Operational Scalability: Chad Prinkey of Well Built Construction Consulting On How To Set Up Systems, Procedures, And People To Prepare A Business To Scale

Maintain excellence in communication.

Having internal meeting cadences that work keeps people informed and engaged and gets the right people involved in the right conversations to make the right decisions. It also means avoiding unforced communication errors. Companies that communicate most effectively can move most quickly and safely. Companies with poor communication try to speed up and find themselves with problems that could have been solved with more effective communication.

In today’s fast-paced business environment, scalability is not just a buzzword; it’s a necessity. Entrepreneurs often get trapped in the daily grind of running their businesses, neglecting to put in place the systems, procedures, and people needed for sustainable growth. Without this foundation, companies hit bottlenecks, suffer inefficiencies, and face the risk of stalling or failing. This series aims to delve deep into the intricacies of operational scalability. How do you set up a framework that can adapt to growing customer demands? What are the crucial procedures that can streamline business operations? How do you build a team that can take on increasing responsibilities while maintaining a high standard of performance?

In this interview series, we are talking to CEOs, Founders, Operations Managers Consultants, Academics, Tech leaders & HR professionals, who share lessons from their experience about “How To Set Up Systems, Procedures, And People To Prepare A Business To Scale”. As part of this series, we had the pleasure of interviewing Chad Prinkey.

Chad Prinkey is the Founder and CEO of Well Built Construction Consulting, focused on serving small to mid-size commercial contractors, construction managers, and developers. He focuses on team skill enhancement, effective compensation structures, and improved communication within construction teams, aiming to nurture continuous improvement and leadership excellence.

Chad has delivered keynotes and programs to over 120 construction companies and associations, emphasizing his industry influence. He also hosts the weekly podcast, The Morning Huddle, featuring expert interviews from the building industry. Well Built’s comprehensive services include strategic business planning, executive coaching, acquisition, succession planning, and leadership training.

Chad is the author of the Amazon Best-Seller “Well Built: How the Top 2% of Construction Contractors Create Superior Value, Profits, and Excellence” (Advantage Books, June 18, 2024). His book outlines a roadmap for contractors to enhance operations, strategize effectively, manage teams, win business, and deliver superior customer value.

Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

Man, I have a very broad background! I am an entertainer by training and passion, and I’ve spent a lot of time on stage. I spent thousands and thousands of hours on stage, from my teenage years into my twenties, as a formally trained actor and musician. I also worked construction throughout high school and college to pay my way through. I pursued a career as a musician and found that I needed a “side job” to pay the bills when the band wasn’t on tour. I got into car sales because it was the least “career-y” thing I could do ( and not do) for six weeks at a time, and they would take me back. It turned out I was pretty good at it.

As the band broke up, as most bands do, I was approached by a customer from my car sales job, who recruited me to work at his B2B sales training company. I quickly went from doing well for myself and making six figures a year, to making nothing at an all-commission job selling sales training to companies which I had no experience doing. The only type of B2B company I was comfortable with was construction. So, I started building a business book from scratch on a straight commission job. I went to my people, the only people I understood — Contractors.

I was very fortunate to pick up a few companies that were well-known in the industry and taught them how to sell. I was successful in helping these clients get more sales, which created a bunch of other problems for them: more sales = more customers = more work. These clients then began hiring me to fix their higher net profit problems, not just sales. To help them, I naturally took myself through a personal MBA. I read over 100 books on business, construction management, and leadership, attended seminars and conferences with other people in the industry, and spoke directly with tons of contractors about the issues they were experiencing. I was exposed to more problems caused by the growth that was preventing growth, from things like project management to culture to financial issues. Then, I looked around and realized I was only at a sales training company but was engaged in much more than just sales training with these clients. That’s what made me start a full-service construction consulting company. We’ve been delivering outstanding results for construction companies only since 2021.

My skills as an entertainer have translated into being a highly effective public speaker, facilitator, and trainer. My knowledge of the construction industry helps me apply those things in a highly specialized way. Over the course of 16 years, I’ve worked with over 200 contractors who have taught me more about construction than any book possibly could have.

