Brad Humphrey – Page 67 – Pinnacle Development Group

John has a good pavement maintenance company in the big picture of things. He’s a hard working contractor who has a normal mix of long term and short term workers. However, he can’t quite seem to break through the profitability ceiling, or “PC.” As much as he figures and refigures his estimating efforts he still is falling 3%, 5%, even 9% short of the gross profit that he should be realizing on most jobs. His frustrations led to his asking me to come along side for the rest of this year to get him over the “PC” barrier.

Too many good contractors are struggling today with getting that next 3%-5% of gross profit. Some contractors are literally approaching double figures in shortages from what they should be experiencing on their gross profit. After reviewing John’s work processes that his field guys practiced I’m convinced that he can realize greater gross profit and tighten up his job-site productivity but it’s going to take some good planning, execution, and commitment.

Image courtesy of Serge Bertasius Photography at FreeDigitalPhotos.net

Pre-Planning For Job-Site Productivity

First, most pavement maintenance contractors, do a horrible job of pre-planning their projects. This is their first mistake. Pre-planning, especially pre-construction, is a specialized effort among general construction companies and our industry could learn much from the same effort.

Pre-construction, with an emphasis on pre-planning, begins when a field leader takes all the collected information from the estimate and begins to review what he and his crew can do to maximize the production effort. This means recognizing where trucks, equipment, materials, etc. should be delivered, unloaded, loaded, and stored. This effort alone costs many contractors thousands of dollars a year in accidents and damaged materials when not done.

Second, continuing the pre-planning effort, the contractor should then set out the next week schedule by each Friday for the next week of work. I introduced many years ago the “Next Week Look Ahead” to our industry at our annual conferences. The contractors who have embraced this tool confidently share that this process of planning will add 2%-4% almost immediately to their gross profit, often more. The big objection I hear for not doing this is that “the schedule will always change.” The scheduled does change periodically but by having the plan in place the alternative decisions can be made faster and with more foresight. There is absolutely no excuse for not planning!

Third, there needs to be an organized process to unload, place, store, and load equipment, tools, materials, etc. This can also be preplanned by creating something Japanese Management has called “5-S.” There are five components involved with incorporate 5-S but one effort that is critical for us here is the development of a 5-S Map.

Develop Your 5-S Map for Job-Site Productivity

A 5-S Map can be used for many purposes that will help to keep things organized and encourage a cleaner and safer job, job-site, more organized trucks, and especially yards and shops. Consider an aerial drawing of your tool truck where you have most of your equipment and hand tools stored. Once drawn, you then identify where each item is to be kept. You can do this by drawing an arrow to the location on the truck where the item is to be kept and then writing what the item is such as rakes, blowers, buckets, etc.

You should have a 5-S Map done on your shop, yard, etc. Also, I recommend drawing a 5-S Map for how you want to lay out your equipment and tools once you are at a job site. Some contractors argue with me but soon realize how much they can save by having all the items that they will be using lined out or positioned on a job site for faster retrieval and better handling.

Fourth, the leadership to hold morning and afternoon “huddles” between a crew leader and the crew members is crucial for successful production each day. This huddle I’m referring to is a short 3-5 minute meeting at the job site that first clarifies what the targets are for the day, confirming who is doing what on the job, and reminding all workers to important information about the job and safety reminders. This morning huddle isn’t enough, there needs to be a “PM” huddle just before all the workers head home or back to the yard. The afternoon huddle would review what happened during the day, what can be improved, and what can be done to organize the site, trucks, equipment, etc. to make the next day’s production go faster and smoother.

Finally, the most critical issue to busting through your profitability ceiling is to be a driver of the first four items. We have enough to battle each day with inexperienced workers or negative attitudes reflected by many of our workers without you not driving, supporting, and enforcing the completion of the four items listed earlier.

Working with contractors across four continents I recognize a scary reality for many construction leaders: “Virtual leadership” (VL) has established its presence.

Virtual Leadership, for the contractor or construction field leader, is the effort made by leaders to be connected to several people or multiple jobs or projects — even though they can only be at one physical location at any one moment. For example, a regional manager, in any industry, may have multiple location responsibilities even though she is not “omnipresent” — present at multiple places at the same time. She will need to execute several efforts so she is informed and up-to-date on the happenings at each of the locations for which she has responsibilities.

