Combat Decision Fatigue in Five Easy Steps

One of the biggest attentional challenges facing company owners and managers is decision fatigue. . For those unfamiliar, the concept

One of the biggest attentional challenges facing company owners and managers is decision fatigue.

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For those unfamiliar, the concept of ‘decision fatigue’ refers to exactly what it sounds like: As we make decision after decision in the course of our day, our ability to make good decisions declines.  This is why a sensible breakfast of grapefruit and quinoa often turns into a dinner of chili dogs and beer, and why grocery stores make so much money off of the overpriced bottles of soda sold at the checkout line. (Seriously.  They have a whole aisle devoted to those same sodas, except that in that aisle, you get to buy a 6-pack for the same price as a single soda…)

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No matter how hard we try, decision fatigue is always going be a thing: Our brains are no different than any other body part, and just as your arms are going to be tired after 20 reps of bicep curls, your brain is going to be tired after making 9,000 decisions by noon.

However, just because decision fatigue is inevitable doesn’t mean it can’t be managed.  The following are all ways of mitigating the effects that it has on your company’s bottom line:

1.Make important decisions when you’re well-rested.

Yes, you do need to prepare a bid for that $3M airport project, and yes, you do need to decide on a new dog groomer for Fido.  And yes, considering the fact that Fido can no longer see through his fur, and is now bumping into walls, it’s probably best that you get both of those things done today.

However, one of those decisions has far bigger potential consequences than the other.

Start the morning with preparing the airport bid.  Then, Google your dog grooming options after the more important things have been taken care of.

2.  See if you can cut down on some of the less-important decisions.

Again, I’m guessing that Fido’s grooming isn’t that important–as long it gets done, everyone will be happy.

If so, see if you can outsource the task.

Your daughter Suzie is out of school for the summer.  She was just begging for money to go to the movies with her friends.  Let her pick a groomer and schedule a time to take Fido in.  Worst case scenario, you’ll end up overpaying by $10.

The less time you have to devote to unimportant decisions, the more energy you have leftover for making the decisions that matter.

3.  For the unimportant decisions that can’t be outsourced, go with the simplest option and move on.

Okay, fine, you couldn’t find anybody to go to the grocery store for you, so this means it’s up to you to pick up salad dressing.

Unless you’re just dying for a change, take the path of least resistance.  Buy the same ranch dressing you always do, and get on with your life. Maybe it is $.10 more.  Maybe it does have three more calories per serving than the competitor.  But you know what?  Life will go on.

4.  Plan daily decisions the night before.

Set out your shirt and pants for the next day before you go to bed.

Have that healthy lunch salad sitting in a Tupperware container, ready to go for the next morning.

That way, the first hour of your morning won’t be eaten up with 1,000 small decisions.

5.  Don’t make important decisions when you’re hungry or distracted.

I know this sounds obvious, but those Snickers commercials were right: You’re not you when you’re hungry.

You’re also not you when Fido is barking, Suzie is whining about what Katie said at lunch, that Snickers commercial is blaring, and you have 300 pointless email notifications popping up, informing you of such pressing matters as ‘I think the printer is sort of low on ink’, ‘Could you check with Mrs. Johnson about church tonight?’ and ‘INCREASE YOUR MANHOOD TODAY WITH XXXXXXTREME MALE’.

If you’re needing to prepare your bid for that $3M airport job, make sure you aren’t hangry.  Then shut your office door, silence your phone, and close out the email notifications. XXXXXXXXXTREME MALE can wait.

It might even gain another ‘X’ by the time you’re finished!

Find Your Joy: Quit Living in Fear of Life

  So as those of you who spend much time reading this blog have probably picked up on, I’m pretty

So as those of you who spend much time reading this blog have probably picked up on, I’m pretty risk averse.

We’ve posted story after story after story warning you of the many ways that life can go wrong.

I mean, I’m a contract lawyer.  That’s kind of what I do.

However, as I was thinking about things, I realized that by only focusing on the things that can go wrong, I’m doing everybody a disservice.

Life is for living.

It’s for taking risks, and following your passions, and buying the things that are poor investments but that will bring you joy. It’s for taking that vacation, and drinking the soda that has too many calories, and asking for what you need, even if everybody ignores you.

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Unfortunately, I don’t really have any empirical data for this post.  It’s expanse goes a bit beyond the purviews of Jobsite, or The Wall Street Journal, or any of my nice books on construction law.  I don’t know that any Harvard researchers have confirmed the benefits of eating a third taco.  It also goes against literally everything that I lecture my longsuffering family about, and there’s a 99.99% chance that this very post will be used against me the next time that I try to talk to my husband about the importance of maintaining a $3 a day food budget.

