship with new or long-time partners.

"You need to be very clear of your value proposition within the sector," Collinson says. "Construction has been one of the later adopters of technology, but we are seeing that change. If you have a particular product or skill set, I would be spending my time looking at where I could apply that to deliver the greatest return. The stronger your relationships with the right people at the right points, the better the outcomes will be."

Key steps to building more profitable relationships

Build trust. Trust is earned, not advertised. Subcontractors win that trust by delivering, predictably and efficiently, time and time again.

Align objectives among all team members. Combining builder staff and subcontractors can easily lead to conflict - and that's bad for everyone. Work to set expectations  and deliverables up front, and monitor progress along the way so everyone is up to date.

Protect yourself. New partners can drive new opportunities, but don't get overexcited. Do your research , talk to past clients, and protect yourself legally before you commit.

Serve your customers. Deliver on your promises and give your clients great service , and they won't stop raving about you - or giving you more work. 

Acknowledge your partners. Trust is a two-way street - and so are the rewards it delivers. Recognise the contributions of your partners and work together to address issues as they arise, and you can focus on boosting profits for both your businesses.

Look after your reputation. Subcontractors live and die by their reputations, so always ask yourself: would you work with yourself? If not, get feedback and fix the problem fast.


© Copyright 2018. RP Data Pty Ltd trading as CoreLogic Asia Pacific (CoreLogic) and its licensors. All rights reserved. The data, information and commentary, provided in this publication (together, Information) is of a general nature and opinions expressed in this publication are those of the relevant contributors and should not be construed as specific advice or relied upon in lieu of appropriate professional advice. While CoreLogic uses commercially reasonable efforts to ensure the Information is current, CoreLogic does not warrant the accuracy, currency or completeness of the Information and to the full extent permitted by law excludes all loss or damage howsoever arising (including through negligence) in connection with the Information.


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