is frequently blamed for job fade later in the project, but may
be predictable and preventable if monitored.
While this may appear to be a KPI only for GCs, subcontractors can measure the amount of time between when a GC
wins work and contacts the subcontractor or buys out the
related work. The greater the time span, the louder the signal that there may be schedule issues manifesting that could
affect the subcontractor.
Companies can put forward-looking indicators into place to
increase the level of quality in completed jobs. Highly technical projects often have increased engineer involvement, a set
number of owner inspections, building infrastructure monitoring updates, formalized architect sign-offs/inspections,
and other levels of monitoring.
Jobs with quality surprises often miss inspections and appropriate documentation. Managers can set the expectation
for tracking key indicators early in the project and insist on
A common approach to monitoring quality control is to
conduct an independent review of all jobs that present significant risk to the company. An internal senior committee
often performs these at agreed-upon milestones to look at
what levels of review are occurring, determine where additional quality control reviews may be conducted, and ensure
that any additional quality control measures are carried out.
Sometimes companies assume that the materials they use
are consistent from job to job and there is little risk of overpurchasing. However, the economic downturn revealed
buildups in both unique and common inventory far in excess
of future job needs. When unneeded inventory builds up,
precious cash is taken out of circulation. Also, bonding
credit is rarely extended to inventory.
A simple series of leading indicators can verify that periodic
inventories are occurring. This helps compare monthly purchasing activity to inventory on hand, identifying instances of
purchasing inventoried stock. A KPI may be a simple exception report that compares monthly purchases of materials
with unchanged primary location inventory of the same items.
With this information, management can investigate why
inventoried items are being purchased and improve practices.
Using inventoried materials instead of double purchasing
can increase margins by 100% on items that may not be
used again, which can greatly improve cash flow.
While a low experience modification rate (EMR) or high
number of days without lost work demonstrates a safe past,
a predictive KPI might be the number of safety activities
currently implemented that includes the number of safety
meetings, communications, notifications, or awards that
recognize someone doing something safe. Other examples
may include team-wide “near miss” meetings or self-audits
of OSHA preparedness.
When you hear of a company with an accident or fatality,
how often do you hear them say that they had an exemplary
record? A great safety record is obviously a good thing, but
is not necessarily a predictor of future success.
HOW TO SELECT THE RIGHT KPIS
FOR YOUR COMPANY
All GCs and subcontractors should recognize the need to
develop their own KPIs, but knowing which ones to select
can be difficult and take significant time.
Start by understanding what makes your company distinctly
different or better than its competition. We often celebrate
success as the result of great input and attribute mistakes to
bad input. However, that is not always the case, and there is
often more to be learned from our successes and mistakes.
We recommend that management teams follow two distinct
Critically Examine Your Successes
Create a list of your most successful projects. After a well-deserved pat on the back, identify why these projects were
successful. What was different? Was there more estimator/
PM collaboration than normal? Was project growth higher
than expected (though still manageable)? Was there a fast
buyout? Was the schedule compressed? Did the subcontractor work faster than anticipated? Were there more subcontractor bidders than expected?
One exercise to try is the Five Whys. Start by asking, “Why
did this project go well?” Then ask, “Why?” four more times
for each successive answer you give. The goal is to arrive at
answers that had not been recognized before and be able to
leverage them for other projects.