Construction projects quickly become price propositions. Construction managers and construction companies understand how volatile raw materials prices can put pressure on a project. For instance, Mortgage News Daily recently reported how “even though lumber prices have recently declined, the National Association of Home Builders (NAHB) says builders are facing some of the fastest increases of other building material costs in history.” And while savvy managers have long known how to hedge against that particular risk, other less obvious pitfalls have plunged many projects into delay, decline, and downright failure.
In this post, we will detail eight things that contribute to a successful construction project and explain common pitfalls you should seek to avoid.
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Number 1: Proper Planning
“Planning” is a catch-all word that describes countless kinds of preparation. And yet despite how vague it sounds, it’s often the main reason why construction projects succeed. Consider just how many things need to be coordinated in order for a project to proceed. They include:
- The scope of the project
- The schedules and responsibilities of the development team members
- The work breakdown structure
- Client expectations
- Delivery schedules and logistics timetables
- Contractor schedules
- Contingent purchases that may vary according to market conditions
- Metrics for when a project has met various thresholds, including completion
Failing to plan for such contingencies means that construction managers need to make decisions on the fly, and such decisions often lead to avoidable errors. For example, countless examples of construction projects that fell prey to scope creep exist. So do projects that landed in legal trouble due to numerous change orders that sent contractors scrambling. Proper preparation protects from a plethora of problems.
Number 2: Carefully Allocating Resources
Similarly, “resources” is another term that often remains ill-defined. In the context of construction projects, it typically refers to two things: material assets and human assets. The first is self-explanatory and essentially means things like materials, equipment, fiscal capital, and the like. The second, though, bears more consideration.
Many construction managers believe that contractors, consultants, and similar construction professionals are the human assets that they need to manage. Spreading talent too thin can force unqualified personnel into roles that don’t match their strengths. (Numerous clerical staffers have become the de facto heads of failing projects simply because they happened to have collected relevant project data into spreadsheets only they have access to.) Avoid spreading your human talent too thin, and you’ll go a long way toward achieving your project’s ends.
Number 3: Understanding and Following Your Signed Contract
High on any manager’s construction project activities list should be carefully following the signed contract. Contracts do more than just set out a construction company’s legal obligations. They also clarify expectations for the developer, the client, and the state of the project itself. It’s true that you’re “on the hook” (so to speak) once you sign a contract. Yet contracts can also have a positive impact on a project.
Caricatures of owner-drafted contracts present such documents as woefully one-sided, shifting all of the risk onto the developer and leaving none of it for the client. If the company is involved in the process from the start, though, most contracts become more even handed. In these situations, closely adhering to the contract protects all parties, clarifies expectations, guides the development process, and helps deliver a successful project
Number 4: Communicating Regularly and Effectively with Contractors and Clients
No construction-project plan magically falls into place. Contractors and clients wont simply step up to take responsibility for the next task in the value-adding chain. And just because a project manager understands which essential things need to happen doesn’t mean that subordinates grasp their importance. Project leaders must lead, and the way they do is through communication.
Another catch-all word, communication will look different depending on the individuals involved — and project managers must interact with virtually everyone involved in the rehabilitation or creation of a structure. Sweat-stained site workers, decision-makers ensconced in air-conditioned offices, and members of the manager’s own team all need to know the next step. Successful managers can communicate in ways they all understand, provide appropriate amounts of feedback, give and receive constructive criticism, and provide praise.
Number 5: Soliciting Independent Cost Estimates
In 1960, Peter Watson — who was a professor of psychology at University College, London — conducted what would become known as the “2-4-6” task. Watson created a number game and had participants attempt to discover a pattern in various sequences of digits. The experiment led Watson to conclude that participants primarily sought to confirm their own preconceptions rather than to seek objective information. This came to be known as confirmation bias, which Psychology Today describes as the following: “When people would like a certain idea or concept to be true, they end up believing it to be true. … This error leads the individual to stop gathering information when the evidence gathered so far confirms the views or prejudices one would like to be true.”
Confirmation bias regularly shows up during the budgeting process — and it can greatly complicate construction projects. Successful managers often solicit cost estimates from independent parties, which helps mitigate their own confirmation biases.
Number 6: Setting a Reasonable Schedule
Drafting and sticking to an appropriate project schedule does more than merely ensure that things proceed at a timely pace. It also helps to maintain the company’s profit margins. How? Construction Business Owner states, “Margin erosion not only results from cost overruns associated with a poor finishing strategy. … Misguided profit calculations from the start often result in margin erosion.” In addition to accounting for profit margin, construction project plan examples should also include scheduling margin. Planning as thoroughly as possible and allotting enough time to deal with any issues that appear (and there will always be issues) will go a long way toward making sure that a manager doesn’t have to deal with change orders, bloated cost-to-complete reports, and a demoralized staff.
Number 7: Embracing Technology When Applicable
Virtually every industry seems to face a plethora of salespeople hawking new technological “marvels” that will improve efficiencies and streamline workflows. Sometimes it can seem as though such solutions are little more than snake oil. Yet managers ought to embrace some innovations — particularly those that synchronize information across the organization.
Once upon a time, construction project plan examples would include Excel spreadsheets. These were a primary tool for compiling information about an ongoing project. Unfortunately, managers learned that it was far too easy for information to become desynchronized from decision maker to decision maker, which led to the circulation of inaccurate information and costly mistakes. Many more technologically advanced solutions exist that ensure your team always has the information it needs. New solutions can also facilitate report generation, automate billing, connect multiple team members simultaneously, and more.
Number 8: Clearly Define Expectations and Shift the Approach When Necessary
Contracts aren’t the only way to manage expectations. (In fact, they aren’t even the main one!) A savvy project manager makes it a priority to consistently touch base with subordinates, contractors, and stakeholders to learn their expectations and manage them. It’s common for managers to sign a contract, create a construction plan, and begin to implement it, thinking all the while that they’ve adequately addressed everyone’s supposition. Nothing, though, could be further from the truth
Sort through countless construction project management examples, and you’ll find one commonality: Problems always crop up. Construction is a complicated enterprise, one given to countless small issues that demand swift resolution, shift required approaches, and alter the expectations of everyone involved. Observant managers who ask questions of workers and clients alike can often spot shifts in expectation as the project’s rhythm changes over time. They will also practice continuous planning, changing their approach as the situation dictates and making sure to meet others’ conjectures.
With more than 250 years of combined experience among senior staff, GNP Realty prides itself on excellent execution of every construction project. We’ve received LEED Gold EB certification and a 2012 Building Owners and Managers Association’s (BOMA) TOBY Award. In addition to shepherding construction projects to completion, we also have extensive experience in property management and commercial sales. Contact us today to see how we can help you achieve your goals!