The famous line, “You can’t improve what you don’t measure” applies to pretty much everything, from business to personal development, to relationships, health, and even sports.
If you’re a sports fan, for example, you keep a close eye on the performance of your team. How much did they score during the last game? Were there any injuries? What’s their current ranking in the league? You can usually answer these questions by looking at sporting data — scores, player stats, etc.
In construction, performance measurement is directly related to success. But what you measure — and how you measure it — is critical to determining what “success” looks like and whether or not you’re on track to get there. In this post, we’ll explore the ways to measure construction performance and how you can optimize the process in your projects.
Understanding Performance in Construction
So, what does it mean to perform well in construction?
Generally speaking, high performance in construction manifests in the successful execution of projects. No matter what your role is in a project or firm, you’ll know that you’re successful if the project was completed on time, within budget, and if it meets the agreed-upon standards.
It’s a tall order, and there are many important considerations, which is one of the reasons why measuring performance in construction can be difficult.
There is often a lack of standards and benchmarks that we can measure against, so we don’t always know what success looks like. And despite the fact that we have a lot of data at our fingertips, the vast majority of that information (96% according to FMI) goes unused.
So, how do we address this?
At Autodesk, we firmly believe that there’s a real opportunity to address poor performance, and doing that starts at the point where it matters the most: the project level.
A Shift in Mindset for Performance
When we measure performance and success, we typically use key performance indicators (KPIs) that relate to the outcome we want to achieve.
For example, individuals who want to lose weight will use the numbers on the scale to track their performance. So, someone who wants to lose 10 pounds will know that they’re on track based on the weight they’ve lost.
Going back to the sports example, a KPI that teams often use is the game score. The numbers on the board indicate whether or not they’re winning the game.
There is a lot of merit in tracking these outcome-centric KPIs like numbers on a scale or scoreboard. They tell a clear story as to how close you are to reaching your goals. But these metrics are also flawed. KPIs like these are referred to as lagging indicators — they are a measurement of output and you can’t do anything about these metrics because they already happened.
One way to improve performance is to shift from just measuring lagging indicators to leading indicators.
Unlike lagging measures, leading indicators are predictive measurements, and they often involve tracking actions within your control.
In the weight loss example, a leading indicator could be the number of steps that someone took or how many calories they consumed. Someone who’s on a weight loss journey won’t be able to control the fluctuations of the scale (lagging indicator) but they can certainly control how much they eat and move (leading indicators).
Even better, these leading indicators can be measured in real time, thanks to movement trackers (like smartwatches) and calorie counting apps.
We can also see this principle in the realm of sports. In games, players need to score more points than their opponents. While the athletes don’t necessarily control the final score, one thing they do have control over is their actions and moves throughout the game.
England’s rugby team serves as a great example here. The England head coach, Eddie Jones, introduced a simple but effective leading indicator to improve England’s defense.
Rather than just looking at the score, he started to focus on how quickly players could get back on their feet after a tackle in the game. To monitor player effectiveness, they are fitted with a GPS tag and the team gets real-time data in training and matches on how quickly the players are getting up off the floor. The players get feedback on how they are performing and understand the contribution they make to the team.
England’s rugby team understands that when it comes to understanding their performance, the scoreboard is the last place they should look.
The exact same mindset can be applied to the construction industry.
Leading vs. Lagging in Construction: The Metrics That Matter in Your Performance
How do we move our focus from lagging to leading indicators in construction?
To understand this, it’s worth looking at how most of us measure performance today.
We did some research at Autodesk and we discovered that the five value drivers for construction are:
- Winning Business
- Schedule or Program
- Health, Safety & Environment
These are the five areas that our customers care most about when winning and delivering projects. And under each value driver are desired outcomes that construction companies need to deliver upon.
For example, under “Winning Business” there are outcomes like increased bid efficiency and increased percentage of successful projects. Under the value of “Health and Safety” are outcomes like reduced insurance premiums and lower incident frequency rates.
You’ll notice that these metrics are all lagging indicators. With outcomes like “win” or “delivered to budget” you’ll only know if you’ve met these KPIs after the fact. This is an area in which many construction professionals can improve.
By focusing on leading indicators versus lagging measures, you’ll be in a better position to increase your performance.
A Model to Improve Project Performance
So how do you apply the “leading vs lagging” mindset in construction?
One approach is to use an influence map, which allows you to connect the things you directly influence to the things you want to achieve.
Here’s how to implement it.
Step 1 – Know your desired outcome.
You start by identifying your desired outcome — i.e., the objective that you want to achieve. As one example, let’s say you want to reduce defects at handover.
Step 2 – Identify the downstream benefits.
From there, you should determine the downstream benefits, which are the positive benefits that you’ll get if you achieve your desired outcome.
In the case of reducing defects at handover, successfully hitting this KPI leads to outcomes like satisfied clients, repeat business, and winning more contracts. Reducing defects also results in lower costs and higher profits.
Step 3 – Figure out your KPIs.
Next, identify the KPIs that will tell you whether or not you’ve achieved those benefits. Mapping these out allows you to connect real business metrics back to the initiative that you and your team are focused on.
Step 4 – Move upstream.
The next step is to go upstream and look at the factors that contribute to a successful outcome. These upstream influencers are usually the actions that teams can control.
Going back to our handover example, take a look at what would reduce defects in the first place. These could include:
- Ensuring defects don’t occur through good design
- Executing good quality management processes
- Increasing the number of inspections carried out over milestones throughout a project
Step 5 – Determine the right behavioral measures.
The final step is to identify the behavioral measures that indicate that the above actions have been taken. How do you know if a task has been completed? Capturing this data allows you to understand what’s being done.
Let’s say you decide to focus on increasing the number of inspections at certain project milestones. This is a metric that’s proven to decrease defects, and best of all, it’s completely within the team’s control.
So, rather than just tracking the number of defects, project stakeholders could put more focus on whether or not the team conducted checks before a slab pour, before void closures, and before final handover to ensure errors are identified before they cause issues and delays later in the project.
There is significant evidence that the more proactive checking that can be carried out, the less likelihood there is of a defect occurring. This means that by focusing on a leading measure like the number of checks conducted, you can reduce the number of defects at handover, and ultimately experience better outcomes.
Using Technology to Capture and Track Data
When it comes to measuring and tracking KPIs, technology is an essential tool to drive noticeable change, especially when you’re moving upstream. It’s exciting and encouraging to see many construction firms embrace new technologies and advance their digital maturity. Still, there exists some wariness in using technology to track KPIs, especially at an individual level.
To overcome this hurdle, teams should create learning cultures where data is used to educate and drive continuous improvement. Ultimately, this will help people understand how and why their contributions help the business as a whole.
Tracking your leading indicators requires real-time data capture at scale. Going back to the example above, if you’re monitoring the number of inspections conducted, you need to have a platform that keeps these tasks in check.
With the right data, you can start to compare the number of issues being raised from checklists compared to ad-hoc issues. You can measure the number of checklists being completed vs. planned.
You can also monitor the number of new users using the tool and measure whether the key features are being used reflecting that correct processes are being adhered to. This allows teams to fully understand that they are doing an effective job.
Overall, the proper tools give you visibility on all the right metrics, so you can measure your performance and improve.
Find Opportunities to Drive Your Performance
We’re all on a journey to improve performance in construction. If you’re on a project or are responsible for a particular business function, such as quality or safety, I encourage you to take the time to identify the most important outcomes from our diagram above. Once you’ve identified what it is that you want to achieve, think of the lagging indicators that define that you’ve been successful in achieving that outcome and then identify those leading indicators that you and your team can take action on.
To learn more about how to create a framework to measure construction performance, watch my recent session at Autodesk University.