Management Styles

by Charles Vander Kooi, ConcreteNetwork.Com Columnist

Now, I want to return to some theoretical issues. Earlier I dedicated a section to management by teamwork. In that section, I share from my own experience of that style of management. I want to take some space here to expand on two other forms of management by teamwork which may differ from the particular style I explained earlier.

First, regardless of which style of management you adopt, every person within your plan should have a detailed job description. Even though job descriptions have been a standard management tool for years, it is amazing how many contractors do not use them, though they may have heard of them. Even if you are a Ma and Pa operation, Ma and Pa should each have a job description. This will clarify who is doing what, and everything is being handled by someone.

For those of you who have never written one, let me go over a few steps you should take in writing one. First, list everything that needs to be done, and administered, in the entire company. Then begin to place names by each item as you determine who should take care of each one. When you do this, you will take into consideration the management style you have chosen from the ones we will describe in this section. Also, you will take into consideration the various types of people we discussed earlier.

Then, take this rough draft, and sit down with each individual to get their response, not about what you have assigned to others, but on what you have assigned to them. Continue to work with the main list until you, and the others involved, feel fairly comfortable with it. I say fairly: you will almost never achieve total agreement on this list.

From this list you are now ready to write individual job descriptions for each individual. These job descriptions should be as inclusive as possible, without inhibiting people from being creative, or from doing things outside their job description. However, you need to emphasize to each person that they need to fulfill their job description first before taking on new or different projects. These descriptions should be as simple as possible. They are just an outline, or listing, of the things a person is responsible to perform.

Everyone should understand that job descriptions are not written in stone. As new tasks or unforeseen things develop, someone may be asked to perform something which is not on his or her job description. Also, every persons job description should be reviewed and possibly changed from time to time at least every six months.

Before I explain the two management styles, let me reiterate a major principle involved in management. I believe construction is one of the most difficult businesses to run. In all of my travels around the country, meeting thousands of contractors, I have only met two of them who had a masters degree in business. Students spend six or seven years in college, studying every kind of business there is, then, when they finally earn their degrees, guess which business they dont go into. This one. After comparing construction to other businesses, they go into almost any other. Does this tell you something about our business?

The construction business is very difficult to manage because it is filled with so many variables. You have variable jobs with variable conditions, and you work for a variety of owners and architects. You have a labor force, variable weather, and a variable overhead, which you recover off variable job costs! Dont fool yourself. This can be a very difficult business to run. But it is not impossible.

Run your construction company with as many eyes, ears, and minds as possible. Thats why I believe you should form a management team to help run your company under one of the following two management styles.

I operated under the first style for many years. It included three key people who formed the team for the entire company and for all its divisions, or profit centers. We were each responsible to the owner, and to each other, and handled everything within our own spheres, including various company divisions.

The three people were a contract administrator, an accountant, and a field superintendent. (I have described them in detail in the section on page 171.) As contract administrator, I estimated all jobs, negotiated them if it was necessary, and then brought them to contract. I then saw that all purchase orders and subcontractors were written, and a form of billing was established with the owner. I then conducted an interoffice preconstruction meeting, in order to cover all of the necessary details, before turning it over to the field superintendent.

I would remain involved with each job, pricing all change orders, doing the monthly billing with the field superintendent and accountant, and doing the punch list at the end of the project. I also looked over all the job-costing information on the job, compared it to my original estimate, and approved all invoices and subcontract payments. I attended any meetings which were necessary when problems came up on a job. As the company grew, I had several contract administrators working under me in this department.

After the preconstruction meeting with the owner, the field superintendent took the job and coordinated all the necessary men, materials, and equipment, and saw to the completion of the job. It was his responsibility to work with all of the field foremen. He made sure their jobs used only the estimated amount of labor. He hired and fired as needed. He also supervised the mechanics in the garage or sent equipment our for repairs, so it would be available when it was needed.

The accountant performed all of the accounting functions, as well as the role of office manager. She directed all office personnel. She also took care of paperwork, filing, and reports.

Style number two uses the same type of individuals, but places them in a different relationship to one another, and to the owner. A team of managers takes on the divisions, or profit centers, of the company. Possible divisions might include construction, maintenance design and build, equipment, and the accounting department. Each of these divisions has a manager in charge of everything in a division. They are then responsible to the owner and to each other.

A division manager may be a contract administrator, a field superintendent, or an accountant in the case of the accounting department. The decision as to who will be the manager does not have to do with job titles, but with who is the most qualified to run a particular division.

Once the owner establishes the team of managers, each manager creates a team of other people to run his division. One division will do for secretarial and accounting services, if the needs for each are not large enough to require separate divisions.

Consider the personalities, the strengths, weaknesses, and goals of your people as you decide which way to run your company. You may have a preference youd like to go with, but you should consider everything before you make a decision.

