Remodeling: CSI

Laid out on the table under the intense rays of the fluorescent lights, the victim was a $100,000 addition that had exceeded your estimate by 10% and missed your scheduled finish date by six weeks. Precisely what went wrong was unclear, but the evidence suggested a multitude of culprits.

In terms of labor, in-house hours were nearly a third more than you expected. The demolition subcontractor went $900 over budget, and roof work was off by $4,000, thanks mostly to the rotten rafters that needed replacing unexpectedly.

Among administrative glitches, permits and inspections exceeded their estimate by $350, including fees for the expeditor you had to hire when the city lost your application.

In terms of products, three windows were incorrectly installed. The bathroom sink was bigger than its base. These and other glitches set the schedule back several weeks while replacements were on order. On the plus side, trim was $200 under budget.

Less measurably, there were the clients. They were edgy with your crew and gave your company a “C” on Angie's List. Their biggest specific complaint? They felt they were always the last to know of changes to their schedule or costs.

OK, so it's not CSI: Crime Scene Investigation, the hit TV show populated by glamorous forensic scientists and bizarre plot twists. But what a successful remodeling “autopsy” lacks in fingerprints, fetishes, and dismembered body parts, it more than makes up for in realistic scenarios, positive outcomes, and practical, constructive, democratically arrived-at strategies for doing a better job next time. Consider the scenario above, which was cobbled together using actual job autopsies (variously called close-outs, postmortems, and debriefings) performed by remodelers interviewed for this and other articles. Had it been your debriefing, it might trigger the following changes to your systems and procedures:

Expensive demo: When it's fairly minor, consider delegating it to a versatile staff carpenter instead of a subcontractor.

Delayed permits: File applications as early as possible, and put weekly reminders in your calendar to call the permit office for a status check.

In-house labor overages: Institute a line-by-line analysis of weekly work-in-progress reports. If overages persist, increase your labor markup, or add more hours to your estimates.

Roofing overage: Hold a “trade day” for subcontractors to evaluate the job and provide fixed-price proposals. Make oversights and inaccuracies their problem, not yours.

Window problems: Stop using that window installer.

Sink problem: Triple-check product specs before placing orders.

Trim under budget: Continue to seek ways to use materials left over from other projects.

Client disgruntlement: Discuss communication at your pre-construction meeting, and meet or talk with clients at an appointed time each week. You'll be able to take their pulse as their project unfolds — and take corrective measures that prevent minor grievances from festering and becoming serious sources of resentment. (See “Pulse Points,” right.)

More than anything, post-project debriefings underscore the importance of pre-project planning. Give everyone the time and information they need to develop accurate estimates, and always set the clients' expectations realistically.

In the medical arena, autopsies can confirm connections between clinical symptoms and diseased organs. They can improve understanding of illness, confirm or disprove the quality of care, and increase medical knowledge overall, leading to better diagnoses and treatment in the future.

In the less clinical vernacular of remodeling, an autopsy or debriefing can show what went wrong and what went right in a particular project, and what you might do differently (or more of) in the future. What you meant to spend, what you did spend, and what caused the slippage. Who did well, and whose performance fell short. What the client liked and didn't like. Where your company excelled, where it faltered, and what opportunities it might have missed.

“There's always something you can learn, even if it's the good stuff,” says Walt Mathieson, an accounting and technology consultant. “What are the things you do better than anyone else, the things you can make more money doing more of?” Keep debriefings positive, he says. “It's not a fault-finding mission. It's an educational mission for improving processes going forward.”

Mathieson has written a white paper (downloadable at www.mathiesonconsulting.com) that outlines a number of guidelines for the debriefing process. He cautions, however, that “there's not a checklist” for every remodeler to follow formulaically. “There are many potential areas of exploration and discovery,” he says, “but if you're looking for a one-page list of boxes to check off, you might miss some real nuggets. Sometimes you don't know what the problem is until you come across it.”

“Everybody thinks, ‘Let's catch the problems,'” says Paul Bauscher of Bauscher Construction & Remodeling, in Loveland, Ohio. “We want to catch the successes as well.” His company debriefs for 45 minutes to an hour after every project, from small bathroom jobs to whole-house remodels.

Key to the meetings' success, Bauscher says, is that they are at once formal, in that they stick to a typed agenda and review detailed job cost analysis reports, yet “we're very open. Everyone has the freedom to say we could have handled this better,” ideally by offering solutions instead of pointing fingers. Finally, Bauscher's team completes a “project score card” that ranks nine categories on a scale of 1 to 10. “I have to believe that if your field crews like certain projects, they're going to be in a better mood and be more productive,” Bauscher says.

Premier Builders, in Wilmington, Del., debriefs after all projects as well as during them, in weekly operations and production meetings. “Our belief is that there's something to learn from every job,” says Candace Roseo, vice president. Scheduling benchmarks are integral to Premier Builders' interim-debriefing process. Gantt charts compare target and actual dates for both the design and construction phases of a project. After a job closes —typically around 30 days out —Roseo and team complete a checklist that covers close-out procedures and reviews finances. The checklist also allows for subjectivity, asking for “the best thing we did,” “the worst thing we did,” four more best and worst points, and the strong and weak points of every individual involved, including office staff and suppliers.

