A construction company’s reputation is as good as its last project, especially if the revenue generated from that project is a significant percentage of the company’s bottom line.
To win new clients, business development executives must demonstrate not only a stellar record for being on time and under budget, but also a consistent pattern of quality, compliance, employee care and risk management. Stopgap measures are no longer sufficient. Skyrocketing insurance premiums, workers’ compensation costs, fines, penalties and not to mention reputation loss can have an adverse effect on a company’s operations and business growth. So, what can companies do to get repeat business and strong referrals?
The answer lies in learning from other leading construction companies that operate at the highest maturity levels of safety, quality, cost and human resources management measures. What are the components of their operating framework? How do they maintain control over costs? How do they consistently demonstrate compliance, operate at higher speeds, continuously build their reputation and keep securing future business? Over the years, leading companies have institutionalized sound practices as part of their corporate DNA. Any compromise on quality, safety or reputation is not an option.
In parallel, construction companies should consider continuous self-assessments based on the leading maturity models relevant to this industry. For reference, Construction Industry Macro Maturity Model (CIM3) and Construction Disability Management Maturity Model (CDM3) are adapted from the Carnegie Mellon University Capability Maturity Model (CMM) for the construction sector. Most process maturity models are based on assessment indicators and their respective threshold values by maturity level. Continuous progression and achievement of threshold values help companies justifiably demonstrate maturity internally to their employees and externally to clients and regulators. Going with the principle of “what gets measured, gets done,” such self-assessments help remind, enforce and assimilate desired practices into managers’ and workers’ daily operations.
The purpose of this article is not to provide a thorough analysis of the various maturity models, but to highlight broad outlines of these models and to enable the setup of appropriate self-assessment questionnaires. The CIM3 model breaks construction industry elements into Key Practice Areas (KPA), Key Practices, Maturity Levels and Outcomes. The CDM3 model focuses on disability management and breaks it down into organizational and individual level indicators. The exact indicator categories, KPA, practices and outcomes can be obtained from examining the references listed herewith. Our focus for this article is on health, safety and quality metrics.
5 out of the 10 most frequent OSHA standard citations apply to the construction industry. (Photo: Shutterstock)
Statistics from the U.S. Occupational Safety and Health Administration show that 1 out of every 5 workplace-related fatalities come from the construction sector with the top four being:
Being struck by object
Caught in/between equipment
Further, 5 out of the 10 most frequent OSHA standard citations apply to the construction industry. Clearly, the construction industry has the most scope for improvement in this area. A safety management framework developed at the University of New Brunswick recommends six safety factor groupings for companywide self-assessment safety questionnaires:
Safety Policy and Standards
Equipment Materials and Resources
Worker Involvement and Commitment
The framework builds on other research in this area and includes input from multiple Canadian construction industry associations.
Cost effective, lightweight and smart technology platforms are available in the market today to automate much of this operational risk framework at budget-conscious construction companies. (Photo: Shutterstock)
In addition to Health and Safety, Quality is the other Key Practice Area in the CIM3 model. CIM3 Quality KPA lists eight key practices and corresponding objectives. They range from requiring minimum standards, total quality management, ISO certification, quality specifications, periodic quality reports, quality inspections, management plans and issue resolution. It behooves industry players to align with this or other similar frameworks and incorporate these elements into their quality self-assessment questionnaires. Learning from other industries’ safety analysis models such as Failure Mode Effects Analysis (FMEA) and Fault Tree Analysis (FTA) for further improvements in this area is also recommended.
To justifiably address these areas of self-assessment, companies need to assess and mitigate all aspects of operational risk: people, processes and systems. Are employees provided adequate tools and training to perform their jobs safely? Does every job go through a job safety analysis assessment? Are systems standardized across the company? Are relevant metrics collected periodically and analyzed? Are risk issues mitigated promptly? Are reports prepared with reliable and up-to-date information for senior management and the board? These are just a few of the many considerations that go into establishing a leading operational risk management framework at any organization.
Investment in operational risk framework
The list of maturity models and areas for improvement can seem endless. How can an organization with meager resources justify the time and attention job safety analysis takes when the focus is always on revenue? Many construction companies may argue that they are not big enough to justify this investment. Ironically, this is in fact the strongest reason for them to justify such an investment. Inefficient processes; disparate, manual systems; and insufficient employee training are most likely key areas holding up the company’s growth.
Investment in robust processes, systems and employee training need not be at the scale pursued by multibillion-dollar corporations. Cost effective, lightweight and smart technology platforms are available in the market today to automate much of this operational risk framework at budget-conscious construction companies as well. Vendors with many decades of experience catering to very large organizations are packaging rich content into baseline packages that can be deployed with minimal implementation efforts. Cloud-based deployments do not require in-house IT organizations or extensive training to get employees trained on the platform. The list of benefits far outweighs the minimal costs to deploy such platforms.
With a strong risk-mitigation focus, winning clients and competing with the leading construction companies in the construction industry should become a whole lot easier.
Andy Hosman is the vice president of Product Management at Sphera. He has more than 17 years of experience in designing, developing, and implementing risk management solutions to help customers assess, mitigate, manage and monitor their risk more effectively. He is currently leading the strategy, design and development of the next generation SpheraCloud™ platform.