Last month we discussed the critical importance of CEO (Consider Every Option) when making business decisions in your office. One bad decision could bankrupt any contractor; one good decision could make you very rich. Most jobsite decisions are not that far reaching, but these are some very real possibilities:

1. A jobsite fatality or serious accident with blatant negligence of OSHA’s rules and no available first aid could put you out of business. Likewise with drug- or booze-related fatalities on your job or in one of your company vehicles on the highway.

2. Sexual harassment, unfair labor violations, discrimination and other bureaucratic charges and court expenses could cut off your cash flow.

3. Poor documentation in job logs and jobsite correspondence could prove quite costly in claims court or arbitration.

4. Timely value engineering to find that “better way” could result in major savings of time and money.

5. Creating a positive, continuing partnering relationship with an owner, general contractor or another trade contractor could easily lead to that pot of gold at the end of the rainbow.

The majority of critical decisions involve a small amount of company dollars that can make the difference between that job being profitable or losing money — but not enough to “break the company.”

When you have a crew of workmen standing and waiting along with expensive cranes, beaches, welders, compressors, pumps or other rented equipment sitting idle, that decision becomes more expensive by the minute. As most of you have witnessed, with your own supervisors and those of other trades, these timely decisions are not always very timely!

Your first and most critical question is, “Who taught that supervisor how to make those decisions?” Unfortunately, the answer to that question is quite embarrassing for the majority of our contractors. The sad truth of the matter is that most jobsite supervisors are actually discouraged from making any decision by “Monday morning quarterbacks,” who second-guess every decision with chiding remarks about “what you should have done.” Everyone knows what you should have done after it’s over. The best thing that happened to Monday morning quarterbacks was Monday Night Football. Now, tell me what to do.

Different Plans: Part of every foremen training program should include this CEO decision-making process. Your foremen need to know what all of their options are, as well as how much money each one will cost the company. In addition to generic supervisor training, these options should be discussed at every kickoff meeting as you value-engineer that specific project. We have always called this Plan A, B, C and D.

Plan A is the strategy, method and time frame that our management team devised and agreed upon to beat the budget and schedule. It naturally demands an accident-free, safety-conscious work site and quality workmanship. We also include after-hour, on-site training to constantly upgrade our workforce.

Plan B is anything better. There is always a better way, and we encourage our jobsite team to watch for every opportunity to improve on Plan A. We compare this philosophy to a football coach sending in each play, but giving his quarterback the option to change it if the defensive situation warrants it.

Plan C is going to be costly. You might wish to call this a dilemma, which is the choice of two or more undesirable options, where you are choosing the option that will be the least costly. Plan C is where I highly recommend weighing all of your “plus” options against all of the “minus” options before you make a decision. Keep in mind how much time is involved with each of those options, as well as how much that time will cost your company. Weighing these costly options should always be done on paper whenever it is feasible. These costly decisions should also be coordinated with the project manager or owner, whenever possible.

Plan D is desperation, decide and do it. In most cases Plan D means that time is becoming our most expensive factor and you have to do something right now! This urgency might involve liquidated damages, delay penalties or legal costs, but I hope most of you now enjoy an industry-wide reputation for getting your work finished in the period of time that you promised. We came from that “old school” where a man was only as good as his word. Repeat business with the same clients and positive referrals for new clients are worth more in dollars than what it costs to keep that promise. In my opinion, there is always a “penalty clause” for not meeting your committed schedule, even if it is not written in your contract! Obstacles And Options: Let’s look at some of the obstacles and options that can face your foremen:

Obstacle 1: Your crews are behind schedule on a critical item that is delaying the other trades and the overall completion of that project.

Option A: Get more people on that job! If you are a union contractor you need only call your local business manager and explain your situation. I hope you warned him of this impending crisis at the pre-job meeting. Open shop contractors can pull craftsmen from their other jobsites, from their fab shop or borrow employees from other networking contractors, who are not busy. We also have temporary manpower services who can furnish “day labor,” but you will generally need to have skilled leadership to guide these untrained hands. This is an exceptional opportunity to use my Green & Gold partnering. You can also recruit and hire more employees, but most of you know that is getting tougher to do each and every day. Hiring those additional employees is an almost impossible solution when you needed them yesterday for a jobsite crisis.

Anyone who has initiated my data-based skills arsenal and recruited part-timers and moonlighters are not concerned about finding more people since you already have access to what you need to maintain your committed schedules.

Option B: Work longer hours! This may involve some time-and-a-half or even double-time wages, but still may be the least expensive option when you weigh all of your costs vs. what it will cost if you don’t get back on schedule. Premium time is a very good solution for any short-term crisis, but extremely costly and ineffective for overcoming a lack of skilled manpower for any long or extended duration.

By using flex-time options you can increase the number of work hours on that jobsite with far less overtime and also provide that “good life” for your employees. With overlapping four 10–hour days or working two crews on three 13–hour shifts, you can also mix part-timers and moonlighters with your workforce. You can easily see why having available part-timers and moonlighters in your skills arsenal will help eliminate overtime expenses and in many instances also eliminate any need for Plan D.

Option C: You can subcontract a portion of your work to a competitor. I hope, you can get this work completed for a fair price. Even if it costs you more than you have in your budget you might still find it to be your least costly option.

Obstacle 2: Your crews are getting the job done but your labor costs are exceeding the budget.

Assuming that your labor estimate is correct you need to first identify the problem:

  • Is your foreman the right man for that task?
  • Is it the right size crew?
  • Do you set daily goals and keep score?
  • Do you reward those who do better?
  • Are they working a full eight–hour day?
  • Do they have the proper tools and equipment?
  • Is the material handling being done efficiently? (Gang boxes, bag and tag, forklifts, carts, etc.)
  • Are you doing only the work that was included in your job scope?
  • Was the work area ready for your crew?
  • Are the other trades, general contractor, inspectors and owner being cooperative?

Once you have identified the problems Consider Every Option (CEO) to overcome that labor overrun.

When you get down to that last question of jobsite cooperation, you may need to conduct a one-on-one partnering meeting with that individual and his or her immediate supervisor to resolve your differences. I’m sure you can weigh what it will cost vs. what it will save, and agree that you made a good jobsite decision.

Above all else, you want to be certain that all of your jobsite supervisors are constantly aware of the critical importance of “on time” decisions. When they consider every option and weigh all of their options to determine what their decisions might cost — or save — you may never face those Plan C or D situations.