Author: devato

Improve your ERP implementations

By: Chad Pearson

The estimated rate of adoption in construction tech is only 66%, making adoption the riskiest part of investment. Subcontractors specifically, have a more difficult time finding best fit tech and succeeding in adoption for 3 reasons:

• Contech is often designed around generalist workflows, yet subcontractors work in endless VUCA scenarios (Volatile, Uncertain, Complex & Ambiguous).
• Subcontractors often cash flow phases of projects, limiting their ability to invest.
• Subcontractors often have tight schedules leaving little time for adoption.

Tips for finding best fit tech and mitigating risk of ERP adoption:

• Section 1: Tips to #buildTRUTH in tech selection.
• Section 2: Tips for due diligence.
• Section 3: Services to ensure ERP adoption and business continuance.

Section 1: Tips to #buildTRUTH in selection process

1.a: Discovery and demos with detailed job info (with YOUR data)

Teaching vendors about your unique traits and workflows is critical, but HOW you teach them has big impact and will #buildTRUTH into the sales process.

We strongly recommend having vendors use your data to build a proof of concept. This can eliminate Smoke-stacking, which is when vendors oversell integrations and partnerships with other vendors. (see video for more info)

Here’s a great list of job information to provide vendors:

• Drawings and Bid Summary – as much detail as possible. (Copy of the Job Cost summary and Purchasing info from an estimate)
• Cost Code List – Code, Description, Division, GL accounts, Expense Type.
• Job Documents – Attachments to be included. (Drawings, Certificate of insurance, Billing template etc.)
• Contracts/ Change order List /work orders – Contract #, Value, Division break down, sub section. (Budget if possible)
• Job Budget Detail – Cost code, Qty, UOM, Unit Cost, budget Date, sub section.
• Job Progress Billings – Schedule of values, Invoice copies.
• AR Deposits – Payments received for the Job.
• Job Cost Detail – Cost code, Qty, UOM, Unit Cost, Transaction Date, sub section.
• PO Detail List – PO #, Delivery date, items, Vendor, QTY, Unit cost and UOM.
• Sub Contract Information – Sub contract value, Cost code QTY, UOM.
• Sub Contract Billing – Billings attached to the Sub contracts.
• Time Card sample/details – Payroll register for Job Employee Code, Hours, Cost codes, Rate, Sub Section, and other job cost payroll items.
• Submittals – Details of Submittals and Attachments sent to GC.
• RFI Listing – RFI detail listing with attachments.
• AP Listing – (List of bills attached to Job) Vendor, Transaction date, Line detail, tax and Total.
• Cost Projection Report/spreadsheet– Report displaying all the cost projection details. (Projection #, Cost code, UOM, Unit, UOM, Rate, Completion %)
• Certified payroll rate sheet (If Applicable) and Certified payroll report. (If Applicable)
• Work Tickets – Sample work ticket received from the work site.
• Daily Report – Sample Daily report received from the job site.

1.b: Eliminate risk of cloud cuffing, which is when software vendors charge you subscription or license fees before they get you live. Recommendation: Ensure vendor is willing to make fees conditional on go-live. (see video for more info)

1.c: Eliminate risk of overages /handcuffing, which is when vendors attract you with low prices, then charge 200% – 400%+ in overages when you feel it’s too late to quit. Recommendation: Ensure vendor will provide GMP (guaranteed max price) agreements for all services required for Go-Live.

1.d: Another good recommendation: Ensure annual fees align with value to ‘subcontractors’, as opposed to GC’s.

Section 2: Tips for due diligence

Tip #1:  2x now saves 4x later

Double due diligence:  Software adoption often results is overages that are 200% – 400%+ over the cost on contract so we recommend doubling the time you planned in making the decision. Subcontractors have little to no time for software selection but investing 2x time now will help expose risk and shortcomings so you can save 4 x later.

Tip #2: worthy references

Finding quality references: Look beyond the references provided and search for subcontractor specific associations for members who do the similar work to you AND who are customers of the prospective provider(s).

We also recommend speaking to 3-4 people in separate departments.

