Issue Layout:Quarterly Issue layout · An Upside to the Downturn 108 Since people are your most valuable asset, this slowdown time offers you the best opportunity to put your limited

maintain your assets

Quarterly2010 issue 1

THIS QUARTER

Improve Your Assets 4

BY JERRY JACKSON

TALENT DEVELOPMENT

Recession-driven Derailment: Do not let your employees jump track 6

BY ASHLEY SISK

TALENT DEVELOPMENT

“So you want to be a trainer?” … Advice to first-time trainers 10

BY TIM TREON

QUARTERLY INTERVIEW

So You Think Your Jobsite is Tough? 14

BY MIKE PUTZER AND KELLEY CHISHOLM

Construction Materials Will Hill

Contractors Rick Reese

Engineers & Architects Lou Marines

Heavy Highway/Utilities Jay Bowman

International Steve Darnell

Private Equity George Reddin

Manufacturers & Distributors John Hughes

Owner Services Mark Bridgers

Surety Lanny Harer

Business Development Cynthia Paul

Leadership Peter Nielsen

Mergers & Acquisitions Stuart Phoenix

Project Delivery Gregg Schoppman

Trade Contractors Randy StutzmanKen Roper

Strategy Briston Blair

Talent Development Ken Wilson

Residential Construction Clark Ellis

Compensation Sean Taylor

CONTACT US AT:[email protected]

Board of Directors

Hank HarrisPresident andManaging Director

Robert (Chip) AndrewsWill HillScott KimplandRon MagnusStuart PhoenixHugh RiceLee SmitherCharles ThomsenCharles Thornton

Copyright © 2010 FMI Corporation. All rights reserved. Published since 2003 by FMI Corporation, 5171 Glenwood Ave., Raleigh, North Carolina, 27612.

Printed in the United States of America.

Departmental EditorsPublisher andSenior EditorJerry Jackson

Editor andProject ManagerKelley Chisholm

Group ManagerTom Smith

Graphic DesignerMary Humphrey

Information GraphicsDebby Dunn

FEATURES

Accelerate New Employee Performance 32There is no better way to ramp up a new employee than to have a top-notch recruiting program, a solid onboarding process and a plan for accelerated growth.

BY JEFF LUKOWSKI

After the Storm — Thinking Past the Downturn 40Leaders are spending more and more time working on day-to-day tactical areas of the business. Forgetting about the people in the organization is a tactical error that has long-term ramifications.

BY GREGG M. SCHOPPMAN

Measuring to Change Operational Behaviors 50Once you stop measuring performance, the gains you worked so hard to achieve will quickly atrophy. People will soon focus their effort on something else. You must keep it up.

BY ETHAN COWLES

Winning in a Tight Economic Market: Learning Your Way to Success 56Learning plans help conceive and then deliver learning. They provide the strategic structure needed to drive skills and applications of the organization.

BY CYNTHIA PAUL AND KEN ROPER

Where is the Green Lining in a Sluggish U.S. Construction Market? 66Industry participants looking for positive trends during these difficult times need to look no further than the construction market’s “green lining.”

BY KEVIN HAYNES AND HEATHER JONES

Field Managers: Technicians or Businesspersons? 76Part 2 of a two-part series — Application of business skills ultimately creates sustaining organizations.

BY GREGG M. SCHOPPMAN

Driving Customers to Your Door 92The most important factor when deciding whether to recommend a contractor is whether the buyer received value for his or her investment. Contractors who do not provide value most likely will not be working for that customer again.

BY JAY BOWMAN, CHUCK JONES AND KEVIN HAYNES

Zurich’s Long View 100FMI recently spoke with Gary Kaplan, president of Construction, and Scott Rasor, senior vice president Specialty Construction for Zurich North America Commercial, about some of Zurich’s talent development initiatives.

BY KELLEY CHISHOLM

An Upside to the Downturn 108Since people are your most valuable asset, this slowdown time offers you the best opportunity to put your limited resources to work: learning. Invest in your people now to manage risk today and make them more valuable as you rebound in the coming months.

BY ANDREW “ANDY” PATRON

A Top-10 List of Mistakes Trainers Make 118This article examines how to avoid 10 of the biggest mistakes trainers make. Avoiding these mistakes will make anyone a better instructor or trainer.

BY DAVID SINODIS

Dear Reader:

How’s this for a bizarre set of cost-saving instructions?

• Quit oiling vehicles.• Drive on-the-road vehicles until the tires blow.• Forget about winterizing anything this year.• Close the shop.• Postpone all repairs until another year.• Quit spending time on equipment inspections; just do it.• No more preventive maintenance spending.

No one in his or her right mind would issue such orders, would he or she?Regarding production equipment that will be needed next week and next season and the year after that? Production equipment is an important part of many construction businesses. As such, it has to be maintained.Equipment is an important chunk of your assets. Letting those assets becomeless productive, then finally unusable is not good business.

So much for hardware. What about warmware? That other huge chunk of your assets, your people? In highly competitive times, less human productivity isn’t acceptable. Increasing safety costs won’t work. Mistakeafter mistake can’t be afforded. Solution: Maintain your assets … especiallyyour people. Our theme for this issue brings you a number of feature-lengtharticles and shorter pieces that are on point with this topic.

You’ll find guidelines as to how to avoid “A List of Top-10 Mistakes TrainersMake” written by one of FMI’s outstanding trainers, David Sinodis. GreggSchoppman, a frequent contributor to these pages, offers two beefy articlesthis month. “Field Managers: Technicians or Businesspersons” is Part 2 of a two-part series. The first installment of this comprehensive look at developmentof field managers appeared in issue Number 4, 2009. Greg’s second article,

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This Quarter: Improve Your Assets

2010 issue 1 FMI QUARTERLY ■ 5

“After the Storm: Thinking Past the Downturn,” deals with looking downstream. Thinking on a strategic level is certainly part of the talent development intent. Jeff Lukowski focuses on getting newer employees off to the right start in his article, “Accelerate New Employee Performance.”“Winning in a Tight Economic Market: Learning Your Way to Success” is presented by a long-term team from our Denver office, Cynthia Paul and Ken Roper. The article contains a very helpful process for putting togetherdevelopment content. Ethan Cowles shows us how yardsticks matter in“Measurement: A Meaningful Tool to Change Operational Behaviors.” Andy Patron points to a brighter side to the economic slide in “An Upside to the Downturn.” Our sponsoring partner, Zurich, features Zurich NorthAmerica Commercial Construction’s Gary Kaplan, president and Scott Rasor,senior vice president Specialty Construction, responding to an interview byKelley Chisholm, “Zurich’s Long View: Why Investing in Training is Essential.”For our readers interested in improving their human asset maintenance, thisinterview is a must-read. Zurich shares a tool that any large company can use to target development of its people.

Feature-length articles on other important subject matter include “DrivingCustomers to Your Door: Five Factors to Increase the Chances” by JayBowman, Chuck Jones and Kevin Haynes. “Where is the Green Lining in aSluggish U.S. Construction Market?” by Kevin Haynes and Heather Jonesrounds out the list of major articles.

In our lineup of departmental articles is a fascinating excerpt from a diaryfrom Iraq, “So You Think Your Jobsite is Tough: Data From the Desert“ byMike Putzer and Kelley Chisholm. Ashley Sisk writes for us, “Recession-drivenDerailment: Do Not Let Your Employees Jump Track.” Finally, another ofFMI’s fine trainers, Tim Treon, advises would-be instructors in his article, “So You Want to be a Trainer…”

Invest some time in maintaining your most important asset — your people.We will be glad to help in any talent development initiatives you may have.

Sincerely,

Jerry JacksonFMI Quarterly Publisher and Senior Editor

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TALENT DEVELOPMENT Recession-driven Derailment: Do not let your employees jump track

Construction firms across the globe have recently experienced a seriesof layoffs, budget freezes, cost-reduction measures and consequent lowmorale because of the recession. Companies that have typically enjoyed an abundance of talent, jobs and funding are now finding difficulties in managing the turnaround of a company that is struggling. Ironically, many companies are experiencing some voluntary turnover from those employeeswho “survived” the layoffs. Other employees are experiencing derailment,finding little to no passion or enjoyment with their work as they did only a few months ago.

Many managers believe that those still employed at the firm after othershave been let go would be grateful that they even have a job. However, evidence from this and other recessions suggests that many of these remaining employees feel overworked, threatened and vulnerable. In nearlyall these cases, the opportunity for derailment emerges and morale suffers.

Morale affects performance. During this recession, reduced performancethreatens construction firms with a double-edged sword. While businessesare doing what they must in order to survive, employee morale threatens to make matters even worse. Derailment occurs when high-performingemployees become disengaged with their jobs and are no longer working upto their potential. Some of the causes of employee derailment include lack of recognition, no opportunity for career growth, differences in opinion with managers or personal reasons. With recession-related derailment, the causes are usually the same, with the addition of “survivor guilt,” increasedworkloads and stress levels. However, the number of derailed employeesincreases; so instead of having just one or two people who are not living upto their potential, there could be many. Recession-related derailment resultsin productivity declines, customer service failures, increased sick days or tardiness, declining sales, increased costs and lower profit margins.

The only way to escape these problems is for construction companies tobe proactive in addressing overall employee morale before any of the othersymptoms occur. Without a proactive strategy, employee disengagement willmost definitely occur and organizational health is at risk.

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Let us back up for a moment. How has the recession caused morale todrop and derailment to occur? In many firms, morale starts to decline whenmanagement becomes aware that the financial crisis that has affected theglobe has now become their crisis as well. Almost immediately, these firmsbegin to create a lean workforce and reduce or eliminate as many overheadcosts as possible. Unfortunately, the changes that may be essential to companysurvival are the same actions that are sending employees off the tracks.Furthermore, while these changes are occurring, the communicationbetween management and their employees is suffering. Rather than hearingabout the firm’s survival strategiesfirsthand from the senior leadershipteam, the gossip mill takes over,often raising anxiety to new andexaggerated levels. Employeesbecome confused, angry, detachedand eventually resigned to the possibility that they might lose their jobs. In many cases, the less information that management provides to its people (includingthose who have been laid off), the stronger the impact of the assumptions that replace open andfactual communication, and thegreater chance of disengagement.

Layoffs are stressful enough forthose who lose their jobs; but thosewho are left behind also suffer asfirms expect them to do more withless. However, given the currenteconomic climate, it is imperativethat employers take action to improve overall employee morale and keepproductivity up. Here are a few leadership strategies that may help managersnavigate through the recession in an honest and ethical way. These strategiesare designed to minimize the chance for recession derailment and to establisha healthier organizational environment for those left behind.

Avoid a series of layoffs if at all possible. Even if a series is not intended, the second round strongly implies that

there will likely be more, and nothing destroys morale more quickly than aseries of layoffs. Management should openly discuss the challenges it faceswith all employees. It may be uncomfortable, especially for those who areconflict-avoidant, but employees will respect the honesty. People get it whenyou say, “We're not doing salary increases this year because we're focused on protecting everyone's job stability right now. We’re going to take care ofyou with raises once we can do it safely.” Show loyalty by brainstorming withvarious departments and employees on ways to cut back to ensure everyonekeeps his or her job. For example, at least one company has undertaken a

Management shouldopenly discuss the challenges it faces with all employees. Itmay be uncomfortable,especially for those whoare conflict-avoidant,but employees willrespect the honesty.

8 ■ departments

four-day workweek with a 20% pay reduction for some grades and 15% reductionof others as a means of hanging on to as many employees as possible. This is difficult to do with field employees; but when employees know you aredoing everything you can to keep them onboard, you may be surprised at the ingenuity and selflessness they can demonstrate when given the opportunity.

Increase the frequency of communication within firms. Communication reduces anxiety and can stabilize, if not improve, morale.

Do not delegate this responsibility to lower levels. Top management must do it. Furthermore, do not resort to management by memo. Everyone can

appreciate an inspirational thoughtvia e-mail; however, if managers are not getting face time with theiremployees, they will not have anaccurate measure of actual employeemorale. Reinstitute “management-by-walking-around” principles. Getto know your people. Find out whatmotivates them and attempt to putthem into positions where they canbe the most productive and addingto the bottom line.

Maintain the morale of those whoremain, and make it a top priority.

This might include showinginterest in your employees’ personallives; making sure you know thenames of their spouses and children;

showing your sympathy when they are dealing with hardships; taking note oftheir interests; and always treating them as people. Encourage employees tobecome re-engaged at work by allowing them to have a say in their workgoals, company policies and procedures, and potential projects. This allowsthem again to feel a sense of worth within the company. Then, when appropriate,celebrate company successes and give credit where it is due — even for the smallest victories. Simple rewards for a job well done can boost morale. It can be as small as lunch, an afternoon off or a note of appreciation. Notonly does this boost morale, but also helps avoid derailment and burnout.Employees need a healthy work/life balance. Perhaps the nine-to-fivestandard will need to change in this economy to improve productivity, andthat does not mean longer hours. Encourage working smarter, not harder.

Continue developing your people. Even in this tight economy, organizations need to create cost-effective

development programs by implementing some of the following:

Mix classroom, online and peer learning opportunities. It will save traveltime and expenses, and in the case of peer learning, create situations for

Encourage employeesto become re-engagedat work by allowing themto have a say in theirwork goals, companypolicies and procedures,and potential projects.


employees who may not typically work together to learn from one another.An example of this is technical training via a webinar or online format.

Create learning that solves real-world problems. The current economyhas presented new organizational challenges. Use these challenges as opportunities to bring your people together. Employees will feel empowered to see their recommendations implemented and form valuable professional relationships that will help them do their jobs more effectively.

Enhance leadership. Create programs that help your leaders engage with employees one-on-one and one on group. Choose programs thatoffer advice on how to provide meaningful feedback. If there are changesin the workplaces, allow senior leaders to explain those changes, ratherthan leaving explanations to the individual supervisors. Even use yourfield supervisors without current project assignments to coach, train andmentor younger staff members, in addition to their traditional use as estimating support.

What can we learn from this recession? No one can afford to wait and seewhich way the market is going to go, and those planning to stay ahead of thecurve and avoid recession-relatedderailment must take action now.Organizations must get to know whotheir employees are, what theyneed as it relates to communication,morale and development, and how toalter their organizational strategiesto meet those needs. Simply payingpeople without providing usefulroles only helps morale a little. Payplus personal contribution to boththe present and the future enablespeople to feel better about them-selves and about their company.

Take the time to create a generalstructure that allows leadership tocommunicate with its team, while at the same time focusing attentionon the needs of the individuals thatremain. Once leaders understandthis, there are a number of cost-effective programs as well as rewards that companies can put in place thatwill lead to improved learning opportunities and, in turn, will promote anengaged workforce that stays on the job for long-term business success. ■

Ashley Sisk is a consultant with FMI Corporation. She may be reached at 919.785.9242 or via e-mail at

[email protected].

No one can afford towait and see which waythe market is going togo, and those planning tostay ahead of the curveand avoid recession-related derailment musttake action now.

10 ■ departments

TALENT DEVELOPMENT “So you want to be a trainer?” … Advice to first-time trainers

Training is a profession that requires individual passion, personal reflection,insight into various training techniques, knowledge of requirements of theposition, both personal and of the trainees, and continuous improvement.Those who accept the challenge and have the desire to make a differencewill find the rewards gratifying.

Merriam-Webster’s Collegiate Dictionary (11th ed.) defines “train” as:

• To form by instruction, discipline or drill.• To teach, so as to be fitted, qualified or proficient.• To direct the growth of.

One of these definitions may be a better fit for you than another, or youmay have your own individual concept of what you want to accomplishthrough your trainer efforts. That being said, let us examine the followingcomponents that you need to consider in becoming a training professional:

• Why? • How? • When?• What? • Who? • Where?

Why? “Why do I want to be a trainer?” Or, “Why am I becoming a trainer?”Answers may include any or all of the following:

• Personal growth/career move• Assist others in their individual personal/professional growth• Passion for the “job”• I was thrown into it by my company

There is nothing wrong with being a trainer for all of the above reasons at the same time. However, most people have participated in training wherethey did not feel as though the trainer was interested in the needs of his orher audience or was not able to make the program subject matter interesting.Why not? Reasons may includefatigue, boredom, lack of interest inthe group or subject matter, lack ofsubject-matter expertise, discomfortat leading a group, self-perceptionas an awkward instructor as well asmany other factors. Trainers who are not passionate about the subject matter and their audienceare headed for trouble. Is your focus on the needs of the audience or is it on your own needs? If solelyfocused on yourself, your success as a trainer will be limited and

Trainers who are notpassionate about thesubject matter and theiraudience are headed for trouble.


short-lived. Some individuals are “thrown into” the role of trainer by theirsuperiors without any desire to be one.

What? “What do I need to know and do?” This includes understanding:

• The needs and expectations of your audience• Your needs and expectations• Your strengths and weaknesses• Your subject matter• How to transfer knowledge to the audience• The objectives of the program• The experience that you want the learners to have• The ability and skills of the audience• The organizational culture of those being trained• Program design/development• Adult learning theory• Your personality type• Evaluation metrics

Becoming a successful trainer can be daunting. First-time trainers must:

• Learn as much as they can about themselves and their responsibilities prior to becoming a trainer (perform an in-depth personal assessment to better understand the reasons for pursuing the role of trainer).

• Gain practical knowledge through attending train-the-trainer workshops.• Ask as many questions as possible regarding the requirements of the

position from experienced trainers.• Become comfortable being in front of groups by practicing presentation

skills in front of various audiences.• Work with a coach/mentor to “bounce ideas off” and provide feedback.• Surround themselves with individuals who can assist them in those

areas where they are uncomfortable or weak.• Join an organization whose focus is on the dynamics of training and

development.

How? “How can I ensure that I am effectively transferring the knowledgethat my audience needs?

You cannot be 100% certain that all trainees are absorbing and laterimplementing all of the information you wish to impart. Some participants maybe less receptive to what you have to say because they have been told thatthey must attend the training, rather than given an option. Others are highlyreceptive to learning and how the new information will benefit them, their teams,their organization and their customers. Some of the “hows” or metrics thatdetermine if the training program is successfully transferring knowledge include:

• Asking the participants immediately upon completion of the training whether they were satisfied with it. Use this feedback to make any changes to subsequent training.

12 ■ departments

• Using pre-course and post-course tests to measure the level of newly gained knowledge and skills. Comparisons between the test results and company goals can provide a good indication about the value of the training experience.

• Reviewing the participants’ degree of learning through implementation of it in their jobs. If they enjoyed the training program but are not transferring their newly obtained knowledge into the workplace, then youmust question the value of the training and the return on the investmentof the program. Determine the effectiveness of the training by reviewingbefore and after behaviors, obtaining feedback from others that work around the trainees, and reviewing pre- and post-job performance.

Remember, if you cannot measure whether the training had any benefits,you need to rethink your training initiatives. Training without measureablebenefits is likely time spent without value.

Who? Whom are we talking about here? You? The training programattendees? Other company trainers? Outside training professionals?

First, let’s talk about you. You need to reflect on your likes and dislikes,skill requirements of successful trainers, speaking skills, etc. Research indicatesthat one of the greatest fears of individuals is public speaking. Are you comfortable in front of groups? One time? As a career? If not, consider fouroptions: 1) Become more comfortable by becoming involved with organizationsthat will allow you to practice your speaking skills in a non-intimidating settingon an ongoing basis. 2) Find a coach or mentor to give you honest feedbackon your presentation skills. 3) Practice! Practice! Practice! 4) Don’t do it!

Next, who are the training attendees? Are they at the same level or in the same positions? Are they executives, middle management or others?Are they a mixture of several positions and titles? Are you comfortable with all levels or one more than another? How many attendees will be in the training class? Depending upon your comfort level, how many trainees do you feel you are able to handle to assure the maximum transfer of knowledge and participant retention? If the class size exceeds this, how will

you handle the situation?Will you be facilitating the

programs by yourself or using others from the company or outsideprofessionals? Determine who,other than yourself, can deliver benefits to your program attendeesthat you alone cannot provide. Whohas experience and excels at anarea of expertise that you do not?

When? When training shouldtake place is an area that is oftenoverlooked by new trainers as notthat important.

If you cannot measurewhether the training had any benefits, youneed to rethink yourtraining initiatives.


• When is the audience ready for the training? When does the organization need the training to take place?

• When does an internal issue call for immediate addressing, etc.?• What are the best days of the week and time of day for training?

• Fridays through Mondays are often the most difficult days to hold training. People are more concerned about their inability to be away from their jobs at the beginning of the week and thinking more about the weekend on Fridays. So gauge your audience well.

• If the training does not require a full day, think about when to begin and end it. Are any of the attendees traveling a long way? If not, do they need to be on the job early in order to offer some direction to those that report to them? If so, do not begin too early or end too late. Do not take these considerations lightly, as the attendees may of may not show up due to the program not fitting into their schedule or making it a hardship on them.

• Are you prepared to provide just-in-time training? Is there an organizational issue that needs to be addressed due to one of the following: Culture? Diversity? Safety? Management succession? Leadership? Ask many questions, uncover organizational and employee issues, seek the advice of many individuals, develop many allies and design a plan to address everyone’s needs.

Where? Where will the training take place? On-site or off-site? Multiplelocations for parent organizations with multiple job sites, locations or companies? Centralized in a single location or rotated among several sites?

• On-site or off-site?• While on-site training allows individuals to be familiar with the

location of the training, it also tends to take individuals away from the actual training during breaks and lunch. This serves to redirect the attendees’ thoughts to other issues and away from the most important reason that they are there, which is on the training material. Hold the training off-site whenever possible.

• Another important issue to address is whether you will be required to hold training at various locations near your office or over a broadergeographical area. Thoughts to consider are whether you enjoy traveling,how often you will be required to travel, family considerations,work/life balance, etc. Consider the reasons that you will be doing the training and the impact on yourself, your family, training participantsand organization. Extensive traveling is not as glamorous as you may think. It can take a toll on you if you are not prepared for it.

This is just the beginning. Your decision to become a training professionalshould not be made without many considerations and much reflection. If yourdecision is yes, follow your passion! ■

Tim Treon is a senior consultant with FMI Corporation. He may be reached at 919.785.9231 or via e-mail

at [email protected].

Quarterly Interview

So You Think YourJobsite is Tough?

Irwin Funderburk CONTRACTOR WITH CDP, INC.

BACKGROUND What constitutes quality construction performance data? Simply, it is the information from which to make good decisions for navigating in the constantly shifting environment of the construction project. Collecting quality construction performance data from the field is always a challenge.Customer needs, environmental considerations, information platform stability, integrity of construction process output data, logistics changes,even personnel — all of these things change on a monthly, weekly, or even a daily basis.

In the spring of 2007 an intriguing gentleman who worked for VIAP, Inc.approached FMI. Let's just call him Bill “whatever-his-real-name-is” Johnsonbecause, well, we really weren’t confident that was his true moniker. VIAP, Inc.is a global program management firm that delivers construction managementand engineering services to commercial and federal clients. VIAP’s charge


“Sometimes we think we have it hard. Sometimes we need an experienceto put things in perspective. As we go about our daily jobs, we encounterproblems and create solutions. We go home at night and think we had ahard day. People did not cooperate or want to cooperate. The project isbehind schedule (aren’t they all?)! Traffic was bad, it was raining, and youhad to work late.” — IRWIN FUNDERBURK

Here is how one civil engineer turned contract programmer spent the summer of 2007, and why he now has a different perspective on what a bad day really is.

16 ■ quarterly interview: irwin funderburk

was oversight responsibility for construction performance measurements in Baghdad. FMI explained to Bill Johnson that we probably could not help. In turn, Bill, who had just arrived from Baghdad, explained that he was notleaving until he had FMI’s agreement to help.

VIAP personnel had been using many disconnected spreadsheets and othertools to manage their projects. Since these tools were not fully integratedwith each other, there was no way to control the process and provide

executive management with visibilityacross the project organization. FMIengaged Paul Riefenberg, presidentof CDP, Inc., a company specializingin project controls solutions, to provide an independent analysis ofVIAP’s needs for a standard projectmanagement system. CDP, underthe guidance of FMI, was able toillustrate how Primavera’s projectmanagement suite of tools couldprovide the needed enterprise environment to standardize VIAPbest practices, while allowing executive oversight in a real-timeenvironment. Once VIAP agreedthat Primavera was its tool ofchoice, FMI contracted CDP to bepart of the implementation team to standardize best practices inVIAP and roll out those practices

to their projects in the Green Zone. The Green Zone is the common namefor the International Zone of Iraq — a 10-square-kilometer (3.8-square-mile)area in central Baghdad that was the center of the Coalition ProvisionalAuthority and remains the center of the international presence in the city of Baghdad, Iraq.

THE MISSIONMike Putzer was FMI’s project manager for the work. FMI’s role in the project was to deliver the following objectives:

• Enable and maintain a robust, globally accessible data management system. Primavera v6.0 and Expedition were selected as the information data collection and analysis platform (See Exhibit 1).

• Provide guidance, direction and data entry assistance to a team of 60 cost engineers who collected the raw cost and schedule data from approximately 20 international contractors working on a portfolio of approximately 250 construction projects under way in the Green Zone.

• Collect, analyze and report earned value metrics Cost (CPI) and Schedule (SPI) Performance Indices to VIAP.

A key element in beingable to execute thisscope of work was tofind someone with theright combination ofsubject matter expertiseand the willingness to goto the Green Zone.


A key element in being able to execute this scope of work was to find someone with the right combination of subject-matter expertise and the willingness to go to the Green Zone. Irwin Funderburk agreed to undertakethe assignment and proceeded with the processing necessary to gain entryto Baghdad. He received the necessary technical support and training fromthe CDP staff in Charlotte, N.C.

