Yoram Kraus, who founded SMS Project Management two decades ago, manages a company that builds dozens of projects a year, and in between finds time to climb the highest peaks around the globe. Kraus finds many similarities and parallel values between managing a company and setting up a project and mountaineering and conquering a summit. SMS Project Management, a company that specializes in planning, supervising, and executing real estate projects for the business and private sectors, was established by Kraus in 1998, and under its management has become one of the leading companies in Israel in the field. Yoram Kraus, a father of three, has over the years become one of the most sought-after professionals in the field and has built complex engineering projects for the Ministry of Defense, international high-tech companies, offices, residential buildings, technologically oriented projects such as data centers, clean rooms and laboratories and even marine piers.
Among your many occupations you are also a high-tech entrepreneur. Do you apply components from the high-tech world in SMS?
“Firstly, I have executed many technologically oriented projects, when you build offices for start-ups and you come from that world and understand the needs of the organization, you understand the needs of the entrepreneur, you know how to speak their language and tailor-build the office for them including all of its various units. I do not know of any other project management companies in the industry whose owners have worked in the high-tech and start-up fields. This familiarity with the entire system of work stages, with the way a high-tech company thinks and the prism through which it sees things and conducts itself, provides an immense advantage to us in managing schedules and budgets.”
“Another attribute of SMS is that many of our projects are Turn-key Projects, meaning they are delivered by us as a single unit. Clients usually are situated abroad, and they actually allow us to take command of the entire planning and execution mantle. This provides us with significant means of control, which in turn provides the customer with industrial quiet, defuncts their need to work with contractors, suppliers, and accounts, but rather only work with us, and we take care of the entire mantle for them. This is a unique process that has developed in recent years and we are one of the leading players in the country in this field. When you execute such a process for a company, you alleviate a lot of their headaches and are able to carry out the project very quickly as well as expedite the joint decision-making process.”
How did you get into the world of construction and project management?
“I was born in Kiriyat Bialik and attended the local “Ort” school. During my studies, I was often absent from school and engaged in extreme sports, running and surfing. On the days that I did in fact attended school, I studied civil engineering and had an amazing relationship with my teacher who always told me I was a wasted talent. 'It's nice that you run and surf, but you have to direct your skills towards the professional field, you have the potential to change the world', so she kept saying and she was right, since creating has always interested me. Building a building is like art to me, both the construction process and the end result, it is a creation and has incredible value for the people who live or work in it. You affect their lives and their environment, you change the skyline, you change the world. The same teacher convinced me to enroll in the Technion and indeed, immediately after graduating from high school, I was accepted to study civil engineering as a student-soldier. Following my military service, during which I served as an officer in an elite unit, I started working as a project manager for a large construction company in the North of Israel. After several years in the industry, I asked myself - why not do it by myself? I am talented in management, I know how to motivate people and I love doing this in every aspect, so I founded SMS Project Management, with the understanding that I bring significant value to the field.”
“In a relatively short time SMS has grown and evolved, I have carefully collected and selected a group of talented and quality people and I consider each of them a creative partner. Together we created an amazing company that started its activities in the center of the country and over the years we expanded the activities country-wide and abroad, including several cities in Europe. Building a company is an amazing thing. You build a tier and another tier, you gather good people around you and together you engage in achieving and creating, it is a fascinating and amazing experience.”
What are the management principles that guide you?
“You have to work systematically because that’s the only way to get results within the given timeframe and budget. First, you build a very clear set of values that will lead you to the goals you want to achieve. Such values are professionalism and commitment to the result and the customer and their interests because the customer is above all else. You must incorporate into the process a central motif of loyalty and understanding that will lead to a harmonious process and joint strides towards the final project. In addition to guiding values, you integrate innovation and technology into the process, because technology is ultimately based on people and the ability to form connections between them. All of these work within the service mantle and create an intimate connection with the customer and familiarity with their needs. The combination of these management principles and values, ultimately results in maximum execution with minimum expenditure of time and money.”
What are the characteristics of the work process in your opinion?
“Work processes must be defined and organized, this is a chain of processes that consists firstly of organizational evaluations superseding the project, then planning and synchronization of all systems, execution under constant control, and finally delivery of the project to the customer. All of these components are executed under strict scrutiny, examining, and streamlining each process on its own in the micro and the vision pertaining to the project as a whole in the macro. It is a matrix that works according to a mathematical, vertical and horizontal formula.”
“The vertical formula - you analyze and calculate the schedules, the proper management of the workforce, all of the foreseeable risks and scenarios, and the creation of strictly scrutinized processes along the way, both of the budget and of the schedules.”