• Speak to people outside accounting is they offer products outside accounting.
• Ask about the variance between the original contract price and total cost of ownership.
• Ask what promises were made vs. delivered.
• Find out about changes in level of support over time.
• Ask user about their level of knowledge of the trade.

Another good way to find worthy references is searching the provider on LinkedIn and find their key sales people. Then look to see which companies those sales people are connected with to get a list of their potential customers who they did NOT provide as references.

• This will help you avoid reference stacking, which is when software vendors stack the deck with references who only provide good reviews.
• In addition to calling companies, search employees of the prospective provider(s) on LinkedIn and look for mutual contacts.
• Your mutual contacts may be able to provide candid insight into the provider’s product, service and integrity.

Section 3: Services to ensure adoption and business continuance

Most implementation services include general level data import, process recommendations and training, yet subcontractors need significant additional work for successful adoption.  As subcontractors have next to no time to complete the additional work, services providers need to step in.

To #buildTRUTH in cost and adoption, have service providers include all services below for a GMP (guaranteed max price) while defining go-live and what a successful implementation looks like.

Recommended Services to include:

Pre-Live Services
1.      Collect, import and validate vendor list, customer list and relational data
2.      Collect, import and validate employee list/safety/experience/HR data
3.      Build GL account listing
4.      Open jobs listing and cost code listing for replication in new ERP
5.      Scoping for custom integrations
6.      Prepare Payroll account defaults including Union, DB, CPR, fringe benefits where applicable
7.      Items database development for each branch/company/division of labor – items must include all properties related to bidding, field and purchasing manager’s perspectives such as:

• internal items codes and descriptions
• each supplier’s code and description for POs
• all related UOMs
• dimensions
• properties
• expense types

8.      Company logo and all external documents for replication in documentation
9.      Sample GL Transactions for replication
10.   Sample Check Stubs (Payroll, AP, Garnishment) for replication in documentation
11.   Sample Job Cost/Job Budget for replication
12.   Sample Reports (PO, AR Invoice, PM) for replication
13.   Sample WIP for replication in new WIP and potential customization
14.   Complete AR Aging (By Customer/Job) for tie off
15.   IF you are looking to integrate an estimating system, you need to:

• create mapping template for each estimator’s database
• map item codes and descriptions, cost codes, expense types
• map locations/subsections, UOM, price per UOM, unit cost
• total cost, dimensions
• You also need to make sure the solution has the ability to map items that were added to any database that were not previously mapped on the fly without software vendor’s assistance.

16.   Outstanding retainage for entry (By Customer/Job)
17.   Trial Balance (Same date as AR)
18.   full historical AIA SOV’s for manual entry to enable accurate retainage billing
19.   Invoice & Cash Receipt Register for replication
20.   AIA billing templates from all customer invoice template for replication in auto-progress billing template
21.   All vendor invoices for mapping so PO matching tools can work
22.   Complete change order log for replication
23.   All sales Tax Rates/Reporting for replication
24.   Monthly WIP Reports (Fiscal Year)
25.   Employee YTD and Payroll Information – Pay Stub/Time Sheet
26.   Payroll Register Reports for replication
27.   Sample Reports (CPR, Union, etc.) for replication
28.   Sample Direct Deposit File for replication
29.   Sample Positive Pay File for replication
30.   All open subcontracts for replication
31.   Complete benefit plans/enrollment (ACA) for set up in benefits tracking
32.   Remote introduction to customer, vendor and employee info
33.   Remote introduction to inventory/material management
34.   Remote introduction to vendor pricing, job special pricing and PO creation
35.   Remote intro to payroll info; pay rates (union/davis bacon, prevail wage, benefits, safety cert etc.)
36.   Open AR for replication and tie off
37.   Open AP / Discount Report for replication and tie off
38.   Confirm Trial Balance
39.   Employee YTD’s (Quarterly) – 940 & 941 for replication
40.   Open Check Lists/Deposits for replication and tie off
41.   Open / Pending Change Orders for replication and tie off
42.   Bank Balance as of Trial Balance (All) for tie off
43.   Bank Reconciliation (All) for replication in documentation and tie off
44.   Job Cost to Date for replication and tie off
45.   Budget’s for replication and tie off
46.   Pre-Live WIP Report for tie off

