Productivity improvement requires serious strategic dedication, but it’s worth the investment.
During times of economic prosperity, two interesting phenomena occur. First, a rising tide raises all ships, and this leads some business owners to believe their business strategies are more effective than they are. Second, businesses can see significant top line gains while also seeing dramatic bottom erosion. Doing more work for less reward is not only unfulfilling but also a major source of risk that must be eliminated.
The answer to the latter problem is identifying and addressing productivity issues.
Productivity improvement requires serious strategic dedication. Unfortunately, taking the time to tweak processes and create continuous operational improvements is the equivalent of pulling into the pits during a major race for critical refueling and maintenance, even when you are the lead car. There is never a “great time” to work on the business. But creating more productive behaviors is key to maintaining a competitive edge.
First steps to productivity improvements
One of the first steps begins with a serious investigation into five aspects of a firm’s standard operating procedures: preconstruction planning, short interval planning, the daily huddle, exit strategy and post-job reviews. While the list could also include change order management, document control, CPM scheduling, etc., these five “modules” have the greatest ability to affect project performance.
True operational excellence begins with a deeper understanding of what these processes and tools should resemble.
Preconstruction planning:
- Is the process more of a dictation or a true collaboration of estimating and operations?
- Does the process begin with developing a “Foreman’s Book” but lack real strategy and discussion?
- Does the team have a game plan at the outset of a project or do they wing it and figure it out when they get on site?
Short interval planning:
- Do managers and superintendents generate a schedule but lack a real plan?
- How many different ways do field leaders plan? Dry erase boards? Legal pads? Or is the plan all “upstairs” in the field leader’s brain?
- How many last minute calls does your shop/yard/tool crib/warehouse get on a daily basis?
Daily huddle:
- How do the construction crews begin each day?
- If you ask a crew member the goal of the day, would they know it?
- What vehicles does your firm have to serve as daily motivation?
Exit strategy:
- Do projects start off with a bang but sputter at the end?
- Does the firm have “preconstruction planning” for the last 10 percent of a project?
- Do demobilization, punch lists, close-out documentation, etc. plague the firm’s ability to collect retention and truly finish?
Post-job review
- What types of projects get a post-job review? The bad ones? What about the good ones?
- How does the firm capture true best practices and lessons learned to make the rest of the firm smarter?
- How does the firm make continuous improvements?
Creating buy-in and accountability
Reflection on these tools and processes and most important, adding accountability around them is the first step in assessing and improving the health of the firm’s operations.
Managers and superintendents who prefer using stop-gap measures or workarounds or simply doing things their own way may question how relevant these tools and processes are. And some firms accept “any methodology” as long as the managers and superintendents get positive results. That stance may seem harmless on the surface, but lack of consistency and accountability can lead to myriad issues, ranging from the creation of double standards to reactive management styles, complexity in training and development and most important, margin erosion.
To get managers and superintendents on board, change agents within the firm must garner buy-in. That starts with involving the people who will use these processes and tools in their creation. Having their fingerprints on every aspect of the operational model creates a sense of ownership. Consider this same concept in the world of smartphones and applications: How often are smartphone users updating an app to fix a bug/glitch or improve performance?
Productivity improvement is a serious strategic journey that mirrors what many firms experienced with safety improvement. Safety training made substantial improvements in safety outcomes. Productivity is much like safety — you cannot simply hope for better performance. You have to plan to be productive just like you need to plan to be safe.
Productivity is something that every leader should consciously examine as one element of their commitment to innovation and continuous improvement. Time to pull into the pits to win the race!
Gregg M. Schoppman is Principal at FMI Corporation, management consultants and investment bankers for the construction industry. He specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. You can reach him directly at [email protected].