FMI recently spoke with Funderburk about working in the Green Zone andhow the experience really did change his perspective.

FMI: Let’s start at the beginning — tell us when and why you were firstapproached for this project.

Funderburk: I accepted a contract to travel to Baghdad, Iraq, and participate in a project that would result in a software system that wouldallow progress and cost tracking for more than 250 projects, totaling morethan $6 billion. These projects are part of the Iraq reconstruction effort. This project was mentioned to me as an aside by a recruiting company I work with. One of the recruiters asked me if I wanted to go to Baghdad. Isaid I might be open to that; it would depend. I didn’t hear anything for a fewweeks, but later was asked if I was serious about it. I said I’d at least talk tothe company about it, so we started a series of interviews with CPD, FMIand eventually VIAP in Baghdad. My understanding of what the project wasand what the conditions were turned out to be almost completely differentfrom what I originally expected.

FMI: What were some of your major concerns before you left for Baghdad?

Funderburk: Some of the concerns I had were simply logistical, such as howdo you get from here to there. You’re going into what insurers consider a war

Exhibit 1

Globally Accessible Platform: Web-Enabled P3 and Expedition

PCs in the U.S. Loadspring Server Satellite Irwin’s PC

Bagdad

I R A Q


zone, so my life insurance was no longer valid, and I had to be covered underDept. of Defense (DOD) insurance. I had to figure out if that coverage wouldbe adequate and if my wife was O.K. with this should something happen to me. I needed to make sure that the type of work that I was doing did notaffect the people I was leaving behind if something bad should happen.There are many more things to consider when taking a job like this than youwould normally think about off the top of your head.

I had no conception about what the living conditions or the environmentwould actually be like once I got there. I guess in a way that was goodbecause I didn’t have any preconceived notions of what to expect and wentin with an open mind, which I think helped in the end.

FMI: How was the actual project explained to you?

Funderburk: This was not the type of work I would normally do. I’m normallya contract programmer, but I’ve had a lot of experience in other fields. I havea degree in civil engineering and used to be a registered land surveyor, so Ihave a broader spectrum of experience than most programmers do.

I went into this knowing that what CDP, FMI and VIAP were expecting of mewas not something that I normally did. CDP was willing to send me to someclasses. I was familiar with the concept but not with the specific software

it would be implementing. So I went to some classes just to makesure that I could get up to speedquickly on the software and theprocesses we were expected toimplement with the software. FMI,CPD and I had a preconceivednotion of what type of data wewere going to be looking at andwhat format it was in. We expectedto be able to go over to Baghdadand have some data already there,in a format that we could use toimport into Primavera. However,when we got there we found outthat our preconceived notions ofwhat the data was, where it existedand how it existed were completely

false. It was almost a manual system for compilation of all of the reports and statistics that VIAP was producing for the Army. What we had to do wasto go back to the very beginning and figure out how to do a data capture sothat we could actually do the import into Primavera to produce the reportsand statistics that the Army was looking for. This didn’t become apparentuntil we got to Baghdad and started asking questions and looking at whattype of data actual existed.

There are many morethings to consider whentaking a job like this than you would normallythink about off the topof your head.


The people over there were very helpful and would provide you with anytype of data you needed. The trick was figuring out what questions to ask —that was the most difficult part. First, the data wasn’t in the format that wewere expecting, and second, we had to figure out the right questions to askto find out where to start looking for the data.

FMI: Did this wrinkle add to the time you spent in Baghdad?

Funderburk: Not really. You make the time over there to get things done.There are 24 hours in a day, and if you have to, you use them all. The factthat we were starting out a stepback from where we thought we were, was, in the long run still okay. The person who was incharge of the operations for VIAPdidn’t care how it got done, as long as it got done and done ontime. You did what it took to get the work done on time.

FMI: What convinced you to takethe project?

Funderburk: First off, my wifeagreed that it was O.K. if I reallywanted to do it. The project time frame wasn’t extremely long,and I knew I wouldn’t be stuck over there for too long. Of coursethe money is good over there, and I would say that it was a factor. The opportunity to go and see what was really going on in thatcountry, at that point in time, was something that interested me. It was in thenews constantly, so curiosity was a factor. And a little adventure.

FMI: What was the most rewarding part for you?

Funderburk: It was really the people I met and the friends I made that werethe best part of it. Also, the sense of accomplishment in getting what I wentover there for done in a timely manner. Pleasing the people involved up anddown the line, over there and over here, is rewarding. But it’s the friendshipsthat you make that stay with you the longest.

FMI: Have you been in contact with any of the people you met since you’vebeen back?

Funderburk: I’ve talked with Steve Gay, executive in command to Bill Johnson

The opportunity to goand see what was reallygoing on in that country,at that point in time, was something that interested me. It was inthe news constantly, socuriosity was a factor.And a little adventure.


and responsible for coordinating all agency activity at the villa, and met withhim a few times. Many of the good people are still over there, continuing construction performance oversight.

FMI: What would you do differently?

Funderburk: I know a lot of things now, and I’d do a lot differently. I think wecovered all of the bases that we (CPD, FMI and my wife Karen) could think of and asked the right questions before I left to go over there. Of course,now that I’ve had the experience, there are some things I’d do differently. I’d make sure that travel schedule and tickets were completely nailed downbefore leaving the States to go over there. Getting out of Baghdad is a big

hassle — I’d have in and out ticketssecured and in hand before I left. As far as what we missed or whatwe did not do that we really shouldhave thought about, given what weknew then, I think we did a good job and there’s not much more thatI’d change.

FMI: What were the living conditions like?

Funderburk: It’s hard to say theywere bad. They certainly weren’tpleasant; but if you compare whatwe had and how we were living to what the military personnel have— most of those guys are living intents — we at least had a roof overour heads. It wasn’t a very solid

roof, but at least we had that, four walls around us and some sandbags. So, as far as where we actually stayed when we weren’t working, it was basically a small trailer. It wasn’t terrible, but it certainly wasn’t pleasant. We didn’t spend a lot of time there anyway, basically just for sleeping. Thefood was provided by the military in its dining facilities, and it was excellent.We were extremely well-fed. If I had to describe the environment, it was hot, sandy and dry. From the time I got into Baghdad, the first cloud I saw wasthe day I left, and it wasn’t much of a cloud. The only relief from the sun wasthe sandstorms.

Our working conditions, where we spent most of our time, consisted of a structure that was hardened and protected from incoming rockets and mortars and stray rounds. This was probably the safest place over there. You work many hours, 12-hour days at a minimum.

FMI: Would you go back?

From the time I got into Baghdad, the firstcloud I saw was the dayI left, and it wasn’t muchof a cloud. The onlyrelief from the sun wasthe sandstorms.


Funderburk: Given the right circumstances, I might go back. I’m not sure that Karen would let me. So probably not. It was a unique experience andsomething that I’m glad I did, but probably would not do again.

The following are excerpts from Irwin Funderburk’s journal, with some commentsfrom Mike Putzer, project manager.

6-12-2007

Arrived in Amman about 8:00 p.m. local. Met by Amman Travel agent and it was mostly a blur from there. It went smoothly; he just said go there, do this.Got to Hotel (Four Seasons) at 10:30 p.m. Beautiful room.

6-13-2007

Woke up to find that my 9:00 flight was canceled. Have another at 14:00 (using 24 hr. clock from now on, easier) pickup at 11:30. Hope this works out OK.

6-14-2007

Made the 14:00 flight. It left at about 13:45. It seemed to be more “Well, ya’ll all here? Then let’s go!” rather than a schedule. The flight to Baghdad was uneventful. So much so that right after the pilot said, “We’ll be crossingBaghdad in about 15 minutes and begin our spiral descent” that I went to sleep and woke up when the wheels touched down. Got in about 16:00 local.

Got through security OK. Passport and DOD card did it.

No one at airport to meet me. I eventually borrowed a phone and talked toJosh. Two mosques were bombed and a lockdown was in effect. No traffic.Route to Green Zone from airport was closed. Eventually Dink from VIAP got to the airport and took me to Camp Stryker. Got there about 17:30. Manifestedon the Rhino bus to the Green Zone. Left Stryker at 02:00 on the 14th. Got inand Josh met me at the “bus stop.” A drug dog searched all of the bags.

6-16-2007

Close mortar attack to start the day!

Worked on finishing the resource assignments for the Implementation Schedule.

Went to the DFAC and saw where the mortars landed. Not very far away (50 meters). Huge fire, rounds cooking off. We couldn’t get out of the villa for a while because all traffic was stopped.

Got to get to bed earlier tonight.

15:00 more mortars. Close. Got to get my PPE over here from the trailers.

Got the spreadsheet from Bill for data input and chart output. Very frustrating;neither Marise nor Dan can open either version of the spreadsheet.

Left at 03:30, bed at 4:15.

6-17-2007

More discussions about the spreadsheet today. Mortars for lunch. Hope I get tomove into a trailer today. Not much of a conference call today. I can understandwhy; it’s 11:00 on a Sunday morning back there.

Steve got in today. Got to move into my real location and unpack my suitcase.Finally!

Quit at 12:15


executing the work

By mid-June, the information platform was in place, the software installed, global linkage had had been established and the system was ready to accept,process and report data. Of the many hurdles to be overcome was the need tosort the bad data from the vague data to the useful data. Data was made available in many different formats. A big part of the initial work effort required Irwin to sort through the different data formats and reports to find the “right stuff.” Only then could information that would ultimately make sensebe loaded to the system.

6-18-2007

Communication between the stateside people and the people over here isn’tgood. Makes it hard to get even simple things worked out.

6-19-2007

Reviewed and extracted Engineering Performance System (EPS) data and foundmore complexity than I thought existed. Had to redo most of what I did.

Close mortar attack!!! One landed right outside the compound. Everyone wasscrambling after that one! Grabbing PPE and hats. Shook the building.

Made a little progress today on the project. Hard, information is not easy tocome by; people will give it to you, but it’s hard to know what questions to ask.

Ended at midnight.

6-20-2007

Working on EPS entry. Terrible headache today. Bed is killing me. Felt betterafter lunch. It’s really hard to get even simple things done here (I’ve probablysaid this before).

Started tearing up the office at 23:00. Taking all the partitions out.

Bed at 12:00.

6-21-2007

We have a wonderful new work environment!

Mortar attack at 10:05, dozen rounds or so. Close enough to get your attention!Made some progress today.

Quit at 23:30.

The remains of the residential complex where members of Saddam Hussein’sruling political party lived.


initial report results

Within a very short time, Irwin’s diligence and attention to detail began to payoff. The quality of the project data allowed CDP and FMI to analyze the costand schedule performance for the portfolio of more than 100 projects. Data wasdeemed reliable and a set of key performance indicators (KPIs) allowed FMI to counsel the chain of command (CoC) such that the CoC could assess the situation and take appropriate action.

6-22-2007

Friday is a stand-down day for the military. No chow ’til lunch. Nobody comes in here ’til about lunchtime. Quiet. Data entry today.

I’m tired and going to bed soon.

Oh, got turned away from chow and got rocketed (three each) on the way back.

6-24-2007

Shannon Bones (aka Shannon Bones, Texas Ranger) took me on a tour of someparts of the Green Zone I hadn’t seen. Neat! Got a picture from a bridge overthe Tigris River and pictures of the new embassy and of Indian country acrossthe river.

These are really good people here. I guess they’re the type that adversity bringsout the best rather than the worst.

Every night I read a few pages in Larry Niven’s Destiny’s Road. Then I put in myearphones and listen to Chris Issak all night.

6-28-2007

There are a lot of places that I would like to take pictures but can’t. They havebig “No photography or video recording allowed” signs everywhere. ProsperityBase contains a huge palace that looks like it received at least two guidedbombs. It appears that it had an elaborate dome on top, but all that’s left is steeland rebar in the outline of a dome. There are huge holes blown out by theexplosions. It was a beautiful building with elaborate carved panels all over the

The Swords of Qadisiyah. Each arch consists of a pair of hands holdingcrossed swords. The two arches mark the entrances to a parade-ground constructed to commemorate then Iraqi President Saddam Hussein’s declaration of victory over Iran in the Iran-Iraq war. The arches were opened to the public on August 8, 1989.


outside; some are just hanging there attached at a few points to the buildingstructure. The military has taken over the still usable portions and piped in a/cand communications.

Quit at 22:30.

7-1-2007

A new month in Baghdad. Make this month and I’m almost home. I can’t wait!Started the day with a mortar round at 06:00. Pretty close, no follow-ons, rolledover and went back to sleep.

Quit at 22:30.

7-5-2007

Three weeks here at 04:30 this morning. Started getting questions on how to fill out the spreadsheet. Steve and I were supposed to answer them. We didn’thave a clue on most of them. Sent them back to the States. As it turns out, theydidn’t have a clue either. Basic stuff, like how many months back do we go?

Going to bed 00:30.

7-7-2007

Today’s supposed to be a lucky day. I guess if I make it through it unscathed, it will be. You don’t think of it much, but you do think of it. What if that mortarround drops next to me?

Got through a project entering Earned Value Management (EVM) with Dan’shelp. Actually, quite a big deal even though no one recognized it except for Dan and me.

Going to bed. Quit at 22:30.

7-8-2007

Big sandstorm today. Visibility less than a half mile. They say this would ground all military flights and maybe commercial. This is a big worry for mewhen I get ready to leave.

Three hours of phone calls. Be glad when Bill gets out of the boonies so he willstop thinking of new things he wants from P5/Expedition.

Bed at 00:00.

Home Sweet Home. The door slightly ajar was the entrance to Irwin’s living quarters.


7-10-2007

Easy day so far. Nobody has hassled me and it’s already past lunchtime (unlessyou count the mortars at 10:15).

16:30. Mortars, at least 16 rounds. Heaviest barrage since the second or third dayI was here. Not a good feeling. Went on and on. Some close, some not so close.Once you hear that cracking sound of a mortar exploding, you’ll never forget it.Later, found out there were between 19 and 26 Kaytusha rockets. One hit a bus.Three dead and about 20 wounded. Less than a quarter of a mile from here.

7-11-2007

Mortars at about 13:30. Got a haircut today. 0 blade all over. When it grows out,a trim and I’m home! Grow hair, grow!

Intelligence says that electricity and fuel are in short supply among Iraqis. This isputting much pressure on the government. It could get really nasty here fast.

Quit at 23:00.

7-12-2007

Got a new mattress yesterday. Slept much better. I can even sleep on my stomach without a spring poking me in the cheek (either side).

Got word today that when you go outside, you must wear helmet and flak jacket. Things are picking up. I hope I get out of here before things go to hell in a handbasket.

Quit at 23:00.

7-12+1-2007 friday

Stand-down day. Not many people here this morning.

Some sort of incoming/outgoing last night about 2 a.m. Woke me up. Pretty faraway. Sat up and listened to it for a couple of minutes, and it didn’t seem to begetting any closer. Laid back down and went to sleep.

View from the top of the building where Irwin worked, overlooking the Green Zone.


11:20 Mortars/Rockets! Close!!!!! Six rounds, very close!!!!!! You could hear themcoming in. Shrapnel all over the compound. Picked up some as souvenirs.

To tell the truth, this is beginning to worry me a bit.

Went to the PX for lunch. Had a Burger King Whopper.

Quit at 23:30.

7-14-2007

Well, made it through Friday the 12th+1 (not that I’m superstitious or anything). I was beginning to wonder there for a while though.

Quit @ 9:30.

report, analyze, assess and act

Data quality improved significantly with each passing day. The portfolio of project KPIs could be sorted rapidly to identify projects in jeopardy. CostPerformance Indicator (CPI) and Schedule Performance Indicator (SPI) data were reliable enough to take action on (See Table 1). One project was identified as being behind schedule and under budget. The project was a police station being constructed on the main road between Iraq and Syria that was under attack by insurgents. Bill Johnson and his task force elected to investigate personally, and were subsequently pinned down, out of contactfor several days. Ultimately, a company of recon marines was assigned tosecure the area. Construction resumed.

7-15-2007

Sick today. Incredible headache. Can’t lie down or it’s worse. Didn’t know if I was going to crap or throw up last night. Crapping won. Started taking theCipro from my traveler’s kit. Hope it works.

Took more Cipro, Motrin and went to bed about midnight.

Steve came in and started packing for Abu Dhabi and didn’t finish until about2:30. I slept through most of it.

Quit at 23:00.

7-16-2007

I feel better today. Not back to normal but better. Gut is still bothering me. I’ll stay on the Cipro ’til I run out.

Steve left for the airport about 07:30 this morning. Hope he makes it out.There’s a big dust storm going on right now.

Over halfway through July now.

There’s a reason this area is usually brown on maps. I’ve decided it’s notbecause it’s desert. Steve just called. He’s still at the airport. He says that tryingto get out of this place is a circus. Bring plenty of water, have as little with youas possible because you have to be mobile; huge lines for the baggage check;they x-ray stuff. He and Chris bribed someone to get around one of the hugelines. His 10:00 o’clock flight is scheduled to leave at 3:00 and probably won’tleave until 5:00. Sounds wonderful.

Quit at 10:30.

7-17-2007

Missed lunch. Still kinda weak and that doesn’t help. All I need is a mortarattack to make my day complete.

Quit at 22:00.


7-18-2007

Well, got my mortar attack to complete my day yesterday. Reading in bed at00:20 so technically it was early this morning. One round, shook the trailer pretty good. Of course, most anything will shake a cardboard box. Hit the flooranyway since there’s usually two quick rounds at a time.

Still taking the Cipro. Finish up tomorrow. Seems to be working. Gut pain isabout gone. Still a little sore. No more headaches though. Wow, that was really bad!

Quit at 11:00.

7-19-2007

Security came in and said to stay inside because a dud landed just outside ourgate. Kaytusha rocket. EOD has been called to dispose of it. It probably landednot much more than 50 or 60 feet from where I’m sitting typing this. If it hadexploded, our guards in the guard shack outside the gate would have been inserious trouble.

Quit at 22:30.

7-22-2007

Finished the RFIs and started docs. Rick is supposed to get here today ortomorrow. Can start turnover then.

Quit at 24:00.

7-25-2007

More turnover stuff with Rick today. Had to take him to the new villa this morning and wound up staying over there until 11:45.

The Iraqi national soccer team is playing in some match today. These people are really excited about this. The outer office is full of them watching. Anotherthing that shows that the people here are just like the people back home. Samelikes, dislikes, want the same things, like the same stuff.

There is one difference. We were warned this morning about going out thisafternoon because of the celebratory gunfire after the match. People havebeen killed and injured here by Sir Isaac Newton. What goes up must comedown! They shoot their AK-47s into the air instead of having fireworks.

Well, the Iraqi team won and while the fans were celebrating, at least two car bombs were set off in the crowds. What kind of sick people can do thingslike that? We heard one of the car bombs as we were leaving the DFAC. Huge explosion.

Table 1

Sample VIAP Portfolio Project Data

Project ID CPI (Cost Performance) SPI (Schedule Performance)

EWS 1914

EWS 1915

EWS 1916

EWS 1917

EWS 1918

1.37

1.23

0.02

0.97

0.89

If CPI is >> 1.0, you are under budget. If CPI is << 1.0, you are over budget.

If SPI is >> 1.0, you are ahead of schedule. If SPI is << 1.0, you are behind schedule.

1.28

1.19

0.02

0.88

0.87


A celebratory round alsolanded just a few feet from us as we were walkingfrom the DFAC to the car.You could hear automaticweapon fire everywhere.Crazy world.

Quit at 21:30.

7-27-2007

Mike and I took an hour thismorning and did the touristthing. We rode around andtook pictures in the IZ. Wedidn’t go anywhere dangerous but we did go armed. We took pictures at theCrossed Sabers holding the AK47s. Combat-hardened veterans!!

Steve got back today.

Quit at 21:30.

7-28-2007

There’s a big closeout conference call today. Should be interesting. Not much to do now, just odds and ends.

Closeout call was a nonevent. Went smooth as silk. I think we have anotherMonday but I think it will be OK. Started all the pieces moving to get out ofhere today.

Quit at 23:00.

7-29-2007

Got a confirmed reservation out of here. Now I’m waiting on the paper ticket to get here. I am dreading getting through the airport here. It is apparently apain in the butt. Mike is flying out today. He is supposed to call me when hegets through most of the process and let me know how it is.

Mike called me a couple of times while getting through the airport. The PSDsdropped him off at 10:00 and he just barely made his 12:30 flight. John and Iwent to see the PSDs and got them to adjust our times back to 8:30. I’d rathersit on my butt in an airport for a couple of hours than panicking trying to getthrough this stupid airport.

The Iraqis won the Pan Asia soccer match. More gunfire than you can imagine.The police at the traffic circles were firing in the air.

Quit at 20:00.

7-30-2007

Got the official word that I can leave. I still need a paper ticket out of Baghdadthough. Don’t have that yet. Need to get the Amman flight changed also. Rightdown to the wire.

Quit at 21:00.

Monument erected after the Iran-Iraq War(1980-1988) as a tribute to the Iraqi military.


8-1-2007

Last day in Baghdad!

Where to begin? At the beginning, I guess. My departure to the airport wasscheduled for 07:30. I was up early and finished stuffing things in my suitcaseand carry-on. I abandoned a lot of stuff because I couldn’t get it back in the luggage and also because I wouldn’t trust it at home anyway (vitamins, etc.).

First thing, one of the PDS cars had a flat and we had to get that fixed and aradio gave problems. The PDS team is very good. They know their business.Getting me to the airport took a three-car convoy. They were in constant radiocontact with each other and with the base. They have stations that they reportback to base as they pass each one. The cars are armored, half-inch glass, runflat tires but they look beat-up on the outside. It makes them blend in. Theytravel “low-profile” as opposed to “high-profile” where you have lights and sirens screaming “shoot me, shoot me.”

Got to the airport a little after 08:00. The PDS dropped me off but left a local national with me to help out . I was also meeting Marwan. He works at the airport for Triple Canopy. He is an “expediter.” He knows the ropes, has contacts to get you through the airport, in other words.

Ok, I still don’t have a ticket. It was supposed to be delivered yesterday at acouple of different times but it never made it. It’s supposed to be at the RJcounter this morning.

First, you stand in line to stand in line. You are still outside but in the shade. Youeventually work your way up to the guard who lets you go stand in line. This waswhere I was when Marwan showed up. I had his number and called him when Igot there. He got me through the guard to the first baggage check. You dropyour baggage in the T-walled area and leave. It is visually and dog searched.

After that search, you claim your bags and move inside. As soon as you enterthe door, there is an X-ray of all baggage and a physical search of you (you get“patted down,” but when the guard got through I thought we might be engaged.They don’t mess around.)

Still don’t have a ticket. Got inside with the PSD guy and Marwan. Marwan goesto the Royal Jordanian (RJ) counter (actually RJ door) to get my ticket. He’sgone a long time before he comes back (no ticket). He says I have to pay cashhere. I was told that I would pay when I got to Amman, but I give him the moneyand my passport ( I know, you’re saying “WHAT?” but that’s just the way itworks). He eventually comes back with my money and passport and tells methat I’ll pay in Amman. OK by me.

Still no ticket. The reservation system for RJ is down. They cannot print a ticket. No tickee, no flyee.

You have to understand about the Baghdad airport. It’s just a place for airplanesto land and people to get on and off. The normal functions that you wouldexpect at an airport don’t exist. There are no ticket agents and ticket counters.Just guards and checkpoints. RJ is one of the only that seems to have an officethere. It is not accessible to the public. That’s why I have Marwan.

So Marwan says wait. We wait (a long time). Still no ticket. He eventually tellsme to get in the line for getting into the actual waiting area. The local nationaland I stand in this huge line and eventually get to the front and I call Marwan.He says go through and he will be on the other side with the ticket. The localnational can’t go past this point so we say goodbye. I was supposed to give himmy phone but I keep it. I’m not giving up my only line of communication with


everyone if I don’t even know if I can get on a plane yet. We’ll work getting thephone back later.

I get through the checkpoint and another X-ray and search. Marwan is on theother side. Still no ticket. He says get in the RJ line for a boarding pass. I get tothe front of the line and still no ticket. Marwan says sit down and wait while hetries to get the ticket. The reservation system is still down.

I wait (a long time). I am getting so stressed out I can’t stand it. I try to be calmbut it’s difficult.

Finally, at a quarter to 12, I get my ticket for my 12:30 flight. I get my boardingpass, pay my airport tax ($1.00), get my passport stamped and get into the gatearea. I am so relieved. It gets worse!

So I meet a couple of guys at the gate in line. They are sitting down on the filthycarpet. I soon join them. I make sure I’m in the right line and we talk for a while.They have a Triple Canopy person with them. She is checking on our plane comingin. There seems to be a problem. She says, “Look out the window. Dust storm!” Oh, great. If the pilots don’t have VFR, they turn around and go back to Amman.

The plane does land. Hurray!!! They immediately close the airport, boo!!!

We sit back down and wait, and wait, and wait. Finally, someone from anotherairline (Air Link) comes up and starts calling names for people for one of itsflights. This is encouraging. After about two hours, our flight crew shows up atthe gate. Good! We stand up again.

Finally we start to board. Another document check at the gate. Through thedoor and another X-ray machine and body search.

We go downstairs and ride a bus to the plane out in the middle of acres of concrete. It’s about 115 degrees now. All the baggage is sitting on the concrete.You have to identify your bag before they will load it. As a general rule, no airplane that comes or goes to Baghdad will ever get near any terminal, anywhere. They are kept far away.

