The construction industry was one of the hardest hit during the pandemic. As states maintained differing regulations and requirements across the country, some regions allowed construction sites to resume work safely, while others remained completely shut down.
Today, as we near the end of the pandemic, the construction industry faces a materials shortage and supply chain crisis that will continue to delay the successful recovery of construction firms nationwide. While the past year threw the construction industry into a tailspin, some firms entered an adapt and evolve stage while others shifted to panic and survival mode. Those that were able to adapt and evolve had forward-thinking and innovative leadership taking charge. Let’s look at the biggest challenges construction firms faced and how to rebuild and prepare the construction industry for the future.
Resistant To Change.
Historically, the construction industry has been heavily resistant to change. This unspoken industry driven culture is something that the majority of construction firms struggle with at the leadership level. Change at every level often requires financial investment and this is a challenge as most construction firms operate on tighter margins than most other industries. Any sort of investment requiring significant liquidity and capital is often met with hesitation and apprehension.
As a result, construction firm Owners often want to see value and ROI immediately after making an initial investment in new leadership. This perspective can be shortsighted and will usually thwart the impact a new leader can have. When a new leader is appointed at a construction firm, success and results should be tied directly to KPIs and performance and a timeline should be established to set expectations. For example, what needs to be accomplished in the first 90 days or 180 days?
This is one of the driving forces that impedes a construction firm from adapting and evolving, and heavily contributes to the industry’s resistance to change. Many existing leaders within the construction industry are initial founders of the firm. As a result, these individuals often get tied down and distracted by the smaller day-to-day activities across job sites, operations, etc. This micromanagement inhibits Founders from stepping back to focus on the larger picture for strategic planning and growth. Founders Effect can also cause issues and problems even after a new leader is appointed, where an original Founder will continue to micromanage, challenge and intimidate a new leader. As a result, this new leader feels stifled, disengages and eventually is “managed out” by the Founder.
In some cases, the leadership strategy is driven by legacy – where a Founder will pass management and ownership of a construction firm to the next generation of family. This can cause problems in two ways. First, the change resistant nature of construction perpetuates as the next generation assumes leadership and operates under the guise of “It’s always been done this way.” Second, there are some cases where the next generation of family is not equipped or a good fit for the role. Honest conversations must be held and expectations must be set with future generations about stepping into a family business and positioned as “Is this what you want to do” instead of “One day you will be running the company.” When a construction business is passed down to a son or daughter and these difficult conversations have not been held – an ill-equipped or inexperienced successor can unintentionally destroy or dissolve a once thriving construction firm.
Let’s face it – most family-owned construction firms and businesses will not have these tougher conversations about succession or willingness to take over the business. Sometimes these successors do not have the people skills to successfully manage teams, but will falsely assume they do because they are in a position of power and authority.
If you are considering passing a family construction business down to the next generation, I would recommend a trial management run prior to handing the reins over. Test his/her/their people management and business management skills first by assigning them a smaller part, vertical or line of the business and watch how they manage, operate and drive results. Sometimes family successors are not a good fit for a company or role – and a backup succession plan will need to be carefully structured. When structuring this succession plan, an effective leader for a construction firm will need to have the following:
● The right balance of leadership skills
● Be a good fit for both the role and construction firm
● Have a high emotional intelligence (EQ)
● Emphasize and tie results more closely to data
These may be found within other key players at the firm who are better positioned and suited to succeed the Founder from a leadership perspective. Sometimes, the best leaders come from outside the organization, and that is when we work with construction firms to place the best fit leaders and candidates for a role. When considering building a succession plan for your construction firm, the best talent and leaders must be identified now in order to begin nurturing, planning, coaching and mapping a path to leadership.
In addition to the above, from our experience placing both mid-to-senior level talent and leaders within the construction industry, below are some critical competencies and leadership skills that we have seen drive performance, success and results.
7 Leadership Traits Needed To Successfully Lead In The Construction Industry.
- Leaders that are able to inspire and motivate their team
- Leaders with excellent people management skills who can delegate and leave the day-to-day tasks to other team members.
- Transformational leaders that can think and act strategically to take a construction firm and business to the next level
- Leaders who invest in their team and employees through recognition, training, etc.
- Leaders that value and encourage training at every level (safety, skills, technology, etc.)
- Leaders who are proactive instead of reactive (challenging the status quo and shifting change averse cultures to facilitate growth)
- Niche industry experts and specialized leaders
About The Author:
Jeff Raymond (firstname.lastname@example.org) President and Founder of Raymond Search Group (RaymondSearchGroup.com) is an industry leading recruiter specializing in Construction and Real Estate, Engineering, Architecture, HVACR/R, Building Automation Systems, MEPF, and Manufacturing. Jeff is known for delivering the top 5% of industry talent to his clients with an unrivaled efficiency and network. Clients and candidates alike rely on Jeff as a trusted advisor through his recruiting expertise, and industry insight.
Jeff earned his Bachelor of Science degree in Business Administration, Management and Operations from University of Massachusetts Lowell. He is experienced in the construction industry and is Procore certified in multiple areas. He is an active member of the Urban Land Institute, ASHRAE, the Institute of Refrigeration (IOR), and The OSHA Education Center Association.