Andersen Wood Insert Replacement Window Clinic

Looking to get some new windows and/or patio doors for your home? Be sure to join Millard Lumber this Saturday (May 1st) from 10am – Noon for a FREE Andersen Wood Insert Replacement Window Clinic! See a demonstration and visit with an Andersen rep. Be sure to bring your measurements and ideas!

Your Homebuilders’ Success Report for April 2010

Edited by Ted Garrison and Ron Black

Increased Productivity

The primary role of management is ensuring maximum productivity from all its resources. This is achieved through effective leadership by properly aligning all resources, including labor, capital, knowledge and equipment.

Prior to 1875, poor performance was blamed on the worker, but Frederick Taylor learned that work could be managed with a resulting increase in productivity. He explained the way to improve results was to “work smarter.” He also concluded that productivity was the responsibility of not the worker, but the manager. While he never included it in one of his formal theories, he recognized that knowledge was a critical capital resource.

The Garrison Report 2010-2: Effective Leadership explained that leadership is about perception and alignment, not control. It also argued that knowledge is a critical aspect to someone’s ability to perceive. Therefore, it’s essential that managers are well informed and have the necessary knowledge to perform their responsibilities. Unfortunately, too often people are promoted into supervisor or management positions because they know how to perform “the work.” The problem is required knowledge is more than simply “how to do the work.”

Peter Drucker wrote, “Knowledge must be able to be applied to all resources: capital, key physical resources, time and knowledge itself.” It requires the know-how to judge other people’s abilities so the right people can best be assigned or aligned to the required work. The effective manager needs an understanding of the big picture because without this insight, it is virtually impossible to establish the right priorities. While knowing how to do the work is helpful, if the individual doesn’t know how to coach or instruct others in how they can improve their performance, this knowledge is useless to the person who needs the help. In other words, the manager’s required knowledge goes beyond how to perform the tasks.

Since the economic well-beings of both the company and its employees are dependent on the company’s productivity, the managers can’t be allowed to fend for themselves. Instead companies need to invest in educating their supervisors and managers. Yes, educating, not training. Training is what you do to teach someone a skill, but to develop the depth of knowledge required to effectively perform the role of manager, namely perception; managers must be educated with the information necessary for them to understand impacts of various factors on the performance of their teams.

Today’s managers need to understand the importance of innovation, the constant need to shift from obsolete or declining methodologies to new and more productive ones, even when the necessary changes threaten their comfort zone. Of even more concern is the idea that some of their subordinates might actually have good ideas to change things that would improve productivity. In essence, this idea of constant improvement is the underlying concept of lean construction and Construction 3.0™.

If you don’t think the construction industry needs change, consider it’s the only significant industry that hasn’t increased productivity since 1960. Other nonagricultural industries have averaged doubling their productivity during the same period. The industry’s approach to supervision and management is a major contributing factor. In part, the problem is an issue in mindset. The industry invests a large amount of time and money on technical training, but often courses that would truly improve supervisor or management performance are overlooked except for individuals at the highest levels of the organizations.

Too many forepersons are promoted simply because they are the best technicians. Without the necessary information, how can we expect forepersons to perform properly? Their source of knowledge is usually someone else promoted the same way, who also lacks the necessary information to perform adequately. In many companies the situation is even worse because the same procedure is applied to superintendents and project managers. The reason it’s worse is because these individual have substantial responsibility and can have a major impact on a project’s performance and productivity.

Many clients have placed tremendous pressure on contractors to reduce project overhead because they believe it will reduce costs. Unfortunately, they are misinformed; it actually increases costs. When there are no positions between foreperson and superintendent, it should be obvious there is gap in the necessary knowledge of the individual when he or she is promoted from foreperson to superintendent. The costs related to this lack of knowledge are greater than the cost of an assistant superintendent. Not only does the assistant superintendent perform valuable functions on the project, but the position allows the individual to gain the necessary background information to perform as an effective superintendent.

When companies hire college graduates and immediately install them as project managers, they do everyone a disservice. The author has a B.S. in civil engineering, but he also knows how stupid he was when he first walked on the job. Fortunately, he had several important mentors who allowed him to grow into the necessary responsibilities of being a project manager. While today’s college graduates from engineering and construction management programs are very knowledgeable with regard to the technical skills of the job, they still lack critical knowledge to perform properly. No one has ever learned how to build a building by reading a book; one must do it. Again the investment in properly developing a company’s project managers will handsomely reward both the contractor and the client.

The recession offers a lesson that proves the above claim. One CEO the author interviewed told him that his company’s volume is down, but its profits are up. When asked how, the CEO explained that since they had less work, he assigned more management people to the projects. The result was that costs came down significantly more than the cost of the additional people. This proves that many of the so-called overhead personnel who have been removed from projects actually had important tasks to perform. The result is less efficiency and greater waste or mistakes.

Tom DeMarco in his book Slack helps explain why this occurs. He points out that middle management’s roles include dealing with change and problems. Superintendents and project managers as well as their assistants are all middle managers. To deal with change and problems requires knowledge and time to think. However, when the staff is reduced to a minimal number, no one has that time, which results in poorer perception and results. DeMarco explained the myth of total efficiency. He found that companies that increased efficiency to high levels actually had a decline in productivity.

Jim Collins wrote that he learned in writing Good to Great that most successful companies are realistic about conditions. It’s time the construction industry embraced Construction 3.0™ concepts and become realistic about what has caused its failure to increase productivity for a half century. The industry can’t afford to do anything else.