So we get on board. The air conditioning on the airplane is out. Wonderful. 115 degrees, sitting on an airplane in the middle of acres of concrete without air

Irwin at the base of The Swords of Qadisiyah.


conditioning. Of course someone forgot to identify his or her bag so we satthere a while longer. Everyone on the plane was soaked with sweat by now;even the stewardesses were sweating. No one complained. We were close togetting out of Baghdad and we didn’t care what it took; we wanted OUT!

Finally, we closed the door and started to taxi. It took a long time to take offbecause of the sandstorm. It increases the time between takeoffs and thearrivals have to use the same runway.

We finally took off. The flight was uneventful. It was an old plane (Fokker 28),but it got us there.

Another X-ray and document check in Amman. The Amana Tour expediter met me as soon as I got off the plane and did his usual good job. Went to RJ, a real ticket counter and made sure of my ticket change and got my boardingpass for tomorrow.

Got to the hotel about 17:00 and checked in. Set up the trip back, paid Amanaand went to my room.

8-2-2007

Woke up at 4:15, 4:30, 4:45… Finally got up at 5:00 and wrote about yesterdaysescape. Got packed up and I’m ready to go downstairs to check out. I guess this is my last entry.

Well, it figures. The flight from Amman was bumpy most of the way so I didn’tget much rest. I got to Chicago and went to the US Airways ticket counter tocheck on my ticket change. They sent me to the United Airlines counter, whichwas of course in another terminal. They wouldn’t take the old ticket eventhough they knew I had the reservation. They said because the ticket was foranother day, I had to go back to the US Airways counter to get the ticket reissued for today. I went back (this is the 3rd train ride). US Airways said thatthey wouldn’t issue another ticket because it had been changed.

Paul called United. I go back to the United ticket counter and go through theline again. I get to the agent and the whole thing starts over. Luckily Paul andTerrie kept United on the line and eventually a supervisor at the counter issuedme a boarding pass.

I am writing this at the gate. I have plenty of time since my flight has beendelayed …

But I didn’t have plenty of batteries. It’s now Saturday night. I finally got toCharlotte about 1:15 Friday morning. I figured that if my baggage was on thesame continent as me I would be lucky.

I was right. We’re still chasing my luggage. I wouldn’t care but it has my neat souvenirs. Oh well, at least I’m not in Baghdad anymore!

CONCLUSIONWe all understand the value — really, the necessity — of getting good construction information out of the field that accurately illustrates the workin progress. If this can be accomplished in a war zone, with steel and mortarshells raining down all around, there is no reason not to accomplish that onyour projects, too. ■

Mike Putzer is a senior consultant with FMI Corporation. He may be reached at 919.785.9266 or via e-mail at

[email protected]. Kelley Chisholm is the editor of FMI Quarterly. She may reached at 919.785.9215 or via

e-mail at [email protected].

P rofessional racecar drivers push their cars to the limit.

Shaving literally a tenth of a second off their lap speed

helps them accelerate through the track and overtake

their competition. A program that enables new talent to move

into the front seat and drive at the limit within their first 12 months

is beneficial to firms seeking to improve productivity.

By following a structured recruiting process, many firms successfully employtraining and orientation programs for new employees. These programs typicallyinclude elements such as formal education or rotational assignments, and helpemployees become familiar with their new surroundings and the firm’s policies.However, while many programs are well organized and information-packed,employees are then left to navigate the firm on their own.

A new employee’s performance in his or her early days with a company can be increased by interlinking the recruiting, onboarding and post-hire ramp-up processes. This article proposes a process for accelerating new employeeperformance and applies this process to the engineering and construction industry.The key premise is that new employees need to be able to shift across the data-information-knowledge spectrum rapidly as they increase their levels of commitment and performance.

By Jeff Lukowski

There is no better way to rampup a new employee than to havea top-notch recruiting program, a solid onboarding process and aplan for accelerated growth.

Accelerate New EmployeePerformance

34 ■ accelerate new employee performance

This management approach is applicable to professional engineering, projector construction staff responsible for activities ranging from back-office work todirect field-management activities. Based on self-learning, this budget-mindedprocess consists of an efficient recruiting process (qualifying), a well-definedonboarding program (warm-up laps) followed by intentional accelerated growth(the big race).

QUALIFYING FOR THE RACE: RECRUITINGOwners of racing teams are understandably selective about who they allow

to get behind the wheel of one of their racecars, given that the typical NASCARracing team has $150,000 to $200,000 invested in a new vehicle. Successfullyrecruiting new or experienced talent is challenging during good times as well aswhen the industry is in a slump. The implications for the engineering and construction industry include having to evaluate new approaches to take duringthe recruiting process to ensure loyalty of professional staff members before theyjoin the company. A goal for engineering or construction firms is to increaseretention through a number of recruiting tactics.

The recruiting process is like qualifying heats for a race. There are three key points to remember when assessing whether a potential recruit is up to the challenge of serving your customers: Have an open-garage policy, orient them tothe “shop” and team, and let them take a test lap.

An open-garage policy might consist of inviting candidates not only to conduct interviews on-site, but also to let them see what it is actually like workingfor the firm. Invite candidates to attend a staff or other company meeting or evenvisit the field to see how the team interacts with each other. Allow candidates to

see the type of work andday-to-day challengesthat they may face as anemployee. Another optionto only conducting one-on-one interviews is to have qualified candidates prepare a planfor executing a fictitiouswork package or someother aspect relevant tothe position they areseeking. Assign a small,select group of employeesto experience such apresentation or mockproject plan review, andthen conduct a follow-upconversation with thecandidate in a two-wayexchange of questionsand answers.

Should I Stay or Should I Go?

100% = All conference attendees

100% = Attendees who changed jobs

Stayed put

Changed companies in past 2 years

85%

15%

Other moves

Contractor to contractor

50%

50%

Where are employees going?

A live survey of participants at the 2009 Engineeringand Construction Contracting Association (ECC) meeting in Bastrop, Texas, yielded the following results:

• 15% of participants in the conference had changed companies in the past two years.

• 50% of those that changed companies moved from one contractor to another contractor.


Just like racecars that need to refuel and get new tires throughout a 400-lap race, building a break into theinterview process allows the candidatesto recharge their batteries. Considerbreaking up the interview day from abarrage of interviews by changing thepace. One change of pace involveshaving the candidate take a personalityassessment. Used properly, these assessments can provide a point of reference and insight as to the challenges the candidate may face whileperforming the job, or even provide anestimate of their leadership potential.“I am using psychological assessmentsto identify the capabilities of candidatesand high potentials,” says Craig Datema, president and CEO of Triangle Associates,a general contractor based in Grand Rapids, Mich. Beyond being reasonable incost, Datema adds, “The level of insight provided by appropriately administeredassessment tools even helps us during our corporate strategic planning to recognizeour true strengths.” Other tips for changing the rhythm of an interview-heavy dayinclude showing candidates an organizational chart, giving them a tour of thefacilities and describing other business locations or branches.

Candidates can get the ultimate driving experience by taking a test lap. Somecompanies allow high-potential prospects to work alongside a peer or manager fora day or even a short internship prior to an offer to get a true experience. Thisensures that there are no surprises on both parts. Expose a high-potential candidateto day-to-day activities that may be both exciting and less interesting to portray atrue picture of the firm and job responsibilities. Progressive and low-cost recruitingconcepts such as these help companies select the best-fit candidate to meet the endobjectives of low turnover and high employee loyalty.

WARM-UP LAPS: THE ONBOARDING PROCESSIn the racing world, drivers take warm-up laps and perform time trials. New

employees should do the same. Before they click the seat belt, new hires need toget to know their team, the expectations for performance and that driving schoolis for everyone. Moreover, if new employees keep their cars in one piece, they will be able to compete on race day. At this point, the employee’s (and company’s)commitment level has increased; thus, this represents a transition for the employeefrom collecting data to sharing information (See Exhibit 1).

Once an employee agrees to come aboard, he or she should be presented with some framework or checklist of expectations for his or her first year. These aredetailed expectations aimed at guiding new employees through the turns that theywill experience on the job. New employees, once onboard, should take the time tointerview many people within the organization that they will either be working for,with or supporting. This exposes the new hires to all of the areas within the company

Once an employeeagrees to come aboard,he or she should be presented with someframework or checklistof expectations for hisor her first year.


and helps them build an internal network. Other checklist items may include specificnumbers and types of assignments that they need to complete throughout the year(i.e., a retrofit project and a greenfield project) as well as qualitative expectations (i.e.,no negative feedback in customer service). In the case of a new sales and marketingemployee, the expectations may include a minimum number of phone calls tomake and job conferences to attend in their first three to six months on the job.

Best-in-class firms employ a boot-camp approach to training new recruits, which is a custom-designed process consisting of training, lectures, hands-onlearning, group activities and question-and-answer sessions. This immersion allows the new employee to have exposure to the full breadth of the company.According to Sue Maden, education and training manager at Burns & McDonnell,“New employee orientation consists of reviewing the history, culture and community of the firm along with specific training on diversity, safety in theworkplace and some hands-on training with technologies used at Burns & Mac.”Company leaders need to establish the culture and set the expectation that allnew employees are required to attend this training. Boot camps may not makesense for all types of firms in the industry. However, new employees may find ita useful exercise to prepare an introduction to the organization in their ownwords and then practice delivering it. This can benefit the employee, especiallyone that is new to the industry, and the company, since each employee can be an ambassador of the firm. Often referred to as a 30-second elevator speech, it is designed around delivering an impromptu and impactful message during abrief elevator ride.

Finally, in order to keep the car on the track and not to crash during practice,employees should be encouraged to prepare a written journal of their weekly activities. These journals do not have to be complicated and long-winded, butmay be simply structured: What I Did, What I Learned, Look Ahead and Concerns(See Exhibit 2). Each section would consist of a short bulleted list. An employeeand manager can actively use these as a tool during interim performance reviews.

Writing about his process of using a track map to analyze a racetrack for thebest line to drive, author Ross Bentley, in Speed Secrets, Professional Race DrivingTechniques (1998), wrote, “A better way to analyze and plan is to do so after you

have spent some time onthe track. You must beable to observe what youare doing so you canimprove on it.” He continues, “Analyze yourerrors to determine whatinfluenced or causedthem.” This advice, whilehelpful to a driver, is alsohelpful to new employees.For example, a new project engineer for amechanical contractorstudying and reading

Exhibit 1

Commitment Throughout the Data-Information-Knowledge Spectrum

Data Information Knowledge

Activity Journal

Employee Training

Job Requirements

Presentations

Open Meeting

Increasing Commitment and Performance


drawings can gain valuable insight reviewing those same drawings after he/sheconducts a field walk of the work area to visualize the installation process or thework in place.

The challenge withonboarding is to maintainmotivation and createthe expectation that theprocess will last morethan a single week or two.

RACING IN THE BIGRACE: ACCELERATEDGROWTH

Eventually, race day will come. This is an opportunity foremployees to acceleratetheir growth. Would-bedrivers can read all of the driving manualsavailable, but unless theyactually wrap their hands around the steering wheel, they cannot fully appreciatethe experience. Rapid learning occurs by both doing and repetition, while reflectingin a culture of continuous improvement. Doing the same tasks again and againincreases proficiency, while reflection on performance is facilitated through mentoring and management time with each new employee.

Work can be arranged in a way to provide rapid learning opportunities. Onecompany broke from the traditional project-based assignment model in order tounlock the potential of its new employees. The traditional model, they believed,did not provide opportunities to repeat the same tasks on an accelerated pace.Instead, the company chose to rearrange the work at the program-level during aperiod of high workload, and grouped similar activities from multiple projectssimilar to a production line to build proficiency in each skill set rapidly.

Mentoring also plays a role in employee learning and is applied in environments with common goals and values, such as an employee-owned company.“A mentoring program pairs up a new employee with an existing employee-owner,”says Burns & McDonnell’s Maden. “The mentor acts as an ambassador for the newemployee.” This mentoring program is designed to help the employee learn thecompany culture, in a specific way related to the business and work group to whichhe or she is assigned. Maden has observed, “Informal but yet successful programsinclude breakfasts with managers and cross-training opportunities.”

Senior team members cannot shadow a new employee in every job locationcontinuously. There will come a point in time when the new employee is workingindependently with the customer. These individual experiences provide that employeeexcellent opportunities to learn and grow. Best-in-class firms have programs torotate employees from the office to the field on the same project, providing anunparalleled opportunity to strengthen the confidence of the new employee.

Exhibit 2

Weekly Update


On the employee’s one-year anniversary, take the time to review the top lessonslearned from the first 12 months. These lessons learned can lead to enriched careerexperiences and development opportunities.

GROWTH: SQUEEZING THE ACCELERATORProblem and Opportunity

A group procurement manager in a leading global engineering, consultingand construction company was facing a shortage of qualified procurement professionals during a time of rapid growth for the company. At that time, a basicprocurement team consisting of a procurement manager, expediter and supportstaff was identified for each specific project. That procurement team was co-locatedwith the project team wherever the project team was stationed throughout thecountry. This is a traditional organizational model used in the industry today.

Because of the shrinking supply and increasing demand for procurement professionals, this group had to make a strategic decision to hire experienced talentor develop new staff. Conventional wisdom suggests that it takes between 10 to 15years to develop a proficient procurement manager through direct immersion onprojects throughout a career. Logically, a “hire skilled talent” philosophy seemed theright choice, since the time to develop existing employees into a bench of skilledstaff would have taken too long. “One prevalent issue working against a ‘develop’approach,” said the group manager “was that no one had time to work with

the ‘new’ guy.” The company nearlyquadrupled in a two-year time frame.In his group alone, there were twonew people hired each month.

The challenge was to acceleratethe process of training existing procurement staff and build thosecapabilities in five years or less to meetthe procurement workload imposed by rapid growth.

SolutionThe hiring manager was involved

throughout the recruiting, onboardingand growth processes. Instead of putting all of the pressure on the

human resources department to find the perfect candidates, some activities weremanaged by the procurement department, such as writing job descriptions. Newemployees were given an orientation to the business unit and department by thehiring manager. It was important to lay out expectations with new staff membersfor their first 12 months. According to the group manager, “It even went beyondsetting expectations in the first 12 months … we had to know where they mightend up after their first year.”

The procurement team also reorganized from a distributed network to a centralized structure. This was a departure from the philosophy of co-locating witheach individual project. The tactic was to control the way the work was brought


to the employee, rather than waiting for the project to present a piece of work toan employee. In the traditional method, though a procurement professional wasexposed to all steps from start to finish of a project, that process may have takentwo to three years, whereby that employee only performed each special activity ahandful of times. In the centralized structure, similar activities for multiple projectscould be carved up and assigned to individuals to build competency rapidly. In thewords of the group manager, the idea was best summarized as “learning to changetires,” which considered that one does not become a good member of the pit crewby working during the race, but rather by changing hundreds of tires during practice throughout their early career. Similarly, the group manager believed thatconcentrated repetition in a short time frame was the key to success in acceleratingthe growth of qualified talent.

ResultOn day one, the new employee participates in basic company orientation

sessions. However, job-specific skills are taught and formally monitored throughthe centralization of activities. The procurement group meets their goal of bringinga new employee up to speed and able to tackle an entire project in a four- to six-yeartime frame. “Some procurement staff ramped up sooner than others,” said thegroup's manager when speaking about the results. The centralized structure was a driving force for new employees to competitively advance in a healthy way byrapidly mastering each skill.

The group manager notes that external market conditions behind an increasein project volumes facilitated the centralized structure with a large amount of procurement activity. He suggests that, “this atypical [centralized] procurementstructure may not be appropriate during slower economies and that gaining experience using the traditional approach may be a more appropriate optionunder different circumstances.”

CHECKERED FLAGThere is no better way to ramp up a new employee than to have a top-notch

recruiting program, a solid onboarding process and a plan for accelerated growth.All of these processes should be interconnected.

In the engineering and construction industry, progressive and low-cost recruiting concepts are being utilized to identify the best candidate that will stay withthe firm. The challenge, however, with onboarding is to keep up the motivationand take the perspective that onboarding should last more than a single week ortwo. Employees tend to learn rapidly when they learn for themselves by doing andtake time to reflect on their performance. Applying these tactics can make a positiveimpact on your new employee performance for staff whether in engineering, project or field positions. Stock car racing champion Dale Earnhardt was oncequoted as saying, “Finishing races is important, but racing is more important.”Cultivating a desire for continuous improvement puts victory lane in our sights. ■

Jeff Lukowski, is a senior consultant at FMI Corporation. He may be reached at 919.785.9213 or via e-mail


T he time of unbridled expectations of prosperity has

passed. Everyone in the country looks to the news channels

to provide some glimmer of recovery. Earnings reports

are deemed “promising” when they “aren’t as bad as expected.” What

was once an industry characterized by gaudy backlogs and personnel

shortages is now comprised of leaner and hungrier organizations. While

there are bright pockets in a landscape devastated by the tempest,

most experts would agree that the road to recovery will be long and

the victims of the fall will be scattered along the right of way.

Organizations now struggle with the challenge of maintaining a positive message for their people while faced with the negativity of a bottomless sea ofdespair. What will drive the industry forward? Will it ever return to the levels of the last decade? What great paradigm is the “next big thing”? History tells us that for every economic downturn, there has been a subsequent righting of theship. While there is no mystic able to read the tea leaves or tarot cards, it is still necessary for business leaders to begin to prepare for the future. No one can deny

By Gregg M. Schoppman

Leaders are spending more andmore time working on day-to-daytactical areas of the business.Forgetting about the people in the organization is a tactical errorthat has long-term ramifications.

After the Storm —Thinking Past the Downturn

42 ■ after the storm — thinking past the downturn

the importance of dealing with present-day issues. However, myopic and reactive management is not enough for long-term organization continuity.Economic forces have pounded andbludgeoned organizations with thefury of a cage fighter. Firms shouldemerge from the arena calloused and conditioned, lean and focused.Strategizing for the future begins now.

TAKE STOCK AND EVALUATEBusinesses need to have an

unvarnished evaluation in much thesame way people need an annual physical. On the surface, the

organization may appear to be performing acceptably, but through a deeper investigation, one may find systemic issues that left unchecked could lead to complications. More importantly, organizations need to examine the way theyoperate and decide if this is truly the model that makes sense for the future.

Most organizations anticipated, carefully situated their business and bracedthemselves for the downturn. Lesser talent was culled, and the organization’s efforts were refocused in the short term to generate cash flow. With this new organizational face, the effectiveness of the changes to structure, process and procedure need evaluation. Put another way, is everything working the way it wasexpected to work and is this the right way to move forward? Some of the areasthat require evaluation include:

• Customers — Are we truly valued by our customers or are we just a number?• Markets — Is this market a long-term solution or short-term prospect?• Execution — Are we best of class or operating with some level of inefficiency?• People — Are we developing our people or have we reverted to a model

of complacency?• Finance — Are we in a strong cash position or simply making it month

to month?• Strategy — Do we have a mechanism that looks at the business five to 10

years out, or are we only dealing with day-to-day tactical issues?• Succession — Do we have depth in the organization at all levels, or are we

one step away from liquidating the business in the event of an unforeseenloss of a key individual?

Great leaders regularly reflect on these areas without bias or prejudice.Feedback on all facets of the business is imperative for improvement. High- performing organizations routinely take an introspective approach to their businessthat enables them to continue to be truly high performers. Similarly, even professional athletes get physicals and consult trainers. While their performancemay slump, their desire enables them to rebound and improve future performance.

Organizations need to examine the way they operate and decideif this is truly the modelthat makes sense for the future.


DON’T PANIC!Science fiction lovers will recall the exploits of Arthur Dent in Douglas

Adams’ The Hitchhiker’s Guide to the Galaxy. As the earth is destroyed and hisentire reality is shaken to its core, Arthur receives a copy of the Guide. On theback of the electronic tome is the inscription, “Don’t panic.” Many industry pundits have posed that the global financial meltdown might mean the end offinancial markets, as we have known them. Examining the behavior of some contractors would also give one the impression that the shortage of projectsdemands drastic action. These firms then grasp at any semblance of a project to“keep people busy and keep the iron moving.” It is important to avoid confusingbusiness ignorance for aggressive business-development tactics. Ignorance mightbe defined as removing all margins or removing major cost centers in an effort toland the job, while being aggressive involves seriously examining cost centers andapplying tactical reductions with careful consideration by all stakeholders. To complicate this further, contractors are employing the aforementioned tactics innew uncharted markets. Risk is inherent in the construction industry. How muchis self-inflicted?

The first step is to understand the true costs of the work. There will always be plenty of firms that will make bad decisions on bid day. However, there arefirms that are simply better or more efficient than others are. How often do wehear, “There is no way they can do it for that,” or “They’ll be out of business in a month if they keep bidding like that.” Yet, the competition remains strong and they keep appearing on bid day. Unsuccessful bids should garner a serious investigation and autopsy in much the same fashion a firm would analyze a project at its completion. Questions to reflect upon might include:

• What alternative crew compositions could we have used?• Is there a different piece of equipment we could have used?• Could we have supervised or managed the project with different resources?• Is there something we are

self-performing that we couldhave subcontracted or vice versa?

• Did we not receive pricing from a trade contractor ourcompetition is using?

Notice there is little to no discussion about the profit margin inthe reflection above. So much is madeof the actual margin assigned thatfirms rarely investigate the true cost onthe project. Squabbling about penniesis a fruitless exercise when productivityrates and efficiencies make up the lionshare of the dollars on a project. Onestrategy is to conduct a reconnaissancemission. Rather than angst about how


a competitor could possibly do a project for such a low price, go and see how they execute. Are they running different equipment than you? Are they using different trade contractors and suppliers than you? What technology are theyusing that you do not possess? This is not an advocacy for corporate espionage,but simply encouragement to investigate and take actionable steps to level theplaying field. Making excuses and lamenting about the one that got away is nosubstitute for action.

YOU’RE RIGHT-SIZED — NOW WHAT?The organization is leaner and streamlined. It is now comprised of high

performers. Senior leaders have made a commitment to this team. The questionnow is “How should they be developed?” Even though this team may be the

smartest and highest-performing, itstill requires development. It is easy to forsake training and development whentimes are tough. Even with a reducedteam, many organizations have slashedbenefits, raises and bonuses. Thoseremaining ponder the oft heard remark,“Development? They should be happy they have a job in this climate.”People do not question the current environment nor do they fail to recognize the significance of havingemployment amidst record-highunemployment. However, ignoring thepeople in an organization not only failsto perpetuate growth of an importantasset but also may demotivate talent in an already bleak environment.

Leaders think that developmentcosts money, money that is already or will be scarce. Yes, the industry is blanketedwith educational events ranging from green buildings to conflict resolution.Education is incredibly important and this is not to suggest that it should bedevalued. Development is much more comprehensive than educational events,however. Development means spending time with your people. With everyonecaught up in the day-to-day grind, it is easy to lose sight of the people that makethe engine move, those who are NOT the squeaky wheels. What are their plansfor the future? Where do they want to be in the organization? While plans for thefuture may have been delayed, with any luck they are not derailed or shelved.Develop an annual plan that is less about a “performance evaluation” and moreabout an action plan for the future. For example, consider the following:

• Personal Focus — Where do you want to be in five years? What do youlike doing in the organization? What skills do you want to improve?

• Company Focus — Where should the business be going? Where do weneed improvement?

With everyone caughtup in the day-to-daygrind, it is easy to losesight of the people thatmake the engine move,those who are NOT the squeaky wheels.


The other challenge is keeping personnel motivated in a bleak landscape.With all of the upside individual benefits off the table and group survival being themost important short-term driver, it is easy to become complacent. Leaders needto continue to invigorate and challenge their teams to stretch. Some ideas include:

• Organizational Connections — Often, the senior leader in the firm is theliaison between professional, civic and philanthropic organizations. Spreadthe responsibilities across the managers in the firm and empower them tocreate relationships and connections.

• Training — Utilize internal resources to become subject matter experts. For example, general contracting firms can assign trades (i.e., concrete, electrical, mechanical, etc.) to internal champions. It becomes their task tobecome educated and in turn educate the masses. Spending the time andinvestment on training one person via “train-the-trainer” training enablesthe organizations to develop other employees internally.

• Keep It Fun — Find a way to use inexpensive or free diversions to occupyyour team’s time. For instance, fantasy sports leagues are excellent for building camaraderie as well as providing some distraction to the inundationof negativism. Channeling the competitive spirit in one’s own virtual football team provides some water cooler chatter that has a significantlymore upbeat tone.

The goal is not to ignore the financial pressures of today but to use the toolsavailable to create an air of optimism for the future. Leaders are spending more andmore time working on day-to-day tactical areas of the business. Forgetting aboutthe people in the organization is a tactical error that has long-term ramifications.

YOU LEARNED CASH IS KING — DON’T FORGET IT!A dangerous cycle was unleashed as cash collections became more constrained.

Collection figures hovered precipitously close to the edge of becoming bad debts. Unfortunately, payroll, materials invoices and utility expenses still requireattention. The organization begins to take on ill-advised projects with questionablecustomers in an effort to generate cash flow. As additional expenses mount withno additional cash flow generated, risk also continues to rise. Many organizationsare finally moving through the collection nightmare with one lesson learned. Cash is king! As trite as the phrase may be, these threewords should become the mantra ofany business organization, in goodtimes or bad.

Many contractors fundamentallyunderstand the importance of cash,but maintain a victim mentality. Theyaccept mediocre payment terms andlack proactive measures to ensure thatcustomers are at least held to some


reasonable standard. This is not to say fist pounding and strong-arming the customer is an appropriate tactic to improve collections. There are some simplelessons to apply to the business in times of prosperity:

• Forecast — Managers should be required to forecast accurately the cashflow based on the billings of their project. More importantly, the differencebetween forecasts and actuals can be used to expose production anomaliesor customer challenges.

