Be a Construction Company that Makes Money

Wouldn’t it be nice if you could almost guarantee your construction company makes money? 

Let’s consider a common perspective: 

You are in a Executive position at a construction company. While you are not the owner, you are a key employee who runs the estimating department and oversees multiple people who look to you for leadership. The culture is good, but there’s a lack of accountability—generally, when someone doesn’t do what they said they’d do, they get away with it. And it undermines the players on the team who are striving for excellence. But what do you about it?

If this sounds familiar, that’s because this happens in some form in almost every single construction organization. 

In struggling organizations, a culture that lacks accountability like this creates unhealthy conflict and gossip. It also tears the team apart. Eventually, these businesses fail or reach a growth ceiling that they can’t eclipse—and they never will unless they dramatically change their philosophy. No matter how good of a leader you are, if you’re the only one striving for excellence, eventually it’s too much weight to carry.

In an average construction company, a few key people are accountable enough for everyone and help keep the business afloat and maybe even help it grow a little some years. As an Executive, contributing to this “accountability team” is an important part of your role. But the business’s success is typically sporadic and based on the energy levels of you and those other key people, which waxes and wanes as you navigate relative periods of burnout. The company will survive and make enough money to make it seem like everything is fine, but the truth is losing a few of those key people would mean the likely demise of the business—in whatever form that occurs. 

Then, there are the excellent construction organizations. Process is clear, roles are defined, and accountability is a must. People say what they need to say to each other, and they are open to ideas from anyone who has something to offer. Accountability isn’t about hierarchy—everyone holds each other accountable regardless of title. As an Executive in this business, you better set a great example of high integrity and accountability, but you don’t have to burn yourself out holding everyone else accountable. Meanwhile, people learn to make their own decisions, and the business is rewarded in the form of dedicated people who bring in higher-than-average profits for the owner(s). 

The Types of Companies That Grow

The excellent construction organizations are the ones that grow and build exciting futures for most everyone in the business.

Accountability and a culture of radical candor—where people care enough about each other to challenge them directly to help them reach their best—are foundational elements to being an excellent contractor with huge potential for growth. But they are not the whole story—the types of construction companies that grow also share a few other things in common.

Here are a list of a few of them with a short description of each. As you read, grade yourself from 1 to 3 in each category. 1 = Severely Lacking; 2 = Needs Immediate Improvement; 3 = Little Improvement Needed 

• Set a clear vision for the future. Vision is the 3, 5, or 10 year future that you communicate to your team as often as is appropriate to help them picture what a successful future looks like. We find it helps to have a vision for each of those timeframes that the team finds exciting and organizes their efforts behind. 

• Build fantastic client relationships. Over and over again, the excellent contractors get there because they partner with other fantastic organizations. Make building fantastic client relationships a part of your culture that every single person commits to and you will be awarded in the form of winning work without being low. 

• Foster employee engagement. Find ways to get the team together outside of talking about work. This helps develop a deep care between coworkers, and when you have care, things like accountability get a lot easier. 

• Encourage new ideas. The industry is always changing, and it’s important to encourage your people to have new ideas and think outside the box. Remember: if you meet new ideas with, “We don’t do it that way because…”, then you are subconsciously telling your people, “We don’t want your ideas. We are going to keep doing things the old way.” Do your best to encourage idea creation by thanking employees for ideas when they bring them, regardless if you end up implementing them or not. 

• Promote from within. One benefit to defining your 3, 5, and 10 year visions is that you and your people will see which positions will be available to them in the future. With that vision of future opportunities, it allows you to start preparing them now, which means more opportunity to promote for those positions from within. While some outside hiring will almost always be necessary, do as much as you can to promote from within. 

• Pay fairly. Pay all employees competitive, market-research-based salaries. Don’t pay a new employee way more money than an existing on in the same position. They’ll figure it out and get frustrated. 

• Follow a set of meaningful core values. Core values are a north star that tells your team how to treat each other and your clients. 5 or 6 values seems like the optimal amount, and they should be meaningful to as many people in the organization as possible. 

While there is always more to consider when striving to be an excellent construction company, I think these are a great start for your business today. Go out and work on the 1s and 2s immediately, and focus on getting 1% better every day. 

Spark Notes:

• A lack of accountability in construction organizations leads to unhealthy conflict, gossip, and eventual stagnation or failure, even with good leadership.
  

• In average companies, a few key people maintain accountability, but burnout and the loss of these individuals can lead to the company's downfall.
  

• Excellent construction organizations thrive with clear processes, defined roles, and a culture where everyone, regardless of title, is accountable and open to new ideas.
  

• Successful construction companies set clear visions, foster client relationships, engage employees, encourage innovation, promote from within, pay fairly, and follow meaningful core values.
  

• To become an excellent construction company, focus on improving areas where you're lacking, and strive to get 1% better every day.