Four C’s Construction

While many firms concentrate strictly on growing backlogs, best-in-class contractors focus their efforts on managing the work they have, maximizing productivity and, in some cases, discovering a world of new opportunity.

Backlog without proper execution only serves to increase a contractor’s risk profile. Managers and superintendents who fail to operate tight controls on projects with already thin margins place their organizations in a precarious position.

The single greatest change in the behavior of contractors should be the renewed focus on efficiency and margin-enhancing activities.

Execution defines best-in-class contractors through implementation of innovative work methods and the embrace of new business tools.

However, firms must also remember the basics, developing a fact-based approach to critically and objectively outline the issues affecting business. Best-in-class companies utilize the four Cs as a virtual dashboard to provide guidance.

1. Competition

The amount of competitors in the field has certainly increased, but many would argue that the quality of the competition has decreased. With inflated bid lists, contractors believe they are simply contending with ignorance and estimating blunders, rather than equally matched opponents.

However, contractors must recognize that the competition, regardless of competence, may simply be more efficient. With less work to manage, best-in-class contractors must examine how they can work more proficiently. This involves spending more time examining the competition, as well as more effectively measuring production and providing more timely feedback.

Contractors should observe how the competition actually executes, rather than licking their bid-day wounds. Field reconnaissance in the industry has become essential to honing the competitive edge. Investigation is no longer limited to the construction industry. Firms are beginning to examine how other industries operate.

For example, the Lean and Six Sigma concepts from the manufacturing world have penetrated the industry in an effort to drive out waste.

Regardless of the buzzword, firms have begun to realize the need to more effectively plan and track performance. Interestingly enough, in some cases, contractors who focus on productivity and efficiency have been able to increase their margins proportionally to levels similar to those of the earlier part of the decade.

The push for real-time data also becomes more important, and firms must recognize the behavioral adjustments that may be required.

Month-end cost reports give way to daily production updates, which can allow course corrections to be made more quickly and more effectively. But accurate recording and timely performance feedback must be done harmoniously and with consistent frequency.

Furthermore, the method of delivery for feedback is almost as important as the data itself. When done in a constructive manner, superintendents and foremen have been less likely to reject the information than they would if they were attacked with the data. Ultimately, firms that become more data driven will reap the benefits of increased firm intelligence.