Construction Business Best Practices Series, Step 3: Organized and Systemized Business


Written by:
George Hedley
Published:
March 1, 2006

Editor's Note: This article is the third in a series of twelve to lead you toward entrepreneurial excellence by our regular contributor George Hedley, owner of Hedley Construction and Hardhat Presentations. To read part two, click here. To read part four, click here.

Have you noticed the construction business is a lot like the circus? You spend your days juggling, taming lions, fire eating, sword swallowing, getting shot out of a cannon, walking tight ropes, dealing with clowns, cleaning up after the elephants and working with monkeys.

With today's pressure to do more with less, how can you get it all done? Where do you start?  Using technology and computers, creating a website, training, finding good help, getting paid, dealing with customers, getting bids out, keeping up-to-date with code, chasing lien releases, dealing with government regulations, handling cash-flow and payroll, ordering materials, meeting with subcontractors, negotiating contracts, checking field measurements, coordinating crews and keeping jobs on schedule. How do you get it all done and still have time to focus on your priorities?

The year was 1985 and I was trying to get my business to work. I had six people on my management team, ten project managers, twenty-five field superintendents, and seventy-five men on our tilt-up concrete crews. My goal was to have a profitable company run by my employees. But I was still trying to do too much myself and make every important decision. I continued to work with my estimators on every bid, presented every proposal, attended every job meeting, supervised every concrete pour and was too involved in every aspect of our business. I even got involved in the little decisions like purchasing office equipment, hiring, firing, tools, change orders and buying coffee for the office staff. Sound familiar?

Is It Easier to Do It Yourself?

No matter how hard I tried to let go and delegate, I just couldn't. It was easier to do it all myself than to trust my people. My actions drove me nuts and my employees crazy. It became difficult to get good people to stay at our company as I was micro-managing and trying to control their every move.

One evening I took my family for a "happy" meal at McDonalds. I noticed the boss wasn't there, the employees were teenagers, customers were happy and the food was consistent and relatively edible. I thought: "How do they do it without the owner supervising and making every decision?" I asked a server to show me their secret. He took me behind the counter where they have pictures clearly displaying how to build hamburgers and other menu items.

Good People or Good Systems?

Wow! A huge company runs smoothly using simple pictures of the finished product. This guarantees consistent quality. Plus the owner doesn't have to be on-site all the time supervising the construction of every customer's order. If McDonalds could do this in their company, why couldn't I do it in mine and build an organized and systemized operation. Systems would reduce my dependence on finding great people.

Systems Are the Key!

I started to understand and realize that systems are the key to building an excellent company. A disorganized company controlled by the owner will never become excellent. Systems allow you to produce the same results on every project every time. Systems will get everyone doing business the same way. You won't have one superintendent handling change orders one way and another doing them differently. Systems will insure little things are taken care of without you reminding people to do them the way you want them done. Systems will allow you to focus on the important tasks that will make you the most money. Systems allow you to deliver consistent results to your bottom-line and your customer's project requirements every time without you being there and making every decision for your people.

As a construction business owner, you want to count on the same things every time on every job. You don't want to rely on great people to remember what you tell them to do. Whether it's pulling rebar into the center of a slab during a concrete pour, starting a project correctly, or handling change orders or timecards properly, you want everyone on your crews and in the office doing things the same way in your company. Systems are the only solution to get your company where you want it to be.

Keep Systems Simple!

I noticed excellent companies have simple systems. For example, at hotels, all rooms always look the same when ready to occupy. How do they do this? Simple. The supervisors explain during their training sessions what is expected to the housekeepers by displaying a clear picture of a finished and ready room. They don't care how the final result is accomplished, just that the room is perfect when completed. This simple approach can be applied to every part of your business.

As I comprehended this concept, my personal goal became to replace myself with systems. I finally realized that great people, excellent estimators, fantastic superintendents or great project managers were not going to make my company perform the way I wanted it to. Why? When your company is not organized or systemized, your company is constantly out-of-control and relies on you to put out all the fires and make all the decisions. Your great people can't deliver without you telling them what and how to accomplish things. In this condition, you spend full-time running around handling problems and directing traffic. Solid and simple systems are the only answer to building an excellent company that's not dependent on you making everything happen smoothly.

 

Why Systems?

How much money are you losing by relying on your people to do their best and not following company installation and operational standards? Create systems to:

  1.     Produce the same results every time
  2.     Meet customer expectations
  3.     Consistent performance
  4.     Be organized and in control
  5.     Eliminate field problems
  6.     Increase quality workmanship
  7.     Improve safety
  8.     Finish

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