The hard days of being a start-up or one-man business are long gone, your hard work and ambition has built the business into a successful local construction player with an expanding portfolio and an increasing wage bill!
The days of day-to-day on-site hands on management practice have receded, with a new tier of supporting managers and partners now sharing responsibility for the business. The downside – lack of fresh air and a growing list of business administration practices and new organisational problems as structures and responsibilities stretch and expand across the business. The purpose of some are clear – financial accounts, payrolls and asset logs form a distinct tangibl links to assets, employees and business practice and ultimately profits & loss accounts. However there are others whose purpose seem vague and confusing. You recognise that some of the more intangible ones are important, but it is easy to put them off as you are uncertain about how exactly they add to the bottom line of the business.
Amongst this growing intangible portfolio of ‘other stuff’ terms such as corporate social responsibility and sustainability seem to be regularly occurring issues. The days of adding a simple 1 page A4 ‘Environmental Policy statement’(usually cribbed from another source) into tenders are becoming a distant memory as clients no longer accept simple EHS assurances and now demand proof of commitment within invitations to tenders and on-site audits. The language within your trade journals and business networks has also started to change with new terms increasingly entering the dialogue such as ‘corporate social responsibility’, ‘responsible construction’, ‘climate change’ and ‘sustainability’ and you are beginning to consider more and more whether these are threats or opportunities:
- What do they mean for your business?
- Will they hit profits?
- Are new hires required? and importantly
- How do you respond in a manner that continues to build the business?
An introduction to Responsible Management
Furthermore, the concept and meaning of corporate social responsibility (CSR) within the construction sector and in particular amongst its SME businesses remains largely undefined, highly fragmented and wide open to interpretation. CSR can cover a myriad of meanings, issues and definitions that are both daunting and confusing to leadership groups within SME businesses – terms such as: stakeholder management, governance, corporate ethics, responsible sourcing, environment and sustainability, human resource management, supply chain sustainability, circular economy, discriminatory labour practices, equality and human rights, corruption and modern slavery – sound expensive to address and resource. Despite a lot of information out there, conflicting CSR messages to SMEs in the construction sector suggests that little practical organisational support has been directed towards helping SMEs map out and address CSR as a wider business tool or aid understanding how CSR practices can aid continued growth in a manner aligns with their often limited or yet to be developed resources.
The long list of issues above is slowly starting to coalesce and morph into what is now commonly termed ‘responsible management’ practices within the Construction company boardroom. A simpler handle that allows businesses to focus on key areas where they may be exposed to risk or deem opportunities to exist.
Responsible Management is the leadership approach that many in the construction industry are using as the springboard to get them attuned with the many ‘Responsible Construction’ programmes that sprung up over the last decade.
Responsible management requires that construction companies, their suppliers, consultant and contractor support services take responsibility, and act to make the construction sector more responsible in its business management practices. Within individual SME construction firms Responsible Management can take a variety of forms and can be characterized as a business leadership team that has seized the opportunity to differentiate itself from many of its competitors by taking into consideration elements such as:
- How to minimize any negative environmental, social and cultural impacts its activities can have on its clients and its local community;
- Generating greater economic benefits from the business by improving retention and working conditions for staff, developing a brand as a good employee and local business;
- Safeguarding natural and cultural heritage and protected species, and possessing the skilled staff to act responsibly on behalf of the business when issues are encountered on site;
- Addressing diversity, access for physically challenged people or opportunities within the local community;
Responsible Management represents a mix between safe and responsible business activities during site preparation, construction, transportation to/from site, material usage, design and local community relationships. Whilst many construction companies still view these as potential obstructions to ‘time, cost and quality’, more established firms view these more in terms of brand, local reputation and employee benefits that they can use to grow their business while providing differentiation between themselves and other local competitors, help safeguard works from delays, additional costs and adverse PR and further contributing to the brand’ that has been built up over so many years.
Responsible Management in the construction sector should help underpin the core business strategy or specialisation by promoting a high quality service for future customers and clients – by respecting all the regulations regarding nature and HR management; safeguarding long term relationships through good communication with local authorities, which can pay back significantly in times of economic downturn or mishaps on site.
In the boardroom it involves:
- being aware regarding main environmental regulations, laws;
- implementing and raising awareness within the board, as well as amongst staff, regarding what responsible management implies in the business’s daily activity;
- facing difficult tasks and problems by offering the right solutions for the staff and clients;
- being informed of the available trainings measures and sector-specific educational trends;
- being oriented to results optimization.
The next part of this blog will look at how the boardroom within a Construction SME can get started in starting to lay a preliminary foundation for responsible management within the business, and align its outcomes with other strategies to continue business growth and performance.
Increasingly SME companies within the construction sector are seeking to build in business strategies that, through choice or through client requirements, build in Corporate Social Responsibilities (CSR). Leading Green can provide strategic and operational support to Boardrooms & senior leadership teams on topics such as Responsible Management, Sustainable Construction, Governance and CSR that are essential on BREEAM and LEED registered projects.