By any measure, these are some tough times in the construction industry. Having had the opportunity to deal with people around the country, I can tell you that we are all taking similar measures to weather the economic crunch.
There are companies going out of business or changing market segments. There are companies that have reduced the hours of hourly administrative and technical personnel and/or had reductions in their staff levels. Companies have shed internal departments and some have reduced the salaried staff levels. Some are reducing the work weeks of the salaried staff to further cut costs.
All of these reductions are being done to cut costs, and hopefully without losing the knowledge and skills necessary for long term success. But, what is the skill set necessary for the long term success of a contracting organization? I think it just may be in some philosophy set out years ago by the late Peter Kiewit.
He said, with a bit of paraphrasing “Bid work at the right price, build work at the lowest possible cost and take care of your assets”. It is not a bad philosophy to follow. I think it lead him to having one of the largest construction companies in the world.
It takes competent estimators and management to bid work at the right price. The knowledge of costs is important to the success of a contracting organization. The same holds true for knowing the market conditions or competition. Building work at the lowest possible cost requires having competent people on the job site. It involves dealing with firms for materials and subcontracts that can be counted on to deliver. Take care of your assets is just that. People are assets, equipment, whether a scraper or a computer, are assets. Your reputation on how you operate your business is an asset.
Firms that are taking steps to cut costs should heed the Peter Kiewit philosophy. They just may see themselves succeeding beyond expectations as they hang in there and recover from these difficult times.
