4 Rules for Running a Successful Construction Company

I picked up my issue of Family Business magazine, and what to my wondering eyes should appear but an article penned by Chad Goodfellow, CEO of Goodfellow Brothers—a large, West Coast heavy civil contractor and a former member of the Family Business Institute. While he specifically wrote to address family businesses, the rules Goodfellow outlines apply pretty darn well whether your construction company is a family business or not.

"It's an honor to be part of a family business, especially a multi-generation one," Goodfellow wrote. "However, when emotions and family dynamics bleed into operational objectives, it's easy to lose sight of that honor and the rare opportunities that come along with it."

He's right; being part of a "business family" at a successful construction firm is an honor. Most adults spend more of their waking hours at work with colleagues than with their own families, so it makes sense that contractors work hard to inspire feelings of commitment and family among the team.

Here are four rules for running a successful construction business, inspired by Goodfellow's article:

1. Put the needs of the construction business first

"One of the biggest sources of conflict for many family businesses ties to company growth and profit distributions," Goodfellow wrote. "Our philosophy at Goodfellow Brothers is to put the needs of the business first."

This philosophy makes complete sense, and there is data to support a business-first mentality. For example, researcher Russ Alan Prince studied family-owned companies to distinguish between "family-first" family businesses and those that, like Goodfellow Brothers, place the business first. He found that the business-first enterprises created, on average, $6 of net worth for every $1 of net worth the family-first firms generated.

If you think about your task as a leader to build projects and create opportunities for others, clearly this is a better pathway. If you build value in a business enterprise at a 6:1 ratio, you will create many more opportunities for others—even if they're not directly tied to the construction company.

2. Hone and widely share your company mission

"No matter your philosophy, the common denominator in successful family-owned businesses is a defined mission aligned for business success," Goodfellow wrote. This wisdom applies whether or not a contractor company is family-owned.

I know it sounds nebulous to carry on about a company's mission, but your mission is your North Star that allows everyone in the company, from the C-suite down to the newest laborer, to navigate in the correct direction and to align efforts with everyone else. How can your people hit a target they can't even see? A clear, compelling and concise mission statement is a must for any successful construction company.

3. Anticipate potential disagreements and keep an open line of communication to prevent them from growing into widespread conflict across your construction company

"A second challenge—or opportunity—in a family-owned business is often conflict resolution," Goodfellow wrote. "At some point in every business, there's going to be disagreement about company directions." I love how he sees the word "challenge" as a two-sided coin, with opportunity on the other side!

Group of construction company office workers having a meeting

Again, whether a family business or not, there will be disagreements in any healthy construction company. The issue at hand is whether disputes continue over long periods, simmer, and break out into more significant conflicts. Minor disagreements occur in contracting companies all the time; however, the best businesses handle them before they morph into larger problems.

Wise leaders spot potential issues among their teams and use resolution techniques to ensure problems don't escalate over time. Frequent, fun company outings give leaders a chance to communicate the business's health, goals and new initiatives and serve an antidote to repressed communication and lack of alignment.

4. Create well-defined roles and responsibilities, and adjust them as your construction company structures change and grow

"At Goodfellow Brothers, we have defined and documented roles and responsibilities to help family members stay in their lane," Goodfellow wrote. "Every once in a while, it is good to pull out those documents to revise as family members' roles change."

Once more, this rule applies irrespective of your company's ownership structure. Having well-documented roles, responsibilities and accountability helps everyone understand how they may best contribute to the team. It also reduces overlap and redundancy while allowing for accountability when people, as they invariably will, stray from their lanes.

"We have learned that a clear focus on honoring the vision of our founders and defined roles and responsibilities will strengthen our organization … and our family relationships," Goodfellow wrote. "It's not an easy path, but the rewards are clear: Turning challenges into opportunities gives way to solid family relationships, satisfied employees and a business built for longevity."

For what more could a contractor ask?