Go-live Services
47.   TRAINING for 3rd party estimating system import
48.   TRAINING for Payroll/HR
49.   TRAINING for Accounting/financial management
50.   TRAINING for pre-construction
51.   TRAINING for Job start up
52.   TRAINING for Purchasing & material management
53.   TRAINING for Job Costing
54.   TRAINING for Document Control
55.   TRAINING for Contracts & Subcontracts
56.   1st month end emergency data repair (time sensitive data repair which is needed with new ERP implementations)
57.   TRAINING for project management
58.   TRAINING for estimators (if required)
59.   TRAINING for field (if mobile apps required)

Post-Live Services
60.   Continued core function training
61.   Post-live punch list creation and resolution
62.   1st quarterly emergency data repair (time sensitive data repair which is needed with new ERP implementations)
63.   CPA checklist and sign off
64.   Post-live utilization assessment
65.   1st year end emergency data repair (time sensitive data repair which is needed with new ERP implementations)
66.   Itemize all custom reports and/or custom work, imports/exports, mappings and APIs required so client can negotiate the cost of ensuring all custom work is made compliant with ALL future software updates as updates often break customization, imports/exports, mappings and APIs.

How to Avoid Unfair Subscriptions in Construction Technology

By: Chad Pearson

I often think that being a former police officer and growing up in a police and military family has made me more sensitive to noticing predatorial behavior. An infallible truth you learn in police work is that wherever you find opportunity, you find honest people serving others, and dishonest people serving themselves (at the expense of others).

So that said, there is immense opportunity in construction technology and I’m noticing that underneath all the great people serving this opportunity, there is a dark predatorial trend of ‘unfair subscriptions’ we need to protect the industry from.

Unfair subscriptions have an imbalance of rights and obligations that can include a lack of transparency of total cost to onboard, misrepresentation of products and services and/or no reasonable options for cancellation without penalty.

Consider this;

Subscriptions were designed for instant value products such as magazines, Netflix or amazon, where subscribers enjoy value as soon as they subscribe. Subscriptions were not meant for complex software that requires labor intensive set up, has no guarantee of adoption and does not provide instant value.

People would never pay subscription fees to magazines, Netflix or amazon if the content, entertainment and distribution centers we’re not already launched and ready to deliver value upon subscription. In construction technology however, subscriptions fees ARE being charged for complex software BEFORE it is set up, configured or performing as sold.

How did unfair subscriptions become a trend?

It is likely that opportunistic investors behind the ConTech M&A explosion compelled some technology providers to apply simple subscription models to complex products in order to create predictable financial spreadsheets in an unpredictable industry.

This predatorial trend hurts the industry because it shifts 100% of the risk of adoption onto contractors as investors collect and project revenue with certainty, even if their products never deliver the value that it was intended to deliver.

Like the scales of justice, balance needs to be restored through fair terms and obligations.

Include the following 3 terms in your subscription agreement to help restore fairness;

1. Define what ‘go-live’ and defer subscription fees until the software is live. An example of how to define go-live for construction accounting software would be:

• AP payments are paid through software
• Payroll runs (and/or) Payroll service export is completed through software
• Client is posting to the GL
• Complete entry of historical AIA/progress billings details to enable accurate retention billing

If you are considering other technology, I recommend collaborating with your prospective technology partner to define go-live in a way that if fair.

2. Establish a fair cancellation policy without penalty.

3. Ensure technology partner provide detailed plans for adoption, including a complete list of tasks, commitments, milestones, skills and hours required. (NOTE that tasks, commitments, milestones etc. apply to both technology partner AND client)

Being aware of positive trends enables you to support them. Being aware of predatorial trends enables you to defeat them. Doing both enables you to help the industry evolve faster, more effectively and in the greatest way possible.

#buildTRUTH

Can remote work outperform teamwork?

By: Chad Pearson

Close proximity has been a defining attribute of elite teams, yet many organizations are adopting various levels of remote work. As traditional teamwork declines, remote work will take on an increasingly large role in performance.  The question we should ask ourselves is, can remote work outperform teamwork?

First, is proximity truly a defining attribute of teams?

