Unexamined beliefs play a role in the management decision making process and deeply held beliefs go largely unexamined. That is to say, we aren’t even aware that we believe what we believe. The problem arises when these unexamined beliefs affect our decision making long after they are no longer true. They are the hidden reason we often make decisions that are not good for us. Here are some unexamined beliefs that can lead to self-destructive decisions in the management of a construction enterprise.
Unexamined Construction Beliefs
Top-line growth is the only answer to continued success in construction.
- Budgeting and strategic planning are academic exercises that have little practical application in the construction business.
- When low-bid leads to unprofitable jobs, it’s just the nature of the construction business. We’ll make it up in volume. Getting new work is always the immediate goal.
- Getting paid on a timely basis is not our right. We have to provide proof that we deserve to be paid and negotiated for it.
- In construction, if anything can go wrong, it will. Risk is the nature of the business. We can’t do anything about it.
I have heard these beliefs repeated too often over the years and have been told they are the facts of life so come to grips with them. The problem is they are not true.
New Beliefs
During research into best-in-class construction management practices we interviewed a CEO who was managing his construction company from an entirely new belief system. He said:
- We try to select customers who are good at what they do…
- We tell our customers it will be less cost to them when we finish on schedule with no hassle, then the lowest bidder will ever get them…
- We never let any outside influence impact our pricing…
- We would rather do less work than take cheap work…
Hard to believe this is a contractor talking. Contractors don’t – select customers who are good at what they do. What’s he talking about? Don’t customers select contractors who are good at what they do… – not the other way around?
Self-Esteem
When this “best-in-class” contractor says that his company tries to select customers who are good at what they do, he reveals both a new belief and a deep sense of company self-esteem that is too rare among contractors. It seems like unexamined beliefs and dampened self-esteem led many contractors to compete for work with marginal low bids and are then forced to salvage cash flow by cutting corners and winning disputes with the owner.
Some contractors box themselves into a corner when in order to get the next job, they signed contracts that placed potential financial losses onto their books, absorbing all of the job-related risk. The party that assumes all the risk is automatically on the weaker end of the exchange.
Enhanced Self-Esteem
This best-in-class contractor saw his company as an equal partner in the construction transaction and adopted a new belief that could be put like this: The dominant success factor in the construction industry is the quality of the relationship between the contractor and owner.
This belief led to this management decision: We try to select customers who are good at what they do. They make good business partners.
Good Customers
Contractors who believe that the quality of the relationship is paramount believe they have the right to evaluate owners and designers by asking questions like:
- Is this owner a timely payer?
- How often is this owner involved in litigation with contractors?
- Does this designer communicate and cooperate with contractors?
- Does this owner want a quality project rather than constantly cut corners?
- How many projects with this owner were successful for all stakeholders?
- Has this owner ever built a project of this type before?
- What do other contractors say about working with this owner?
- What is this owner’s experience with sureties?
Better Beliefs – Better Decisions
When you’re considering bidding on a new project do you believe that you should evaluate the quality of the owner?
- Do you routinely sign contracts that overwhelmingly favor the owner because you think you have to?
- Do you see your company as a best-in-class performer that deserves to be paid on time?
- Is it time to examine your beliefs to evaluate how well they are serving you?
