Four Big Reasons for Effective Leadership in Construction

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WAYNE RIVERS: Hi, everyone. This is Wayne Rivers at Performance Construction Advisors where We Build Better Contractors.

This week I want to talk about four big reasons for effective leadership in the construction industry. This is written by Brent Gleeson, who's the founder of EXCELER8, a consulting firm. He is a bestselling author and a former Navy SEAL.

So he writes about construction. "The US construction industry is at its most transformative decade in its history." Wow. "Fueled by federal infrastructure packages and all this other stuff. At the same time, advances in technology and artificial intelligence are reshaping how projects are designed, managed, and delivered, while the rapid acceleration of clean energy initiatives is fueling unprecedented demand for new infrastructure and retrofitting. Another powerful force is data center development," as we all know. "Yet beneath all this headline growth lies a paradox. While opportunity abounds, growth alone does not guarantee long-term success. The companies that thrive will not be those with the largest projects in the pipeline, but those that scale," I'm sorry, "those that invest in leadership, talent development, and organizational resilience to sustain performance at scale. In short, success will not hinge on cranes and concrete, it will hinge on people."

How many times have you heard us say in these vlogs that construction is a people business? And Brent Gleeson certainly agrees with that, and we wholeheartedly agree.

Now, what about this is important to you? Well, are you not facing the same challenges that he writes about? Volume growing, complexity growing, the desire for environmental friendliness growing, all those things are real in construction, all the disruption threatened by AI, et cetera, et cetera. He writes that growth exposes cracks, but companies with robust leadership pipelines enjoy one and a half times the employee retention and 29% higher profitability.

So we talk about succession planning all the time. What Brent Gleeson emphasizes is it's not enough to have succession at the chief executive, CFO level, the senior project manager level, it's important to have leadership succession, I'm sorry, succession planning throughout your organization in every position at all times. So instead of defining yourself as a builder, let's say, or a site development company, you might start to think of yourself as a people development company because that's what's going to make the difference in the super successful contractors in the future versus those that may lag a little bit.

It's not checking a box. He says to embed leadership development and competency growth in all layers of the organization. Four tips from Brent Gleeson. Number one, safety, safety, safety. Kevin Albanese had the greatest quote on safety. He didn't even remember he said it, but it was so beautiful that I remember it like it was yesterday. He said, "Safety is all about courage and grace. The courage to call out unsafe behavior when you see it and the grace to accept that someone's doing that in your best interest." Safety is all about courage and grace, and I think that's the perfect way to look at it.

"When people embed better safety practices in the organization," Gleeson writes, "their incidents fall by 20 to 50%, their productivity improves 15 to 25%. They have," guess what, this won't shock you, "higher morale and they have better client trust because the client knows there's not going to be an issue on that job site on a particular day because of poor safety practices." If you're going to be in the people business, you've got to get your people safe from home work ... safe home from work every day.

Number two, reduced rework. Now for the trade partners out there, rework is a nightmare. Eliminating rework requires continuous feedback and improvement. So I went to see the Blue Angels this past weekend, and one of the things that's unique to the Blue Angels is they do a deep after-action report after every practice flight, after every real flight or show flight, and they are relentless in saying, "I was a foot from where I was supposed to be," or, "I was eight inches from where I was supposed to be," or, "I was late coming in on that." They are relentless. They are giving themselves virtually real-time feedback after every single flight, and they're relentless in finding flaws, difficulties, ways to improve, et cetera, et cetera. That's a great example. Now the military is a little different, I know, from the typical contractor, but it's a great, great practice. He said that if you have this constant feedback loop, you can reduce rework by 30 or 40%, which would be a tremendous profit boom.

Number three, build careers, not just jobs. This is scary. Nearly 40% of the skilled workforce will retire in the next 10 years. That is terrifying. Where are the replacements for those people going to come from? That is one of the huge challenges. So it's not just signing bonuses, it's not just employee referral programs, it's onboarding.

I remember telling the story about my son who went to work for a rather large regional contractor. Now I'm trying to remember, they were in the insulation business, and he went in for his first day in work, and there's nothing, there's nothing. And the guy that hired him was so busy that day, he said, "Just try to absorb as much as you can." That was the onboarding experience for a significant regional contractor. I couldn't believe it. I just thought it was awful. And so you've got to make the employment experience. We talk about the experience economy. You've got to make the employment experience sound enough to cause people to want to come back to work every day because they have choices, don't they? Okay. Onboarding, mentorship, all those things are important in retaining your people.

The fourth thing, invest in talent pipelines. Our most progressive contractors have full-time recruiter, multiple full-time recruiters. They are looking at HR and attracting talent as important enough to hire professionals to focus on it 40 hours a week. The folks that are still out there needing a project manager for the biggest job they ever ... those people are in a little bit of trouble. You've got to be looking at talent as a pipeline, something that you don't do twice a year or when someone retires. It's a constant pipeline. When you find talent, get it, get it, and find a place for them to help you get better. Do succession planning at all levels of the organization, and the human side of your business is going to be the decisive side of your business in the coming years.

Let me know what you think, [email protected], pros, cons, agree, disagree, we're ready for all of it.

This is Wayne Rivers at PCA where We Build Better Contractors.

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