Your company’s reputation rides on successful projects. We have all heard of that one company that seems to get projects no matter how badly they do. But, broadly speaking, companies that finish projects to spec and on time get rewarded by the marketplace. The question then becomes, how do you succeed at more projects?
I firmly believe thinking in strategy rather than tactics helps in all types of professional situations, so let’s apply it here.
Pick the Right Projects
You might hear a commercial real estate agent say, “You make the money when you buy.” That means you do due diligence, run the numbers. It might mean penciling it out on a napkin. It should mean charting it out on a cost-analysis spreadsheet to estimate return on investment and potential pitfalls for realizing that return.
Find some of The Driller’s best guidance on picking projects in our recent article “Maximizing Utilization, Minimizing Risk on Drilling Projects”. Read the fuller description of Brock Yordy’s “5x15 Scoring System” in the article, but to sum it up, you score potential projects on difficulty, materials lead time, overall risk and other factors. Then, you use those scores to pick projects in a sweet spot for your company. A scoring system like this helps you identify “stretch” goal projects that can enhance your company’s reputation and bottom line, and say no to projects where the risk or hassle fall short of the payoff.
Be Open to Inputs
We say it to the point of triteness, but true leaders — whether on a jobsite or at a company helm —know their limitations. Put another way, overconfidence often works against success. One big sign of overconfidence? Not doing reference or consultations with other professionals when needed.
Questions become your strategy here:
- How do I successfully plug in to other contractors on a major project? Talk to engineers, project designers and other contractors. Learn how your piece supplements, complements and augments. What does it mean to them if you fall behind?
- I’ve never drilled in that area. Who can fill in the gaps in my knowledge so I can make an informed choice about a project? Who would have logs or familiarity with the geology? Maybe find a geologist to supplement your first-hand knowledge.
- I’ve had trouble managing inventory, particularly as the number and size of projects has increased. What kind of business coaching is available for someone running a contracting business?
Keep an open mind and ask questions to make up for what you lack. The inputs you receive may make you re-think your tactics on the current project or your strategy for the next 5 years, and that’s OK. That’s the point.
Do Good Work
It seems so obvious: If you want to succeed on a project, do it well. But, you have to work within project, time, people and supply limitations. Go back and read the piece about the 5X15 Scoring System, which rates projects in advance on a 15-point scale. Ideally, projects in the 6-10 range challenge your company’s people and capabilities while maximizing equipment utilization and profit. However, a 13 might present needless challenges — and risks — to a company’s people, equipment or project management capacity. Those types of challenges can put a contractor in a position that endangers their success.
To summarize, strategic thinking for contractors, much like a commercial real estate investor, is to make money on the “buy” — during initial bid negotiations and before. Carefully evaluate projects, consider all the inputs (asking questions where you’re not sure), and price accordingly in the bid. Then take and succeed at projects that stretch but don’t break company capabilities. Repeat.
What do you think? As a contractor, what does strategic thinking look like to you? Send an email to email@example.com.
Stay safe out there, drillers.
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