FMI | Construction & Engineering Industry Insight

  • Five Ways to Get Your Compensation Systems in Order

    Posted on September 2, 2016 by FMI Corporation

    Is it easy in your market to recruit and retain top estimators, project managers and superintendents? Have you been surprised by the recent turnover of a high-potential employee? If you’re dealing with these and other talent issues, it’s time to get your compensation and performance management systems in line with the new normal of higher competition for talent, worries about retention and experienced managers aging-out of the workforce. Here are five ways to get your compensation systems in order: 1) Establish a compensation philosophy and share it with your company. A compensation philosophy is the mix of base salary and bonus that a company offers versus what is available for a given title in the labor market. Many companies in the construction industry have never formally articulated a compensation philosophy, but even if they have not stated one, there is a “phantom” compensation philosophy that exists based on their historic practices. The trouble comes when actual practices do not match up with the company’s self-image, or when the company leadership believes they are following one philosophy, while the rank and file believes something much different. If you do not benchmark this and really know (rather than guess) what your compensation package looks like relative to your competitors’ packages, then your compensation philosophy will always be a guess and subject to drift.

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    This post was posted in Consulting and was tagged with construction blog, construction compensation, construction salary, compensation in construction, salary construction

  • Four Fundamentals of Highly Effective Boards

    Posted on July 20, 2016 by FMI Corporation

    When done well, assembling a peak-performing board pays off in dividends for engineering and construction firms. Companies throughout the engineering and construction industry are seeking innovative solutions to the myriad challenges they face in today’s competitive business environment. Leaders are confronted with talent pressures, changing technologies, increased competition, demographic shifts, economic uncertainty and various other seemingly random obstacles on a daily basis. To find solutions, leaders are considering a long list of options, including re-examining the way they recruit, onboard, train and develop their people; hiring talent with unique skill sets; re-examining their business models; forming new partnerships; joining peer groups; and finding ways to cut costs and increase productivity. Through it all, one powerful asset is often overlooked or not fully utilized: the board of directors (even more specifically, the use of independent outside directors as members of those boards).

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    This post was posted in Consulting, Center for Strategic Leadership and was tagged with construction industry blog, NRCI 2014 Q2, engineering blog, construction blog, peak performing board, board of directors construction, construction firm blog

  • Industry Icons: How to Blend Three Core Management Styles into a Successful Leadership Team

    Posted on July 14, 2016 by FMI Corporation

    3cb6a31By Bob Uhler, The Uhler Group As the leader of an enterprise, your principal job is to assemble a team of synergetic executives who blend in a way that most effectively meets your organization’s short- and long-term goals. Not everyone should play the same role, for example, since assignments demand different leadership skills and responsibilities. Asked to reveal his organizational management philosophy, ex-New York Yankee manager Casey Stengel once said, “Keep the five guys who hate you away from the five guys who have not made up their minds.” This reply—while probably tongue-in-cheek—would probably still hold true today, particularly within larger organizations where the executive management players fall into three different categories. They are:

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    This post was posted in Consulting, Center for Strategic Leadership, Talent Development and was tagged with NRCI 2014 Q2, construction management, construction leader, construction leadership, leadership style, management style

  • 8 Ways Construction Firms Can Plan More Strategically For The Future

    Posted on July 13, 2016 by FMI Corporation

    For many firms, financial regulators, and homeowners, the most recent housing bubble and subsequent Great Recession blindsided their confidence, cutting short an era of unprecedented growth and good fortune. But some people were prepared. Some even sounded the alarm. How was it they saw the downturn coming? Knowing what is going to happen is quite different than preparing for an eventuality. In a new era underpinned by sustained economic uncertainty, business leaders are learning to insure themselves against unpredictable futures. Keeping an eye on movements and events—both within the industry and beyond its bounds—can lessen the surprise factor. Put simply, leaders need to be a few steps ahead of the game. By looking at a range of possible outcomes and scenarios, and by developing a strategic response for each, companies can reduce the shock of industry shifts and minimize crisis-mode decision-making.

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    This post was posted in Consulting, Center for Strategic Leadership and was tagged with construction industry blog, construction industry, NRCI 2014 Q2, strategy construction

  • Building Your Digital DNA: Five Key Steps

    Posted on June 9, 2016 by FMI Corporation

    Today’s new technologies allow industry professionals to link up and share project knowledge across integrated teams, 24/7, across the globe. When the Internet was introduced in the early 1990s, no one really knew that complete industries, cultures, governments and businesses would be transformed by this innovative platform for sharing information, learning and transacting. Nevertheless, what started out as a novelty of sorts has since grown into a 3 billion-strong web that’s accessible via the desktop computer to the 5-ounce mobile phone — and everything in between. Technological advancements are also reshaping the engineering and construction (E&C) space, where the evolution of design and construction functions has taken a leap forward with the transition from electronic drafting to high-resolution digital modeling (also known as Building Information Modeling or “BIM”). Thanks to ubiquitous digital connectivity, cloud computing, and big data, the E&C industry is undergoing a historic melding of engineering, architecture, fabrication, construction, and other related disciplines, undoing 100 years of expansive industry fragmentation.

