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June 30, 2000 8:17 AM CDT

The Revolution Is On

Gain a competitive advantage by investing in your people

By

A revolution is occurring from boardrooms to shop floors across the country. Contractors are searching for and finding competitive advantages by making an investment in their people. We will look at how that strategy can impact your competitive posture, how to structure it for success, and how to apply the benefits to your organization.

Change is always the mantra of business. Contractors are no exception. The challenges most contractors face today, however, are different from the past. Sometimes the greatest challenge is the speed at which change is occurring. Organizations respond to changes in the marketplace only to find the market moves on before their changes can receive full value for the efforts invested. Other organizations may be challenged by maintaining their financial flexibility in the marketplace. And still for others, it's the search for a profitable niche that can be the basis of future growth. Regardless of the primary focus, what do all of these organizations have in common? The need for effectively re-engineering their organization's capabilities.

Contractors today are searching for strategies to develop high caliber, dedicated, innovative, and hard working people. Imagine what the impact would be on your business to have all of your key managers operate at the level of a senior executive. Key field personnel, project managers, estimators, engineers, and business development managers all operating with the total company perspective of a senior executive. Someone who is able to read the changing winds of the marketplace and build effective strategies to exploit windows of opportunity. Imagine having a project manager streamline field operations and improve effectiveness while maintaining quality and safety. Imagine the impact to your business.

How you get there is the objective of this article. We will explore the strategies necessary to make all your key managers highly effective senior managers. That means having every key manager focused on finding "new successes" for the organization. People who are vested in discovering strategies that will maximize corporate success into the future. People with those abilities will consistently operate at the pinnacle of performance, their absence can dramatically change the picture of the future.

So how do you go about securing a talented pool of key managers?

You can do what a hotel chain proclaimed a couple of years ago with their ad campaign. The headlines read "We don't train our people to be nice." The fine print reinforced the underlying strategy for success. "We don't need to, we only hire nice people." Certainly that would simplify the process of finding employees who treat customers with service and respect. You as contractors need people with unparalleled technical expertise be that engineering, estimating, project management, production, and management. In addition to high-value customer service, construction people may even need to navigate their way around job costs, project control systems, legal aspects, and insurance. It's not as simple as having "nice people."

Right now there is a vast group of talented people available. People who can help guide your organization into the future. Luckily the search will not have to be elaborate nor far reaching. The people that you are looking for already work for you.

How can that be so? You might think you have a bunch of 6-7-8's when what you really need is a bunch of 10's. But who better to be a 10 than a current 6 or 7 who is looking for more responsibility and better opportunities? I am not talking about the alchemy experiments of eons ago. The process of turning lead into gold. If one of your people can become a 6, 7 or 8 largely due to their own efforts and sweat equity, they have the ability to evolve into a 10 with some structured assistance from you.

Management development efforts that are at the cutting edge today are unlike the past processes. Management development is more than participating in a training program on a periodic basis - regardless of how good the training may be. Effective management is a systematic process of elevating the skills and abilities of people. Elevating them to the level needed for the company to capture continued success in the future. Development starts with a focus on the individual's strengths and weaknesses. It is a process of changing behavior that will generate results for the company and the individual. It's like gas to a combustible engine. The engine has some value without the "fuel", but it is the fuel in the engine that drives to extraordinary results. Effective management development is the fuel that is the fulcrum of explosive corporate success.

Ensuring Your Efforts Generate Results
Having spent the last several years working with contractors to create training and development systems, a defined sequence of steps has evolved to ensure effectiveness of mid- and senior-level managers. Whether directed at improving a defined skill - like finding and securing new customers - or more comprehensive in nature, the pitfalls of developmental success are consistent and avoidable.

Start at the End
The real objective of any training program is changing the behavior and performance of those participating. This is not to be confused with the objectives of an educational program. The goals of which are to deliver information, facts, ideas, and opinions rather than modify your existing skill capability. If changed behavior is your target, that's where the training process needs to start. Specific performance expectations are established and communicated to the target audience. Efforts are directed at uncovering the internal support systems that will help or hinder implementing new skills. Strategies are then developed to reinforce skill implementation.

Discovering Potholes and Roadblocks
Incentive compensation, employee feedback, and the performance review process are frequently hidden potholes to greater performance. While working with one general contractor this point became very evident. He was frustrated by the lack of initiative demonstrated by project managers in discovering new work opportunities. After having repeatedly "trained" project managers on everything from negotiating skills, marketing strategies, leadership, and even time management, there was no significant change in the basic performance of the project managers. Project managers spend the majority of their time running projects and putting out fires. They spend very little time courting potential clients. Time invested in marketing was inconsistent and largely ineffective. Work opportunities being secured with new customers was on the basis of "the lowest bid wins."

FMI's involvement was to review which compensation and benefit package would be required to attract a higher caliber of project manager. The contractor had resigned to hiring a new project management staff as the only means of affecting the corporate objective of increasing negotiated work opportunities and, therefore, profit performance.

During the process of reviewing the responsibilities and duties of project managers for a new compensation and benefit package the real training challenges were revealed. The hidden roadblocks to the marketing behavior of project managers involved the incentive compensation plan, field manager effectiveness, and the performance review system.

