The importance of knowing your limits in business and playing the long game.

Interview with
Simon Muliigan
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The importance of knowing your limits in business and playing the long game.

Managing growth and aligning it with your company’s vision is a tall order for most businesses.  Today’s guest, Simon Mulligan of Taranaki Civil Construction has been able to manage its processes and human resource very well.  Incorporated in 2004, this company has been led to its level of success under the leadership of Simon Mulligan and Shayne Bunn.

 

Having a clear vision in mind, Simon has developed a business model that was born out of years of experience in the industry and taking advice from trusted mentors who have helped him along the way.    Simon’s experience working in and around multinationals has helped him get an in-depth understanding of structures around CAPEX and other business activities related to construction.  As tempting as it is for most business owners, Simon and Shayne have been able to keep their expenditures to a minimum and still manage to be efficient.  Knowing which processes to outsource has also proven to be one of Taranaki Civil’s strengths.  They have been able to build strategic alliances that have helped them grow.

 

Being a family owned business Simon and business partner Shayne (Brother in-law) have been able to strategically develop a unique point of difference of being able to undertake 90% of their projects using in-house resources. .  Unlike their competitors, their size, capability, and flexibility give them the leverage they need to stay relevant in the market.  The flexibility in their decision making processes has allowed them secure key contracts and become a well-recognized and respected force in the industry.  According to Simon, the buck stopped with them and although they have an operations manager who runs the day-to-day operations, they still stay in the loop and give their support where needed.

 

Recognisng and maximising talent has also helped in Taranaki Civil’s growth.  Clear-cut roles had already been established from the start based on each owner’s strength.  The culture of family remains strong within Taranaki Civil’s organisation.  They recognize that their employees have lives outside of work, and in all reasonable situations encourage their staff  to maintain this work life balance.  Simon knows that a happy home life produces happy and loyal employees, and thus a more productive workforce. 

 

As part of their organisational practice, they have management meetings once a week.  During these meetings, they discuss issues such as identifying opportunities and keeping track of what they currently have.  They also have a four-week plan in place at any given time. 

 

Among the challenges Simon and Shayne are facing in 2016, was the compliance of health and safety regulations put in place by the government.  They chose to see this as a marketing tool to differentiate themselves from the competition.  This has helped take their business to another level.  As a result, opportunities of helping clients and negotiating contracts have opened up. 

 

One of the things Simon emphasised was the importance of not being afraid to employ someone with better skills than him, and now has almost made it a requirement.  This has allowed him to delegate more work, knowing that his company is in good hands.  Asking the help of experience people who have been in the industry has also helped.  According to Simon, they have been very good at pointing out some pitfalls or some opportunities. 

 

In terms of technology, Simon has embraced the latest technology, an area that he has used this for has been Asset Management.  Having this technology has allowed his Operations Manager to keep track of their assets at any given time.  At the same time, it has allowed Taranaki Civil to be transparent with their clients.  Another area where technology has helped was in the maintenance of their equipment.

 

The several business awards that Taranaki Civil have won, gave his the team well-deserved recognition for the hard work they do.  Simon explains at that time of entering the awards, they were more focused on benchmarking to see where they were at, however the awards cemented their place in the community and that has helped their business to further develop and improve.    

 

If you would like  more information on Taranaki Civil Construction Ltd, or to contact Simon direct please visit their website at www.TCCL.co.nz

 

SIMONS QUICK FIRE ROUND:

 

Best Marketing Tip:  Always be honest.

Best Operations Tip:  Always get it done.

Best Staff Management Tip:  Be the one who starts the conversation.

Best Time Management Tip:  Whatever you think you can get done in a day, take 30% off.

Best Business Tip:  Never overcommit.  Keep that bit of humbleness about you. 

 

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BUILDING THEIR WAY TO SUCCESS:  TARANAKI CIVIL CONSTRUCTION

AN INTERVIEW WITH SIMON MULLIGAN

 

Today’s guest is Simon Mulligan from Taranaki Civil Construction.  Incorporated in 2004, under the leadership of Simon Mulligan and Shayne Bunn, Taranaki Civil Construction has grown as one of the leading suppliers of roading, drainage, earthworks, and chipsealing in Taranaki.  Working closely with the government and several multinationals, they have diversified and grown to what they are today.

 

Can you tell us a little bit about your background and how you ended up where you are today with Taranaki Civil?

 

I started in the construction industry some 20 years ago, 1996 as a labourer and now progressed to being a business owner.  Through that time, I got some great opportunities with multinational companies based here in Taranaki and a few out of the province and then some 12 years ago, an opportunity to start a business with some like-minded people.

