You can't rely on memory alone in the competitive, litigious construction industry.

My client was bragging about his young project manager's fantastic ability to remember dates and details. "When Tom comes out of a meeting or talks to a client on the phone, every important situation is locked in his brain and you can be sure he'll take care of it. I never met anyone in my entire life with a memory that good.

"He also remembers cost codes, telephone numbers and even the batting averages of every New York Yankee baseball player in the last 20 years. Tom has only been with us for eight months, but he sure has made a good impression. We know we've got a real winner!"

He saw the disapproval on my face and asked, "Don't you agree?"

"Memory is a wonderful thing," I answered. "But it has no place in the business world. Tom would probably be a real winner if he competed on one of those how-to-be-a-millionaire shows on TV, but just imagine how his memory would stand up in arbitration or a court case involving millions of your company's dollars. Those real winners have all their facts documented on paper."

The Zero Memory System

Our company's orientation and induction for foremen and management personnel explains very clearly that we trust absolutely nothing to memory. We call it "Zero Memory." We require that every detail and commitment be documented on paper or a computer disk. Actually, what we demand of our staff does require memory - enough memory to remember to write the information down and then to remember where it is when you need it.

My client asked Tom to join us in his office, and we explained the critical importance of not trusting his fantastic memory. Tom was very appreciative, and he admitted that several times his memory had gotten him into trouble in his previous jobs. He had always assumed that thorough documentation was wasting too much of his valuable time.

As we began discussing specific items, Tom asked to be excused. He went to his office and came right back with his laptop computer. "I know how to take notes," he said. "I just forget to do it. How's that for a fantastic memory?"

Because I come from the "old school" where a man is only as good as his word, we started with the subject of "fulfilling your promises and commitments." When you tell someone that you will do something, do it!

Proper Documentation

If you forget to write down a promise, you might also forget that you made it. If the promise is for an employee put a note in his or her performance file with two dates. The first is when you made your promise; the second is when you will fulfill it. If circumstances change and you cannot meet your commitment, go back to that individual and explain why the promise was not kept. This will at least show him that you honor your word. There is always a chance that your memory will fade, but the written note will stay in that file until you take care of what you promised.

Every commitment to a business associate should be on your "to do" list for the day and time you committed. Naturally you want to always be on time for appointments, and at the very least call the individual to notify them of any delays. It is an outright insult to make anyone wait for you. It implies that their time is not as valuable as yours is.

An important problem for those who rely on memory is the effect on possible litigation for contractors who must go to arbitration or claims court. When your jobsite foreman pits his memory of events that happened one or two years ago against the job logs and meeting notes of the other contractors involved, you will lose!

In addition to taking notes at jobsite meetings, you need to carefully read the official minutes sent out by owners, architects or general contractors to repudiate any false or damaging statements. You have only one week to respond. You also can request that important information be inserted into the minutes at a meeting.

I also recommend using a written agenda of items you intend to discuss at any meeting you attend or conduct. This ensures that your memory will not be overwhelmed by interruptions.

Every commitment you make should be entered into your "to do" list, diary or planner with the date received and the date promised. Fax messages are easy to keep track of - for those who remember to file the faxes in their active file.

We use written checklists for every critical repetitive function in our company to eliminate the need to remember each and ever item. Our estimates, bids, purchase orders and submittals thus all become routine tasks, as do the jobs of stocking the warehouse, maintaining company vehicles, preparing job trailers, conducting safety inspections, etc.

We don't have to mention the importance of getting jobsite work orders written and signed, since all of you have undoubtedly been down that road trying to collect money on behalf of your foremen.

Hopefully you believe in "horsetrading" your services for favors from the other trades, the general contractor, the design team and the owners. This cooperative atmosphere benefits everyone on the job, but you cannot rely on memory alone to manage it - some people are takers but not givers. That is, some people have convenient memories. They may only remember what they did for you, but conveniently forget everything you did for them. Horsetrading transactions should also be documented, for the following reasons:

  • The individual you are horsetrading with may be transferred to another job or leave the company.

  • Someone higher up in the other company's management team may not honor that employee's commitment.

  • You need to monitor your horsetrading to maintain a fair balance with each individual.

  • You might need documentation of your work to justify your actions with your own company.

Salary Administration

The biggest hazard of relying on memory in our industry comes in the area of wage and salary administration. About 90 percent of today's construction employees feel they are underpaid. This includes our offices as well as our jobsites. What is really sad is that more than half of those disgruntled employees are not even earning what they are currently being paid. This problem has always been serious, but today's craft shortage and high turnover multiply these consequences.

The primary problem is a convenient memory. It's an enormous task to remember what each employee did or did not do and how much we agreed to pay them in wages, salaries, benefits, perks and bonuses. If all of this is not properly documented, business owners tend to remember an employee's shortcomings and mistakes and focus on the lower end of the pay scale for that position.

It doesn't require too much imagination to determine what each employee conveniently remembers. You can understand why we have so many unhappy campers.

Fortunately, you can eliminate these frustrations by trusting nothing to memory and initiating our "Four D's" of wage administration:

    1. Direction: Decide what direction your company wants to go in. Choose the market you want to compete in (residential, commercial, industrial, service work, utility, union, Davis Bacon, open shop, local or distance) and decide how much you are willing to pay for the caliber of employees the work requires.

    2. Discussion: Explain your situation before you hire any new employees. You naturally should clarify this with existing employees as well. Initiate written company policies, job descriptions, work rules, wage and benefit packages, and your chain of command (organizational chart). Leave nothing to memory - or assumption.

    3. Discipline: Follow through with your commitments, and monitor and measure every employee's performance to ensure they honor their commitments. Good employees want to be measured and rewarded accordingly, but they want to be measured fairly. You can see why you have to keep score on a daily basis.

    4. Documentation: You can compare your employee's acceptance of fair wages to a student's acceptance of fair grades for their performance in school. Teachers trust nothing to memory. They monitor and measure performance daily and enter each student's score in their record. They do not even attempt to remember everything that occurred for a whole semester or quarter.

    They simply evaluate the written score card, because it reflects exactly what happened.

Imagine a contractor trying to remember exactly how each employee performed for an entire year in order to establish an acceptable wage. When you consider what that employee conveniently remembers for that same year's performance, you will readily agree: In our competitive industry, memory lane is definitely the wrong direction!