What are the differences between a successful and unsuccessful construction company in today’s market? We have clients who are booming, others that are hanging on and some who are only months away from closing their doors. Why do some companies succeed and thrive while others falter, struggle and ultimately fail? We represent hundreds of privately held firms, and the following strategies are based on patterns that have emerged as we’ve assisting these clients over the years. Though they are based primarily on observations from our construction clients, they are broadly applicable across multiple industries.
Acceptance. To quote the words of Bob Dylan, “The times, they are a changing.” In order to survive, or better yet, prosper, construction companies must change with them. Frankly, I tell my clients that business in this industry has changed forever. It’s time to embrace that fact and move forward. The previous decade was built on false numbers and unhealthy economic patterns, and those times are not likely to return in our lifetimes. Face the inevitable and accept the change for your company. Take the best of the old methodologies, the strategies that grew from solid practices that led to efficient productivity, and scrap the rest. If it’s unsupportable, let it go.
Management. Changing management is often the hardest for a company to make in the process of turning things around because it frequently requires some difficult and emotional decisions. Nevertheless, it’s also the most important one. If you don’t address your management team’s effectiveness then none of your other steps are likely to work. So if you make only one change, make it this one. I recommend taking an objective look at the strengths and weaknesses of your management team. It’s harder than you think, partially because these may be your friends. Utilize management consultants from outside the company to assist with this objective review and analysis. Tie salary and bonuses to performance – it can happen even in construction. When the analysis is complete, get rid of toxic or underperforming execs, and start fresh with seasoned and aggressive managers.
Advisors. Your trusted advisors (CPA, business attorney, financial planner, business consultant, etc.) should be more than situational firefighters – they should be a part of your management team! These advisors can do, and usually enjoy, more than just solving problems as they arise. Use their capacities for planning and strategizing for growth. Think of it as preventative maintenance and insurance for your company. The best part is that many advisors do not charge for these strategy sessions (attorneys included)! Additionally, you will get the opportunity to reap the benefits of the knowledge that your advisors have gained from working with other companies in your industry. For more information on how to best utilize your advisors, please check out our upcoming blog posting on Advisory Boards.
Training. The best education starts at home, so remember what has made your organization great and go back to those roots. Train your employees traditionally but also look to new ideas, technologies and techniques. These people are your bottom line, so you want them at the top of their game. When you invest in good training for your employees, you’re investing in the company’s future. Good education doesn’t have to be expensive, either. Our law firm alone offers over 30 different free training seminars, yet fewer than 10 percent of our clients utilize them. Help is out there if you want it, so look around and you may be surprised to find exactly what you need.
Plan. The old saying “Failure to plan is planning to fail” may be cliché, but it’s true. Create a plan. Share the plan to others in your organization and to your advisors, and make sure everyone is on board. Set measurable goals, and then stick to the plan. Hold everyone accountable. Measure progress and reward success. Learn from mistakes along the way. It’s basic stuff and it makes a world of difference.
These strategies can’t change the world or the economic climate, but they can definitely change the way your company interacts with them. Success boils down to observation and adaptation, both things that you and your business can handle.
Observe. Learn. Adapt. Repeat.