Buckets of Cash, with special guest: Sean Osterhagen 

Recently at Pinocchio’s Bar and Grill in Reno, NV, I had the pleasure of having a candid, open, and honest discussion with Sean Osterhagen, a construction manager of his own business. I asked Sean to put the description of his business in his own words.

Sean: “Right now it’s just two of us, me and my partner Wayne, it’s called Power Mechanical Group. When times are slow I fill in for other contractors around town. We do industrial piping, commercial piping, boilers and cooling towers. My specialty is boiler and cooling tower is water treatment. We set up systems, test them, and ensure that they’re working right. We keep the equipment from fouling.”

Elton: “So, it sounds like you have to go out and get the work yourself? Maybe perhaps go through a bid process?”

Sean: “There’s a couple ways we get jobs. There’s a place down off of Wells Ave. where you can pick up jobs that have gone out for bid or by word of mouth. Word of mouth usually works out the best. We’re not aggressive marketers so mostly it comes from other people.”

Expert’s Input: Brief break in the interview: In a blog post titled Is Word of Mouth Better than Advertising? Jonah Berger discusses why is word of mouth more effective? He lists two main reasons:

  • Trust – Not surprisingly, we trust our friends more than we trust ads. Our friends, however, will tell it to us straight. They’ll tell us if the product is good, or bad, and as a result we’re more likely to believe their recommendation.
  • Better Targeting – Word of mouth is much more focused. People only tell you about things that they think are at least somewhat relevant to your interests.

The article goes on to talk about when word of mouth isn’t always better than advertising but in this instance, that part of the article is irrelevant for this interview. Word of mouth works for Sean and for him, that’s enough for one very specific reason as we’ll see later in the interview.

Elton: “So, when you say ‘aggressive marketer’, and it’s just the two of you, I’m assuming you have to wear a lot of different hats?”

Sean: “We’ve done a few flyers and we have a website that we get a job here or there from. The work is not particularly something we want to do but it’s something that pays. And yes, as far as wearing different hats goes we at one time had a couple guys working for us and at that time we weren’t so much in the field. But for right now, it’s book keeping, bidding, our own payroll, and doing the work itself.”

Elton: “So if there’s a problem with the client or contractor you have to stop ‘mid-action’ go out …”

Sean: “… yes, we do service also …”

Elton: “… so something like that?

Sean: “Yep, and it’s always an emergency.”

Elton: “Always an emergency? Like as in ‘I need this done yesterday!’?”

Sean: “Yep. When you’re dealing with water usually there’s a leak so mainly ‘we’re not getting any heat’ or ‘we’re not getting any cooling.’ But when it comes to the industrial you’re dealing with processes so they need them now! Cooling towers are the biggest ones, air-scrubbers, and when those go down, the plants down.”

Elton: “Can you tell me a little bit more about that word of mouth? How are you getting those people to continue to recommend you? What’s the end result that is driving them to be ambassadors for you, to pass you onto their friends?”

Sean: “Usually just working with them. Once we do a job with someone, they like the quality and the work we do. We’re honest and fair. Our prices are inline and the quality of the work is really good. And they like working with us once they get to know us. It’s hard to get that in an industrial environment because there’s so many different levels of management. Before you can do anything sometimes you have to talk to the owner, sometimes you have to talk to the accountant, sometimes you have to talk to the project super intendant or it could even be down to the ‘boiler-guy’ …”

Elton: “… or maybe all of the above?”

Sean: “Right! Or someone who has nothing to do with it who’s complaining about not having heat in the building and they want to know what’s going on. But once we get in there and start working with them, usually we’ll be back in there on that same job to work on their stuff again. And people move around in the field quite a bit. Say a plant manager, they move around a lot, I’ve found every couple years. And when they get to that new plant, they usually call us up for projects there as well.”

Elton: “They remember?”

Sean: “Yep. But that’s on the commercial/industrial side. When it comes to residential homes, there’s just a few people we work with. They call us because they have a house they’re going to do, or they have a tract they want to get going. They’ll give us first climb on it. Some of the bigger ones it’s hard to get in with them, they’re set on who they use, especially corporate builders. They are very difficult to deal with so we usually back off on those.”

Elton: “Can you tell me a little bit about consistency? Maybe they ask you something like this or maybe they don’t. Something along the lines of: ‘Hey man, why don’t you just give me a deal?’ Or ‘Hey man, I know you?’ Or even ‘Hey man, you’re my son?’”

