I am not an actuary or a statistician, but my guess is that overall morale in our industry is quite low.  Employees who once worried about climbing the ladder of responsibility now feel that they are fortunate to have a rung to hold onto.  Business owners fear making payroll.  Production managers who used to fear they wouldn’t get all of the work on the board completed and on time may now struggle to keep people busy.  Even if your company is maintaining performance metrics, the evening news is filled with down notes.

I often discuss corporate culture in this blog and the vast impact that a sound culture has on a company’s bottom line.  If employees “buy in” to the program that the company promotes, everyone benefits.  Folks get to work on time.  Jobs can be finished quicker.  Pride in ownership displays itself.  But I believe a part of this equation is employee morale.  This is a tough time for all of us, and many construction business owners who are struggling to fill job boards and make payroll don’t have much sympathy for staff.  But your staff, even if they aren’t directly feeling the heat from reduced hours, pay or benefits may still be struggling.

I recall a time in my life when interesting projects that involved the use of my seldomly used timber framing tools was all that was needed to keep me motivated.  Working on many of the house museums in Savannah, GA, also helped me get excited to work each day.  But then marriage and family came, and my focus changed with their arrival.  Setting a timber truss wasn’t the only thing I needed to stay motivated.  I needed other things - job security, insurance and a check each week.  Our staffs are feeling these same pressures coupled with a deep uneasy feeling that something in our economy just isn’t right.  They may not be able to address it in scientific terms, but they know that something just isn’t right.

Now is not the time to withdraw to the daily struggles of the corner office and wall yourself off from staff.  To the contrary, now is the time to interact with them, and get a solid feeling of your construction company’s working pulse.  Meet with carpenters, team leads, superintendents and project managers. Most of all, communicate to your employees every bit of information that you are willing to divulge.  Empowering staffs with information won’t make them cut and run – instead, it will help them to better understand fundamental economics that are impacting their career and employer.  Ignoring questions of staff morale will surely lower it.

The gulf oil spill has given those of us in the construction industry a valuable lesson.  My guess is that if I took a straw poll of contractors, 99% of them would submit that they never cut a corner to reduce costs and speed up a project.  While the vast majority of them would be telling the pollster the truth, I would estimate that quite a few would be lying to both the poll taker and themselves.

I am certainly no expert in prospecting for oil, drilling wells or collecting crude.  In fact, I know very little on the subject.  But I do understand intimately well the pressures that we all face to keep our projects on time, on budget, faithful to the drawings and specifications and accident free.  Most of the time these goals are mutually inclusive and fit hand in hand with one another.  Sometimes, though –extraordinary time or financial pressure exists to subordinate one of these fundamental goals to the others. 

Don’t do it.

One of the great things about our industry is that much of what we are supposed to do is scoped out, drawn and specified for us beforehand.  The better the bid package, the less confusion and opportunity to skimp on details exists.  While this may sound like an advertisement for the American Institute of Architects, make no mistake that many important details are left out and remain up to the general contractor to faithfully execute.  Most of these issues have industry standards as a guide, but again some are open to interpretation.  When we sign a contract, our companies are given the fundamental trust by our clients to faithfully execute the bid documents and to perform all phases of the project to or above industry standards.

What the gulf oil crisis teaches us is that no time constraints or financial pressures are great enough to cause us to not perform our work to acceptable standards.  Checks and balances must remain in place at all times and not ignored.  Warnings from subcontractors must not go unnoticed.  Problems cannot be simply buried under stories of earthen backfill, hidden behind a layer of ½” drywall or sunk below a mile of ocean water.  These checks and balances exist to mitigate future damage or, especially sad in this case, eliminate the loss of life and property and the destruction of precious ecosystems.

Ours is an inherently dangerous endeavor.  Powerful equipment, falls, etc. are all part of our chosen profession.  Entire industries have sprung up to help make construction less dangerous and safer for our employees and clients.  By making our projects safer, we save lives and property and build our reputation.  But no industry exists to check and double check each and every phase of our work.  That alone is up to us and our project teams.  Each person must be empowered to have input.  Each issue must be addressed.  And above all, we cannot allow any of our fundamental goals to exclude the others.  Doing so may cost us a bit more at the time, but the cost of skimping on quality and not constructing to  or beyond acceptable industry standards will be paid for generations.  