“The horizontal formula - harmoniously controls the entire project from the beginning to the end and its goal is to maximize and streamline all stages of the work from the moment of planning until the delivery of the project to the client. Its purpose is to instill motivation to look for the weak links if any, then strengthen the process, tighten schedules, and cover all the details of the process. The combination of the two matrices produces an amazing system and management platform that synchronizes all the factors within a project: the developer, the architect, the contractors, the project manager and last but not least the professionals and suppliers. This is an in-depth perspective that allows you to properly manage the entire life cycle of the project throughout all its stages. This is how you adapt the construction process to the system of expectations around you: to the expectations of the developer, the architect, the contractors, suppliers, and everyone else involved. In this manner, the entire life cycle of the project is defined by truly clear characteristics and moreover, this is how the critical indicators for success are defined.”
“The SMS team, led by the project manager, takes care to manage the process according to three defined characteristics: Defining the value from the customer’s point of view, identifying the factors of wasted resources at all stages of the work process and eliminating them, as well as maintaining a flow that produces excellence throughout the work process by means of strict systems that constantly incorporate continuous improvements into such process. These are the values we impart, and the work processes we portray to the client when approaching each and every project.”
Among his many pursuits, Yoram Kraus manages to find time for the hobby closest to his heart - mountaineering. Kraus has been climbing mountains for nearly 20 years and has conquered peaks around the world, including the summit of Mount Kilimanjaro in Africa, Mount Elbrus in Europe, the summit of Mount McKinley in Alaska, Mount Aconcagua in Argentina and other peaks, in order to complete the 7 summits challenge, which is the “right of passage” route of mountain climbers around the world and includes 7 summits on 7 continents. In addition, Yoram Kraus loves marathon running, motorcycle riding and kite surfing.
In what way is project management similar to mountaineering and extreme sports?
“I was once asked if there is a disconnect between my personal life and my professional life. The answer according to my worldview is that there is no difference. Work is a part of life, when you turn work into a kind of pleasure and it fits you into life, you can go far. When I climb a mountain according to principles that bring me to the top, then descend and return to work and incorporate the same principles from the mountain into the company I run, I realize that the same values, such as determination and perseverance, adaptability, and creativity, all exist in the two complexes, which blend into one singular unit. In both extreme sports and project management, if you are not adaptable, determined, persistent and creative, you will not overcome difficulties and you will not reach the top of the mountain or, alternatively, you will not finish the project.”
What sets SMS apart from other companies?
“The thing that sets us apart as a company is our perception that the client is at the top of the pyramid. First and foremost, we always take care of our client's interests, while ensuring that all of the project's components are implemented to their satisfaction. We have the ability to know how to speak with the client and set them on the right track, because they always see things from a different point of view. We study the way in which the client envisions the project, and, in that way, we plan the construction process up to the end of the project.”
“The client is the entity that guides us, and we are the professional entity that knows how to get them going, like dancing tango. We engraved in our hearts that the client and service are above all, and even if the client calls in the middle of the night and brings up an idea or just wants someone to listen, then we will listen and speak and work together. The client invests millions of dollars in the project and we need to know how to route these funds while making sure it is under budget control. Thus, it is extremely important that they trust us and really feel comfortable during the conjoint process.”
Is there a difference between constructing a project for the Ministry of Defense, an international company, or a private entrepreneur?
“Every client orders a project which is different in its essence, whether it is the Ministry of Defense, an international company or a private entrepreneur, and inside these verticals, each client is an entity for itself, but they all have budget controlling systems that manages each and every dime that is spent, and the thing they all have in common is that eventually you are dealing with a person who has a unique and intrigued personality. Whether it is the Ministry of Defense's project manager or that of an international company, or a private entrepreneur, at the end of the day, in each segment you are facing a person, that wants an efficient system, one that holds up to schedule, that operates its budget control in the right way, knows where to save funds, that manages correctly and provides them with the best service possible. As I mentioned, the client is always at the top of the pyramid.”
What is the difference between constructing project in Israel and constructing Abroad?
“Usually, the planning processes in Israel and abroad are the same, it is the pace of execution of projects that makes the difference, the pace of life in Israel is faster than in most places in the world. In many cases, the clients in Israel demanded immediate results, and not once we had to face a situation of planning while executing a project. As time passes you can see the change and most of the clients in Israel now understand the importance of pre-planning as opposed to planning during the execution stage, due to the simple reason that it just costs more. It is an important message that we convey as of the first few meetings with the client. Plan properly – and you will save a lot of money, and receive a clear, fast, and well-defined execution process.”
“In the sense of the span of control, the world has changed from edge to edge during the recent years, in the past, I had to fly to Europe once a week in order to be in direct touch with the project manager and the client, to ensure that the process is being carried out properly and at the pace we have set. Our management is strict, we are extremely meticulous with the processes and we manage the project from a close range and in the most tightly manner possible. Today it is really easy to manage a project from afar with the help of the technological developments in the field of video conference and other additional tools that are available and more efficient than ever. With that said, one of the most important values in the company is the ability to delegate and trust your team, trust your project manager, in the same exact way in which I trust the climbing team that stands beside me on the mountain. You have to trust the person you are with and that he will rely on you. It is a mutual process of two persons, not a one-sided thing, but a dialog. And so, when a foreman does abroad on your behalf, you know you can trust them and let them manage the project, and the client quickly learns to trust them and the company as well, and then the process is carried out in perfect harmony and synergy.”
