7. To What Extent Should Managers Delegate? Quite a few construction firms like to pour responsibilities on managers without any sense of what constitutes a full plate. In addition, managers are guilty of hoarding tasks because it makes them feel relevant.

a. There are companies that have managers that handle 15-20 projects without any supporting personnel

b. Some companies will provide limited support to managers in the hopes that the work will get done

c. The smart companies will utilize a 6 or 8 to 1 ratio for Subordinates to managers so that managers are not overwhelmed. In addition, these companies will encourage further delegation so that Managers can see the big picture

Organizational Tools That Create Coherence

There are other organizational tools, after they are created, that enhance organizational structures while limiting the number of personnel that are needed to operate a successful construction firm. The decisions that should be made below by companies help tremendously in maintaining a compact organizational structure.

1. Choose the type of organizational structure that you want

a. Hierarchal
b. Matrix
c. Organic

2. Create efficient report formats

a. Make information transparent, which means clear on its face
b. Establish proper distribution routes so that the right people receive information
c. Provide interpretive reports and business activity reports to Managers that explains the transaction data

“Decide strategic revenue targets first by choosing an option. This is most important criteria for organizational development.”

3. Streamline communications

a. Focus on hard data communications, not verbal
b. Limit the number of meetings through prior information distributions
c. For those meetings held, distribute minutes

4. Define positions through job descriptions

a. Outline performance task summaries by function and business area
b. Set goals through key results areas (KRA)
c. Conduct performance reviews on a semi-annual basis

5. Compensation systems

a. Create an Incentive Plan to drive performance by assigning scores to KRA achievements
b. Establish Base Pay System according to construction industry standards & compensation philosophies
c. Establish policy of pay decreases for non-performance as well as pay increase for superior performance

6. Publish & distribute company manuals

a. Orientation/Hiring Manual
b. Company Policies and Procedures
c. Project Management Manual

While construction firms wait out this economic calamity, it may make sense to start to think about what your company should achieve in 2010 and 2011.

Terry Kramer is president of Kramer Consulting in Scottsdale, Ariz.