At the end of the day, we have a solemn duty to do what is right, not just what we can get by with.  The scary thing is I understand where the pressure comes from.  We are all under it nearly every day.  I can put myself in the position of the project manager who is told it “should be good enough” by a subcontractor and struggles to balance costs, time and safety.  Some instances in life are the kick in the mouth we need to avoid complacency and acceptance of anything less than our best.  The photos of shrimp boats skimming for oil rather than shrimp is an image that should convince us that “sort of ok” is just not good enough. 

As an industry, we simply cannot tolerate “good enough” or assume that problems, once buried, won’t have catastrophic consequences down the road.

I have to travel often for work, so I am a frequent flier on a large carrier located here in Atlanta.  I am fairly comfortable with the service they offer.  I feel that the airplane is airworthy and relatively clean; the crew is well trained; the staff members are reasonably courteous.  Aside from the baggage fees  that I don’t use because I  carry on luggage only and the fares that continually inch upward, I don’t feel that I have too much to complain about.

The other day I was in Dallas and flew on Southwest airlines for the first time.  I wasn’t too crazy about the method of boarding, but was pleasantly surprised by how efficient the boarding process was. The gate agents were courteous and the flight service crew seemed comfortable and excited to be at work.  The over-riding theme of the day for me was “Happy”.  Everyone associated with that flight in a Southwest uniform projected happiness and a fun atmosphere shrouded in excellent professional etiquette.  The standard FAA required pre-flight briefing was fun and even, dare I say, entertaining.  I didn’t feel cheated because it wasn’t delivered in a dour monotone.  I didn’t feel less safe because the attendant made a few wisecracks in the middle of it.  In fact, for the first time in a long time, I actually listened to the briefing!

The culture at Southwest has been written about ad nauseum.  Staff are empowered, executives are humble and focused; flight crews are excited to be at work; customer service agents seem to actually like serving customers.  How did they do it?  How did they create this culture that can only breed self fulfilling prosperity?  What can we do at our own organizations to make life more tolerable for our employees who then project that image to our clients?

Culture change doesn’t happen over night.  It doesn’t happen in a month, either.  Culture modification is a profession in and of itself.  But in our construction organizations, I feel it doesn’t have to be.  As we continue to step through the worst economic downturn in decades, take a moment to analyze the culture of your firm.  Are the employees genuinely happy to be there?  Do they have a stake in the outcome of your organization aside from the proverbial pay check?  Are they empowered to offer ideas, point out problems and own the solution?  The first step to modifying culture is defining what you want your culture to be.  Too often we allow someone else to define who we are rather than defining our own companies.   Too often culture shifts from one crew to the next without displaying a focused message.  Too often we retain the rotten eggs with the understanding that all the eggs must be rotten, so let’s just stick with those  we currently  have.  Are your jobsites clean and well marked?  Do your superintendents own the project that they lead or simply act as a conduit to someone else?  Is every member of your staff asked to bring ideas and solutions to the table, or told to sit tight and watch the pros work?

Culture may be the one item that can’t be quantified in any legitimate manner, yet has an enormous impact on your company and client service.  Not all service companies can project fun in their marketplace like Southwest does.  But that doesn’t mean that we don’t define our culture and surround ourselves with staff and managers that support that effort.  A little bit of effort at making your company a rewarding place to work will pay off in spades in customer relations.  One short flight on an airline made all the difference in the world to me.  I will now actively pursue that company to pay my travel dollars to when the situation arises when I can use them.  Imagine that each interaction with a potential client does the same for your business. 

How do you want to be perceived?  As the company that is just going through the motions, however rote they may be, or the company that is focused like a laser on projecting the best customer experience possible from initial contact to signed punchlist?  As a customer, we may go back to the former out of necessity and convenience, but we patronize the latter out of choice.  The difference is subtle when written in words, monumental in scope.

