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BWB Consulting's 'BWBie's have moved into first place. If our records are accurate this is the first time the company have sponsored a team in MERIT so this is very commendable performance with no historical experience to draw on. KBR's 'Highwaymen' stay second, 'Not That Team' slip to third from first, Jacobs' 'CH2M is now Jacobs' slip one to fourth, Atkin's India's 'INSIGNIA' rise three to fifth and Atkins UK's 'Famous 5' stay sixth. But only 131 points separate these top six and the next twenty or so are not that far behind. Given that the average improvement in this round was 13% with a standard deviation of 6% there are still great changes in scores taking place.
Head office staffing is important for company capability. Have you enough marketing effort to secure bid invites? Have you enough measurement staff to recover all you're due from each contract? Have you enough quality, health and safety staff to run efficiently? Have you enough estimators to prepare accurate bids? Are your project managers' experiences well suited to the jobs they are managing? Is your own labour or subcontractor staffing optimum?
These are all construction management issues.
But it is not only the construction side of marketing, estimating, running and completing projects that determine a successful company. The financial side is equally important.
The ratio of turnover to company capital is an important indicator and at a level of 9 times the company capital the questions start to be raised as to whether your company have enough assets to support its work load. If your work load is growing you may need more capital to support the bigger company. More capital comes from retained profits or borrowing. High levels of turnover to capital indicates that the company capital is working hard, as it should be. If the ratio is much lower, it indicates that the company capital is not working hard and your Finance Director needs to consider how to respond. Grow the company's turnover, invest the capital outside the company or reduce the capital. Your Finance Director is just as key a contributor to company success as the construction directors. Don't forget the shareholders, they own the company and are looking for their share of profits.
Teams that have won jobs with low bids will see the effects ripple through their accounts and their score will not rise as before and might even fall. The market may tighten and bidding success may become more difficult. Teams will make inappropriate judgements especially as the leaders start to defend their position and the chasers get more aggressive. So we expect changes. MERIT 2018 is far from settled. There are four more rounds left, and it's still all to play for and plenty of time for the top places to shuffle.
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The Sponsors Award rankings are Atkins India, KBR, Sweco, Fluor, AECOM, Kier, Mott MacDonald, Arup, Atkins UK, Taylor Woodrow/Vinci, Wood and Capita
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Teams are rising in the rankings, teams are falling in the rankings, with the range of improvement large. By inspection the most spectacular rises amongst the top twenty in the rankings are: AECOMmanders up 39 places; MMB1 (Mott Mac Bentley) up 26 places; CurtLUSH (Curtins) up 24 places; Sweco Solihull up 19 places; Easy as ABV (Black and Veatch) up 17 places; and MOTTly Crew ( MOttMac) up 15. These movements reflect the range of improvement in the performance score which has a high of 26% achieved by KBR's Highwaymen. So good improvements are possible with the average of positive improvements being over 14%. The standard deviation of positive improvements of 7% indicates the great range of performances. Amongst the top six there are two newcomers, two improving their position and two slipping a little.
This analysis indicates great turbulence in the performances. This suggests that not all teams may not be as disciplined as they could be. There will be more significant changes to come in the remaining rounds.
The tutorial helps guide teams on their decisions and deals with the mechanics and the calculations and the relationships between the various factors. These must be understood. There are too many for each team member to deal them all in the time frame, but with tasks allocated amongst each team member they should have clearly defined responsibilities. The team members must be an expert in their area of responsibility. In other words, the team member is an individual specialist. The individual team member needs to understand all aspects of the input to the decisions for which they are responsible.
At the Board meeting, when taking decisions, the team members (ie Board Directors) need to present clear proposals with good sound reasoning, which the Board needs to synthesise. The CEO and Board should interrogate each Director to test that their recommendations are soundly based and have not been arrived at on a casual basis. In this way, the quality of each suggested decision is evaluated.
The eventual decisions may well be compromises. The test is the common, good not an individual Director's own position. This is teamwork in action. This all requires leadership. The question raised before is whether your leadership is strong enough to ensure that each team member is making a good contribution. Is teamwork happening? Is each decision interrogated and tested? Are the final decisions sound and well understood? No decision should be taken without the consequences and the risks being understood. These are the key lessons from the MERIT experience: disciplined decision making; teamwork and leadership, they all go together. Anything less will not succeed and will make the road ahead very bumpy.
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The Sponsor's Award for Sponsors with three or more teams entered has its own league table currently the rankings are Atkins India, KBR, Sweco UK, AECOM, Atkins UK, Fluor, Kier, Mott MacDonald, Arup, Taylor Woodrow/Vinci, Wood and Capita. With only 10% separating the top ten.
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Teams are still learning and teams are still developing their strategy. Don't take too long, some may get there quicker.
There are many decisions to be made each round. These decisions are all interdependent. Making good judgements for all, or for most of the decisions, is what will improve performance. Good decisions require balance, there is always a down side. Too much on overheads drives up costs, too little on overheads will have consequence on jobs to bid for, estimating capacity, cash recovery ability, general efficiency.
Balanced decision making takes judgement. Judgement requires data and information from each team member and teamwork to make the right compromises. This will take organisation. Each team member is a director and has an individual responsibility. Each director should come to the decision-making meeting, whether real or virtual, well prepared and informed. One director not doing their homework is letting the company down. What does the Company Chairman (ie Team leader) do with an underperforming fellow Director? What would happen in real life? Discipline will range from severe reprimands to sackings even or especially from within MERIT!
Once at the meeting each director should act for the common good not just their individual section, this is teamwork. Organisation, discipline, teamwork requires leadership. Make sure yours is strong enough.
One key metric to watch that it doesn’t drift is the turnover to capital ratio. If your capital isn't working hard enough, that is it should be supporting a higher turnover, then you should find better things to do with it. This advice should be coming from your Finance Director.
At this stage of MERIT 2018 we expect unrest with a great range in the percentage improvement. The ranking isn't stable, and there will be more upheaval to come, but getting the decisions balanced will improve ranking. Maybe the tortoises chasing the hares will demonstrate this.