However, one thing that I always endeavor to do with this blog is to provide those of you reading with every tool to make your life and business and successful as possible.  And in doing so, it dawned on me that I was doing a disservice by always providing tidy, predictable advice.

Life, after all, is not always tidy and predictable (no matter how much I may wish it would be).

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Personally, I am a box checker.

I do drive a Volvo and weigh myself every day and track my spending down to the cent.  I always arrive to work early, and I never leave until every item has been marked off my to-do list, and I don’t really take very many vacations or spend much time with my family.  But those…probably aren’t good habits to emulate.

And so, my latest non-‘Key to a Better Year’ is to go do the things that will make you a happier person.

After all, summer has sprung, and the lake is calling your name!

Time is of the Essence: The Role of Timing in Construction Lending

As we’ve previously discussed, construction lending is complicated.  Additionally, there are tools available to help lenders better mitigate the risks

As we’ve previously discussed, construction lending is complicated.  Additionally, there are tools available to help lenders better mitigate the risks inherent to construction.

However, there’s a third piece to the puzzle that’s also important to discuss: Timing.

When it comes to lending on construction, even a few weeks can have a tremendous impact on both the safety of the deal, as well as the long-term viability of the client.

The slideshow below gives a solid overview of the importance timing plays when lending to a contractor.

Timing presentation

However, in short, the reason timing is so critical on construction is because of suppliers: Anytime there’s a cash flow issue, suppliers are the first group to go unpaid.

When suppliers to unpaid, liens get placed on jobs.

When liens get placed on jobs, contractors and their lenders don’t get paid.

For this reason, anytime a lender has a construction contractor on their books, it’s critical that they be on the lookout for any signs of trouble.  At the first sign of an issue, it’s imperative that they act quickly to get the matter resolved.

Failure to do that can easily lead to massive losses for the bank, as well as long-term damage to the client’s financial future.

Construction Manager Benefits

Very few truths in business or investing are universal–after all, life is complicated, and for every rule, there is an

Very few truths in business or investing are universal–after all, life is complicated, and for every rule, there is an exception out there somewhere.

However, one rule that plays out pretty consistently is that if something is easy, and nearly risk free, it probably won’t be that profitable. Or, if it is highly profitable, there will be 10,000 other companies fighting for a piece of the pie, making life anything but easy on your sales team.

Conversely, if you can figure out how to navigate an area that few others have succeeded in, you have a pretty good potential for profit.

Construction, for better or worse, is one of those areas where few lenders have succeeded.

There are a number of factors that make construction lending particularly perilous, including unfamiliar contracts, potential for setoff, laws that favor property owners and general contractors over suppliers and subcontractors, and the simple reality that a typical construction project is filled with moving parts (literal and metaphorical).

To add to this, the stakes are high–a residential mortgage default is often a $100-300k problem, much of which can be recouped through foreclosure.  On the other hand, a commercial construction deal gone south can easily turn into a seven figure problem, with no means for recouping the loss.

Because of this, banks often choose to shy away from construction, and if they don’t, they demand high collateralization to help offset the risk.

The problem with this approach, however, is twofold: First, it limits the financial products available to contractors.  Secondly, it hurts the bank’s profitability to have to say no.

With Construction Manager, we hope to bring everybody one step closer to solving this problem.

Unlike the average commercial loan officer, we live, eat, and breathe construction.  We have decades of combined experience reading AIA contracts, managing liens, and navigating the potential perils of construction. We know what to look out for, and we know how to help mitigate those risks.

Construction Manager gives banks and loan officers across the country access to our knowledge. By using our services, banks can make an informed decision regarding whether to fund a particular project.  Additionally, with our tools, it’s possible to greatly reduce risk exposure on projects once they’re funded.

Construction will never be easy. Construction will never be risk free. But, with the right tools and knowledge, construction can be a boon to everybody’s bottom line.

Stay Safe From the Terrors of Construction Lending

If there’s one question that I get asked more than anything else, it’s ‘Why?’. Why couldn’t you fund this deal? 

If there’s one question that I get asked more than anything else, it’s ‘Why?’.

Why couldn’t you fund this deal?  Why won’t anybody else fund this deal?  Why did my bank tell me that they’re no longer funding construction? (From the new loan officer at the bank) Why did my boss tell me not to fund construction?

The short answer is: Construction is scary.

In most commercial lending spaces, the big risk is insolvency:  So long as the account debtor stays in business, and the work has been performed, the right people will get paid.  That’s a gross oversimplification, of course, but it more or less holds true across industries–that’s why credit insurance is such a useful buffer against risk.