The other day I had an early flight out of Atlanta and was sitting in my car about to reverse out of the garage. As a bit of an admitted geek, my radio was tuned to an am morning news radio station. For some odd reason, the local Atlanta channels don’t tune in real well within a mile or so radius of my home. We live in a rolling area and I have pretty much attributed this problem to physical geography. I fiddled with the dial and turned it up a notch to 760, which came in loud and clear. My point? AM 760 is WJR radio from Detroit!

Physics and radio technology aside (of which I know about zero), I was pretty happy to be presented with the opportunity to listen to WJR radio for about 3 miles of the trip to the airport. Don’t ask me how this was physically possible, I don’t know. Maybe someone can help me with that. But this radio station defined the “Center of Influence” that was Detroit during my youth. The sports teams of my youth came to life on that station. I still remember Ernie Harwell with his immaculately sweet southern lilt bantering about a Kirk Gibson home run, a Trammell to Whitaker to Evans double play or a Jack Morris fastball.  I remember hearing the play by play of Stevie Yzerman carrying his team yet one more time to the Stanley Cup playoffs; Barry Sanders twisting, turning and juking his way to superstardom; or Isaiah Thomas and Joe Dumars teaming for an NBA championship.  The sound of WJR was always on in the background of my family’s home spilling the local and national news of the day.

I was born in the City of Detroit. I was raised a couple of hours north of there in Michigan’s rural thumb. The thumb is, socially if not physically, light years away from the big city, but Detroit was our center of cultural influence. The Detroit that springs to mental image to many folks now-a-days (abandoned, high unemployment, crime ridden) is not the Detroit I was born into and remember. Detroit was an international city that built automobiles and trucks for the entire globe. The Detroit automakers were the envy of the developed world thanks to an innovation by Henry Ford that brought the automobile to the masses and gave rise to high wage manufacturing work. Immigrants spilled into Detroit for manufacturing work and opportunity, creating small burgs and hamlets that resembled their homelands but melded into American culture and society – in fact, helped to shape our culture and society.

This trip down memory lane does have a point. Detroit was the manufacturing capital of the world for a number of decades. Not just the Big 3 car companies themselves, but the suppliers, engineers, designers and product developers that sprang up to compete for and build components and sub-components for the automakers. Much of the economy of the area I grew up in reveled in the status of being the world’s great manufacturing giant. We became complacent with the status quo. We grew up with the expectation that additional education was a nice but not necessary accomplishment because one could earn a solid middle class living in the factories. In fact, the financial paradigm was tilted towards manufacturing work!  One could earn more money in the factories than many positions requiring college degrees. I never did work in a factory personally, but my siblings and many of my family, friends and neighbors did indeed choose that route. It is simply what one did. As a state and as business leaders, we grew complacent with success and status and failed to innovate. It is difficult to innovate when you have no one to emulate – and we did not. We scoffed at the “junk” imports that foreigners tried to make and introduce into the global market. For the most part, those initial attempts by foreign auto companies deserved some skepticism. They were not very good. We chuckled under our breath and went about building the best cars in the world. Since trucks and high powered muscle cars were the most profitable segment of the auto industry, most of the product development and marketing dollars went into them. The small car was best left for the “foreigners” to build. Who in their right mind would buy a small, shabby car from a foreign auto company? Why buy a glorified golf cart when you could listen to and feel the rumble of a 396 Super Sport Chevelle? The world must be mad to even consider such a thing.

But as history would show us, the world can be made mad very quickly.  Any great business or product can be rendered obsolete by forces outside of their immediate sphere of influence. The oil embargo of the 1970’s was the initial shock that sent our version of the world, and the fortunes of my home state, careening on a difficult path. Unbalanced trade laws, archaic labor rules and outsourcing are providing the final few notes of “Taps” to an industry and keeping the state in turmoil. We have not yet recovered, although by most appearances at least two of the companies have a good shot at becoming profitable again – although incredibly smaller and leaner versions of themselves.