For example, I operated under the first style because it fit my personality and that of the field superintendent of the company. I believe to this day that neither one of us would have functioned very well under the second style of management. The first style just fit our personalities better.

However, I think the second style is much easier to run. It defines accountability more clearly, and it does not require perfect cooperation between the contract administrator and field superintendent. The first style does demand this kind of cooperation.

Either style requires you hold one major annual meeting. Hold it away from the office in a conference facility or resort. If you operated under the first style, the three key members of the management team should attend. If you operated under the second style, the division managers should attend.

The purpose of the annual meeting is the following:

  1. To establish a company budget, which will include projected sales for each division, as well as projected costs and profit. These budgets should be reviewed by everyone in the meeting.

  2. To brainstorm about future direction and goals for the company as a whole. This is the time to add items to your New Ideas/Projects Board. It is also a time to congratulate your people on the good job they have been doing, and show them the great potential which exists for your company. Guest speakers are not always a bad idea. I have spoken at some of these meetings.

  3. To network among your people. This is a great time to let each of them share some of the problems they are experiencing in their division, or on a particular job. Your employees will contribute some of the best answers to your employees problems and the companys problems.

Sometimes, your company will make a great deal of income generated as a result of these types of meetings. I encourage every company, even a Ma and Pa operation, to spend some time on one each year.

Now, I want to address a question that is probably on the minds of some of you. What do I do when people dont perform under either style as they should? There are four things I want you to consider if it happens to you. First, examine yourself, and your opinion, to determine if your perception is accurate. I have found sometimes my opinion about people who are not performing may be flawed, because I am not seeing all the hurdles being jumped, and the extenuating circumstances which may be hindering performance. Also, I may be failing to totally evaluate the completed product produced by a person. You may need to get more information.

Second, reexamine the persons job description. It may be the performance is not what it should be because the person does not fully understand his or her job and what you expect. This can be a fault with the original description or simply due to the fact when something has changed, making the original description obsolete.

Third, reconsider the persons qualifications. You may have misread their ability or talent and have attempted to put a square peg in a round hole. Management is an endeavor that involves something of a trial-and-error process, because it involves people. It is never too late to make changes. Many times, I have found people more than glad to make such changes, because they recognize things are just not working.

Fourth, dont be afraid to let someone go. If someone does not fit in your company, and does not work well with your people, they will probably fit somewhere else, and there is someone who will fit better in your company. If you keep people where they do not belong, you do yourself and the employee a disservice.

I also want to point out an important principle concerning these management styles and people. I feel that, in most cases, it is best to get your administrative ducks in a row before you go out and acquire a lot of additional work. Upon writing this, I had just put down the telephone after talking with a contractor who testified to this. He first got his administrative functions in order, then went out and increased the sales of his company. There are too many contractors who get in a hurry to increase sales and get the cart before the horse. They increase sales without having the management people in place to handle it, then they suffer loss of income, and damage their reputation.

I conclude with a statement I often make to contractors. I tell them they need a full-time consultant to their company. When I say that, they often look at me with questioning eyes. I can tell they are calculating the cost of such a thing. They know they could never afford it. Others think Im trying to drum up business for my consulting firm. I go on to explain to them the full-time consultant their company needs is them.

One of the greatest company owners and managers I have ever worked for had this very approach. He developed people like myself to run his company. Then, he let them do what he had trained them to do. However, he always told us when the going get tough and we needed advice, his door was always open, and that he was there to consult with us on any problem we faced. And, this is just how we viewed him, as our consultant. This style of management allowed us to gain from his experience and knowledge, without being intimidated. It allowed us and the company to grow to be all we could be.

Every one of you, no matter how large or small, has a management style whether you want to or not. For some of you, your style has developed through the years with no conscious effort on your part. Others of you have followed some kind of plan. It does not matter which of these best describes you. It is important for you to do two things. Identify your style, and try to write it down or articulate it in another way so you and others can examine it. Then, with the help of others, constantly reevaluate your style and always attempt to improve it make it fit you and your people.

Seminars offered by Charles Vander Kooi

Estimating & Bidding Balancing Estimating, Job Costing, and Accounting People Management

Charles Vander Kooi Biography:

Charles Vander Kooi has been involved in the construction industry for over 30 years, thirteen as an upper-management employee of companies and seventeen as a consultant. He has bed over a billion dollars in work over his career. As a private consultant, he has helped over 1,200 companies in their estimating/bidding systems and has lectured to over 70,000 contracting people nationally and internationally.

Constantly in demand, Mr. Vander Kooi speaks at an average of 100 Trade Shows and Conventions annually, teaching his philosophy across the U.S., Canada and Australia. His company consults with an average of 100 clients annually to assist in improving their performance.

He has authored eight books to the industry and his seminars are available on audiocassettes as well as videos.

Vander Kooi and Associates, Inc.
Phone: 303.697.6467, Fax: 303.697.6815

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