A large part of success in construction requires that your teams are inspired by what they’re doing. It involves confidence in your company’s ability to get a project done –learning from your mistakes while you keep moving forward. It’s important to surround yourself with good people. Team members should give each other “real talk,” being honest with other team members.
A big part of construction management involves risk. And a big part of managing risk on a job begins at the very beginning with understanding, managing and dealing properly with contracts.
Technology exists to simplify the contracts process. It can make construction professionals more efficient and give them a better understanding of the risk a company faces during a project. When project managers are better at understanding and achieving contractual obligations, companies can work smarter, be more profitable, face fewer unknowns, have less liability, benefit from lower transaction costs, improve pricing, and realize more profits.
Even after all the researching, bidding and negotiating, construction is risky. Things you don’t plan for will still happen. The consequences – precisely who pays for that risk – are bound up and set forth in the contract. The contract contains the roots of risk.
Managing risk is knowing what you are responsible for contractually if it goes wrong on the job. Even if you can’t negotiate the terms, you should still be aware of the responsibilities you are facing. You may be able to make up for that risk (build in padding) somewhere else before you sign the contract.
It is to your advantage to have real data, real market analysis before you execute a contract. Technology can give you insight and the ability to understand what you’re facing as far as consequences. It can give you more contract intelligence so you can make common sense decisions.
Collaboration is important, both internally and externally, among the people who understand contract provisions and those who don’t. It is the bridge between the back office and the field. It can also remove external barriers.
Whether you end up with a contract that is considered good or bad, the project managers and operators have to comply with the terms of that contract. They need to understand it to comply with it, and often the contract can be stealthy document to some. The weight of all the little details on a job can be a crushing weight to PMs. Often there is not much give and take during construction, and yet PMs are charged with making the right decisions to be in compliance with the contract.
No technology in existence is perfect. Don’t allow that reality to weaken your team’s commitment and performance. The best way to deal with that is to be growth-minded and willing to improve. More and more companies are learning to face adversity, realign and continue to move forward. The industry as a whole is getting stronger at doing that.
Tune in to episode 149 of Bridging the Gap Podcast where host Todd Weyandt and Josh Levy, founder of the contract tech solution “Document Crunch,” talk about construction risk management, mitigation and more.