Project Team Accountability
Driving accountability to the Project Team for budget performance is a key objective in the quest for enhanced profitability on construction projects. After all, if the Project Team doesn’t “own” the estimate, they may lack commitment to meeting or exceeding the targeted costs. This situation is especially evident when projects turn sour and management starts to look for answers to why the project is underperforming from a profit standpoint. An easy out for the Project Team is to blame it on an unrealistic estimate, whether this is true or not.
Eliminating this scenario can be challenging in a typical construction company that has an Estimating Department which is separate from the Construction Department, and where the Project Team provides little to no input on estimates. While this structure benefits from the ability to develop highly specialized talent in each functional area, the lack of input from the Project Teams on estimates doesn’t facilitate driving Project Team accountability for budget performance.
Some companies simply choose to drive “top-down” accountability to the Project Team, but real buy-in from the Project Team will likely achieve the best results. The better solution is to bring in the Project Team during the estimating process to gather their input. However, doing this in a meaningful way, without pulling them off their current projects for an excessive amount of time, isn’t that easy, and having a Project Team on the bench to work with the estimating department during the bid process can be costly and inefficient.
At BlackVector, we suggest a two-pronged, data-driven approach. First, it is important to create a feedback loop in the organization such as that depicted in the diagram below. This is a data-driven feedback loop where actual productivities, cost data and KPI’S, from current or previous projects, are fed back to the estimators to use on current bids. Having Project Managers validate the productivity, cost data and metrics being used on current bids is a good practice to start building their buy-in before the job is won, and it shouldn’t take up an excessive amount of their time.
The second prong is to provide constant feedback to the Project Team on performance against the metrics used to create the estimate. This constant feedback during the construction phase is a data-driven approach which serves to hold the Project Team accountable for performance on the specific metrics which they validated during the creation of the estimate, and which were derived from other similar projects. This serves to create awareness in the Project Team of the importance of performance to plan by constantly providing feedback on how they are tracking.
The challenges to this data-driven approach include: 1) creating the right metrics; 2) having the ability to easily track all the relevant data and; 3) presenting the data in a meaningful way that everyone easily understands. Employing a system such as BlackVector helps solves this challenge by easily tracking project data and metrics from estimating through to project execution.