7 Crucial Best Practices for Project Management in Construction

Top General Contractors deliver world-class facilities by hiring top talent, building effective project teams and improving productivity which, in return, drives increased construction productivity and competitive advantage.

Yet, achieving and maintaining a thriving organization is a little more complex. What are the key components that make for successful projects and thriving organizations? After 20+ years of studying the industry, Trimble has compiled seven "best practices" that highly successful, best-in-class organizations deploy to boost organizational performance and yield impressive direct and soft benefits.

Best-in-class facility owners understand these practices very well. They realize that it takes more than mere words to achieve a successful project. They have learned that in order to create lasting change within their own teams—and extend that change to subcontractors, architects/engineers, and owners—they have to define clear processes, train teams on how to follow them and create a desire (incentive) for the team to want to do something differently. With that in mind, here’s an inside look at seven crucial best practices for project management in construction. 

1. Create Project Accountability

Best-in-Class firms manage accountability on every project, and their PMs are the business managers for their projects. The best PMs personally feel that if their project is losing money, they are losing money. If a project has problems, they don’t make excuses by blaming the estimator, the architect, or the owner. Companies can create accountability by having senior management actively involved in the periodic, rigorous examination of job status. This does not mean just a cursory review of project costs; it also includes a narrative of the following:

• Current project status
• Project cost projections compared to budget
• Change order issues and management
• Customer concerns
• Subcontractor performance
• Cash flow status
• Profit projections

Senior management must create the proper atmosphere during these reviews by creating a forum for open and honest communication, rather than recrimination and punishment.

Only then will project personnel feel comfortable enough to share both the good and bad news so that corrective action can be initiated before it’s too late.

In our experience, this culture of “no excuses” is one of the best competitive advantages a contractor can possess.

2. Be Proactive

One of the most valuable practices of best-in-class organizations is the ability to establish and measure key performance-leading indicators. Simply put, they take a proactive leadership problem-solving approach, not a reactive approach.

If you’re unsure whether you’re a proactive or reactive leader, ask yourself:

• Are my projects consistently over budget and/or late?
• Does my unofficial job description include “Fire Fighter” or “Problem Solver”?
• Do I regularly get e-mails marked “urgent” or written with CAPITAL LETTERS?
• Do I start the day with great intentions only to get derailed by 10 AM?
• Do most of my project performance reports focus on last month’s data?
• Are there high volumes of RFIs?
• Do I get surprised by change orders?
• Do I use contingency funds early and often?

If you answered yes to any of these questions, then you are likely making at least a few reactive decisions. There are a number of ways to become more proactive. Best-in-class contractors work in a time management quadrant that emphasizes important tasks—not urgent tasks. Urgent activities are a staple of organizations that are constantly in a fire-fighting mode. These are often tasks and activities that are someone else’s responsibilities, but given to you to manage. You can often spot these as action items in your court, even though the deadline might be driven by someone other than you.

Typical "reactive" lagging indicators include:

• Actual cost versus budget costs
• Actual schedule milestones accomplished
• Quantities installed
• Cash flow to date

Of course, to get to the promised land of working on important, but not urgent items, you have to first complete those tasks activities. Once best-in-class contractors have completed as many of urgent tasks as possible, they can begin to plan ahead for future action items.

For example, proactive contractors often track and review the following forward-looking leading indicators:

• Estimate to complete (ETC)
• Estimate at completion (EAC)
• Potential Change Orders
• Project risks
• Contingency utilization
• two-week look ahead
• Cash flow forecast
• Workflow aging & cycle time

Proactive contractors recognize the importance of communication and team dynamics, so they ensure there is adequate time for leadership activities. They keep a careful eye on the culture of the project team and look for signs of defensive behaviors, CYA and the over utilization of email.

They create time “above the project” in areas including:

• Capital program vision & strategy communication
• Training and development
• Talent management
• New talent recruiting
• New employee on-boarding

Contractors do not have to be resigned to always being in fire-fighting mode on their projects. When you have a burning desire (an increase in projects), bring in the knowledge (gap assessment), and the skills (experienced leadership), you can build game-changing practices that can catapult you to become best-in-class.

4. Automate to Operate

Best-in-class contractors invest their time in high-value activities. Automate to operate reinforces the age-old truth that no one has enough time in their day to get everything done. Best-in-class contractors have figured out that automating as many of the things that steal their time as possible allows them to apply their time to the things that directly improve program performance. In today’s environment, there are two dirty little secrets that tend to steal much more of our time than we care to admit. Project managers spend:

• Too much time crunching numbers: According to several studies including ones conducted by the Project Management Institute, as much as 80% of a project manager’s time is spent communicating project status. When speaking with the design team, a project manager needs to discuss the latest design changes. The subcontractors wants to discuss payment status. The internal management team wants to hear the latest overall status. It’s all related but each conversation requires different information. Project managers often spend a lot of time crunching numbers to enable a productive meeting. The data is shared in a variety of formats from Excel spreadsheets to PowerPoint slides.
• Too much time chasing people down: How many times have you personally walked an emergency change order request all around the owner’s office even climbing flights of stairs to get everyone to sign it and approve it? How about a late invoice that a subcontractor desperately needs today or they will walk off the job site?

6. Collaborate to Accelerate

Building on the previous point, contractors must lead the strategic implementation of project management software. They must collaborate and engage all stakeholders inside and outside the organization.

Consider that one of the biggest risks to any project is change orders. Change orders can wreak havoc on a construction schedule and raise project costs beyond the allocated budget.

Change orders occur from a lack of communication. Too often in the design of a hospital wing or a university facility, the capital project team forgets to communicate with the end users.

Best-in-class contractors are using technology such as building information modeling tools to engage internal stakeholders and end users. Remember, if a picture is worth a thousand words, a model is worth a million. Top contractors find a way to make complex models as easy to use as Google Earth so that someone with no design or construction background can engage in the process and contribute—thereby reducing the chance of change orders during construction.