April/May 2019 Edition
by Gregg Schoppman, Principal, FMI Corporation
The “Year of Talent” appears to be an appropriate rallying cry for 2019. In addition to its impact on a firm’s long-term ability to execute work, no one is getting any younger. Businesses are continually wrestling with succession depth for owners and simply business leaders in all facets of the organization. Best of class firms have managed to use this industry challenge as a opportunity to develop a strong competitive yet collaborative culture that accomplishes many things – soft/hard skill enhancement, business management education, improved communications (internal and external), morale improvement and ultimately leadership growth.
Talent is but one trend that is the focus for 2019. While there is always a pall of a potential economic slowdown or market correction, businesses remain focused on developing a fact-based strategy to drive success. The key theme is not simply riding the wave of the market highs but in fact driving the wave and being in control of any uncertainly the market will bring.
The Year of Talent
This is not simply about training and education but a full comprehensive program that examines the full complement of “people focused” strategies. These include the following:
- The Brand – What does an employee driven market think about your firm? Why would they choose you in a sea of great organizations?
- Recruiting – Where are you “fishing”? There is no “secret location” but how and where firms fish for talent has to be deliberate, consistent and disciplined.
- Hiring – How many levels does you hiring process have? How do you evaluate a candidate? What screening tools are available for ALL positions within your firm?
- On-Boarding – What does the first day, week, month, year look like? Is there structure and discipline to how new associates are brought on board?
- Training and Education – How are new associates trained? What about mid- and senior-leaders – is their training and education stunted?
- Performance Compensation – How do you reward star talent? How do you retain star talent long-term?
The knee jerk reaction for many is that these elements are not easy nor are they done on nights and weekends. More firms are evolving to a leadership position that is dedicated to full time talent growth and development. While there is a cost impact, the cost of doing nothing to cultivate and grow associates may be far greater.
It seems silly to mention the role of technology as being a critical trend. Every year, technological improvements move at an exponential rate in terms of innovation and growth. The best question to ponder is how your firm is keeping in lockstep with these changes. There is a fine line between fascination with technology (the bright shiny object) and true innovation (leveraging technology to enhance all aspects of performance). Whether it be the continued push towards prefabrication and modularization, enhancements in autonomous vehicles and equipment, utilization of lean/agile/six sigma principles and systems or simply using the storehouse of data firms sit on to proactively drive business decisions, technology needs to become an action point within every firm’s business plan.
As projects get larger or more complicated or timeline compressed or some combination of all of these, there needs to be a refocused commitment to firmwide risk management. With the rise of tools that serve as “profit centers for risk”, such as captive insurance programs and trade partner default vehicles, contractors will be required to comprehensively think of risk. Coupled with increased life safety requirements from customers and agencies and the ever-increasing cost of healthcare costs, risk management requires a trained professional to integrate all of these elements across business units and projects. It is not simply enough to view this as an “annual renewal” process. Rather, it will require integration into areas such as the following:
- Go/No Go Project Selectivity – True risk registers for project or client targeting
- Pre-construction Risk Planning – Balanced life safety and productivity planning
- Post-Construction Reviews – Incorporation of best practices and lessons learned
- Quality Assurance and Quality Control – Limiting long-term potential sources of liability
- Employee Health and Wellness – Healthy employees correlate to lower health costs
Risk is an aspect of construction that must be measured but it is not enough to compartmentalize this within the office of the CFO or Controller. Risk management in the future requires careful, proactive installation in all corners of the firm.
Acute Infrastructure Needs
Channeling Dean Vernon Wermor from the 1978 comedy Animal House, “0.0.” Well, it isn’t quite that bad but according to the American Society of Civil Engineers, the infrastructure within the United States received a grade of D+. Anchored by D scores in the aviation, energy, schools and transit categories, the nation is grossly negligent across all the areas that serve as the backbone. While there are many questions as to the Federal, State and local responses to these needs from a budgetary perspective, it is apparent that something must be done. Consider the simple fact that Americans spend an average of 43 hours in traffic annually – what a way to spend a week vacation! What is the impact to logistical needs within the firm and employee health before you even consider the impact to the marketplace should the $4 trillion in spending be funded? The opportunity is vast even if only a fraction of that funding comes to pass but more importantly, there remains opportunity for ancillary businesses. For instance, even if a contractor does not build in the water, wastewater, transportation, aviation, etc. sectors, it is important to consider the industries that complement them or simply the growth that will positively impact a geography.
There is no shortage of scenarios that may positively or negatively impact the construction industry. When leaders apply optics to these trends, they can easily provide roadblocks to growth or engines fueling opportunities. Whether the economy wanes or continues to thrive, the critical questions to ask are as follows:
- If our best customer went away, what would our business do?
- If our niche or sector(s) went away, what would our business do?
- If our best people left the organization, what would our business do?
- What aspects of the organization not only require the most continuous improvement but also what impact would that have on our long-term health?
- What should the leadership team in our organization do now to develop both craftspeople and management to run the business in the future?
- If we mined the data our organization has, what would it yield about the firm’s current performance?
- What data should the organization use to make future business decisions?
Best of class performance should not be left to luck. The rising tide that raises all ships is wonderful when times are good but the high performers today may not be the same firms of tomorrow. Winning strategies and tactics require discipline, dedication and ultimately talent to make 2019 just the beginning of a dynasty.
As a principal with FMI, Gregg specializes in the areas of productivity and project management. He leads FMI’s project management consulting practice. He also heads the consulting management group of FMI’s Florida office. Visit website at fminet.com.