A significant portion of project managers' incomes were based on profits from work completed. Every six months a bonus check was cut. It represented a substantial amount of their annual compensation. With the average length of a project being 3 to 11 months, the key to maximizing compensation was securing and closing out work in an expedient manner. They simply did not have the financial luxury to spend a significant portion of their day chasing negotiated work opportunities that may not pay off for 12 to 24 months - if at all.

Aggravating an already challenging situation was a small element of the formal performance review system. It "graded" the project managers on their ability to manage jobs - nothing was included for their efforts in finding new customers. I am not suggesting incentive compensation or performance review systems are inherently detrimental to training efforts, quite the contrary. These systems can be a key element in an effective reinforcement system designed to elevate performance standards.

But in this case, incentive compensation and performance reviews were roadblocks to getting project managers to embrace marketing responsibilities. Changing only those two elements will not affect sizable changes in behavior. By looking at the project manager's key responsibilities laid across a matrix of time invested, it was obvious that management skills training at the superintendent and general foreman level was necessary to free up sufficient time to allow project managers the luxury of marketing prospective new clients.

Uncovering roadblocks to skill implementation is sometimes like an archeological excavation for buried treasure. Though the process requires a commitment of time and energy, the treasure it uncovers is worth thousands of dollars of profit. Attacking those inhibitors that float silently along like icebergs in your internal systems is the most effective means of achieving dramatic, long-term, and consistent upswings in performance.

Aiming Your Sights on the Target
One key element of any effective development process is creating training content that hits the bulls eye. It requires making a couple key assumptions. First, people are only willing and able to embrace a finite number of changes in a limited period of time. Some people by their sheer nature are willing to embrace more change, others will only embrace a few changes. Whatever the magic number, it is a small quantity. The average person will not be effective at implementing a multitude of substantive changes in a short period of time.

Creating high-impact training content requires focusing on those key skills that will result in the greatest improvement. It means concentrating the training on the 20 percent of skills that when implemented will consistently return 80 percent of the total benefit.

Adult learning is a fast growing field of study. Today there is a plethora of resources that provide high quality training designed around the needs of your people at different stages of their careers. Building content around learning styles, corporate cultures, and target outcomes all speed the transfer of learning (also known as the learning transference coefficient) from the classroom straight into day-to-day use.

Most contractors find that acquiring an existing program or hiring an instructor designed to create content for your individual situation, is preferred over assigning the task to an internal staffer. Creating a one-day training program from scratch typically requires 25 to 60 days or more. Meaning that for every one day of classroom training, the course developer will invest between 25 and 60 additional days of time to create a training package. The content, training-the-trainer sessions, designing reinforcement strategies, and a feedback loop all require a substantial amount of time to develop.

The common means of developing focused, topical training sessions is to build on an existing body of knowledge and customizing the elements to your specific situation. Technical and specialized training is increasingly being written from scratch for contractors of all sizes. Because the time commitment needed to develop technical training exceeds that of management skills training, incorporating the skills of an instructional designer is a positive use of corporate resources.

Whether creating content from scratch with an instructional designer or customizing existing content that meets your training skills requirements, a task force of your people need to be actively involved in the process. They will serve as subject matter experts in ensuring relevant real life examples and interactive sessions are developed. They will oversee accuracy of technical content and converge the philosophic basis of management skills to your corporate goals and objectives. Their involvement cements buy in and positions the training with the target audience.

The composition of the task force changes based on training content. At a minimum, it should include a sampling of the target audience, one or two immediate supervisors, senior management, and potential internal trainers.

Expanding Learning Out of the Classroom
Training is designed to create new standards of performance. It is designed to provide the information, structure, and practice needed to put skills into place. But, a critical element that has been historically missing from the process is management and peer reinforcement. Learning new skills is only half the battle. Each manager of the target audience needs to be active in the reinforcement process. Managing the process of behavioral change, periodically reviewing progress, and setting new target goals are necessary to provide the feedback and guidance needed to ensure success.

Consistent ongoing reinforcement is a vital element of the learning process. The embryonic stages of reinforcement begins in the learning environment. The majority occurs on the job. Ideally the reinforcement will occur at regular intervals, each of a limited duration.

The reinforcement process needs to actively involve the immediate supervisors of the audience. Managers will need coaching on the structure of reinforcement and strategies to maximize effectiveness. Reinforcement modules, based on the key competency areas of the training, are typically developed in parallel with classroom content.

Continuous Performance Improvement
Effective development does not stop with the initial skills training. Implementing a process for continuous improvement is the vehicle to prolong the value of classroom instruction and sky rocket the return on resources invested. Learning is a continuous dynamic in the life of a construction industry manager. By combining structured corporate learning with individual efforts, a Learning Organization will be created that propels the company into the future.

Training and development does not have to be an expensive adventure. Structured properly from infancy, the return on resources can be immediate and amazing. Through using this simple structure for the development of your key managers, the impact on your company and the individuals are limitless.


About the Author

Cynthia Paul is a director with FMI, management consultants to the construction industry. Cynthia works with contractors of all sizes to develop their leaders and managers of tomorrow.

 

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