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    This post was posted in Consulting, Research, Technology and was tagged with construction industry blog, construction industry, NRCI 2014 Q2, engineering industry, engineering blog, construction technology

  • Your Hotline: Building a Better Reporting Mechanism

    Posted on June 2, 2016 by FMI Corporation

    A strong corporate culture and open lines of communication go a long way when it comes to developing and running an ethical organization. Ethics programs have been praised for the effect they have had on the engineering and construction (E&C) industry, shoring up the reputation of firms, and bringing stricter oversight and regulation of work practices. But all ethics programs are not equal. In a firm dedicated to promoting lasting cultural change through the ethics program, reporting rates will be higher, and incidences of ethical violations will be lower. Conversely, it is possible to have in place the facade of an ethics program, and yet harbor a dishonest and retaliatory culture that discourages ethics reports. In this case, your last line of defense is your anonymous hotline. The performance of your ethics program depends on how engaged your employees are with the company in general and ethics in particular. This in turn depends on how your company seeks out and responds to reports of ethical misconduct. Here’s a list of five ethics program best practices, and the reporting mechanisms that underpin them.

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    This post was posted in Consulting and was tagged with construction industry blog, ethics construction industry, construction industry, business ethics, construction ethics, engineering ethics, construction firm ethics, company ethics programs

  • Three Key Ingredients of an Accurate Cost-to-Complete Estimate

    Posted on May 20, 2016 by FMI Corporation

    Trade contractors live and die by their ability to estimate, manage and project labor costs. In most construction firms, few things are as misunderstood or as poorly managed as accurate projections of costs to complete (CTC)—particularly when it comes to understanding how to estimate the remaining labor costs on a labor-intensive project. Unfortunately, project managers don’t always understand what goes into a solid CTC estimate. On bid day, for example, estimators are expected to accurately determine how much labor cost will be required to complete an entire project with less than adequate plans and specs, absolutely no history of completed work on the current project, and a limited amount of time. Like any good recipe, failure to include one or more of the important ingredients will produce a less than desirable result. Since labor is the big wild card in the cost-to-complete estimate, the following ingredients will focus on the labor portion of this process.

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    This post was posted in Uncategorized and was tagged with construction industry, NRCI 2014 Q2, cost-to-complete estimate, cost-to-complete, project labor costs, estimate costs

  • 10 Ways to Program Customer Loyalty into Your Work

    Posted on April 21, 2016 by FMI Corporation

    Understanding client behavior – what makes them tick, how they make decisions, how they buy work, and so forth – has become a critical element in today’s business dealings, particularly in the AEC industry, where people and relationships play a key role. The following recommendations describe crucial, practical steps toward building a solid foundation for a successful customer loyalty program. This information was gathered from interviews with both industry executives as well as senior FMI associates.
    1. Find the right match. Building a long-term relationship starts with identifying the right match. If a client’s culture and values match with your company’s culture and values, the chances for establishing a mutually beneficial and long-lasting relationship increase immediately. As part of this reconnaissance phase, it is also important to consider whether a client’s work matches with your company’s core competencies and whether they complement your working style.

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    This post was posted in Consulting, Center for Strategic Leadership and was tagged with construction industry, Peer Groups, NRCI 2014 Q2, construction blog, customer loyalty, relationships construction

  • Six Things You Need to Know About Public-Private Partnerships

    Posted on April 11, 2016 by FMI Corporation

    Through in-depth interviews with more than a dozen public-private partnership (P3) industry leaders, as well as FMI experts, we uncovered several tactical strengths that help contractors get started with P3s, from both a business and operational standpoint. Here are six things you need to know about P3s: 1) Build your expertise through strategic joint ventures. Pick your partners carefully. Most interviewees described P3s as a completely “different animal.” What you learned in previous construction jobs does not necessarily apply to P3s. Therefore, it is important to start cautiously, educate yourself as you move along, and work with experienced project partners – ideally, trusted partners with whom you’ve had successful prior experience. When selecting the right partners, the lowest bid is not always the best choice when you are hoping to form a long-term relationship in which both your futures are invested.

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    This post was posted in Consulting, Center for Strategic Leadership and was tagged with construction industry, Design and Construction Industry, P3s construction, construction blog, construction public-private partnerships

  • Six Global Trade Strategies for Today’s Engineering and Construction Firms

    Posted on April 4, 2016 by FMI Corporation

    A relatively new concept for many U.S. design and construction firms, today’s global business environment has grown significantly over the last 10 years, and along the way, has pushed companies of all sizes to begin thinking globally. A seemingly simple proposition, the idea of doing business beyond domestic borders is actually quite complicated. Today’s global economy and political outlook remain uncertain and possibly even disconcerting. According to McKinsey’s latest economic outlook, executives across the globe are concerned about China and how its growth might affect the world economy. Many of today’s business challenges and opportunities facing corporate leaders are global in nature and therefore demand leadership with a truly global mindset. To ensure that your firm is positioned to manage these challenges while also taking advantage of the opportunities associated with global trade, here are six strategies that all companies can benefit from—regardless of company size or type:

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    This post was posted in Consulting, Center for Strategic Leadership and was tagged with construction industry blog, construction, NRCI 2014 Q2, engineering blog, global trade construction, global trade

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