What types of projects do you build and manage?
“We mainly work with international companies in Israel and abroad, amongst others, we worked with Google, Mellanox, Sentinel Lab, SAP, HOT, Phoenix Insurance and Bezeq Communication. In addition, we deal with projects in the residential field for preservation for private entrepreneurs, managing processes in Jaffa port, luxury villas in Kefar Shemaryahu and Hertzeliya Pituah, and more. We touched a wide and diverse range of clients. The beauty is that at the end of the day you are managing the same process. If you know how to keep a very clear methodology, the set of values and the set of work processes are correct and understood, you can build amazing projects and manage the process correctly for any type of client with their own different background. For example, in the not-too distant past we built piers for civilian and security entities and the question arises, what does underwater work look like building a building or setting up a huge and technologically complex data center for a high-tech company? So, of course such projects are not the same and in underwater work the range of risk is greater and the unexpected factors greatly outweigh the expected, but in the end the set of work processes remains the same.”
Tell us about some projects in the high-tech field.
“We established the first offices and Google Development Center in Israel. All communications with Google were conducted in front of a customer I had never met physically, solely through phone calls. The process was “remote controlled” and the client wanted to set up amazing offices in the spirit of the company and they demanded as such here and now. Google provided a set of instructions to the talented architect Ram Goldberg and we built the project together, all while communication with the client amounted to phone calls and weekly emails, and we managed to create a trust system leading to a work process that was swift and successful and the result - amazing. We created beautiful and tailored offices for the brand and what it represents under the strict guidelines of Google and their rules, exactly according to the visual and technical language that characterizes the company's offices around the world.”
One of the areas in which Yoram Kraus and SMS project management specialize in is the construction of data centers for international and Israeli companies. These are sensitive projects that combine high-standard construction capabilities and various technological components such as data communication systems, storage systems, backup systems for power supply, satellite connections, fiber optics, environmental control and various security devices.
“Building a data center is a unique and fascinating process, suddenly you discover a system that is completely different from residential construction, for example. Here, the requirements are completely technical, the decision-making process is managed by a technical team and not by an architect, the processes themselves are very technical and it is of utmost importance to run the data center on the designated date, seeing as every day that it is operational is worth a lot of money to the company. The process is completely technological and touches on the components of power supply, communication systems, complex infrastructure and security systems, all of which come together in order to operate in sequence and provide the end customer with a response around the clock. As a project manager, you meet with very diverse layers of professionals from different disciplines and design and technological processes, our job is to combine them into one singular unit and it is an amazing process to me.”
“We built a huge project for 'Hot' in the company's complex in Yakum, an amazing project that includes the construction of the command and control system (NOC) and the telephone and office systems in a very large area spread over tens of thousands of square meters. We have also built projects of this type for other companies such as Sentinel Lab, Bank Hapoalim, Phoenix, Nespresso and other small and large companies. What's great about this relationship with the client is that you evolve with them, you build them the infrastructure that allows them to grow and then they return to you to seeking to integrate you in other projects.”
What are the possible points of friction in project management?
“There are almost always points of friction. Wherever there is money and schedules there are points of friction. Setting up a project is a very complex process. A client comes, sits with an architect and project manager, and imagines the end result. The architect needs to translate and express the client's request with the help of a drawing, and here we enter unto the picture and begin to see the functionality of these processes. This is a sensitive point and there can always be friction between the three factors. You need to synchronize this system and rotate the gears of this machine in order turn it into a singular entity. Then comes the issue of the budget. Sometimes the architect reflects a process whose actual value is more expensive than the client's planned initial budget and we need to bridge between them. Here we are required to be able to integrate into the process tools from the world of negotiations and even mediation and psychology, and the smart move is to integrate and move things forward to an amazing result within the given framework.”
Describe the feeling at the end of a project.
“When you finish a project, whether it is an office or a residential project, you always feel immense satisfaction. When it comes to offices, it's amazing to see the dozens of people working in the office, moving in the space you created as part of an organic body, a living entity. It is amazing to see the positive energy flowing into it and becoming an integral part of a creation that you have brought to life. It amazes me time and time again. In residences, you see the customer enter the building you built and go about their life, their daily routine and it is an experience in itself. It lives and breathes, it is far beyond bricks and steel. Even in mountaineering, a mountain is not really still, it is alive, it is moving, it is always changing and always fascinating. The weather on the way to the summit is constantly changing, the condition of the snow, glaciers and the climbing path, all of which are in constant motion. The mountain is an organism and every time you meet it in a different configuration, a different 'mood', the mountain is alive. In both project management and mountaineering the goal is to conquer the summit. It's the same experience. In mountaineering you conquer a summit and in project management you work with the client and hand in hand climb together and conquer the summit and together create immense value. It's fascinating to me, and the satisfaction is enormous.”
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