When John Gemmi of Gemmi Construction, in Doylestown, Pa., started sharing each project's financial information with his four lead carpenters and helping them to understand their contribution to the bottom line, the leads began to actively participate in controlling costs and decreasing slippage.
At the weekly production meeting, Gemmi reviews actual versus budgeted reports for each phase of ongoing projects. “Sharing numbers is crucial in making everyone feel they are part of the team and can work together toward a common goal,” he says.
Previously, Gemmi included the budget in the job binder, and the leads were aware of the company's markup. “But they just saw one number; they did not know the cost breakdown,” he explains.
The communication has paid off — after a year of regularly discussing project budgets with his leads, Gemmi Construction's profit on individual jobs has jumped from 3% to 8%.
Gemmi says that at the weekly meeting all four lead carpenters also learn from hearing about one another's specific challenges on their particular project. The estimator attends the meeting as well, which gives the leads an opportunity to discuss any estimating issues. “If we are historically budgeting too low in a certain category, we make adjustments to our estimating program,” Gemmi says.
He charges leads with sharing any relevant information from these meetings with their crews. For example, if the lead realizes that the budget provides four days for a floor installation, he might ask the crew to work together to meet that goal. Gemmi says he hopes to create a greater incentive to track budgets by creating a bonus program.