• Cross Functionality — Organizations that involve managers in the collections process are more successful than those that simply leave thefunction to accounting and finance.

• Process — Billings and collection departments should have a strict process that begins with evaluation of creditworthiness of customers andprojects, and then deals with how pay applications are processed and, moreimportantly, the steps of following up. Furthermore, everyone involved inthe process is defined, including members of the customer’s team thattouch the invoice.

• Communication — When is the first call made to the customer when the invoice is late? What delay constitutes “late”? Establish a process that designates someone to communicate with the customer early in the process.This not only makes the connection, but also flushes out an errant invoiceearly rather than on the day payment is supposed to be remitted.

Contractors may have been lulled to sleep by years of prosperity and easypromises of the “check is in the mail.” Customers and general contractors may be less quick to release payment in these turbulent times. Avoiding self-inflectedwounds, such as errors on invoices and the proverbial lost invoice, will at least keep

an organization’s days sales outstandingat a lower level and more cash in the coffers than its peers.

FINE-TUNING THE EXECUTIONFor years, organizations have

struggled with making time to establishthe right processes and procedures.Often, managers have been more concerned with keeping their headsabove water in a fast-growing businessthan ensuring that a “pre-job planningmeeting” went according to the numbers. Margin-eroding behaviorswere accepted as necessary evils inlight of saturated personnel. Now,with backlogs small and margins even

smaller, flawless execution is imperative. While the planning aspects of execution setthe tone for a successful project, creating a sound understanding of the organization’sdirect costs should become a priority for management.


With project awards at low levels and bidder lists at historic highs, managementteams must engage in good quality pre-construction meetings. Now is also the timeto ensure the tools are germane, especially as organizations assume new projects innew niches. Management should conduct a routine inspection of these processes as part of an annualevaluation of the business. Equippedwith a strong “toolbox” of writtenprocesses and procedures, managersmust re-evaluate production rates andother direct costs. Many organizationscapture production information neither during the project nor at theproject’s conclusion. Interestinglyenough, countless operation groupscontinue to question the soundness of their estimating department’s bids, even in theface of such a noticeable disconnect. Competiveness begins with an understandingof the company’s true costs. Consider the following tactics to improve execution:

• Estimating with Operations — With added bench strength, best-of-classfirms are involving project managers and superintendents in the estimatingprocess to provide constructability review.

• Trade Contractor Feedback — If project costs are primarily trade-contractor-related, review their specific unit costs and develop a historical unit costdatabase. Trending individual activities such as mechanical (dollars/ton),drywall (dollars/linear feet of wall type) and concrete (dollars/cubic yards offoundation) helps pre-construction groups through conceptual estimating.

• Post-job Review Audits — Identify four to five specific cost areas at thebeginning of the project during a pre-job planning meeting. During theproject, management tracks daily production and provides a summary forestimating to adjust for future projects.

With a refocused effort on processes and procedures, management can examine the composition of its costs. More importantly, managers develop andrefine the correct margin-enhancing behaviors now to ensure the organization issituated appropriately for the future. Lastly, getting project management and fieldsupervision to use job-cost feedback correctly reinforces the efficiency messageregardless of the economic state of the industry.

FINDING THE NEXT BIG THING — MAKE THE INVESTMENTAs stimulus packages were doled out, many contractors quickly found

themselves moving across niches and markets. Site contractors became transportationcontractors. Commercial contractors became federal contractors. Everyone becamegreen. All found themselves in a long line of existing market players, fighting forprecious scraps. Being late to the party can be an expensive education as well as afrustrating endeavor for the organization.

The larger question that must be answered is, “What is the next big thing?”

Competiveness beginswith an understanding ofthe company’s true costs.


Awaken the crystal balls! Better yet, start researching and make an investment to explore new markets. Being pioneers in a sector, niche or market allows firms to command higher margins. These pioneering roles help companies avoid commodity classification. One must exploit a marketplace as long as possiblebefore saturation occurs. As one contractor finds a profitable niche, the competitionwill not be far behind. Consider the green movement in the United States. Ascontractors become accredited LEED professionals, they should be asking themselves, “Is this what will separate us from our competition, or will this simplyget us to the dance?” In the 1990s, general and trade contractors alike flooded the “technology arena” only to see that niche become saturated and eventuallyburnt-out. Many were able to leverage their “corporate résumés” effectively in otherareas (i.e., biomedical, health care, etc.). Strategically speaking, as new contractorswere entering their marketplace, these same pioneers were reconnoitering thelandscape for new niches, the same new niches that very few competitors had pillaged and exploited. The same lesson applies today.

Market conditions of the past decade have made many contractors not onlyrich but also lazy. Investigating new markets and niches is hard work. Becoming a sales-centric organization is a characteristic that will define successful businessesin the future. Being a reactionary order taker requires little skill and tends to yieldlow percentages when the competition is proactively seeking the same work in the market. Organizations must continually reflect on two specific areas of thebusiness development cycle for the short term and the long term:

Tactical Focus — Short Term• What are our resources (i.e., managers, superintendents, estimators) doing,

and how can their duties include some function of business development?• How do we stack up against the competition? Are we losing on price, or is

that an excuse we make to cover for our other mistakes?• What forums do we have to reach our current customers?• Are there any current customers that present our organization with

undue risk?• Are we chasing everything or do we have discipline to say “No”? How

should we decide what to chase?

Strategic Focus — Long Term• Where are we positioned now? Is this market going to be here in one year?

Five years?• What is our exit strategy from one niche to another? Should we always

have a presence in the current market(s)?• Where should we be in five years? What should we be doing to get into

that market?

The questions above should mimic many of the same questions leadershipconsiders when they evaluate their organization. Getting work must exhibit some blend of art and science to be effective. Laziness and lackluster businessdevelopment are not traits of high-performing organizations of tomorrow. Thehigh performers are already thinking about the next big thing.


ACT NOW FOR TOMORROWDealing with prosperity is much easier and more fun than coping with an

economic collapse. Important decisions can be procrastinated as managers dealwith unbridled success. Contractors now make life-altering decisions daily, all withthe aim of survival. Making payroll is often elevated to high on the to-do list,while finding the “next big thing” is relegated to the bottom of the list. Leadersmust still lead and be forward-thinking regardless of the impediments that crosstheir paths.

Two analogies come to mind when examining the efforts of constructionfirms in today’s tumultuous environment. Today’s strategy development anddeployment can be likened to the game of chess. Chess masters plan movesahead of their competition. They are 20–30 moves ahead and haveequivalent contingency plans as theiropponents move, adjusting to the new environment. Moving pawns to combat an opponent’s queen is reactive and a defensive strategy thatoften ends in an early checkmate. Tobeat this “Kasparov Economy” andposition one favorably for the “DeepBlue” future, take the steps now toresearch, evaluate and act.

The second example is that of two tennis champions volleying,unable to break the other’s serve. Asone player becomes tired and weak,serves are returned with only survivalin mind. The stronger player attacks,pounding the ball backhanded to theweaker player who moves around the court in exhaustion. Once again, the weakerplayer simply attempts to protect his or her position and strikes the ball with aprotectionist mind-set. Finally, the aggressive player pounces and slices the ball toa spot on the court where the opponent cannot return. The lesson is twofold. Thestronger player wore down the competition by a relentless attack, finishing theopponent with a shot that did not require energy but simply played on his or heroff balance and exhaustion. Secondly, the weaker player was always one stepbehind the competition in that he or she was focused on returning and defending,rather than positioning for the future. Making payroll is important. Estimating isimportant. Managing projects is important. Focusing on day-to-day tactical detailsis the equivalent of having an efficient engine room with no one in the wheelhouseof the ship as it hits an iceberg.

Game, set, match. ■

Gregg Schoppman is a principal with FMI Corporation. He may be reached at 813.636.1259 or via e-mail


A ny operations person worth his or her salt knows that

consistent operations lead to lower risk, better control,

faster training and profits that are more consistent.

Many construction company executives will tell you that their

company’s operations are consistent. They may even proudly point to

an extensive SOP manual and declare, “This is how we do things here.”

Reality often is different from perception. Actual operational processes

and behaviors are full of exceptions and individual “best” practices.

Rampant excuses for why certain projects did not follow standard practiceand/or why some individuals do not have to follow the rules exist. This quicklyerodes operational discipline and increases risk, decreases control, slows training anddecreases profits. In the worst cases, operations can become completely independentof any SOP manual, no matter how detailed or impressive the manual is.

If we assume a company already has standard operating procedures (identified,systems built, employees trained and processes rolled out1); how can the companysupport consistent compliance? Measure them. We have all heard sayings like,“What gets measured gets done” and “If it can be measured, it can be managed.”

By Ethan Cowles

Measuring to ChangeOperational Behaviors

Once you stop measuring performance, the gains you worked so hard to achieve will quickly atrophy. People will soonfocus their effort on something else. You must keep it up.

52 ■ measuring to change operational behaviors

We intuitively accept these sayings as being true but often dismiss their importanceas being just a “fortune-cookie saying.” In actuality, measurement is one of themost powerful tools to change people’s behavior and achieve compliance.

WHAT AND HOW TO MEASUREMeasuring operational behaviors is extremely easy. Start by identifying the few

critical results that are trying to be achieved. In most cases these may include thingslike gross profit, labor-cost variance, labor-hours variance, material variance, etc.These are called downstream measurements — the results of our process and actions.

Next, identify the aspects of your operations that support positive upstreamresults. Examples of these include pre-job planning meetings, short-interval plans,daily huddles, etc. These are the things that, through experience, the company hasidentified as being highly correlated with positive results.

These are just some measurement examples. More, less or different measurementsare acceptable depending on individual company operations. Tracking a mix of upstream and downstream measurements is the key (cause and effect). As a company becomes more consistent with its upstream processes and behaviors, thedownstream performance of the projects will increase.

MEASURE THE STATUS Up, down, good or bad; determine where you are. When measuring a process,

define the process and measure success. For example, when measuring pre-jobplanning meetings, first define whatthe pre-job planning process is andwhen the pre-job planning meetingshould take place (i.e., “The pre-jobplanning meeting is to take place nolater than 10 days before labor ormaterials are delivered to the projectsite.”) Success in this example is only achieved when the meeting actually meets the criteria: 10 or moredays before labor or materials aredelivered to the project site. If a pre-job planning meeting is skipped,

Upstream measurements measure the necessary components of a project or process that helpincrease the probability of reaching a favorable outcome. These include, but are not limited to:

• Pre-job planning meetings • Planned versus unplanned calls• Short-interval plans • Daily huddles

Downstream measurements measure the results of a project or process. These may include:

• Labor-dollars variance • Material variance• Labor-hours variance • Gross profit/margin


or if it is held but failed to meet the explicate criteria, it counts as a miss. Measurethe success by the following calculation:

Measuring something like labor variance is easier, as shown in this example:

Perform calculations such as these for all your key processes/measurements. A single, static measurement is not always helpful. It is often insufficient to

tell the whole story, and without multiple measurements over time, it is impossibleto know if things are going better or worse or to see the correlation between positive behaviors and positive outcomes. In addition, raw numbers are often hardfor people to digest and make sense of quickly. To solve these issues, graphicallytrack and display measurement information, as in Exhibit 1.

By using graphical output, information comes alive. You can see not onlywhere you are today, but also where you have been and whether things are gettingbetter or worse.

IMPLEMENTATION TIPSHave Realistic Expectations: Many construction managers and company

executives expect to achieve 100% compliance right away. This is simply not likelyto happen. In fact, if you do see 100% compliance right away, be skeptical of the

Jan Feb Mar Apr May

33.3

41.750.0

75.0

85.7

Jun Jul Aug Sep Oct Nov Dec

JanYTD

OpportunitiesAccomplishments% Compliance

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

93

33.3

5027

54.0

125

41.7

147

50.0

86

75.0

76

85.7

000

000

000

000

000

000

000

0

10

20

30

40

50

60

70

80

90

100

Source: FMI Research

Exhibit 1

Pre-Job Planning CompliancePercentage of compliance

Baseline: 54%Progress line

Number of Successful Pre-job Planning Meetings Held

Total Number of Pre-job Planning Meeting OpportunitiesPre-job Planning

Meeting Compliance (%)

Actual Labor $s to Date for Work Completed

Estimated Labor $s for Work CompletedLabor Variance

to Date (%)

=

=

54 ■ measuring to change operational behaviors

quality of the figures. It usually means people are simply pencil whipping thepaperwork. Expect widespread compliance to take a few months (see Exhibit 2).

People must know what is being measured and why. Solicit feedback andwade through the initial gripes and complaints. It takes time before everyone seesthe fruits of consistent operations.

Start Slow: For a couple of reasons, start out measuring only a few things. Thefirst reason is to keep it manageable. Setting up the systems and tracking downaccurate information is a project in and of itself. Concentrate on getting it rightrather than fast. The second reason is to keep people calm and informed. If this isa new practice for your company, there will be widespread confusion about whatis being measured and why it is being measured. If rolled out too quickly, peoplestart to feel paranoid that the company is trying to get rid of them. Keeping yourpeople informed and aware of the process is the best way to integrate measurement.

Stay Positive: Always, always, always measure successes. “You catch more flieswith honey,” and when promoting new behaviors, it is no exception. Demonstratingpositive progress toward goals makes it feel like a learning process: a crawl, walk,run situation.

Inevitably, not every project will go smoothly. If you are measuring successes,challenges can be addressed in a positive manner without placing blame or havingemployees become fearful (especially important during implementation of newthings). Get everyone working as a team to reach 100%.

If the “failures” are measured, you are in for a disaster. The “each-man-for-himself” attitude quickly destroys camaraderie and the value the process is tryingto create. People will spend their time thinking of reasons why it can’t/didn’t workthan how to make it work better the next time.

Post Aggregate Information Publicly: Post the company measurements/graphs

Jan Feb Mar Apr May

33.3

41.750.0

75.0

85.7

Jun Jul Aug Sep Oct Nov Dec0

10

20

30

40

50

60

70

80

90

100

Exhibit 2


Baseline: 75%Progress line

100.0 100.0 100.0 100.0

JanYTD



93

33.3

926975

125

41.7

147

50.0

86

75.0

76

85.7

1010

100.0

1111

100.0

1212

100.0

99

100.0

000

000

000



publicly, in job trailers, break rooms or in job boxes — anywhere that people canfrequently see them. This gets people talking about the goals and how to improvethe measurements.

Displaying aggregate information also serves as a type of peer pressure. If thecompany performed nine out of 10 pre-job planning meetings, and you were the one person that did not hold yours, you would feel the pressure to performnext time without ever being officially reprimanded.

Communicate Successes (cause and effect): With time, the correlationbetween upstream and downstream measurements will become clear. Projects thatconducted pre-job planning meetings, short-interval plans, etc., will have higherprofits, higher productivity and fewer delays. Projects that did not complete upstreamactivities will not perform as well. Make sure people see, hear and understand thecorrelation. Disciplined operations will positively affect the bottom line.

Keep It Up!: Once you stop measuring performance, the gains you worked sohard to achieve will quickly atrophy. People will soon focus their effort on somethingelse. You must keep it up.

Use continued measurement as a management tool. If compliance starts todecline (see Exhibit 3), use it as a tool to ask questions, reaffirm the importance ofoperational consistency, diagnose any problems and get the operations back on track.

Measurement is a simple way to encourage consistent behaviors and leads toconsistent results. ■

Ethan Cowles is a consultant with FMI Corporation. He may be reached at 303.398.7276 or via e-mail at

[email protected].

1 How to build standard operating procedures is outside the scope of this article.

Jan Feb Mar Apr May

33.3

41.750.0

75.0

87.585.7

Jun Jul Aug Sep Oct Nov Dec

1010

100.0

1111

100.0

1212

100.0

99

100.0

87

87.5

97

77.8

0

10

20

30

40

50

60

70

80

90

100

Exhibit 3


Baseline: 76.15%Progress line

100.0 100.0 100.0 100.0

77.8

JanYTD



93

33.3

1098376.1

125

41.7

147

50.0

86

75.0

76

85.7

000


T he level of competition in the industry is higher than it has

been for the last several decades. Firms have responded

by rightsizing their companies, focusing on work that they

have the best chance to win and becoming price-competitive. While

those changes help companies respond to the immediate challenges,

the long-term question to ask is, “What will it take for companies to

be successful as they move forward?”

FMI anticipates that the construction market will be rocky for the remainderof 2009 and into 2010. The level of competition will gradually ease, but for manycontractors that might be 12 months or more from now. Architects and engineerswill see their market pick up quicker. Regardless if you are an architect, engineeror contractor, next year will be challenging.

Rightsizing generally leaves companies with their best and brightest people.Those people will take on more duties, across a wider range of responsibilities, inorder to meet the day-to-day demands of the company. That is true for operations,business development, estimating, pre-construction and administration. Todayeveryone needs to learn a few new tricks in order to get work done effectively and efficiently. The strategic question is: How does your organization become a“Learning Organization?”

By Cynthia Paul and Ken Roper

Winning in a Tight Economic Market: LearningYour Way to SuccessLearning plans help conceive and then deliver learning. They provide the strategic structure needed to drive skills and applications of the organization.

58 ■ winning in a tight economic market: learning your way to success

CUSTOMER FOCUS: A LEARNED BEHAVIOR Industry firms have focused on customers for years. At least that is what

companies say. Through the market expansion in recent years, many architects,engineers and contractors have lost some of their focus on customers. It has notbeen malicious intent. There simply has been more work to effectively pursue orcomplete. The result is that too many firms have said they were customer-focused,yet remained unresponsive to the customer’s needs. Too many have simply used“customer-focused” as a marketing speech and changed very little about how theypursue, win and build work. The difference is very apparent to the customer. Theresult is that customers have felt the lack of attention and responded by droppingtheir level of loyalty to the firms with which they work.

How customer-focused are you? One quick test is to ask, “Do you spend time calling on a potential customer if there is no immediate project at hand? Or do you prioritize your time to those customers that have immediate work onthe books?”

Creating a relationship with a customer before a project hits the street is asimple way to show your level of commitment. This is not to suggest you spendthe majority of your time calling on customers who do not have projects for youin the near term. Instead, when you decide whom the right customers are, committo spending time developing those relationships when projects are available as wellas when there are no immediate work prospects. Customer-focused means beingcommitted to building lasting relationships, not simply chasing projects.

Customer focus is a very simple thing for the customer to determine. Theamount of care put into projects certainly demonstrates it. A big telling point ishow customers are treated before, after and between projects. The economicchanges have helped the industry wake up to the realization that truly focusing

on customers is a strategy that requiresa different approach than chasing projects. Customers have responded to market changes by increasing thenumber of people competing for a single project opportunity. That marketpressure is resulting in lower projectcosts for customers. Many A/E/C firmshave firsthand experience with lowercustomer loyalty, price-focused projectselection and too few opportunitiesthat hit their sweet spots.

You need customer-focused skills if you want your organization to deliver service at a level that standsout in the mind of the customer.

Customer-focused skills are one of the new areas where architects, engineers andcontractors are investing and growing their people. Simple ideas for increasing theskills and abilities of your people to meet the demands of customers—on projectsor off—can impact your reputation and the preference (or lack thereof) that customers show you during the project selection process.

Customer-focusedmeans being committedto building lasting relationships, not simplychasing projects.


Building customer-focused skills is a way to win and keep customers and getyour company positioned to take advantage of market improvements. Yet manyA/E/C companies put off training, because a common challenge is finding thetime and resources to get it all done.

If you believe, as most senior people do, that people are your most importantasset, it makes sense to invest in their growth and development. Think along thelines of repair and maintenance forequipment. Training is equivalent topreventive maintenance for people.

START WITH THE END IN MIND The endgame is the best

starting place whether growing theskills of your people or equippingthem with brand new skills. Clearlyoutlining the specific skills and abilities that your people need is thestarting point; it also provides the road map through which training iscreated and delivered.

Customer-focused skills needs differ from one organization to another. Some companies need theability to find new customers, targetand win the work, and build lastingrelationships. For others, due to theirorganizational structure, the field personnel might be solely focused on delivering ahigh-quality project and using that platform to make sure that the customer selectsthem for the next project. Regardless of how your company operates, the key tobuilding high-impact skills is to identify the outcomes you want to generate.

Spend a few minutes thinking about the one or two critical skills that reallymatter. What, if your people had the ability, would make a difference to customersatisfaction? What skills would:

• Drive customer loyalty? • Increase communications on a project? • Improve your design process, making sure you fully understand the

customer’s needs and objectives? • Help with project closeout and expediting finishing the job?• Set you apart from your toughest competition?

Skill building needs to be focused on delivering the customer experience thatgives your company a signature in the market. This signature or brand needs toset you apart from the competition and provide customers with a reason to workwith you. Skills training must generate a business return for the company whileproviding your people with the tools they need to be successful.

Starting with the end in mind means building a concrete plan that gets your


people from where their skills are today to where their skills need to be in thefuture. When you pull the plan together, it is called a learning plan. The planincludes learning objectives, focal points, methods, and tools and resources.

Quick Learning Plan Definitions:

• Learning objectives are the overall outcomes that need to be accomplishedthrough the learning process. Learning objectives define the successful outcome of the training effort.

• Focal points are more tactical. They outline the key points to be covered. They serve as a road map for content development. Focal points also helpmatch the learning objectives to the content and methods of training thatbest fit your strategic goals.

• Methods refer to the instructional process that will be used to teach newskills and abilities. This could include lecture, small group discussions, practice sessions, role-plays, etc. Because of different learning preferences,adults need a variety of hands-on applications in order to grasp and understand skills being presented.

• Tools and resources are the last element in a learning plan and providestructure and reinforcement both inside and outside the initial learningexperience. Think of these as information, checklists, reference material,books, etc. They represent walk-away tools to assist employees in applyingthe newly learned skills and abilities to their day-to-day jobs.

Putting all the elements together, a simple learning plan example is shown in Exhibit 1.

This learning plan example builds on the company’s need to have accurateand timely project closeouts. The learning objective defines the expectation for the learning process. The focal points capture the highlights of the learningcontent, while the methods outline the structure of the training. Tools andresources are tangible reference materials that training participants can use in theclassroom and on their jobs.

Exhibit 1

Simple Learning Plan Example

Learning Objective Focal Points Methods Tools and Resources

Demonstrate efficiency with Excel 2007 macros and equations in project closeouts

• Overview of Excel 2007—changes and updates

• Create standard formula protocols

• Overview of company closeout procedures

• Use of closeout template

• Apply formulas and macros to data analysis

• Project closeout— Standard operation

procedure

• 1-2-3 project closeout checklist

• Automated project closeout template

• Classroom lecture

• Classroom discussion and workshops

• Computer guided learning—Excel DVD training

• One-on-one training workshop—“Closing your job using Excel 2007”


The learning plan not only provides the structure to create learning that drives results, but it also becomes a simple tool to communicate to the internalmanagement team what the training will entail, making it easy for them to support and reinforce learning during the work experience.

LEARNING OBJECTIVES: THE DESTINATION Long before you determine if employees are going to learn the skills in a

classroom, on the job or by self-directed efforts, learning objectives provide cleardefinition of the purpose of the training. The company can then determine if theoutcomes are worth the time and effort that need to be invested in order to buildthe outlined skills.

The following are a sample of learning objectives on customer-focused behavior:

• Identify customer hot buttons through the use of questions• Diffuse anger and conflict with customers• Demonstrate customer-focused behavior through your body language• Answer customer questions that build value • Ask discovery questions in the sales process• Craft a win strategy for proposals• Demonstrate proficiency in face-to-face communications• Control tone of voice in order to communicate effectively• Read and interpret the other person's communication style• Communicate effectively via writing• Create an effective opening for presentation• Manage the question-and-answer session during the client interview• Prepare for a presentation• Create a key account plan for your top customer• Conduct background market research on a potential new customer

Learning objectives define where the person should be at the end of the training, regardless of the format or structure of how the skills or knowledge ispresented. If creating an effective opening for presentation is the learning objective,the training should focus on structuring a message, building in attention-gettingfacts, providing an agenda, telling customers why they should listen to you andsetting up the body of your talk. Each learning objective breaks down into definablebehaviors and skills that become the focus of training.

Learning objectives set to what extent the skill/knowledge must be learned. Forexample, if a learning objective is “demonstrate five effective strategies for opening ameeting,” the participant would first learn effective strategies for opening themeeting and then demonstrate his or her knowledge in order to fulfill the learningobjective. Demonstration of a skill provides a much stronger test of skill acquisitionthan does a written test. When the participant can effectively demonstrate fiveeffective strategies for opening meetings, then the training is complete. In this case,you know if the training was successful when participants can demonstrate theirmastery of the skill (i.e., create and deliver an effective opening for a presentation).

If the learning objective was “explore the tools available for creating effectivemeetings,” the learning would focus on presenting the tools to the audience. The


process would be moreeducational than skills-based. Demonstrating theskill or exploring toolscan be effective learningobjectives. The key is thelearning objective needsto drive an outcome that makes sense for the company. Exhibit 2provides examples of performance verbs forlearning objectives.

Adults are differentthan their younger predecessors. Adultscome to the learningenvironment with past

experiences, the need for control and a sense of urgency regarding achievingresults. It is simple to dramatically increase the impact of training by building inadult learning principles. For tips about adult learning in general, see Exhibit 3.

Building training on learning objectives ensures the learning process is sustainedand hard-hitting. Being clear about the skills and abilities needed to be successful inyour right-sized companyand providing trainingincreases your capacity to succeed in the currentcompetitive marketplace.Why simply survive thecurrent economy whenincreasing the abilities ofyour people will help yousucceed in spite of theeconomy?