It has been said that our mistakes can be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I’ve made this mistake a bunch of times! One of my primary roles has always been sales. I scheduled introductory meetings in the hopes of converting them into sales meetings. I had even convinced my boss that these introductory meetings were sales meetings. It was always embarrassing when a “get to know” meeting turned out to be just that, and there was no sales opportunity to be had. I made excuses as to why my sales meetings didn’t pan out. The biggest lesson I learned was to be honest with yourself. Confront the brutal truth about the situation. When I was commission only and needed the sale to pay the bills and five meetings to get a sale, it wasn’t doing me any good to lie to myself and pretend like I had a sales meeting scheduled that was really just an introductory meeting.

Getting the third degree from my boss was tough, but it was much more painful not to get a paycheck. I finally grew out of making other people, including me, think I was doing better than I was. Instead, I realized that meeting success meant confronting the truth. I still use this story and experience with clients now when they lie to themselves about their profits, how much they have in the backlog, or if they have a good culture to get them to understand that they won’t get any better or make any progress toward their goals unless they’re honest with themselves.

What do you think makes your company stand out? Can you share a story?

Two things differentiate us from all the other business advisors and consultants that we compete against in the market:

1. We are both a strategy AND implementation company.
2. We bring broad business expertise to a very narrow market sector, which allows us to be an all-in-one solution provider for the relatively small group of customers we’re qualified to service.

To illustrate that, we worked with a 100-employee general contractor who had a business advisor with whom they’d been working for three years. Because they already had this relationship, they were hesitant to bring on a new provider. They had been told by trusted friends on more than one occasion that they should be working with Well Built to help them enact their growth strategy. We discovered their current advisor was facilitating strategy discussions with the company and following a popular business “operating system” to theoretically create accountability around planned execution. Their advisor knew nothing about construction and wasn’t qualified to advise them on their strategy. Their advisor also wasn’t interested in putting in the necessary hours and effort after the facilitated meetings to enact the initiatives they discussed. Because of that, the company was planning to enact strategies that weren’t market-tested and were struggling with implementation. In every meeting, the update was the same: no progress.

When Well Built got involved, it was a 180 from that experience. We started pressure testing the strategic plan and making recommendations grounded in experience and deep industry knowledge, which enhanced and focused the plan. Our team rolls up their sleeves and helps our clients get their work done, up to and including doing it for them, so continual progress is made. They’re getting all of that for not much more than what they were previously paying, which has made them, and many like them, a committed partner company of ours.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

1. Confidence, which ties into risk tolerance. At 25 years old, I left a job where I was making six figures to jump in the business-to-business environment where I had no customers. I thought it was a great idea, until I immediately went from 6 figures to $0. This eventually led me to build my business and reach a great place. When I was ready to leave that role and start my own company, I had to walk away from a 7 figure book of consulting business to start over. Again, it sounded like a great idea because I was confident I could do what I wanted. Most people do have it in them to do what I’ve done, but most people don’t have the confidence in themselves to actually do it. When you’re confident, it doesn’t seem like too much of a risk.
2. Empathy. I genuinely care for others, and I love people. I give everything I have to the people who entrust me with their livelihoods. That deep caring for those people has led to incredible long-term relationships that are much more than transactional business relationships. I have not always sold the most, but my clients never leave, and I believe that’s because how I care is authentic.
3. Humor! I have found that the ability to make others feel good and lighten the mood in any room makes more people want to be around you. I don’t know exactly what I’m doing to make clients and team members want to spend time with me, but I have to imagine my fun-loving and humorous nature plays a small role.

Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader? I’m curious to understand how these challenges have shaped your leadership.

Some of the hardest decisions leaders have to make, especially dreamers like me who see the opportunity and possibility around every corner, are what to say no to and choose not to pursue.

When I first started Well Built, we were trying to launch two lines of business simultaneously. In one line of our business, the market was not overwhelmingly supportive of what we were trying to do, which flew in the face of my dream. It was painful to divest from that line of business, repurpose resources elsewhere, and essentially admit defeat. Since we made that pivot, we’ve enjoyed a much greater market response. We’ve been able to focus on our core business, which, especially in our earliest phases, was necessary. It taught me that some ideas won’t work and to be more methodical in planning and evaluating before pouring resources into those ideas. Choosing what things not to do is just as important as choosing what to do.

Thank you for all that. Let’s now turn to the main focus of our discussion about Operational Scalability. In order to make sure that we are all on the same page, let’s begin with a simple definition. What does Operational Scalability mean to you?