Construction, on the other hand, is a world unto itself.

You have a long and sometimes complicated payment stream that includes the project owner, the project owner’s bank, a general contractor, first tier subcontractors, second tier subcontractors, third tier subcontractors, and suppliers for all of those subcontractors. You have architects and engineers and project managers who can disrupt the flow of the project at any time.  You have delays caused by unrelated parties.  You have disputes about whether work was performed properly, and what the true scope of work was, and who should be on the hook for unexpected conditions that arise.

Moreover, all of these variables come with big price tags:  When things go wrong on a residential mortgage, it’s generally a $300k problem, with a $300k house as collateral.  When things go wrong in commercial construction, it can easily be an $15M problem, with no finished product to turn to for security.

Because of all of these issues, when it comes to construction, you can’t just write a check and call it a day.

In order to safely fund, you (1) Have to know at least a little about construction, (2) Have a very solid grasp on what the overall project looks like, including knowing who every party both upstream and downstream is, as well as the various contractual loopholes could cause problems in the event of dispute, and (3) Keep a constant eye on the project, since things can go from ‘running smoothly’ to ‘multi-million dollar pile of useless beams and unlaid bricks’ within a matter of days.

This that means that for most lenders, construction just isn’t a wise risk.

Land of the Free Because of the Brave

This weekend, we’d like to take time to remember the brave men and women who’ve given their all to protect

This weekend, we’d like to take time to remember the brave men and women who’ve given their all to protect this great country. They may no longer be with us, but their sacrifices live on.

As we spend our three day weekend grilling out by the lake and ringing in the beginning of summer, let us all reflect on the selfless men and women who made all of this possible.

From all of us at Construction Finance, let us not forget the reason for the long weekend, but let us also not forget to celebrate the great county our service members fought to protect.

Meet the Dream Team: Tipper

In my various Dream Team introductions, it dawned on me that I’d left out one rather obvious person:  Myself. Thanks

In my various Dream Team introductions, it dawned on me that I’d left out one rather obvious person:  Myself.

Thanks to this blog, I’m presumably the least mysterious person in this office, since I’m pretty much always boring y’all with stupid facts about my life. But still, it was pointed out that if I was going to embarrass other people with a post about them, that I should probably introduce you all to myself, as well!

And so, in the interest of full disclosure and humiliation, my name is Tipper.  I’m a lawyer, an Ole Miss grad, and a fan of long walks on the beach. (Not kidding about that last one.  Going to the beach is pretty much my favorite.)

I spend my days going over 70 page contracts to ensure that people are actually going to get paid for the work they do. I talk to everybody and their brother, trying to make sure everyone has the information they need to manage their finances/get money/run their businesses successfully/not inadvertently screw up their entire lives. When they do screw up their entire lives, I’m usually the first line of defense at trying to fix it. According to my business cards, I’m the Vice President of Business Development. And, I’m also the person to talk to about your dog/the thing the mechanic at Jiffy Lube said to you/your kid’s phobia of Jello-O/your desire to move to Siberia…not because those things are my job, but because I really like people, and I can totally relate to being scared of Jell-O.**

I’m a huge nerd who can read through about five zillion AIA contracts in an afternoon and still get distracted by an article in The Wall Street Journal that I just had to read.* When I’m not being a nerd at work, I go home and do more nerdy stuff (I’m looking at you, non-existent social life, gallery of questionable art, and 300 page Word document of badly written fiction).  I can probably tell you everything you ever needed to know about whatever my weird interest of the month is–from the safety mechanisms behind swimming pool drains to the history of public housing.

Also, I like cheap champagne, going to the beach, and walking through my house pretending that I’m a T-Rex.  You know, normal stuff.

*Spoiler alert: No, I do not actually need to read a review of the latest Subaru SUV or what the markets in China are doing. That is in no way pertinent to my job or anything else about my life. But that’s not going to stop me from reading about it, anyway.

**Jell-O is scary, okay?  In fact, pretty much everything is scary.  I’m basically just a walking panic attack.  But that’s okay, because I’m pretty fun, regardless.

Keys to a Better Year: Four Steps For Better Time Management

So far, most of our ‘Keys to a better year’ I’ve talked about have been specific to construction: After all,

So far, most of our ‘Keys to a better year’ I’ve talked about have been specific to construction: After all, this is Construction Finance. Construction is kind of our thing.

Some concerns in life, however, are universal. And time management is one of them.

No matter who you are or what you do, there are never enough hours in the day. Figuring out how to best manage those limited hours is crucial to your business and your overall happiness.  

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As I touched on in Seize the Day, there are multiple facets to time management, and not all of them have to do with the precise division of seconds.   

