CEO's Blog

The first group is bigger and lazier. Representatives of this group succeed in the ability to simulate work. Unfortunately, they don’t understand that they are alive because of the second group. Guys who are smart and energized find the ways to automate businesses. It is kind of remedy from bureaucracy. They also don’t argue with the first group and don’t try to educate them. The second group simply finds new ways of eliminating the infinitely created prohibitions, norms and regulations. While passive guys from the first group discover new bypasses, energized guys from the second one has time to move the whole world, including lazy guys from the first group, to new level. While the second group exists, we can be sure that there will be development of the immunity against stupidity and inactivity.  The second group has invented the crypto-currency because of the unaccountable financial situation of the first group. Now the first group thinks how to block the new way for enterprising (energetic) businessmen.

Today we observe the new electronic system of the business automation, which serves as immune system against unprofessional bureaucracy.  It is not easy to get to the same level as the guys from the second group. If you slow down a little bit, you can easily get to the first one. 

Let’s talk about the educated and interesting candidates. There are some problems with them as well. For instance, most of time when they start projects, this type of candidates totally forgets about three main criteria. They forget to be specific, intelligible and accurate. The absence of these characteristics almost sets their education to zero level.

That is why, besides their education and experience, it is very important for me to test candidates through the above-mentioned parameters.

Some candidates are taught to be specific, intelligible and accurate by their parents. Unfortunately, the colleges and schools don’t teach it. There are two ways to obtain these significant characteristics. Either it is gained reflexively because of the systematic intelligent overload; or the candidates get to the TOK Company where they are taught to be specific, intelligible and accurate at the same time. When I talk about the first option, I particularly mean the overload. Candidate won’t be able to find the rational operating mode and make the working process organized without three main criteria. I want to say that the ability to structure processes is the derivation from the above-mentioned parameters.

Here are my descriptions of three characteristics.

Specifics –laconically stated information with numbers; that describes theme, or contains the essence of subject or problem. 

There is no conclusion regarding advantages and disadvantages of these characteristics. There is no emotional description as well. There is no opinion about the quality of the subject information. There are only numbers and the essence of question, in case if numbers can’t describe everything.

Intelligibility –consistent presentation of information that is grammatically and stylistically correct. There is a need to divide information by topics (bullet points) or by the paragraphs.

The main goal and task of intelligibility is to present information that is understandable and clear for listener.

The main criterion of intelligibility is the capability of being understood by the listener.

Accuracy is the capability of keeping promises, completing plans, and repaying debts on time.  It is important to reply to emails or phone messages, answer the phone, or call back to the opponent.

It is also significant to choose the date of the project completion and, of course, to complete projects or tasks on time.

If you are unable to finish the task on time, it is important to let others know about it and choose the new date of the project completion.

The situation, when you don’t let others know about being late for the project, is not acceptable.

You can’t cancel assignment that you have received from director; even it is not relevant any longer. All the tasks and assignments, including its cancellations, have to be discussed with director. 

I had a period of my life when I thought that the inability to navigate in disorder was my feature.  Time has shown that a lot of people have the same issue. The difference is that some contractors understand the problem, and some don’t. In my opinion the person, who is comfortable with the mess, doesn’t leave a chance for himself to analyze the working process properly. Unfortunately, a lot of people are fine with the mess at the construction sites, apartments, or cars. It seems that the majority has grown up in the chicken coops.

I have to explain to the employees that it is very important to be organized at the construction sites and keep the places clean and neat. Sometimes it is even more significant than the quality and the deadlines. To be honest, neither quality, nor time can happen without observing the systematic order. My employees and I have the meetings about this topic. I try to drive into their minds that the order at the work place shows their professionalism. If I sit in my employees’ cars, I only need five seconds to understand how their apartments look like. It is very difficult task to make the employees to be organized at the construction sites.

The long process of evolution has made a man from a monkey. Can you imagine how long will it take to transfer from a pig to a human being? Neither the meetings, nor the penalties, nor the fines, nor even the threats will help to change people around.  I have to remind my employees that if they work for TOK Company they need to be organized and professional.  