The foreign auto companies, not wanting to compete head to head with muscle cars and trucks, developed small, fuel efficient cars from the get go. They looked to our automakers and emulated what worked and, more importantly, learned from what did not. They were hungry for success, yearning to gain market share in an arena dominated by huge national conglomerates. They were crazy for even attempting to do so. They failed, sometimes miserably, at first. They were small and nimble organizations that focused on efficiency way before Process Engineering became the consultancy de jour. They kept working, adapting, fine-tuning their development and engineering processes until that day when external forces beyond their control (the Oil embargo and fuel rationing) suddenly made their products a viable and desirable product for the consumer.

The trap was set, by no one in particular other than the hand of fate. Detroit would spend the next 30-40 years playing catch up in a game that they mastered in a market that they created. The masters had been overtaken by the student. I know it is easy to see with the benefit of hindsight, but no one (or at least a very few in my home state) saw this coming. The fortunes of Michigan would be forever changed the day that OPEC stopped shipping us oil in October of 1973 in response to the U.S. supporting Israel in the Yom Kippur war. The 20% interest rate cycle of the late 1970’s added even more fuel to the economic situation – but the city and domestic auto industry was already metaphorically burning. I think the same parallel on a broader scale can be seen in our peculiar relationship with Communist China. They are learning what we do well and are improving on what they can in several industries – not just manufacturing.

What is the lesson in all of this? Events that are unforeseeable often play enormous impacts on our fortunes. In a blink, what seems like common sense is lost to a new reality. If organizations do not remain nimble, agile and capable of rapid market corrections, those that are capable of those qualities will dominate the new industry. To those that are managing successful companies now – understand that your competition is studying how you do things and are learning to do it even better than you. They are seeing where you market, how you develop your products and services and the efficiency with which you convey them to your clients or customers. They are scouting what you do well and what they can improve upon. They are preparing to compete with you, in a market you may dominate currently, with improved versions of your own processes! And, if another of those unforeseen events occurs, (think cash crunch, credit markets freezing, etc.) these outsiders will be in a position to become the hunted rather than the hunter.

Even the best organizations with a large market penetration must constantly re-imagine, re-tool and re-think their processes and methods of engagement and be prepared to react when the unforeseen occurs. How many builders and developers were laughed at when they did not hold huge notes on land positions a few years ago? How many were scorned for not loading up on overhead and debt – even though debt was thought to be the magic carpet to affluence and overhead was code speak for “Positioning for future growth – because we will grow forever and ever, amen”? Those organizations that have been at the forefront of energy efficiencies and emerging technologies now hold the upper hand. Where does your company fit into this equation? Are you reacting to the marketplace or are you proactively defining your place in a new one? Discerning the difference between the two isn’t easy – but failing to do so has many negative consequences.

To wrap up – always, always remember and keep it as your organizations guiding influence – the competition is agile, smart, efficient, capable, proactive, always learning from you and hungry. You must behave like the competition – even in markets you may currently dominate.

The quest for efficiency from our supply chains is important to any business.  In an industry like ours, where our supply chain consists not only of raw materials but of finished goods and labor, our suppliers and subs present as much of a public face of our organizations as our own employees do.  “Squeezing” them for every last dime just doesn’t cut it.  Threatening to fire them unless they reduce their fees isn’t a magic solution, either.  Instead of fighting a losing battle with our suppliers, lets partner with them and get their feedback on where they think efficiencies may be found.  It may sound like an irrational statement, but oftentimes, getting more efficiency out of our supply chain has nothing to do with the suppliers and subs themselves, but how we and our staff manage these relationships and our projects.

Many of us have been there before.  The client dawdles in making selections on unspecified items (Terrible inefficiencies – thus wasted dollars – exist in allowances.  Eliminate them whenever and wherever possible).  They choose an ornate Italian stone that must be steamed over on the next ship, which may take six weeks.   In the interim, the quarry union went on strike.  Another two week delay occurs.  We can’t finish our custom bath tile.  Without tile, we can’t trim out the plumbing.  Without trimmed out plumbing, we can’t complete the project and final bill.  The plumber wants his payment, the tile setter is getting out of whack with his schedule.  The client wants the crew out of their home.  Anger ensues and a great project can easily turn to mush.  Sure, we will ultimately get the project done and the final bill will be sent and paid, but we are floating the project with our company’s money until we get it wrapped up and bills in and accounted for.  I don’t know about you, but I would much rather use client funds to float the project, not my company’s.  Cash flow is paramount.

