A construction company does not have a management team. It is its management team. This is an important distinction to ponder. Contractors provide construction expertise to our clients for a fee. This “expertise” is the “know-how” derived from the years of collective “experience” shared by the management team the contractor has assembled into a company. 

I have often said, and still contend, that designating construction professionals as “contractors” has been the most misleading branding in American industry and has done great damage to the construction industry’s business model. Construction professionals are “consultants”, not “contractors”. The only asset they have to sell is the collective expertise of the management team they have assembled. They do not HAVE a management team. They ARE a management team.

The Pyramid Organization

Historically most construction company founders and owners were taught to manage from the top down in a traditional military command fashion. The resulting pyramid-shaped organizational chart is still the most common type of organizational structure in the construction industry. The typical chain of command goes from the top, the President/CEO down through Departmental Vice-Presidents to Division Managers, then through Project Managers to Superintendents and finally to Foremen on the job site. Each level commands the level below all the way down to the trades people who do the work.

Teams Not Troops

No one uses the term, “employees” anymore. Human resource professionals have adopted “team members” or “associates” when referring to what we old timers used to call employees. This is meant to convey a more convivial feeling for the employer/employee relationship. Team members today are considered equal members of the team (even to the boss who, incidentally, is no longer the “boss” but is now the “team leader”). Team leaders lead the team from the front. They don’t boss team members around from the top. 

The traditional founders of construction companies, even if they are benevolent by nature, find this new arrangement a little disconcerting. “How do you get anything done?” “What happened to discipline?” “What about productivity?” “What if they don’t want to do what I want them to do?” “Who’s running this show?” 

In the military tradition “motivation” was taken care of in the forced “discipline” of boot camp, where “patriotism” and “loyalty” were the only positive motivators. Further cajoling the “troops” was considered unnecessary and counterproductive.

Assets Not Employees

The management team is a construction company’s primary asset. Construction companies are selling consulting services provided by a team of experts. The team’s ability to complete a complex construction project is all a construction company has to sell. I suggest, therefore, that for the modern contractor the “team” concept is essential to a construction company’s success. 

The recent skilled labor shortage that the construction industry experienced during the pandemic was caused by an entire generation of “baby boomers” (the most mature members of the work force) deciding it was time to retire since many were forced to stay home anyway. Construction’s top management immediately felt the squeeze and began to steal skilled labor from their competitors. No one was safe and recruiting, training, and retaining your construction “team” became the order of the day. This recent crisis was the impetus for all of us to take a fresh look at how we valued our team.

Leaders Not Bosses

This fresh look engendered new respect for the teams we have assembled and encouraged us to build and maintain our “team of experts” with care rather than the “tough guy” approach many of us were used to. Let’s listen to and learn from the leadership lesson of the experts:

  • “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams
  • “Management is doing things right; leadership is doing the right things.” – Peter F. Drucker
  • “Alone we can do so little, together we can do so much.” – Helen Keller
  • “Tend to the people, and they will tend to the business.” –John Maxwell 
  • “Leadership is the capacity to translate vision into reality.” –Warren Bennis 
  • “The first responsibility of a leader is to define reality. The last is to say thank you. In between, the leader is a servant.” – Max Dupree
  • “In looking for people to hire, look for 3 qualities – integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you.” – Warren Buffett

A New Belief

The most effective way to build value in our companies is to stop being bosses and become leaders. This blog is intended as food for thought. Next week we’ll look at how leaders build and motivate expert teams.

For more information on leadership, read more at: LEADERSHIP

For a broader view on team building, read more here: TEAM

To receive the free weekly Construction Messages, ask questions, or make comments contact me at research@simplarfoundation.org.  

Please circulate this widely. It will benefit your constituents. This research is continuous and includes new information weekly as it becomes available. Thank you.