FOCAL POINTS: THE ROAD MAP OFLEARNING CONTENT

Focal points are thesecond major element of a learning plan. Focalpoints to a learning planare like milestones to aschedule; they focusefforts and provide short-term destinations alongthe skills-building path.

Exhibit 2

Performance Verbs for Learning Objectives

Analyze

Apply

Assess

Calculate

Choose

Classify

Compare

Construct

Debate

Define

Demonstrate

Describe

Diagram

Differentiate

Discuss

Dramatize

Employ

Explain

Find

Formulate

Identify

Illustrate

Interpret

List

Measure

Memorize

Name

Operate

Perform

Position

Practice

Predict

Recognize

Record

Reproduce

Schedule

Select

Shop

Show

Sketch

Test

Translate

Write

Exhibit 3

Adult Learning Principles

1. Adults are independent and self-directed. They need to be able to express themselves freely. Incorporating discussion sessions is a simple way of actively engaging learners and respecting their independence. Allowing them some control over the learning process increases their engagement and knowledge.

2. Adults bring life experiences to learning. Learning needs to build on or connect to their life experiences. Their knowledge needs to be respected in the learning process.

3. Adults are goal-orientated. They come to learning already knowing what they want to learn. They determine if they will actively participate or passively sit back and watch the process unfold before them.

4. Adults are practical learners. They prefer to learn things that directly apply to them, their job, family or lives. They are less likely to willingly participate in theoretical learning.

5. Adults are relevancy-oriented. They need to understand the purpose of the training. Starting out a session explaining why the learning is important and the impact it can have on them will get the training off to the right start. Be sure that the entirety of training does not consist of “why,” but that much of it is focused on “how.”

Source: Malcolm Knowles pioneered the field of adult learning. He identified these characteristics of adult learners.


Focal points are the high-levellook at specific content that will be included in training. They can be educational or skills-based.Regardless of the intent, educationalor skills-based, focal points create the superstructure around which tobuild the course content.

Focal points become the detailedsteps or tactics for accomplishinglearning objectives. If the focal pointadvances the learning objective, it isincluded in training. If it does notadvance the objective, delete it. Focalpoints give you the opportunity to create high-impact learning and richtraining experiences.

Whether creating individual learning opportunities or full corporate universities, senior leadersneed to think through their learningobjectives and focal points. Withouttheir active participation in theprocess, the learning initiative frequently falls apart within the first 12 to 18 months. Simply said, strategicleaders are experienced at linkinglearning to strategic business objectives. They have the power to bring together all the resources of the firm to accomplish business results. With a learning plan,they can see the big picture of what the company is trying to accomplish and helpintegrate learning into the strategic fabric of the firm.

METHODS: LEARNING VARIETY = INCREASED LEARNINGClassroom training is a highly effective way to introduce concepts and allow

the audience to practice new skills in a safe, supporting environment. Classroomtraining is not necessarily the best method for learning, nor does it fit every skill. The key is linking the learning method to the skills being presented and the business objective that is being targeted. There are many learning methods, andthe designer’s imagination is the only real limiting factor. For adult learners,including different methods of learning increases overall skill comprehension andhelps support transferring this knowledge to their day-to-day activities.

Methods of learning include role-plays, discussion groups, self-directed learning (i.e., books, DVDs/tapes, etc.), Charrettes, side-by-side shadowing, fieldlearning labs, computer-assisted (i.e., webinars, seminars, testing, etc.), coaching,on-the-job learning and collaborative/team-based exercises, to name just a few.

Methods include “how” to present new ideas. For example, a new idea maybe presented verbally, in writing and/or modeled. Methods also include lecture,

FOCAL POINTSFocal points cover a wide range.

Educational focal points: • Explore the macro drivers of the

construction industry.• Investigate alternatives for

communicating with customers.• Provide highlights of our new

scheduling program.• Introduce the new proposal

development process.• Review our existing client list.• Update the group on current

strategic initiatives.

Skills-based focal points: • Create detailed project schedules.• Practice client-focused discovery

questions.• Learn the three skills for opening a

conversation with the customer.• Demonstrate presentation skills and

practice presentation.• Coach on effective strategies for

diffusing customer conflict.• Rehearse existing best practices that

are successful with customers.• Conduct a project review meeting.


small-group discussions and sales call ride-alongs, as well as determining theaudiovisuals that will be needed to aid comprehension and learning.

When walking through a jobsite, a very effective learning method may bedrawing or sketching out a visual aspect of the project. For example, you couldsketch out the finishing details of a wall easier than describing it. It would not matterif that sketch were on a piece of paper or in the dirt with a stick. When people see“new” ideas in their heads, it is easier for them to comprehend the message. Iflearners are visual learners, sketches or other pictorials are almost essential.

Research on audiovisuals points to two basic facts:

• Audiovisuals allow you to decrease the time needed to communicate anidea effectively.

• Comprehension levels increase dramatically through the use of audiovisuals.

A simple rule when presenting a new idea is to use three to five differentaudiovisuals that reinforce the message. For example, with classroom training youcould use a flip chart, handouts, PowerPoint presentations and/or have a processmodel displayed on the wall. The presenter also becomes an effective audiovisual.

TOOLS AND RESOURCES: CEMENTING LEARNING AND SETTING THEFOUNDATION FOR APPLICATION

Tools and resources address those items that will be included in the learningprocess and available during training. Tools include workbooks, process flow chartsand sample project closeout reports. One example of a resource is a peer/mentorwho will help guide an individual through learning.

Tools and resources also include reinforcement strategies to keep content current for participants. A simple but effective reinforcement tool is the use of apocket-sized learning model that learners carry with them and use on the job.Reinforcement tools also include newsletters, discussion groups, online supportgroups, mentors/coaches or checklists. The types of reinforcements are as varied as methods of learning. Get creative. Use a variety of different tools and resourcesto maximize the impact of learning. Almost all reinforcers get tired over time.Ensure that learners receive reference material and tools that help them take learning and apply it in the workplace. Application is where results are achieved,where objectives are made real. Most learners are simply not efficient enough tohear something one time and perfect the skill.

CONCLUSION: CHANGING CULTURE, WINNING CUSTOMERS FOR LIFE Customer focus behavior is more than a marketing slogan. It needs to permeate

the skills of your organization, from top to bottom. Your people need concretestrategies, tools and techniques that help them communicate to customers theimportance of those customers to your organization.

Providing people the skills and comfort levels needed to be successful in creating a customer-focused culture challenges many organizations. If a person’sskills levels are lacking, that void communicates loud and clear to customers. Ifskills are present but discomfort in using those skills means no execution, the customer again gets the idea that there is no customer focus. Knowledge alone


does not provide the result; action is essential. Overcoming discomfort of action isa vital part of skill building.

Learning needs to be a lifelong commitment we each make individually andcorporately. Organizations committed to growing the skill level of their people uselearning plans to help conceive and then deliver learning. Learning plans providethe strategic structure needed to drive skills and application of the organization.

You do not have to change all customer-facing skills in order to be successfulat creating a customer-focused culture. However, you do need to focus on one ortwo skills on an ongoing basis to change the culture of the organization.

Customers today have an unprecedented choice of which company to work with. Thinking through and building the skills of your people provide youan opportunity to build competitive advantage. A consistent level of skills insidean organization is a competitive advantage that is very difficult for customers to duplicate. The skills and abilities of your people are one of the enduring competitive advantages. ■

Cynthia Paul is a managing director at FMI Corporation. She may be reached at 303.398.7206 or via

e-mail@[email protected]. Ken Roper is a principal with FMI. He may be reached at 303.398.7218 or

via e-mail at [email protected].

Sample Learning PlanTitle: Presenting with Pizzazz—Classroom Training

Learning Objective Focal Points Methods

TimeFrame

Tools and Resources

Explore top tips and tools of effective presentations

Create the structure of an effective presentation

Indentify methods of encouraging audience participation during the question-and- answer session

• How construction industry presentations are different

• Customers’ perception of presentations—what works and what does not

• Influence: the purpose of presentations

• Seven deadly sins of presentations• Tools available to the presenter to

convey the message• Role of audiovisuals in comprehension • Three tools that makes them remember you • Common mistakes presenters make• Reading the audience: Are they getting

the message? • Industry research—What it takes to

stand out from the competition

• The hidden structure behind every effective presentation

• Eight steps to structuring presentations that win the project

• Building in the facts—Selling to the left brain• Right brain communication strategies• The power of blending the right and

left brain • Getting creative to capture the

audience’s attention

• Preparing for Q&A• Exploring audience dynamics—What

drives the reactions you get? • Five strategies for managing Q&A and getting selected• Crafting answers that sell your

difference

• Evaluation workshop—

spotting what is working and what is not (video-based)

• Appendix of types and uses of audiovisuals

• Industry research paper: “Presentations from the Customer’s Perspective”

• Presentation checklist

• Video-taped practice sessions

• Group and individual feedback sessions

• 50 most common Q&A questions

• 25 questions to engage the audience

2 hours

3 hours

1 hour

• Lecture• Small-group

practice sessions• Video critique

session

• Lecture• Individual

practice sessions• Mini

presentation practice sessions

• Lecture• Small-group

practice sessions• Computer-aided

learning • Demonstration:

creating interaction during Q&A

T otal U.S. construction put in place has dropped 14%

in 2009 and is forecast to drop another 5% in 2010.1

As a result, contractor backlogs are shrinking, and the

competition for a limited number of building projects continues

to increase. While these are not the best of times in the industry,

they are not the worst of times either. One of the areas where

FMI has seen increased market activity is due to the industry’s

acceptance and application of green construction practices.

The majority of contractors are continuing to see robust demand for greenconstruction in their backlogs, even if those backlogs are down. FMI predicts thattotal U.S. green construction put in place will increase from $19.1 billion in 2009

to $22.9 billion in 2013. While the whole pie of construction is getting smaller,green construction is taking a bigger piece. In 2002, green construction represented1% of U.S. total nonresidential construction put in place, but by 2013 this is predicted to increase to 5.5%. As a result, the U.S. construction market may be a bit darker but also a bit greener.

Of course, the intensity, or shade of green, varies depending on the particular

By Kevin Haynes and Heather Jones

Where is the Green Liningin a Sluggish U.S.Construction Market?Industry participants looking for positive trends during thesedifficult times need to look no further than the construction market’s “green lining.”

68 ■ where is the green lining in a sluggish u.s. construction market?

market, both vertically and geographically. Some markets are a“mint” green while others more closelyresemble a “hunter” green. In order to measure the degree of green andsubsequent market opportunity forgreen construction, FMI has createdthe “Green Intensity Index.” We have examined three primary demandmeasures for green construction: market size, market growth and saturation of the total construction market segment. As shown in Exhibits 1 and 2,the market opportunity for green construction increases the further to the rightthe vertical market is located on the graphic. The vertical markets that appear tobe a darker green, or have a stronger opportunity for green construction, includeoffice, educational and health care, while lighter green markets, or those just starting to incorporate green building practices, include commercial, lodging andmanufacturing. Furthermore, the office, educational and health care markets are

Exhibit 1

Green Intensity Index

Com

mer

cial

Lodg

ing

Man

ufac

turin

g

Am

usem

ent

and

Recr

eatio

n

Publ

ic S

afet

y

Tran

spor

tatio

n

Hea

lth C

are

Educ

atio

nal

Off

ice

Green Market Opportunity

Market

Office

Educational

Health Care

Transportation

Public Safety

Amusement and Recreation

Manufacturing

Lodging

Commercial

Market Growth% change 2009–2013

10%

39%

38%

49%

67%

–26%

–30%

–27%

–17%

Market Saturation% of 2010 total

16%

7%

4%

2%

3%

5%

1%

1%

<1%

37,201

35,351

9,888

3,893

2,422

3,698

2,637

1,482

1,002

Market Size$Millions, 2009–2013

Exhibit 2

Green Construction — Primary Demand Measures

Greatest Least


represented by darker shades of green,which shows that green constructionpresents a larger market size, strongergrowth and a greater share of totalconstruction volume, as shown inExhibit 2.

While Leadership in Energy and Environmental Design (LEED)certified buildings can be found inevery state and more than 400 citiesacross the U.S., green construction is still highly concentrated in larger,urban and more progressive states and metros (See Exhibit 3). It is estimated that the greenest 15 stateshave two-thirds (67%) of the LEEDbuilding area, compared to only 40% of the nation's population.2 States such as California, Oregon, Washington and Pennsylvania have the most LEED-certified buildings and are considered to be on the forefront of the green building movement. In many of the leading geographies for green construction, there isstrong political support for green initiatives. For example, the mayor of LosAngeles has made environmental issues a top priority and recently announced thatby 2020, renewable sources will meet 40% of the city’s energy needs. In contrastto these market leaders, green construction in the Great Plains, including NorthDakota, South Dakota, Nebraska, Kansas, Oklahoma, Montana and Wyoming,

It is estimated that thegreenest 15 states havetwo-thirds (67%) of theLEED building area,compared to only 40%of the nation’s population.

AL

AZ AR

CA CO

CT

DE

FL

GA

ID

IL IN

IA

KSKY

LA

ME

MD

MAMI

MN

MS

MO

MT

NENV

NH

NJ

NM

NY

NC

ND

OH

OK

OR

PA

RI

SC

SD

TN

TX

UT

VT

VA

WA

WV

WI

WY

Exhibit 3

U.S. Green Intensity Map

Greatest percentage of LEED buildings

Least percentage of LEED buildings

Relative percentages of LEED certified buildings per state


is still limited and represents less than 5% of the nation’s green construction put inplace total. Stakeholders looking to find the green lining in the U.S. constructionmarket need to focus on the educational, office and health care markets, particularlythose located on the East and West Coasts, where there is building interest forgreen construction.

GREEN EDUCATIONALThe educational market is one of the top-three markets for green construction

in terms of total volume.3 Looking forward through 2013, FMI does not see thismarket losing any ground. In fact, FMI predicts that green educational constructionput in place will grow from $6.1 billion in 2009 to $8.6 billion in 2013. In May2009, the U.S. House of Representatives passed the 21st Century Green High-Performing Public School Facilities Act (H.R. 2187),4 which would authorize $6.4 billion for school renovation and modernization projects in fiscal year 2010.As funding from the American Recovery and Reinvestment Act (ARRA) state stabilization fund is being directed and distributed to schools and as the previouslymentioned school modernization bill works its way through Congress, more government dollars than ever will soon be available for schools to make muchneeded green improvements and implement green building practices. K–12 schooldistricts in large metropolitan areas, such as New York City, Los Angeles, Chicagoand Philadelphia, are already committed to green standards for new constructionand major renovations, and will have little difficulty utilizing these federal funds.

While government funding has been a primary driver of new green construction in the K–12 educational market, it is definitely not the only driving

factor. A growing number of schooldistricts are looking to retrofit existingbuildings. Increasingly, K–12 schooldistricts are partnering with energyservices companies (ESCOs) to doperformance contracting, which offersa means of financing energy upgradeswith the projected energy cost savings.With new construction slowed down, retrofits of existing buildingscan help school districts reap the highest return on their investments.

An increasing number of educational owners understand thebenefits of building green and are now looking for construction partnersto assist with the implementation of innovative green building practices.Green building practices are being usednationwide not only by K–12 schooldistricts, but also by higher educationinstitutions, such as the CaliforniaInstitute of Technology (Caltech),

An increasing number of educationalowners understand thebenefits of buildinggreen and are now looking for constructionpartners to assist withthe implementation of innovative green building practices.


which is looking to use green buildingpractices on all new buildings and haseven developed its own photovoltaicsolar plant. Another recent example of a higher education institution implementing green building practicesis Penn State University, which isawaiting the completion of its AppliedResearch Lab in State College, Pa.What is interesting about this projectis its use of a precast cistern to capturestormwater runoff and control infiltration. Water runoff will then betreated with filters and ultraviolet lightand reused as greywater in the building.This innovative solution, designed toeliminate disturbances to the buildingsite’s underground limestone deposits,will allow the project to apply for a

LEED Innovation in Design credit and seek LEED Gold certification. The projectmanagement team believes that the water innovation credit it may earn could be the first ever awarded in Pennsylvania. Projects such as these at Caltech and Penn State will continue to gain industry recognition and acceptance by education owners, making the educational market one of the greenest construction markets.

GREEN OFFICEThe amount of green office space constructed last year was almost 10 times

the amount in 2002, and the volume has increased significantly every year sincethen. At the same time, overall office construction in the nation has been far less than that, so there has been a decisive swing from conventional to greenerconstruction. As the nation’s largest owner and operator of office buildings, the U.S. government continues to play a major role in this conversion. In 2009

the government’s impact on the green building movement became even greaterbecause of the ARRA and its green initiatives. One of the major provisions of theARRA made $4.5 billion available to the U.S. General Services Administration(GSA) to convert federal buildings into high-performance green buildings. Ofcourse, strong growth in green officeconstruction is not limited to publicbuildings. A primary reason for thisincreased demand in the private sectorhas been the ability to make a strongerbusiness case for green buildings dueto increasing tenant demand for green,supportive government policies andinvestor expectations. Additionally,many Real Estate Investment Trusts(REITs) needing to pay off debts are

The amount of green office space constructed last yearwas almost 10 times theamount in 2002, andthe volume hasincreased significantlyevery year since then.


looking to green construction as a way to maximize building valuations by loweringoperating costs. FMI predicts that the demand for green office construction willcontinue to increase and reach $8.6 billion by 2013.

The ARRA funding is distributed unevenly throughout the nation (SeeExhibits 4 and 5). The largest beneficiaries are California, Colorado, Texas, New

AL

AZ AR

CA CO

CT

DE

FL

GA

ID

IL IN

IA

KSKY

LA

ME

MD

MAMI

MN

MS

MO

MT

NENV

NH

NJ

NM

NY

NC

ND

OH

OK

OR

PA

RI

SC

SD

TN

TX

UT

VT

VA

WA

WV

WI

WY

Exhibit 5

U.S. Stimulus Projects by State

<1010–100

100–200>200

$ Millions

AK

HI

DC

ALAL

AZAZ ARAR

CACA COCO

CTCT

DEDE

FLFL

GAGA

IDID

ILIL ININ

IAIA

KSKSKYKY

LALA

MEME

MDMD

MAMAMIMI

MNMN

MSMS

MOMO

MTMT

NENENVNV

NHNH

NJNJ

NMNM

NYNY

NCNC

NDND

OHOH

OKOK

OROR

PAPA

RIRI

SCSC

SDSD

TNTN

TXTX

UTUT

VTVT

VAVA

WAWA

WVWV

WIWI

WYWY

Exhibit 4

U.S. Stimulus Projects by State

1–23–5

6–1011–15

>15Number of projects

AKAK

HIHI

DCDC


York and Washington D.C., and Texasand Washington, D.C., have the mostprojects in many sizes from small tovery large projects. Most of Colorado’svolume comes from a few vary largeprojects. While Washington, D.C., has a large number of projects, theDepartment of Homeland Security’sconsolidation and development of St. Elizabeth’s Campus is the largestone at more than $445 million.

The U.S. Green Building Council (USGBC) continues to play a significant part in the advancement of the green building movement.Membership in the USGBC hasincreased to 20,000, compared to just 5,000 in 2001, and there are nowmore than 131,000 LEED-accreditedprofessionals. In addition, more than 35,000 projects are currently participating inthe LEED program, comprising more than 5.6 billion square feet of constructionspace in all 50 states and 91 countries. These figures are not too bad for a programthat totaled just 35 million square feet in 2002. As an organization that is seen as a leader in green building innovation, the USGBC recently completed its new headquarters in Washington, D.C., which sets the bar for design, constructionand operations in green office construction. The two-story, 75,000-square-footoffice building earned 94 of the 110 possible LEED points for Commercial Interiors,which is 14 points more than the 80 required for LEED Platinum certification.One of the most interesting components of the office space is a two-story tall water

feature that brings the outdoors inside,connects the two floors and helps control indoor humidity. In addition,the building includes a 500-year-oldgumwood that was salvaged from thebottom of the Tennessee River and isincorporated into the elevator lobby,reception and conference breakoutareas. This building will allow theUSGBC to further its commitment toeducation and outreach efforts relatedto green building.5

GREEN HEALTH CAREGreen health care construction

is one of the largest nonresidentialgreen construction market segments.FMI predicts it will account for almost

More than 35,000projects are currentlyparticipating in the LEEDprogram, comprising morethan 5.6 billion squarefeet of constructionspace in all 50 statesand 91 countries.


$2 billion annually through 2013

and nearly 10% of total U.S. green construction put in place. As the healthcare industry reacts to and plans for an aging population, this growing market segment has the opportunityto be the leader in the green buildingmovement. Health care facilities are soenergy- and resource-intensive that theyrepresent a tremendous opportunityfor improving energy management,while at the same time reducing operating costs and assisting with thegoal of improving human health.Bottom-line-driven health care ownersmust look past the higher initial costsof green building practices, which area traditional stumbling block, and look forward to the long-term, financial,

operational and environmental benefits. For example, although incorporatinggreen design typically adds 5% to 8% to the cost of construction, energy savingsover the life span of the building can climb to 25% to 30%.6 Once the health carecommunity embraces these operating-cost benefits, the market opportunity forgreen construction is limited only by the amount of total health care construction.

To see the potential and evolution of green building practices in health careconstruction, one needs to look no further than the Dell Children’s Medical Centerof Central Texas. The hospital, located in Austin, Texas, recently became the world’sfirst LEED Platinum hospital, by earning 54 LEED points. One of the key factors in reaching its LEED Platinum certification is the cogeneration plant locatedonsite, which allowed the project to earn the majority of its LEED points receivedfor energy efficiency. As a result of this cogeneration plant, thebuilding’s net energy efficiency increased to75%, compared to 29%efficiency with the use of a coal-fired powerplant that would have normally supplied thehospital’s energy needs.Interestingly, it is also the only hospital to receive a LEED point for daylighting. The hospitalachieved daylighting in 75% of its spaces,

Exhibit 6

Construction Put in Place — 3Q09 Forecast $Millions

7,814Office

Educational

Health Care

Amusementand Recreation

Manufacturing

Transportation

Lodging

Public Safety

Commercial

6,164

1,740

988

735

638

415

384

250

As the health careindustry reacts to andplans for an aging population, this growingmarket segment has the opportunity to bethe leader in the greenbuilding movement.


including 35% of its diagnostic and treatment areas.7 As with the other leadinggreen building markets, educational and office, health care owners will increasinglylook to construction service providers to help meet their sustainability initiatives.

CONCLUSIONS AND IMPLICATIONSGreen is no longer a nascent term in the construction industry. In fact, in a

number of construction markets, it is quickly becoming the status quo. Several of the industry’s largest construction markets including office, educational andhealth care will continue to have the greatest demand for this type of construction,particularly on the East and West Coasts. Contractors looking to capitalize onthese opportunities must not only have the capabilities and resources, but also theproven track record of being able to deliver LEED-certified projects, which is stillthe accepted measuring stick for green construction experience. Now is the timeto become involved in this expanding market and to push the envelope even morewhen it comes to innovative green building practices. Industry participants lookingfor positive trends during these difficult times need to look no further than theconstruction market’s “green lining.” ■

Kevin Haynes is a consultant with FMI Corporation. He may be reached at 919.785.9275 or via e-mail at

[email protected]. Heather Jones is a construction economist at FMI Corporation. She may be reached

at 919.785.9335 or via e-mail at [email protected].

1 Jones, H. (2009). FMI’s Construction Outlook 3rd Quarter 2009 Report. Raleigh, N.C.: FMI Corporation.2 How Green a Recession?-Sustainability Prospects in the U.S. Real Estate Industry, Number 70 February 2009

Andrew Nelson, RREEF Research.3 Haynes, K. & Jones, H. (2008). Forecast Calls for Building Green in U.S. Nonresidential Markets. FMI Quarterly (3), 62–77.4 Green Schools May Get a Boost in 2009, http://greensource.construction.com/news/2009/090707GreenSchools.asp

Andrea Ward, Building Green, LLC.5 U.S. Green Building Council Announces LEED Platinum Certification of New Headquarters, www.usgbc.org

USGBC, July 2009.6 Going Green with Healthcare Construction, http://www.rejournals.com/news/212324-going-green-with-healthcare-construction,

Scott Pickands, REED Construction.7 How Healthcare’s First LEED Platinum Project Got It Done, Richard L. Peck, Healthcare Design, June 2009.

M any construction managers and engineers will

spend years immersed in the technical subject matter

related to their career. Learning critical business

skills is often relegated to an elective course or even to later in their

career. The business of construction requires different knowledge

than how concrete cures or how storm water drains off a site. Skills in

business knowledge are often lacking within firms today. Application

of business skills ultimately creates sustaining organizations.

The premise of exploring this body of knowledge is to apply several fundamental business school practices to use in day-to-day construction operations.Rather than list highlights of an MBA course of instruction, this series intends toillustrate how project leaders can implement fundamental MBA concepts in aproject setting. In the first part of this article (FMI Quarterly, 2009, Issue 4), weinvestigated the areas of finance, organizational behavior and ethics. In this partof the series, we explore: marketing, economics and operations management.

By Gregg M. Schoppman

Field Managers: Techniciansor Businesspersons?

part 2 of a two-part series

Application of business skills ultimately creates sustaining organizations.

78 ■ field managers: technicians or businesspersons?

MARKETING 101One of the greatest misconceptions in the construction industry is that

project managers and superintendents do not market or sell. People often viewOperations as the vehicle to win the game while business development, or the traditional act of selling, merely creates the opportunity to play the game.Managers fail to see their role as a means to further the relationship with their customers and generate more sales. More importantly, managers do not view the work they do as selling, regardless of whether it is selling a change order, a schedule or an idea. Marketing and selling concepts are too often viewed as parlortricks of snake oil salesmen.

Customer-centric ConstructionProject success can only be achieved when customers are satisfied. Yet many

managers see customers as the largest impediment to the success of the contractor,particularly on the hard-money jobs. This perception risks precipitating an adversarial project climate almost immediately. Add to that troubled project startthe natural evolution of changing customer wants as the project progresses.Complicate the playing field further by the multiple complexities of schedules andresources found on typical projects. Further, erode the working relationships byweak communication leading to calcification of perceptions and misperceptions. Is it any wonder that by the time projects reach completion, both customer and

contractor are frazzled and weary withthe experience? What is needed is amore customer-centric approach.

The first step to a customer-centric construction project is creatinga foundation on which to build a relationship. Try to work from the customer’s point of view. What isimportant to the customer? Manymanagers sell a cost-conscious budget,when in fact the schedule is far moreimportant to the customer. This disconnect creates a rift that carriesthrough the entire project.

Pre-construction meetings shouldset the tone early when the playingfield is still undefined. On most publicprojects, pre-construction meetings are required but lack the “meat” toattack important issues. Items on theagenda are reduced to mandatory

bullet points that are so established because the project construction specificationsrequire it. For instance, the team discusses the requirements for a schedule butrarely handles the challenges surrounding a schedule.

A purposeful kick-off discusses true issues. Contractors that surface true project issues not only better understand the motivations of the customer, but also

The first step to a customer-centric construction project iscreating a foundation on which to build a relationship. Try to workfrom the customer’spoint of view.


tend to manage or exceed the customer’s expectations. Why are the customersbuilding what they are building? The stock answer, “To make money,” is simplynot enough. Whether the reasons are personally motivated (i.e., threat of losingjob) or corporately motivated (i.e., threat of losing market share), contractors mustunderstand why their customers are building what they are building. How will theproject be built and what mechanismswill be used to handle issues such asinvoicing and change management?Many contractors are afraid to askthese questions early because they feel that this line of questioning is antagonistic and confrontational. This fact-finding exercise can help your customer manage his or hermoney and change-related items, and expose any potential flaws early inthe process. For instance, contractorsunderstand project financing and the nuances of a customer requestingadditional funding as the project is under way. There are many documented examples of a customerapproving changes but not making thesubsequent request from his or herlending institution. Discovering thereis no methodology for handling these types of change orders only at the time thechange occurs is poor management practice. A contractor that helps the customerearly in the process is truly demonstrating customer-centric construction.

Understand your customers’ business. Managers must create focused “construction solutions” for their customers. Not only is the project scheduleimportant, but also a customer may have a particular piece of owner-furnished equipment that will become the focal point of the project. Taking a hands-onapproach to understanding how that equipment functions and integrates into thegrand scheme of the project makes a contractor seem more like a problem solverthan simply a builder.

Project VisionContractors often resemble thoroughbred horses storming down the track at

Churchill Downs, with blinders on to maintain focus on the remaining lengths of the race. Linear thinking dominates the contractor mind. First site work, thenfoundations, then walls, then roof, then finishes, then landscaping and then theproject is finished. In some cases, contractors view the project more as a vehicle topay the rent rather than a component of their master company strategy. The parable about three masons demonstrates creating project vision. All three wereconstructing the stem wall of a church. Asked what they were building, the firstmason replied, “A wall.” The second chimed in, “A building.” Finally, the thirdmason responded, “We are constructing a church where families will congregate


and worship for many years into the future.” All three are equally correct. However,the third understands what purpose the project is serving in the larger picture.What is a project vision? What will this project accomplish for the customer’s firmcorporately? For the contractor?

Creating a vision is essential to galvanizing a team. Everyone should understand why the firm has chosen to build this project and what it means in the larger strategy of the organization. Exhibit 1 demonstrates a classic scenario ofinconsistent project vision as well as the potential ramifications.

All of the visions within Exhibit 1 are viable. However, the schizophrenicapproach to the project sends a mixed message internally as well as externally. Beforea project begins, the team should create and ratify the vision. Some potential project visions include:

• Increased Market Share — By completing this project, the firm adds to its resume.

• Increased Customer Share — By completing this project, the firm has theability to negotiate future work with this customer.

• Increased Customer Goodwill — By completing this project, the firm has the ability to leverage this relationship with similar customers.

• Increased Backlog — By completing this project, the firm will maintain orgrow its workforce.

• Increased Workforce Training Opportunities — By completing this project, the firm will be able to develop new members of its team in a low-risk environment.

Once again, building for the sake of building is a constructor perspective.Building with a purpose helps fuel the strategy to complete the project successfully.

Exhibit 1

Misalignment of Project Vision

Focus on the Client’s Next Project

Potential Issues:• “Negotiated Change

Orders”• Thorough “Hand

Holding”

Sales and Estimating

Focus on Volume

Potential Issues:• Project Team Shifted

Before Completion• Inadequate Time for

Planning

Senior Management

Focus on Costs

Potential Issues:• “Hard and Fast

Change Orders”• Cut Corners on

Quality• Crew Optimization

Project Management

Focus on Schedule

Potential Issues:• Overstaff the Project

to Substantial Completion or Work Overtime

• Customer Needs are Secondary to Schedule

Field Management

Perception of Vision

Resulting Decisions on Project


Customer PerceptionAny discussion on construction

marketing and business developmentshould include examination of the customer and the perception it hasabout the project team. Constructivefeedback is essential for improving performance. However, feedback is notalways flattering and there is a tendencyfor both parties to avoid uncomfortablediscussions. Regardless of whether ornot the contractor seeks feedback, thecustomer’s good or poor perceptionremains. Those that choose to solicit itand use the constructive criticism forthe better have the potential to retaintop customers longer.

One strategy of high-performingorganizations is to solicit feedback on a regular basis. Today consumersare asked to grade performance on everything from an interaction atHome Depot to the service at anOutback Steakhouse. Contractorsneed regular feedback as well. Ask for feedback at the completion of a project,possibly in conjunction with the post-job review. Another way to gather early signals is to conduct this step earlier in the project, perhaps at a midpoint review.A written or conversational survey consisting of the following questions is anexcellent start to making improvements before the end of the project:

• Project Communication — Are we proactively communicating with you on issues and resolutions? What could we do better?

• Project Schedule — Are we managing your schedule? What could we do better?

• Project Cost Control — Are we managing your costs? What could we do better?• Project Management — Are we managing the project site, cleanup and your

neighbors? What could we do better?

A short, concise survey such as this is powerful in the hands of a project teamintent on delivering for the customer. The important part is to take action. Donot ask the customer about areas of improvements and then fail to deliver. Raisingexpectations that are then unmet is poor business, indeed.

ECONOMICS 101At the heart of any economics conversation lie the principles of supply and

demand and the factors that influence them. Whether it is inflation, monetarypolicy or America’s Gross National Product, managers face the implications of

Regardless of whetheror not the contractorseeks feedback, the customer’s good or poorperception remains.Those that choose tosolicit it and use the constructive criticism forthe better have thepotential to retain topcustomers longer.


these concepts whenever they purchase steel or hire a crew of concrete finishers.Microeconomic and macroeconomic principles pervade every aspect of a contractor’slife even if they are not explicitly stated.

Microeconomics, Comparative Advantage and Opportunity CostBusinesses continually strive to define their comparative advantage. In the early

part of the 20th century during boom of the industrial revolution, contractors astrue builders began to give way to the specialization that the industry now views assubcontractors or trade contractors. It has been determined that productivityincreased through specialization. For example, there can be substantial gains fromutilizing an electrical trade contractor rather than performing the electrical workwith in-house labor. Contractors use the concepts of comparative advantage in

many ways. Some contractors serve asconstruction managers and positiontheir skills of managing multiple tradesas a competitive advantage. Othersfocus on one specific craft, such asconcrete placement. These contractorsuse their ability to manage and controlthe concrete work, often a critical pathactivity, as a distinguishing featurewhen compared to their competitors.

Many businesses wrestle with the legacy they have created. Whetherit involves site improvements or concrete work, many companies holdon to old conventions because “that’sthe way we’ve always done it.” In It’sNot the Big That Eat the Small, But the Fast That Eat the Slow, the authorsaddress the concept of businesses failing to act quickly and instead holding onto conventions for the sake

of history.1 Businesses, whether construction or publishing, must be quick toreshape their organization according to changing paradigms in their niche. Mostimportantly, businesses must recognize that there are few comparative advantagesthat last forever. Refinement and rediscovery are important to maintain the leadon the competition.

Another issue plaguing many firms is the need to “feed the machine.”Companies take work at low margins to keep platoons of men and womenemployed. As altruistic as this may seem, is the company doing this group a disservice? Can the magnanimous actions of the firm truly provide a prosperousenvironment when failing to maintain competitive edge? For example, firms willtake work outside the sector or niche in which they are supposedly specialists, atless than cost, to keep crews employed. In some cases, companies use the areaswhere they do have a comparative advantage to finance areas where they do not.Performance inefficiencies are barriers to profitable trade, whether in construction

Businesses must recognize that there are few comparative advantages that last forever. Refinement and rediscovery areimportant to maintain thelead on the competition.


or some other business. In fact, capitalism counts on the inefficiencies of some inorder to provide comparative advantage and consequent profitability to the moreefficient. In essence, firms subsidize their work but call it “good business decisions.”

Project managers should use theconcept of opportunity cost whenevaluating decisions about their workhabits. In The E-Myth Contractor,Gerber discusses the main drawback tothe entrepreneurial mindset of manycontractors. Their limiting factor isthey fail to delegate duties better handled by another individual. Forexample, what is a better use of a project manager’s time — evaluationof a project cash flow or the processingof submittals? Few would argue thatthe first item is the more importanttask of the two. So why do so manyproject managers labor in the minutiaof submittals and shop drawings? Ignorance of financial matters lies at the heart ofmany of these decisions. The money is made with the right decisions regardinguse of time and other resources.

Macroeconomics and the Internationalization of ConstructionJames Gwartney, co-author of Macroeconomics — Private and Public Choice,

defines macroeconomics as “that branch of economics that focuses on how humanbehavior affects outcomes in highly aggregated markets, such as the markets forlabor and consumer products.” The role of American fiscal and monetary policyhas a huge impact on how a manager operates. Inflation, interest rates and thevalue of the dollar abroad are sensitive topics to most citizens. Great project managers understand how these affect their projects, as well as their organizations,and influence the demand for new facilities, projects and services. While no firmhas a crystal ball to predict the future, it is important to understand the influenceof such macroeconomic principles. For example, how do inflation, interest ratesand the value of the dollar affect a contractor operating in the medical sector?High-tech sector? Residential sector? Roadway sector? Macroeconomic principleslargely shape how each niche’s customers purchase and pay.

The “elasticity of demand” is a concept used to define the sensitivity of price on the demand for products, and managers should use it as an indicator ofmarket conditions.

• Elastic Demand — If there is a small fluctuation in price, the demand willdecline or rise.

• Inelastic Demand — Regardless of price, the demand remains the same.

Consider a roadway project. If the cost of concrete rose considerably, thedemand for concrete pavement would drop, giving rise to asphalt road surfaces.


Concrete would have an elastic demand. On the other hand, rising fuel costs haveinelastic properties in that price has little effect in the short term on fuel demand.Many economic considerations must be evaluated in terms of short- and long-termimpacts. Managers using this information can effectively provide alternative strategies and potential value engineering options with better insight. For example,examine the success of Southwest Airlines in recent years. Many experts have saidthat Southwest’s ability to hedge on the price of airline fuel protected it as otherairlines were decimated by rapidly escalating prices. Many contractors have adopteda similar philosophy by hedging on critical materials in volatile pricing movementssuch as copper, drywall, steel and other commodities at various inflection pointsin the past decade. While not without risk, smart managers can use similar strategies to supplement a competitive advantage.

In recent years, many project managers have had to think about the biggerpicture. For example, the covers of U.S. News and World Report, Engineering NewsRecord and Business Weekly flashed the burgeoning economy of the United ArabEmirates, or more specifically, Dubai. While the current economic situation mayportray a different story, it was not too long ago that tower cranes adorned thelandscape of a country creating some of the world’s largest engineering endeavors.What does the creation of the world’s first ski slope in a desert have to do with acontractor in Indianapolis? The answer is everything. For example, consider theincreasing costs of raw materials such as concrete and steel during that boom thata domestic contractor in the United States faced. While there were many factorsaffecting the cost, foreign demand of these goods greatly influenced the price, timingand availability. Managers who see the world’s economy have the ability to forecastand stay ahead of the competition better than those that operate myopically.Progressive firms continue to explore the world marketplace for their materialsand labor needs. There are many examples of firms purchasing steel from Chinesesources. The greater challenge lies not in the procurement — albeit the logisticalconsiderations are considerable — but how managers approach the purchasingprocess. International laws as well as the entanglement of negotiating across

cultures may or may not be worth theadded savings. According to ThomasFriedman, author of The World is Flat,the flatteners that have shaped theworld in 2008 have created a trulyglobal marketplace that true visionariesmust consider when doing business;True visionaries do not just look forthe impact on their own businesses,they analyze the possibilities for theircustomers’ businesses as well, fortherein lies the future for the market.

Many firms are seeking to supplement their teams with a globalapproach. Design firms have discoveredthe benefits of outsourcing design tocountries like India and Pakistan.

Managers who see the world’s economyhave the ability to forecast and stay aheadof the competition better than those thatoperate myopically.


Other firms are attracting international talent from depressed economies to workwithin the United States. While an unorthodox strategy, it simply requires a keensense of immigration law and policy as well as an understanding of how to integratethis talent into the fabric of the organization.

OPERATIONS MANAGEMENTProject managers and superintendents often find the most comfort in traditional

construction methods and means. Process and procedure are the lifeblood of anyproject; yet in most cases, the ability todefine operations management at aproject level becomes a nebulous collection of daily tasks with poorlyestablished starts and equally vagueterminal points. For example, manymanagers and superintendents viewtheir responsibilities as a daily checklistrather than standardized duties that areeasily compartmentalized. Documentcontrol, financial management, scheduling, cost control and short-interval planning are clear examples ofprocesses that comprise a manager’sday. The disconnect lies in how eachof these processes is accomplished. Inmany organizations, processes are asdifferent as the people that are requiredto execute them. There is little rhymeor reason as to how a process starts as well as the expected deliverable. The challenge with this is that there is no consistency and ultimately a great deal ofinefficiency as teams struggle with knowing who does what and when.

High-performing organizations create their own body of processes that becomethe foundation of the firm’s “standard operating procedures.” The very name scaresmost managers. “Processes can’t be defined. We need creativity to operate. Ourcustomers are different — we can’t plan how we do our work.” All are implausiblearguments used to skirt the primary issue — what is the right way for the firm todo its work efficiently, and generate a healthy return while keeping in mind theniche within which it operates? While every customer and project is different,managers must seek to gain a level of consistency to manage their projects.

Process ImprovementGary Rummler and Alan Brache, authors of Improving Performance —

How to Manage the White Space on a Organization Chart, examine the concept ofprocess improvement through process mapping. The authors describe a process mapas a “value chain” and state, “By its contribution to the creation of delivery of aproduct or service, each step in the process should add value to the preceding steps.”2

Furthermore, each process begins with an initiation point as well as a terminalpoint or goal. This goal is how the performance of each process is judged. Lastly,

High-performing organizations createtheir own body ofprocesses that becomethe foundation of the firm’s “standard operating procedures.”


as the process map is generated, “white space” or areas of disconnect are broughtclearly into view. Creating a process map provides not only a road map for allstakeholders in the process, but also highlights areas of massive corruption. Forexample, the two simple process maps below in Exhibit 2 illustrate this concept.

Each process is true. Once a company generates an invoice or submits achange order, the next step in the process is largely the one shown. However, mostexperts would agree the most challenging part of the process is within the bubble.After generating an invoice, what happens next? For each project, these conditionsmay be different. Poor performing managers fail to understand how this processcomes to fruition and what truly happens within this box. High performers seethis as an area of potential improvement. Not only do these managers identify theindividual steps within this box (e.g., “Invoice to Resident Engineer, 2 days,”“Invoice to District Office, 7 days”) but also identify the owner of each step socorrective action can be made in the event something fails to occur.

Process maps should exist within every process in an organization.Organizations must utilize process improvement on a regular basis to evaluate how they do business and cull out inefficient or truly obsolete practices. MichaelHammer and James Champy ask firms routinely to question how they do business.“If I were re-creating this company today, given what I know and given currenttechnology, what would it look like?” In their book, Reengineering the Corporation,they tell business owners and managers to not simply tinker with process but seriously consider dramatic change or radical departures from the way they havedone things for years. The challenge exists in the people who must create thisvision. The “It can’t be done here” mentality is rampant through the industry.Change for the sake of change is never good. Change because the business processis broken is essential to avoid extinction. When re-evaluating the process maps inExhibit 2, consider the following:

• How are we currently collecting money owed and how are we currentlyprocessing change orders?

Exhibit 2

Examination of the White Space in the Collections and Change Order Process

Work Complete on 25th of Month

Invoice Collected

Change or Unforeseen Condition Identified

Change Order Approved

Financial Management Process

Change Order Process

Invoice Generated Change Order Submitted

Defining the White Space

• What happens in the process that creates the controversy?

• Who is responsible for the process?

• What level of escalation is created when a

component of the process is not done?

• Is there a way to streamline the process to improve the efficiency?


• Why do we continually collect late and fail to gain approvals in a timely fashion?

• Do our processes match the industry/niche in which we operate?• Do our customers not have a process internally?• Are our customers ignorant of the standards of our industry?• What radical reinvention needs to take place to ensure we collect our

money and avoid the undue risk of unapproved change orders?

Changing the behavior of management is an arduous process, but failure tochange will breed the same results the firm is already achieving.

Scheduling and PlanningProject schedules provide the backbone of most construction projects. The

greatest flaw of managers in relation to scheduling lies in their inability to use thedocument as a tool to manage the project effectively. At the outset of a project, abaseline schedule is developed. Predecessors, successors and a complicated logic webare the focal points of management.The first mistake in the scheduledevelopment process lies in the lack of involvement of the field. Field managers, who are largely responsiblefor enabling the schedule to come tofruition, fail to have input on how theschedule will progress. Instead, fieldmanagers inevitably create their ownschedule, consisting of a dry eraseboard and years of experience. This isan example of inefficient redundancybecause the schedule that is most likelyan exhibit to the general contract andsubcontracts is not being used actually to govern the project. A project managermay create the master critical path schedule, but the superintendent should provideinsight long before it becomes the foundation for the project.

Great schedule management is more than logic and Gantt charts. Anotherelement that is lacking in most schedules is the updating. Baseline schedules largely remain untouched on many projects, and many managers view them withdisdain: repugnant requirements of the general contract. The updating process can expose many sins of poor-performing managers, who will rationalize theirbehavior by saying, “We’ll pick up those days and THEN we’ll update the schedule.”Schedules are one of the most requested items during construction lawsuits.Would many of these lawsuits exist if a proactive process to manage the scheduleexisted? Great managers not only update with a consistent frequency but also consider the following:

• Resource Allocation — Managers use this information to evaluate importantconsiderations such as workspace constraints, critical path impediments and crew balances.


• Cash Allocation — Whether examining from a cost allocation for the customer’s benefit or a cash flow distribution for the firm’s benefit, managers know where the money is coming from.

• Milestone Focus — Schedules require milestones to gauge progress and provide “bite-size elements” for managers and crews alike to digest and seethe fruits of their labor.

One of the most important elements of any schedule is how to define theend. Schedules that finish with landscaping and clean-up activities fail to capturehow to accomplish the project end. Closeout itself should consist of numerousactivities including, but not limited to:

• Punch List Generation (internal and external)• Punch List Completion• Commissioning• Testing• Final Inspections• Owner Training• Submission of Closeout Documents

Finishing strong is something every contractor should strive for but few attain.Many contractors leave the starting gate resembling a race horse but stumble acrossthe finish line with the grace of a mule. Operations are characterized by how theyexecute the finish that they defined at the start-up. Contractors should measurecloseout to express the importance of finishing strong. Exhibit 3 shows how high-performing contractors can measure closeout and benchmark their progress.

While erroneous, the terms of scheduling and planning are often used synonymously. Managers use processes such as pre-job planning, short-intervalplanning and daily planning effectively to deliver their schedules on time.

Efficiently managing the projectschedule is one method to ensure theproject stays grounded and in control.

Quality Control Productivity improvement has

taken many shapes over the last 50years. Total Quality Management,Quality Circles, Six Sigma and Leanare all concepts that have had varieddegrees of success in the industry. The Six Sigma process involves the use of facts and data to improve thequality of process outputs. By

reducing variability or the number of defects, performance for the customerimproves. Consider the number of defects project managers and superintendentsencounter during the life of a project. What is the impact of these defects orrework? In addition to the costs of replacing defective building components and


the opportunity cost invested on these laborious tasks, there is the cost most often forgotten and hardest to recover — the customer’s perception of rework.The damage is two-pronged. The first is the initial impact of rework can lead tothe customer questioning its choice in the firm responsible for the rework. Thesecond is the damage to the customer’s trust in change orders and items related to project costs. Right or wrong, there is a belief that contractors are often tryingto make themselves whole by boosting pay applications and padding changeorders. Better planning and communication reduces poor quality. In addition toasking the customer his or her perception of the project quality, consider someimportant metrics as detailed in Exhibits 4–6.

• Punch Lists — Evaluate the average number of punch list items per monthon a corporate basis (See Exhibit 4).

• Warranty Costs — Evaluate the average costs per month related to warrantyexpenditures (See Exhibit 5).

• Internal Perception of Quality — Evaluate the subjective scores as they relateto quality (See Exhibit 6).

While Six Sigma aims to reduce variability, Lean aims to reduce waste. Forconstruction managers, waste comes in many forms. Labor is frequently the largestsource of wasteful spending. Poor planning leads to the following:

• Labor Overages — Overpopulating a jobsite does little to improve productivity.

• Emergency Purchases — Improper planning leads to many last minute purchases.

• Equipment Mismanagement — This is brought about by equipment hoarding and idling.

• Poor Quality — Addressing rework leading to expediting work to avoidclaims of delay which can lead to further rework.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

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50

60

70

80

90

100

Exhibit 3

Closeout Efficiency Metric — 2007

Closeout durationNumber of days

Average monthly project closeoutYTD average


Short-interval planning processes, largely a part of FMI’s Productivity BuilderProcess, as well as of Lean with its Last Planner system, involve the field managerand examines both the resources as well as the impediments he or she will need toachieve goals of the project.

Efficient operating procedures crossover to the construction industry, regardlessof the nomenclature. In an industry predicated on low margins, reducing wasteand variability is a critical attribute of high-performing managers.

CONCLUSIONThe construction industry is difficult to compartmentalize into five or six

subject areas. Understanding concrete, steel and drywall is important but must be balanced with accounts receivables, supply/demand and marketing. Being


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20

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40

50

60

70

Exhibit 4

Company X: Punch List Items Metric — 2007

Number of items

Total items per monthAverage items per projectYTD total average per month


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20

30

40

50

60

70

Exhibit 5

Company X: Warranty Costs — 2007

U.S. Dollars (Thousands)

Total monthly warranty costsYTD monthly average


business minded will help organizations make significant strides to improving performance long term.

Business concepts such as strong cash flow, customer-focused behaviors,opportunity cost and waste reduction are neither groundbreaking nor revolutionary.Unfortunately, for the construction industry, too many perceive that general rulesof good business sense cannot or do not apply to their business model. Great project managers and superintendents not only understand their role in the business of construction, but also think about how they can apply concepts suchas these to their projects. Replace the “It Won’t Work Here” behavior with the“How Can This Work Here?” mind-set. Carrying models and trends from otherindustries and supplementing the builder mentality with the business mentalityare truly how great managers succeed in the business of construction. ■

Gregg Schoppman is a principal with FMI Corporation. He may be reached at 813.636.1259 or via e-mail


1 Jennings, J. & Houghton, L. (2002.) It’s Not the Big That Eat the Small, But the Fast That Eat the Slow. New York: Harper

Collins.2 Rummler, G. $ Brache, A (1995.) Improving Performance: How to Manage the White Space on the Organization Chart. San

Francisco: Jossey-Bass. p. 45.


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50

60

70

80

90

100

Exhibit 6

Quality Inspection Scores: Quality Director and Project Manager

ScoresPercentage

Quality director monthly averageProject manager monthly average

Quality director cumulative YTD averageProject manager cumulative YTD average

In the 2009 (3) issue of the FMI Quarterly, we introduced the

term “customer investigation,” which is directed at understanding

your customers’ behaviors and their perceptions of the value

and benefits that your company brings. We noted that this customer

understanding requires answering three important questions:

• What drives customers to your door?

• How unique is the value associated with your service offerings?

• Is there anything you can do to influence either of these

two in your favor?

You must be able to answer the first question and understand what drivescustomers to select a particular contractor. In most U.S. building markets, the amount of work opportunities has diminished in recent months, while the number of bidders has increased. The ability to attract customers to a contractor’sdoor has become even more important. When an owner is looking to select acontractor he or she will often discuss the pool of available contractors with those

By Jay Bowman, Chuck Jones and Kevin Haynes

Driving Customers to Your DoorThe most important factor whendeciding whether to recommenda contractor is whether thebuyer received value for his orher investment. Contractors who do not provide value mostlikely will not be working for thatcustomer again.

94 ■ driving customers to your door

parties considered knowledgeable on the contractor community.Recommendations from these industry stakeholders carry muchweight and can go a long way in influencing the final decision of theowner. A successful competitive strategy includes a plan to increase the number of satisfied and loyal customers in your company’s portfolio, resulting in more customer recommendations.

FMI has completed numerouscustomer satisfaction and loyaltyassessments for construction contractors. As part of these studies,we have examined more than 30performance-related factors (pre-construction through post-construction) and thelikelihood of the particular contractor being recommended. FMI’s research oncustomer investigation, which includes input from more than 1,100 constructionowners and industry participants, shows that the five performance-related factorsthat most influence the likelihood of a contractor being recommended are:

• Overall value provided• Ability to exceed expectations• Commitment to solving problems• Focus on and responsiveness to the customer• Contractor morale

It is important to gauge where a company stands in the minds of its customers with each of these performance factors. By addressing each of theseareas, any contractor can increase its chances of bringing more work to its doors.Let us look at each of these performance factors and see what is being said aboutthose that are considered best-in-class contractors.

OVERALL VALUE PROVIDEDIt should be no surprise that the most important factor when deciding

whether to recommend a contractor is whether the buyer received value for his orher investment. Contractors must provide value to their clients, or they will most likely not be working for that customer again. Of course, what constitutes value tosome customers may be different to others. For example, one owner may perceivevalue as being the added capabilities and services offered by a contractor, such asvalue engineering, while another may feel that value has been added when thereare fewer problems and less change orders on a particular job. In either case, itmust be stressed that value is not the same as price. In fact, FMI’s research on customer investigation shows that pricing has the lowest correlation to customerrecommendation. Instead, customers select construction contractors that are

It should be no surprisethat the most importantfactor when decidingwhether to recommenda contractor is whetherthe buyer received valuefor its investment.


capable of delivering quality results in return for a fair price, which is often a bit more expensive compared to other contractors. Of course, the term “fair” is subjective and dependent upon the parties involved. Typically, FMI’s clients whoprovide value are described as good, quality contractors that may even be viewedas a bit “pricey,” but the customers scoring the contractor with high value believethat they are getting what they pay for. Here are some of the comments that have been made about contractors that provide value:

“[The contractor’s] reputation is expensive. If you can afford [the contractor], it iswell worth it. The value that it brings to projects justifies the premium.”

“I like its engineers and approach to projects. [The contractor] thinks about theproject and how to get the best value for the money. [The contractor] actually feels likea lot of my own crew.”

“[The contractor] is a little bit higher with its prices, but on a negotiated project, I am willing to pay extra to get what I know I am buying.”

“[The contractor] was 5%–10% more expensive on the bid. We were willing totake that extra amount for the work quality.”

“You will pay a premium to hire [the contractor], but, if what it delivers is whatyou need, it is well worth it. It is not interested in being the lowest price contractor.”

ABILITY TO EXCEED EXPECTATIONSIn today’s construction market, it is no longer sufficient simply to meet the

expectations of the customer. Instead, contractors must be willing to go the extramile to satisfy their customers by exceeding their expectations. Of course, doing thiscan be easier said than done, especially when the contractor is primarily focusedon completing the job on time and on budget. How exactly does a contractor goabove the call of duty with its customers? FMI has heard a variety of examplesduring its research on customer investigation. Often it is the contractorthat is willing to complete an extratask or put forth the extra effort thatcompletely satisfies its customers.Sometimes, these extra steps are noteven that demanding; but what really counted is that the contractorrecognized these extra steps meant alot to the customer. Contractors thatconsistently exceed expectations aredriven to satisfy their customers; it is part of the company’s DNA. Thesecontractors view the customer as apartner, not as a transaction. Here are just a few examples of what has

Contractors that consistently exceedexpectations are driven to satisfy theircustomers; it is part ofthe company’s DNA.


been said about relationship-driven contractors that consistently exceed the expectations of their customers:

“It is a very relationship-based contractor, where the company is interested indeveloping long-term relationships instead of making a killing on a job and neverworking with that owner again.”

“The nice extra stuff [the contractor] did was great and showed it considered therelationship a partnership. It helped with the grand opening and with dealing withVIP guests.”

“[The contractor] has taken extra steps to accommodate us.”

“[The contractor] put a lot of extra effort in. It was not a problem, and its workerseven volunteered to do it.”

“[The contractor] is very efficient and is able to build in bad weather, and it doesn’t stop. Other firms close down in inclement weather.”

"The site was absolutely the most orderly, clean and safe job site. [The contractor]got on me at times for bringing someone onto the site without a hard hat. Off-the-chartssite management."

“We had people in the community commenting about how clean the work site wasduring the whole project.”

COMMITMENT TO SOLVING PROBLEMS Almost every project encounters problems at some point. In our industry,

it is virtually inevitable. Regardless of where the fault lies, it is how a contractordeals with problems that truly counts in the mind of the customer. Moreover, aproactive and prescriptive approach to issue resolution separates that firm from its

competitors. Owners desire that theircontractor approach problems head-on,propose creative and innovative ideas to resolve the issue, and follow through with its commitment.Owners frequently complain that their concerns never are addressed despiterepeated assurances from the contractor.Another common owner complaintconcerns receiving negative news.Getting bad news early is always better than delaying delivery of thebad news. By consistently acting in the owner’s best interests, the result ofthese efforts is trust. Trustworthinesskeeps customers around and results in

Regardless of where the fault lies, it is how acontractor deals withproblems that trulycounts in the mind ofthe customer.


referrals and repeat business. A strongfield staff with a proven track record is an important ingredient in solvingproblems in the field. Additionally,having a staff with pre-constructionexpertise is essential when confrontedwith design problems or value-engineering/cost-management issues.

“[The contractor]is very good atstanding up during meetings and identifying problems that will likelyoccur and providing input on how tonegotiate these issues.”

“Builders and developers don’t often get along well together, but our contractor’s attitude about being nonconfrontational and not worrying about whocaused what to happen, but to fix it, has been very, very helpful.”

“Its ability to respond is remarkable. If you get into a bad situation where youneed an over-the-top effort, [this] is your contractor.”

“[The contractor] makes mistakes just like anyone else, but what it does is pick upthe pieces better than anyone else.”

“[The contractor]’s ability to build these projects without having full informationon them … Developers rely on [the contractor] a lot to come up with a lot of theanswers for them, and present the answers to them when problems arise. These are notjobs where everything is nailed down on the very front end of the job.”

FOCUS ON AND RESPONSIVENESS TO THE CUSTOMEROwners want their contractor to treat their project as if it is the contractor’s only

project. Even if owners know their contractor has multiple projects in progress,they want that sense of dedication from the contractor that their project is the onlyone that truly matters. When they call their contractor, they want an immediateresponse. Some may describe these owners as high-maintenance, but as the sayinggoes, the customer is always right. Another means of being responsive, as difficult asthis may be, is knowing when to say no to an opportunity. When your resourcesare significantly overtasked is one time that a current no can gain long-term respectfrom the customer. Historically, this has been a challenge for so many contractors.By declining an opportunity for the appropriate reasons, you are doing the client afavor, and in the end, all parties benefit from this candor and mutual respect.

Perhaps the owner or developer is a repeat client. He or she had such a positive experience with the previous project, that the contractor was the sole consideration. With this comes the expectation that the contractor will performand respond to his or her needs exactly the same on the subsequent project. This


unwavering commitment to responding to customer needs is yet another performance factor that we have found drives customers to your door. The client’sbest interests should ultimately prevail when assessing an opportunity. Despite theclient’s pursuit and insistence, sometimes “no” is the best answer for everyone.

“The reason that we have worked with [the contractor] exclusively is because of thesense of responsibility and customer service.”

“The president and his staff and partners … they’re as honest as the day is long.They demonstrate the utmost integrity. Whatever they tell you, you can take it to thebank. That’s rare.”

“I know some of its people personally and admire their integrity, especially theirresolve to work through problems with a primary focus on the client rather than on itsbottom line.”

“One of the attributes that I appreciate about [the contractor] is the attention itgives us and the responsiveness of the company. Upper management is always veryresponsive. They step in and do what is necessary for the success of the project.”

“[The company] always gives me the right answer, as opposed to the answer I wantedto hear. There isn’t a thing that would prevent me from considering it in the future.”

“Although our contractor has many clients and many build-outs, we always feltlike we were its only client. It was very attentive to us and in meeting our needs.”

CONTRACTOR MORALEThe morale of a contractor’s project team is an intangible performance

factor that can turn a good project into a great project. Morale is partially a result of the corporate culture shaped by a company’s leadership, but it is also an outcome of the efforts of the field leadership and the wholehearted commitment

they have to not only doing a goodjob, but also making the project asenjoyable as possible. Construction is a messy, hectic business. From sitepreparation to project turnover, thereare countless opportunities for conflictand confrontation. The contractor that is genuinely interested in the project’s success and deals with issuesconstructively and calmly will create a lasting impression in the eyes of the customer.

Good morale is most evidentwhen working to resolve problems.Subcontractors gravitate to the generalcontractors and construction managers

The morale of a contractor’s projectteam is an intangibleperformance factor thatcan turn a good projectinto a great project.


who run their projects positively and respectably. Contractors in this situation can expect preferential pricing as well as high-quality project teams from theirtrade partners. An excellent example of high morale on a project occurred withone of our clients who was building a replacement hospital for a community having funding difficulties. The contractor donated a significant amount ofmoney to the hospital’s fundraising campaign, as well as built a gazebo in amemorial garden using materials from its jobsite trailer deck. These acts boostedthe morale of the subcontractors, the owner and the community. This is just oneexample of a contractor displaying a sincere allegiance to its client. You can betthat if this community has another project in the future, the contractor will atleast make the short list.

"The team that [the contractor] provided was a big part of why the project wassuccessful. It cared about the project and brought in expertise when needed.”

“The corporate culture that [the contractor] breeds is outstanding. When there areissues, they are dealt with and decisions are made.”

“Everything starts at the top of the organization. The president wants to treat peoplethe way he wants to be treated, and this filters down throughout the whole company.”

“[The contractor] differentiates itself by having exceptionally good control over itssubcontractors. Because of the volume of work that [the contractor] has, it commandsthe best subcontractors and gets timely performance from them.”

“The “can-do” attitude of [the contractor] not only endears clients to the company,but also is present at all levels of the company and on all projects.”

Contractors must measure and address these five performance factors if theywant to thrive, particularly in today’s market conditions. Contractors that arehearing comments similar to those mentioned above are most likely already receiving a good number of customer recommendations. If your company is nothearing these types of remarks, there are tangible steps you can take to increase the chances of having customers comment in a similar fashion. Of course, meeting customer demands is only one piece of the puzzle. In an upcoming issueof the FMI Quarterly, we will examine another significant piece of the customerinvestigation process, the competition and the uniqueness of a company’s valueproposition. Until next time, enjoy the process of driving more customers to your door! ■

Jay Bowman is senior consultant with FMI Corporation. He may be reached at 919.795.9336 or via e-mail

at [email protected]. Chuck Jones is a consultant with FMI. He may be reached at 919.785.9229 or via

e-mail at [email protected]. Kevin Haynes is a consultant with FMI. He may be reached at 919.785.9275 or


T raining dollars are historically one of the first budget

items that companies eliminate or drastically cut in

economic downturns. Since talent development is at

the core of Zurich’s value proposition, it has not only refused to cut

back in this area, but have instead chosen to expand its capabilities.

Zurich is developing its next generation of leaders through offerings

such as its Construction Educational Series, monthly underwriting

webcasts and nine-box talent development process.

FMI recently spoke with Gary Kaplan, president of Construction, and ScottRasor, senior vice president Specialty Construction for Zurich North AmericaCommercial, about some of Zurich’s talent development initiatives.

FMI: Please explain to our readers what the drivers were behind yourConstruction Educational Series (i.e., Construction 101 and 201).

Kaplan: Our people need to understand the industry, the exposures and theconstruction processes. Our customers have said that they want an insurancecompany that can speak and understand the language of the construction industry.

By Kelley Chisholm

FMI recently spoke with GaryKaplan, president of Construction,and Scott Rasor, senior vice president Specialty Construction for Zurich North America Commercial, about some of Zurich’stalent development initiatives.

Zurich’s Long View

102 ■ zurich’s long view

A big part of our value proposition is ensuring that we have people who are specialistsin this industry segment and are able to talk to contractors in their language andunderstand the specific risks they face and the processes they use. We have hiredmany people over the past 15 years from the construction industry. But, just like ourcustomers, we are bringing in talent directly from the universities, some of whomlack the industry specialization; so clearly we have an ongoing need to get our peopleup to speed with construction terminology, equipment, means and methods, etc.

Fortunately, we have Dan Murphy, an industry-recognized professional with a deep knowledge of construction. Dan is very passionate about the training sideof the house and he developed a series of training sessions to bring and keep our people up to speed. We started with [Construction] 101, which is pretty basicand talks about what you’ll see on the jobsite, what types of construction thereare, types of equipment used (i.e., cranes, backhoes, excavators, etc.) and the risksassociated with them. We eventually began using that material externally at industry events such as AGC, CFMA and IRMI, and ended with Dan traininghundreds of people across the industry. We saw a lot of applicability on the outside,so we began offering it to our brokers, who had also added many new people. We

offered to have Dan come out and traintheir staff, and at the same time bringour underwriters along so that we canall talk about issues, new businessopportunities and the like.

Rasor: I think one of the thingsthat helps us as insurance and risk professionals is the training groundsour people in the vernacular of whatcontractors do. One of my favoritestories that Dan tells concerns losstrends, where we’re looking at claimscoding to determine what the cause of the accident was. One of the losstrends we began to see was “injured orbitten by an animal," which seemedodd for a construction contractor.Upon further investigation, the detaileddescription of the loss talked aboutbeing struck by an elephant trunk.Elephant trunk is slang vernacular for a concrete delivery system. Not understanding the construction vernacular can lead to some incorrectloss assumptions and mitigation strategies. As a result, we conductedthis training not only with our

underwriters but also with our claims professionals. Our risk engineers, most ofwhom come from the construction industry, assist in the delivery of the trainingto help ensure we design materials that complement our customer’s business.

A big part of our valueproposition is ensuringthat we have peoplewho are specialists inthis industry segmentand are able to talk to contractors in their language and understandthe specific risks theyface and the processesthey use.

— GARY KAPLAN


Kaplan: The engineers thatwe have, about 150 of them, average 15 years of experienceworking for contractors. Theyhelp Dan put the material together and get it out there. Ourrisk engineers all are rooted in the industry, which helps whenwe sit down with a customer totailor their insurance programs.We understand their business and their needs, and are able toput together programs designedto help them to succeed.

FMI: How often do you offerConstruction 101 and 201?

Kaplan: It really depends on[Dan’s] schedule. We conductbroker forums, where we go to each of our regions once a year and spend a half-day talking to our partners about what’s going on with the construction industryand how Zurich can help them do a better job of selling our value proposition.We typically have breakout sessions at the forums where we discuss Construction101 and 201 as part of ongoing education and development. These breakout sessions are where we usually grab their interest. Dan gives them a brief 10- to 15-minute update on what we’re doing, and many brokers will ask for him to comeback and have a session with them. Internally we held 101 in 2008, 201 in 2009

and have plans to offer 301 in 2010. We have put the materials online internally sothat new people can review the materials as needed and not have to wait for athree-year cycle. How often does Dan conduct training externally? It reallydepends on the demand — I’d say about a week each month.

FMI: Are your employees required to participate, or is it optional?Rasor: We reviewed all of our construction educational offerings, including

monthly webcasts, which update the underwriting and service teams aroundtrends, loss control techniques and information on any of the 100 products andservices we offer to help our customers. We utilize an intranet tracking systemwhere employees register for live webcasts. These webcasts also recorded so that if new people join the organization or if, for some reason, existing employeesmissed the webcast, they can review the materials later. The people in our organization are getting the foundation to help support them when they’re outtalking to our customers.

Kaplan: Zurich began heavily investing in training two years ago when I wason the operations council. We spent money on a system that allows us to both doall of the training required as a large company and track individual developmentplans and progress. Scott had this idea: Why don’t we use this system to track participation in the training programs as well as in the monthly webcasts? The


system has been a great way for us tosee who has and has not attended.

Rasor: The big-ticket issue here is education and getting better atunderstanding construction risks. This is core to our mission, our visionand our values. It isn’t unusual thatfolks in our organization volunteer topresent on these webcasts. It isn’t just a top-down educational series thatrequires the checklist participation;rather it’s often from the ground up. Afrontline underwriter might discover a particular trend that electrical contractorsare experiencing, such as shoulder injuries from pulling wire and conduit. Theunderwriter works with his or her risk engineer on identifying techniques to helpthat particular customer reduce those injuries. The underwriter and risk engineerwill then define what is needed and present this solution in the webcast forum sothat others can learn and share these new approaches with their customers, therebyunderstanding a new way to improve loss control and prevent injuries on the jobsite. This knowledge sharing is embedded into our culture, which I feel is animportant part. Everyone in the organization is looking for opportunities to improveour customers’ performance. Because of this, we are never at a loss for topics topresent at our webcasts. It isn’t unusual that we have to prioritize the topics offered,whether its risk engineering, claims, underwriting or premium audit. With theeconomy being what it is, it has been a struggle for our customers to estimatewhat their exposures are for the upcoming policy year. On a recent webcast, wediscussed how to assist our customers in estimating their exposure base so they’repaying the right amount of premium. It does our contractors no good to overpaytheir premium, and it actually hurts our organization if they underpay. So gettingan understanding of how to estimate the exposure base was a particular issue thatone underwriter ran into with some of his customers. He got with his premiumauditors and presented in a webcast how to help our customers understand howbetter to estimate their exposures so that they are managing their expense dollarsand appropriately paying their premium, which helps both their business and ours.

FMI: How are you measuring your return on investment (ROI) on these programs?

Rasor: The tough part is: How do you measure the value of teaching your people? One thing we are looking at is the premium and submission flows of thebrokers' offices after we have conducted Construction 101 and 201. We are tryingto determine if we get any spike following the event, which we have seen. Thisaligns with our belief that when you're in their office more frequently, you tend to get more business submissions.

Kaplan: We do measure performance of our various lines of business. If we’re having difficulty being profitable on a line of business, more than likely ourcustomers are as well. That makes us aligned in terms of trying to address that lineof business and developing tools and techniques aimed at improving its performance.


Our online Tool Crib has more than 30 insurance products and 70 servicesdesigned specifically for the construction industry. Globally, the things we havedone have resulted in 27 straight quarters of profitability for Zurich. So we havean idea that the culture and the emphasis around understanding our customers’business continues to prove results for us over a lot of different economic environments in the marketplace.

FMI: Zurich developed a nine-box process as part of its talent developmentand management efforts. Please tell our readers what this is and what the driversbehind it are.

Kaplan: This started when Jim Schiro took over as Zurich's CEO in 2002.One of his key strategies at that time was talent management and development.He pushed the organization hard to come up with a repeatable process, which Jim calls The Zurich Way. He started with what he calls the top 200, which wereZurich’s top-200 executives globally. Jim wanted to create a way of identifyingwho were the best performers and who had the highest potential among thatgroup. This annual process is done by the entire leadership team at Zurich, andwe’ve drilled down several levels so that it’s being implemented by everyone in themanagement ranks on up. The way the process works is you slot your directreports into a 3 x 3 matrix (See Exhibit 1). The X-axis is performance — are theybelow average, averageperformers or aboveaverage? The Y-axis istheir growth potential.Do they have limitedgrowth potential, somepotential or are theyready to move to thenext opportunity? Weput those people intothose various boxes, but I think the real power comes with the discussions you have as a leadership team. These discussions happen throughout the organization at variouslevels. We talk about theemployees — are they inthe right jobs? Do theyhave the right challenges? Are they developing as fast as we think they should? Are there opportunities outside their current organizational structure that mightbetter suit them?

Rasor: It provides a very powerful visual opportunity for discussion. Likemost organizations, the two types of performers you’re very concerned with areyour high-potential performers and your underperformers. It helps formalize

Hig

h G

row

th

Pote

ntia

lG

row

th P

oten

tial/

Role

Exp

ansi

onN

o/Li

mite

d G

row

th P

oten

tial

New Role/Does not meet/Partially meets expectations

Meets Expectations

Performance

Succession Planning Focus: Boxes 9, 8, 6 and 7

ExceedsExpectations

7 8 9

4 5 6

1 2 3

Pote

ntia

l

Talent Mapping GridExhibit 1

High-potential performersUnderperformers


conversations around whether a poor performer needs more tools or more development or maybe shouldn’t be in the organization. With your high performers,it makes you discuss what opportunities you are going to provide them to get tothe next level. That way the top and the bottom, which probably require the mostattention, are getting it because it is right in front of your face in a very visualfashion that forces you to have those discussions around what you are going to do with those employees.

Kaplan: The tracking system I mentioned earlier has a very strong performance management component and we can document objectives andprogress towards those objectives. It also has an individual development plan(IDP) template, and we’ve pushed very hard in the past two years to make sure

every employee has an IDP. What really makes the nine-box processpowerful is that it allows us to thinkabout who should lead our changeefforts as development opportunities.We recently got together, planned andprioritized our operational plan fornext year. There’s a lot of work thatneeds to happen, and we’re going tohave to make changes to be successfulin implementing our strategy for 2010 to 2012. So you look at those opportunities and can usually breakthem down into work efforts. Callthem projects or call them formationof teams, but ultimately people haveto come together and think throughthings that result in needed changes.

The nine-box is really a great way to look across the organization and see who isright for a developmental challenge and who is right for stepping up and leadingone of these teams. This is a great chance for employees to show that they can lead teams, drive change and be successful at innovating and creating new productsand services to help be successful implementing our strategic plan.

We also use sponsorship statements at Zurich, to challenge high-potentialindividuals to form teams to address opportunities. We teach our leaders to articulate what they think should be implemented as challenges. So, if you are aleader, in a brief, one-page outline, you state what you think should happen. Forexample, “I’d like you to pull together a team to address a specific issue or potentialopportunity, challenge them to generate a result in 60–90 days, and recommendwho they might include on the team.” Probably the most important part is toteach the leader to continue to coach the team leader throughout that period sohe or she can help them remove barriers and deal with personnel issues or conflicts.This has been a very powerful and successful way for us to implement change atZurich as well as develop the next generation of leaders.

We are strong proponents of mentoring at Zurich. In May 2009 Jim Schirowas quoted in The New York Times as saying we all have a responsibility to mentor

The two types of performers you’re veryconcerned with are your high-potential performers and yourunderperformers.

— SCOTT RASOR


others. We cannot ignore our responsibility to mentor others, especially when we look back at our own careers and can diagram when someone else took thetime to provide guidance and serve as a sounding board. It takes effort, but it is avaluable pursuit.

Our employees are engaged in what is going on here. Knowing where peopleare at varying stages of their career and helping them reach their potential has asubstantial impact on our ability to deliver when it matters.

Rasor: Another one of the benefits of accenting Talent Management, workingon development and using tools like the nine-box is to analyze whether the personin a particular box is ready for the next job or the job after that. In other words,are there two levels of promotional opportunity in this person’s potential? Andthen it asks the tough questions: When? How long will it take to get them ready?Who is going to be involved in the process? You have an output that garners a lotof employee loyalty because the employees see the activities from the sponsorshipstatements to the individual development plans to the various projects they’reworking on as being foundational to preparing them for the next challenge. In anyorganization, people on the top line of the nine-box look for those challengesinternally, and if they cannot find them, seek them in other organizations.

Kaplan: I think it has had a very positive impact on employee retention. Mostpeople really enjoy contributing to or leading teams that innovate and create newand improved solutions, processes, products or services.

FMI: Are you formally measuring this?Kaplan: Yes, we absolutely measure retention and look at what the retention

is, based upon where the employee is in the nine-box.Rasor: Turnover within Zurich's Construction unit has been in single-digit

territory since our start in 1995.Kaplan: And after others leave us, our rate of employees who return to Zurich

approaches 50%.

FMI: What is the cost of untrained people?Kaplan: Untrained people make mistakes. We saw this clearly over the past

five years as we implemented “The Zurich Way for Underwriting and Claims.”Errors in transactional excellence impact almost everything we do, both internallyand externally. We rely on data to help us in decision making. When we makemistakes, it influences the data and the subsequent analysis. We are relying moreand more on highly sophisticated tools to help in our decision making and cannotafford to make data errors.

FMI thanks Gary and Scott for sharing their thoughts on training and developing their people in a troubled economy. ■

Kelley Chisholm is editor of FMI Quarterly. She may be reached at 919.785.9215 or via e-mail at

[email protected].

Our people are our most valuable asset.” Many

executives share this view, and most really mean it.

However, if you were challenged to prove it, could you?

You might try looking at your balance sheet, since this is where your

company’s assets are listed. Typically, you will see “cash,” “accounts

receivable,” “materials” and “fixed assets” but probably not “people.”

According to the accountants, “people” are not an asset. Your accountant,though, will point you to another financial report: your income statement. Therehe or she will show you line items entitled “direct labor” and salaries in OperatingExpenses — both categories making up the “people.” The dollars there representthe direct cost associated with having people on your payroll. In addition, many ofyour other costs exist to provide benefits, supervision, shelter and communicationsfor your people. After only a little research, you find that the most valuable, yetun-booked, asset is really one of your biggest costs! You can see that your peopleare expensive, but what are you doing to show them how valuable they are?Moreover, are you doing anything to make them more valuable?

Many companies have taken a hard look at their financials during this tighteconomy and have cut costs. They have made the tough decision to slash overheadand reduce headcount by trimming “direct labor.” In other words, they have fired,

By Andrew “Andy” Patron

An Upside to the Downturn

Since people are your most valuable asset, this slowdown timeoffers you the best opportunity to put your limited resources towork: learning. Invest in your people now to manage risk todayand make them more valuable as you rebound in the coming months.

“

110 ■ an upside to the downturn

laid off or let some of their people go. Generally, this first round of cuts involvedjettisoning the “C” and “D” players, reducing salaries or asking some staff to workpart-time. Many firms now find themselves in an uneasy place, not wanting to letany more people go because they may be needed to do the work the company ischasing. So a few extra, top-notch people are hanging around the office, with littleor no work to do.

Your “most valuable assets” are costing you cash and not producing revenue.Your choices are A) pay their salaries and hope that the economy will turn aroundin time, or B) terminate them to cut your direct labor costs today. The expedient,default answer for most business owners is option B. It is the logical answer. Themath supports it. But if you only take a short-term financial view, you risk losingsome of the very people that made your business what it is today. This will changethe trajectory of what your business can become in the future. Before you chooseoption B, consider how much you have already invested in your people. Howmuch money have you spent on: time working with them, the equipment and

tools purchased for them, the sharedexperiences, and all of the coachingand correcting that you and othershave invested in them?

These employees probablyembrace your company culture andlive out many of your corporate values, which they have learned overtime, through blood, sweat and tears.These “sunk costs” are what makeyour “most valuable asset” valuable toyou. As you wrestle with how to stayin business, consider this “investment”cost. What would it cost you to startall over with new people? Because thestart-up cost of new hires will likely be much higher than the start-up costs of the players that you let go, the aggregate cost and time of replacingstaff is quite large and can be up to 2.75 times the investment that youmade in the old team. The best

long-term business decision is Option A, unless your situation is quite desperate.Now go a step further. If you decide to continue to invest in your experiencedteam, ask yourself, “What can I do to maximize the investment I have made inthese people?” The answer: continue to develop them and make them even better.

Now is strategically the best time to invest in the development of your people.The demographics of our industry are changing, with only a short window ofopportunity to prepare. Baby Boomers (born from 1946 to 1964) currently make up about 45% of the workforce and are 77 million strong. While some aredelaying retirement plans due to the recession and loss of retirement funds, theticking clock still poses a problem. Some Boomers are retiring and many more

Now is strategically the best time to invest in the development of your people. The demographics of ourindustry are changing,with only a short window of opportunityto prepare.


will as soon as they are able.Generation Xers (born from 1965

to 1980) make up about 40% of theworkforce within a cohort of onlyabout 49 million people. They areassuming the leadership positions asBoomers retire, but there are notenough of them to fill all of the emptyseats. Millennials (born from 1981

to 2000ish) currently make up onlyabout 10% of the workforce, but there are more than 73 million ofthem. As more of them enter the workforce, they will be required to step intoleadership roles sooner than any generation before, because of the vacancies left bythe Boomers as they leave the working world. Most of these Millennials arenowhere near ready for such a role.

The current economic downturn provides precious time to execute a transferof knowledge and expertise from Boomers to Xers and Millennials. This might bethe only good thing about the current economic condition (See Exhibit 1). Thereare plenty of internal options for this transfer of experience. Many companiesalready have mentoring programs, one-on-one and group coaching, rotationalprograms for “high potentials” and special assignments with a seasoned leader. Theobject is to transfer real-life experience from those with more than 25 years in thebusiness. In most cases, this means from Boomer to Millennial. The upside of this information/experience transfer opportunity is significant. Done correctly, thetrauma of management/ownership succession can be minimized and your businesscan continue to thrive (or begin to thrive). The fly in the ointment is that mostBoomers (and Xers too) are very busy and they do not have the skills to adequatelypass their knowledge to the next generation of leaders. Many will try to find a wayto make it happen, but most companies need some help.

The days of sink-or-swim learning are over. Letting people fail is just tooexpensive. Your projects are too complex, too costly and the margins are too small to contain any mistakes, politically or financially. There is just too much atstake today. You need to provide some expert lessons to transfer knowledge and

Exhibit 1

Populations by Generation

Boomers

Xers

Millennials

77

49

73

Current Total Population Millions

Current Workforce Population Breakdown

100% = Total Workforce

40%

45%

10%5%

Boomers

Xers

MillennialsOther


experience to your future leaders. You need to provide education and training togive them the skills and abilities they need to be more effective, and to managerisk so that you can stay in business.

Determining the training needs of your people is not an easy task. You couldcommission a formal competency assessment to determine specific training needsfor each individual in the company. This allows decision makers to target their

training dollars and select courses thatwill give them the biggest return.Without a formal assessment processin place, determining the training dollar allocation can be hit and miss.Jerry Porras, author of Success Built toLast: Creating a Life That Matters, provides a framework for determiningtraining needs. He contends that ifthere is something that you like doingAND you are good at, you should doit. The converse is if you do not likedoing something and are not good atit, you should avoid it. In theory, thisis the road to long-term personal

success. Unfortunately, we rarely have that option. There are many tasks that weNEED to do, that we do not like doing and/or are not good at doing. Exhibit 2takes Porras’ idea and tweaks it to create a matrix that has two axes: “Need” alongthe vertical and “Skill Level” along the horizontal. The intersections create fourquadrants: 1) Need is high/Skill is low, 2) Need is high/Skill is high, 3) Need islow/Skill is high, 4) Need is low/Skill is low. This provides a framework for howto focus your people-development thinking. The tasks with high need and lowskill level (quadrant 1)should get your first dollars. However, consider the tasks inother quadrants also.Even if your people aregood at something, when the cost of failureor loss is high, training is imperative. Now fill inquadrant 1 (See Exhibit3). Some topics that arecommon across theindustry are: pre-bidevaluation, pre-job planning, job start-up,short-interval planning,job-cost analysis, productivity feedback,

The Need/Skill Matrix

1 2

4 3

Nee

d is

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eed

is L

ow

Low Skill High Skill

Exhibit 2

Training Focus

1 2

4 3

Nee

d is

Hig

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eed

is L

ow

Low Skill High Skill

Sample Quadrant 1 Items• Pre-Bid Evaluation• Pre-Job Planning• Job Start-Up• Short-Interval Planning• Job-Cost Analysis• Productivity Feedback• Change Order Management• Job Status Review• Closeout• Post-Construction Review

The Need/Skill MatrixExhibit 3


change order management, job-statusreview, closeout, post-constructionreview, to name a few.

Consider your target audience.One size does not fit all when it comesto effective training. The contentshould vary by job title. Field staff usedifferent skills and knowledge thanproject managers do. Senior project managers need more business and people management skills than theproject managers they manage. Thesenior team has to deal with broaderindustry issues than the mid-levelmanagers, so its training focus should be different. The deliverymethod should vary by job level, also. As you move from field to office, the trainingmethods and content should reflect those changing audiences. For example, meetings management training has a different focus if the audience is a group ofsuperintendents versus senior executives. Although there are some common practices,field staff generally require training examples to directly be applicable to the fieldenvironment, or they will not use it. A daily huddle meeting is very different froma quarterly financial review.

Training should be industry-specific and practical. The issues that field managers face in construction are very different from those experienced by theirpeers in manufacturing or technology. For example, generic meetings managementtraining will not be as effective as construction-specific meetings managementtraining designed specifically for field staff. They will more easily relate to the curriculum, see the application and use it more effectively if they can see how itdirectly applies to what they do every day. Choosing the most targeted, focusedtraining programs will extend yourtraining dollar and give you the greatest return. Exhibit 4 helps toillustrate this concept. Furthermore,there are market sectors within theconstruction industry, such as heavycivil, specialty and general contracting.The development needs of each levelwithin each industry sector can varywidely. Find content and material thatspeaks to the right level and group tobe most effective.

After you define the focus of your training, do not waste it on poor delivery. Invest in a high-quality training and development program.Consider important adult learning

After you define thefocus of your training,do not waste it on poordelivery. Invest in a high-quality training anddevelopment program.


characteristics before you decide on who and how to train your people. Some ofthe characteristics of great learning experiences include:

• Relevant, real-life and practical • Good leader/trainer/teacher • Challenging learning environment • Creative, unique and interactive delivery• All learning styles (visual, auditory, written, kinesthetic) impacted design

and delivery • Participants are moved in some way, often to take certain actions• Fun. Learning should be fun, especially for adults

Investing in targeted, experiential training is the greatest risk-reducing investmentin a tight, competitive market. Determine the highest returns on your trainingdollars. When the training is strategically important and the need (risk) is high andthe skill level is low, you need to provide the necessary developmental opportunities.Money is tight, so do not waste it on the wrong type of development. Look backat your list of Quadrant 1 tasks and target the one or two that will give you thebiggest return on investment (ROI). Relevant content, engaging facilitators andinteractive presentations help the participants learn and retain the information,increasing your ROI. Here are three approaches for calculating training ROI.

C-Level

Vice President

Director

Project Executive

Senior ProjectManager

Project Manager

Superintendent

Foreman

Next Generation

Field Engineer

5.0 7.52.5

Years of Experience

Source: Andrew B. Patron, FMI Senior Consultant

10.0 15.0 17.512.5 20.0

Time SpentIn-Office

Training by Level and ExperienceLeadership InstituteProject Manager Academy IIConstruction Profitability

Project Manager AcademyConstruction Supervisors AcademyEmerging Manager Institute

Time SpentIn Field

Level in Organization

Exhibit 4


COST/BENEFIT RATIO APPROACH1. Calculate direct costs, including materials, conference fees, trainers’

compensation, consultant fees, trainees’ wages, travel, meals and hotels.Divide this number by the number of trainees in the program.

2. Calculate indirect costs, such as loss of productivity while employees are in training and not on the job.

3. Calculate the total training program costs. 4. Estimate expected productivity benefit resulting from training (be

conservative). 5. Calculate the first-year profit improvement with the productivity increase. 6. Estimate the length of training effect using a discount rate formula to

reduce the value of future years’ productivity increases. 7. Add 5 and 6 to total estimated profit increase from training. 8. Calculate total training benefits

after training cost by subtracting7 from 3.

9. Calculate training ROI. This method rolls all returninto the first-year calculation(which is the period in whichthe training cost is expensed),so an annualization of return is not needed.

INDIVIDUAL COMMITMENTSAPPROACH

This approach focuses on changesaccomplished and overall businessresults instead of mathematical projections. The idea is to identify twoor three core behaviors that, if employedby a specific business unit within theorganization, would dramaticallyimprove business results. The next step is to provide the training and focuson ensuring that participants who complete the program are truly capableof performing the specified behaviors.

The participants then receive three-to-six-months’ worth of reinforcementand support related to the target performance and their subsequentprogress. The specific financial impact related to that business unit is comparedeach month (or week) after the training experience. The impact of implementingthe target competencies is determined and evaluated in terms of strategic benefit.

The ROI process involves the participants and their managers and extendswell beyond the learning event. Once the detailed commitments are established,

COST OF TRAININGConsider a two-day training program for 16 employees.

• If you pay each employee $200 per day, multiply that by two days. You would pay $400 times 16 employees for a total of $6,400 in trainee wages.

• Estimated costs for training facilitator,materials, room, a/v equipment and travel equals $16,500.

• If the company makes 20% profit on each employee hour worked, the loss in employee productivity while in training would be $1,280 ($200 per day x 20% x 16 people x 2 days).

= The total training costs are $24,180 in this example.

RETURN ON TRAINING INVESTMENT Assume that each of the 16 employeesimproved productivity, which resulted inan additional 10% of profit per employee.The added profit after the trainingwould equal $79,360 ($200 per day x10% x 16 people x 248 days) in the firstyear, which, in this example, is a returnof three times the cost of the training.


employees submit progress reports. Implementing the new skills is linked directlyto the business activity that is the beneficiary of the changed behaviors.

ROOT CAUSE ANALYSIS 1. Identify the root cause of organizational “pain” (e.g., closeout, change

orders or customer service). 2. Determine how much the pain costs. Using closeout as an example,

determine the total cost of delay in closing out, number of days of accountsreceivable, cost of general conditions for extra days, cost of each “additional”punch list item, overtime and callbacks.

3. Design a program around focused training that would reduce the closeoutcycle by a targeted number of days, identify who and how many peoplewould be involved, and determine the costs associated with it.

4. Develop a cost/benefit ratio. How much is earned by implementing trainingto closeout sooner versus the current closeout cycle?

These are just a few examples of how you might try to determine ROI.Return on investment in the area of training is a somewhat subjective exercise.Collecting enough evidence to point to training as the main reason for success willundoubtedly require a great deal of time, calculations and expertise. It may take

some time for that investment to returnto you through the changes exhibitedin your people. However, rememberthat any training is an investment inyour greatest asset — your employees.Training and development show themhow valuable you think they are andincreases their value to you.

One-time training is useful, butongoing development demonstrates toyour people that you continually investin their value. A common concernfrom many companies in this economyis they just do not believe they havethe money for training. Derek Bok,former president of Harvard University,said, “If you think that education isexpensive, try ignorance.” With that in mind, consider an analogy in ourindustry to help frame this discussion.During this slowdown, a number of companies have used the time to

do maintenance on “fixed assets” (equipment). The “yellow iron” is the cleanestand most maintained it has been in years. The strategy is sound; you have to do the maintenance on it anyway, and it is money well spent in the end. It is agood time to get everything in good working order so that it is ready to go whenyou need it (or want to sell it). An added bonus is that you can keep some good

Remember that anytraining is an investmentin your greatest asset —your employees. Trainingand development showthem how valuable you think they are and increases their value to you.


workers busy for a while. You spent some money, but you know it will pay backwhen the work picks up again. After all, as long as the equipment was sitting idle,it was not making you any money so you might as well take advantage of the lullto get it in tiptop condition. That same logic holds true for your “most valuableasset,” people. Unlike equipment, talented people improve with age, experienceand training.

To recap: • Your people are your most valuable asset. • The current economic times have forced many to make some tough

decisions and you now have the best-performing, most productive group of people available in your company.

• The demographics of the construction industry are pressing you to transferskills and ability as quickly as possible to the next generation because BabyBoomers will be retiring.

• Your backlogs are smaller, projects are less profitable and tougher to produce,and your service area is more spread out than it has ever been. Mistakes aremore costly than ever.

• Invest your first training dollars where the training need (risk) is high andthe skill level is low, to get the greatest return.

• Before you invest in training, target your training efforts by selecting thebest, most focused delivery and content possible for each group to maximizethe effectiveness and application.

• Since people are your most valuable asset, this slowdown time offers youthe best opportunity to put your limited resources to work: learning. Investin your people now to manage risk today and make them more valuable as you rebound in the coming months.

Many owners take the position, “If we train them, they might leave.” Job hopping was a bigger risk a few years ago — not so much today. Today, a better follow-up question is, “What if we don't train them and they stay?”

A senior executive with a billion dollar general contracting firm observed,“Even if you think you are good at what you do, I want you to get better.” Thisattitude helps him manage project risk, grow his business and create a gapbetween his company’s performance and the next guy’s. In this economy, he is taking the long-term view of success and proving that his people are his mostvaluable asset. You can prove it, too. ■

Andrew “Andy” Patron is a senior consultant with FMI Corporation. He may be reached at 919.785.9239 or


i n his book, How to Teach Adults, William Draves maintains

that one must meet three criteria before being able to teach

adults: a love for the subject, a desire to share it and a basic

competence in the subject.

He further points out that the third requirement is not that the trainer is an expert. Often, the participant may be as much of an expert as the trainer is. While the instructor will do a much better job if he or she has a passion for thesubject, it is just as important to care about the people in the class. An instructorwho cares that the participants “get it” will invariably be a better instructor thanone who does not care.

There are many mistakes people make in training. This article examines howto avoid 10 of the biggest mistakes trainers make. Avoiding these mistakes willmake anyone a better instructor or trainer.

The No. 1 mistake many trainers make is that of not realizing that the training is for the participants and not to feed the trainer’s own ego.

Our industry is filled with people who deal with hands-on reality. We ignorethat to our peril. Participants want to see and touch what they are learning. Along-winded, conceptual dissertation is not the best way to approach training inconstruction. The best trainers understand that their role is as a facilitator to helpthe participants learn or gain a skill. The trainer must focus on the learner’s initialskill level, level of openness to learn, ability to learn and preferred learning style.

By David Sinodis

A Top-10 List of Mistakes Trainers Make

This article examines how to avoid 10 of the biggest mistakestrainers make. Avoiding these mistakes will make anyone a betterinstructor or trainer.

120 ■ a top-10 list of mistakes trainers make

Without this focus, the trainer is likely to make a number of the rest ofthe top-10 mistakes. The facilitatorshould have a passion for the materialand skill to be mastered as well as forthe class participants. In other words,to be an excellent trainer, you have to care. You have to care enough totake the time necessary to prepare.Part of the preparation is determiningwhat the objectives of the training are. This may mean surveying orinterviewing some of the participantsand/or their supervisors beforehand. It means finding out what skill level the participants currently have. Interviews or pretesting can help with this.

Mistake No. 2 is being a presenter rather than a learning facilitator. For many of us, this is a response to our previous experiences as a student in

high school and college. The teacher lectured and we furiously took notes.Sometimes during the class, the teacher allowed us to ask a question; sometimes we had to wait until the end of class. Often this type of trainer is not even a good presenter. The presenter trainer becomes enamored with his own voice, and forgets the purpose of the training. The objective is to ensure transfer of

knowledge, not to stand in front of the class and just throw out information! If it were as simple asthat, we could easily use a DVD orother recording. We could even justrecommend a good book to read. The dynamic difference allowed in a classroom setting is that you havemore than one participant. Theinteraction with the facilitator and the other participants enhances therichness of the learning experience.Participants also learn from each other. A lecture does not permit thistype of learning.

Mistake No. 3 is improper use of presentation technology.

The major culprit is the misuse of PowerPoint. One of the most usefultools available to trainers, PowerPoint

is a powerful way to present a visual. However, trainers tend to use it like a hammer in a one-tool toolbox, just like the overhead and the 35mm slide showthat preceded it. Recognize that PowerPoint is but one of many ways to deliver

The facilitator shouldhave a passion for boththe material and skill tobe mastered as well asfor the class participants.In other words, to be an excellent trainer, youhave to care.


information. Use it judiciously and sparingly. A few tips for designing PowerPointpresentations include:

• Use a large, legible font for bullet points or captions. If the participants cannot read it from the back of the room, the font is not big enough. Some say, “But if I make the font any larger, I can’t get everything on theslide.” The answer is, you are trying to put too much on the slide! Considermore than one slide, or better yet, lower the content on the slide to the few primary words that make your point.

• Do not overdo the animation and fancy graphical tricks that are available.More than one or two types in a program are overkill.

• The participants can read the slides. Do not read the slides to them!• Turn the slides off. It is very simple to hit the “b” key and blank out the

slide. If you need it later, hit the “w” button. Remember, the PowerPoint isjust a portion of the delivery techniques.

• If you include a slide, you must leave it on the screen for at least 30 secondsso that the participants can read it.

Other big mistakes with technology usually occur when you have not preparedenough. To make sure it is in working order, all technology should be checked outbefore the class starts. Consider what your backup plan will be if the technology fails.

Mistake No. 4 is ignoring adult learning theory. Adults learn differently than children, and you must take their experiences

into account. They are usually motivated, if you give them a reason to be. Mostadults do not appreciate a lecture format. Although some are less likelyto participate in discussion than others are, conversations with peerscan go a long way in helping themretain the knowledge you want themto remember. In addition to class discussion, also have smaller group discussions. Pay attention to the small-group dynamics and increaseinteraction accordingly. Role-plays can be effective, but you must preparethem to the point that the situation is real to the participants. Any simulation that cannot be linked back to what they experience in theirreal work world will be limited in its effectiveness. Learning how tomake the linkages for them is a majortask for you as a trainer. Standard off-the-shelf simulations and role-plays can beutilized to make a point, but again you have to make the linkage between the realworld and the synthetic simulation or role-play.

Adults learn differently than children,and you must take their experiences intoaccount. They are usuallymotivated, if you givethem a reason to be.


Mistake No. 5 is the misuse of yourself as a training tool. Along with any slide show, workbook and simulation, you are part of the

instruction! You are communicating with your voice, face, gestures and wholebody. Your physical attitude determines the energy level in the room. Your voice modulation determines the attentiveness of the participants. Some authorshave gone so far as to call the instructor “the show.” This in no way means youare an entertainer. No one expects you to be a comedian or a magician while

you are training, but like it or not,people pay more attention to someone who is interesting. Your job is to make sure that you are interesting. Consider a high schoolmath teacher who has been known todo cartwheels in class to reward theclass for accomplishments. Studentsthroughout the school know about his cartwheel fame. They want to bein his class. His students want to learnbecause of the cartwheels and otherinnovative motivational things hedoes. This is not to suggest that anadult trainer do cartwheels in class, but you have to be willing to take extraordinary steps to help studentslearn. If participants are mentallysomewhere else, they are not learning.

One of the best ways to make a class interesting is to use the participants’ own stories and

experiences. Try to surface these experiences in different ways throughout the course. When you need an illustration of something happening, call onsomeone in the class to help you with an example. The art to this is to make theexample fit what you are trying to teach, while making the volunteer a hero tothe class.

Trainers must pay attention to their voice and modulate the frequency (speed)and volume of it to keep the training interesting. Avoid reading PowerPoint slidesword-for-word. Often, this will lead to speaking in a monotone voice. A monotonevoice is a disaster for a trainer.

Mistake No. 6 is trying to cover too many topics and/or too much information in the allotted time.

Learning objectives should be clearly defined and limited. Many new trainerstry to cover so much material that there is no time for interaction with the class,no time for group activities, whether simulations or table discussions, and no timefor practice to make sure that the participants understand the information.

Often a trainer forgets that the class has not seen the material before. Ensurethat the participants have a chance not only to learn the key concepts of the

One of the best ways to make a class interesting is to use theparticipants’ own storiesand experiences. Try to surface these experiences in differentways throughout the course.


training, but also to be able to see the relevance to them and see the practicalapplications. This often requires time for reflection and discussion during theclass. If instructors do not build in the appropriate time and methods to allow theassimilation of the knowledge, they have failed.

Of course, the converse to this mistake is also undesirable. When we do nothave enough content for the time allotted, we are tempted to try to fill time! Timeis a valuable commodity in the construction industry. Trainers do a great injusticewhen they “fill time.” If there is a legitimate reason to review or continue the classwith discussion or even with additional topics, fine, but we should not just filltime. As a learning facilitator, plan well enough to have the proper amount ofmaterial for the session.

Mistake No. 7 involves the time after the training session is over. Many trainers do a great job during the training session itself, but have

done nothing to ensure that the training sticks. A trainer should make sure thatthe participant receives the training in such a way that allows retention and implementation. Action is needed, not simply understanding. For most learners, if they do not use the information soon after the program, they will forget it. Thesession should end with a discussion of the major points of the programand their implementation. The facilitator can use an action planningelement to accomplish this at the endof the program. We should not rushthrough the action planning session.Remember, without implementationthe program is superfluous.

Mistake No. 8 is failure to handle logistics.

If participants are uncomfortable,they are not learning. The room temperature should not be too hot or too cold. Many facilities are toocold in the morning and then too hot in the afternoon. Beware of theimpulse to overcorrect temperatureissues. Breaks should be scheduled andgiven. If your day is going to last from8:00 a.m. until 4:30 p.m., you should have at least two breaks in the morning andtwo in the afternoon. One of the morning and afternoon breaks can be “biological”in nature and limited to 10 minutes or so. The other should be more extended (15 to 20 minutes) and give the group a chance to decompress. Make participantsaware that they have permission to take a break whenever necessary. Lunch canusually be one-half to one hour, depending upon the extent of catering. Lettingparticipants know the time expectations takes away a lot of angst. They can nowrelax and concentrate on the class.

A trainer should makesure that the participantreceives the training in such a way that allows retention and implementation. Actionis needed, not simplyunderstanding.


Mistake No. 9 is not getting feedback. Of course, most trainers have some sort of feedback or evaluation at the end

of the class, but that is probably too late to improve the class that just ended. In addition to an evaluation at the end, the good facilitator will gather feedbackthroughout the class. There are a number of ways to gather this feedback.

• At the first break of the day, ask a few of the participants how the class is going.

• During the session ask for a quick thumbs up/thumbs down/thumbs sideways. For anything other than thumbs up, ask for suggestions.

• Take time to solicit positive and negative feedback on the course rightbefore the lunch break on the first day. This is often referred to as“plus/delta” feedback. Write a plus sign and a delta sign (represented by atriangle) on the top of a flip chart. Ask the class to call out some thingsthey like about the course so far. Write these down under the plus column.Then ask for what they would change about the class. Write these downunder the delta sign. Make sure you do not question or become defensivewhen receiving delta feedback;arguments increase the risk ofnot getting any more feedback!

The important thing is to getsome feedback from the class beforethe end of the class. Of course, if youask for feedback, you need to act on it.

Mistake No. 10 is possibly the biggest any of us can make in any profession.

We begin to think that we aregreat and that we have done it all ourselves. Good trainers alwaysremember that they are a success due to more than their own efforts. Many people have invested a lot of time and care into making you the person and trainer you are. The people who hire you to provide training are putting theirtrust in you. Do not take this trust and responsibility lightly. If you care about thepeople you are training and care about doing the best job you can for them, youhave an excellent chance of becoming a great trainer. If you lack care and shirkresponsibility, your chances of being a truly good trainer are minimal.

Avoid these 10 mistakes when you are training. At FMI, our purpose is tobuild a great future for the construction industry and its leading organizations.The insights in this article will help you to better train and educate your people. ■

David Sinodis is a senior consultant with FMI Corporation. He may be reached at 919.785.9350 or via e-mail



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