Indulge me as I come off the rails a bit here. I’m going to share a story from law enforcement that seemingly has nothing to do with our business in subcontractor technology. This is not to draw a comparison between business and police work, but to bring attention to the fact that there is more information that is dependent on proximity than most believe.

Since I was 8 years old, I’ve had the privilege of being surrounded by some of the world’s highest performers in Olympic wrestling, professional mixed martial arts, elite law enforcement squads, military and business. Close proximity teamwork was always at the center of success and was largely taken for granted.

It wasn’t until I started working in law enforcement that I started to pay special attention to proxemics, which is the study of human use of space and the effects space has on behavior. I worked in a busy downtown division – an area of the city where it was common to walk into a room and have the hair on your neck stand up.  We were always told that those ‘spidey senses’ and ‘gut feelings’ did not qualify as evidence in court so I paid extra attention to human behavior in order to articulate evidence more effectively.

Consider the following;

I attended an address where a woman suffering from schizophrenia was standing at the top of a narrow staircase, wielding a chef’s knife at officers, screaming “You’re not taking my children”. Myself and 2 officers, Pina and Peter, went up the rear fire escape to a bedroom window and saw a child around 3-4 years old crying hysterically as a slightly older child comforted him while covering the crying child’s ears.

We could see the emotionally disturbed woman just outside the bedroom screaming down at the officers, so we quietly knocked on the window to get the children’s attention. The calm child opened the window, guided the 4-year-old into Pina’s arms and then crawled out the window himself into Peter’s arms.

I entered the apartment, snuck up behind the women, signaled officers, disarmed and restrained the woman without injury to her.

When I came back outside to let the children know their Mom was ok, the calmer child put both of his hands on my face and said “My mom needs help. Can you take her to the hospital?”.

Let’s dig in.  2 young children and 6 officers navigated this crisis entirely through behavioral cues.

• Not a single word was spoken. 

Furthermore, the calm child had clearly been conditioned to crisis. While unfortunate as that is, his ability to stay calm under pressure, recognize signals of trust and act on them prevented a serious escalation of violence as weapons were involved.

Without exaggeration, these types of VUCA scenarios (volatile, uncertain, complex, ambiguous) occur hourly, if not more in Toronto Police Service’s 14 division. Experiencing these scenarios on a daily basis, imprints just how much proximity influences communication and performance.

In fact, when you experience the immense impact proximity and behavioral cues have on people, you notice with great clarity just how much communication is lost when you do NOT share the same physical space.

More mainstream examples of proximity’s impact are seen in sport and business every day. Anyone who has been a champion or been on a championship team feels similar dependence on proximity and behavioral cues that police do in crisis resolution. And anyone who has brought people together in business during a crisis has also felt the impact of proximity.

While these examples require proximity, some business initiatives do not, so these are not intended to be equal comparisons. They are intended to show that MORE information is exchanged when people share the same space and that information has much greater impact on performance than many believe.

 Why is proximity so influential?

The MIT Human Dynamics Lab, run by Alex Pentland, studies group chemistry and connection. The lab’s research affirms what elite teams feel every day, which is the fact that our brains rely on signals and belonging cues such as eye contact, attention, body language and tonality in close proximity to let them know that it is safe to be with the group and that the group likely has a strong future together.

In short, our brains are designed to work in close proximity to others. For over 95% of the time our ancestors have been on this earth, we did not have language. Language is only around 200,000 years old yet the survival of our species in the 5-6 million years prior was dependent on behavioral cues and signaling.  When you consider our evolution over millions of years it is not surprising that our brains are incredibly effective at receiving cues and signals.

This connection from non-linguistic cues and signals creates a chemistry and team culture but it is entirely dependent on close physical proximity.

This is further supported by outstanding research by Daniel Coyle, author of the Culture Code, on some of the highest performing teams in the world. What was most interesting about Daniel’s research was the following list of core attributes that existed in all of the elite teams he studied;

• Close physical proximity
• A lot of eye contact
• A lot physical touching such as handshakes and hugs
• Ample short, energetic exchanges (no long speeches)
• High levels of mixing where everyone talks to everyone
• Few interruptions
• Lots of questions and intensive active listening
• Humor and laughter
• Attentive courtesies such as saying ‘thank you’ and opening doors for each other
• And finally, the teams had chemistry that was addictive.

