Construction business owners and managers continue to blame poor or unfavorable results on the economy, competitors, customers, location or employees. Do you blame poor results on any of these common excuses and problems I hear over and over from contractors?
- Profit fade during the job
- Final job cost higher than estimate
- Low profit margins
- Too much competition
- Customers only buy low price
- Can’t find any good help
- Job close-out too slow
- Too many call-backs
When you drive too fast and get a speeding ticket, you change and drive slower to avoid another citation. When you trim roses and cut yourself, you never forget to wear gloves again. When you add too much water to concrete, you find out it won’t meet the required strength and then don’t make the same mistake again.
When your construction business continues to have the same problems over and over, month over month, and year over year, what do you do to stop and fix the problem?
No accountability and responsibility leadership
When managers don’t want to face reality or are too busy to find real solutions to their problems, poor results continue. Rather than focus on finding solutions, the tendency is to blame others, not accept responsibility for issues and hope problems stop happening. I call this “No A/R” — not accepting accountability and responsibility for results.
An example is continuing to bid cheap work against too many competitors and hope you’ll make more money by bidding more low priced work. Or wondering why your job costs come in higher than your bid when you don’t track, verify or update your costs until projects are finished (or never). Or continuing to get call-backs to repair unfinished or shoddy workmanship long after the project is done when you don’t have enough proper field supervision or a job close-out procedure in place.
When companies don’t get the results they want, it's not the competition, economy, customers or people. It’s usually the ‘No A/R’ leader who tolerates poor performers and isn’t willing to try new ideas, systems, methods, people, markets, strategies, or customers — and is often afraid to make people accountable or responsible for their performance and therefore continues not getting the results wanted.
The problem starts at the top of the chart
Company owners are 100% responsible for everything in their company: sales, profits, growth, quality, customer service, organizational systems, people, productivity, cash-flow, and management. In other words, responsibility and accountability starts at the top.
No A/R leaders blame poor results on others and circumstances beyond their control. Weak leaders sit and wait for something to happen, hope profitable customers call, pray someone will show up at their door to professionally manage their projects and run crews, or wish some other miraculous event occurs quickly to change their future. All while not doing anything different or decisive to make results happen on their own.
Successful business owners have to be proactive, make changes and take responsibility to achieve great results if they want to get to the next level, make more money and grow.
Do nothing different to get nothing different
I drove by a well-located Sears department store and its parking lot was empty while the rest of the shopping center was jammed full. Sears can blame its decline on Wal-Mart, Target or the Internet. But in reality, the leaders of Sears were stuck in the past and made decisions to do nothing and not change their business model, customers, image, products, services and pricing.
Rather than trying innovative products or unique concepts, they kept offering the same tired old comfortable things and didn’t change how they do business, hoping something would get better. The leaders hoped their new competition would go away and customers would keep buying from a business that was out of touch, outdated and not changing how they do business.
The leaders didn’t do what they needed to do. No changes or innovation and afraid to try new things. They got eaten alive and now continue to scramble to keep up with the competition. What about you? Are you willing to do what you have to do and take responsibility for better results?
Change starts at the top
Getting great results is the number one indicator of the business owner’s vision and leadership. Real leaders make quick decisive decisions to adjust and stay ahead of changing business requirements and customer needs. When customers demand specific scheduling software, project websites or faster schedules, you don’t have the right to complain.
When there are too many competitors offering low prices on your project type, you have to change how you do business and revamp your business model. When you can’t find cheap help, you have to take charge and retain a hiring coordinator or consultant to revamp your recruitment program. When your field productivity takes more crew hours than in your estimates, you have to dedicate time and money to a job cost update tracking software program and staff required to generate weekly cost updates for your foreman and superintendents to review.
No A/R leaders wait for something to happen and complain about everything except their own performance. Business owners rarely come into the office and say, "I've made a decision. I need to change how I manage and lead and direction of our company.”
Poor leaders walk into the office and say, "Crews are too slow and aren’t making it happen. Customers want lower prices and don’t pay us fast enough. Competitors are too cheap and willing to work for next to nothing. We can’t make enough profit. Therefore, everyone will have to work harder and we have to cut costs.”
Effective leaders realize they must have the courage to change themselves before anyone will follow their lead. Over 90% of employees rate their company leadership well below excellent. Employees don’t see business owners taking charge and doing what they need to do with the poor performers, bad customers and not knowing their numbers.
Doing something is better than doing nothing
I work as a business coach with lots of contractors. The common challenges are find more help, get more organized, build a management team, grow, and make a large profit. This only starts when the owner has dynamic vision employees get excited about.
People want to follow a leader on a mission to be the best in their market. They won’t follow someone who is negative and complains about problems, people and why they can’t compete. Leaders who really lead, stand up and say, "Here's where we're going, the changes we need to make, and how we’ll make it happen," instead of, "Work harder and we'll see how it works out; and if we do well, maybe we'll be able to survive."
This No A/R attitude doesn't make people excited about coming to work and improving the bottom-line.
What’s your future?
Accountable responsible leaders have an exciting vision and connect it to specific measurable great results. Some companies have visions to be the best company, offer the best service or provide the best quality. While that's an ok vision, it’s not exciting.
An example of an exciting vision: Be the market leader in innovative construction solutions for difficult complex projects that require technical expertise and intense engineering by providing loyal customers a value enhanced project delivered significantly faster than expected.
Ask everyone at your company, "What's the exciting vision of our company? What are we trying to accomplish and our top three priorities? What specific targets are we shooting for?” You'll get 37 different answers if you have 37 people in your company. To get bottom-line results, get everyone on the same page from top to bottom.
What’s your goal?
After defining your exciting vision, specific results must be targeted to quantify your goals. For example, if your vision is to be the best contractor in your market, determine what specific measurable results enhance your bottom-line. Some specific measurable targets can include: a referral from every customer, no installation errors or 98% on-time completion.
What specific targets and numbers can you shoot for to realize your vision and get the results you want?
George Hedley CPBC is a certified professional construction BIZCOACH and popular speaker. He helps contractors build better businesses, grow, increase profits, develop management teams, improve field production, and get their companies to work. He is the best-selling author of “Get Your Construction Business To Always Make A Profit!” available on Amazon.com. To get his free e-newsletter, start a personalized BIZCOACH program, attend a BIZ-BUILDER Action Plan Boot Camp, or get a discount at www.HardhatBIZSCHOOL.com online university for contractors, E-mail GH@HardhatPresentations.com.