Key Metrics: Correlations, Causations, and Necessity Part 1

Corey Adams

I have a ton of conversations with other construction business owners. Most of the time, we just talk shop, network, or laugh at things we have seen over the years. I enjoy having conversations that are not keyboard-related. Inevitably, some of them ask about growing their business. Now, my wife says I ramble sometimes, and that is true, but my answer to those who ask dives into a few metrics that I believe are necessary to understand.

We can call these correlations, causations, or just a necessity, but they are absolute. The first one is going to be hard to hear for some. In fact, I have had people tell me I am flat-out wrong, but they usually push back out of some form of denial more than a basis of fact.

The larger a company gets, the less quality that is produced. If that ruffles your feathers, go ahead and count to ten before you proceed.

I would consider this more of a causation than anything. When we start out, we are on every job. We take full responsibility and pride in every task we complete. We have one project going at a time and no distractions. We are committed to making the job perfect so we can use it to find more jobs. 

As we grow, we have employees, multiple projects, multiple distractions, and more overhead that hangs over us. Bottom line is we have to produce more and quicker. We slowly begin to take ourselves out of every task on a project and become the big-picture business owner we always dreamed about. The problem is that unless you have like-minded employees, they will never produce the quality you could on your own. This happens in the first couple of crews that are hired. 

If you choose to enterprise and run four or more crews, quality is one of the first sacrifices that is made. Now, a lot of you can talk a big game about how you can run 100 employees and have the highest quality, but you are missing the point. An enterprise company can deliver quality, but it will never match the skilled tradesmen working alone. I won’t go as far as to call it garbage, but you have to agree that the larger the organization, the quality delivered is lower. 

Please understand that I am not running this down at all; I am just making those small business owners out there aware of it. We all want to dream that we can achieve unlimited growth without any sacrifices, but we cannot. The good thing with larger companies and projects is that they are mostly based off of prints, inspections, specs, etc. This helps the owner control the final product delivered by their employees.

I do want to make sure we understand a very clear distinction in quality. There are varying degrees of quality. For the sake of this article and the ones to come, I will break it down into three levels of quality: exceptional, acceptable, and you get what you pay for (YGWYPF).

A small business where the owner and main tradesmen are involved heavily with every project can provide exceptional quality. As we grow, our goal is to keep our quality delivered as close to exceptional as possible, but it will continue to creep towards an average of acceptable the larger we become. The longer we can keep it above acceptable, the better off our company is. 

If a company hovers around acceptable, they will profit, but the desire to grow more will drive them into that other category. I don’t even like to talk about YGWYPF. It feels dirty to me. 

If you want to grow your company, this is a metric that you need to be mindful of. Understand that not every job will be perfect; quality doesn’t have to be exceptional all the time, but quality control will be a new line item that needs to be addressed. 

I get it; small companies can have bad quality, too, but that is not the point. The point of this article is to explain the metric of quality. If you want to provide exceptional quality on every project without sacrifice, then you will need to remain small. It is a fact. Next month, we will hit on another metric that needs to be known. 

If you still need convincing that the larger an organization becomes, the lower the delivered quality is, do yourself a favor and go stand in line at your local DMV.