“We debrief on the fly, too,” Roseo says. She cites a recent situation where cabinet changes were discussed, documented in meeting minutes, but not indicated on the actual plans. Twenty cabinet faces (for a dentist's office) arrived with holes drilled on the wrong sides. As a direct consequence, the company now requires any design changes to be noted on the actual plans, next to the signatures of the project manager and owner.

Other improvements inspired by debriefings at Premier Builders:

• Product specs are triple-checked before orders are placed.
• Each job gets an on-site storage trailer to keep materials from going missing, being damaged, or getting in the way during construction.
• The project manager and field supervisor do two “internal job walks” and punch lists before final walk-through with the client.

Without a body, there's nothing to autopsy. Without finances, there's no quantifiable way to compare the accuracy of your estimating to the realities of production. Even time-and-materials contractors should debrief, Mathieson says. He recommends being open book with direct expenses, but says to be sure your staff understands the bigger financial picture. “It's incumbent that the lead carpenter knows that the owner isn't just pocketing the gross profit on the job,” he says.

At Greg Smith Co., in Falls Church, Va., owner Greg Smith takes time during and after projects to compare the actual costs of labor, materials, and subcontractors to their estimated costs. When there's a variance, it almost always involves in-house labor, as his trade contractors work for a fixed price. Smith still sees value in having in-house crews, so he is adjusting his markups and hours to offset their occasional inefficiencies.

At Harrell Remodeling, in Mountain View, Calif., an extensive project oversight process culminates in a line-by-line analysis of the estimated and actual costs of every aspect of the job. Questions asked might include: What was the construction revenue and gross margin? The design revenue and gross margin? Was enough budgeted for administration? What did we learn from this project? (See “Lessons Learned,” right.)

At Advanced Kitchens and Advanced Contractors, in Marietta, Ga., all 11 employees help to “dissect” active projects at weekly production meetings, says Ed Cholfin, president. Using work-in-progress reports, they can compare original and current contract amounts, change orders, job-completion percentages, and more. The company also reviews timelines, expected delays, and strategies for minimizing their impact.

This process concludes with a job autopsy shortly after receiving all project numbers and client surveys (performed by Guild Quality, www.guildquality.com). “The agenda is short and sweet,” Cholfin says, but numbers are reviewed at the granular level, down to how much was estimated for tile, how much it actually cost, and what caused the variance. In the year since beginning these meetings, gross profits have climbed 10%, he says.

Pulse Points

Remodeling debriefings shouldn't be revelations as much as confirmations of the data you've collected throughout the project — and corroboration that you've corrected course as needed. That applies to job costs and scheduling as well as to the emotions of everyone involved.

Harrell Remodeling is systematic about checking in with clients while jobs are under way. During the design process, biweekly invoices are mailed with a four-question survey “to kind of get their temperature,” says Lisa Sten, senior designer and assistant design manager. Later, during construction, the project manager completes a “job task summary” that summarizes job progress and the client's specific areas of satisfaction or dissatisfaction.

At Bauscher Construction & Remodeling, president Paul Bauscher calls clients weekly to learn “how things are going, is there anything I can do, is the job being cleaned up as it should be?” He “drills down” to pick up on the unspoken nuances that can make or break the client's satisfaction, especially when they feel so close to their project manager that they're reluctant to complain to him or her directly.

On larger projects, Bauscher's company also sends clients a one-page “interim project satisfaction survey” covering cleanliness, communication, professionalism, and workmanship, as well as soliciting their open-ended comments and concerns. (See Good Form, page 62, for a closer look at this survey.)

Good Bones

Successful job debriefings don't have to be formal, but they do work best when they follow a written agenda. Use the following guidelines as a starting point, then tailor your format to your company's culture and circumstances.

Who should attend: All major participants in a project, including the estimator/salesperson, project manager, accountant, and owner or other “decision-maker or action-causer who has enough pull to actually get things done,” says consultant Walt Mathieson. The decision-maker should go to all debriefings to provide a broad perspective that can distinguish between isolated incidents and pervasive trends.

When: Shortly after the project is completed, after all costs are known and client surveys are in.

Where: In a conference room or other place with few interruptions and distractions.

How long: Generally 30 minutes to an hour, but set aside at least a few hours for your first debriefing. “The first time through, no one is going to think of all the questions, let alone know all the answers,” says Mathieson says.

Then what? Close the circle. Using what you learned in the debriefing, create an action plan for improving projects going forward.

Lessons Learned

Brilliant insights and ideas can quickly vaporize if they aren't documented, disseminated, and acted upon. Harrell Remodeling has a few ways of locking in the knowledge gleaned when employees talk about projects.

After debriefing (“jobcost”) meetings, the entire company is e-mailed a brief summary of each project reviewed. Besides outlining basic financials and identifying key staff, the summaries list a few “learned things” based on that project's particulars. These might range from pans or plaudits for specific vendors and trade contractors to concrete suggestions for avoiding re-dos — for instance, do a grout sample to ensure that colors match, clarify any confusion on drawings, build in more administrative time for plumbing when several parts of the home are affected.

There's also the Harrell Remodeling “knowledge base”: a folder in the company-wide e-mail system where employees log learned things in general. The knowledge base has six categories: green building, sales/design, administration, production, code/drawing issues, and all departments.