5 Ways to Move Your Construction Operations Into a Class of Their Own
“Good enough” is when you’re making a box of macaroni and can’t get the weird cheese dust to mix in right. “Good enough” is when you’re on the treadmill and just can’t handle that last five minutes. “Good enough” is when you check your first grader’s art homework. While “good enough” is acceptable for daily life, it’s not enough for today’s construction operations.
All too often, construction teams can get comfortable with moving along in the process, not questioning why they do something a certain way. After all, the industry has been virtually unchanged for decades, why change now?
While it may seem like it’s easier not to kick up any dust and do the job “good enough,” it’s not going to meet the needs of a legitimate construction project in the long-term. Tight margins, ambitious schedules, increasing construction risk and rising material costs are a few of the reasons why teams cannot afford to accept stagnation. Today, it’s more urgent than ever to elevate construction operations to excellent or risk getting left behind. Teams that don’t move past that phase will inevitably fail.
Nonetheless, there are plenty of tools and methods to achieve excellence without the headache of a complete restructuring. Below, we’ll discuss why you should be striving for excellence in all of construction and what strategies are going to help you achieve greatness faster.
“Good Enough” Isn’t Enough in Construction
Recently, Kiewit Technology Group conducted an internal survey of the top 500 construction companies from 1965. Not surprisingly, 450 of these companies were no longer in business. Nevertheless, as the company looked into the reason why these companies failed, they started to see a clear pattern: 90% of companies faltered because they refused to embrace change and innovation to take on increasing project demands.
This is not a unique story. Other major contributors to construction company failure include over-expansion, volume obsession, unrealistic promises, bad contracts or entering new markets unprepared. That’s not the root of the story, though. Underlying these traits was a lack of attention to detail, a loss of discipline and “pushing the speed limits of change.”
As FMI explains, the speed limit of change is when a “company is operating at its speed limit, or maximum level of change, using all of its resources to accommodate the changes being made. If the company exceeds its speed limit, the ability for it to maintain its discipline and quality of work is severely compromised, and there is an increasing risk of instability leading to failure.”
McKinsey and Company report construction companies come in massively under other industries when it comes to productivity. Moreover, although only 15% of E&C firms saw double-digit growth between 2005 and 2015, they could achieve 20-30% operating margins if they design operations differently.
In other words? All of these elements are variants on a theme: It’s what happens when those in construction operations take action with a “good enough” attitude and without actually doing the necessary vetting and prep work, ensuring you have the resources or following through with discipline.
What “Just Good Enough” Entails (Hint: It Means “Not Enough”)
This good enough attitude takes an extreme toll on the construction operations industry. Estimates hold that more than 90% of global projects worldwide are either late or over budget, while 60% of all construction projects in the UK run behind, claims the country’s architects.
So what exactly does “just good enough” look like? Well, let’s talk about that. Companies that don’t go the extra mile exhibit traits such as:
- Low productivity: In the past 20 years the global average for the value-added per hour has inched up by 1% a year, about one-quarter the rate of growth in manufacturing.
- Thin profit margins: Construction has some of the lowest profit margins out of any industry–only 15% seeing double-digit growth, remember?
- Self-serving culture: Construction operations’ traditional methods of mitigating most of the risk to subcontractors creates a competitive construction environment where everyone wants to look out for their own interests.
- Disjointed communication: Without careful attention to communication, mistakes and rework abound.
- Constant lateness: 77% of megaprojects around the globe are 40% or more behind schedule, according to the McKinsey Global Institute.
- Unsafe working conditions: A culture where corners are cut is unsafe for workers. Plus, it increases insurance costs and can bankrupt a company, should something serious happen.
While the above list is a challenge to overcome for any modern construction company, it’s the only way for companies to excel in the future. Nonetheless, many in construction operations don’t understand that achieving excellence isn’t just an add-on; it’s critical to the survival of any business.
Because sooner or later, “good enough” will come back to bite you. So the question becomes, how do you achieve excellence?
What Excellence Means to Construction Operations
Obviously, the exact approach to receiving excellence in construction operations varies for every business, but those which can be characterized as rising above the rest share some basic traits, including:
- Teams that are in sync: Teams are connected and collaborative. They are on the same page about project changes, so there is lower rework and fewer change orders.
- Higher returns: Again, according to McKinsey, companies could achieve 20-30% operating margins if they design operations differently. Companies with higher returns are the ones making deliberate changes in their processes and models.
- Happier clients and owners: When companies take business seriously, this results in happier clients and owners. These relationships provide returns again and again as long-term trust is built.
- Safer jobs: No one has to fear the risk of worker injuries or fatalities, because there are no questions about OSHA compliance and there exist no unsafe working conditions.
In order to get to this level, however, construction teams must learn to move past status quo, which is harder than it sounds. It takes more than good intentions to go from “good enough” to excellent. Luckily, while it’s not easy, there are tools and better processes designed to make the transition easier.
5 Ways Construction Teams Can Move Past Status Quo
1. Collaboration Technology
First and foremost, those companies that wish to achieve excellence absolutely must get the right technology on board. That means field collaboration software to connect teams with the right plans, documents and people they need when they need it. In today’s construction landscape, tools for collaboration should be non-negotiable; money is made or lost in the field and it is essential to centralize plans and communications.
If you’re looking to increase collaboration on the job, here’s a great checklist to keep your team connected and on the ball.
Building information modeling is one of the most powerful approaches to take construction operations to the next level. It keeps the whole team connected and aligned early on so that there is significantly less chance for mistakes later.
Another benefit of BIM, is the quality of information and data it provides when it’s time for project handoff. Owners with the rich level of data that BIM provides are more empowered to manage costs and a longer lifecycle.
3. Collaborative Delivery
To build an environment for excellence to flourish, companies must also build a collaborative and transparent culture. Again, there already exists a powerful method for ensuring this: integrated project delivery, which uses the joint skills of everyone involved in the project and aligns them all toward the same goal. This helps companies get away from the headache of multiparty contracts, which only incentivizes individual groups and singular priorities rather than the whole. Paired with collaboration software, IPD is even more effective and achievable.
Then companies must shift their attention to improving quality through standardization. When processes, technology and methods are all standard, the quality of construction goes up. You can now keep repetitive tasks on track easily and reduce errors.
Getting started with standardization can be tricky. Nevertheless, it is management with the right guide. If you’re looking for more information on how to standardize your construction operations, check out this useful guide.
5. Staff Development
Lastly, it’s critical to invest in staff development if you want to achieve excellence in construction operations. Workers are an amazing resource–and one you should be continually investing in to grow, retain and recruit. The quality of workers and managers are in direct correlation to project success, so providing additional training and development opportunities will immediately improve your success, save your timelines and reduce overspending.
Additionally, you must invest in diversity and inclusion efforts. It’s more than the right thing to do; diverse companies perform better, and staff that feel part of the equation are likely to be more productive, with fewer roadblocks to personal and company-wide success.
It’s Time for Construction Excellence to Become the New Status Quo
Finding excellence in most jobs and industries is clear-cut. Stakeholders want things done right, don’t want to have to retread the same steps and would prefer to avoid long and lengthy legal battles.
What is different about construction operations is the sheer number of tasks involved, the massive opportunity for miscommunication and error, and the mounting costs associated with every change, do-over and dispute. That being said, it’s easy to get frustrated by all the things that could go wrong and stay stagnant. But if you and your company are ready to embrace your potential, it’s time to move past the current status quo forever, and it starts with standardizing, communicating and taking a team-oriented approach. The time has come for excellence to become the new standard for construction operations.
So choose excellence in the field, and save “good enough” for your next Netflix movie choice.