Gregg M. Schoppman is a consultant with FMI, management consultants and investment bankers for the construction industry. Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Prior to joining FMI, Schoppman served as a senior project manager for a general contracting firm in central Florida. He has completed complex construction projects in the medical, pharmaceutical, office, heavy civil, industrial, manufacturing and multi-family markets. Furthermore, Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets. For more information, visit www.fminet.com or email Gregg Schoppman at firstname.lastname@example.org.
The Lone Rangers: Why isolation and inconsistency in project management drives inefficiency before body
Reminiscent of the days of Wyatt Earp, Jesse James and Billy the Kid, marshals, wranglers and rogues roam the construction industry today. And construction project managers resemble lone rangers, operating in isolation and managing work by their own standards instead of the company’s standards.
Leadership enables this cowboy-esque behavior by focusing on end results rather than the methods used to achieve the results. Some argue that profit is profit in this economic climate. But construction business owners will have a chaotic future if they only focus on short-term profits instead of a system defined by long-term consistency.
Origins of Behavior
Consider Walmart and McDonald’s. Regardless of where you are in the world, you will notice these businesses look and act the same, with only subtle exceptions to geographic tastes and menus. The way both companies buy, stock, prepare and sell their products has been determined through exhaustive research, and this has enabled them to provide low costs and consistent products.
Like these businesses, construction companies should also be consistent in their operating procedures. Many contractors preach consistency but few practice it. This consistent behavior begins with how you introduce new associates to the firm. Most firms claim they have standard operating procedures. They have bookshelves lined with manuals defining the correct way to prepare a pay application or plan a project, for example, but these manuals sit covered with dust. A manager cannot learn how to manage without a solid understanding of the firm-wide standards.
Individuals hired as junior managers, assistant project managers or project engineers will often be paired with a senior associate. They quickly adapt to their mentor’s style, and in the absence of firm-wide standards, they only use methods they have learned from that person. And new senior employees will usually incorporate what they have learned from their previous employer.
As firms evolve, tools and processes evolve, and the concept of firm-wide best practices may lie within the experience of these individuals to create standardized practices. If everyone harnesses these best practices, consider how efficient the company could be.
Instead, project managers, superintendents and foremen often operate with little interaction from their peers. Field managers sometimes only see other team members at quarterly staff meetings. When everyone works in isolation, this creates inconsistencies.
Some of the following factors contribute to the cowboy mindset:
- Management allows this behavior.
- Management does not realize a lack of standardization results in inefficiency.
- Management does not know how to measure standardization.
- The firm lacks one set of best practices and settles for levels of mediocrity.
To increase the adoption of firm-wide standards, the leader of the company must stand behind the best practices. Management should then identify key aspects of the management process that need to be standardized.
Cross-departmental teams should be assembled to develop appropriate tools and processes. These developmental groups must be the same people that will ultimately use the process. Figure 1 outlines the entire development process.
Figure 1. Developing Internal Processes and Tools
One of the most important aspects of Figure 1 is the measurement component (highlighted in orange). In the same vein of instilling a safety culture, behavior must be measured. For instance, to prevent accidents, firms train their crews, implement inspections and conduct a series of preventive practices, all of which can be measured to ensure compliance. Similarly, firms must create enforceable metrics to ensure that everyone adheres to firm-wide management practices.
Figure 2 illustrates a key performance indicator relating to preconstruction planning.
Figure 2. Preconstruction Planning Compliance
Within this graph, management measures the number of times preconstruction planning was conducted in relation to the project starts for each month. As more managers became trained, the number of accomplishments increased. This accountability standard is absolutely necessary to change behavior.
Often, firms are concerned with downstream metrics, such as profit/loss or the EMR, and do not focus on the behaviors that affect these results. These metrics can be employed for most processes such as short interval planning, post job reviews, project close-outs and daily huddles.
A 10 percent overrun in labor expenditures for most firms could vaporize the small margin associated with a project. In an era that has little room for error, firms with a universal set of best practices will be more likely to reduce margin erosion, control their risks and improve their overall financial standing.
Construction Business Owner, May 2012