Operations is the part of the business that must execute what you sell, and scalability is the ability to do anything in a replicable way that allows you to do a lot of it. To me, operational scalability means your ability to execute on a mass level consistently.

Which types of business can most benefit from investing in Operational Scalability?

Product-based businesses are scalable operations almost by definition. We expect the product we buy to be identical to the last. I don’t expect my Coca-Cola to taste like root beer. Generally speaking, product companies have a significant advantage in that they have relatively controlled environments such as manufacturing facilities, and the benefit of modern manufacturing technology, i.e., robotics, minimizes the margin for error. The primary roadblock to scaling is the ability to raise investments to pay for those things.

Scaling a service business is much more complicated because of the human element. There’s the customer and their effort in the service delivery, and then there’s the staff variability and their ability to deliver, which ultimately means there’s more room for a variance in client service and delivery. Investing in operational scalability in service and product businesses is equally important, yet the types of investments are dramatically different. In one, it might be equipment and technology; in the other, it might be processes, people, training, etc. There’s a reason there are so many tiny service businesses, Well Built included, for now. It’s a tricky thing to scale.

Construction is a hybrid business that combines manufacturing and services. It’s pretty rare to do both at a high level.

Why is it so important for a business to invest time, energy, and resources into Operational Scalability?

For consistent customer experience. It may not be important if the organization doesn’t want to grow. If the organization has decided to stay the same, then it’s honestly not important. If you want to grow, then it’s essential because your customer experience needs to stay consistent, otherwise you’ll sacrifice your reputation.

In contrast, what happens to a business that does not invest time, energy, and resources into Operational Scalability?

Whether service or product-based businesses, it causes inconsistent customer experience, a poor reputation in the marketplace, and an inability to generate referrals. Your growth goals and desires then become reversed: you don’t want to grow anymore. Most companies that are trying to grow but refuse to invest in operational scalability will go through a period where they slightly grow, but cap out, then eventually shrink. They’ll then get so small and stay small because they can’t or won’t make those investments.

Can you please share a story from your experience about how a business grew dramatically when they worked on their Operational Scalability?

One organization I work with used to largely depend on the owner to ensure every project went as planned. This was the case for a couple of decades in the business. They had reached the threshold that they couldn’t grow beyond. Over the course of 2 years, we systematically pulled hats off the owner’s head and replaced him with the team to consistently deliver on operations. We were documenting processes, training team members, and getting systems in place so that the team could deliver the same result consistently. This removed the owner as their bottleneck to growth. Now, in year 3, they’re on track to double the revenue they were when we first started with them and at their best profit margin to date.

Here is the primary question of our discussion. Based on your experience and success, what are the “Five Most Important Things A Business Leader Should Do To Set Up Systems, Procedures, And People To Prepare A Business To Scale”? If you can, please share a story or an example for each.

1 . Nail your processes. Start by documenting everything that’s currently happening in your business. I’ve often heard leaders say, “We don’t need processes for all these things.” My stance is that there’s no such thing as too much process. Every task in your business is being done in some way, and if it’s not optimal, it’s an opportunity for improvement. This doesn’t mean you drop everything to focus solely on processes, but you should aim for everything in your business to be done in the best possible way. As you document current processes, you’ll naturally question, “Why are we doing it this way?” This will reveal inconsistencies and variations in how tasks are done, helping you identify which methods yield better results.

Once you’ve documented your processes, you’ll naturally want to optimize them. Comparing different approaches will show you which process works best based on results. People tend to stick to what they know, but when clear evidence shows one method is superior, it becomes easier to inspire change. People understand change when the results clearly indicate change is necessary. Sometimes, you’ll find multiple effective ways to do something. If that’s the case, document all successful methods.

Finally, none of this matters if you can’t enact the processes with courage and discipline as a leader. As a leader you HAVE to be able to have the discipline to enact the processes, even if your team resists at first. Over time, as the benefits become evident, the proof of success will naturally encourage adherence.