We don’t understand how those contractors make the estimation without any measurements, drawings, and calculations.

However, most of them lose the control during the workflow. When it comes to the production, it becomes clear that those contractors make a lot of mistakes, including the price, which they have given to the client. Most of the time the price is lower than it is supposed to be. That is why they win the tenders. Furthermore, the contactors don’t have the detailed estimations and it is easier for them to tell the customers about the additional work. The work that is not included in the specified price. Sometimes they get lucky and receive all the money they ask for. Sometimes there is a conflict between the contractors and the clients.

The second one is the right way to make the estimation. It includes:

- measurements

- defect log

- project

- estimation

We see the customers who are not interested in the detailed estimation right the way. We also know that some clients only look at the final price. So we don’t work with them, because they get along with theabove-mentioned contractors with the lower prices. The result is guaranteed, actually the absence of the result is guaranteed.

IKEA had its own peculiarity. When we compared IKEA with other shopping malls, we saw that the whole system and each sector had been organized.  First of all, the management department was very professional. Second, IKEA’s administration was highly responsible in all levels; its staff took care of the General Contractor and created a favorable atmosphere for him. It really helped to complete the project on time. There were no problems with the payments. Our company was focused on production. We avoided the problems that we used to have in other malls. 

I couldn’t understand how big companies were able to survive and get the same profit as I did. They offered the same prices, had more expenses and responsibilities.

Then I realized that I was very tired of working all the time. I decided to hire the employees and gave them some responsibilities. When I gave the work to the staff, I told myself that I would have less money, but more free time. However, my salary didn’t reduce after I had hired the employees.

I was upset that it took me so long to understand how important to have the staff. I got the chance to look for the new opportunities. It released me from the routine, helped me to deal with the development strategy for the company. This conception allowed me to focus on the intellectual activity, not on the fuss. We created the Department of Operations and Technical Systems, the Department of Design and Architecture. My employees and I were able to create the system that worked well, but not perfect. We did the detailed analysis of our company to find out what was missed. Moreover, our goal was to reduce the losses and have the maximum efficiency.

Lately we created the Department of Analytics. It was necessary to have this department because we wanted to be sure that everything was under control. In advance, I was convinced that the Department of Analytics should be the main sector of the company. 

Our company tried our best to explain the customer that it was just impossible to build the “Labyrinth” project for suchlow price. The project could be completed only if the contractor invested his own money. We couldn’t convince the client. Two and half months later, our company was finishing the renovations of the above-mentioned project. The previous contractor didn’t meet the deadline, quality, and the documentary agreements of the “Labyrinth” project. The employees who worked for that contractor didn’t receive their salaries.

The workers were left without anything. It looked like they were the ones who paid the amount of money that the previous contractor missed. 

When the customer wants our company to build a house, we understand whether this person gets the construction experience for the first time, or he already has some background. If the client makes the renovation for the first time, he usually talks only about the shell of the house. What is it? The shell is only 20 percent from the entire construction.

Here is the whole picture:

1. Architectural steps of the residential house:

a) Drawings of the Front Elevation

b) Sectional Drawings

c) 3-D Visualization of the Facade

d) Basic Layout of the Floors

2. Reinforced Concrete Structures:

a) Foundation Structure

3. Design Project:

a) Plans with Furniture Arrangement

b) Ceiling Architecture

c) Finishing Texture of the Floors

d) Wall Sketches with the Indication of Finish Textures

e) Pluming Equipment Blueprint

f) Heating Floor Plan

g) Lighting Fixtures Plan

h) Receptacles and Switches Plan

i) Fireplace Plan

j) Kitchen Floor Plan

k) Finishing Schedule

l) List of Materials

4. 3-D Interior Visualization

5. Engineering Systems:

a) Pluming and Sewerage

b) Heating System with Boiler Room

c) Ventilation and Air Conditioning

d) Internet Cable

e) Security Alarm System

f) Main Switch Box

g) Sewage Facility

6. Landscape Design:

a) Plan of the Lot with the Buildings

b) Topographic Elevation on the Plan

c) Zones of the Lot, Path Routs

d) Plants Selection

e) Fence

It is very difficult to start the project without all the above-mentioned details. However, it is easy to make the mistakesduring the actual construction.

