PrefaceThe following concepts are simple yet out of the box thinking in today’s culture. I would ask that we set aside current work flow processes and open our minds to solutions that will increase the company’s profitability. In doing this I think like Steven Covey, and begin with the end in mind. The results are the basis of building a solution. If the results cannot be measured with a system that provides accuracy then you have no results to improve on. With all the inflow data, the outflow data (results) will have to be just as accurate. The key to getting the outflow data accurate is with consistency.

TrustThis starts with the employees in the field. The first thing to clarify is that more employees are trustworthy then those that are not. Management must ensure that anything asked of the field is driven to create trust. If you can secure their trust, then they will give at their true potential. At the end of each day every worker wants to know, ‘Did I do good or bad today Boss?’. It is impossible for management to respond to this question to every employee daily. The question is really 2 parts. The first is production (Am I producing within the company’s budgeted goals?) and the second is Skill (Am I improving so that I might be able to increase my hourly wage?). A basic management rule to build the employees trust is, “Never mess with the employee’s money”. As management we dismiss this basic daily function that this has any bearing on the employees trust. We take away their ownership of them recording their own time and have a management person do it, we make them use a time clock bolted to a wall near their work location, and now we have fingerprint scanners, retina eye scanners and location tracking inputs devices. What do these processes display to the employee that is giving of themselves every day? Management must trust to get trust. Accountability is the core principle of trust. Any solution must build into the process accountability. The solution must keep in focus that accountability is driven by the fact that more employees are trustworthy then those that are not. Building walls to stop the untrustworthy just slows down and destroys trust of the trusting ones. Employees want and desire accountability. Accountability must be conveyed for improvement and not used as a whip to beat them. Another core principle is that anything management promises employees must be delivered, correctly and on time. An example is paychecks, if an employee does not receive their check on the date management promises did we improve trust? I know we have laws that cannot force employees to direct deposit, but a conversation with each employee properly structured and explained might get them to see the benefit in building trust. The cost in money and time to distribute these paychecks can be astounding, not to mention the incredible loss of trust when it is not. When the employee does not own their hours and allows someone else to take that responsibility what happens when an error or unknown change is made? Again, this is another example of employee’s loss of management trust. If the above processes are improved, so will the profits. All employees are motivated by trust. Without trust, their output is a direct correlation to the amount of trust they do have. Any changes to current processes need to keep the above concept present during any communication with employees they are directly and indirectly accountable.

TechnologyThe next thought is technology. With current IT capabilities the cost to utilize has become increasingly more attractive. Today’s new workforce are tech literate. They have grown up with Play Station’s and Xbox’s where they are rewarded for skills acquired by being allowed to move up to the next level. They see immediate rewards for their efforts. All of these games are consistent in providing timely feedback and building trust that the user can feel as they work through the levels. We are at a crossroad in the workforce. We have experienced 40-50 year olds that will be retiring soon. This workforce has limited tech knowledge but have come a long way in the last 5 years in using smart phones. Building processes using technology must address the strengths and weaknesses of both. Moving away from spreadsheets and into a solid data store will be the future. Centralizing the data will allow for web pages to be built. All processes must be designed to ensure trust, be accurate, timely, and eliminate redundancy. Every inflow of data must be from the point of origin and never retyped. Spreadsheets were created because of the mathematical capabilities and individual flexibility. The devastating effect is that they are individual and sharing the results in a timely, accurate informative way is impossible. They become islands that each one has to be looked at to see trends and any types of analysis. Looking at your current accounting system does it have the capabilities? Can time cards be imported into the payroll process? Does it allow for Phases and Cost Codes with a assigned unit of measure and quantity? Does it have the ability to store change orders and break them down by phase & costs code with quantities? Answers to these questions are the basis for developing a web solution to create a real-time production portal. The amount of money being spent on redundancy can pay for a full and part time programmers. The return on investment can be realized in less than 1 year!

