In today’s successful concrete construction company, extraordinary profits are earned by ordinary operations people who have a clear direction on the task to be completed, when it needs to be completed, and an understanding of acceptable units of productivity. These skilled operations people typically need very little management and enjoy creating more efficient means of completing assignments.
Skilled operations people are extremely valuable in a company. They can keep projects profitable when estimators miss an estimate but win the job. They can correct problems revealed by accounting before its too late.
The old concrete construction company was run by strong personalities, gut feelings, and check book balances. We called it feast or famine. As people moved along with these companies, they would do what they thought their jobs were until something went wrong — then the owner would have to change the name of the company and start over again. High turnover rates affected both craftsmen and entities.
I have seen well-intentioned contractors who try to measure production with systems designed by estimators or accountants who want to know how many nails it takes to fasten an 8-foot stick of chamfer. The results of these extreme measurement systems are that only about 2% of the information is useful — the rest is CYA, lies, and a huge burden on operations that negatively affects behavior. I have experienced the industry average pre-tax net profits of 3-4% on a good year with these systems. However, being raised in the field operations of a concrete construction company like many of you, I fought hard for relevant, accurate data to help my crews make decisions. As the company grew, I couldn’t make all of the decisions, because there just wasn’t enough of me to go around. I also believed that most of the people I worked with could and would make the same decisions I did if they had the same information I had.
After many years of refinement, we consistently produced twice the industry average pre-tax net profits while having fun at it. Not only measuring units per man-hour, we defined craft skill level and measured the number of acceptable hours in training in each skill level — thus retaining help and increasing quality and pride of workmanship. With some fun incentive programs based off daily production rates, we created friendly competition among crews. A generous compliment accompanied by trusted data viewable by everyone in the company is very powerful stuff that pays huge for everyone.
The biggest obstacle to productivity measurements is breaking out cost into too much detail. We have found that too many details can create anti-productive behaviors along with inaccurate data.
As skills increase, focus may change periodically. For example, productivity incentives may need to change to focus on inefficient use of tools and equipment, or better safety awareness, etc. Each craftsman should know units of measure — for example how many sqft/mh is an acceptable day on a floor pour or how many sqftca/mh is a great day forming walls. We all need validation that we put in a good days work for a good days pay. I call that intrinsic value. Most of us have experienced an abundance of extrinsic value which is mostly short-lived pats on the back with no deep feeling or meaning.
Conversations between project managers, estimators and project superintendents will be more intelligent when it comes to collaborating on winning a new project and setting budgets on a projects won. Craftsman will buy into daily production goals when they know production goals are achievable and help make sure supplies, materials, and tools are ordered to get desired results.
The bi-products of accurate operational productivity measurements is knowing that annual strategic plans are achievable, with yearly bidding and backlog budgets that help eliminate the feast or famine scenarios. You will increase your banking and bonding capacities along with confidence and better pricing from your vendors.
The soft stuff is the hard stuff, but we look forward to helping you decrease the learning curve with fun, enjoyment, creativity, and rewarding relationships in your concrete construction company, as well as build a great reputation in the construction community.
“One accurate measurement is worth a thousand opinions.” —Grace Hopper