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FMI Quarterly/September 2013/September 1, 2013

Communicate, Communicate, Communicate

Industry8_imageWriting about the importance of communication may initially appear to be trite. Would any effectiveleader/manager deny that “good communication” is imperative for a business to thrive? Yet, despite this awareness and the relentless attention communication receives, organizations still struggle to communicate effectively.

To confuse the situation further, as the level of technology advances, it seems like genuine communication has decreased. To some degree, communication is much like staying healthy; we all know we should exercise daily and eat right, but all too often we find ourselves delaying that trip to the gym or pulling through the drive-through for a quick breakfast or lunch.

At FMI we work with a wide range of construction companies across the country and from numerous trades. Our work relies on thousands of data points gathered from a wide range of construction industry employees. Through countless interviews and surveys, we gain insight into the perceptions and the realities of the organizations with which we work. Although each firm is unique and has its own individual challenges, it is not surprising that a large number of our clients identify themselves as ineffective communicators. Even more interesting, the further we remove ourselves from the leadership of the firm, the more profound the communication gap becomes. Said another way, the closer we get to the actual work being put in place, the stronger the need for improved communication effectiveness.

Among best-in-class firms, effective communication begins at the top through an intentional and continual commitment. The best organizations over-communicate; that is, leadership at all levels of the firm repeatedly share the same information in multiple ways and channels, to account for the variability in employees’ ability to receive information. By modeling this commitment to communication, the desired behaviors spread throughout the organization, becoming an integral part of the cultural fabric. Of course, this does not happen quickly. Arguably, it is a never-ending effort. Despite the challenges, companies that support and promote effective communication reap the benefits.

OBSTACLES TO GOOD COMMUNICATION

Admitting that effective communication is important is the easy part — most of you were there before reading this article. So why doesn’t effective communication happen? Why would we neglect something so important? Everyone’s answer is likely a little different. There are plenty of obstacles on the road to becoming better communicators, but the two biggest obstacles to effective communication that we see in our work with contractors are uncertainty and time. Acknowledging and understanding these obstacles is the first step toward developing a plan to overcome them.

Time
Working in the construction industry often requires us to be agile and flexible with our time and often it requires that we fit 16 hours of work into a 10-hour day. Strapped for time, and overloaded with work, it is easy to shift into a triage mode of communication; we begin to deliver only those messages regarding the short-term problems that have our immediate attention. In doing so, we are keeping the wolves away from the door, but often we are neglecting messages that benefit the long-term health of our businesses. The construction industry is demanding of our time, and there will never be a shortage of surprises to be dealt with, but this should not prevent us from communicating to our teams, proactively and intentionally. To do so, we need to develop our communication infrastructure to answer the crucial question of communication: Who needs to know what by when? To ensure we benefit most from our communications, viewing all project and company communications through this filter ensures we prioritize the highest-value messages and audiences and minimize the extent to which noise filters through to nonessential audiences.

Uncertainty
To say that we work in an industry full of uncertainty would be a gross understatement; the construction industry is driven by macroeconomic trends that are widely out of our control and market fluctuations that are difficult, if not impossible, to predict. This ever-changing climate keeps owners and leaders continuously questioning the next move and analyzing the last one in an effort to smooth the volatile ups and downs and drive success. At a project level, it is equally hard to map out the challenges that will likely arise: Working with other firms, weather and financing can all affect our level of certainty and change the dynamics of a project midstream. Come decision time, the natural uncertainty that accompanies operating in the construction industry can be paralyzing to an organization. Combine that with the stigma of weakness that comes with uncertainty, and it is easy to understand why leaders often are reluctant to communicate to their organizations with anything less than a well-thought-out and foolproof plan. However, in the absence of full clarity and a perfect plan, we should not neglect communicating to employees; they understand that we operate in a challenging industry and are our most empathetic audience. To communicate purposefully in a climate of ambiguity is a leader skill worth developing.