Example: One company was experiencing an extreme inconsistency in project outcomes, and inevitably, one or two terrible projects destroyed what would have been an otherwise profitable year. In addition to draining their finances, it drained morale, too. The team that was working very hard and having general success had their personal growth and income goals destroyed by underperforming projects. This became an environment that was high risk for employee turnover. As the company lost people, it made it even harder to accomplish the mission. They resisted implementing processes as a relatively small company with an entrepreneurial culture. They resisted mandates and processes, but the cost was becoming overwhelming. Eventually, they were able to capture the best practices carried out by the top-performing teams and mandate adherence to those proven processes. Although they encountered initial pushback, the company had the courage to weather the storm of complaints. It ended up getting handsomely rewarded with its first year of no-loser projects. They were able to share the wealth with the team to inspire ongoing compliance and support the right way. All resistance then melted away because the proof drove behavior, but initially, leadership had to drive that initial change because the first step is always a leap of faith.

2 . Train your people.

Once your processes are documented and optimized, it’s time to begin training them. It’s essential to make sure everybody learns what is expected of them and is given skill training where they need to follow the process. You can’t expect people to walk into your company fully capable of doing the role you’re hiring for on day 1. Companies that aren’t prepared to train people for the roles they’re hiring for will find themselves with a lot of failed hires, and very frustrated with recruiting. This is where your work on policies and procedures comes in, so you can quickly make a new hire fully productive. This gives you the ability to hire people who are a good fit for the role and have the capacity to do the role and the personal makeup for the role. One of the biggest obstacles to scale is your ability to hire. And the biggest obstacle to hiring is the talent pool. If your position has very certain specifications, then it shrinks the pool even more. We’re focused on removing some limitations to hiring because it no longer matters if they come with a particular experience; you can teach them what they need to know with good positional onboarding. Let’s be honest: reallly good, qualified people are gainfully employed. Training programs come in many forms. There is no definitive single way to build your company’s training programs, but some things it should definitely include are company onboarding and positional readiness.

Company onboarding and positional readiness ensures that people are up and running in their positions within a set period of time. Company onboarding is the initial glimpse your employee gets of what kind of company you are. It includes getting to know team members, teaching new hires about basic cultural norms and values, company policies, general do’s and don’ts, and basic software and technology training. Essentially, it’s all the things the employee needs to know about being an employee of your company, but it has nothing to do with their position.

Positional readiness is training specifically for their role and for people you’re getting ready for a future role. What companies who master this do really well — they grow their own. They do that by having positional readiness programs already prepared, so they’re developing their talent into the key positions they need.

For example, in the construction industry, we find this constant. Not enough people enter the construction industry with the skills and knowledge they need for the job they are hired for. The pool is shrinking every year as the industry’s average age has increased. Companies have experienced extreme degradation in their work quality, corresponding to degradation in their reputation, to where the average contractor is awarded purely on the low bid because they all suck. So who cares? This way of thinking is an industry epidemic — if everyone sucks, why pay a penny more for anyone? This shared state of affairs has created an immense opportunity for those who are committed to training their people. Those companies enjoy uncommon levels of profit and success, partly due to the lack of competent competition. The key differentiator is that they train their people. They do not take for granted that people know how to perform those positions at their best. They teach everybody to train those positions to perform how they want them to perform.

3 . Become a leadership development machine.

Solving the problem of having enough people on the team can be handled with good positional readiness training, but companies that plan to grow need strong managers in place. You need to be getting people ready for leadership roles. You have to be able to groom leaders, otherwise, leaders will become your bottleneck. If you only have people who can do the work, but not people to lead the teams, you won’t be able to achieve the growth and scale you’re looking for. Then, there’s natural succession. People are going to retire, and companies that become overly reliant on a small number of key people and have no plan for succession have high employee risk. This can also become a huge bottleneck to growth.

Example: One company had their SOPs dialed in, their sales machine humming, and immense demand to grow both service lines and geographies to meet customer demand. But, they lacked the leaders with the capacity to oversee that growth, which put them in a bind where they either had to choose to pursue the opportunities and risk mid-management, resulting in reputational damage, or decline the opportunities, play it safe, and miss out on the upside. After one venture of pursuing the opportunity and experiencing the blowback, it shrank and declined the growth opportunities. This was a wise course of action at the time, but it was very disappointing for the future. They had great people, processes, and operational excellence, but they needed leadership development. After this loss, they had to spend time hiring and developing great leaders.

4 . Master personnel decisions.

