Is Your Construction Company Ready for Change?

Creating a business model that focuses on accommodating change can seem like unnecessary extra work. Yet change is always a part of the landscape — an uncertain economy, rapidly developing technology, the remnants of a pandemic or even normal market shifts.

Adapting to changing demands and digital advancements can help your company come out better on the other side. By being flexible and recognizing when change is needed, you can increase responsiveness and position your company for growth.

Improve Your Soft Skills

Though it’s tempting to focus on the numbers in your operation, soft skills help clarify your business’ values, culture and mission. While they might not be quantifiable, they pave the way for acceptance of change throughout the organization.

One soft skill you can focus on is your construction company’s leadership. You and your leadership team set the tone for the entire company. So take some time to think about what kind of leader you are. Do you have the attitude that you’d like embodied by the rest of the company? Is your leadership team unified when new procedures, policies and processes are being introduced? Are you jointly encouraging production, collaboration, good morale and employee accountability?

You can also improve communication skills and processes. Are you effectively conveying your business’ strategy to the entire company? How do you communicate business continuity plans and operations to employees and customers in the face of a storm or other forced closure?  Are you taking advantage of new and existing networking options that can help you grow your business?

Finally, don’t forget about employee motivation and empowerment. A construction company workforce with good morale is often a path to greater profitability. For example, well-trained employees reduce legal liabilities, risk and on-the-job injuries. So while investing in employee training can cost money, the payoff is worth it.

You can also increase productivity by improving motivation; recognize employee accomplishments regularly and incentivize them to do good work. Additionally, do your employees have all they need for self-sufficiency? By giving them the tools they need (both physical and knowledge-based), they can work more independently and gain confidence.

Review Your Operations and Processes

Can you make any of your processes more efficient and productive? Doing so can reduce your costs — an important goal in construction. Streamlined operations are also easier to fine tune when you have to adjust to market conditions.

While it’s quiet, take the time to look for missed opportunities. There are several questions you can ask yourself:

• Job Estimating: Are you using a job-estimating system that allows the right amount of revenue to remain competitive while keeping revenue high? Can you quickly capture delay and scheduling costs that could be used in future claims? Are you accounting for supplier price increases, pandemic costs and extra equipment and labor expenses?
• Project Managers: Are your company’s project managers setting reasonable timelines? What about achievable, realistic goals on your projects? Can they effectively manage your customer’s expectations appropriately? Are they able to make improvements on their time management processes?
• Risk Management: How is your company evaluating risks, whether it’s based on projects, contracts, receivables, payables, billing, bank credit line changes or loan balances? What about risks with your subcontractors? Are you taking precautions? Are you using bonding requirements, schedule and work type to prioritize new business?

Technology Reappraisal

The changes typically brought forward by digital transformation were accelerated with the COVID-19 pandemic. From cloud collaboration to virtual modeling and robotics, technology has forever changed the construction industry.

Your company’s ability to evolve with technology will impact your future success. Here are some things to think about:

• Automation: Can you streamline job-costing, requests for information, risk assessments, project management, asset management and customer relationships using automated processes?
• Augmented Reality (AR): What about using AR to check for errors in your plans prior to breaking down or when you’re doing training with your crew?
• Analytics: Does your job-estimating software let you report budget-to-actual, labor productivity and cost-to-complete? What’s your best customer type?
• Internet of Things: Are you using sensor data and devices on your equipment to predict maintenance and assess your performance? What about for tracking equipment on the job site?
• Drones: How are you performing safety checks after a big storm on your job site? Are you manually laying out your job sites? Drones can be used in these and other scenarios.

Seek Professional Advice

While making changes like these in your construction business can be difficult, it can also yield big results. It’s important to consult with construction CPAs and other professional advisors to find the best solutions for your business.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.