For many, 2017 may go down as one for the books. A few bumps in the road came along with a surge in construction demand like the skilled labor shortage—not to mention a few natural disasters thrown in for good measure. But before the dust has settled on 2017, contractors should invest some time and effort into reviewing what really happened this year. These insights will allow your construction firm to take stock of the year just completed before planning and setting goals for 2018.
First, you should never miss an opportunity to apply lessons learned. This is a great jumping-off point for the second part of this task—taking a hard look at each department and what metrics you use to measure their success.
Applying Lessons Learned
Let’s face it, we should always be applying lessons learned to build our knowledge from one project to the next. Sometimes it’s not much fun to reflect on all of your firm’s actions, meaning the good, the bad and the ugly. However, taking stock of these “lessons learned” may prevent you from repeating the same mistakes over and over.
OK, let’s get started and pull off the proverbial Band-Aid. We’ve included below a wide variety of tough questions to ask your business. We think they will yield some answers that will help you in this process of reviewing 2017:
- What was our total in place sales goal?
- What was our goal for hiring?
- How many lost hours did we have due to safety issues or accidents?
- Did we exceed our bid/hit ratio?
- For those projects won, did we achieve our profit goals, man-hour targets, safety meeting frequency, reporting functions timely, etc.?
- Did we dig deep into change orders both approved and unapproved and determine how we could have done better?
- Did we achieve our bid production rate?
- Did we implement new software like our implementation plan called for?
- When we bought that new piece of field equipment, did we set up an effective maintenance plan? Did we correctly allocate for the entire expense in our bids and our job costs?
Processes and People
- Did we put into place those metrics to measure the goals we set for ourselves?
- What did we do during the year to adjust things to more accurately achieve those metrics?
- Did we effectively engage with our employees?
- What would they say?
- Did we provide effective feedback to our vendors and suppliers? Will they give us the best price next year?
- How did we recognize our clients this past year?
- Did we truly show them we appreciated their business?
- Did we ask for a referral?
- How did we deal with those complaints from the job site?
By documenting lessons learned, you can identify where to make changes. For example, you may discover that investing in new technology with a focused implementation and training plan would improve productivity and employee morale. You can then determine the breadth of changes required, whether to apply them to just the takeoff division of the estimating department or your entire worldwide operation with 100 offices.
Reviewing and Setting New Metrics
By digging into the numbers revealed above, you can begin to understand what changes should be made to achieve stronger results, such as an improved bid/hit ratio. It’s important that every contractor set metrics for success. This includes each department and segment, such as accounting, sales, marketing, estimating, project management, safety, field operations and HR. By setting new metrics for 2018, you can spell out what is required for each department to meet their goals.
Here’s a handy checklist by department and examples to get you started establishing your fresh, new goals for 2018.
Update Accounting Calendar, enter new items from lessons learned, document new processes, retool month-end reporting and sequencing based on input from operations.
Quality implementation of the CRM this year, no more excuses, take the time to document what the prospect really wants, make sure we deliver this message to the estimating and operations teams.
Replace metrics that were not clear from last year, update new marketing calendar to share with staff, revise newsletter to bring real value to both clients and vendors, rethink that opportunity to sponsor the local hunger drive or other local charity event.
Update bid/hit ratio with revised metrics based on lessons learned, use more detailed views into market segments, change to processes and systems to achieve these changes, prepare to move to the Oasis Platform by On Center Software. When launching new technology, be sure to take the time to plan and implement so that an effective rollout is achieved.
Update protocols to effectively discuss concerns with accounting (no more yelling down the hall), implement new processes for software systems that were a problem from last year, work with estimating to develop a better transition from estimate to project start.
Update job box talk tools to use, revise documentation that is easier for field to manage, document and report with, revised trainings based on real need, and revised budget for safety equipment.
Make sure new hires receive specific training in 2018. We will invest in this process and achieve increased production, which will be measured and adjusted against.
Make staff reviews enjoyable and meaningful again, restart that process you wanted to do three years ago to pre-schedule those one-on-one’s between supervisor and staff, implement the new payroll system that more adequately integrates with the new project management field operations software.
Make Your Plans for 2018
We hope these questions and metrics trigger some thought-provoking discussions in your construction business. By making sure to create performance baselines and benchmarks, you can identify areas of improvements and implement a timeline to stay on track. No doubt, if you can dig into the answers and data, your business will be well on its way to beating the competition and having a stronger fiscal year in 2018.