People Product and process mean nothing if your business is not adaptable in the face of change. In the past 14 years since I began in this industry, I have seen significant transformations, most recently market conditions that are changing at a rapid-fire rate. The following are a few external influences that forced our company culture to become adaptable and flexible.
Rapid-cycle construction: Owners are demanding that projects be completed faster, smarter and cheaper. Schedules are compressed or accelerated, leaving greater room for error, but less time or money to absorb those errors.
Direct owner-purchased equipment: This forces contractors to increase labor rates to maintain profit margins, thus creating an opening for more aggressive competitors.
Nontraditional players: Construction management companies and developers are entering what has traditionally been the mechanical contracting industry, resulting in the commoditization of our industry and a new competitive dynamic.
Internet reverse-bid options: Decisions are price based and further the commoditization trend.
Loss of manufacturing companies: Many manufacturing firms are moving out of the country. What was once a vast sea of prospective customers has slowly begun to dissipate, reducing the number of businesses we sell to and increasing the amount of competition.
Each of these market conditions presents its own challenges but taken collectively, and if not managed correctly, they could be the downfall of an organization. Harrell-Fish Inc. has implemented several internal strategies to overcome these threats to our day-today business health.
Project preplanning: Our goal is to have a succinct project plan in place from Day 1. I meet with our estimating staff, project managers, job superintendents, safety director and operations manager to review the customer specifications, identify opportunities and risks, and anticipate manpower, safety hazards and required time.
Hiring a full-time safety director has been well worth the outlay.
Full-time safety director: As owners are becoming increasingly aware of contractor EMR ratings, the cost of hiring a full-time safety director has been well worth the outlay.
Dedicated project manager: Labor is one of the most significant non-fixed variables in our jobs. By assigning a project manager to focus on T.I.M.E. (tools, information, materials and equipment), our job superintendent is free to concentrate on increasing productivity, eliminating delays and ensuring project profitability.
Prefabricate everything possible inhouse: This strategy allows us to decrease time to market as well as material handling costs, which account for about 45% of labor time. With the savings, our labor hours are more effective and we're able to perform with fewer people in less time.
Adopt innovative products and materials: Using products and materials such as ProPress copper fittings, PEX tubing or AutoCAD can allow for faster, less costly delivery. In fact, integrating an AutoCAD system into the project planning process paid for itself with just one pharmaceutical job. We believe it is crucial to continuously challenge our company to do things we've never done.
Leverage technology: At HFI we have begun what we call e-projects, which rely on an electronic delivery process for information flow. We create a Website and load all critical information about that project onto the site. We then provide access to our employees as well as our customers with varying levels of security. Now a job superintendent can access information on the jobsite simply by accessing the web through a PDA. HFI uses a software product called Docunet, which is a subscription-based construction project documentation package, to deliver our e-projects.
Diversify into new markets: HFI has moved into the bio-tech/biopharmaceutical markets because they place a higher value on quality. We continue to penetrate these markets by understanding their unique issues and investing in training and specialty tools to maximize success.
Add value to every project: The trick is in knowing if the value you are adding is really a perceived value to the customer. You can find out through feedback questionnaires. We implement these on all projects, at the 50% completion mark and at the end of a job, enabling us to finish strong and improve on subsequent projects.
Get involved in the industry: Keeping your fingers on the pulse of the industry is critical. Through organizations such as The Unified Group, an independent association of the country's best mechanical contractors, we are challenged to stay on top of trends and learn from the successes and failures of other elite contractors.
This quote by journalist and suffragette Dorothy Thompson (1893-1961) sums up HFI's company philosophy: "Fear grows in darkness. If you think there is a bogeyman around, turn on the light."
For these strategies to be successful you must support, train and empower your employees. You'll begin to see a high performing team that can maneuver and operate effectively within changing market conditions. Don't be left in the dark; drive the fear out of your organization and take the path to brighter, more prosperous future.
Steve Dawson is president of Harrell-Fish Inc. in Bloomington, Ind., a mechanical service contracting firm specializing in commercial and industrial sites. Dawson a member of The Unified Group. He can reached at 812/339-2579 or [email protected].