How to Invest in Your Company’s Future

Tom Merritt is an example of how a local contractor transformed his company into a leading commercial civil, earthwork and concrete company by focusing on continuous improvement. After working as a laborer and doing side jobs on weekends using his truck, trailer and tractor, he started Merritt Contracting Inc., in 1995 near Indianapolis, Indiana. By focusing on “Making Things Better: People, Projects & Process,” Merritt has grown his business to well over $12 million in annual revenue with 60 dedicated, longtime employees and a large equipment fleet.

Become a Lifelong Learner

During my 25 years of experience as a construction business coach and presenter at more than 550 conventions and conferences, I have learned there are two kinds of construction business owners: lifelong learners and those who continue to do things the same way. Guess what? The lifelong learners make a lot more money than the 98 percent of those who stop learning and improving early in their careers. I met Tom Merritt more than 6 years ago when he attended one of my programs, and I quickly discovered he was a determined lifelong learner focused on continually improving his company, people, team and management skills. He was also very focused on building an efficient company using systems, standards and technology and challenging his players to continually improve.

Invest in Improvement

Today, one of Merritt’s main priorities is getting the company culture right. His focus on and dedication to improving people is evident. He invests time in regular team meetings and programs to guide people in the right direction and keep the lines of communication open. The company has a regular employee recognition program with incentives such as employee of the month awards, gift cards when crews meet their goals, regular employee satisfaction surveys and a personal career development plan for each employee.

On a continuous quest to build a better company, Merritt is not afraid to dedicate real money to consultants, technology, training and management systems. He uses several business consultants for various company improvements, and he learns best business practices from other contractors as a member of a construction business owner peer program. He also commits to attending a few construction conferences annually, and he is dedicated to utilizing the latest technology and software available. The company even uses drones to fly over, review progress and monitor jobs on a regular basis.

Hire for Character

Rather than look for the most experienced people, Merritt hires for character and trains for skill. The company’s ongoing training program includes a series of short videos and QR codes they created, which are available via “The Merritt Way” YouTube channel. Merritt’s team created hundreds of training videos with topics including how to set up a laser screed, properly maintain equipment, fill out timecards correctly, use specialty tools, download job cost reports and everything else the team needs on a regular basis. These how-to videos provide simple instructions, help people to learn faster, improve efficiency, eliminate downtime, troubleshoot, reduce field problems and help Merritt to make more money.

Put People First

To keep connected with and stay focused on people, Merritt requires a formal, honest, open and frank review for everyone that they call a “quarterly conversation.” Employees may discuss their needs, examine their contributions to the company and talk about how they can improve. This time provides a consistent check-in with their manager/boss and a discussion of roles, goals and performances. Here’s an example of a quarterly conversation agenda:

• Core values—Rate employee on company core values such as teamwork, ongoing learning and attitude
• Accountabilities, responsibilities and roles—Rate on a scale of excellent to needs improvement
• Accomplishments—Review all
• Areas for improvement—List specific areas that need attention
• Performance improvement—Develop action plan
• Career development plan—Discuss employee goals and actions required to get to next level
• Employee comments or concerns—Honest feedback, including rating manager’s performance such as clear direction, communication, feedback, delegation, training and core values

Focus on Results

To keep the team focused on achieving better results, Merritt implemented a weekly scorecard to track feedback. Clear expectations, targets, goals and updated tracking for every job, crew and player keeps the team focused on winning results. Every week, the management team, department managers and project teams review their results and then discuss how they can maintain progress, improve or get back on track for underperforming jobs. Below is an example of a weekly scorecard tracking system.

• Man-hours—Over/under budget
• Equipment­—Over/under budget
• Backlog—Costs and hours
• Change orders—Approved, completed and/or performed without authorization
• Safety—Audit, violations and accidents
• Past-due receivables—30-, 60- and 90-days past due
• Rework—All projects including callbacks and warranty work
• Equipment—Damages and repairs
• Customer complaints
• Employee satisfaction ratings
• Credit line balance
• Revenue versus goal
• Gross profit versus goal
• Overhead versus goal
• Net profit versus goal

Hold Regular Meetings

Like most business owners, Merritt disliked scheduling and holding regular meetings with managers and crew leaders. He would often call a meeting, miss or reschedule it and eventually stop holding them altogether. As a result, he spent his time running around constantly talking to his project managers, superintendents and foremen to make sure they were doing what he wanted them to do. This created a lot of stress as his people relied on him to make decisions for them, and it didn’t allow him to focus on his priority—developing empowered, accountable and responsible company leaders.

Eventually, Merritt learned the key to building a winning team was to let people do their jobs, give them the rope they needed to succeed and even allow them to fail. He refocused on helping his project managers and superintendents to do a better job, rather than micromanaging them. This management shift allowed Merritt to make higher net profits and significantly grow the company, and to take the time to build stronger customer relationships.

After implementing his new management style, Merritt maintains an open dialogue with his five direct reports; still makes it a priority to regularly visit jobsites to stay in touch with key field employees; provides coaching by offering input regarding job labor and equipment strategy; and attends regular mandatory weekly and monthly meetings designed to help everyone achieve better results.

Now, he is determined, focused on doing the right things and not compromising his values. He is never satisfied with the status-quo and works hard on what matters: improving people, systems, structure and results. His investment of time and money implementing “The Merritt Way” has paid off, as his company has greatly improved the top and bottom lines.