Growth in any business, regardless of the industry, is a function of variance. This is a fact. However, in my opinion, there is no other industry where such a variety of complex issues combine to produce variance. Therefore, to successfully scale a company’s growth, a leader’s number one responsibility must be to protect his or her organization from variance. In fact, one of the most distinguishing factors of successful growth is a leader’s skill at understanding, embracing, and acting proactively to deal with variance productively.
Variance consists of the seemingly infinite number of variables and unknowns that builders face day in and day out. And, as consultant and author Fletcher Groves put it, every construction company is a system, meaning a set of interdependent parts working together to accomplish a specific purpose. Considering that each function in your construction company forms an integral part of that system (interdependence), you begin to see that variation must somehow affect every part of the system and manifests itself in some form of waste, which eventually reduces profit and increases cycle time. This is a simple example of cause and effect.
Understanding Variance; There is no “Normal”
Variance is everywhere in a construction company, but it is almost always limited to two categories: either common cause variation or special cause variation. Common cause variation consists of constraints largely of our own doing – things we can generally control by eliminating waste or increasing efficiency. Special cause variation consists mostly of external constraints, or unknowns: things we generally cannot control (or that we perceive as un-controllable).
Either way, there is no denying the presence of variance and its growth-stunting potential every day. It is here to stay and presents itself in many ways, some predictable, others not so much. As Groves put it in his excellent book The Pipeline, “…common cause …variation is a reflection of our ability – or inability – to achieve repeatable results, while …special cause variation, is a reflection of not knowing what the results will be.”
Embracing the Reality of Variance
Armed with clear vision of the future (predictable and repeatable growth) and tempered with the inevitability of variance, a mindset shift is in order (see The Scalable Builder Part I). Embracing chaos is not top of mind for most leaders, nor is it commonly referred to in vision or mission statements. But it is a defining factor of successful leadership.
Chaos is just another (and perhaps more suitable) word for variance. If not, the two are certainly close relatives! Making a moral commitment to the reality of such chaos is the leader’s first and most important step to moving beyond it and conquering it in the daily course of running a construction company.
To illustrate, almost every leader has some level of intellectual commitment to succeed. The difference lies in embracing variance and how we orient our thinking toward it and therefore, how we anticipate and deal with it effectively. Moral commitment always acts in the best interest of everyone affected vs the more common inward focus of intellectual commitment. Optimal outcomes then, are a function of a leader’s intellectual and moral commitment to the work.
Proactive Thinking and Action
Once armed with awareness, the game changes. Leaders go on the offensive vs playing defense. Understanding and embracing the reality of variance from the stance of moral commitment sets us apart in our ability to deliver unique and distinct value to our constituents – all of them. We take back control where control seemingly was not possible. We proactively anticipate variation, often addressing and resolving it before it happens.
This is leadership at its best! And, it affects everyone in the organization. Great leadership, the positive, powerful attitude of overcoming stuff that neutralizes many others, is contagious. Best of all, it is a skill easily attainable with the simple understanding and embracing of it head on. Variance is not a dirty word. With its goal being to hinder or stop our delivery of value to our constituents, the mandate to address it and orient our thinking to overcome it systematically is clear.
What’s your plan for a bright 2023 and beyond? What needs to change? Legacy Business Leaders has the answers you need to help make your epic leap to self-sustaining success in the building industry. How can Legacy help accelerate your organization’s growth? Check out our one or two-day onsite High-Performance Team or Managing a Growing Business Accelerators. Being together in person creates a dynamic climate for lasting change and profitability. For more info click here and fill out the form to receive a prompt reply with more details.
Also, feel free to head over to the Legacy website and schedule a no-obligation conversation to find out if coaching could be a good fit and strong ROI for you! Or check out and download any of the Builder Templates there as well. We’re here to accelerate your path to blazing profits and lasting success – results guaranteed!
Wishing you the best!
Legacy Business Leaders, LLC
Fred Reikowsky, LPBC