Ten Minute MBA
The iconic comedian George Carlin brought down the house with a routine he called, “The 10 Minute University”. He proposed that colleges should limit course content to only what students remembered five years after they had graduated. It would save time and money, he contended, and the residual knowledge base would be the same.
The primary financial strength or weakness of a construction organization depends on its ability to generate accurate financial data and to utilize it in the management of the complicated interdependent relationships between marketing, production and accounting. Research suggests that most managers understand their delivery method better than the multi-layered management side of their overall business.
During decades of analysis of the skills required to manage these complicated relationships my research group uncovered the individual functional management processes that the “best in class” construction organizations utilized. We then organized the management processes into a simple “yes or no” checklist that could be used as a do-it-yourself diagnostic tool – a sort of MBA in construction management. Utilizing our simple but comprehensive “yes or no” checklist, senior managers would be able to see if they were utilizing the management procedures used by the most profitable construction companies in their category.
The Self-Analysis Tool
Each question on the “yes or no” checklist identifies a management procedure that our research discovered was being followed by best-in-class construction companies. When self-administering the checklist, you will easily identify management skills that your company already utilizes and discover procedures that you have not yet adopted.
- The self-analysis checklist is divided into two main classifications:
- Financial Management
- Business Management
- Financial Managementis divided into 4 functional areas:
- Accounting Proficiency
- Financial Reporting
- Cash Flow Management
- Debt Management
When answering our simple “yes or no” questions you’ll be taking an inventory your company’s management procedures.
Do you have a positive working relationship with your CFO? Do you trust and utilize the information contained in his or her financial reporting? Is actionable information supplied in a timely manner? Do you track cash flow/working capitalcarefully? Are positive banking relationships nurtured?
- Business Managementis divided into 13 functional areas:
- Organizational Structure
- Record Keeping
- Receivables Management
- Overhead Management
- Change Order Management
- Subcontractor Management
- Project Selection
- Management Style/Personnel
- Multi-year Business Plan
- Succession Planning
- Risk Management
- Dispute Resolution
Here’s a sample of the business management questions you’ll be asking yourself:
Do you have a functional organization chart? Is field reporting timely? Are you invoicing according to the contract? Do you expect to be paid according to the contract? Do you pursue payment aggressively? Is the checklist procedure clearly understood and agreed upon? Do you have an overhead budget? Are change orders managed consistently? Are you utilizing “low-bid” subs exclusively? What about risk management? Is professional communication with all personnel the norm? Do you have a formal, written business plan? What about a succession plan for each key employee?
In Search of Excellence
As it turns out, the best-practice business management skills of construction are not rocket science. In fact, when you self-administer the complete Self-Analysis Program found here on the Simplar site, the commonsense nature of the program will become evident immediately.
Ten Minute MBA
You don’t need to spend 2 years in a graduate business school to learn the management skills it takes to run a successful construction concern. You only need to look around at the best companies in your field and see what they do. That’s what we did for you and our notes are summarized in the free Construction Company Self-Analysis Program. Use our checklist as your 10-minute MBA. You’ll be amazed at what you’ll discover about your company and how apparent your path to excellence will be. (Download the free program at: