Real estate

Stemming the Unexpected Crisis in the Construction Industry

constructorA sudden, unexpected crisis can wreak havoc on a construction company, especially when the company in the middle of a major project or projects. The crisis might come about through the death or disability of a key manager, a defection from the company or other unanticipated cause.

Employees will still need to be paid, materials still need to be ordered and paid for, and loans from financial institutions must still be paid. Most importantly, project deadlines must still be met. If a construction project or project stage is not met, penalties usually apply, sometimes on a per diem basis.

If serious enough, it can force the company out of business. The losses sustained during the crisis and the damage to its reputation may be too severe for the company to company to overcome.

In a crisis situation, the company will need to act boldly and decisively. Often, pulling people off one project to complete another only averts the crisis temporarily. It creates a new crisis with the unfinished project that had its resources diverted. In other words, it can quickly become a "robbing Peter to pay Paul" situation.
At times, the company must look outside itself for help. But when it does, not just any person or team will do. For the best chance of a crisis aversion team to work, the company must find someone offering construction & turnaround services. The characteristics to look for in turnaround services should be:

• Experience in the particular industry or similar industries.

No matter how fast or how talented the individual or team members are, failure to have a working knowledge of the industry involved will require being brought up to speed in the field. In most crisis situations, there is insufficient time for training or self education;

• Managerial experience, preferably in project management and supervision.

As with the industry experience factor, there usually isn't enough time for on the job training of a new manager. Though the person might be a valued employee and well trained in the field, lack of experience in seeing a project through or managing others is a large risk to take. Alleviating the crisis will be difficult enough without adding risk;

• Turnaround and crisis aversion experience.

The individual or turnaround team should have a track record in handling similar situations. It is one thing to manage a project when everything is running smoothly, but crisis management takes a different skill set. Negotiation and mediation skills come to the forefront in these situations, along with the necessary experience previously mentioned.

In the unfortunate event of a company crisis, looking for a turnaround consultant to right the ship and keep the company going will become an indispensable asset. The company's future may ride on that decision.

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