Building More: Accuracy or Efficiency

I am sure by now you have heard the saying that you can have it good, cheap, and fast. The problem is you can only choose two of the three. Good and cheap won’t be fast, cheap and fast won’t be good, and good and fast won’t be cheap. It is a phenomenal analysis of what we as contractors aim to provide, and the limitations of what we can deliver. When it comes to field operations, this gets professionalized a bit and is explained as production vs. quality.

This article takes it a step further. I want to take it away from the field and apply some of the same principles to the office, specifically the processes and policies we create.

Before I implement any process, policy, or program, I think about one thing first: Will this produce the desired outcome? If yes, I then ask myself the next two questions: Will it produce an accurate result, and will it be efficient in providing that result? The ratio we are shooting for is not static. It is a moving target that takes thought, planning, and understanding.

The first question about providing the desired outcome should be common sense. The reality is that many companies implement processes, policies, and programs that do not provide the desired outcome. They have too many loopholes, manipulation points, or they are just plain old bad.

The second set of questions is where we want to focus today: accuracy and efficiency. Why do I ask these questions simultaneously? Because different tasks require different answers to these questions. Even deeper, each process, policy, or program requires a balance of them.

The ultimate goal is to create systems that are high on both sides of the equation. A highly accurate process that is equally high on efficiency is how businesses grow exponentially. If either one of the sides suffers, it drags the business down in more ways than you can imagine. Here are a few examples of what I look for when blending the ratios of accuracy and efficiency.

Accounting accuracy needs to be on the higher end. We all know that high efficiency is not a friend of accurate accounting, but we cannot exclude efficiency from the equation. If we spend half our time accounting, we only spend half our time on producing, growing, and all other business operations that are required to pay the accountants.

What about something like tracking consumables? Screws, nails, etc.? You would be surprised how many companies put in policies that are highly inefficient to track something so small. You won’t be surprised that many companies have no policy to track it. I would guess that the majority of construction companies have no accuracy or efficiency when it comes to this. Create a policy that is efficiency-focused. You can sacrifice some accuracy to create a policy and process to track expenses that may only be 3% of an entire project. I will ask this: If you half-ass tracked something in 5 minutes a week that could save you 1% on your early expenses, would you?

Processes, policies, and programs drive our operations. From daily reports, payables, receivables, and estimate tracking, we have systems. How we design these systems is up to us. What is more important to you in each individual process? I have found that inefficient processes tend to have less accuracy. This is especially true when the people in charge of execution do not care, understand, or realize the implications of accuracy variance.

Instead of choosing between accuracy and efficiency, blend them. It will not take long to realize that efficient is accurate, and accurate can be obtained through efficiency. The ratio you choose is up to you.

Building More: Accuracy or Efficiency

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