Proactive Project Management Systems!

by Marcy Marro | 1 July 2019 12:00 am

But, are things going as well as you were told? A few days later, you get a call from an angry customer screaming his project is three weeks late. Another is upset he is not getting the quality and service he contracted for. Another client demands you drop everything and fix his problem now. Your accounting manager tells you some project managers are not doing their required paperwork timely and several change orders have not been approved in advance by the owner. An irate subcontractor calls threatening to pull off a job unless they get paid for work completed two months ago.

No Project Problems?

These problems are symptomatic of companies run by owners who haven’t taken the time to make installing proactive project management systems a priority. These owners struggle and fail as they let project managers continually tell them what they want to hear instead of the truth. This avoids conflict until it’s too late. Typical project management problems are encountered when companies don’t have standardized systems in place that guarantee everyone does business the same way. You want consistent performance and results. You don’t want to rely on your constant reminding, checking and confronting to make sure everything is performed exactly the way you want it done. You want your project managers to be accountable and keep you informed of the real situation on every project.

Even if you have great managers, they will do things differently unless you have written systems in place for all to follow. Six good project managers will do things six different ways, late or not at all. This creates chaos, disorganization, stress and loss profits. Your customers, subcontractors and suppliers can’t deal with a company that doesn’t have consistent business standards and systems in place.

Typical reoccurring problems like those described above are a result of the company owner not requiring everyone to follow the company project management systems. Most companies have general rules to follow but don’t have them written down. The owner then tries to keep project managers herded like cats to follow the company rules. But, busy owners, over time, let their people slip from following written company procedures, if they even have them. It’s hard to keep people accountable to systems that aren’t written, reviewed, trained, tracked, followed and adhered to.

Get Project Driven!

Owning and managing a successful general contracting company for over 35 years has taught me a simple truth: to build an excellent company, you must get your project management systems installed, proactive and permanent. Excellent companies consistently hit their overall goals and project management targets in the areas of time, budget, customer satisfaction, quality and safety. They are focused on more than getting jobs done as efficiently as possible.

They focus on being organized and have a systemized proactive approach to project management so they can:

1. Consistently measure success
2. Start and finish projects fast
3. Be on-time and budget
4. Meet their commitments
5. Keep customers happy
6. Create a great place to work
7. Build teamwork
8. Identify problems early
9. Train and improve people
10. Maximize and allocate resources
11. Grow
12. Make above average profits

What are Proactive Systems?

Proactive project management systems are repeatable and standardized written organizational methods, procedures and guidelines that achieve project goals and optimize resources of time, energy, money, people, equipment and materials within a specific deadline. Project management is composed of several different types of activities such as planning, assessing risk, estimating resources, organizing work, assigning tasks, directing activities, monitoring, tracking, reporting progress, and finally, analyzing results. Proactive project management systems control all project activities and deliver the desired and targeted results on time, on budget, per the contracted scope of work while minimizing risk.

4 Stages of Proactive Project Management Systems

1. Project Goals and Objectives

Consistent performance and success is more than getting organized and training project managers to do business the same way. Successful projects start with clear objectives and measurable results to shoot for. Without clear targets, you can’t make project managers accountable or responsible for their results. Every project must have clear, written and measurable targets and goals to shoot for and use to measure success. Before every project, sit down with the project team and lay out the goals and objectives to aim at including:

1. Overall project objectives
2. Budget and Financial
   1. Job cost
   2. Productivity
   3. Profit
3. Time and schedule
   1. Start
   2. Milestones
   3. Completion
   4. Punch-List
4. Quality
5. Service
6. Safety
7. Customer satisfaction
8. Training

2. Project Planning

Successful projects have written plans to ensure they stay on track and hit their goals. There are certain steps every project must follow that guarantee on time and on-budget completion and success. These steps must be identified and perfected as part of your project management system. These systems can include pre-project start-up meetings, procurement procedures, change order systems and shop drawing standards.

The objective is more than keep the job moving. It is to hit the goals and project milestones. Systems will make this happen. Project managers must breakdown the project into small incremental steps that will ensure accomplishing the end results. By creating and following a project plan, the manager can assign tasks and hold people accountable. To draft a successful project plan, include the following:

1. Project specifications
2. Project requirements
3. Materials
4. Resources
5. Equipment
6. Labor
7. Cash flow
8. Tasks
9. Schedule
10. Accountability
11. Responsibility

3. Project Production and Implementation

The next step is to build the project. Ongoing organizational systems will keep your project tracking toward the desired end result. Each project team member must know what is expected and what systems must be followed before starting work. By establishing clear measurements and procedures, team members can get started on track and monitored on an ongoing basis as to their progress. Consider which project management systems will guarantee that every project will meet its goals:

1. Project control systems
2. Procurement systems
3. Installation systems
4. Tracking systems
5. Cost control systems
6. Quality control systems
7. Productivity systems
8. Training systems
9. Safety systems
10. Customer systems

4. Project Monitoring and Evaluation

As you build each project, constant monitoring becomes easy for the owner or upper management when systems are in place and being followed. When project management systems are installed and used effectively, monthly evaluation meetings become a simple check of what has been done properly and what needs attention. When systems are used, problems become quick to identify, hard to overlook or hide, and can be addressed before it’s too late.