First of all, an experienced client asks questions about the design and the possibility of General Contractor agreement.

If the company doesn’t finish the work on time, the overhead expenses will increase:

1. Salaries to the managers: the project manager and the site engineer.

2. Salaries for the office managers assigned to the project (monitoring of the suppliers, purchase of the materials)

3. Delivery costs

4. Supplies

5. etc.

That is why, the irresponsible companies cut the salaries to the employees or purchase cheap materials, when they don’t meet the deadlines. It is very disappointing that people have to pay their own money in order to complete the projects on time. It happens when the leaders of the companies are not qualified and don’t know how to organize the work properly. Those leaders cheat on the clients, employees, etc. This is widespread case.  Our company pays salaries on time and meets the promised deadlines. This is a main reason why people want to get a job with us even our salaries half less than other contractors offer.

We always criticized the contractors who strongly adhered to the consistent cycle of performing the types of work. On one side, they were correct, but most of them were always late for the deadlines. Our company believedthat some of the activities could be performed at the same time, if the high quality remained. But everything had a limit. For example, it was impossible to make the interior design without havingthe roof. Our company still didn’t know even the work had been done. We described the situation when we didn’t have the roof till the end of the construction.  A snow, rain and frosty wind came through the concrete ceiling, whichhad many technological passengers. However, it wasbetter than a single technological passage with an area of 3500 sq. mi. It was colder on the site than outside because of the concrete around us. It remindedthe movie “How the Steel Was Tempered” by Pavka Korchagin. The hero of the movie was a guy who was sick, had no coat, hat, or boots on. Heheld an iron scrap and continued working. This was exactly the same situation.

The reports about the work reminded the letters from the battlefield. A lot of employees, including the site engineer and the project manager, got sick during the renovation of this project because of the conditions at the site.

Unfortunately, our company was late for the deadline. Itincreased from three to six months. One of the contractorsrefused to go to Moscow. Ihad promised him to have a better title after he came back. To be honest, I was exaggerating. Iunderstood what kind of experience my employee had gained. It was difficult to describe what kind of professional worker our company had.

Finally, we discovered that the interior design could be completed without the roof. It was just the question of the price… price of the workers’ health. It was very complicated to transfer the loss of the health into a monetary equivalent in our country. Most of the clients had high expectations; they didn’t really care about the workers when the project was almost over.

1. Estimate

2. Schedule of work to be performed

3. Financing schedule

4. Delivery schedule of missing solutions and finishing materials

5. Contract

If the client gets to the last bullet point with the particular contractor, he will start the project with him. The professional companies usually offer similar prices.  However, those prices aren’t very high. Basically, every contractor gets the minimum profit.  It is very complicated to find the client who agrees to the price that is higher than the medium market price.

When the client chooses the contractor whom he wants to work with, the main criteria is the estimated price of the project. This is the reality. Most of the clients don’t really care about how professional your company is, how many reviews you have, or how long your company is in the construction business. The customer usually looks for the lower price.

When the client chooses the lower price, he needs to be sure that it is the real lowest price. The final price is usually formed from different criteria such as the list of work and the materials for the project. Each potential applicant makes his own list of the types of work.  For example, the task for the architectural section is to calculate the estimate for the construction of the “shell” of the future house. One contractor understands the “shell” as only the foundation, the walls, and the roof. The other one will include the windows, insulation, entrance doors, and facade cladding. The most professional contractor has more detailed project that includes the blind area, the drainage ring, embeds for water, cable, sewage pipe, and the technique of installing the windows. For instance, if the house is made of the bricks, the windows will be installed into the gap between the bearing walls and the cladding.  He also estimates the installation of ventilation shafts and their lining under the roof.

