From Where I Stand — Do you ever feel like you are working harder than you did
15 years ago? In spite of technological changes, automation, and efficiencies the work days still drag and the weeks feel longer and longer. Society is innovating all around you while you feel stuck in the mud. Other industries integrate systems, artificial intelligence, analytics, and technology to either compress or maximize their workdays. Yet, here you stand, convinced not much has changed at all. What if I told you, if you work in landscape construction, that nagging feeling is true? In May, I attended a seminar by Robert Dietz, Ph.D. who is the chief economist for the National Association of Homebuilders. Dr. Dietz shared his forecast for the housing market and the general economy based on past and current trends. One of Dr. Dietz’s slides stuck with me. It showed the labor productivity for various industries over the past 55 years. The productivity in non-farm businesses during that stretch has increased 150%. Construction productivity over the same time frame has decreased by 10%. That is a 160% swing between construction and all other trades. So, how do economists measure something as ambiguous as “productivity?” Productivity is defined as the ratio between the units of work and the hours of work of performed. So, in landscape maintenance, it would be the number of square feet of properties maintained divided by the number of hours it takes to service those properties. In landscape construction, there are handful of variables to determine the units of work from the installed material to the size/cost of the job to the square footage of certain improvements. Every road still leads back to a ratio and that ratio has barely moved in construction for 50 years. How is that possible? We now have cell phones and compact utility loaders and computers. We have complex job-costing and tracking software, GPS, and robots. The answer to big questions are usually big answers. Economists agree that the primary reason is the one that birthed the professional landscape industry — urban sprawl. As cities expanded to the suburbs, construction changed dramatically. No longer did massive construction companies build massive skyscrapers and apartment buildings. Construction firms spread out far and wide, nestled into communities, and worked on single-family homes and landscapes. These were smaller, more nimble companies with no ties to unions or guilds. Anyone in landscaping can tell you that working with singlefamily clients is a challenge. Everything is custom. There are hundreds of competitors in your service area. Budgets ebb and flow. There are delays. Crews are smaller. Time-lines get stretched. Local permitting and regulations are a handful. Urban sprawl meant that construction companies became too darn small and projects became too darn customized. Only 5% of builders work for companies that employ over 10,000 people. In landscaping, that number is zero. A “large” landscape business will employ 100-400 people. Now, let’s contrast that to manufacturing and business services. 23% of manufacturing employees work for companies with 10,000 or more employees. 25% of those in business services work for organizations 10,000+. Bigger is not better, but bigger does usually mean the investment in systems, automation, and people designed to increase productivity. Other industries have a trickle-down effect. Amazon, McDonalds, General Motors, WalMart, Apple, etc. implement effi-
ciencies aimed at improving productivity. These are companies worth billions of dollars with thousands of employees. Those improvements are then modified and customized to fit smaller employers and the innovations and productivity that comes with them infiltrates the entire market. Construction doesn’t get to enjoy these globalized improvements to efficiency because the global leaders aren’t big enough to invest billions into innovation. So the answer is really simple, just increase the size of your business to 10,000 employees and the rest will take care of itself. Ok, so if that is not possible, how does a landscape business increase productivity while maintaining its current size of operations? After reading more articles and white papers on this subject than I can count, increasing productivity boils down to four factors: 1. Grow without growing It has been interesting watching the larger companies within the ILCA membership pursue business management platforms in the last decade. I know at least a dozen companies currently implementing or coalescing behind a single platform. Most landscape companies have to shoehorn maintenance, construction, and snow management into the same system. Some pulled data from existing platforms and others pulled numbers from Excel spreadsheets and legal pads. The benefits of these platforms such as Go LMN, Aspire, SynkedUp, WorkWave, Stack, etc. is that they not only turn the inexact gut-feel of productivity into exact numbers, but they allow for benchmarking with other companies across the country. In short, if you can’t hire 10,000 employees, make it feel like you have 10,000 employees by sharing internal data with other companies like yours on a level playing field. Many of these systems provide reports on sales, gross margins, job costs, etc. The good news is that all this information is true...it has to be. Ask anyone about “their year” and numbers tend to get puffed up. Either the owner does not know or wants to add a nice layer of polish before spitting numbers out in public. Business management platforms aren’t using fudged numbers meant to impress colleagues. These platforms use the actual numbers required to make these systems hum. So if owners don’t know their gross margins, their business management platforms do.
Products of our Productivity
2. Champion project management Let me state, for the record, there is nothing wrong with managing from your gut. Understanding numbers is worthless if management is indecisive. Gut-feel managers often excel at processing information quickly and making hard and fast decisions on the intelligence they are soaking up. Rather than use a software platform, they use the computer between their ears. With that said, project management is the golden key to increasing productivity. Most likely, the person (or persons) involved with project management should be process-oriented - meaning, if the process flows, success will follow. The only alternative is if senior management is process-oriented. If that is the case, the project manager should be resultsoriented to counterbalance the bean counting at the top. Either way, someone has to watch the indicators while the other caretakes the process. A good Project Manager should be championed and his or her job function should be clearly explained to the rest of the organization - this person is here to increase productivity and lower costs while trying not to
The Landscape Contractor June 2022
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