Operating in multiple places at the same time is not unusual for a contractor. However, the consequences for not being accurately informed about the activities and developments at each of the multiple locations have reached a higher level of importance than ever. Let’s consider that:

There are fewer technically capable crew leaders so more crew leaders need “hand holding”
Information is in greater demand than ever and can be hard to get
Having needed information in a shorter amount of time — just in time — is expected of everyone connected to a construction project
The cost of poor decision making, resulting from not seeing things personally, can be very high
Because we have fewer capable leaders we must engage the leaders we do have to covering a greater number of jobs and people

Recently, a contractor called me and after sharing his frustrations about trying to lead more than one project concurrently, convinced me to share some of the same helpful techniques with others that I had shared with him. He says that the techniques are working for him, that he is much more confident and that he doesn’t feel as beaten down — like he is losing the battle.

In the hopes that you, too, can benefit from the techniques he is using, here are the seven suggestions I gave him. Be sure to tailor each of these techniques to better fit you, your company’s needs, projects and people.

VL #1 – Create a detailed schedule

Many contractors continue to struggle with creating clear and accurate work schedules. I’ve written about the importance of using a “look ahead,” whether it’s one, two or three weeks so I will not elaborate on scheduling here.

However, for the project leader — or multiple location leader — maintaining an accurate, updated and thorough schedule is the first technique that must be executed. Such a schedule should identify critical path activates for the different projects and locations and the dates that the leader plans to contact or visit.

VL #2 – Institute a “Hi-Lo” weekly briefing

This is actually easy to implement and can be your number one tool to staying in touch with your different sites and workers. Here’s how it works in its most simple format.

Each Friday your leaders of the different jobs, projects or locations are to send to you a one-page “brief” that consists of three to five highlights and three to five lowlights.

The highlights are to be written in a short, bullet-point format, providing you with just enough info to keep you posted. Most contractors and field leaders are experienced people who can sniff out whether there is more info to request or if there is a need for a follow-up call. Encourage your leaders to be honest, to keep their comments brief and to not withhold any information — good or not so good — from you.

Your job will be to respond to each of the incoming “Hi-Lo’s” so that each sender understands that you are reading his or her input. If you do have questions about any of the bullet point items, call the leader. If your concern is about negative news be sure not to get angry and start yelling at your leaders or you will be sure to kill the Hi-Lo effort.

Remember, it is a communication tool to keep you informed because you can’t be at every site all the time.

VL #3 – Set out tailored expectations & objectives

Each new job or project brings with it a set of needs. Perhaps the site is close to a residential area so that signage and extra precautionary “look outs” need to be posted to prevent accidents. Maybe a customer will be making weekly visits so additional safety and cleaning needs to be performed throughout the week. There might even be a restriction on work hours that must be followed due to a sound ordinance.

No matter the need, it is very wise to over-communicate your expectations for the completion of the work by documenting the expectations and by developing goals for the workers to achieve. Tailoring expectations and objectives will require more time from the contractor or construction leader to develop. But doing so can “create” as much as possible the work environment — giving the senior leader important insights he otherwise wouldn’t have without being at the site throughout the project’s life.

VL #4 – Access visual-based tools

Skype and Facetime are two tools, visually based, that I am depending on with increasing demand. Because I do a lot of coaching with contractors and leaders in about 15 different countries these tools are now a bigger part of my consulting than ever.

Contractors — who spend four, five, even eight hours a day on the phone — can likewise make greater use of incorporating the same two tools. I would suggest that some of those phone calls become a visual experience.

Because many contractors know their workers well, seeing their faces while speaking empowers the contractor to have a better feel as to whether his leader is confused, lacking in confidence or perhaps just flat out “covering his tail” by lying. Having access to the other person’s facial expressions can add much to a conversation, especially one that will be five to 10 minutes (or longer) in duration.

Setting up conference calls using video-conferencing is being used by larger contractors with increasing regularity and is becoming more cost effective, enabling the smaller contractor to begin considering its use also.

VL #5 – Establish regularly scheduled communications

It’s important that you establish a regular schedule for communications with any leader operating at a location remote from wherever you are located. Whether you use cell phones, video-conferencing or Skype, it is important to establish some regularly scheduled times for a formal communication effort.

