The definition of the status quo is: “The state of things; the way things are, as opposed to the way they could be; the existing state of affairs.” For example, “He’s content with the status quo and isn’t looking for change.”
Most employees do not like change. Years ago in New York City, a company moved their employees on the east side of the floor to the west side and vice versa. Eighty percent of the employees objected to the change. One year later, the company asked if the employees wanted to swap back to the original setup. You guessed it — 80% did not want to move.
Most people have comfort zones. However, business is not about comfort; it is about efficiency and profitability. If you want comfort, you might have to hire someone to say nice things to you. And if something is efficient and profitable, do not change it. However, if something is not working, you MUST change it.
Analyze your processes and then break out of the status quo. The objective in contracting is efficiency, accuracy, and profitability; not simply how you prefer to do something.
Are you stuck in the status quo in any of the following areas?
- Estimating production and efficiency: How is the company performing? How is each estimator performing? Are you bidding on every ideal project or are you missing projects? Simply producing more estimates should not be the goal. Bidding the best projects in the best markets will increase efficiency. This may or may not require additional estimators. Also matching the type of project to the estimator’s experience/expertise will increase efficiency.
- Win ratio: Are you trending downward or upward? One thing is for sure — you are not just staying steady. You are either increasing or decreasing. A high win ratio will indicate a higher efficiency. Analyze the projects that you did not win. Determine what may have been the factor(s) contributing to why the project was not won. Check your estimates’ accuracy, the competition, and the current market. With fewer projects to bid on, typically, the profit margins go down. When there is plenty of work to bid, the competition is less fierce, and win ratios go up.
- Software: Are you taking advantage of software designed for the construction industry? Surely you are not writing takeoff quantities on paper takeoff sheets, then totaling and entering them into your estimating software? Estimating software is a tool that an estimator uses. The estimator must know how to apply the best philosophies and practices to use estimating software to its greatest potential.
- Departmental procedures: Do estimators organize and use software to their preference or comfort zone? The value of a standard operating procedure (SOP) cannot be overstated. The departmental structure must provide the best environment for employees to work. It is well documented that employees are most productive in a structured work environment.
- Estimating sequence: Do you have an estimating checklist that estimators follow for consistency? Consistent procedures will provide consistent results. For example, a cook typically will follow a recipe for a particular dish. A recipe is usually a list of sequences of combining ingredients for designated time segments. The best estimating departments create “recipes” that provide the best outcomes and greatest efficiencies.
- Training: Does your company provide training for all positions? Electricians are trained through apprenticeship programs. Workers are trained in safety through OSHA 10 and OSHA 30 programs. Which training program are your estimators and project managers trained in? Some are trained by observation and the “trial and error methods, which are the costliest.
Every contractor should have departmental procedures that every employee must follow. These non-negotiable procedures must be required to make the contractor as efficient as possible. Here are actions you can take that will contribute to ending estimating bad practices that are contributing to the status quo.
