In part 1 we covered the basics of the Acquisition Team (A-Team), in this installment I would like to discuss some of the mechanics of procuring work. Like the construction of a building, procuring work does not just happen, it comes about through hard work and planning and a very focused effort. The most skilled craftsman without engineered drawings cannot accomplish as much as those with detailed drawings. Winning work follows this same principle.
Data is the Key
I am a big believer that it is impossible to make decisions or do any work without good data. For example, installing a roof top unit requires a tremendous amount of data acquisition before the task can begin or it will not been done properly and will take forever to complete. From the size of the unit to points and locations for connection, the total amount of data is tremendous. Even think about all of the data prior to the field work that is required during engineering. If the right data is collected correctly and efficiently and utilized properly, the process goes off without a hitch, but we all know what happens when the process fails.
Procuring work is not different, but many organizations do not spend the time needed to acquire the right data so they can execute properly. What projects are out there? What is your client looking for? What is the right price point for the project? What are my strengths? What are my weaknesses? How do those compare to the competition? Why did we win the last job? Why did we lose that project? All of these along with many more questions should drive the data for work procurement. Too many times contractors treat these as subjective questions with simple answers, but let me assure you there are real data points that should be collected.
If your A-Team is going to succeed, you need to be retrieving data points. Quantitative data points like your hit ratio on specific projects, completed projects similar to the ones you are pursuing, customer specific successes and failures, current projects you are performing with a customer will arm your A-Team with tools they need to be more successful.
Being Proactive and Not Reactive
How many times is this phrase used in corporate settings? Way too many to count, but it still holds true. In the field it is about getting work done ahead of schedule in lieu of waiting. In work procurement it is about business development. Going out and finding opportunities instead of waiting for them to be produced on your email account.
Why is this important? I have heard the argument, we only have so many estimators and they are always busy, so why would we need to change the way we find out about opportunities. It is simple, it’s all about quality. Estimating and work procurement should not be measure by how busy they are or by the number of estimates, those are invalid data points. All work procurement is about the amount of won profit margin during a period and the risk that profit margin contains. For any business to stay alive it needs profits and to have a future it needs backlog with profits and hopefully little risk of losing that profit during the execution of the work.
Being proactive will bring more opportunities to the surface. This can allow you to determine the projects with the best chance of winning the most profit with the least risk. Without a focus on business development and being proactive, you will be at the whim of the market and your clients and I am not convinced they are out to ensure you have the most profitable work with the least amount of risk.
Customer Service is Golden
The customer is king. Without solid customer service in a service industry like construction your time performing work will be short lived. Your A-Team needs to be leading the customer service efforts. How is this done? First you need to have a culture that the customer is king and have people that are dedicated to ensuring that customers are satisfied. The rest in my experience is pretty easy. If you execute a good work acquisition effort, the customer service falls into place. For example, by having the right size team that understands what the client wants your team will be able to deliver that expectation. With a proactive approach you will be in contact with the right people and contact with the right attitude makes for great customer service.
Planning and Executing
Every tough won opportunity has a plan that was executed. From sports to battlefields to businesses, plans allow people to prepare for every eventuality and chart a path to victory. Does your company have a plan? How much work needs to be won in the next month, 6 months, year? At what profit margin? In what business sectors? Every business must have a business plan, but is yours developed down to a level where people can execute and the end goals can be achieved. I have seen too many construction plans that show revenue and profit per month for the year with little regard to the backlog and procurement it takes to achieve those numbers. Construction numbers (especially on project driven companies) lags so much that a good portion of the year’ work and profits are set prior to the year beginning.
Work procurement plans need to be long term and look out for many more quarters or years than the traditional business plan. If you want to have a profitable and busy 2012, your A-Team needs to be driving towards a goal that wins work now in the next 6 months.
