Honesty is the Best Policy

Oasis Construction

“Five months into the global crisis, people said to me that if we could survive then, we could survive in any market. If you set yourself up properly someone will give you a start. Someone gave us that start and we have gone great guns from there.”

He admits there were difficult moments – in retrospect he wonders if it was such a good idea to launch an ambitious construction business at the same time as marriage and imminent parenthood. “That first year was jam-packed with things happening, not to mention trying to get a business up and running. It was quite hectic,” he comments with some suggestion of understatement. “If I was doing it again, I don’t think I would organise to do all those things at the same time, but once we had started there was no going back – we just had to make it work.”

Starting from home, with his wife helping, Michael has already grown the business to the point where it has outgrown two smaller offices and is about to move to new premises that will accommodate a growing staff which is about to be augmented by two more additions. “We are extremely busy at the moment,” he shares. “So we must be doing something right.”

As with so many younger and more progressive builders around Australia, what Oasis is doing right is not so much building better bricks and mortar but building better ties to customers. This business is all about relationships, says Michael – building and maintaining good relations with customers, contractors, architects and partners in industry. He had considerable previous management experience of the industry and had seen firsthand how poor relationships and inadequate people-handling skills were hampering business for many companies operating in his region – southeast Queensland (Oasis is based just outside Brisbane at Mango Hill with the impending move taking the business to Brendale). So it was a top priority for him and his young team to establish this new company as something a bit different and with a forward-thinking approach to customer relations.

The company does not specialise, although it enjoys the heritage building sector, but in essence will not turn away any viable project. One recent project involved a half-million-dollar refit of the offices of ThomsonAdsett, a leading architectural practice, which Michael admits was a somewhat daunting prospect. At the end of last year he decided to start up a facilities maintenance division, making the company capable of doing anything from changing a light bulb to executing an $8 million dollar project. “It is an investment in time but it’s not a loss leader,” he says. “You do enough small jobs for a client and build the relationship and one day they may come and ask you to do their bigger project.”

Two words that strike the reader of Oasis’ website are ‘honesty’ and ‘integrity’. People tend to think of builders in a negative way, says Michael, as someone who will stitch them up and walk away leaving defects or twist arms for variations every few days. “I think honesty and integrity are wanting in the industry and we are trying to bring some of it back in,” he explains. The old-school approach to the construction business was “very confrontational. But we are not old school. We are new school and that is about relationships, which rely on honesty, integrity and transparency.”

The market around southeast Queensland has hardly been any brighter than in the rest of Australia in the last couple of years. “I don’t think the market is any better here than anywhere else. Everyone talks in Queensland, as they do in Western Australia, about the mining boom, but unless you are in major engineering or have a large company, you don’t get to see that work.” Oasis has seen the size of individual projects getting smaller “because there are fewer projects of the size we prefer.” Michael would like the $6 or $7 million projects (wouldn’t we all) “and that is what we are aiming for, and we have done $2.5 million projects, but we haven’t seen one of those come through our estimating department for some time. We get squeezed toward smaller projects and larger builders are coming into the space to compete for the smaller projects.”

It’s almost a fact of life that the construction industry becomes even more adversarial in its nature in tough times. So how does Michael square the circle and retain his honest and transparent approach without confrontation? “It is more adversarial between the subcontractor and the builder, because the former is reducing his rates so far in trying to win a job,” he explains. Having gone in so low, they then try to recoup costs and margin by resorting to variations and other practices which just encourage confrontation. “So it is important to build relationships with your suppliers, build trust and honesty and be fair and equitable with them.”

Michael has no doubts: “Poor documentation has been the bane of the industry throughout the last 20 years.” It is the basic underlying cause of the alarming number of variations and, he says, “that’s why builders get a bad name.” Often, he says, “The builder bears the brunt of criticism from clients about escalating costs because they don’t recognise that the supply chain supplying to the builder has their hand out for anything and everything in an effort to recover costs. These costs often must be passed on to the client. The client doesn’t see that the root cause is that the documentation is often poorly prepared. “The whole supply chain is stepping down, being reduced to the lowest common denominator,” and as in anything, you only get what you pay for. In a difficult market, “unfortunately it is becoming harder to rely on those relationships because often clients are only interested in the dollar.” Too often, instead of investing in quality (of documentation and execution), a client will take the lowest bid and then get angry when the extras start rolling in. Sometimes a client can be his own worst enemy because not enough of them take the trouble to really closely examine what they are buying.

Oasis really does try to do things differently. “We work on a ‘no surprises’ basis. You can’t avoid variations in an open tender – there will more often than not be additional costs. But it’s all about how you present that fact to a client. Talk about it, make sure they are aware and can make their own commercial decisions about how they want to proceed.” Michael cites a case of a current client with a story of a project completed by a different builder, an apartment block, on completion of which the client was hit with a variation of $400,000 as a parting surprise. “That is not transparency or openness. It’s hiding an issue until the last minute.”

Michael does not hide his ambition to spread Oasis beyond southeast Queensland. He wants at some stage to move interstate and has some staff members who would like Oasis to become international – Michael, interestingly, mentions Vietnam as a potentially lucrative emerging market which could emerge within the next five to ten years. But, he says, “first we must ensure that the Brisbane office is well settled in and secure and that we have a good level of funds behind us in the bank.”

He points out that Oasis has never had to borrow. “We built this company without finance; there is no bank involvement, we have managed it with our own funding which I believe gives us a strength other companies don’t have. I would not want to see us go interstate and then get stretched financially.”

Probably bearing in mind those difficult initial steps four years ago, Michael admits he would want to see a significantly improved global financial situation before making such bold new moves. In the meantime, Oasis Construction (Aust) will continue building on the strong foundations – so to speak – of trust, integrity, and accountability.

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July 16, 2020, 11:16 AM AEST