OP-ED: Preparing for Resilience and Vitality During Periods of Economic Change
Daily Journal of Commerce
Pacific Northwest skylines have been transformed over the last decade as our industry has seen unparalleled growth. Anyone with a pick or shovel has had work. Businesses continue to express a strong degree of confidence in the local economy.
Maintaining that momentum is a whole other matter. While backlogs continue to be handsome, many companies are beginning to report softness. We also are seeing the standard symptoms of an overextended market – rising costs, friction on delayed and ill-performed work, and escalation of lien activity due to nonpayment issues. Preparing for resilience and even vitality during periods of economic transition does not happen by accident. Staying on top of your business is crucial to thriving in a changing environment.
Our teams are sharing key insights for the most pressing challenges and opportunities as we approach an evolving economic cycle. The most pressing issue, shared over and over by executives and by trade associations this past year, is how to keep your people. In this thriving environment, many innovative employers are developing succession and training strategies to keep their people (and lure others). Do you have a plan to transition your business? Do your employees have an “ownership attitude?” If the answer to either is “no,” or maybe worse yet, “I do not know,” consider some innovative ways to approach these issues. Check with your advisers and consultants – have they been helping businesses administer innovative programs to transition ownership and keep key personnel? You can enhance your culture and diversify your team by seeking out help, and exploring and implementing these programs. And if you don’t, it is likely that your key employees have been invited by other groups to consider their programs. Don’t be left behind. Keep your people.
Another pressing issue relates to building resilience. Are you plugging into the latest and greatest technology innovations to improve performance and increase efficiency? Everyone today carries a cellphone, one that has the capacity to memorialize activities, create reports, and track hours and efficiency. Most resilient groups are adopting a variety of modern technologies, including software and applications, and using them to create analytics. Are you using technology to track administrative activity and performance? If you do not want to do the research for what is the latest and greatest, consult with your local trade association. Networking with these trade association resources will save you time and very well could reveal opportunities you previously had not considered. But above all else, know how your teams are performing. If you do not have an existing, reliable system for tracking administration and performance, or snazzy reporting software, consider implementing one of these. Attempting to diagnose where margins are off in a good economy is preferable to diagnosing problems when urgency hits. Now is the time to iron out productivity issues and get back on the right track.
A further pressing issue relates to keeping (and growing) market share. Studies recently report a vexing question among employers considering their options in this changing environment: how do you diversify project offerings and control costs? Dedicating resources now into R&D likely will create operational efficiencies later that will make your company more efficient and competitive in a less thriving market. It may in the short term impact your bottom line, but an ongoing investment and reinvestment into capital and programs will keep your company on the forefront. Having this competitive advantage when margins are tight can be the difference between thriving and just
A final word about resilience – it can be fun and exciting to chase a shiny new object (project) that is outside your relationship circle and/or historic competency. And stretching your teams is a good exercise to test and challenge them, and to create growth. But there is no substitute for trust – working with partners and teams you know and respect. Dedicate time with not only your own employees, but also with your subcontractors, vendors, suppliers, consultants and others to learn more about their businesses, their values and their objectives. Work on forging that bulletproof relationship of trust now while things are going well. Having a friend when things are not going so well is invaluable.
Column first appeared in the Oregon Daily Journal of Commerce on March 13, 2020.