Conclusion
I was only able to touch on the basic principles, but I hope this gives you room to think. The biggest challenge in this recent downturn is the amount of work out there. If you can focus your efforts on winning the work that is out there now, when the economy recovers you will thrive. Your A-Team is the best weapon to sharpen and deploy in good times and bad times to ensure that your company is successful.
Data is the Key
I am a big believer that it is impossible to make decisions or do any work without good data. For example, installing a roof top unit requires a tremendous amount of data acquisition before the task can begin or it will not been done properly and will take forever to complete. From the size of the unit to points and locations for connection, the total amount of data is tremendous. Even think about all of the data prior to the field work that is required during engineering. If the right data is collected correctly and efficiently and utilized properly, the process goes off without a hitch, but we all know what happens when the process fails.
Procuring work is not different, but many organizations do not spend the time needed to acquire the right data so they can execute properly. What projects are out there? What is your client looking for? What is the right price point for the project? What are my strengths? What are my weaknesses? How do those compare to the competition? Why did we win the last job? Why did we lose that project? All of these along with many more questions should drive the data for work procurement. Too many times contractors treat these as subjective questions with simple answers, but let me assure you there are real data points that should be collected.
If your A-Team is going to succeed, you need to be retrieving data points. Quantitative data points like your hit ratio on specific projects, completed projects similar to the ones you are pursuing, customer specific successes and failures, current projects you are performing with a customer will arm your A-Team with tools they need to be more successful.
Being Proactive and Not Reactive
How many times is this phrase used in corporate settings? Way too many to count, but it still holds true. In the field it is about getting work done ahead of schedule in lieu of waiting. In work procurement it is about business development. Going out and finding opportunities instead of waiting for them to be produced on your email account.
Why is this important? I have heard the argument, we only have so many estimators and they are always busy, so why would we need to change the way we find out about opportunities. It is simple, it’s all about quality. Estimating and work procurement should not be measure by how busy they are or by the number of estimates, those are invalid data points. All work procurement is about the amount of won profit margin during a period and the risk that profit margin contains. For any business to stay alive it needs profits and to have a future it needs backlog with profits and hopefully little risk of losing that profit during the execution of the work.
Being proactive will bring more opportunities to the surface. This can allow you to determine the projects with the best chance of winning the most profit with the least risk. Without a focus on business development and being proactive, you will be at the whim of the market and your clients and I am not convinced they are out to ensure you have the most profitable work with the least amount of risk.
Customer Service is Golden
The customer is king. Without solid customer service in a service industry like construction your time performing work will be short lived. Your A-Team needs to be leading the customer service efforts. How is this done? First you need to have a culture that the customer is king and have people that are dedicated to ensuring that customers are satisfied. The rest in my experience is pretty easy. If you execute a good work acquisition effort, the customer service falls into place. For example, by having the right size team that understands what the client wants your team will be able to deliver that expectation. With a proactive approach you will be in contact with the right people and contact with the right attitude makes for great customer service.
Planning and Executing
Every tough won opportunity has a plan that was executed. From sports to battlefields to businesses, plans allow people to prepare for every eventuality and chart a path to victory. Does your company have a plan? How much work needs to be won in the next month, 6 months, year? At what profit margin? In what business sectors? Every business must have a business plan, but is yours developed down to a level where people can execute and the end goals can be achieved. I have seen too many construction plans that show revenue and profit per month for the year with little regard to the backlog and procurement it takes to achieve those numbers. Construction numbers (especially on project driven companies) lags so much that a good portion of the year’ work and profits are set prior to the year beginning.
Work procurement plans need to be long term and look out for many more quarters or years than the traditional business plan. If you want to have a profitable and busy 2012, your A-Team needs to be driving towards a goal that wins work now in the next 6 months.
Conclusion
I was only able to touch on the basic principles, but I hope this gives you room to think. The biggest challenge in this recent downturn is the amount of work out there. If you can focus your efforts on winning the work that is out there now, when the economy recovers you will thrive. Your A-Team is the best weapon to sharpen and deploy in good times and bad times to ensure that your company is successful.