Re-positioning Performance: Construction Contracting Organizations

Except for one or two large construction contracting organizations which are professionally managed, most of the other contracting organizations (especially family owned businesses) which are still doing good and trying to grow need to wake up to growing challenges and threats confronting their organizations today. Though there seems to be acceptance for growing professionally, but somewhere the efforts to bring in necessary organizational changes seems to be very short lived, hesitant, not strategic in nature, not sure about where to begin, and many such reasons. Well-known names such as Gammon, IVRCL, HCC, SIMPLEX, PUNJ Lloyd etc., have not been able to embrace the challenges and threats, as a result have suffered and burnt a lot for known reasons in the process of growing and trying to bring the intended changes. Revival takes its own long time.

Construction Contracting Organizations which seem to be growing today are mostly on account of the reduced competition, clients having a limited option in terms of awarding the contracts, business slow down, changed political situation etc. For a country of our size and the ocean of business that exists today and tomorrow, we need many more big-time contractors. Appetite has grown but not competence. Capacities have grown but not performance. Except for some incremental changes here and there, business is still being managed in the same old traditional / conventional ways.

Eagerness to grow exists but short lived. Eagerness to bring in changes exists but limited. Eagerness to involve technology does exists but very short sighted again. Contracting organizations need to overhaul their ‘Operations’ and ‘Management’ of businesses completely,

1.      To grow in leaps and bounds

2.      To transform completely into a large EPC Organization

3.      To new markets etc.

Long standing and established contracting organizations are losing on many business opportunities 

1.      To emerging players, competitors and large players

2.      Capacities to execute large projects is diminishing with quantum of the projects and

3.      Inabilities to execute large contracts at desired level of competence is denting brand image / value to a large extent

These contracting organizations are surviving only on their long-standing history, good will of the clients / customers. Use of data by such organizations to benefit is either to the minimal / negligible and missing on many fronts. Progressively growing with only such limited credentials is not sustainable. Growth must be targeted aggressively. Taking hard decisions is the need of the day. Building capabilities is a precursor to building capacities.

There is no other option but to grow professionally. Embark on the journey to growth by embracing

1.      Strategic Road Map (not just Turn Overs)

2.      Business Model to Seek, Execute and Generate Revenues & Profits

3.      Strategic Road Map to build Capabilities and Capacities

4.      Technology today is unmissable part of any growing organization.

Investment more in Time & Effort besides Money, growth is bound to come. Start with small incremental changes, create more change agents internally who all together push the giant wheel in the direction of growth and prosperity. Bring in change in a more structured format. At times prescribed changes if they are brought in at a faster rate, you are more likely to see it getting adopted. On the contrary changes which take longer times to bring in intended changes may not see the light at the end of the tunnel. This is more dangerous than not changing at all as it leaves the organization in a state of confusion and without motivation. Sometimes it makes more sense to bring the strategic changes on priority than embracing more work orders.

Pick up the Human Resource Department to start with

1.      Define the ‘Processes’ in a more robust manner, across every function of HR

2.      Create ‘Process Change Agents’ across functions of other departments as well

3.      Roll it out across all every function of all the departments

4.      Bring in lean excellence concepts such as 5S, DMAIC Approach to solving every problem

5.      Involve in ‘Value Stream Mapping’ across organization including ‘Projects’

6.      Identify the right technology for data mapping. Always remember that right data in a timely manner is the differentiator, developing auto analytics, retrieval of data at any point of time and in a manner that every decision maker needs is the need. Only the ‘Study’ part of the analytics should be left to the individuals.

7.      Adopt an inverse pyramid model for costing meaning where the unit costs come down with growing quantum etc. Avoid as much capital investment as possible. In an OpEx based model the risk is involved only to the extent of usage.

8.      At project level, involve in holistic ‘Mapping of Work Output’ rather than going for productivity improvement. When you know how much you are producing and at what rates, when you capture the bottle necks in an analytical manner, study the same etc. you are better equipped to bring in the right changes. See it to that you are mapping real time. No big software investments are required for the same.

9.      Target to improve the capabilities of the Supervisor & Foremen grade of human resources as they are the critical link between what an Engineer says and what Workers execute. Occupational Standards, Qualification Packs for the various Job Roles, everything is available today with National Skill Development Corporation (NSDC) and Construction Skill Development Council of India (CSDCI).

10.  Get to implement the ‘Recognition of Prior Learning’ (RPL). This is not just a magical tool to formalize the economics but also to get very focused on the required training thereafter. RPL could be performed across the hierarchy, including recruiting of Engineers. No huge investments are required for the same. On the contrary reimbursements are available from organizations such as CSDCI for performing RPL at workers level. Also remember that RPL is one of the only tools which would eventually reduce the gap between planned and deployed and eventually help organizations in undertaking ‘Workforce Planning’.

11.  Learning & Development is another area where organizations need to revamp the existing approach. When Organizations know what business they are into, When the recruitment happen with ‘Job Descriptions’ in place, when the ‘Performance Appraisal Report’ is in place etc., then why to generate ‘Wish Lists’ of the individual employees and map against the same. Merge or integrate ‘Performance Appraisal with Learning & Development’.

a.Adopt robust and comprehensive ‘Job Descriptions’, ‘Recruitment Process’ and ‘Performance Appraisals’ etc. Job Descriptions should speak from a 360-degree perspective.

b. Train individuals thoroughly on ‘Recruitment & Selection’ process, conducting a ‘Performance Appraisal’ etc.

c. Gaps in an individual’s performance are his/her specific training needs, unless in specific cases where the individuals are moving laterally or into a completely new domain.

d. Publish holistic job descriptions stating the desired levels of performances as training needs list.

e.Map the at what degree are the individuals performing against such a published training need.

12. Involve in blended training approach. Generally maximum percentage of the knowledge can be standardized. Adopt technology-based learning for the same. It becomes not only consistent but also effective and efficient.

13. Let entry of ‘Skilled Workers’ be only with ‘Recognition of Prior Learning’ (RPL). For a new worker even if it is knowledge based, his actual skills can be evidenced subsequently when the individual starts working. Based on the performance necessary call can be taken.

14. ‘I map my own work and it’s output’. Let this be the approach for undertaking ‘Progress Monitoring’. No passing on the information. This is very much possible with the right technology adoption.

15. We are so hard pressed on many occasions that despite being knowledgeable about the right ways of doing things, we tend to adopt the easier ways to get going or start the works. For example, there exists no structured and scientific approach to ‘Operations Management’ before the works begin at any new sites, ‘Value Engineering’ is adopted minimally, lately, with lot of hesitation and without any scientific or structured approach and also not as a mandatory process to benefit the organization.

Many easier ways exist to improve on organizational performances. What we need to really do is to address every time we pick any work following typical questions:

1.     Whether this is the right way which will improve the productivity, quality and without any safety lapses.

2.     Whether it will give right and timely data

3.     Whether it will eliminate repeat of mistakes

4.     Whether the unit cost is decreasing upon repetitions and increase in quantum

5.     Whether right people are deployed for the right jobs.

a.     Remember if workers on the forefront of execution are given activities which are repetitive, defined and in a structured manner i.e. in a more mechanized manner quality, productivity are bound to improve subject to the right and timely supervision.

b.     It is only for changing and customized jobs that you require very highly skilled workers.

A nation should not lag in developing infrastructure at the speed that it wants for want of large and good contractors and start looking outside. Also, it is Indian Organizations who have the first and default choice of being proud contributors to the development of country’s infrastructure for its own people.