The Job Ready - IT theme is currently under development. Subscribe to our Job Ready communications to be notified when updates are available.
The Job Ready - Collaboration theme is currently under development. Subscribe to our Job Ready communications to be notified when updates are available.
The Job Ready - Risk Mitigation theme is currently under development. Subscribe to our Job Ready communications to be notified when updates are available.
Construction executives have to deal with a lot of issues in their day-to-day schedules, which can often lead to some common pitfalls that can affect their businesses. These errors can often occur when firms become larger and continue to grow. Failing to keep the construction supply chain under control can often lead to a wealth of troubles down the road. Below is a list of common leadership flaws provided by Inc. magazine that executives at construction firms should work to avoid when looking to expand their businesses.
Fear of Change
When construction executives are ready to grow their firms, they can't be scared to research new processes that can make their firms more efficient. Innovations such as construction accounting software can help keep track of their budget for each project, while the use of smartphones and tablets gives all members of the workforce greater visibility into project information. In order to learn ways a company can change, construction executives can ask their staff about what types of things the firm can do to improve upon its processes. By trusting employees, it shows construction executives see their staff as more than just a cog in the machine.
Failure to define a company culture
Employees want to feel as though they are part of something big and their firm will continue to grow to become a leader within the industry, Inc. points out. Part of achieving this goal is to build a company culture that starts in the management sector. Executives at construction firms need to define what values are most important to the business and what their expectations are for their entire staff. By spreading this information throughout the entire workplace, construction executives will see improved leadership and more unity within the entire organization.
An unclear identity
Building a company from the ground up is often a difficult venture in any industry, the magazine notes. However, when construction executives have their organizations running, they must figure out what they want their businesses to look like when it is completely established. Knowing their limitations and what projects they will be able to take on speaks a lot about how well construction executives understand their businesses. Part of growing as a leader means having a clear understanding of what the company does best.
Here are five steps to conduct a visibility audit:
Analyze your current situation
Based on your goals, look at your past performance and where you are today. If you want to increase profits, for example, identify the projects which have the best contribution margins. What patterns and anomalies stand out? Does job location affect your profits? Or is it the type of work that makes a difference? Could it be a particular project manager’s jobs that are dragging down your overall margin?
Once you have completed your analysis, establish benchmarks related to your current performance and how you compare to other construction firms. Several contractors I know establish competitive benchmarks through regular contact with peer groups. Others use benchmarking information supplied by organizations such as the Construction Financial Management Association, which provides a Benchmarking Builder CD Tool.
Consider “Big Data”
I’ve just described today’s world of benchmarking. In tomorrow’s world, benchmarking will revolve around “big data,” the massive amounts of information – text, audio, video, photography – that companies generate each day. Cloud technology will help to quickly aggregate and analyze big data across multiple construction-related companies who opt into sharing information such as wage and materials pricing or productivity metrics.
Set your KPIs
Based on your business goals and benchmarks, define key performance indicators (KPIs), such as RFI cycle time, and the time frame you should look at each metric. How often you track a KPI depends on how often the data changes and how quickly you can make course corrections.
Put processes in place
Once you’ve identified what you want to monitor, make sure your processes can deliver your data. For example, if you don’t currently update your estimates with change orders, you can add that to your workflow to get a truer picture of your estimate-to-actual cost variance.
Do you currently conduct a visibility audit? How do you make sure you have the right data to make the best decisions for your company?