While it is easy to blame the client and the supplier for this mess, we aren’t paid to lay the blame at someone else’s feet.  Clients don’t pay us to be finger pointers. Believe it or not, construction is not a production business.  It is a customer service business with a production component.  Our suppliers and subs, like it or not, are part and parcel of the public face of our organizations.  Choose them wisely, and not based solely on price.  Look at them as a critical component of your business, not the enemy.  While the example above is not the fault of any supplier, but the choice and delay in selections, it does not matter one bit to a client.  Let’s work with our suppliers and subs at the onset of a project.  Work hard up front to find areas that will cause problems down the road.  Selections are always a project delayer and game changer.  Your subs should be able to compile a list of items that are often found on punchlists or tend to be longer lead items, like the example above.

In this environment we are all trying to do the same or more with less.  This includes your subs.  Browbeating them now will not produce the intended result.  It will only drive a good sub away the moment they have enough backlog.  The only way this efficiency equation works is if we get more efficient in managing our projects, staff and supply chain.  Don’t expect everyone else to have all the answers, but, rather, work with them and gain their particular knowledge.  Small efficiencies can add up to big dollars.  We can’t manage a successful company unless we manage our supply chain as efficiently as possible.

I am about to put the finishing touches on a porch I have been building for my family.  A rather unremarkable job for the most part, until I set down to thinkin’ about it.

Part of the process that I steer all of my potential clients to is an attempt to assign each lead a number that corresponds to a stage in the sales/execution process.  (1-5)

1. Website feeler or call for information (cold lead)
2. Potential for developing relationship (warm lead)
3. Pursuit in Progress (prelim scope of work/design ideas)
4. Proposal
5. Client

But what struck me as I was sanding and spit polishing our new gathering place last weekend was just how different the project seems from an owner’s perspective.  We didn’t want to start with anything more than a rough design, because it is fun to tinker, modify, change and adapt as we go.  My wife (our CFO) wanted a firm price before we tore the old one off (without a design! Sound familiar?)  I wanted to know how many of my summer weekends this porch that I hadn’t designed yet or planned would take. (Familiar to anyone?)  In essence, my wife and I were the worst possible clients!   

It made me realize just how important the process of lead to client navigation is.  I preach over and over that we cannot give anything more than an absolute ballpark guess of cost (and I try to stay away from anything other than a # to see if we aren’t even in the same orbit)  until after Phase 3 is complete.  We can’t begin to know what something will cost or how long it will take until we have a rough scope of work and at least a preliminary concept design, which then pushes us into phase 4.  But yet, on my own porch, with my own precious time and my own precious resources, I became the worst possible client.  I wanted to know everything possible without going through steps 1-4.  It suddently dawned on me on why my clients are often like this.

When we commit to a project, we know the end will justify the means.  But so often, our clients don’t enjoy the means of getting there.  This is the area that I strive to excel in for my customers.  We have developed a simplified process not only for tracking lead to client – but for tracking earthwork to punchlist.  We strive to make the means enjoyable by setting out a plan that gets them to the justification at the end of the project.  We work diligently, almost religiously, on tracking costs and avoiding missing steps in our process.  I did none of this on my own project at my own home.  Part of it is because I didn’t want to make the effort.  Part of it is, as sick as it sounds, building things is not only my livelihood but my hobby.  I didn’t want to make my hobby seem like work.  In so doing, we bumbled the cost to complete.  We missed the estimated completion time.  Our design looked nothing like what we started out with, because we started with hardly an idea.  Sure we are happy with the end result.  But is cost 1/3 more than I thought and took 3 weekends of work longer than I estimated.

Our clients want to behave in this manner, too.  They have a vision and immediately want to send out invitations for the housewarming party while the addition is nothing more than a sketch or two on a sheet of paper.  It is our job as professionals to guide them in the steps of building, the “Order of Things” as I like to call them.  Betraying this order causes a curse to be put on our projects in terms of time and dollars and ultimately client retention and good word of mouth.  The “Order of Things” is darn near the ten commandments in my company.  But, oddly enough, not for my own project.  I betrayed my own commandment of thou shalt not betray the Order.  I like this phrase so much I want to write a book about it someday.

