Defining everything it takes to be a good contractor would be a very long list. But last month (in Part 1 of this article) we developed the following list of management skills needed by the good contractor and reviewed the first two in detail. We will cover the last three this month.
Gauge your own level os susceptibility to each item as you read the list of problems that cause contractors to go broke.
In last month's column, we introduced the seven core elements of value and the importance of measuring performance in each area. Tracking performance in each of the core elements allows management to determine where value is created and where it is destroyed.
To learn how a construction company is performing, the first place most people look is the financial statements. But the real measure of management effectiveness is whether it creates or destroys value. Some might say “sell more, work faster, be safer, and you will be successful.” But a company can sell a lot, work hard, have a great safety program, and still go out of business. The reality is that financial statements alone do not tell the whole story. Creating value means improving performance in the core elements of value.