How to Draft a Construction Organization Chart


Written by:
George Hedley
Published:
March 1, 2012

Many construction businesses reach a certain size and stop growing because the owners try to do too much work themselves. They have a difficult time delegating and deciding who to hire. 

Companies cannot grow if the owner makes every decision about scheduling crews, ordering materials, buying equipment, meeting with customers, deciding which vendor or subcontractor to use, approving change orders, completing every cost estimate, determining the final markup on bids, presenting every proposal, reviewing every contract, approving all invoices, determining employee salaries, etc. You get the idea: You must allow employees to take on responsibilities and do their jobs to build your business.

Hire Smart Construction Managers

When business owners finally make the big decision to hire an experienced manager with a strong resumé, they often decide to move someone from within the company into this key position, even if the person has little or no experience in this area. After trying this approach for a short time without any luck, they resort to hiring a low-paid assistant, untrained field supervisor, junior project manager or an estimator with little experience. Some owners make a bigger mistake than this by hiring a relative or family friend who is out of work.

Business owners tend to make these poor hiring decisions to save money or avoid the time required to hire and pay for the perfect employee or manager. They hope this easy, less expensive approach will work out.

However, if you hire untrained people with little or no senior management experience because they are inexpensive, you will spend all your time answering their questions.

Design Your Chart

Most construction organizational charts show who reports to each manager, but they often do not list each person responsible for each area of the business and the tasks required to achieve the company's strategic goals.

To organize your construction company, draft an organizational chart by listing on a flip chart all the tasks that have to be accomplished in your company. Use these headings across the top of your chart:

Business Development

Operations

Finance

Administration

Management

Then, use a sticky note for each function required in your business. After brainstorming and completing this exercise, post these tasks beneath the headings in logical order. 

For example, business development should be the project manager's responsibility. A full-charge project manager handles procurement, negotiating subcontracts and purchase orders, writing contracts, project documentation, correspondence, customer meetings, change order management, preparing and updating job budgets, approving and updating job schedules, drafting progress payments, approving invoices, meeting contract requirements, achieving the job profit goal, meeting the project schedule goal, gaining customer satisfaction and many other responsibilities.

Delegate Responsibilities

After you complete the chart, assign employees to be responsible for each of the work tasks listed. This can be tricky. For instance, if you allow your project manager to draft the subcontracts but not make the final decision on the price or subcontractors without checking with you first, then this task needs to be broken down into two or three parts to show who will be responsible: draft contract, approve subcontractor and negotiate final contract amount.

On the accountability chart, assign the person who will be in charge of each business function.

Determine Your Role

After determining who will be responsible for each area, decide which areas you should be responsible for based on what you do best and what will help deliver the highest return on your time.

Almost always, the company owner should stay involved with the business development function. By deciding what you should do, you can then create a new job description and management position for someone to take over other responsibilities and decisions you previously handled.

Hire based on what you need to grow your company, not what will help you save the most money. If you take a risk on paying more than you are comfortable with, you may be surprised how well things turn out in the future.

 

Try This

To organize your company, draft an organizational chart by listing on a flip chart all the tasks and jobs that have to be accomplished in your company. Use these headings across the top of your chart:

·         Business Development

·         Operations

·         Finance

·         Administration

·         Management

 

To receive a copy of a sample BIZ Function Chart, email  George Hedley at gh@hardhatpresentations.com.


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