I often marvelled at how some folks that hire us haven’t a concept of the difficulties and pitfalls in renovation and construction.  It is our job to develop a process, stick to it and not sacrifice it for the sake of expediency.   If we do, years of tinkering with process go out the window, and goodwill often goes with it.  Don’t become your own worst enemy – develop your process and stick with it.  The efficiencies gained when you can say “Client X is a 3 right now” and everyone knows exactly what that means is important for laying the foundation that our reputations are built upon.  I didn’t follow my own plan, but I learned something valuable – how my client thinks the moment that they call some one to design or renovate their home.  How much will it cost?  When will it be done?  When can you start?  I am sorry, Mr. or Mrs. client – the answers to all of these questions can’t be determined until you are at least a 4!!!

Maintaining a high-level of jobsite productivity is one of the most important activities for any foreman, superintendent, or project manager. The first step to increasing—and maintaining—jobsite productivity levels is to understand what all the fuss is about.

When production rates drop, a project can lose money. Without proper documentation, these losses cannot be recovered. Worse yet, if production rates are left at a lower level, and a company adjusts their estimating to match their production rates, the company will become uncompetitive in the marketplace.

On the other side of the coin, if production rates are monitored closely, and improved upon constantly, then the company will gain a competitive advantage in the market, and any impacts will be seen immediately, when they can be dealt with. Many factors affecting productivity are well within our control, but many more factors are generally out of our control.

Here, we’re going to explore what productivity is and how it is measured.

What is Productivity?

Quite simply, productivity is a measure of how much of something is produced for a given amount of resources.

Productivity is related to job costing, but is typically more detailed in that it captures both the quantity of installation AND costs for a specific period of time.

Job costing systems typically capture costs at such a “big picture” level that it is impossible to get accurate production numbers out of them.

Job costing systems also typically run a minimum of one week behind, so by the time you could get any useful productivity information out of them—it is likely too late.

How Productivity is Measured

Productivity is expressed as a ratio between units produced or installed and
resources used.

A very simple calculation example is a trenching operation where production could be expressed in feet per day. Typically one of the numbers, either resources or units, is set to “1,” and that is typically expressed as the second part of the equation, as in the different examples below:

• 310 Feet Per Day

• $4.62 Per Foot

• 32 Fixtures Per Day

• 0.25 Hours Per Fixture

• $12.76 Per Fixture

The following table shows some typical Units and Resources used in productivity measurements:

PRODUCTION UNITS	RESOURCES
• Each • Linear Feet • Square Feet • Cubic Feet • Cubic Yards • Tons	• Schedule – Weeks, Days, Hours • Manpower – Hours, Crew Days • Equipment – Weeks, Days, Hours • Cost – Total, Variable

Production Rates at Extreme Detail

A great example of production rates are the labor units used in the bidding of construction projects. These rates have been determined through very detailed cost accounting on a variety of construction projects.

There are several companies that assemble this type of cost data. Some are industry specific such as NECA (www.necanet.org), while others hit the broad construction market such as RS Means (www.rsmeans.com).

While this level of detail is required for accurate bidding, it is impractical to track job costs or production in the field at this level of detail.

Measuring Production in the Real World

You have to find a balance between labor units used for estimating, which are too detailed, and the job costing system, which is too broad and provides information that is too late.

A realistic production measurement timeframe needs to happen on a daily basis, at a maximum, in order to provide actionable feedback. These should also be summarized by the week to even out high-production and low-production days, as well as taking into account when setup and pre-fabrication is done to support higher production over the following days.

Production Rates are Relative

Production rates are relative. They mean nothing if they are not compared to something else.

The typical comparisons are:

• Estimated: If your production rate exceeds the rates you estimated the project by, you are making money. If not, then you are losing money. It is critical to know this on a daily basis so you can make corrections. If you are unable to attain the estimated productivity rates, then the feedback needs to get back to the estimators so they can adjust the production rates they estimate jobs at. Overestimating productivity on a bid CANNOT be made up for with more volume!