Of course, it is more difficult to win the tender for the third contractor. His estimated price is higher than other two contractors offer.  As mentioned before, most clients don’t want to get into the details. They don’t compare the set of components. The customers look at the final price.

Finally, there are some recommendations for the clients. Please compare the prices for certain types of work, rather than the final price. Our company’s experience shows that the client who doesn’t look at the details of the contract has more chances to choose unqualified contractor. These contractors don’t show their phenomenal talent to work below the market price. They have no experience to make a proper estimation. 

Here is what you usually do:

You give the companies the technical task for the construction of your future house, or the renovation of your apartment, or the decoration of your restaurant, business center, etc. You hope to receive back a detailed estimation. Most likely only one company out of several is able to make the estimation properly. Others don’t bother themselves to consider the project details or simply don’t know how to make the estimation. How can you trust such contractor to build your house, if he doesn’t calculate the price of the construction properly?

Please choose the estimation of the company that has made it scrupulously. Send it to the other applicants. If they don’t know how to calculate it properly, at least they will be able to make the final document look better and nicer.

We hope you understand that only the professional company or the freelance contractor can estimate the project correctly and properly. Actually few people know how to do it. Most of the contractors give one final price or the price for 1sq.ft. Their price turns out to fifty percent more because they haven’t included all the necessary work.

Please don’t miss the opportunity to test applicants by the main criteria. It is the proper estimation!

 According to the plan, this Kidsburg is supposed to be opened on December 10^th of this year. The president of Russia Vladimir Putin is expected to be at the opening ceremony.  It shows how important the kid’s life is. Kidsburg in Moscow is a very significant project for our company. This is a new stage in the development for us. It is also the first project of such format that we do “on a turn-key basis”.  We also make the equipment, decoration, buy and assemble the furniture. However,the opening ceremony has been cancelled and rescheduled. According to the official documents, the whole Detskiy Mir store is going to be renovated by February 20^th of the next year. I don’t think it is possible to complete the whole renovation for such a short period of time. It is very disappointing for our company because we will have more expenses. Our Kidsburg’s client will alsoget less profit.  According to the plan, the kid’s city is supposed to welcome the visitors for the New Year Holidays. These days are the most profitable in the entertainment industry. Kidsburg belongs to the entertainment sector. Our company is very sorry, but nothing depends on us in this situation.

Our company is also finishing two more Kidsburgs in St. Petersburg and Rostov-on-Don. We are currently negotiating our participation in the creation of Kidsburg in Voronezh. We hope to sign the contract in the beginning of December.  One of the problems here is that Kidsburg has to be completed by March 1^st. It means that we have only 2,5 months to finish the project. Even with this tight schedule we guarantee that we will meet the deadline and the project will be qualitative.

We clearly explained to him that it was impossible. However, his wife expected a baby in 1.5 months. He dreamed to bring a newborn to the new apartment. If we finished the repairs earlier, our customer would pay us 25 percent extra.We weren’t sure that we could complete his request within such a short period of time. We decided to try.  It was hard to describe how was it. It reminded us a nightmare! We worked nonstop. There were 35 workers in the apartment. Could you imagine 35 people in 1400 sq.ft apartment? This is one person per 40 sq.ft.

We got lucky that our client’s wife didn’t deliver the baby earlier. We were able to complete the renovation on time. One day two cars arrived to the front door. One car brought the parents and the newborn. The bathtub was in the second one. We told our customer that it would be better if the bathtub got to the apartment before the newborn. There were four workers holding a bathtub followed by the parents with the baby.

Our customer was satisfied with the renovation although the quality of the repairs wasn’t perfect due to the short period of time.  As promised, he paid us 25 percent extra.

Since then we promised ourselves not to participate in such “crazy” projects; however, we didn’t keep it. We had a lot of 24/7 orders for one reason or another. 