Daniel’s list aligns with every elite team I have been a part of since I was 8 years old, especially the addictive chemistry. I can still remember the feeling of comradery which, at the time, I never wanted to end.

But wait…team proximity is on sharp decline!

COVID-19 response is creating a world that makes team proximity in business difficult.

But even without Covid, a recent Harvard Business review study showed 96% of employees want flexibility to work from home and to choose their own hours. This data aligns with our own data here at Plexxis Software Inc., where 94.7% of the applicants in 2018-2019 said they wanted flexible hours and work from home options.

At Plexxis, we work as a team, as closely as possible with COVID restrictions, and do not allow work from home, except in rare exigent circumstances. This approach comes at the high cost of limiting candidates to the 4% of people who prefer proximity but we pay that price in order to maintain elite team cohesion. We experience the benefits first hand and are often surprised at how fast and furious the world is moving away from proximity.

What is also surprising is that after Googling “attributes of high performing teams” and searching 14 pages deep, there was no mention of proximity as a core team attribute. Deeper research revealed that there are over 8,100 peer reviewed research papers on high performing teams, and still no emphasis on this most important attribute.

It feels like most of the world underestimates the value of proximity.

As the majority of the world moves towards remote work, we should anticipate a negative impact on physical and mental well being. So before we continue to answer our original question, I want to offer a simple tactic remote groups can add to their routines that will help mitigate the negative impact on mental health.

We hope you find this useful.

At Plexxis, we prioritize well being as it is a foundational requirement for elite performance and quality of life. We do this by paying attention to team members and looking for symptoms of stress, struggle and distraction.

Upon observation, we trigger conversations around stress, struggle and distraction and adjust professional development initiatives and course content accordingly. This enables us to identify problems before they cause irreparable damage to people and the mission.

This is simple when you share the same space and learn each other’s behaviors’ but if you are a part of a group that works remotely, you will likely not see symptoms of struggle until it’s too late. This means time needs to be set aside to normalizing conversations on well being in a pro-active manner.

Concern; People tend not to openly discuss their struggles unless leaders have built exceptional levels of safety and trust in the environment, which is rare, especially when groups work remotely.

Solution; Ask 3 simple questions that help identify symptoms of struggle, stress and distraction instead of asking invasive questions about causes, crisis and diagnoses.

These questions help you “see the unseen” so you can begin the important conversations around health.

• Do have any concerns around controlling you day/week?
• Do you feel there is anything at risk we can help with?
• Rank the level of focus (between 1, being low and 5 being high) you believe you’ll have for the day/week.

The answers to these questions open the door to conversations that help address and maintain good health before significant damage is done to employees and the mission.  Also, patterns may emerge that might expose a crisis, enabling leaders to become a ‘path to professionals’ who can help with issues outside of the leader’s skill set.

I personally use this tactic both at Plexxis and with the professional fighters I train.  In almost every case where a struggle is exposed, the struggle is mental, not physical. The candid discussions that follow normalize and de-stigmatize conversations around mental health and performance which truly help teammates become their best.

Even when you are an observant leader or teammate on a tight cohesive team, people can successfully hide symptoms if they feel the safety isn’t there.  For that reason alone, it is important to maintain this routine to normalize conversations so teammates feel they can be candid.

Back to answering our original question;

As most of the world is transitioning from transitional teams who share the same space to remote work, which is best done through “teaming”, it helps to define and understand the difference between the two.

An excellent book to read on teaming is; Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy, by author Amy C. Edmondson, a Professor of Leadership and Management at the Harvard Business School.

The difference between team and teaming can be summed up as; Team is a noun. An established group of people located in the same place, as a static entity, pursuing a common goal with stable boundaries, tasks and trust.

Teaming on the other hand is a verb. A dynamic activity of a group of people, who are not a bounded static entity, who come together to pursue a common goal.

Groups who do not share the same physical space, yet are pursuing common goals, can do so through remote teaming.

The question we should be asking then is; can remote work outperform teamwork?