• Past Production: Comparing your current production rates to your past production rates on the same or other projects is the best way to determine if you are being impacted or if the new installation method is working.

• Industry Standards: This information is hard to attain, but with a little work, you can gain a lot of information and set benchmarks for your production. The importance of comparing your production with the rest of the industry is that if you can exceed that production, you will gain a competitive advantage, which equals more work, more profits, and more opportunity for everyone. The opposite is also true.

One other area you can compare production rates is between crews and even crew members. This will clearly show the wide variation between a top producer, an average producer, and a bottom producer. You can use this information to help share ideas about production, and in turn, raise the overall average. Having this data widely available takes care of a lot of people management problems because it makes it obvious where people really rank.

By understanding what productivity is, how it is measured, and by monitoring production rates closely, a company can increase their jobsite productivity level, and therefore, create a strong competitive advantage in the marketplace. It’s worth the effort!

	DAVID BROWN is the Founder and President of D. Brown Management, a consulting and management firm that helps construction companies improve profitability. Headquartered in Northern California, the company provides a full scope of general management solutions to construction clients nationwide, including strategy, planning, operations, field productivity, workflow, financial management, technology, and marketing.
As always, ask any questions and comments are always welcome. You can post them here or send an email to david@dbrownmanagement.com. Reader comments and questions will become future posts.

It is very easy to spend too much time working on small problems and not enough time forecasting icebergs and scouting opportunities.  In my organization, I swear we will spend hours debating the font size and attached clip art of a particular memo and only a few minutes discussing the content!  We’ve even gotten bogged down on what brand of glue works best for interior miter joints.  Every once in a while it becomes necessary to close the notepad and start over with a fresh page and perspective.  It is all about getting back to basics.

Simplicity in thinking is not necessarily about behaving like a simpleton.  (Although some might call me this!)  It is about organizing priorities in such a way that no one issue takes more of our valuable time than it should.  Breaking a large problem into smaller, more manageable pieces so that segments can be solved and the remaining issues challenged.  It means delegating issues to capable subordinates and allowing them the opportunity and the space to grow into leaders.  It is too easy to get overwhelmed in minutiae while opportunity passes us by.  It also means maintaining focus on the simple issues that impact our organizations and not worrying about those that we cannot alter despite our best efforts.

While I was working on a project in business school, I came up with an acronym that attempts to convey my thoughts on business leadership into a simple phrase that I can repeat to myself when I begin to feel overwhelmed.  Yes, it is an oversimplification of difficult processes – but I am a huge devotee of thinking as simple as possible.

Get back to BASICS:

·         Believe in the product, service and organization

o   If you don’t believe in what you do, no one else will, either.

·         Actions, not words

o   Words are what clients read.  Your actions are what they remember and pass on.

·         Simplicity in thinking

o   The keystone concept of my approach – Keep it as Simple as possible!  Simplicity allows for a checklist to make certain we are being thorough in our judgments.

·         Initiate ideas

o   Be an idea generator.  Bring solutions to problems (both your clients and your own) Think beyond the canned response.  Above all, think proactively.

·         Communicate

o   Without communication, even simplicity becomes unruly.

·         Service above all

Business leadership can’t be broken down into an acronym alone.  However; the cleaner and more simple we can make our approach, the more efficient it becomes.  The more efficient an organization becomes, the more time can be spent on scouting for work, earning profit or, heaven forbid – relaxing.

The current environment holds numerous challenges.  I have no idea when the tide will turn or when/what/where the next big thing will be.  But the message I preach over and over is timeless.  Simple thinking approached with clarity and focus, a tight control of spending, and a willingness to bring new tools, ideas and analytics into your organization while providing exemplary service will win in every environment.  Whether winning is defined as simply staying alive or actually thriving is a point for debate.  The key point here is to get back to BASICS and focus on what will make your organization successful.

