Tips for Staying Profitable in the Construction Industry
Lee Smither offers invaluable information to construction companies in a presentation to Mountjoy Chilton Medley LLP. The presentation was titled Adjust, Adapt, Act: Winning Stories for the Post-2007 Construction Industry. Mr. Smither shared success stories of companies that have managed to stay profitable during hard times, revealing their secrets. The following are some great takeaways from the presentation.
- New Environment – When describing the state of the U.S. construction industry, Mr. Smither used the abbreviation V.U.C.A. (Volatility, Uncertainty, Complexity and Ambiguity), and I think all contractors can easily identify with this abbreviation. The construction industry in the U.S. is, and will continue to be, fundamentally different. Waiting for it to return to its original form as a booming industry is not a good strategy. Firms must adapt to the changed, competitive landscape in order to survive.
- Embrace Technology! – In today’s hi-tech business environment, owners and construction clients are expecting much more from their contractors. They expect faster services and streamlined processes throughout the entire project, from planning to completion. Firms that are not technologically savvy will stand out in a negative way.
- Project Management is Key – The most recent construction boom allowed companies the luxury of focusing less on project management because there were so many projects to keep them profitable. Nowadays, good project management skills are being re-learned and the next generation of managers/leaders should be trained to manage projects very effectively and efficiently.
- Multi-skilled workforce – Emphasize training, and cross-train employees to handle any situation. You don’t want any setbacks on job sites.
- Go to where your clients are – “Traveling contractors” will be more common in the future.
- Client relations – Understand that communicating with clients is not limited to your business development (BD) professionals. In fact, most client touches are through project managers and superintendents. Make sure you can maximize on these touches through BD training for your professionals in the field. They are the ones who will be talking with customers more often.
- Bid less, win more – Focus on bidding on quality jobs, likely to be the most profitable. Using resources to bid on every job available is not the way to go.
- Plan for all scenarios – Make sure you are prepared for any situation. Think about multiple scenarios (best-case, worst-case, and most likely), and build contingency plans into your corporate strategies.
Do you have your own tips for staying profitable in the current economy?