Bottom Line Management

(tips for contractors)

Bottom Line Management focuses on:

  • Long-Term Profitability, Not Volume
  • Customer Service
  • Investing In People And Systems.

Successful contractors adopt Bottom Line Management to help return their companies to basic principles of good business practice while integrating modern management technology. They recognize that advances in management technology – the technology of directing and motivating employees — are as important as advances in industrial technologies.

Begin with Goals

   First comes focus, goals, a vision of what you want your company to do and where you want it to go. What services do your clients want? What are your resources? What does your vision imply for growth and profits?

Strategic planning and a mission statement will help you make sure your company is headed in the right direction.

Seek Continuous TQM Improvement

Continuously improve all elements of your company to do things right, the first time, every time. This is Total Quality Management (TQM). It starts with customer satisfaction. Areas for possible improvement include packaging a GMP proposal, project management procedure manuals, computerized program management systems for controlling critical resources on multiple projects, and a standardized estimating and job costing system.
A program management system should include estimating, accounting, database, and project management software. This will allow you to maximize the use of scarce resources, e.g. time and skilled people, and to avoid delays from being over-committed. When your estimating systems are standardized, you are able to improve bid reviews, eliminate mistakes, increase accuracy and minimize misunderstandings.

Play the Team Game

Continuous improvement is a team game. Teams made up of management, line and project personnel and, when appropriate, the owner should study and recommend improvements. Show respect by involving people in this process. Make the process successful by providing training and the right resources.

Manage By Projects

Direct your projects using TQM and improve your bottom line. Do you have multiple projects which share people and equipment? Of course you do, and you should identify those projects, coordinate schedules accordingly, and integrate those schedules with your day-to-dayoperation. Support services can help you with scheduling, including CPM, job logic and crew constraints, float and flexibility, and with estimating and job cost control.

Seek Win-Win With Partners

Avoid construction disputes. They hurt your business. Go for partnering. With owners, subs, architects, vendors: create a team atmosphere, open communication channels, build trust and openness, implement goals, and provide mechanisms to solve problems. Partnering reduces cost overruns and project delays. Remember, anyone can request and push for implementing partnering before or during a project.

Re-engineer the Process

If you’re in decent shape, but struggling with cost or quality problems, juice up your continuous TQM initiative. Don’t waste money on re-engineering unless you need radical redesign of critical business processes that really matter, like bidding or switching markets. Draw from the Diamond Model what you need to make your company succeed.