Dennis Engelbrecht, a senior consultant at The Family Business Institute, part of The Travelers Cos. family, spoke at the Associated General Contractors of America’s National Convention April 2-4, and outlined the top 10 reasons contractors achieve success. These were the characteristics that the institute’s top rung of clients had in common, marked by growth and profitability.
1. Servant Leadership
An effective leader likely attained that position because of innate talent and drive, but once at the top, he doesn’t settle in his ways.
2. Positive work environment
Thriving companies maintain a culture that attracts and retains people by tapping into employees’ priorities — vision, transparency, teamwork, access to leadership and more.
3. Attracting and retaining the best people
Bringing in new talent is one of the most formative to a company’s culture and success. While easier said than done, “Slow to hire, quick to fire” is a mantra among the upper echelon of growing firms.
4. Strategic business planning
Companies that did strategic planning saw 150% volume growth and 220% profit growth roughly three years later. It’s the simple act of setting a target that puts construction companies on a path to success via an executable plan.
5. Effective business development practices
Companies need to recognize that they need to build up skills in both bidding for projects while still maintaining relationships that will open doors in negotiations. Companies need to develop strong business development strategies in both bid and negotiated markets.
6. Diversified and profitable mix of work
Types of project, such as new hotel construction, come in waves as trends, so it’s best for contractors to diversity their portfolios.
7. Operational strength
Top construction companies tend to nail three areas: launching a project internally, reviewing jobs and finishing strong.
8. Proper capitalization
The best companies tend to keep a conservative amount of capital which allows them to jump on opportunity when it arises, such as an acquisition or key hire.
9. Data leverage
Companies that are data-smart perform better. Inputting data into visually interactive dashboards can be a powerful tool for tracking overhead and determining how much is appropriate.
10. Strong risk management
Construction companies that go through a formal “go, no-go” evaluation process ahead of a project less likely to get entrenched in a project that was destined for failure from the outset.
Learn more from ConstructionDive: