Construction Companies Can Become World-Class

Article By Alan MacNair
Vice President - Kimmel & Associates

It's not remarkable for me to say that during the eleven years I have served as an executive recruiter in construction in the Southeast, this economy is the weakest and most troubling my clients have faced. In fact, consultants who have been here at Kimmel & Associates for 25 years readily say the same.

To adapt to this struggling business climate and serve our clients in whatever way they need, our leadership here introduced the "New Deal," a series of 10 Programs aimed at approaching our clients with greater insight and renewed effort and at keeping morale and hope at a high level within our four walls.

But this economy has also necessitated some hard decisions: we also discuss protecting the core of our company -- and surviving.

My aim in this article is to encourage construction executives to consider a "New Deal" of your own to survive and succeed in these times and to position yourself to thrive once the economy rebounds, as it will.

Take what you will from the series of specific ideas and anecdotes that follow, but I believe that this crisis presents you with a chance to innovate and re-shape, based in part on the ideas and opportunities listed here:

  1. Pursue Emerging Markets. The Obama Administration seems determined to both fund projects that rebuild America's infrastructure and reward those companies who spearhead efforts in Green building and produce LEED-certified projects. Federal work, Military work, and LEED-certified work is out there. Of course, you know this - but capitalizing on these markets requires knowledge of where they are and demands persistence in winning the jobs.
  2. Geographical Diversification. Just as there are markets you need to pry open, so there may be cities or regions or states that need precisely the product that you can produce better than those currently working there. Are there places into which you can expand to generate more work and money?
  3. Top-Grading. Call this what you will, but streamlining your company is a necessity in this climate. Letting someone go is never pleasant, but inefficient or poorly motivated workers slow down the entire team and cut into your profit margin. You are always going to cull the wheat from the chaff: this economy merely demands you do that more frequently while demanding your employees reach a higher standard of achievement.
  4. A Conscious Commitment to a Positive Attitude. Belief that your company will succeed is essential to its success. I encourage you to root out those who believe the sky is going to fall and who spread that gloomy forecast and tell them they need to go elsewhere for work. That attitude is poison.
  5. Re-allocation of Human Resources. The decision called for in this section makes for an uncomfortable environment in some workplaces. Bringing on new employees while others are being laid off or let go is difficult to justify, and, extremely painful in cases wherein long-term employees are let go. But hiring those who are expert at procuring business -professionals in Business Development, Pre-Construction, Conceptual Estimating and people with great client communication skills - can have far-reaching benefits that assist everyone in the company.
  6. Concentration on Honing Your Workforce's Skills. Assuming you are not hiring in mass numbers right now, this is the moment to make the women and men you have now the sharpest force they can be. Train, train, and train some more. Sharpen your talents in scheduling and estimating and any other element that can go into lowering your own costs and raising your profit margin.
  7. Use the Company's Collected Wisdom. Ask the Superintendents and Project Managers and others out in the field, and everyone else, for their ideas. Where is the new work we can land? What markets have potential? How can we improve? Presumably, you hired smart, driven people. Use those smarts and that ambition. And be sure to reward and recognize those ideas that provide a concrete benefit to the company.

Honestly, three results await every construction company right now.

First, some companies will go out of business. This has already happened and will continue to for some time to come.

Second, some companies will stay in business but will diminish because they refuse to capture more market share and shape themselves to be indispensable to their clients.

And, finally, a more inspiring outcome. Some companies will maintain their current client base and win a greater market share by acting boldly and implementing some of the suggestions above. Those companies will be brave and determined enough to invest money, resources, and marketing in the procurement of new business.

Your company's survival and success comes down to attitude. Okay ... no one can predict where this economy is going or how long it might trend downward before surfacing again. However, you must maintain an attitude of hope and an assumption of ultimate victory.

And this attitude starts at and flows down from the top. Here at Kimmel & Associates we have a leadership that has stated very plainly and frequently that we will do what we must to flourish: we will protect the core of the company. We are entering our 29th year in business and we know how to remain strong and move forward. Our leaders, like you, have asked hard questions and acted when the inevitable hard answer presents itself.

For example, leaders at construction companies must ask this: "Do I let more people go or do I reduce salaries and keep everyone working?"

I have old friends who are Presidents and Chiefs of Operations in construction, and I believe they sincerely love their workers: these are salt of the earth men and women who want to take care of their families. Some of those workers are currently sitting at home, on salary, with no work to do.

Make no mistake: there is heartbreak at every level in this economy.

But there is also triumph and the reassurance that some of you are doing everything well already. One day, years ago, circumstances threw me in for a day with a young man named Kenny, who worked on the line for a company fabricating cases for computers. He was fairly low on the totem pole.

We'd just met, so I asked him "Where do you work?"

"XYZ Fabricating," he said.

"How is that over there?" I replied.

"We are a world-class company," he stated with pride

"Really? Why?"

"Because three years ago we were producing 1200 units a month. Now we produce 1600 units a month. Because last year we had a units-to-error rate of .003% and this year that rate is .0017%. That's why."

Kenny said "we" are a world-class company. He was not an executive - far from it. But he felt ownership of his efforts and a sense of accomplishment. He had specific proof - clear benchmarks he had helped achieve - that his company was good and getting better. That makes for a proud worker who believes he has a future full of promise.

Yes … a proper attitude, some steel in your spine, and a commitment to protect the core of your company can see you through these times. Employers must go to the women and men who make their companies go and say this: "I need your help."

"I need your help to make this company survive and, eventually, thrive. Let's talk about what makes us a world-class company. What do we do that provides a great job for you - the employee - and what do we do that makes us a great partner for our clients? Let's talk about this."

No one wants to return to the soup lines of the Great Depression, but trials in the United States like that depression and World War II have always allowed this country to produce its greatest moments of triumph. Construction remains a foundational industry in this country, and Kimmel & Associates is proud to serve professionals who will help lead America back to the standard of success and achievement our hard work has let us come to expect.

Those times will come again. Your innovation and determination can hasten their return.