No it can’t. We don’t believe teaming will ever outperform teams.

There is a small chance that technology may enable humans to connect and communicate as effectively as they do in close proximity but for now, remote teaming will require significant effort, ever-present leadership, sound strategy and effective tactics in order for groups to maintain high levels of performance and well-being.

Hold the door!!! What about companies with multiple branches and locations?

At Plexxis, we provide subcontractor specific technology to high performing subcontractors, many of which have multiple entities and locations. One thing we observed in over 20 years of complex technology adoption is that while high performing subcontractors with multiple locations share a common goal, each physical location has it’s own unique micro culture.

These high performing subcontractors have a strong macro culture, exceptional leadership, vision and a clear mission that keeps all locations and divisions aligned, yet each physical location still seems to develop it’s own micro culture within the macro umbrella.

It is not only fascinating to observe, but discovering those variances between locations is now a core milestone in our discovery process that helps us build the deployment plan for our software.

Regardless of whether you agree that proximity is better than remote teaming, I think we can all agree on one fact; How groups interact has significant influence on what they become.

3 behaviors top teams avoid to excel in struggle

By: Chad Pearson

The bad news is struggle will define the next 5 years.

The good news is those who excel in struggle will define the next 20 years.

Thankfully, top teams who consistently outperform competitors, regardless of the struggles they face, share one common thread we can all learn from in order to build teams that not only excel in struggle, but absolutely love it.

A little warning first. This is a long article so if you’re concerned about the next 5 years, set some time aside…If you have the time, we got the tips. Enjoy!

Here we go; Many teams use their collective wisdom and historical data to predict and plan but that’s not enough anymore. While past behavior has normally been a great predictor of future behavior, we now live in a VUCA world (Volatile, Uncertain, Complex, Ambiguous) where the future is unpredictable and how people interact is changing.

Past experience and metrics are becoming dangerously unreliable for predicting and planning for the future of our VUCA world.

Top teams who excel in struggle and constantly outperform others go beyond metrics and focus heavily on preventing price’s law from infecting their team.  Teams who prevent price’s law turn the struggle of VUCA scenarios into advantages instead of obstacles while taking immense pleasure in doing so.  Following their path may be the single most effective way to crush the next 5 years while becoming a defining force for the next 20.

What is price’s law? Price’s law is an imbalance of effort on the team that gets worse as groups get bigger.

The law itself says that “the square root of the total number of people in a group completes 50% of the work, while the rest of the group shares the remaining 50%”

For example:

• If there are 10 people in a group, approximately 3 people do 50% of the work and 7 share the remaining 50%.
• If there are 25 people in a group, approximately 5 people do 50% of the work and 20 share the remaining 50%.
• In a group of 100 people, approximately 10 people complete 50% of the work and 90 share the remaining 50%.

Any reasonable person would agree that price’s law exposes unfairness between those who invest their best effort, often referred to as ‘The Roots’ or ‘A Players’ versus those who invest just enough effort to get by.  Even though most would agree, few try to prevent it when it becomes visible.

How do top teams prevent price’s law?

Top teams who consistently outperform others, despite challenges, maintain an exclusive culture of performance and family-like chemistry that naturally protects them from price’s law in the same way strong families care for each other and protect each other from threats and harmful behaviors.

Our company, Plexxis, creates software for subcontractors. As subcontractors work in a VUCA industry, we have been hyper focused on maintaining a culture that prevents price’s law for over 20 years. Of the dozens of tactics we use at Plexxis, the MOST important for maintaining a strong culture that prevent price’s law is our ‘protect and serve’ mindset.

We serve the team by providing everything they need to succeed while protecting them from threats and 3 categories of harmful behaviors;

• Distracting
• Destructive
• Incompatible

As leaders protect and serve the team, teammates protect and serve each other by giving their best effort to make each day easier for everyone while supporting each other through bad days and protecting each other from bad habits.

Here’s a detailed breakdown of the 3 categories of behaviors we avoid in order to prevent price’s law and excel in struggle.

Category 1 of 3: Distracting behaviors

An exceptional experiment called ‘The Bad Apple Experiment’, by Will Felps from the University of South Wales identifies 3 distracting. (You can read about the experiment and how it ties to culture in; ‘The Culture Code: The Secrets of Highly Successful Groups, by Daniel Coyle).