Project Management Systems are Proactive

A key success factor to owning and managing an organized and systemized company is to select the systems that will ensure the success of your operation. To create proactive project management systems, start by selecting the top 10 systems and procedures you feel, if implemented and followed, will guarantee successful projects 90 percent of the time. Then you must be proactive and stay focused on these systems as musts for your managers to implement, maintain, track and perform. It will be your job to monitor these priority systems and force your project management team to adhere to without exception.

Review this list of project management systems and select the top 10 you feel are the ones which are a must in your organization:

• Ongoing safety program
• Ongoing training program
• Change order management
• Procurement procedures
• General contract checklist
• Subcontract checklists
• Purchase order checklist
• Required approval list
• Insurance requirements
• Submittal and shop drawing steps
• Project scheduling and monitoring
• Request for information system
• Scope of work standards
• Specification review
• Customer service standards
• Customer satisfaction review
• Job cost reporting and review
• Progress payment procedures
• Project paperwork standards
• Contract documentation
• Contract administration
• Contract management
• Project communication
• Project management meetings

Project Success System

At Hedley Construction, we selected and installed and then monitor 15 project management systems on an ongoing basis. The overall system that holds it all together is our monthly project management meeting. In this mandatory meeting, we review the progress of each project under construction with the project team. Each project team includes the project manager, project engineer, superintendent, foreman, contract administrator and project bookkeeper. Each project management meeting takes about one hour to fully review. We review and check that each system is being followed, and if the project is on track and meeting its goals, objectives and milestone targets. At each project management meeting we review and monitor the following:

1. Project goals targets
2. Job-site photos
3. Updated schedule
4. Proposed change order log
5. Executed change order log
6. Subcontract tracking log
7. Accounts receivables
8. Accounts payables
9. Shop drawing and submittal log
10. Job cost update
11. Budget variance report

Company Success System

In addition to the monthly project management meetings, we hold an overall company success meeting to review the progress of the overall company and projects in progress. At this review we focus on hitting milestone targets for every project. Our review includes the following agenda items:

1. Current project milestone tracking
2. Sales and proposals
3. Estimates and bids
4. Pre-construction
5. Procurement
6. Project start-up
7. Construction
8. Completion
9. Payment
10. Overall strategy

Systems that Work

The following are a few of the top priority project management systems I recommend to keep your projects on track:

Project Start-Up System

1. Review bid/estimate/proposal
2. Read complete contract
3. Review complete plans
4. Review complete specifications
5. Visit job site
6. Project goals and objectives
7. Set-up project master budget
8. Complete project checklist:
   1. Insurance requirements
   2. Bonding requirements
   3. Billing and payment requirements
   4. Cash-flow needs
   5. Discounts available
   6. Shop drawings and submittals
   7. Schedule and deadlines
   8. Long lead items
   9. Special tools and equipment
   10. Meetings
   11. Who has authority to sign?
   12. City and permit requirements
   13. Site accessibility
   14. Loading and unloading needs
   15. Project close-out requirements
9. Execute contract

Procurement System

1. Always award to the lowest responsible bidder.
Before awarding contracts, review:

1. Bid scope of work
2. References
3. Financial capacity
4. Ability to meet schedule
5. Adequate manpower
6. Similar project experience
7. Quality workmanship
8. Professional
9. Training program
10. Safety program

2. Review contract terms:

1. Final scope of work
2. Schedule
3. Delay clauses
4. Mandatory meetings
5. Clean-up and punch-list
6. Supervision
7. Change order procedures
8. Notice requirements
9. Payment procedures

3. Execute all subcontracts prior to starting job

Shop Drawing and Submittal System

1. Create list of required submittals
2. Put submittal requirements in subcontract
3. Put close-out requirements in subcontract
4. Submit for approval within 30-45 days
5. Get alternates and substitutions in writing

Change Order System

1. Never give it away
2. Be firm but fair
3. Charge the right price
4. Never do extra work without understanding:
   1. Is the work extra?
   2. How is it to be charged?
   3. Who pays and when?
   4. Is there money available to pay?
   5. Who is authorized to approve?
5. Always request additional time required
6. Give proper prior notice per contract
7. If it’s not in writing, it didn’t happen!

You can get your construction business to work without your constant attention and monitoring by creating, installing and using project management systems. The choice is yours to build an excellent company that is organized or not. The results you get are a direct result of your priorities and how you run and manage your entrepreneurial company. To make more money and have more fun with less stress, get organized! Install systems to produce consistent results and get everyone in your company doing business the same way.

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George Hedley, CSP, CPBC, helps contractors grow and profit as a professional business coach, popular speaker and peer group leader. He is the author of “Get Your Construction Business to Always Make a Profit!” and “Hardhat BIZSCHOOL Online University” available on his website. Visit www.hardhatbizschool.com[1] for more information.

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