 

Can you tell us more about Taranaki Civil Construction?

 

So we’re an infrastructure/construction business.  We take care of anything that involves any type of infrastructure.  Our business is quite fortunate because we’re able to do 90% of the tasks for a project in-house.  None of our competitors likely can do that.  We’re the only business in this province that’s able to do that much or has the license to do it.

 

Predominantly in our industry, a main contractor will put out a contract and they will undertake a certain percentage or maybe sometimes might even do some project management on the side.  They would get subcontractors and from there, they have a big management input.  In our business, we’ve taken that model and turned it into an in-house model, which is quite an unusual model that’s used these days because of the capital investment and the training involved and the experience you need from some people.  We’re very fortunate to have that in our business because we’ve got some people that can…there’s at least 7 or 8 disciplines in our business and in our firm, we have 5 or 6 different heads. 

 

 

 

 

 

 

 

 

 

Was that a strategic move?

 

When we started our business, it was predominantly built around finishing road pavements and road reconstructions.  We also had drainage so we did that cause we had that core crew with those of us that started the business and then we looked at the opportunity of what else we could do and we used subcontractors.  We quickly realized that laying concrete was something that we didn’t want to do in-house so we built a strategic alliance with concrete companies and we left that alliance.  We got into that, then we did all our own utilities under the ground, drainage activities and then we realized that by doing that, we were attractive as a contractor because we didn’t have this drama of doing a project and having to use subcontractors.  Clients can deal with one contractor and get that streamlined to the activity.  So then we, through default with length of service, we got into the benchmen’s spraying market and we bought a Benchman sprayer and there was no plan there, it’s just something we fell across the opportunity.  We attracted the right amount of people now and developed that and we went from relying on a multinational company doing all our surfacing work to two years later, signing a supply agreement with them for us to do all of their work.  We were fortunate through our level of service.

 

You think one of the reasons you’ve been able to do that in the industry is that you are a small family-owned company and can make decisions quickly?

 

That’s correct and we’ve worked in and around multinational companies, so we understand the structures around CAPEX and all those kind of activities and we’re a small family owned business.  This is the sort of business where you can break it down a little bit. You’ve still got to campaign to somebody to find somebody and it’s…that will never change but we’ve had the opportunity to make some snappy decisions and be in a special force.  Yes, we’ve taken on some financial burden because we effectively work in a big life sandpit with very expensive toys that require a lot of maintenance and diesel.

 

How many employees do you currently have?

 

If we speak today, there’s 58 of us and that ranges from ourselves leading the business, 4; contract managers, 4; operations manager, who takes care of implementation; operations staff, we’ve got 8 or 9 of them.  We’ve got operators in the field, field labourers.  We’ve got maintenance, in-house, we’ve got an engineer, we’ve got three mechanics.  We’ve got some hundred and sixty people.

 

 

 

 

So how is it doing business with family?

 

We did do that in the early days for the first two years in Taranaki construction.  It was a three-way ownership and directorship in the business and we quickly realized that that wasn’t gonna be the way that the business needs to be run for the rest of its entirety but it was very much the success of how it got to year two and the growth it had.  If it hadn’t been all three parties together, it wouldn’t have gotten to that stage.  That was a springboard to get to that and it wasn’t to be for the rest of the time. 

 

So there was a change of ownership and then it became a family-owned business.  That has had some really good results.  What it does do for the great people that we’ve tried to come work for is to show them that the family is still very much a culture here and even though we’re in a serious workplace, we appreciate the fact that people have got lives outside of Taranaki and it’s really good that you can make some decisions but we’ve got a golden rule.  We can sit around dinner or a christmas day and not have an issue.  And as time’s going on, we’ve got through some tough times, some real serious issues.  We’ve lost our premises in a fire in 2011.  We’ve had a serious workplace incident where an employee got injured.  That was a really tough time.  We’ve gone through a tough operating site in Englewood.  So, we’ve been through the wringer in 12 years and we’re stronger for it.

 

So your business partner, your brother-in-law, Shayne, I know you both have different roles in your business.  Can you tell us how you define these?  How you manage things?  And did you plan that right from the start. 

 

In the early two years of the business, we shared the work and were hands on and on our toes running the business.  In the two years, we had 8 employees and that was fine.  And now, the business partner departed.  When that changed, the business, by default I had skills and he had as well and we hired some contract management staff. 

 

So Shayne keeps the focus on the field.  So that’s when we really defined the roles as I would take care of the business activity and workload and all of those type of activities and Shayne’s strength has been in the field and he has really good mechanical strength and understands the field and he understands the tools that we’re engaging. 

