November 2018

by Gregg M. Schoppman, FMI

There are two interesting phenomena that occur during times of economic prosperity. The first is the confusion or blurring of lines between superior market conditions and business genius. It is not to say that business leaders are failing to effectively strategize, but it is important to understand that a rising tide will raise all ships. Put another way, business best practices may not be at the root of many firm-wide successes. Secondly, 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. Productivity improvement requires serious strategic dedication. Unfortunately, it is the same work that provides the engine for firm growth that distracts the firm from making strides in internal improvements. Taking the time to “tweak” on 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.

The four key elements of every organization’s operational model should include proactive processes, consistent firm-wide tools, metrics to drive performance, and behavioral change. In fact, that final element—behavioral change—is often the most challenging hurdle to overcome. How many firms accept “any methodology” as long as the managers and superintendents get positive results? On the surface, what’s the harm? On the contrary, lack of consistency and accountability lead to a myriad of issues ranging from the creation of double standards, reactive management styles, complexity in training and development, and most importantly, margin erosion. Additionally, many firms tend to address their productivity woes with training alone. Education is imperative, but it often masks the bigger and deeper issues. Awareness of productivity issues does not do enough to make demonstrative change—this is the equivalent of attending a seminar on weight loss. While it is great information, it does not change the deeper behavioral issues surrounding diet and exercise.

One of the first steps to productivity improvements begins with a serious investigation into five aspects of a firm’s standard operating procedures: 1) preconstruction planning, 2) short interval planning, 3) daily huddle, 4) exit strategy, and 5) post-job reviews. Many leaders look at this list and scoff at its simplicity. However, 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 lacks 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 the 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 of the project?
  • Does the firm have “preconstruction planning” for the last 10 percent of a project?
  • Does 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?

While the list could also consist of change order management, document control, CPM scheduling, etc., these five “modules” have the greatest ability to affect project performance. Reflection on these tools, processes, and most importantly, accountability around operating procedures is the first step in true assessment about the health of the firm’s operations. Firms that see this list and feel they exist, but lack internal “stickiness” must question the relevance. Put another way, how germane are these tools and processes? As managers and superintendents create stop-gap measures, work arounds, and simply “their own way,” change agents within the firm must garner improved buy-in. Buy-in or acceptance begins with the people that will use these processes and tools helping create these processes and tools. Having their fingerprints on every aspect of the operational model creates a sense of ownership. Consider this same concept in the world of smart phones and applications—how often are smart phone users updating an app to fix a bug/glitch or improve performance? Is the current team building with version 1.0 or 5.0? Productivity improvement is a serious strategic journey that mirrors what firms experienced relative to safety improvement. Safety training only did not make substantial improvement—more importantly, firms that took proactive action reaped the benefits of enhanced safety measure, equipment, processes, etc. 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!

As a principal with FMI, Tampa, Fla., Gregg Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Prior to joining FMI, Schoppman served as a senior project manager for a general contracting firm in central Florida. He has completed complex and sophisticated construction projects in the medical, pharmaceutical, office, heavy civil, industrial, manufacturing, and multi-family markets. He has also worked as a construction manager and managed direct labor. Furthermore, Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets. He can be reached at (813) 636-1259 or gschoppman@fminet.com.

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