“Best in class.” It’s a phrase thrown around a lot, but what does it actually mean to be a best-in-class contractor? Seasoned industry experts remind us that it’s not about luck: it’s about having a clear strategy, focusing on implementing it, and tracking progress regularly. The result is ideally a company that thrives without you having to micromanage every single detail. Read on to unpack the insights.
Vision, Goals, Teams and Targets
Though it’s not easy to have break out, best in class, success in the construction business, the good news is achieving it is possible. At Construction Business Coaching, George Hedley points out that building a thriving operation is largely based on setting a strong vision and clear goals, and cultivating capable teams who are prepared to go after their targets:
Best in class” contractors continually move their businesses to a higher level and achieve their business plan initiatives, visions, targets, and goals. These top companies work well without the owner’s hands-on involvement in making everyday decisions and supervising work. These companies are managed by strong take-charge and accountable management teams who handle day-to-day operations including estimating, project management, scheduling, ordering, and field supervision. They make high-profit margins with steady growth, attract and retain great people, operate with standard enforced systems, hold regular meetings, have a clear organizational chart and written job descriptions, manage their business development and sales to deliver a continuous flow of loyal customers and profitable contracts, and their investments provide a high return.
According to Hedley, something best in class companies take seriously and put time into developing and updating is a strategic business plan, which includes attention to these components:
- Written business plan including a 5-year vision, mission, and core values.
- Clearly tracked targets and goals including growth, revenue, gross profit, net profit, mark-up, margin, job size, equity, and return.
- Specific action plans for improvement including systems, talent, recruiting, hiring, organizational structure, meetings, customer development, sales, estimating, project management, field operations, production, job cost tracking, equipment, customers, and marketing.
- Winning game plan with “must-do” systems and processes to ensure success and achieve consistent results.
- Regular management team strategic planning sessions to develop updated business plans and strategies to improve, monitor results, and achieve goals.
Winning high margin customers, consistently, knowing and tracking numbers, recruiting and nurturing top talent, running efficient meetings, and leaning in around continuous improvement and technological innovation, are other keys to success from Hedley’s viewpoint. Relatedly, his advice for business owners includes these tips:
- Seek projects with a high barrier to entry, high qualifications, niche expertise, and low competition.
- Implement a proactive business development, marketing, and sales plan to maintain loyal and repeat customers who provide a steady flow of high-profit work.
- Implement sound financial management for revenue, equity, work in progress, completed contracts, overhead, profit, markup, crew production, job cost tracking scorecards, and equipment.
- Maintain strong financial management, bonding capacity, and a line of credit.
- Monitor, track, train, and enforce companywide systems, policies, standards, procedures, and processes to deliver expected results on a consistent basis.
- Hold and maintain effective regular meetings to hold people accountable, monitor results, communicate, and encourage teams to reach their goals.
- Maintain a proactive safety program….
- Maintain an effective employee talent development program to attract, recruit, develop, mentor, train, promote, and retain great people.
- Maintain the latest cutting-edge technology, construction methods, management systems, techniques, strategies, and initiatives….
When you become so successful that you have more customers that you can handle, remember: complacency is the enemy. As Nick Howell of T&N Asphalt Services advises, responding to customers remains essential:
Don’t get fat and happy and become complacent. No matter what your current schedule or workload, try and give each customer or potential customer the respect all customers and prospects deserve. That doesn’t mean you have to take all the work that comes your way, but simply be respectful to them, even if you have to decline to bid. My company often books up rather fast, and some years we’ve scheduled out for the season very early. While a good “problem,” it doesn’t stop the phone from ringing. But I always respond to people, even if I can’t bid…. I often refer the customer to other decent contractors. I can’t tell you how much this has paid off. We consistently have customers use us later in the season or the next year, just because of how we handled the first interaction.
Leveling Up?
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