Our Infrastructure Imperative Conference series continues today with Gregg Schoppman, a principal with management-consulting and investment-banking firm FMI Corp. Gregg leads FMI’s project management practice and heads the consulting management group of the company’s Florida office.
And we’re suiting up for an epic struggle. Seems there are two ways to approach construction productivity and, frankly, this industry ain’t big enough for the both of ’em. More on that in a moment.
A year ago, FMI teamed up with Viewpoint Construction Software, a cloud-based accounting, project management, and workflow optimization tool, and BKD LLC, one of the nation’s largest accounting firms, to form the Alliance for Construction Productivity. Their mission: to use Big Data to pinpoint why efficiency has stayed flat for 50 years, even as other industries, from manufacturing to agriculture to hi-tech, have soared.
Gregg consults on projects throughout the U.S. and as far away as Moscow. When it comes to wrestling with operational discipline (and losing), he wryly observes that “we’re a lot more alike than we think.”
When Gregg addresses the AEC professionals and project owners attending Hanley Wood’s Infrastructure Imperative Conference Nov. 13-15 in Cleveland, he’ll share what research and his extensive field experience reveal: the not-so-secret secrets for “Achieving Operational Excellence.”
Peggin’ Gregg: 5 Main Things to Think About
Meanwhile, after visiting with Gregg for a half-hour or so, we saw five key ideas emerge that ought to get the industry’s cowboys and Vulcans alike melding on the logic of improving productivity and profitability ...
1. Do you run your business like Billy the Kid or Mr. Spock?
“People like the fact that they can be cowboys and cowgirls in this industry,” Gregg says. “We let people have a lot of autonomy, but we confuse autonomy with the lack of discipline and structure.”
Gregg, who’s a civil engineer, suggests that if something can be linear and systematized – he calls it “The Vulcan Mentality” – that’s the way things should be done.
“Take Starbucks for example,” Gregg says. “They have an infinite menu; you can get whatever you want. Yet it will always look and taste the same – there’s always a standardized approach. They allow their employees to be creative in their company, but have figured out a way to let people operate with guardrails.
“Now think about ABC Construction, a $50-million-a-year roadbuilder or civil contractor: is there the ‘ABC Way’ of doing things, or is it John’s way, Mary’s way, Steve’s way? That is what’s at the heart of all this.
“Everyone has manuals and standard operating procedures, but no one ever reads them because no one is ever managing by them.”
2. Sorry, but there’s no silver bullet.
Communication and planning are critical in an environment that’s becoming ever more sophisticated and complicated. The path to doing them well, however, is not all that shiny or exciting.
“Everyone looks for the silver bullet, but the reality is that you’ve got to have structure and processes,” Gregg says. “Whether that’s to account for your inventory, sending materials out, or jobsite planning, you must be very deliberate – and it can’t be just checking boxes. The so-called secret sauce has about 100 disparate parts, and we have to be very strategic.”
Doing each step, and doing it consistently, is how to make every job profitable.
3. We’re using the wrong metric to measure success.
With all construction markets experiencing significant growth, builders are in the precarious position of biting off more than they can properly chew. They suffer from the “It Feels So Good To Say Yes” syndrome, but over-booking can put their reputation at risk.
“The busier we get, the sloppier we get, and that’s why more builders go broke in good times than in bad,” says Gregg.
Contractors move superintendents and project managers on and off jobs like chess pieces to cover the influx of projects they couldn’t refuse – with the result of neither starting nor finishing projects to the best of their ability.
“They’re in the fourth quarter, and what do they do? They pull their quarterback! Why would you do that when you’re down by seven touchdowns? Why would you remove people? We barely start one project off right, and we’re going to finish another one poorly.
“They view lots of work as the measure of success, but the real measure should be: are you profitable?”
4. Excuses we make.
Builders believe that because they tackle a wide variety of projects, they need to create a specialized solution -- “a new recipe card” -- for each one. But what about following procedures?
“They say, ‘That’s too confining; it takes away my creativity,’ and I scratch my head and go, ‘What does that have to do with anything? The problem-solving part of things, the collaboration, is where you should be creative.’”
Gregg says contractors use other excuses, too, to avoid using established processes:
- The weather
- The building department
- Safety regulations
- Lack of good people to hire
- Even the customer!
“I don’t think Starbucks complains about the customer; in fact, that’s their reason for being,” says Gregg. “Are we fixating on externalities, complaining about background noise instead of what matters?
“Did you do your planning?
“Do you have a system? Do you follow the system?
“Do you communicate effectively in your organization?”
5. Changing those crazy, lazy ways ... it can be done.
Without a doubt, improving productivity takes dedicated focus. The good news is that many companies are making that push.
One is a client of Gregg’s: “Morale was very low when I started working with them. They didn’t know their costing very well and were very isolated internally. They had something like 10 project managers and 12 ways of doing things. They actually submitted two bids to the same customer one time!”
They turned it around by making operational excellence part of their business strategy. The result: $10 million added to the bottom line over five years.
“It doesn’t happen by itself,” Gregg says. “You need process, structure, tools, and most importantly, accountability. I can’t stress that enough: You only can manage what you’re measuring.”