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The Perfect Construction Year

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Many businesses operate based on the "things to do" strategy. While this can be successful, it is also very stressful.

The Perfect Construction Year Flow Chart

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What if you were to sit down with your team and jointly decide what a perfect day, week, month, and year would look like in your company? Strive to achieve these ideals every day. Focus on the process, not on the task. I am not advocating the elimination of planning and goals. The achievement of these goals can be enhanced if you back up and focus on the underlying processes that lead to successful execution. If you design the process correctly, and focus on the process, then goals will be achieved as a byproduct.

For discussion purposes, let's focus on one version of an annual cycle for a contractor. This cycle will achieve great results, but the process is very hard to execute. There are many things that come up throughout the year that will make the contractor want to delay or delete certain phases of the cycle.


The best companies start with a process like this, usually at the annual level, and then break it down into quarterly, monthly, and weekly processes. Refining the processes is what drives results.

 Trying to drive results with a task list can work, but it is VERY stressful and puts a lot of the responsibility (stress) in the hands of the person(s) making the list.

Let's take a look at the phases of our model construction year. This cycle has more to do with when the busy / slow times of the year are versus the accounting cycle or calendar year.

 

  • December (General Goals): This is the time of the year when things have really slowed down. You are just getting back from Thanksgiving. If you are an underground contractor, moratoriums are likely in place and you cannot work on the city streets. It is possibly raining or snowing for many of the days during the month. Everyone is thinking about the upcoming holidays. This is the perfect time to get your team together and start creating some general plans for the upcoming twelve months. Is there a new market you would like to enter? Do you want the company to grow? By how much? Are there specific areas that you would like to cut costs? Are there some major capital investments you would like to make? This does not have to be anything fancy - just a list and some brainstorming. Keep it short with no more than five or six major items.

 

  • January (Action Plans): People have come back from the holidays and now it is time to unveil the plan for the rest of the team. Hold a series of meetings to describe each of the big goals. As a group, break down each of these bigger goals into specific action items and assign responsibilities and due dates. It is at this point that a common measurement system needs to be put into place to monitor progress; this is where accounting comes in. If the goal is for a certain amount of growth, then tracking systems need to be set up to monitor estimating progress, earned revenue, gross profit maintenance, manpower levels, and cash. These systems need to be set up to identify problems and opportunities on a weekly, monthly, and quarterly basis. Without these feedback systems, execution will be haphazard.

 

  • February (People): People are the driver for EVERYTHING that happens - either good or bad. Jack Welch was the CEO of General Electric for over twenty years prior to retiring several years ago. He is known as being both one of the best and toughest bosses around, and GE's financial performance reflected this. His thought on people was, "if you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it, you almost don't have to manage them."


At this time, you should have your general goals for the year defined, as well as detailed action plans and feedback systems in place to support these plans. You should spend the month of February reviewing individual action plans with each person. Look at their performance from last year. Set goals with them during this review process. When applicable, tie their compensation to the achievement of these goals and specific action items. Set learning and personal development goals for them that support both their personal vision of a "perfect day" and your vision of a "perfect year" for the company. Make sure they understand the feedback systems that are in place so they can monitor their own progress.

 

  • March-May (RUN!): By March, the work is usually starting to break loose and everyone is in run mode - it feels like a full sprint most days. Jobs are starting, there is not enough manpower, equipment breaks down, schedules are getting compressed and cash is tight; all the normal things that happen during this time of year. If you do not have a general plan, established goals, feedback systems created, and "people plans" in place, this process seems very frustrating. It can lead to very little actual growth in the value of the company. In this case, everyone is doing things based on little planning and with no feedback.


During this time, thousands of decisions are made throughout the company every day. Each of these decisions has a direct impact on cash, profitability, quality, safety, and customer service. Some of these decisions are good - some are bad. Good planning and rapid feedback systems will increase the number of good decisions that are made.

 

  • June (Review / Adjust): This is very difficult to do. During June, you are still in peak production. If you close your fiscal year in June, you have that additional stress as well. It will be very easy to push off a formal review at this time and react on gut feeling instead. This is exactly why you need to make the time in June to review your progress and make adjustments. If you worked hard in December, January, and February, this should be a relatively simple process because all the information will already be available. If the process is difficult, then work your way through it as best you can and remember this experience so you can improve the process starting in December.

 

  • July-November (RUN FASTER!): You are still in peak production months. Continue executing every day, every week, and every month just as you have been. Look closely at both the results AND the process. Are you making decisions based on good feedback? Is the feedback fast enough? Is it accurate? What else would help? You will need to take this information right into the December planning phase when you start all over.

Focusing on improving the process is a simple and important shift. Making a buck is hard - building a process that makes a buck is VERY hard, but this is the only way to create long-term value. It is the only way to stop feeling like a fire fighter.


This works at the project level and at the company level. It also works at the country level, with the United States having an almost insignificant portion of the world population, and being a "toddler" in age, yet holding most of the world's wealth and power.

D. Brown Management provides a wide range of services to help define and document critical processes. These range from the simplest, such as how to properly fill out a Daily Job Journal to bigger, more global processes, such as a "Project Manager's Perfect Week" or even the "Perfect Construction Year".

 

Posted by David Brown on June 2, 2008 08:02 PM|Permalink

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