We are all looking for ways to make our operations more profitable.  In an economy such as ours, we can basically forget about raising fees to cover those inefficiencies inherent in General Contracting.  We can also forget about charging for our pre-bid services.  I am so often amazed at how much time and effort we give away to clients for no cost – only to be told that our proposal for whatever reason did not contain the winning formula.  Ugh!

When we can’t raise rates to cover runaway costs, we’ve got to look somewhere.    As boring as this subject may be, simply streamlining processes and getting more efficient use out of our resources is the most cost effective means of quickly generating dollars to our bottom lines.  Where do your jobs often go over?  If you are like me, estimating portions of general conditions (such as job cleanup) is a disaster.  My trouble is that I understand that at 3:00 during the week for an hour or so and on Friday everyone is cleaning up the site and prepping it for a weekend.  But I also know from experience that the  ”General Conditions” line item is the catch all place to code unaccounted time for the field workers.  The time “Harry” is using to drive between jobs or pick up a tool from another jobsite.  I am afraid to add more time to the job cost but in essence this is job specific overhead that I don’t account for enough.  I  know some would say (myself included) that I need to bring the hammer down on time coding, set these expectations and require follow through.  Fair enough.  But that is only part of the problem. 

I started putting these things together and realized that, while my company is very small, having only one table saw and one miter saw was an absolute crimp on productivity.  Having only one rotary hammer in the company saved me the $500 for the second one, but bred terrible inefficiencies into the workday as carpenters chased them all over town.  Simple items such as this popped up all over the place, when I cared to look.  Of course I worried about the cost of keeping track of and maintaining these extra items and/or loss or theft – but assigning them to a superintendent cleared that hurdle.  This is just one small example of the inefficiencies that I sawbuilt into my tiny organization.  I now see many more built into much larger ones.

We have to think of our organizations as an organism.  One in which several different locations depend on the home office to coordinate logistics.  Make time to ask your staff what inefficiencies they see.  (Remember payday Fridays before direct deposit when staff had to go to the bank??)  Note what things are inefficient in your day, from stopping to pick up coffee with the line around the block at the local coffee shop to answering each and every call as it comes in instead of screening them.  Items such as these affect the small contractor and the large organization tasked with multiple projects in multiple locations.   The list could take up much more time than allotted on a blog.  But remember that efficiency breeds time savings, which begets more profitability without raising costs.  These small items often help us to uncover larger issues, and it is there that real savings can occur.  Sometimes we have to take the “aerial” view of our companies to get a grasp on our major processes.  Other times we need to dig into the minor processes and see where we can become more efficient with our resources.

We belong to an era that has automated nearly every process available to some extent.  Hanging door blanks in a jamb is a lost art in the field and will solicit confused looks from many of our carpenters.  Much of what we do gets pushed off to specialists that do one thing very well.  The jack of all trades is often seen as antiquated or too expensive. This axiom is often also true for our field leadership.  Those that fully understand the technical aspects of the trades are often not taught the intricacies of management and vice versa. In a tough market we normally can’t pad our estimates to include missed items.  We have to get more efficient, and reducing or eliminating end of project completion items is a great place to start.

I think part of our training program should include fundamental skill tasks as well as management tasks.  I don’t think it is necessary to teach a superintendent exactly how to cope/miter crown moulding, but it is important that he/she understands what it should look like at the end of the project.  If we can eliminate or, at the very least, take a big chunk out of the punchlist at the end of the project through improved quality control, we have earned much more than the cost of training in time and production costs.

I have often suggested that a list of Quality control items that often find their ways onto punchlists get put together.  At a monthly meeting, take one or two of the items and explain how this issue made it to the end of the project before being corrected and when/how could it have spotted earlier.  Some punchlist items are difficult to spot until final trades are completed.  Others can and should be caught at the time the subcontractor is on site performing their portion of the project when it can be most efficiently corrected.

We are all getting pushed for tighter margins and tighter times to completion.  Right now, the client holds the upper hand.  Eliminating time and expense from completion items is a great way to increase profit without increasing bids and/or proposed profit margins.  If we think of each item on the punchlist as costing a minimum of $500-$1000 to correct, it easily adds up to a significant dent in our budgets.