WHEN WE HAVE TO OVER-COMMUNICATE

Employees fundamentally understand that change is often a necessary part of an organization being successful. Despite that understanding, when change presents itself, there is a natural discomfort and resistance. As discussed, there are often things standing in the way of communication, but there are certain times when it would serve us well to over-communicate, whether through email, phone calls, memos, meetings, etc.

Volatility in our Market
The last five years have certainly reinforced the fact that volatility in our industry can be very unsettling to teams and can quickly erode morale. As margins tighten and bonuses shrink, concern about the future grows among employees. The same uncertainty discussed earlier that keeps us from supplying information is perversely increasing the demand for information. During volatile times, acknowledging the situation and outlining a plan for weathering the storm are invaluable to employees. Good communication can quickly dissolve rumors, support employee retention and serve to rally employees during difficult times. In many ways, it may be more important to communicate during these times than in smooth times. Employees want to know the plan and strategy for getting through the storm.

Changes in Leadership
The construction industry, more so than many, has a culture of camaraderie that relies on strong relationships between leaders and crews. Because of this dynamic, making changes to organizational structure or leadership can send shockwaves through an organization. Communicating the reasons for a change in leadership and setting the stage for a new leader can ease the natural discomfort felt by employees.

All too often, when there is a change in leadership, firms are guilty of sending out mass email notifications or, even worse, allowing the news to spread by word of mouth. Best-in-class firms take a much more thorough approach that will vary, depending on the level of leadership affected and the number of employees impacted. At a very minimum, a short meeting with those employees directly affected by the change should occur prior to the change, and, when appropriate, the shifting or outgoing leader should be involved. In this setting, it is much easier to frame a consistent message and put to ease initial concerns from the group. Those initial stakeholders also become the couriers of the message to the rest of the firm and ideally advocate for the new leader and endorse the decision.

Changes to the Compensation Plan
One of the most sacred things to employees is their compensation. Of all the changes that an employee may encounter, a change in a paycheck can easily be the most discomforting. Rarely do we see a shift in the fundamental compensation plan, but it is not uncommon for adjustments to be made to things such as incentive compensation plans, vehicle allowances or other employee benefits. As managers, we often see these benefits as secondary to an employee’s income, but the reality is people begin to see these secondary perks as real compensation and often adjust their lifestyles accordingly.

When compensation is affected, it is imperative that we speak openly and honestly about the strategic reasons driving the decision. While employees may not be pleased about the change by any means, they are much more likely to be empathetic about the decision when it is not a surprise. In the case of a change in incentive compensation, modeling the expected impact to the employee is a must. In reality, changes to an incentive compensation plan most often are intended to reward employees more justly; understanding the plan and the new drivers of compensation often leaves our top performers more satisfied than before. However, without thorough communication of the changes, the initial confusion and uncertainty may result in unrest that could have been avoided.

Sometimes the communication failure occurs when leaders/managers assume that common knowledge is, in fact, common knowledge. Consider the 2013 changes in paychecks resulting from the expired payroll tax cut, the increase in the Social Security Wage Base and the increased taxable Medicare wages for high earners. When payroll checks were suddenly different from last pay period, did you assume that all employees read the paper or watched the nightly news and knew what was going on? Before the paycheck change, hopefully you over-communicated the reasons for the changes. If not, you likely had some confused and concerned employees.

CONCLUSION

All of us understand the importance of communication, but the best contractors understand the constant and consistent effort that has to be put toward effectively communicating. Strong communication requires short-term effort that delivers long-term benefits. But like our original analogy, without those “daily trips to the gym,” we will never reach our peak performance as contractors. As long as we keep the fundamental communication question in mind, “Who needs to know what by when?” our internal communications are more likely to get the job done.


David B. Madison is a consultant with FMI Corporation. He can be reached at 919.785.9213 or via email at dmadison@fminet.com.

 

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