THE WELCH COMPANY
440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700
S U M M A R Y
DIARY: August 12, 1997 02:01 PM Tuesday;
Called surities about using SDS for Communication Metrics.
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0201 - Bevington, Jackl & Haas 510 932 8500 fax 1961
020101 - Ms. Anne Bevington, J.D.
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Time Not Enough to Think about Communication Metrics
Sunshine Profits Good Times Improvement Not Needed Bad Times No Time
Grasshopper Ant Sunshine Profits Money Coming In Conceals Danger Pre
Ant Grasshopper Sunshine Profits Invest Experiment Better Methods Co
Improvement Experiment Pilot Test Change New Methods Invest Sunshine
Ant Grasshopper Sunshine Profits Pay Experiment Innovations be Prepa
1412 - ..
1413 - Summary/Objective
141401 - Follow up ref SDS 5 0000, ref SDS 6 0000.
141403 - Contacted bonding companies about improving their risk management
141404 - efforts to avoid loss in light of current market conditions and
141405 - imploding managements due to information overload.
1417 - Analysis
141801 - As a result of continued reports of a building boom in California, and
141802 - the nation, coupled with record low unemployment, ref SDS 5 line 43,
141803 - this increases the risk of error by contractors to under bid the cost
141804 - of work that will escalate due to adverse market conditions. Low
141805 - unemployment means the quality of people available to perform new work
141806 - is lower. More work means less attention to current work. It places
141807 - contractors and sureties at risk. Over the next 18 months or so, many
141808 - contractors will have failed projects, leading to litigation, losses
141809 - and failures.
141810 - ..
141811 - Since I have not been successful in helping contractors
141812 - recognize this risk and adopt Communication Metrics to cope with it,
141813 - possibly sureties who have value at risk, and have influence on
141814 - contractor work practices through issuance of bid bonds, would like to
141815 - support timely risk management by requiring contractors to bid work
141816 - with a budget for Communication Metrics.
141818 - Generally, contractors will not budget for management support like CPM
141819 - and Communication Metrics, unless it is specified. This places them
141820 - at risk because failing to adequately plan and manage the work results
141821 - in being overwhelmed by events. Present, favorable, market conditions
141822 - present opportunities for investing in the tools and methods needed to
141823 - succeed. If this investment of sunshine profits is not made, then
141824 - many contractors and bonding companies will meet the fate of the
141825 - grasshopper who danced during the summer rather than heed warnings
141826 - of the ant to invest.
141828 - ..
141829 - Called Johnson & Higgens 415 981 6700
141831 - Left message for Rick Stinson
141833 - Bond Department Rick Stinson.
141834 - One California, 5th floor
141837 - Called Anne Bevington for referrals.
141839 - She will be back 970819. Left message for her to call me.
141841 - [See follow up at ref SDS 7 line 56.]
1421 - 1533 Rick called back
1422 - ..
142201 - Explained my interest in providing Communication Metrics for the
142202 - bond folks risk management support.
142204 - I explained having worked with Paul Downs and that Johnson & Higgens
142205 - was our bonding company. Rick said Paul left Johnson & Higgens about
142206 - 10 years ago and joined another firm. He retired about 3 years ago.
142208 - I explained the essence of Communication Metrics and that bonding
142209 - companies have a heightened interest in finding ways to improve the
142210 - management of their contractors and design professionals, so they can
142211 - meet the challenge of the current building boom where unemployment is
142212 - extremely low, with the result that mistakes and losses will increase.
142214 - We considered my discussion with Max Blodgett of the U.S. Army Corps
142215 - of Engineers that bidders will not include Communication Metrics in
142216 - their bids unless it is specified, ref SDS 2 line 158, similar to CPM
142217 - many years ago. Now we know CPM and cost control are critical.
142218 - Contractors do not yet know about communication control, but it is
142219 - much more powerful than either cost or schedule control, because it is
142220 - a predicate to getting the work done.
142221 - ..
142222 - I mentioned Dutra having filed bankruptcy as an example.
142224 - Rick said Guy F. Atkinson filed chapter 11 just yesterday, and MK has
142225 - been in trouble for a long time. He expressed concern that such
142226 - seemingly strong firms are failing.
142228 - I explained discussions with Contractors who indicate being
142229 - overburdened by information. They strive to expedite by relying on
142230 - conversation, ref SDS 4 line 240, because it is difficult to use good
142231 - management practices consistently in the modern era of information
142232 - overload and more regulations, ref SDS 4 line 194 and ref SDS 3 line
142233 - 441.
142235 - Rick agreed with this analysis. He asked me to call John Lettieri who
142236 - is in charge of their bond department. John is at 415 393 5132
142238 - [See follow up meeting with John on 970815, ref SDS 6 line 57.]
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