 

As we’ve grown the business, I’ve kept those front of house things and he’s kept an eye on what’s happening in the field.  We do overlap cause we have operational experience background, so we have some common ground.  I don’t confess to be anything mechanically-minded.  I know enough to get myself through the day.  Whereas I really enjoy the thrill of the tender and chasing things along and making sure that people are right in our business and he doesn’t have that focus, so some days we come to work and have a coffee at 630 or 7 o’clock and have a meeting.  We don’t talk to each other the rest of the day.  He’s off doing his thing and I’m doing mine, so it’s really quite fun also.

 

So what’s been your biggest challenge doing business?  What are some challenges in growing your business from 0 to 58 people?

 

One of the challenges has been maintaining an organisational culture because that’s what people come and work for us and out of the 12 years, on average, employees have worked for us for 7 and 1/2 years.  It’s not bad on an average when you’ve had growth that we’ve had.  We’re pretty happy with it.  In the early days, we had to find a point of reference to our competitors where people want to leave their secure jobs and work for us because we have a lot to offer people.  Plus the fact that the buck stopped with Shayne and I.  If you needed a decision, they didn’t come from the head office.  They came from us.  So, one of the challenges, like I said is being able to maintain that.  As we’ve grown, we’ve had a management structure change and there’s an operations manager now that is on a day-to-day basis running the gear and the guys.  So, we try and always stay in the loop and support.

 

This is a challenge and I can appreciate that you’re expanding.  How do you control that?

 

Well, we do that through every Tuesday afternoon, we have a full management meeting and that’s when we go over opportunities that are out in the marketplace and count our opportunities that we’re working on.  Also, right through discussing personnel issues and we plan our next month in advance.  So we’re always have a four-week plan in advance and we do that as a group.  So for contracts managers, team manager, operations manager, myself.  At times, Shane will be there to give input.  Other times, he’s  out in the field, so that’s what we do help bridge that culture so that we can get a hand on one thing.  Everybody has their input.

 

I think that’s quite evident that we can talk to our staff cause I’m 90% sitting in at 7 AM when the morning shift starts.  Shane and I are sitting there having coffee sitting around with everybody else.  Even for myself, having operations background, I still get out in the field and try and get some work in just to show that I’m human and I get a chance to talk to people and that’s really important to me.

 

 

 

 

 

What are the challenges you’re finding now in 2016?

 

There’s been some good changes in 2016 and not many people had it good because it’s around the health and safety environment of making people safe and a lot of people who have been in our industry for many years put their hands up and say, “hey look, we don’t want to go there any more.  We’ve just had enough of this crazy world we live in.”  But I’ve actually turned them on their head and tell them, “This is a great marketing opportunity to make yourself different from others.”  You either get on the wagon or we’re gonna sell half our assets and have to downsize our business.  So we just got on the wagon or let go of 12 years of hard work.  So we did that and we introduced Health and Safety within our business by having somebody manage that direct thing.  We took a portion of managing that in-house and then its taken…helped take us to the next level and it’s an important way of doing business these days in this environment.  Opportunities of helping clients has opened up and negotiate contracts.

 

What about marketing or sales?

 

With certain clients, traditionally talking about how we our in our income, about 80% of our work is one competitive team.  We deal with attributes that might be weighted to 50 or 60% non-price attributes and that’s when you can see your worth.  The ones we can negotiate like the operators who would like to have one contractor, so we give some agreed rate and negotiate from there.  We’ve got relationships with some of them on the province.  That’s just the way it goes in that cycles.  We couldn’t do probably 50% of our turnover without having that person in that position today.  So that’s a big part of our business. 

 

Considering the challenges that you have had, with the benefit of hindsight, what would you do differently?

 

I think I would have some more data on hiring more people sooner.  Taranaki is a unique place to do business and we only do business in Taranaki.  It’s very hard to find trade somewhere else.  So, we’ve built relationships with a lot of people that in the early days that then came to work for us.  So they were people working on the side and they wanted to be part of what we’re doing.  I wish that I’d spent a little bit more time in hindsight doing that.  It would probably been neat to work for some people that now we work for that could have been doing work for sooner but that was just a progression and the growth thing.  The heat was down quite a bit working inside the business.  Now it’s working on the business and that has been a big change.

 

 

 

 

It’s hard at the start because you need to create income.

 

We started working on this business and we started working in this business and it’s very hard to pull yourself out of that mode but it’s very important for everybody else that we keep continuing to work on the business.