Felps labels the behaviors as;

• The Jerk (aggressive and defiant)
• The Downer (has a tired depressive attitude)
• The Slacker (withholds effort)

While these 3 types of behaviors impact teams differently, Felps showed that all 3 categories of behaviors decreased the effectiveness of the groups by about 30%.

In short, when there’s a Jerk in the room, people don’t feel safe enough to open up, which harms the team and their outcomes.

When there’s a downer in the room who starts telling everyone how tired they are and show physical signs of defeat, such as hanging their head low, others in the room start behaving the same way and adopt the low energy attitude. In a relatively short period of time, others have their heads down and arms folded just like the downer.

When there’s a slacker in the room, the group quickly picks up on the vibe. They tend to get their work done faster but do half-assed jobs. What’s interesting is that they end up believing they are doing good work when in fact, it is not good work at all. They simply pick up on the bad attitude and their insufficient work ends up hurting the team.

Felp’s experiment also found that when strong teammates lead engagements, deflect negativity and keep others engaged, the harmful behavior was mitigated.

An important thing to recognize here is that attributes like intelligence, talent, experience and other abilities you find on resumes matter much less than people’s attitudes and interactions.  It is not what people do…it is how they interact that is most important.

When teammates are aware of distracting attitudes they bring into action, they can put effort into a healthier mindset that helps them be their best while maintaining an environment that helps others be their best.

Category 2 of 3: Destructive behaviors

Cutting these people from the team is usually an easy decision as they are so toxic to the team. The challenge with these people is when they are owners, family, friends or key talent such as CFOs, controllers or top salespeople.

In that scenario where the destructive behavior is from an owner, friend, family member or key talent, leaders can lack the courage to protect the team.  This lack of courage comes a great cost.

It may help those in this scenario to know that this scenario is the leader’s biggest opportunity to show the team how important they are. The single courageous act of cutting seemingly indispensable people who are toxic can reset an entire team on an incredible path.

There are many destructive behaviors, but we labelled 4 as the top behaviors needing swift decisive action in order to protect teammates;

• HENIs (Hoarder of Information, Emotional, Narcissistic, Impatient)
• LALAs (Low Attention, Low Absorption)
• Smiling Assassins
• Entitled

The HENI is that person who hoards information, is highly emotional, narcissistic and impatient. These behaviors by themselves are manageable, and at times can be found in any one of us, but together they are a destructive cancer that needs to be cut out from any team.

These are the types of people who need to control the world around them and are willing to make their teammates lives more difficult in order to maintain their own comfort.  They will consistently inconvenience others just so they can get what they want while refusing to learn about, and empathize with other perspectives.

The LALA is that person who willfully invests low attention to teammates and tasks and fails to stay in step with the team. They have a disregard for mission, self and team and tend to spend their time on things that have little to no value to anyone.

Every working hour that a teammate invests into ‘low attention and low absorption’ re-distributes workload onto other teammates while the lack of attention to detail often results in errors that require other teammates to repair later.

LALAs are not to be confused with neurodiversity.  Those with conditions such as ADHD or dyslexia do not choose to pay less attention while in action and when provided the right environment, they can be among the highest performing and most caring teammates.

LALAs choose to give their attention away to other things that result in harm to teammates, the mission and even their own heath.

Today’s biggest threat in relation to LALAs are online distractions. Social tech companies have invested trillions of dollars into creating ways of stealing people’s time and attention while influencing human behavior. Depending on the study you read, people are interrupted by their phones between 90-160 time per day. This is not healthy in any arena, let alone on a team, but it shows how powerful social tech tactics have become.

Social tech is so good at what they do that many people cannot even drive a car without checking their devices. So many people have fallen victim to social tech tactics that distracted driving laws had to be put in place in order to keep people alive.  Even car manufactures have started building lane automation to keep drivers in their lanes. (Let that sink in)

LALAs are extremely susceptible to social tech’s theft of time and attention. Just like distracted driving, an effective way to protect teammates from LALAs is to mandate and educate.

