CHALLENGER INSIGHTS Vol. 24:
The Art of Disruption
Does this situation sound familiar? You work closely with an end user and an architect to design a project, only to have a General Contractor take your expert work and shop the opportunity to a competitor for a lower price. Your carefully-designed project was disrupted by the General Contractor, and as budgets become more strained, we will experience an increased frequency of project design disruption.
We must work strategically. The best time to disrupt the traditional Design, Bid, Build process is the earliest time possible.
Get to the End User
But how exactly do you disrupt the traditional process? We have to get to the end user. I often hear, “The architect doesn’t want me to talk to the end user.” Is that architect going to hold your specification? If the architect is going to treat all competitors as equal, then what are your worried about losing?
My point is – if the architect is not holding the specifiable differences, we need to establish those differences with the end user or we risk being shut out of the process. If you must not cross the architect, why not have your demand generation team approach the end user separately? When we get to key contacts within the owner’s organization, we have to disrupt the flow that puts the purchase in the General Contractor’s hands.
The end user has two options. One option is the purchase through the General Contractor and the other is an option to buy the equipment you want on contract. I’ve outlined some of the differences here:
| General Contractor Purchase | NJPA Direct Contract Purchase | |
| Purchase Price | Vendor price plus GC Markup | Contracted Rate |
| Construction Planning | GC through the Vendor | Vendor through the GC |
| Installation | 3rd Party or Vendor Installation | Factory Certified |
| Product Support | 1 year beyond Installation | Warranty Period and Beyond |
| Equipment Type | Low price | Best quality |
Making the Case for End Users
The case to make with the owner is the General Contractor adds margin, but does not add significant value. They should invest money where it yields the best return. The vendor who puts forth the best design, plans to deliver on time and on budget, provides support beyond the first year, and has the best solution is the vendor of choice.
Beyond this, the storage systems are often in place for 20-30 years after installation. The GC remains on-site for one year, but what happens during years 2-20 when issues arise? If they buy direct from you, they get one-call support for the lifetime of the products. We have to make this case – and we have to make this case as early as possible in the process.
What if you don’t have a relationship with the end user or can’t get to them? Let’s work together to build a plan to reach the end users. We can’t wait, expecting sole source justification. Too often we believe we are in control, only to have the budget cut and the project put out to bid. Let’s put ourselves in a position where we can negotiate how to work with a limited budget rather than being cut out of the deal by a GC who doesn’t care how much work we’ve put into design.
Disrupt or be disrupted.