Go or No Go?

Even with a well-defined strategy for competing, winning and growing, construction company leaders can still face an “eenie meanie” dilemma when it comes time to make a decisive “go or no go” decision on a potential new project. Here’s practical advice from other leaders in the field. 

Do You Want It? Can You Win It? Can You Execute Successfully? 

At Construction Business Owner, Lori J. Sullivan underscores that growth in construction requires leadership to “own the strategy, translate it into a business development plan, and define the markets and customers the company is best positioned to serve.” Then, each time an opportunity reaches the go/no-go decision making moment, apply a consistent decision making process. Sullivan shares these pointers for evaluating opportunities for the winning combination of strategic fit, competitive position and delivery capability:

• Strategic Fit: Assess whether the opportunity aligns with your target markets, involves a funded and trustworthy client, offers reasonable terms, and provides solid profit potential and good customer compatibility.
• Winning Potential: Analyze your competitive standing by understanding likely rivals, decision-maker relationships, award criteria, and unique advantages such as prior experience or local partnerships.
• Execution Capability: Determine if your organization has the required staffing, expertise, financial capacity, and operational bandwidth to successfully deliver the work, handle logistics, and manage risks without straining existing commitments.

As you develop a more consistent approach to evaluating all opportunities, you may find Sullivan’s complete Go/No Go Framework helpful—and her reminder too: “Defining your markets tells you where to compete. Defining your best-fit customers tells you who you want to work with. A disciplined go/no-go process determines which individual opportunities deserve the company’s resources.”

Operational Alignment: Collaborating Before Bid Time

Alignment between estimators and field operations is essential in the run-up to a go/no go decision. Jerry Aliberti, principal of Pro-Accel, points out that estimators and field operations often see two completely different projects when reviewing the same opportunity. To ensure a sound go/no-go evaluation, these two teams must engage in active conversation to challenge assumptions and align on pricing, schedule, and key risks. Clearly, the path to success is not carved when questions about the guts of a project plan hit the air after it’s been won, right? 

Before finalizing a decision to “go for it,” Aliberti recommends: “Have Operations challenge production assumptions with the highest risk, including crew sizing, equipment needs, site access, and construction sequencing.” Toward a sustainable culture of alignment, he also encourages:

• Schedule monthly site visits for estimators to observe active field operations and refine future pricing accuracy.
• Include project managers in weekly preconstruction reviews to vet assumptions prior to final pricing approval.
• Identify and assign ownership to verify the highest-risk production assumptions during handoff.
• Analyze post-project production data against initial estimates to continuously improve future bid accuracy.

Good To Avoid: Sunken Cost Fallacies

Once you and your team have committed time and effort to exploring the viability of an opportunity, it can be tempted to fall into the trap of saying yes, even when the project does not align to your strategy. Sullivan emphasizes the importance of steering away from “sunk cost threat,” explaining: 

This is the sunk-cost fallacy: continuing to invest because of what has already been spent rather than because the opportunity still makes sense. Leadership may also worry that walking away could waste years of relationship-building, but relationship capital alone does not make a project strategically sound, winnable or worth further investment. Opportunities evolve, conditions change and new information emerges….each new decision should be based on what the team knows today, not simply on how much has already been invested.

Small, Medium, Large? What’s On Your List?

Every construction business has its own path to growth. That’s why Colonial Surety Company offers bonding programs to fit a range of needs.

For bonds up to $500K: The Hometown Bonding Program is a credit-based option for contractors who are newer to bonds or who need them occasionally. Qualified contractors can get bid and performance bonds as needed for upcoming projects, without a traditional surety line of credit.

For larger bonds: Get single and aggregate bonding limits in writing, and even issue your own instant bid bonds, through The Partnership Account® for Contractors. Once qualified, you can get a surety line of credit of up to $20 million single and $40 million aggregate. You’ll also receive free financial scores just for completing our easy pre-qual.

Put your business on a strategic growth path, starting right here:
Bonding Programs at Colonial Surety Company

In business since 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial Surety Company is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed.