Greater Efficiency = Greater Profitability

I'm pretty sure I have seen all the ways you can run an inefficient, unprofitable team in the construction industry. And if I haven't seen it all, I don't need to, I've certainly seen and experienced enough to know what it looks like and I'm not interested in learning more, first hand, about what not to do in the growth of business.

What I do know is the right level of efficiency can lead to greater profitability; these two concepts, efficiency and profitability, are tightly intertwined and you need to be able to rely on your team to make it all happen. Although somedays it feels like a complete pipe dream to think this level of coordination is possible, it is possible with the right people and the right plan. Working as a cohesive, efficient team boosts morale and directly impacts the bottom line and the level of effort required to get there is substantial. The thing is, most people would rather exchange long-term success for short-term "easy", which only exacerbates the pain and suffering you experience on a daily basis. Today we are laying out what you can do as a leader in your business to foster a more productive and profitable working environment by optimizing team efficiency.

The Importance of Team Efficiency in Construction

Whatever level of project you contribute to, team coordination, whether it's in-house or across the whole construction team, is critical to the success of the project. These teams must collaborate to deliver projects on time and within budget while maintaining high-quality standards. A breakdown in communication or coordination can lead to delays, cost overruns, and client dissatisfaction. This is not anything new to you, this is likely something that frustrates you on a daily basis.

As the leader, your responsibility is to ensure that every aspect of the business has been built to operate like a well-oiled machine and the right people are your most critical asset. Ensuring that your teams work efficiently is the key to achieving long-term profitability and sustaining a competitive edge in a demanding market.

Here are some actionable strategies that can help your team work more efficiently and, in turn, become more profitable.

1. Embrace Technology to Boost Collaboration

The construction industry has historically been slow in adopting technology, however, recent effort to provide the industry with tools to help simplify processes can transform the way teams work. From project management software to communication apps, technology plays a central role in facilitating better collaboration.

Here are some ways technology can improve team efficiency:

• Project management platforms: Software like Procore or Buildertrend allows for real-time collaboration between team members. It tracks project milestones, updates, and assignments, ensuring that everyone is on the same page, including the client. If you are not yet at the size where you are ready to invest in some of the higher priced platforms, you can always start small and work your way up. The Microsoft suite of programs are even a good low-cost way to start. Just start somewhere. I do recommend starting as big as you can because the cost associated with change is significant, give yourself something to grow into.
• Cloud-based file sharing: The ability to access important documents like the most recent drawings, permits, or contracts from anywhere streamlines operations. Dropbox and Google Drive are examples of platforms that facilitate file sharing.
• Communication tools: Platforms like Slack or Microsoft Teams encourage quick and effective communication between teams, especially in situations where employees are working remotely or across multiple job sites.
• Time tracking and scheduling tools: Using tools like QuickBooks Time ensures that labour hours are accurately recorded, which improves payroll accuracy and managing project timelines.

By integrating technology into your workflow, you enhance communication and collaboration across your teams, ultimately driving efficiency and profitability. The key here is to have all team members using the apps, including the leaders.

2. Invest in Continuous Training and Upskilling

I say it often, your team is your number one asset and having the right people is most important for your success. With the industry’s rapid changes—whether due to technological advances or new building techniques—require teams to be adaptable and continuously improving.

The best approach is to ensure that training programs are required and employees are paid for their time to complete them. Upskilling your team doesn't just improve efficiency; it allows you to take on more complex projects that can yield higher profit margins.

Here’s how to implement effective training:

• Regular workshops and seminars: Whether it's safety training, project management, or technical skills, regular training ensures that your team is prepared for any challenges that arise. Depending on the type of training it can be held weekly, bi-weekly or monthly. What "regular" training is, will depend on your own circumstances.
• On-the-job training and mentorship: Pairing experienced workers with newer team members creates a mentorship culture where knowledge transfer happens organically, improving the capabilities of your entire team. This is also a great way to pass along "The Company Way" - seeing what it looks like in action, not just in theory.
• Certification programs: Encourage employees to pursue certifications in specialized areas, whether it's in sustainable construction practices, advanced project management or specific manufacturer training. Certified employees can complete tasks more quickly and efficiently, reducing delays and costly errors.

Skilled workers who feel supported in their professional development are more productive and more loyal to the company, reducing turnover costs.

3. Streamline Decision-Making Processes

In the construction industry, decision-making can be a bottleneck, especially when an over-involved leader has to be part of all the decision making. Waiting for approvals or feedback can slow down progress and lead to inefficiencies. To prevent this, leaders must take a step back, and trust the team they have adequately trained, to make decisions on the spot when necessary.

Actionable steps to streamline decision-making:

• Delegate authority: Trust your people and give them the freedom to make decisions consistent with their pay scale, without checking in with you. Give them space to make mistakes and learn. Have a safe environment that encourages learning through experience. This increases confidence, loyalty, growth among your team members and more efficient operations, increasing profitability.
• Implement clear guidelines: Establish a framework within which decisions can be made. Employees should know when they have the authority to act and when they need to escalate issues.
• Improve communication lines: Ensure that lines of communication between teams and decision-makers are clear and fast. This can prevent misunderstandings and reduce the time it takes to resolve issues.

A streamlined decision-making process minimizes project delays and helps maintain momentum, leading to more timely project completions and, consequently, better profitability.

4. Foster a Culture of Accountability and Collaboration

Team efficiency often hinges on the culture of the organization. A company culture that emphasizes accountability and collaboration will produce teams that work together more effectively. Leaders play a crucial role in shaping this culture and ensuring that it filters down to every level of the organization, starting with the leader.

Key strategies to foster accountability and collaboration:

• Set clear expectations: Every team member should understand their role and responsibilities within the company. This minimizes confusion and ensures that everyone is working towards the same goals.
• Promote team ownership: Encouraging teams to take ownership of their part of the project builds accountability. When individuals feel responsible for their contributions, they are more likely to deliver high-quality work.
• Encourage open communication: Foster an environment where feedback is welcomed, and team members feel comfortable voicing concerns or suggestions. This open communication can lead to better problem-solving and innovation. This approach is based on trust and requires patience through implementation when this has not been the way of operating. It will take time for your people to truly feel like they can trust you.

When teams operate in a culture that prioritizes accountability, collaboration naturally follows. This results in higher productivity and more consistent, profitable project outcomes.

Aligning Efficiency with Profitability

Efficiency and profitability are two sides of the same coin. By embracing technology, investing in training, streamlining decision-making, and fostering accountability, leaders can feel confident their teams are working efficiently, leading to higher profit margins.