Every day construction company owners are constantly trying to figure out how to get the most out of their resources so their projects get completed relatively close to the projected date and budget. The challenge is how do they do it better than the next company out there who is competing for the same project? Margins are getting tighter and demands on completion are growing. The result of this challenge is owners are constantly monitoring their teams, which leads them into the risk of managing every aspect of the project in detail and creating a situation where they are spread too thin.
With the rise in technology as a tool, owners have been shown many different methods to keep an eye on their projects and GPS has been one of those tools that has seen an increase in usage by contractors in the construction industry. While there are advantages to using this technology, we like to challenge assumptions that across the industry GPS tracking will provide meaningful and measurable results on a large scale.
The Assumption: Utilizing GPS is the right measurement to increase the bottom line.
In his book "The Goal: A Process of Ongoing Improvement", Dr. Eliyahu M. Goldratt summarized the goal of any business down to ONE thing, to MAKE money. Operating on this premise, our focus will be to relate decision making back to making money. The hope is as you review this material, you will find resources to help your organization make money. So, let's answer the question: "Will GPS help increase the bottom line?"
Much has been said regarding the benefits of GPS and what it can do to improve projects. In an article from HR Technologist titled: 5 Reasons Why the Construction Industry is Embracing GPS Tracking, Aigerim Berzinya, Director of Marketing at Turtler, cites some compelling reasons why GPS could be useful.
1. Protect Vehicles and Equipment from Theft
2. Monitor Employee's Driving Habits and Identify Safety Risks
3. Reduce Fuel Expenses and Wasted Time
4. Boost Performance by Assessing Productivity Levels in Real-Time
5. Resolve Client Disputes with Recorded Data
Without going into detail for each of these items, you can quickly see that much of the tracking revolves around fleet management. By analyzing the data that comes from GPS for equipment/vehicles, it is possible to make adjustments and even follow exact pathways that will increase the bottom line.
As far as fleet is concerned, Verizon Connect leader Kevin Aries authored an article titled: "How do construction companies use GPS tracking?". While the items covered in the article don't necessarily translate into dollars generated, they certainly DO translate into dollars saved on projects. When looking at the bottom line, revenue generation is primary, but savings are also important.
For monitoring employees, there is much risk involved in adopting this as a strategy. Attorneys are great resources when reviewing employee matters like "do I use GPS to track my employees?". Take a look at this article on "Monitoring your employees through GPS: What is legal, and what are best practices?" Elizabeth Austermuehle blog Editor for Greensfelder Attorney's at Law exposes some of the consequences of adopting this as a strategy for improving performance. Probably the best statement in the article is "Only monitor employees to the extent that it is justified by a business need." I would ask, do you really need to monitor them via GPS?
The Challenge: Will GPS translate into greater productivity?
What about item #4 (Boost Performance by Assessing Productivity Levels in Real-Time) from our list above? Now this is where we will challenge the assumption that GPS will increase results. Is tracking employees' location going to increase productivity? Let's look at a scenario where the focus is on the wrong measurement.
"The case of the mistaken pathway"
Two brothers embarked upon a quest to change the exercise industry. They came up with an innovative idea to improve how effective treadmills can be to consumers who use their new technology.
They had a great product; one of the best treadmills money could buy. Plus they had an interesting approach to getting their product to market. They would provide the treadmill at NO cost to the consumer, including shipping, setup and delivery. In return, the new owner would agree to share the usage data for the treadmill and provide feedback to the company on how it worked for them. Really, who wouldn't take a free treadmill if all you had to do was go for a run and let the treadmill send information back to the company? It's a no-brainer!
So, orders started to flow in and the brothers sent out a treadmill to their first customer. Back at the office the two entrepreneurs held their breath waiting for the first bit of information to show up on their screens. Then it happened. The treadmill was activated and miles were received showing that the consumer was running on their product. A cheer went up from the brothers as they realized their dream was happening and they were going to be totally successful.
Each day, they would come back to the office and watch as mile after mile of information was received. And each day, the consumer would be found happily running a few miles to send data back to the company.
Of course, that was the first few weeks. Sadly, the consumer began to get bored with running on a treadmill. But still wanting to be good about reporting usage, and worrying that the free deal might go away, the treadmill would be turned on from time to time so there wouldn't be any gaps. Pretty soon, this didn't continue either and usage began to diminish and the screens that were so full of data soon went blank.
The brothers were struggling to figure out what went wrong. From everything they could see, the consumers were really getting a lot of miles in on the product. They analyzed all the data but they couldn't find out why everything went bad. Needing help, they met with a business coach who shed some light on the subject for them.
Coach: "What are you measuring?"
Brothers: "Miles traveled on the treadmill over a period of time."
Coach: "How did you know that the consumer was using the treadmill?"
Brothers: "Because we saw the data come across our screens in real-time. We knew it was being used. We could see it."
Coach: "Did you really know? What if the customer let the dog run on the treadmill?Brothers: Silence
Coach: "What are the REAL results are you trying to determine?"
Brothers: "How our treadmills have helped our consumers in their health goals."
Coach: "If that is the result you are seeking, then tracking their usage isn't the right measurement." "Shouldn't you be tracking the resulting health of the consumer; pounds lost, increased stamina, or some other type of measurable result?"
Remember, the areas in which you focus are the areas where you will have resulting change. If you want to focus on location for your business and know where all of your employees are at any given moment, then your result will be people where they are required....BUT....and this is something you really need to consider long and hard, does this mean they are actually productive while they are onsite?
Just because an employee's device shows that they are onsite does NOT really prove they are productive. It's not the right measurement.
I've spoken to countless owners who have asked about GPS and my question is always the same, "what are you trying to measure with GPS?" to which they respond, "I want to make sure my team is working onsite and not clocked in at McDonalds." This response is a symptom of a greater problem. Lack of trust in team members is a cultural issue, not a issue with technology.
As our consultants at VisionTrax work with our clients, we help owners stop chasing the few bad apple employees by transforming the culture in the company to one with a singular focus. The resulting culture drives the bad apples out and solves another core problem that owners encounter of "how do I find and keep good employees?". Time and time again, companies that are less punitive in their approach to tracking and more goal focused have greater retention and higher employee morale and they are the ones that see the increase to the bottom line.
While GPS is proving itself to be a useful tool, to what it is applied is the difference in measurable results. Remember, the Goal is to make money, if a tool is more of a hindrance to this mindset, then it should not be adopted. Decide what is right for your business. If you want more assistance in those decisions, give VisionTrax a call.