In a previous blog posting, I wrote about the value of employee evaluations. Simply, an employee evaluation measures employee performance. It is an opportunity to sit with good employees to review what is working and conversely, what is not working. To do this, a written job description is mandatory because without written position expectations, how do you hold an employee accountable for their job performance? By creating and reviewing a written position description, both employee and employer can review and agree on employee expectations.

Let me review the process for creating documented company position descriptions.

It starts with identifying all the company functions within your construction company. I have included a sample list of the positions in any construction company:

• Owner/President

• General Manager

• Production Manager

• Office Administrator

• Office Assistant

• Director of Sales

• Salesperson

• Director of Marketing

• Marketing Manager

• Architect/Designer

• Estimator

• Expediter

• Lead Carpenter

• Carpenter

• Apprentice/Helper

If you are a one- or 2-person company, your name is next to most if not all of the company functions above. As your company grows, you begin to delegate these company functions to key employees. 

In programs that I do, I like to ask company owners how many company hats they are “wearing” regarding day-to-day company functions. In most cases, owners are responsible for 6, 7, or even eight company functions because that is what is required. Long-term, an owner’s responsibility is to guide the company's growth. It is their job to maintain company health and growth. Here is a simple question—if owners are busy overseeing multiple company functions regarding day-to-day operations, how much time is left to “work on the business” and guide company growth. The answer is usually…extraordinarily little!

I have included a sample organizational chart illustration below:

What you will see is that I have taken all the company functions above and created an illustrated organizational chart to represent each company activity. In every construction company, you have the “3 legs” of sales, production, and company administration. Added company functions are listed under each division heading. The next step in this process is to “populate” the illustrated organizational chart with the names of the owner or employees that are responsible for each company activity.

I have included a sample” populated” organizational chart below:

This is where an owner can begin to see all the company activities that they are responsible for. It may help illustrate why they work 50 or 60 hours a week. Most owners are doing too much! This is the first step in identifying what tasks can be delegated to good employees or new hires. Regarding those decisions, there is a simple “check-in” that I do with construction company owners to help them make these needed delegation decisions.

My check-in is this—if a company is generating one million dollars ($1,000,000) in annual revenue, and we divide that by a standard 2000 work year (40 hours a week times 50 weeks), I want the owner to see that they are generating company revenue at $500 an hour. With this comparison, I ask them why they are doing any company function that they could pay someone else $25, $35, or even $40 to complete? An owner’s time is valuable—more valuable than most realize!

Let’s review the next step in this process. I ask owners to imagine their company operations 6-months from now. In an ideal world, with the appropriate plans and preparation, what have they delegated or outsourced regarding existing responsibilities? In this 6-month “ideal” company organizational chart, we now begin to identify what the owner should be doing based on their unique owner skillset. 

As we identify specific administrative or production activities that can be transferred, we note that change on the future organizational chart. We are now creating a company “roadmap” for the next six months. And like any building plan, these plans are subject to change. This first step is getting in on paper!

If owners are delegating specific responsibilities, I will ask them for the various tasks that go along with that responsibility. In a short conversation, I can begin to create a list of tasks just by speaking with someone. I have also asked owners when there is any confusion to create a daily log and over a 7-to-10-day period, just log where their time is going daily. This takes discipline, but the results can be striking! Often, owners are spending 20 to 25 hours a week on company functions that can and should be delegated to qualified people!

Delegation is simply putting your expectations into writing. You do this every time you do a building project. The plans and specifications define the scope of work and identify the desired outcome. How can we delegate company tasks and hold employees accountable if we don’t put our expectations into writing?

Your 6-month future organizational chart begins to let an owner see what they would like to delegate. In defining those tasks, an owner can also prioritize that task delegation. This is a key element of the company roadmap. You can create a plan to hand off company tasks in order and timeline that allows an owner to manage that process better.

There is another benefit to the 6-month organizational chart. If you have employees without written position descriptions, ask them to document what they do daily. We can begin to document employee responsibilities by following the same process that an owner did to document their company functions. And just like any building plan, these tasks can change. I want employees to know that their position descriptions are a living document that we will continue to update on an ongoing basis. 

The preparation of documented position descriptions is a collaboration between owners and staff. Your staff is in an excellent position to define and document their positions. This helps if the position ever becomes vacant and needs to be refilled. It also helps with staff training. Your input (as the owner) is necessary to ensure that the system and procedures are what you want and are acceptable for your company.

“One reward that comes from this collaborative approach with employees is that if an employee helps write their position description, they own it!”

One reward that comes from this collaborative approach with employees is that if an employee helps write their position description, they own it! They helped create it, and that owner-employee collaboration builds a stronger company culture. Employees know that they have a voice because of this collaborative process.

There is another reward here. When an owner begins removing themselves from day-to-day operations, that company is building transferable value. A potential buyer does not want to buy a company whose profitability is based on that owner’s participation. A company has value when profitability remains strong due to documented company processes and systems. The role of a successful construction company owner is to build a company that does not depend on them regarding day-to-day functions and activities. In implementing this, they are building a “saleable” asset!

The overall goal here is to bring all this information together in the form of individual employee manuals for each role in the company. Every company position manual will include:

• The company organizational chart

• Individual job descriptions

• Documented company operating procedures

This may sound like a lot of work, but I can assist you with this. I have written a business manual with 21 construction-specific job descriptions that will give you a big shortcut to doing this within your own company:

How to Manage a Successful Remodeling Company: 21 Construction Specific Job Descriptions

It will provide you with templates that you can edit and modify for your own company descriptions. You may need to customize these descriptions for your own use, but you won’t be starting from scratch! I’m happy to share that manual with you. 

To request this customized business manual, send me an e-mail at david@remodelforce.com. I will forward that to you.

If you are interested in knowing more, please click on the following link: https://www.contractorexitstrategy.com/take-your-exit-readiness-assessment