Mandates command a healthy use of devices and online content while education informs of the risks to mission, self and the team so teammates can make healthier decisions on their own.

Smiling assassins are those who are nice in front of you but gossip and undermine you in secrecy. While everyone deserves a chance to improve their behaviors, this type of behavior should be considered a one strike you’re out violation.

Entitled are those who believe oneself to be deserving of special accommodation. Entitled behavior is difficult to change but not impossible.  At Plexxis, we use a marco/micro empathy test to help make decisions on personal accommodations. When someone has a personal ‘micro’ request, we test to see if it fits and helps the team ‘macro’ mission. If the marco and micro fit, the accommodation is considered.

Category 3 of 3: Incompatible behaviors

These behaviors are extremely challenging to avoid in today’s environment as they can be great people who are among the most talented, highest skilled, have the deepest experience and exceptional demonstrated success….but they are incompatible with the attributes of top teams.

The 2 incompatible behaviors are;

• Lone producers
• Remote workers

Lone Producers are incredible performers who continuously outperform everyone else in their arena. They are the workaholics who never say die.  They almost always win. They are the top talent that recruiters dream of and that companies strive to hire as they are so good at what they do…but they are not team players.

Lone producers are exceptional by themselves, as entrepreneurs or as a part of organizations who have transactional models that can operate with open, flexible remote teaming environments.

Companies who depend on culture and tight cohesive teams, however, take a huge risk hiring lone producers.

Remote workers operate in isolation while culture is created in proximity.

This alone makes remote workers incompatible with teams who maintain a culture that prevents price’s law. The isolation and transactional nature of remote work is literally the exact opposite of the proximity and interactions at the core of top teams.

Even when the economy is comfortable and predictable, remote workers lower the effectiveness of communication, degrade culture and can even compound physical and mental health concerns as the benefits of group care and chemistry are removed. But in VUCA environments, these negative effects of isolation are exacerbated.

Why is proximity so influential?

The MIT Human Dynamics Lab, run by Alex Pentland, studies group chemistry and connection. The lab’s research affirms what top teams feel every day, that our brains rely on signals and belonging cues such as eye contact, attention, body language and tonality in close proximity to let them know that it is safe to be with the group and that the group likely has a strong future together.

In short, our brains are designed to work in close proximity to others.

For over 95% of the time our ancestors have been on this earth, we did not have language. Language is only around 200,000 years old yet the survival of our species in the 5-6 million years prior was dependent on behavioral cues and signaling. Our brains are incredibly effective at receiving cues and signals.

This connection from non-linguistic cues and signals creates a chemistry and a strong team culture but it is entirely dependent on close physical proximity.

This is further supported by outstanding research by Daniel Coyle, author of the Culture Code, on some of the highest performing teams in the world. What was most interesting was the following list of core attributes that existed in all teams.

• Close physical proximity
• A lot of eye contact
• A lot physical touching such as handshakes and hugs
• Ample short, energetic exchanges (no long speeches)
• High levels of mixing where everyone talks to everyone
• Few interruptions
• Lots of questions and intensive active listening
• Humor and laughter
• Attentive courtesies such as saying thank you and opening doors for each other
• And finally, the teams had chemistry that was addictive.

Our close proximity culture at Plexxis is core to our existence so we can validate, first hand, both the presence of these attributes above, and the intrinsic value they provide.

Those considering proximity in their strategy to prevent price’s law should know it comes at great cost.  A recent Harvard Business Review study showed that 96% of employees seek the flexibility and freedom of remote work. Embracing this type of culture can limit recruiting to the 4% of workers who enjoy proximity, team cohesion and struggle over flexibility, personal accommodation and comfort.

Our hiring process at Plexxis is designed around finding that 4% crazy misfits like us who enjoy our type of culture. It’s a huge price to pay but we gladly pay it as the benefits to the team, mission and personal well being far exceed cost.

As companies navigate the struggle of the next 5 years, the biggest challenge they face might not be the economy itself. It will likely be dealing with price’s law within their own group.

Those who embrace the path paved by the word’s top teams may not only define the next couple decades, but the lessons learned, relationships earned and stories in their journey will be defining factors in their lives.