Sean: “Ha! Yeah, people always ask for favors, they always want favors. And depending on what it is sometimes we say ‘yes’ and sometimes we say ‘no.’ But if it’s going to be a big cost, we need to get reimbursed for it. Every time we’re stacked up favors from people that ask for favors a lot, we get burned so usually they don’t happen too often. I have a few clients that I take extra special care of. And I know that I’m the only person that will touch their plumbing because they know that I’m going to do a good job. There’s other people that just want a deal. They want their bottom line lower, they want to be able to buy another 12-pack of beer at the end of the day. But eventually, it cuts into our pocket and we don’t usually see compensation for that. It’s a fine line. You talk to people, you deal with them and with some of them very quickly it comes right back to you by way of a back charge or something simple and we can give simple back to them. It works out well, there’s a relationship there. Other times, not-so-good, it’s just ‘gimmie gimmie gimmie’ and we just say ‘no thank you.’”

Elton: “Sounds like maybe it behooves you to stay consistent in how you treat everyone?”

Sean: “Well, there are definitely a few consistencies. First, the quality of our work is good. We make sure the product you receive is what you expected if not better. We want to customer to be happy and sometimes you just can’t make them happy. Second, we treat everyone the same. Going into a job, everyone is the same. Everyone gets the same price, the same mark-up, the same hourly rate. Even depending of if we get called out at ten-o’clock at night because someone needs something right then and it’s an emergency. Or, you might just be awake at that moment saying ‘I have a problem.’ We’ll take care of it in either instance, we take care of our customers.”

Elton: “Sounds like it really helps in the long run, with advertising you don’t have time for, this type of customer relationship becomes your advertising.”

Sean: “Word of mouth is a big one.”

Elton: “In wrapping things up here can you tell me a little about the enjoyment you get out of what you do,
when it does go right?”

Sean: “It’s definitely not the high pay ….”

Elton: “… wait, what?”

Sean: “It’s not the buckets of cash that I’m spending at night.”

Elton: “Hahahahaha!”Sean & Elton

Sean: “Seriously, for me it’s on a personal level. I like working with my hands, I like creating stuff and I like building things. I enjoy looking at the prints and creating what I see especially if it’s a good project. If it’s something interesting to do then I get enjoyment out of it. I like to use what’s out there to build that product and I like dealing with a customer that appreciates that. The inverse being a tract home where you don’t meet the customer, you’re just in there as part of another team, that’s kind of difficult. But when you meet the customer, you talk to people and you get the see their enjoyment out of what you do, that makes me feel good. And that’s worth the tradeoff …”

Elton: “… the end result?”

Sean: “Yea, when it’s done and they look at it and they’re ‘Wow, thank you!’”

Elton: “When they say: ‘That’s exactly what was in my head.’”

Sean: “Yeah, when you get to see that, that’s good. And sometimes you see that and sometimes you don’t. You get into some of these big projects you don’t ever meet the BIG guy who comes in and enjoys it. And it’s a little bit of a downer, it’s a bummer when that happens at the end. When you do a good job and you don’t hear what a good job you did. A pat-on-the back, a handshake.”

Elton: “It doesn’t take a lot, does it? A verbal perhaps?”

Sean: “Yes. And I’ll take a little bit of a cut in pay and give you a great deal on what you want as long as I know it’s going to be appreciated. It makes me feel good.”

Elton: “There is something definitely to be said about stuff like that.”

Sean: “There are different successes in the world and success isn’t always measured with money. You can’t drive success with money. There are other things that drive success … and sometimes it’s just a pat on the back, a ‘Thank you.’”

Elton: “Sounds like you’re getting a lot of those with those repeat customers?”

Sean: “Yep!”

Expert’s Input: In an article titled: Why employee recognition is so important, there is a part on the Cost-benefit analysis of employee recognition. Some of those listed benefits are:

  • Direct performance feedback for individuals and teams is provided.
  • Higher loyalty and satisfaction scores from customers.
  • Teamwork between employees is enhanced.
  • Retention of quality employees increases – lower employee turnover.
  • Better safety records and fewer accidents on the job.
  • Lower negative effects such as absenteeism and stress.

Without a doubt, those are legitimate reasons to say thank you. But, In a different post by Amy Lyman titled Say Thank You More Often she discusses what lessons can we take from saying thank you. Digging a little deeper, she says: “Why say thank you? Well, we do it partly because we’ve been taught from a young age that it is the right thing to do.” That to me says it all. Because, at our earliest introduction to the concept, we’re not taught that it breeds teamwork, that it increases quality of work, that our stress levels will go down, etc. We are taught to say thank you because it’s the right thing to do.

I want to thank Sean for his time and insight into a portion of Project Management that as managers or leaders we may not get exposed to a lot, those doing the physical work. I also want to thank Sean for his thoughts on how he, as a Project Manager effectively and consistently handles his own customers. For me, it’s was a strong reinforcement of how to properly treat people. So, go out and say thank you to someone on your team that deserves it and for whatever reason, you’ve overlooked that vital step with that individual. Why? Because it’s the right thing to do.

Note: This post is in continuation of the interviews I’m conducting with other project managers from a wide variety of industries and fields. See my 1st guest speaker post for a more detailed description.

Image Credit: Photo by Author

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