 

So, what are some of the other key things in your successes and what have you been doing personally and professionally as a leader?

 

There’s been a couple of trigger points in the business where we’re working on a couple of contracts and there have been small things that grew into very large things some few years ago, going back to 2009 and there was a station built by contact energy and we were down there to run some foundations for another company, a subcontractor and we left that site some 18 months later after completing the finished paper on the site, so that one, we had twenty excavators on the site and we had 40 people working there.  Now that was pretty much into the year, we never had a structure for that but we made something happen.  That was a really good tender that put us in the map as we could compete at that level and we’ve been involved in some projects like and that really sprung that out. 

 

You get other opportunities offered to you to team with us and do this and do that and it’s really quite good now with a strong reputation in the industry that you get invited to the preamble.  So you’ve got a client that’s thinking about doing something.  That one will invite you around for your opinion and your involvement earlier on, during the design stage and you get to review some documents and you have a look at that and those are really a good thing to see.  You know that it’s on the horizon, it might not be the end contract but they want you to be part of the team and to review these documents and that’s a good thing to have in business.

 

In the last 12 years, what did you learn about professionally?

 

Never be afraid to employ somebody with better skills than you.  In fact, make it the requirement.  I’ve got a bunch of them in my team and they can put together things than I can better than I could ever do and run a contract.  And there’s people here that can do things better than me.  I’m the person here that gets things together.  In any given day, if I had to, I can sit alongside with them and still know what they’re doing alongside in the system and that’s important. 

 

So, just recently, I’ve noticed that my time is very demanding with a lot more management staff.  58 staff?  So I’m struggling to get around to spending time with everybody.  So I talked to some other people in the industry, the mentors?  And I realized that I need to delegate more of my routine duties so that I could spend more time with those people.  If I give them new tasks and then spend time with them doing new tasks.  So that’s what I’ve changed in the last month, really.

 

I was just going to ask you if you had mentors.

 

I’ve used some unofficial mentors, some people who have been there and done that in the industry.  Very similar to our industry.  Sometimes, not exactly the same.  Transport operators, or some manufacturing people and they’ve been very good at pointing out some pitfalls or some opportunities that are to clients.  That’s been the key way and in the early days of being a subcontractor, some other clients who were our main contractor.  You learn from those businesses and that’s been the key.  You also look at business trends and one of the things that is needed in our industry is technology and to jump on that.

 

How has technology changed your business?

 

Management of assets and people that work for you and the way that you construct your business out in the field and a couple of things we did.  About 18 months ago, we engaged with a company called e-growth to manage our assets and track them.  Vehicles and machinery.  Everything we own that’s got an engine that’s self-propelled has an asset tracker on so we can see it, right through fleet management right to produce and charges so we’re compliant.

 

Our operations manager, Scott Foreman could not function efficiently without knowing where our assets are at any given time that’s allowed our clients to see that we’re transparent, so if we’re doing our job and it’s not a fixed price or rates, there’s a variation, we can quickly go to a desktop, fire it up and prove to them where the assets are on the site or they did this many hours and what it did was it built confidence and sure enough, this transparency, they know that they can come and look and then we had a couple of clients that would rather us do the work. 

 

We can share the risk and I don’t have to rely on written documentation, any time, I can pull than up.  We work for an oil and gas operator and we’re right in Taranaki, and we can demonstrate that after several complaints that our trucks weren’t breaking the break limits and we’ve set some parameters around the new speed limit.  So we can see some speed limits on our system and the operators and our truck drivers’ work too and they’ve sent us an email to say that we’ve broken those limits and we’ve got an understanding with the oil and gas operator that as soon as we get to a certain level, if there’s been an incident, we will acknowledge it.  So that helps.  The communication - they really stick to the parameters that they can see so that’s been official.

 

Keeping up with the maintenance has been a never-ending battle and programming it, so there’s no effect of downtime and things like that and we’re very weather-dependent, so on a wet day, there’s a lot of spinners and filters that go around, as you can imagine.  There are trucks and it’s a different kind of busy.  It’s maintenance busy and that’s where we’re very lucky cause we’ve got several people in the business that work on these.

 

I know you’ve won several industry awards over the years.  Tell us about these and what has winning those meant to you and your business?

 

We won Emerging Business award in 2006 and the Engineering Award, as it was known in those days.  That was a real eye opener to us cause we entered it for feedback not for anything else cause we thought, “Oh, we’d better see where we’re at.”  And we were having some changes in our business at that time, so we won these awards.  We had a good little celebration as you do and what it did is that it allowed people to see all these guys actually connecting to what they say.  They got some recognition.  So that was really quite good and it was 2 years of really hard work and it happens in these stages and 7th hour week of activity.