Our office staff was able to coordinate the specialists who came and fixed both the pole and the power line within 2.5 hours.  It was nice when the solution of force majeure and planned situations came up so quickly.  However, it was frustrating that this solution cost us forty thousand rubles of unexpected expenses during 2.5 hours. 

During the process, our client decided to change the project.  He wanted us to make the insulation with the Penoplex material instead of the mineral wool (he listened to some guy). We tried to explain to him that Penoplex boards, despite the lower thermal conductivity, could change its size depending on the temperature. There could be cracks along the joints. The customer didn’t want to change his decision. Then I added a clause to the contract changing the warranty policy. I necessarily guaranteed cracks on the facade.

Two weeks later, the customer called the contactor and complained about the cracks on the facade. The client was embarrassed to contact me.

At least, we fulfilled our warranty obligations regarding this clause.

Our customers whom we have built two Kidsburg sites know us very well. We have conducted a maximum preparation for their project. When the preparation of the project is completed, our company is told that our estimated price is too high to afford.

I have been working for this project for the whole month, and haven’t participated in any other assignments. It is very disappointing that I have wasted so much time! However, sometimes it happens… It is always possible that there are some General Contractors who offer cheaper estimates. Unfortunately, there is one for the project, called “Skazkin Dom”. It is an assignment that we have wanted to participate in as nowhere else. 

Our company paid the salaries almost every day.  In a month the workers started trusting us and recommending more builders. The temporary workers worked well for 1.5 months.

I strongly recommended to my colleagues to have their own employees when they had orders in remote locations. Our electricians worked at that project that is why that part of work went particularly smoothly.

Everybody was satisfied. Our client was extremely happy to start working earlier, including the New Year’s holidays that were the most profitable days. Our company was glad to finish the project before the deadline. 

Our colleagues didn’t believe us when we told them that we had built the whole complex for 3.5 months. However, the General Contractor agreement was signed on May 20^th; by that time we didn’t have any project for any of the above-mentionedbuildings. It took us about 2 weeks to make the project for this object. During this time KolyaYass designed the Russian sauna and house buildings for us. In the middle of June, our client let us know that his birthday was on September 16^th and the guests were already invited to the hunting grounds. It called “Get it done or die”.

Attention here, please! All buildings were built on September 15^th. The furniture, interior design, and the necessary equipment were settled and completed by the same date. The curtains were hung on and the slippers were bought.

Honestly, it was almost impossible to complete this project on time. The schedule was crazy and completely booked during those days. We had to pay our attention to all the details. We always explained our customers how significant to have a project in advance. It helped to reduce the timeframe for it and made the work smooth.

When we started this project, we expected to have the finance problems and some misunderstanding with the General Contractor. However, we were absolutely not ready to havethe problems with the staff.  Our company didn’t have any reasons to have this issue. Unfortunately, this problem with our working staff was the main one. In the beginning of the crises our staff was waiting for it to be over soon; but when the year passed and the crisis remained, everybody left to Belarus, Ukraine and Tajikistan. The paradox was that we didn’t have both the orders and the staff.

In the result, our company decided to pay the salaries almost every day, so we hoped, it would help us to keep the staff. We had people from all CIS-countries working for us; it was a crazy rotation. It was such a mess!

Luckily, we had Mr. Arthur Mhoyan who was very professional human and resource manager. He knew how many works we needed. Finally, we completed the project on time. 

If we didn’t meet the deadline, there would be 20 percent less profit for our company according to the contract. In addition, our company would have to pay the rent and utilities for these premises for the period of delay. Moreover, if we were delay, we would have to pay for the rented apartment, including the utilities.

We didn’t have any competitors at this tender. No one decided to participate in such crazy project.

It was a summer time when we started. We didn’t have a lot ofworkers. However, we had young and enthusiastic helpers. They were about 23-24 years old then.  We finished the project with their help on time.

Those guys still work for our company. Today they are the managers of some projects.

Mr. Durov’s social network “VKontakte” is located on the territory that we have built.