Eventually, every construction company finds itself running into a wall. Work is coming in, the crew is busy, and yet the numbers at the end of the month don’t reflect any growth. That’s when companies decide to hire more people, thinking that bringing on another superintendent or a project manager would resolve the issue.
Interestingly, the problem is not always about a lack of people, but a lack of systems, alignment, and structure within the existing team. Here are some ways to correct the issue without adding a single person to payroll.
Close the Gaps Between Estimating, the Field, and the Office
A major contributor to losses is the transition process between phases. Estimates are done one way, jobs are completed another way, and invoices are generated based on the data collected. The missing link in the process reduces the profit margin at every turn.
The fix is to define a shared language and process for how information is communicated from estimates through the field to the accounting department. This would also involve preliminary planning sessions where the estimator takes the superintendent through the estimating process, as well as daily or weekly reports that correspond directly to cost codes.
This is where an experienced construction keynote speaker can help. A construction keynote speaker is an authority in their field who speaks at business forums, company events, and conferences to help construction teams identify operational blind spots that contribute to margin loss. Their job is to address any gaps between the estimates, operations, and accounting processes, which in turn helps prevent any leaks between project phases.
Build a Culture Where Standards Matter
Many construction companies fall victim to a common situation: they feel accountable and have high-quality standards when the boss or another executive is present, but these standards tend to drop when the person is no longer around. This is not an issue about people, but about culture, which influences profitability in a negative way.
The introduction of an accountability system into the company’s culture involves defining the standard, documenting it, and training staff to hold it, regardless of whether anyone is watching. This begins with establishing standards within the crew. All employees must be aware of how the world is supposed to be done before initiating steps in the process. Remember, when crews own the standard, less rework, shorter timelines, and better profits follow.
Introduce Repetitive Documented Processes
Many construction companies operate primarily on tribal knowledge. Tasks get accomplished through some individuals knowing how to go about them. The problem is that knowledge lives in their heads, so when an individual falls ill, switches jobs, or quits, things grind to a halt, or mistakes occur that affect profitability.
A documented procedure can solve this issue. The process could be a one-page checklist, a video that explains the process in just under a minute, or a two-minute set of instructions stored somewhere online. The idea is to have a scalable system that enables any qualified team member to perform specific tasks without consulting the owner or the senior team member.
Endnote
Profitability in the construction industry is not all about winning contracts or recruiting better employees. This is achieved by improving efficiency within the existing workforce, and it all begins by addressing the systems that manage the process.
