Two Critical Things Every Business Must Do

The business of construction is both challenging and exciting, with days full of risks and rewards.

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Jack Stack calls it “The Great Game of Business.” In this book and his follow-up book called “A Stake in the Outcome,” he describes how to create a culture of ownership.  

Quote: People who run companies know that there are really only two critical factors in business. One is to make money and the other is to generate cash. Jack Stack. Book: The Great Game of Business by Jack Stack.

At the very foundational level, a business must make a profit and generate cash. While there is a lot more that a business could and should do, it is only with the foundation of strong cash flow growth that allows these other things to happen.  

Like Maslow’s Hierarchy of Needs, we can’t focus on self-actualization if we don’t have our primary needs of security, shelter, and food met.  

As a society grows, it is easy for people to lose connection with the basics required at the bottom of the pyramid. It can worsen as people take them for granted or become dismissive of them. A building will fall when the foundation is weakened. We can see this happening in today’s society in many ways.  

Here, Simon Sinek talks about current generations wanting to impact the top of the mountain without knowing the whole mountain:

Ensure that this does not happen in your business by connecting profitability and cash flow to actions and outcomes at each level of the organization. This is exceptionally challenging but also exceptionally rewarding if done correctly.  

Do you understand the importance of the Contractor Scoreboard?




Setting Standards and the Feedback Loop
Set the standard. Train to the standard. Certify to the standard. Plan the work to the standard. Execute to the plan and the standard. Check against the standard. Make prioritized improvements to the standard, training, planning, and execution.
Appearance and Experience of Management Control
As your career develops and you grow into roles of greater responsibility, one of the biggest challenges is what Jennifer Garvey Berger calls “The paradox of the appearance of increasing control and the experience of decreasing control.”
Changes and Cash Flow Improvement
Construction is a cash-intensive business and change orders are often one of the root causes of poor cash flow. A 30-day improvement to change management workflow can generate over $400K in additional cash flow for a $50M contractor.