Just as you would hold regular meetings if you were on the site you should create accountability with your remote leaders. To further support this effort you should also create a meeting agenda. It’s critical that when leading others, virtually, that you create as much knowns as possible. This effort, if you execute it consistently, will begin to build greater accountability, encourage teamwork and grow the responsibility taken by those at other locations.

VL #6 – Conduct regular project, job and site reviews

Depending on the size of the project or job or, depending on the experience level of those at a remote location, it’s very important to conduct a regular review. The review should be conducted either monthly or quarterly. For many contractors even a weekly review of jobs or progress on jobs might be a norm to establish.

The review should cover all of the participating elements that you and your leadership team deems critical to the success of the project, job or location. Don’t limit your reviews only to the following areas, but certainly the items listed below should be part of your reviews:

Safety status and needs
Costs associated with effort (against the budget)
Team-building progress (conflicts? turnover?)
Schedule updates and progress reports
Relationship status with customer, suppliers/vendors, sub-trade contractors, others?

Depending on your project or location you may have additional areas that should be addressed and discussed. Make the needed adjustments and incorporate them into your regularly scheduled review. Oh yes, have someone (not you) take notes on the review meeting. Then distribute the notes to those who participated in the meeting.

VL #7 – Set a goal for personal visits

Ok, we’ve presented a lot of impersonal techniques intended to personalize the leadership effort, but there is admittedly nothing that is better than a personal visit by the contractor or construction leader to their remote sites of operation. As some high-growth contractors and leaders can attest, as business growth demands more attention it becomes increasingly difficult to spend time “in the field.”

For most leaders this is an uncomfortable reality that they hate but realize that working “on your business versus in your business” demands more attention to business development, special customer visits, building stronger financial relationships with bankers, participating in more community events, etc.

If the contractor or construction leader does not schedule their week to include in-person visits to their different sites, then the daily issues and urgent requests will win out and there will be no time for personal visits. A plus to having a formal schedule that is followed is that this tool can provide a contractor with a reason to say “no” once in a while.

The schedule then becomes a good leveraging tool to use when those less-than-important requests are made that threaten to pull a leader away from more important duties — such as visiting a jobsite.

Now, nothing is easy about Virtual Leadership. I can almost promise you that you will never feel comfortable and that you will always be fighting the schedule and the clock to visit your multiple locations as much as you would like. “Get over it” and accept this internal conflict as the new norm. It is the sign of a growing construction business for owners to have such stress — but it’s also a sign that your business is doing a lot of good things.

Before we leave this topic let me express a few more personal thoughts and observations. First of all, equip your vehicle to be as “office like” as possible. Drive safe but utilize any “wireless” technology as is legal in your area. As already noted, contractors are on their cell phones for most of their workday. If you are driving a big portion of the day then you might as well make the communication process work for you and your leaders the best way possible.

Second, work extra hard at preparing your project, job or location leaders to take the right approach to being successful. People who lead need the backing and support of you and others. Be sure to educate them on the best ways to access such support without limiting their own efforts. In other words, don’t tie the hands of your remote leaders on things that they need to be free to execute.

If you do find a remote leader drowning in his remoteness…revive or replace him ASAP! We certainly should have a very good picture of what each of our leaders represent before we send them out, but we need to be quick to address those leaders who are struggling.

In some cases all the leader might need is a gentle word of encouragement (or a swift and instructive kick to the seat of their pants). In other cases the leader may need to be replaced … and replaced quickly before the project is almost beyond salvaging.

Leading your people while you are not physically present to lead is still a growing requirement. Like most change that is thrust upon us, embrace it with your eyes wide open and consider making the virtual effort as personal and effective as possible. There are no easy solutions but there are many techniques that can greatly improve the results. Be patient as you adapt and as those leading in “far, far, far away” locations adapt. Allow your remote leaders to voice their frustration, realizing that some venting is Ok, almost medicinal, and can allow the leader to exhale the bad things while inhaling some positive support from you.

You want to lead and grow your business, right? Well, along with the growth will come changes that you may have never considered — yet that you must make. If you’re in this mode today…Congratulations!

Hang in there and put these seven techniques into action. If you’re not quite there with living your leadership virtually, get ready and begin to prepare yourself and your other leaders…it’s just around the bend.

Good luck…from one Virtual Leader to another!

This article originally appeared in ForConstructionPros.com

Author Archives: Brad Humphrey

Tightening Up Job-Site Productivity…and Profitability!