There is only one true leader in a construction firm. He or she is typically called the President, CEO or Chairman. They perform true visionary leadership.
To succeed in leading, they must achieve the following: ( this is leadership as defined by most people)
• Setting Direction
• Aligning Resources
• Motivating People
When we think of leadership, we tend to think of a military model. A construction company CEO or President’s role is markedly different from a military leader’s. Construction executives have cost, revenue and thus, profit responsibilities. They don’t deal in life or death. Contractor’s lives and challenges don’t compare. However, what they do does have an effect on employee’s lives including the employee’s families.
In the first step of the leadership process, Setting Direction, construction contracting leaders must know the value of a potential direction. Intuitively or quantitatively, they must determine the right or most profitable direction of the firm. Again, the direction affects many people’s future including their own. It is inexcusable to be influenced by a current fad or management trend. Facts and logic must rule the decision. The direction that is chosen must be substantiated by compelling reasons, not the least of which are strong financial ones.
Not to oversimplify, the ability to meet a payroll is what all employees including the CEO want. Effective cost and revenue stewardship is a must to meet that payroll. Overall, maintaining a positive profit and loss statement with advantageous cash flow leads to a certain future for any company.
This is very different from the military. In fact, a contractor’s leadership challenges are insignificant when compared to a battlefield command. War leadership has no superior or is similar to anything else. There is no equal to it. (meaning don’t take your role of construction leadership too seriously)
Construction firm leaders have to move an organization in a profitable and sustainable way. It must be a careful and thoughtful act which includes contingency planning. Having a 25 year view is great stewardship and a gift to the next generation of company executives. They will thank you for it and as well they should.
The people who don’t run the entire construction organization (project managers, chief estimators, field supervisors etc) have minimal influence on Setting Direction and Aligning Resources. However, they must Motivate People.
Management is defined by most people as:
• Planning the Work
• Organizing People and Processes around the Work Plan
• Monitoring Behaviors and Results
All construction supervisors perform the above three functions daily, not just once a year at the company retreat. Planning, Organizing and Monitoring well is what all good managers do. The great ones motivate people consistently. That is leadership directly on point.
We conclude everyone who has subordinates in construction is a Leader – Manager. They must lead, but at the same time must perform specific managerial activities. It is part of their responsibility. Managing for profit is not a military style of leadership. It is different. In your contracting business, all your employees rely on their compensation and benefit package for their future. No small matter. Again, good revenue and cost stewardship is a must to meet a payroll.
Why is the leader – manager model effective? Having better supervisors directly affect the two parts of the construction business – people and processes. Improving the way these performance drivers are lead and managed improves results.
We observe that in successful construction firms, leader – managers can be found at every level — from the owner to the entry level person. This is particularly true in construction organizations that have a team approach. No one builds alone. We rely on others to complete certain work steps. We believe the Leader – Manager skill is the new driver in the construction industry.
The reality of the construction industry demands we have dual roles. In our opinion, redefining leadership as having a business management component better serves the construction industry.
For more information on this critical subject, purchase a copy of my McGraw-Hill book, Managing a Construction Firm on Just 24 Hours a Day. We offer a bundle with Excel templates that are featured in the book to help assist in making financial, estimating and project management decisions.
Matt Stevens is President of Stevens Construction Institute, Inc. A management consulting firm which works only with construction contractors. Learn more at www.stevensci.com