Michael Watts of Bel Air Construction (Big50 1998) in Jarrettsville, Md., has a theory: What is measured gets improved. To that end, he uses a form to track the progress of his four project managers. He asks each of the managers to estimate the projected completion percentage on current projects. Watts and his production coordinator, Christine Beck, then use the information to create a weekly report on each project manager's progress.
The first section of the report lists the estimated percent complete on current jobs. The spreadsheet formula uses that percentage to track how much of the sales price managers have spent and the estimated gross profit up to that point. “We have all their numbers at a glance. If they do it right the first time and schedule it well, their numbers are high. If they don't do it right and they have to redo it, the report is a reflection of what is happening,” Watts says.
The second section of the form covers similar statistics on the completed jobs by this project manager in the past year and provides a history of his or her performance. As invoices from vendors come in, Beck updates the numbers to reflect any additional costs attributed to each job.
The report keeps Watts out of the field and allows his project managers to control their own performance. “Your people are managing their activities rather than being managed. They are motivated by the numbers they see every week,” Watts says. Beck says if the project manager sells a change order, she updates the “sold for” amount and the job budget to reflect the change.
Watts has been using the system for almost 10 years and goes over the numbers at a weekly meeting. “We have some people producing 10 times what was acceptable 10 years ago,” he says. Watts says the reports revealed that the percent profit of one of his managers was decreasing. It turned out the manager was starting his own business. “We knew something was wrong. He could have gone on for years if we did not have this measurement system,” Watts says.