1.  Take care of yourself.

Seriously.  I know that things like ‘get eight hours of sleep’ and ‘eat enough vegetables’ sound both painfully obvious and super irrelevant to time management, but the reality is, a healthy you is a productive you.  Sacrificing sleep to get more work done is like trying to save time on a roadtrip by never stopping for gas…it never works out as well as you think it will.

2.  Do one thing at a time.

Again, I know how tempting multi-tasking is.  I’ve answered three phone calls in the time it’s taken me to write this.  So uh, do as I say, and not as I do?

But seriously.  Experts far brighter than myself have proven over and over that you’ll get more done if you quit trying to multi-task. So please, quit trying to negotiate with suppliers while supervising your crew and eating lunch.  You’re not doing yourself or anybody else any favors.  

3.  Make yourself a schedule, and stick to it.  

This one goes right back to the multi-tasking thing.  Particularly when it comes to incongruent tasks (think buttering up your supplier vs. lecturing Skylar about the need for protective equipment vs. reviewing the numbers with accounting), there’s a lot to be said for setting aside specific chunks of time for specific tasks. 

Think about what needs to be done.  Then think about the best time to do those things–keeping in mind both practical realities (9 PM isn’t the time to negotiate with suppliers) as well as how you’re naturally wired (speaking from personal experience, you don’t want the me who’s just reviewed numbers with accounting in charge of anything that requires getting along with other people).    

4.  Manage the other things in your life.

‘Taking care of yourself’ doesn’t just mean drinking enough water and getting the side salad at lunch.

The reality is, if your marriage is falling apart and you’re no longer on speaking terms with two of your three kids, it’s going to be hard to work productively.

Pay attention to your feelings.  Take time out for hobbies.  Do the things that make life worth living…it may seem counterintuitive to take the weekend off when you have 9,000 things that need to be completed, but often, that’s when it’s the most important.  Making the time to handle your life means that when you are at work, you’ll actually be able to focus on getting the job done.

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Does some of this advice make me sound like one of those flowery weirdos they interview on Oprah?

Yes. Yes it does. But occasionally, those flowerly weirdos are right.  

Talk Derby To Me

As we’ve established before, I have a bit of a weakness for themed outfits. I can’t help it. My mom

As we’ve established before, I have a bit of a weakness for themed outfits.

I can’t help it.

My mom was an elementary school teacher.  I was in a sorority*.  I went to Ole Miss.  Forcing people to dress up in coordinating outfits for no good reason is basically my one true calling in life.

As such, when I looked on the calendar and realized that the Kentucky Derby was coming up, I just knew what I had to do…I mean, there’s nothing in the world better than seersucker, Lilly Pulitzer dresses, and giant hats! What could be more magical than making a bunch of accountants and analysts dress up for such a momentous holiday?

In the words of my victims, ‘literally anything’.

But you know what?  Deep down, I know they enjoyed it.

*We’re going to plead the fifth on how long my sorority career lasted.  Let’s just say that new member handbook was awfully long, and studying wasn’t really my thing.

Today’s Useless Fact: Brutalist Architecture

  For today’s Useless Fact, I decided to try outsourcing. …….. One of my all-time favorite podcasts is 99 Percent

For today’s Useless Fact, I decided to try outsourcing.

……..

One of my all-time favorite podcasts is 99 Percent Invisible, which covers pretty much exactly what it says–the weird, random stuff that’s right in front of us, but that nobody really gives much thought to.

Anyway, in terms of construction(ish) topics that they’ve covered, awhile back, they did a piece on one my favorite guilty pleasures: Brutalist architecture.

https://99percentinvisible.org/article/unite-dhabitation-le-corbusiers-proto-brutalist-urban-sky-villages/

Brutalist architecture refers to those giant concrete buildings that everybody hates.  They tend to appear on college campuses.  They had a role in shaping the high-rise public housing that was built in the 1950’s.  Sometimes there are government buildings downtown that take advantage of brutalist principles.

Basically, they have zero positive connotations in most people’s minds.

But…they’re actually pretty cool (in a hideous, impractical, and difficult to maintain way).

Yes, the concrete cracks, creating all sorts of difficult-to-repair leaks.  Yes, they do tend to turn a weird, dingy color after a decade or two of exposure to the elements.  Yes, they do sometimes look rather…well, brutal. Yes, there is a reason that very few buildings were built like this either prior to 1950 or after 1970 (it was pretty short lived fad).

Still, at the end of the day, they were certainly an interesting experiment in alternative uses of building materials. And, they were a nice break from the standard red brick and white column neo-classical designs that are so prevalent in this part of the country.