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Tomorrow Will Be Different Than Today or Yesterday

by Kimberly J Corwin, FTCA

For those of you that know me, you also know that “Change is Constant” is one of my favorite phrases.  We have a constant reminder of this on a plaque that hangs in our house that my husband has had forever, it reads “It’s what you do next that matters most”!

The Road to Recovery – complete with Fear Curves!

In the recent, April 9, 2020, PCA Briefing, “Coronavirus Impacts on the US Cement Industry”, Ed Sullivan, SVP & Chief Economist, indicated that we will see record breaking declines ahead.  However, all indicators also show that interest rates will remain low which should play to design/build contractors and developers.

There is no doubt about it, we are in a recession; a severe, unprecedented recession.  But for how long?  How does it compare to 2008?   

The best analogy I have heard to date is this; in 2008 our economy was a 60 year old, over weight male that had not exercised in several years, had a very poor diet, smoked and drank, in general it was unhealthy and destined to have a life altering event.  In comparison the last few years our economy has been training for an Olympic race, in great shape, performing well, and we just had a severe ankle sprain complete with a lot of pain and swelling.  This analogy is important because it predicts our recovery period.  In 2008, it took years of dieting and life style changes to get back in shape.  Currently, we need to continue to eat healthy, do physical therapy and prepare to race again.   The deciding factor on how quickly we heal will come down to our mental attitude. 

Following any injury we are hesitant to put weight or pressure on the injured area.  This is no different.  In fact, it could possibly be much worse.  Experts say that COVID-19 has and will continue to cause emotional havoc on us, our companies and therefore our economy.  Why?  Because it is an invisible enemy; we can’t see it and therefore we are afraid.  Historically, when under attack, people unite against invasion, attackers, and the enemy.  Since this enemy is literally everywhere, it is more isolating and has the potential to make people more suspicious of one another.   This is the Fear Curve.  It is imperative that as we come out of the current restrictions, ALL people, government officials, Associations, us as leaders, must build confidence in our communities and teams to build the Emotional Safety Net for our Associates and ultimately the consumers to resume spending and the United States to resume economic growth. 

Don’t Waste a Good Crisis:

As I sort through all the information, the feelings and the next steps, I am reminded that there is opportunity that lies in every crisis although this can be hard to see when we are in the moment.

The word crisis comes from the Greek “to separate, to sift” which means to pass judgement, to keep only what is worthwhile. There is an opportunity in every crisis and the deeper the crisis, the better the opportunity can be.   

In an April 8th article by Pradip Krishnadervarjan in Industrial Distribution he recommends the following: 

Take this time to identify things you cannot afford to lose during these times to retain your capability and continue to create value in the marketplace.

Determine how you will invest in those vital assets to retain them and keep them strong.

Observe!  What is your competition doing right now and where are they struggling? How will you combat similar challenges in your business and are there successful strategies can you adopt?

Communicate your plan for coming out better and stronger as a company with your shareholders (your associates, customers and vendors).

Opportunities exist during this disruption, but we must be secure and comfortable enough to focus on them. 

In order to do that he recommends applying the 90/10 rule to your patience-to-panic ratio so that you can make decisions from a point of control.  It’s more sustainable, though challenging to implement at the pace of demand right now, to spend only 10 percent of your time on panic and 90 percent on patience and planning.

Feeling afraid might be accurate, but there’s nothing productive that we can do with that information. Instead, it can further exacerbate feelings of fear and uncertainty. You might be thinking that it’s helpful to know that we’re all in this together; yes! But the way to do that is to acknowledge a collective reality – that “it’s natural to have a myriad of feelings during uncertain times,” and that we “want to focus the team on what we can control and impact.” And bridge the larger conversation about what the team can do to weather the storm.

Be calm and Lead On!

Is Your Company Recession Resistant?

I don’t believe that anyone is recession proof, but I do believe there are ways to become recession resistant.  The truth of the matter is construction is cyclic.  It is important to be as diversified as possible.  As CEO at AH Harris being recession resistant was a constant strategic area of focus for our leadership team.  We looked at our mix of projects; Commercial, Residential, and Road & Bridge (Infrastructure).  We also looked at our Customer mix and Geographical diversification.  It is important to not have one customer hold the key to your financial security.  During the last recession geography played a role for us in maintaining growth with locations in NYC and Boston.    Finally we looked at our product breadth, did we have products that allowed us to be on the job site from start, earth movement, to finish, window glazing.   Vendor partnership development and acquisitions allowed us to stay on projects longer. 

In an April 6th briefing with White House reporters, Trump has promoted a $2 trillion plan that would fix roads, bridges and other transportation systems through long term, zero-interest borrowing.  I have always been and will continue to be a huge fan of a long term federal infrastructure budget.   

Spending on major infrastructure makes sense because it carries large labor multipliers. The rule of thumb is that $1billion in infrastructure spending creates 30,000 to 40,000 jobs. The magnitude is dependent on the type of infrastructure spending. 

The vast majority of the jobs created by infrastructure investment will pay above the national median.   Beyond creating good-paying jobs today, infrastructure investments promise to enhance the productivity of the American economy tomorrow, boosting the incomes of working Americans in the future.  Every dollar of infrastructure investment leads to an estimated $1.60 increase in GDP the following year and twice that over the subsequent 20 years.

Ok, I can hear you thinking, great, but how does that help my business today?  Most Tilt-Up Contractors don’t do a lot of infrastructure work.  Let’s go back to where I started this article, FACT:  Tomorrow will be different than today.  Ask yourself these 3 questions:

  1. Where am I today?
  2. Where do I want to be in 3-5 years?
  3. How can I take advantage of the current market disruption/shift?

It is time to think outside the Distribution Box.  Can you add additional infrastructure project capabilities?  Can we design tilt-up bridges and/or waste water treatment plants?  Perhaps it is time to consider partnering with other construction allies?   Are there services or products you can provide that relate to infrastructure projects? 

Rahm Emanuel said “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.” Emanuel–was talking about how governments must take advantage of our current economic crisis. But the same idea applies to each of us, as individuals and as business leaders.

The last several years have been good to the Tilt-Up Industry.  Let’s not stop now.  It’s what we do next that matters most.

Be safe out there!

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TILT-UP TODAY, a publication of the Tilt-Up Concrete Association, is THE source for Tilt-Up industry news, market intelligence, business strategies, technical solutions, product information, and other resources for professionals in the Tilt-Up industry. A subscription to TILT-UP TODAY is included in a TCA membership. Subscriptions for potential TCA members are also available. If you would like to receive a complimentary subscription to the publication, please contact the TCA.