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| NEW CONSTRUCTION
STRATEGIES ARTICLES |
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| Southeast
Construction Magazine: December 2004 Issue |
Innovation: The Path to Greater
Profits - Part 6
By Ted Garrison |
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In
the first five parts of this article in Southeast
Construction, the author explored first
eight of 12 critical traits of a successful innovative
company. Here, he points out the need to create and
maintain realistic expectations, and also the importance
of measuring progress against specific targets.
9) Create and maintain
realistic expectations:
This is an area where every company
needs to be careful. The fastest way to destroy
incentive in the field is for senior management to set
unrealistic expectations. The way to avoid that
is to involve field people in the setting of the goals.
Unless the people that must achieve
the results believe they can accomplish the results,
they tend to give up.
During my career I was assigned the
task of finishing a project in two months that had four
months of work remaining. When I walked into the
room with all the subcontractors and the general contractor’s
team, the only difference between me and everyone else
was I believed we could do it. No else did.
And no one knew how, including me!
When people tried to tell me it couldn’t
be done, I just kept asking, Why? They finally
gave up, somewhat in frustration, and said, “Okay,
we can do it, but we don’t have any idea how!”
The good news is now they were focusing
on solving the problem instead of complaining. We brainstormed
for an hour or so, with little result. Finally,
one subcontractor said, “That won’t work,
but if we do this way it will.” The pendulum
had swung. The rest of the people in that room
started adding little piece to the process. Finally,
after about fours we left that room with a plan to accomplish
our goal. The very people who said it couldn’t
be done had created the plan.
To make a long story short, they achieved
the goal. Not because someone told them how, but
because they all contributed little innovations that
made it possible to complete the project on time.
The key to success was the fact that the workers on
this project created a solution they believed in.
They turned the project’s expectations into a
believable reality.
10) Measure innovation’s
progress against specific targets:
Innovation is a process. And
just like any process you must measure results to ensure
target goals are being met. For example, ever
wonder why 3M has such a good innovation record?
The company requires that every division’s sales
have at least 25 percent from products developed within
the last three years.
In construction, instead of the contractor
focusing on how cheap they can build a building, they
should focus on how much extra value they can deliver
as a percentage of total cost. For example, instead
of focusing on only construction cost, examine all the
ways the contractor can save the building owner other
costs during the construction process or during the
life of the building. Considering the cost of construction
represents only about 10 percent of the total lifetime
cost of building, obviously there are more opportunities
to save costs during the life of the building than during
the its construction.
When you measure your company’s
innovation progress you need to assign specific accountabilities
to your employees. For example, instead of just measuring
a project manager’s performance based upon how
close he came to the schedule and budget, measure how
many new services he created for the customer on each
project. This is critical because innovation is
not destination, but a continuous journey.
The best way to get your employees
to really understand the importance of innovation and
the fact that you are serious is to measure it. When
they realize their innovative performance will have
an impact on their bonuses and promotions, they will
focus on it. However, the key to the measurement
of innovation is that those being held accountable must
have a say in how it is measured and what the targets
are.
In Part 7 of this article in the next
issue of Southeast Construction the
twelve traits will be wrapped up including a summary.
The traits that will be discussed will include why innovation
is the result of focused, disciplined, and rigorous
mental processes as well as why it’s necessary
to reward what you want. |
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THE END *
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Ted
Garrison, the author ofStrategic Planning
for Contractors, works with businesses
in the construction industry. He can be reached
at
Growing@TedGarrison.com
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