Construction companies could take a page out of football’s playbook
The year began with as much opportunity as volatility in the commercial real estate market. Now the construction industry is entering the second half of the game with volatility staring us down, ready to play.
As contractors ponder how to succeed in DFW’s hot construction market, the classic “attack wins games, defense wins championships” strategy becomes an appealing and retrograde idea. It could also offer a glimpse into the future.
Although the complete opposite of a championship-style game, the most fun but incredibly boring game I’ve ever been to was Auburn’s 2008 3-2 win over Mississippi State. At football. Both teams were terrible in attack, with no ability to move the ball and a series of penalties and fumbles. The whole defense won the game (War Eagle).
Any good businessman knows that you have to play both sides of the ball. Vision setting, emotional intelligence training and strategy sessions are of no use if they are not properly balanced with processes, fundamentals and operational prowess. It appears that we are at the point in our economic cycle where these processes will have their place in prime time on the ground.
This year’s playbook has several variables to consider as local construction companies assess how to play better defense in these volatile times:
Attracting and retaining a talented workforce: There are not enough skilled construction workers entering the labor market to meet current demand. Construction spending continues to outpace construction employment, at least for now. Even if a recession is looming or the market weakens, most entrepreneurs will continue to play catch-up to find quality talent. While advances in prefabrication and construction innovation continue to be part of the conversation, as a whole, our industry can be as slow to change as a Pac-12 team finding a good defense.
Diversity of market sectors: DFW offers something most cities don’t: a huge diversity of construction market sectors. Inflation appears to be testing the upper limits of office and retail projects. Relocations and a buoyant real estate market point to continued growth in the multifamily market sector. Healthcare, life sciences, education and data centers appear to be holding up and are likely able to absorb some of the impact of market volatility.
Maintain schedules by maneuvering through supply chain constraints: Supply chain issues are the gift that keeps giving in today’s construction market. Whether it’s a cement shortage or a one-year delay for a generator, all project materials should be identified and tagged before they begin to help the project complete within regulatory deadlines.
Understanding costs and escalation: The construction market has always been a lagging indicator when it comes to cost. Current indices indicate that construction costs are still very much on the rise. The reconnaissance report reveals many challenges, such as gas and raw material prices. Being able to accurately estimate and maintain budgets in today’s market is a dual-threat scenario that entrepreneurs seek to implement.
An entrepreneur’s focus on blocking and battling their industry’s core may not be the most flashy new formation, but it is a way to provide as much stability as possible under conditions of volatile market. It will also allow companies to play a better offense once market conditions stabilize. There’s a football coach somewhere in Alabama who likes to talk about “The Process.” While not too nice, fun to face, or tall, the man found his calling and proved successful. Find your process, trust it, and let market volatility do its best against the five-star rookies in your defense.
Brasfield & Gorrie Regional Vice President Jason Weeks leads the General Contractor’s Dallas office and is Chairman of the Board of Directors of TEXOThe building association.