AUSTIN, Texas—Contractors usually see indicators in their jobsite and financial data when something is going wrong with a project. But sometimes, a project succumbs to troubles even when the data looks great, two construction industry veterans said during a session at Procore's Groundbreak Construction Conference this week.
“Sometimes metrics can be deceiving depending on who is putting them out and how they are received,” Nancy Novak, senior vice president of construction for Compass Datacenters, told several hundred attendees. “You’ve got to dig in and understand … what they mean.”
Novak and Tamara Yang, Balfour Beatty Construction’s director of learning and development, said there are four key things contractors should do besides looking at data when a project is going south: monitor and adjust the team’s behavior; use empathy to understand all stakeholders’ issues and to implement solutions; quickly “course correct” the situation; and “future proof” your company’s next jobs by learning from troublesome projects and creating a culture where bad news isn’t bad.
Monitor and adjust team behavior
Poor team behavior shows up on the jobsite long before it shows up in the financials, the presenters said. For instance, Novak described one large project from her decades-long career that looked successful on paper: Despite “tons of changes,” it was on schedule and on budget. But something very different was happening at the jobsite. “Heads were hanging low” when managers visited, she said. “We had a team morale problem."
Novak discovered that workers were stressed about the project and not gelling as a team. She became concerned that capable employees and subs would start jumping ship. To boost the “team health,” Novak bought dinners and stayed on-site to listen to concerns and filter issues. “We didn’t lose anyone on the jobsite,” she said.
On another project, the team’s energy was high, the group had a great rapport and the owner was good to work with. But the project leader was burned out, which was beginning to impact the team, so Novak brought in another manager. “The switch in leadership made all the difference,” she said.
It’s important for contractors to observe how their teams behave with each other, as well as how well they work with subs, Yang said. “See if there is finger pointing and blaming going around, and if they have a good relationship with the owner and the leadership."
Yang said that Balfour has a “smart start” meeting with all stakeholders before the project’s onset to set behavior expectations. “It’s all about building trust,” she said.
Team behavior also includes how the contractor’s executives react to problems. What executives say and do impacts work on the jobsite, she said. “If they are going to go off the ledge, they might be taking the whole team, project and earnings off the ledge."
It’s very easy to blame others, particularly subcontractors, when something goes wrong on the site. Novak and Yang said contractors must find out what the issues are and then use empathy to understand all sides in order to do what’s best for the project.
Novak recounted a project where a sub was complaining about losing money. “I told the sub, ‘show me your books and how much the damage is,’” she said. After seeing the sub’s financials, “I said, ‘I am going to do everything in my power to make the job easier and recover some of the job for you.” Novak said she spent some money to improve the sub’s situation on the project.
Although the project didn’t end up being as lucrative as the sub would have liked, Novak said he told her afterwards he wanted to do all her firm’s work going forward. “He’s going to be there for me,” she said. “Preserving the relationship [with a good sub] is most important.”
Being empathetic not only means understanding the subs’ point of view, but also taking responsibility for problems your firm created on the job, Yang said. “Transparency is key,” she added. “You might not be able to make the subs whole, but they’ll know they were treated fairly.”
Implement a course correction
What should you do if you’ve improved the team's behavior and applied empathy, but the project still is off-track? You should quickly shift gears to do what’s best for the project, Yang said.
Novak recounted one project where “everybody was suing everybody. The owner, even the caulk guy.” She brought in a team to unearth what had happened and found that her company and the owner had “screwed up a lot of things. But we and our subs were the ones who paid the price for this.” Not only was there a financial cost to the stakeholders, but there also was high turnover of workers.
Novak set out to get every party to pay its fair share as well to keep her firm out of court. Although she was told it couldn’t be done, she got all the subs to align with the contractor. “It took months, a lot of meetings and deep dives, but they all got on board.” In the end, there was no litigation, all the subs stayed in business and the contractor preserved its relationships.
‘Future proof’ for more jobs and workers
Yang said that executives at many construction firms don’t want to discuss failed projects, but leaders should take lessons for problem projects and share them internally. “Let’s talk about what we did to get there and what we did to turn it around."
Contractors need to create cultures where employees are not afraid to report bad news to their supervisors, Yang said. “Reward the bad news early because bad news later is really bad,” she said.
Likewise, construction firms should take a long view on every project decision because “you are going to be dealing with those subs and architects on future jobs. We want those subs to bid on future jobs, and if they are fairly treated, they’ll give favorable bids. If you can be fair, that’s when you’re going to grow your reputation and get you more jobs and employees,” she concluded.