Good Habits

 7 HABITS ED PIC 1Seven habits can lead to projects staying on time and under budget.   

By Chris Bell

The steps to achieve and maintain a thriving construction project management program can be complex, leaving facility and asset owners at a loss of where to begin to improve their current program. However, as the construction industry has become more technologically adept by adopting cloud-based project management solutions, we have seen a significant spike in resources and data that paint a clearer picture regarding the practices that separate top-performing owners, those who regularly see projects completed on-time and under budget, from average or low-performing owners. In fact, they can be boiled down to seven common habits.

Habit 1 – Be Proactive

In order to excel, the first habit facility owners must adopt is to be proactive. A proactive owner works in a time management quadrant that emphasizes activities that are important, but not urgent. Why is that? “Urgent” and “important” activities are a staple of organizations that are constantly in a firefighting mode, meaning that these activities are usually somebody else’s responsibility but for whatever reason, they have been abruptly passed to the owner.

Therefore, owners must eliminate urgent activities as best as they can. Whether they are completed by the owner or assigned to another employee, getting these tasks off the table is critical, as it allows owners to begin tackling forward-looking measurements. For example, proactive owners review items like the Estimate to Complete (ETC) and two-week look ahead, while also ensuring there is adequate time for leadership activities like talent management and new employee on-boarding. By prioritizing these activities, owners establish quality communication and team dynamics.

Habit 2 – Forecast Completion

Of course, one of an owner’s top responsibilities is ensuring the proper execution of construction projects, which means access to data is necessary. In the past, much of project management was focused on reporting a project’s status and what already happened, since real-time access to data wasn’t an option. This lag meant that owners might not get a project’s full report for at least several weeks.

Clearly, this isn’t the most efficient way to run a project or forecast completion, which is where cost management software and schedule management applications have come into play. Cost management tools track and control risks that could impact project cost as soon as they become known, and schedule management applications review a project’s work status and can immediately identify if productivity is falling behind.

However, owners sometimes still get tripped up with forecast completion. Why? Because a cost management solution may report that the organization has spent 100 percent of its budget while the scheduling tool will report that the project is only 25 percent complete. While these may both be accurate numbers, if an owner reports them in isolation, stakeholders end up with a very misleading idea of the current status of a project. Therefore, it is important to always refer to both numbers when looking at a project’s forecast and ensure the appropriate systems are in place to generate this information in real-time.

Habit 3 – Automate to Operate

Unfortunately, owners often spend much of their time on tactical items such as running around to get change order requests approved or communicating project status to a number of groups, like the design team, general contractor and internal management. However, leading owners don’t do this. They recognize that by driving non-value activities out of their workday, they can dedicate more time to things that truly matter. They accomplish this through cycle time reduction.

For example, in order to streamline reporting cycles, leading owners use construction program management software for capital projects designed specifically for owners. This centralizes all information related to program performance and eliminates the need to pull data from multiple systems and organizations. Furthermore, by using integrated business intelligence, they can automate graphically rich reporting and analysis so any slice of program performance is just a click away.

Habit 4 – Win-Win and Pay Fast

A major source of cost overrun on capital projects is change order. Regardless of the contracting strategy – be it guaranteed maximum price, design/build or integrated project delivery, owner direct change orders and contractor substantiated change order requests can quickly turn small decisions into massive scope and schedule impacts.

To take control of this, first, top-performing owners apply pragmatic risk management to the process by funding their contingency budget with money that is already allocated to the project. A few tips for implementing this type of strategy include:

• When the contract is initially awarded to a third-party, include a provision on the contract that allocates buy-out saving on materials and subcontractors to be allocated to contingency funds

• Contractually require that the owner has visibility to the estimating process and the buyout process

• Consider creating an incentive for contractors by offering to distribute a percentage of remaining contingency to them once the project is complete

After owners have gained cost visibility and applied buy-down savings to contingency funds, they need to ensure timely payment to contractors. Contractors have to pay financing fees for carrying the cost of procured materials until they are reimbursed by the owner through progress payments. The longer owners take to pay them, the more costs they incur, which get passed back to them in the form of overhead. By acting swiftly – yet smartly – owners can add to their budget without sacrificing a quality final product.

Habit 5 – Empathize, Adapt and Overcome

Best-in-class owners empathize, adapt and overcome, especially when it comes to technology-driven process implementation. Putting this into practice means working to understand the challenges of a project and addressing them through a collaborative, technology-enabled approach, while at the same time retaining their strategy for success.

It’s not easy, but a top owner knows that the best solution to improve productivity, streamline processes and drive efficiency requires some adjustment once it makes it into the field. Therefore, these leaders listen; they ask stakeholders what they need to make their jobs easier and what are the bottlenecks that slow processes. They seek first to understand before being understood – a fundamental tenet of active listening.

Habit 6 – Collaborate to Accelerate

Owners must collaborate and engage all stakeholders inside and outside the organization – a particularly important habit as a project moves from the virtual environment to the jobsite. As previously mentioned, one of the biggest risk to any capital program is change orders, but remember, outside of unforeseen conditions, change orders occur because of a lack of collaboration with stakeholders. Best-in-class owners use technology such as building information modeling (BIM) tools to engage internal stakeholders and end users. These models can provide a 3-D visual representation of the facility about to be built, and to external stakeholders, we all know that if a picture is worth a thousand words, a model is worth a million.

Habit 7 – Relentlessly Improve

Continuous improvement is vital to every company’s success, regardless of size or market segment. Once owners have adopted the above habits, top owners use all of the data collected throughout the project management process to continually improve and identify bottlenecks. One of the most reliable ways to make sure a company is continuously improving is to apply Six Sigma’s DMAIC approach, which stands for Define, Measure, Analyze, Improve and Control. A data-driven improvement cycle, it is a natural extension to the seven habits described here. 

Seven Habits, One Result

At the end of the day, while implementing any of these habits will better a facility owner’s construction project management program, in order to experience a truly holistic improvement, it is necessary to adopt all seven. Only be addressing all components of a program – ranging from employee training to automation to collaboration – can an average owner become a top-performing owner, which comes down to one criterion: delivering projects on-time and on-budget. 

 

Chris Bell serves as the vice president and program management evangelist at e-Builder, leading all aspects of marketing including market strategy, product marketing, demand generation, CRM, brand strategy, public relations and social media. Throughout his 20-plus-year career, Chris has leveraged a unique blend of backgrounds from the engineering and construction industry, project and program management, and software industry to position tech companies for growth.  

 

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