George Hedley works with contractors to build profitable, growing companies. He is a professional construction business coach, popular speaker and best-selling author of Get Your Construction Business to Grow & Profit!, which is available online at hardhatpresentations.com. To sign up for his free monthly e-newsletter, get involved in a BIZCOACH program or get a discount for online classes at hardhatbizschool.com, email firstname.lastname@example.org.
Construction business owners and managers continue to blame unfavorable results on the economy, competitors, customers, location or employees. Do you blame poor results on any of these common excuses and problems?
- Final job cost is higher than estimate
- Low profit margins
- Too much competition
- Customers only buy low price
- Cannot find any good help
- Job closeout is too slow
When your construction business continues to have the same problems over and over, what do you do to fix the problem?
No A/R Leadership
When managers are too busy to find real solutions to their problems, poor results continue. Rather than focus on finding solutions, the tendency is to blame others, not accept responsibility for issues and hope problems stop happening. I call this "no A/R," or not accepting accountability and responsibility for results. A prime example is continuing to bid cheap work against too many competitors and hoping you will make more money by bidding more low-priced work. Another example is wondering why your job costs come in higher than your bid when you don't track, verify or update your costs until projects are finished.
When companies don't get the results they want, it's not the fault of the competition, economy, customers or employees. It's usually the leader who tolerates poor performers and isn't willing to try new ideas, systems, methods, people, markets, strategies or customers. This leader is often afraid to make people accountable or responsible for their performance and continues to lack the desired results.
For many contractors, the common challenges are finding more help, getting more organized, building a better management team and continually making a larger profit. This only starts when the owner has a dynamic vision about which employees can get excited. Employees simply won't follow someone who is negative and complains about problems, people and why they can't compete. Employees want a leader who will stand up and say: "Here is where we're going, these are the changes we need to make, and this is how we will make it happen."
Problems Start at the Top
Responsibility and accountability start at the top. No A/R leaders blame poor results on others and circumstances beyond their control. They sit and wait for something to happen, hope profitable customers call or pray someone will show up at their door to professionally manage their projects and run their project teams.
Successful business owners have to be proactive, make changes and take responsibility to achieve great results if they want to get to the next level, make more money and grow.
Change Starts at the Top
Getting great results is the No. 1 indicator of a business owner's vision and leadership. Real leaders make quick, decisive decisions to adjust and stay ahead of changing business requirements and customer needs. When customers demand specific scheduling software, project websites or faster schedules, you don't have the right to complain. When there are too many competitors offering lower prices on your project type, you have to examine how you do business and revamp your business model. When you can't find help, you have to take charge and task a hiring coordinator or consultant with revamping your recruitment program. When your field productivity takes more crew hours than you estimate, you have to dedicate time and money to update job-cost tracking software and the staff required to generate weekly cost updates for your foremen and superintendents to review.
No A/R leaders wait for something to happen and complain about everything except their own performance. Business owners rarely walk into the office and say, "I have made a decision that I need to change how I manage and lead our company." Poor leaders walk into the office and say, "Crews are too slow and aren't making it happen. Customers want lower prices and don't pay us fast enough. Competitors are too cheap and willing to work for next to nothing. We can't make enough profit. Everyone will have to work harder and we will have to cut costs."
Effective leaders realize they must have the courage to change themselves before anyone else will follow their lead. Over 90 percent of employees give their company leadership a rating of well below excellent. Employees often don't see business owners taking charge and doing what they need to do with poor performers and bad customers.
What's Your Future?
Accountable, responsible leaders have a vision and connect it to specific, measurable results. Some companies have visions to be the best company, offer the best service or provide the best quality. Here is a better vision: Be the market leader in innovative construction solutions for difficult complex projects that require technical expertise and engineering by providing loyal customers a value-enhanced project delivered significantly faster than expected. Ask everyone at your company:
- What is the vision of our company?
- What are we trying to accomplish?
- What are our top three priorities?
To realize actual results, get everyone on the same page, from top to bottom.
What's Your Goal?
After defining your vision, specific results must be targeted to quantify your goals. If your vision is to be the best contractor in your market, determine what specific, measurable results enhance your bottom line. Some specific targets include: a referral from every customer, no installation errors and 98-percent on-time completion.
What targets and numbers can you shoot for to realize your vision and get the results you want?