 

But then we cemented our place in the world, in the industry, in the area, so we carried on and then in 2015, we thought we’d just revisit that and we got some good feedback.  We’re fortunate enough to win the Energy Excellence Award for our contribution to the energy sector and we’ve done a lot of work in the oil and gas industry and what that did is that it again confirmed to the oil and gas operators that we were somebody that might want to have in their team and in their system.  So we get opportunities from several other oil and gas operators now and it just has a positive spin and nothing better than having some tangible recognition for the good work you do and you’re able to demonstrate it.

 

We wanna work at a certain level when you know, that’s like, you can use it off at a great distance.  You can use it to manage your staff and your people and it gives you a great marketing tool to build a show to clients that you can work at that level rather than you trying to make something up on the run, you know.

 

As a seasoned business person, what are some mistakes you’ve seen business owners making?

 

 I don’t go looking for other people’s mistakes but I do see some people that may be are humble in any stage of their business and they struggle to manage their cash flow and then you’ve got to be always thinking about the rainy day in our industry, it happens, literally.  You’ve got to be very head down and savvy and I see a lot of people and many people in our industry.  I see them get into some tough financial situations with equipment and I see people buying expensive equipment when you don’t really need to.  There’s some good opportunities with a lot of second hand.  It will save you a lot of money.  [laughs] But they’re also a huge commitment and when the work dries up, you’ve got to be able to service that debt and especially when the TFC happened.  A lot of people suffered with a lot of shiny stuff.  A lot of toys.  Another thing a lot of people are doing these days is that they’re not thinking about it longer, they’re thinking about the quid little bit that they can make out of one contract and then to the next but sometimes, not every job will make you a dollar.  As long as every job keeps your reputation intact, the long game will always be good for you.

 

What other advice would you give to established business people? 

 

Do your homework and know your game.  I admire people in the labor profession and running a business they know nothing about.  I really do.  I think you’re the elephant in the room.  Some days, it works.  Some days, it doesn’t, I suppose.  But you’ve really got to know your game.  You’ve got to know your financial limits and if you’re really got to be great with people.  If you’re not great with people, do something else with your life because the people is what makes your business function. 

 

People skills are probably one of the most undervalued skills. 

 

Every business needs people who don’t manage people well and you’ve got to find a place in the world for them but as a business owner or part of an ownership group, there’s somebody there who can handle people.  Otherwise, it’s not gonna function.

 

What do you see in your industry in the next 5, 10, 15 years?  Where is it going?

 

The industry’s changing, especially the government based work that we get.  That probably makes up 50-60% of our business.  I’m now looking to cement those into longer term contracts and we don’t have those.  We work around it.  For example, road reconstruction will fall in a large team contract in years to come and there’ll be quite broadly regionally based.  So for owners/operators like us, we need to build strong alliances with multinational companies to be able to offer that component.  There’s only so many contractors and there’s only so much work and we only need a portion of it but it’s how we get it and how we do it.  That’s important for us.  For us in the business, we need to look into vertical integration and seeing how else in our business we can do it ourselves and without a huge capital investment, as always and there’s an option that’s on the horizon for that.  Look smarter and keep people stimulated because people need to be challenged all the time because these are the areas in our business where we have them working.

 

 

 

If Oil and Gas doesn’t come back in 10 years, from a strategic point of view, is that a concern or an issue do you say for Taranaki in your industry?

 

Oil and Gas, we earn money when it’s there.  When it’s not there, we earn it somewhere else.  So that’s really good.  We have a few assets piled up but people are still busy, so that’s great.  We predominantly not aim to work out of town, not purely because of the name.  We don’t like taking a suitcase to move and our employees work with us not to leave out of town.  That’s why to grow our business, there has been some vertical integration on the side and that’s been good because of the culture.  We’re not geared to run our fleet outside of Taranaki.  It’s better if it’s within the town.  That’s just the way our structure is.  We know and vision in the future to run outside of Taranaki.  Who knows what it may be in the future? 

 

QUICK FIRE ROUND:

 

Best Marketing Tip:  Always be honest.

Best Operations Tip:  Always get it done.

Best Staff Management Tip:  Be the one who starts the conversation.

Best Time Management Tip:  Whatever you think you can get done in a day, take 30% off.

Best Business Tip:  Never overcommit.  Keep that bit of humbleness about you. 

 

 

www.tccl.co.nz

 

 

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