Stop Crucial Mistakes from Destroying Your Construction Company.
Every month, your construction firm has the “coup de grâce” meeting to determine where projects stand, and where your billable hours and invoices sit to meet production targets. The regular meeting is a mad scramble between Executives, Project Managers, Foreman, and Accounting. The Office is tense and riddled with spreadsheets and binders filled with paperwork. Everyone in the company is thrown into a whirlwind to make certain decisions on project billing are made accurately. Research shows that fire drills and poor planning destroy morale and hinder company growth, so why continue the insanity.
The million dollar question is how do you shift from fire drill tactics into a more proactive “forward-thinking” team turning the meeting into a long-term asset? It’s a leadership mindset. The first step is to know already before the meeting where each active projects stands in your portfolio. However, this requires help by leveraging technology and modifying some of your processes. For the better, of course.
Below are five tips that will empower your employees and company to eliminate the fire drill meeting; become a more proactive business based on real-time information sharing and positioned to deliver greater profits from start to finish on each project.
1. Recognize where projects stand before the monthly meeting
Executives and managers need greater visibility as projects become larger and more complex. It’s nearly impossible to keep an eye on everything that’s going on, right? Right. Busy subcontractor firms during peak seasons cannot get into the weeds of every project. It’s also made worse if you’re using emails, excel spreadsheets, notepads, phone calls, etc. All of your important business and project information is siloed, disparate, and there not enough hours in the day to dig into the network to find crucial information.
However, today’s best project management and document control technology for subcontractors help management attain real-time daily visibility into projects. The data (workforce, labor, time and hours, materials) is entered from the field and office on mobile devices or laptops to keep projects progressing on target, and within budget. Corporate Management and Resource Reports allow executives and managers to quickly review “project to completion” data and make adjustments as needed – Daily, Weekly, and Monthly depending on the duration of your projects.
2. Identify Your Productivity Weaknesses
The big question to ask yourself is what are we doing to increase productivity and profitability for each project? Continual learning is essential, but you need an easy solution to collect data and feedback to make it manageable, and actionable. Subcontractors are not at their best as data analysts but need a system and supported processes that account for factors that highlight poor productivity and cost outcomes. Issues related to insufficient productivity include, but not limited to:
— Poor organization. Decision-making and procurement processes do not have the speed and scale required.
— Inadequate communication. Inconsistencies in reporting mean that general contractors, partners, suppliers, and owners do not have a shared understanding of how the project is faring at any given time.
— Flawed performance management. Unresolved issues stack up because of a lack of communication and accountability.
— Contractual/Proposal misunderstandings. The procurement team typically negotiates the contract, and this is almost always dense and complicated. When a problem comes up, project leaders or field foreman may not understand how to proceed. This confusion is many times passed to the field staff.
— Missed connections. There are different levels of planning, from high-end preparation to day-by-day programs. If the daily work, which is imperative for subcontractors, is not finished, schedulers (or the back office staff) need to know—but often don’t—so that they can update priorities in real time.
— Poor short-term planning. Subcontractors are good at understanding what needs to happen in the next two to three months but not nearly so much at grasping the next week or two. The result is that necessary equipment may not be in place.
— Insufficient risk management. Long-term risks get important consideration; the kinds that crop up on the job not nearly as much.
— Limited talent management. Subcontractors may defer to familiar people and teams rather than asking where they can find the best people for each job.
These problems are serious and shared. Understanding them and being committed to improving processes and willing to leverage new technology to remove obstacles is crucial to long-term success. Imagine injecting real-time decision making into your subcontractor business to increase productivity on each job.
3. Recognize actual utilization of employees
The third general area that needs attention is failing to understand the actual use of employees. Use relates to the billable or chargeable percentage of all time incurred by an employee. Even if you have the mentality that all time is billable, that still does not make it so. Every employee is going to have some time, such as training or vacations that need to be recaptured in their rate at a minimum.
4. Protect for Litigation
Document. Document. Document. But, not using paper that gets lost in the field and never makes it into your document control system. It doesn’t take much to get litigation started in the construction industry. Seemingly excessive subcontractor charges that are insufficiently un-documented. An obscure, but important, contract page that the client claims to have “missed.” Arguments over the physical condition of a project site. Subcontractors may well find themselves on either side of a legal dispute, which is why they should always be careful to have well-documented notes and daily reports in a consistent format that can be accessed by appropriate parties at any time.
Additionally, field notes and daily reports need photographic evidence as part of the document of record. Having a cloud-based document control and project management platform connected using mobile devices helps employees out in the field digitally document every important facet of the project, which is entered once – updated as needed.
5. Catch Small Issues before They Become Big Issues
Problem solving requires new approaches. Ongoing problems with a supplier or stakeholder. The strange green sludge oozing out of a hole at the edge of a site that’s getting a little more noticeable every day. Daily reporting from the jobsite creates a record that can be used to justify certain actions (like hiring additional equipment or ordering testing) to prevent problems such as this from developing into a big issue.
I hope these tips – much easier stated than implemented, help you recognize it’s time to be proactive in shifting your operational and technological priorities. Turning the monthly fire drill meeting into a dynamic priority session, because you’re already working with real-time data on a daily basis, will help you stop mistakes from destroying your construction company.
With the availability of cloud and mobile construction applications designed exclusively for subcontractors, there’s no better time to assess your firm’s performance and strive to improve. Subcontractor technology is easy to implement and adopt across your enterprise. Many subcontractors begin with one project, measure its success, and then expand its adoption and capabilities. The monthly fire drill meeting can be labeled a thing of the past by committing to a new and reachable performance standard.