Contractor changes its perspective
Third-party evaluation motivates Elzinga & Volkers to rethink how it does business.
A locked glass box sits on a conference table in the offices of Elzinga & Volkers Inc.
Filled with dollar bills, the box is a reminder of a dirty word in the construction industry, at least to the employees of Elzinga & Volkers, a Holland-based general contractor. Mike Novakoski, E&V president and CEO, calls it the “Trade Contractor Swear Box,” and it came about as a result of a New Year’s Resolution a few years ago.
“I remember being bothered by the term ‘subcontractor,’ the idea we’re general contractors and these people are subs,” Novakoski said. “The term ‘sub’ means beneath, below, less than, and I thought these are our partners that drive the success of a project.”
Earlier this month, the lockbox paid off, as Elzinga & Volkers was named Michigan Contractor of the Year (MCOY) by the American Subcontractors Association of Michigan (ASAM) for the second time in the award’s six-year history. The firm also won the MCOY in 2012-13.
ASAM’s inaugural MCOY event six years ago was the beginning of Novakoski’s perception change in how it works with trade contractors. MCOY nominees and the winner were announced, all without Elzinga & Volkers team members finding out. Novakoski discovered the event shortly following by reading an article about the winner, Dan Vos Construction.
He was bothered by the fact Elzinga & Volkers wasn’t considered and sought to change the way the company did business.
“We were connected to trade partners and wanted to know how this came to be and what the criteria was,” Novakoski said. “It’s this awesome third-party evaluation of us, and we decided we’d work really hard to be the best at the criteria.”
Elzinga & Volkers went from not knowing about the event to a nominee in the second year. The firm won its first MCOY in the event’s third year.
Each year, when the ASAM shares results with the general contractors, Novakoski said Elzinga & Volkers takes the criticism seriously. The firm’s leadership at the field level took heavy criticism, so the aspect was placed under a microscope, and now, some of the field leaders within the company from five years ago are no longer employed at E&V.
“Those were the folks who were disallowing the trade contractors to be efficient, effective and profitable,” Novakoski said. “They weren’t thinking the job out in advance, they weren’t communicating well and weren’t the partners the trade contractors needed.”
The shock of ASAM starting a third-party evaluation of general contractors was an occurrence Novakoski believed the industry and Elzinga & Volkers needed.
Without the trade partners explaining to general contractors what they want, Novakoski said a company can look at itself in a mirror all day and think it’s the best company in the world.
For more than 70 years, Elzinga & Volkers leadership teams have led a solid firm, he said, but there still were pieces of the operation that could improve.
“We can lull ourselves into a sense of false accomplishment or that we’re better than we really are,” he said. “We thought we were a good company with good integrity and people trusted us. We needed that evaluation to turn the light on to the possibility that we weren’t as good as we thought we were and allow us to roll up our sleeves and get to work.”
Elzinga & Volkers is a national contractor, with more than $300 million in work across the nation. Most of the work, however, is done by the trade contractors. Novaksoki said as a general contractor, Elzinga & Volkers does approximately 10 percent of the work on a jobsite, largely consisting of paperwork and coordination.
General contractors put together the puzzle pieces of trade contractors to finish a project, he said. Until recently, most contractors relied on threats to finish jobs.
“Over the history of our industry, there’s been this honorable position placed on us to be something greater than it really is,” Novakoski said. “At the end of the project, there’s this beautiful building, and we pushed a lot of the paper, but the reality is the trade partners did all the work.”
A history of poor treatment was part of the initial spur for ASAM to create the MCOY. The MCOY process also is meant to promote how all contractors come together for the entire economy, said Matt Fennema, ASAM president and Kent Companies vice president.
“The MCOYs send a message that extends beyond the construction industry alone,” Fennema said. “They demonstrate how we are working together to shape our community — not only by changing the skyline of our city, but also by creating jobs, leveraging technology and stimulating the economy in a way that impacts every West Michigan resident.”
Elzinga & Volkers doesn’t often take on jobs resulting in a changed skyline, Novakoski said, but the importance of all the firm’s projects aren’t lost on him. With more than 1,500 jobs annually, Novakoski said at least 1,450 are under $500,000. Potential for larger projects from repeat clients always are top of mind, he said.
“We live on small renovations,” he said. “We know we need great trade partners, so we can be in and out without customers knowing we’re there. If a customer doesn’t like what we do on a $5,000 job, why would they give us a $5 million job?
“We need great relationships with trade contractors, so they can come into those small jobs and still blow it out and be done in two weeks.”
Ensuring trade contractor partners are happy in work and safety is important to Novakoski and his team.
Each year, the firm invests more than $50,000 in its Alive 365 Safety Week event to help train Elzinga & Volkers and trade partner employees. Elzinga & Volkers has made it 10 years without a lost-time accident and has won multiple Associated Builders and Contractors Safety Contractor of the Year awards.
“I can hire a trainer for $500 for three of my people, or I can pay $500 to train 30 people, and I don’t have 30 people who need the training,” Novakoski said. “I’m not interested in getting $25 from different people, that’s not what’s important. I don’t care about OSHA fines. I care about employees being home for their kids.”
Novakoski said none of the honors are what he’s shooting for, nor is growth for the sake of growth or money. He wants to do better work and make job sites a great place for employees of both Elzinga & Volkers and its trade partners.
“Whether we win the award or not, we’re getting better, we’re getting strong,” Novakoski said. “We’ve looked at the MCOY as a blessing, because it’s upping the game of all us general contractors that want to be recognized.
“None of it is Harvard MBA stuff. It’s just the belief that we’re putting ourselves in a support role. That we’re keeping our ego in check and don’t take more credit than we deserve.”