You want to keep great people. You want to make good people great. You want to get rid of the wrong people. All of these things have to be within your competence set to scale. Everything we’re talking about with training and getting new people to be productive doesn’t matter if we can’t keep the people we’re developing.

For example, countless companies continue to retain the wrong people out of fear of conflict, a sense of loyalty, or a sense of guilt. Those wrong people put undue pressure on the right people on your team. The right people become frustrated, burnt out, and resentful, and they end up leaving. Not only do you end up with the wrong people, but now you’ve lost the good people because you resisted making the tough choice. You’re lowering the bar for everyone when the average performer is below the minimum acceptable standard. Winners don’t want to be surrounded by losers.

5 . Maintain excellence in communication.

Having internal meeting cadences that work keeps people informed and engaged and gets the right people involved in the right conversations to make the right decisions. It also means avoiding unforced communication errors. Companies that communicate most effectively can move most quickly and safely. Companies with poor communication try to speed up and find themselves with problems that could have been solved with more effective communication.

Example: one team of 10 executives constantly felt like they were rowing in opposite directions. Decisions were being made without input from key team members, and those decisions were not effectively communicated. They had two people doing opposite things because of it. In one case, one person was researching a new vendor for a service line, and the other was extending the contract with their existing vendor within that same service line. It came to a head when communication from one department head said there was a change in vendor, meanwhile, the other department head had just signed the contract with their old vendor and couldn’t make the change they wanted to make for another 5 years. If this miscommunication happening at the top, you know it’s happening throughout.

What are some common misconceptions businesses have about scaling? Can you please explain?

People often think that scaling requires the quality of the experience. Not everything that “scales” is McDonald’s. If the strategic driver behind your growth is lowering costs to become a more affordable provider, that’s one strategy. This is very common in the product industry. But in the service industry, it will almost always have the opposite effect. Many companies don’t try to scale their business because they’re afraid it will come with having to accept a lower-quality output, but that’s not necessarily the case. You don’t have to compromise quality.

How do you keep your team motivated during periods of rapid growth or change?

The key is to prepare them for it and not pretend like it’s not happening. Rapid growth and change are often jarring for people, but what’s more alarming is leadership’s failure to acknowledge that it’s happening. Call out what people should expect. Prepare them for the stresses and aggravations. Do your best to minimize the pain, and people will be prepared for the worst or be pleasantly surprised. I did this with my team in May by making the growth we were experiencing seem a lot worse than it actually was. It caused our whole team to be all on board.

Also, make sure it’s in service of something they can get behind. They don’t want to grow just your thing; they want to grow their thing as well. Make sure that they have a personal stake in success.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Everyone has their shit, and everyone’s shit is the worst” — Toni Prinkey (my mom)

As a kid, this quote, repeated at least weekly by my mom, always helped to give me perspective on whatever problems I felt I was going through. It simultaneously validated my feelings that my issues were the worst and put my issues in perspective with the kinds of problems other people might have to deal with. I’ve retained this lesson my whole life and always give myself grace when I feel bad about something, and remember that I’m right there alongside the rest of humanity with my problems, though I might be embarrassed if I had to compare with someone dealing with real problems.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

Immigration reform in the United States. People want to come to the United States, as evidenced by our ongoing line at the border, and it has become a highly politicized topic when it really shouldn’t be. It’s a question of math. We need to introduce more productive members of society for the sake of our economy. Construction, hospitality, retail, etc., rely on people to play these crucial roles. Part of why Americans don’t take these roles is because we’re not keeping up population growth with target GDP growth. The bottom line is that the employers need them here, and the people want them here. Americans should want a responsible amount of legal immigration here. Unfortunately, because we don’t have that, we have a large black market of undocumented immigrants who are not in the correct position to contribute their fair share to the American economy or enjoy the benefits of being a documented immigrant. It’s baffling to me that we should accept billions of dollars of labor flowing through our black market. It would do an immense amount of work if we set aside politics.

How can our readers further follow your work online?

https://www.linkedin.com/in/chad-prinkey/

https://www.wellbuiltconsulting.com/

https://www.wellbuiltconsulting.com/newsletter-archive

https://www.wellbuiltconsulting.com/wb-webinars

https://www.amazon.com/Well-Built-Construction-Contractors-Excellence/dp/B0CZ5GRLQG

Thank you so much for sharing these important insights. We wish you continued success and good health!