Cost Codes and PhasesWhat we are measuring. For some unknown reason we seem to want detail. How many hours does it take the employee to install chamfer strip on a CIP wall? It would be nice to think that by breaking the job cost down to this level creates accuracy. It is impossible to ask employees at the end of the day to break their time down to any more than 3 measurements with any kind of accuracy. If we take the input of their time from them and ask a management person to do this it then becomes a process to make the budget work out. The process becomes a pattern of let’s make the numbers work out instead of what really happened. The more eyes on the results will increase the level of accuracy. The confusion is that the detail is needed. Less is better, but with a condition. The condition is that we add data that accurately identifies the variances in the results. For example, instead of cost coding spread footings, strip footings, column footings, we just cost code them as footings. Now we know that if we do that there will be a large variance between the results coming from each project

completed. This is where we would add the data or filters to each result record that would identify variances like the complexity on a scale of 1-5, Earth or Formed, Lay Back 1:1 - 1:4, Sub Excavated, above or below average temperatures, above average rainfall, customer coordination, and geographic location. These examples of adding data to the results can produce consistency and lower the variances of the data. In concrete construction there should be no more then 25-30 cost codes total. The variances can be designed with consistent filters to allow the estimators, crews, admin, and marketing to have a historical results database to use daily. If we need the cost code measurement more detailed for

planning and scheduling the use of phasing to present the measurement in shorter duration goals. Example, we have a project that has 5 buildings. Phasing would be Building 1 Footings, Building 2 Footings, etc. We could even use phasing for establishing weekly goals of large quantity cost codes. Example we have a project with 1000 CY of Footings and in our preplanning we establish 5 weeks to complete then we could phase it by the quantity needed per week. Always reference that Phasing is for establishing the plan goals and the cost code is for building the historical data store. In our historical data store when the project is completed we would have 5 records for the project on footings with either of the above examples. Anyone can query this history and apply the proper filters and get expected results that can be reproduced during estimating. The knowledge of estimators knowing how to build it will reduced and the person responsible for looking it over will have less time in reviewing with solid factual data to compare against. Keeping the cost codes consistent in numbering and what work is performed in each one of them job after job will produce this useable history. I attached an example of a consistent cost code structure. This is the most important step, without simplifying the cost codes, creating consistency of the cost codes, and apply consistent filters to the cost codes then timeliness, accuracy and any chance of looking back and what the results were will be unobtainable.

Career Path and TrainingThe perfect time to communicate with all employees on a daily basis is when they enter their time. With technology and the fact that most employees have smart phones we now have the ability to display the information to them. The other part of the question every employee ask daily ‘How did I do today Boss?’ is communicating their skills improved or learned daily as they acquire them. If we have a consistent set of cost codes that are the same on every project every time. We can do the same for the skills needed to accomplish each of the “Standardized” cost codes. For example footings, might have 10 primary skills required that need to be learned by every employee. Defining the skills required and measuring them daily will produce a historical data store of what they accomplished and how many hours they have completed in each of the skills. A daily measurement to the defined skills could be captured by 1 of 5 questions. They don’t know it, Somewhat Know It, Know It but still require Supervision, Know It and can Supervise It, Know It and Supervise It and Can Train It. Imagine a data store on each employee that would allow you to review the total hours of every skill worked on each of the cost codes and where they are with the capabilities of accomplishing them! Safety training can be incorporated and displayed to them also. They will become more trusting if they own their hours and see the results of those hours daily.

SummaryUsing a repeatable consistent set of measurements (cost codes) and a data store then presenting it to all the employees becomes easier. Using smart phones and kiosk tablets the implementation and cost can be reduced. Building a website that shows the employees daily the production and skill results will focus everyone towards improvement and the bottom line will benefit. Understanding your data storage of your accounting system will help in developing the consistencies in the measuring system. I know the results from focusing on the above will produce more profit, less stress and redundancy of each person’s job, a more trusting relationship between management and field, and more time to work on improving and less time putting out fires. If we begin with the end in mind and stay true to the employees in the field giving them a measuring system they can trust then all other processes will improve.

Lee Clark CFO at Somero LLC Greer, SC, United States

Lee Clark, CFO of Somero LLC, has over 15 years of experience creating software for the concrete business. His first software system, created in 1999, was notably covered in several trade publications. Lee’s lifelong commitment to measuring performance in the construction industry is realized in his latest project which provides managers and employees real time details on any given job.