Safety performance can either make or break a project and help or hinder one’s future career prospects. It can both positively or negatively reflect on a company’s reputation and affect its financial health. Front-line supervisors hold the key to unlocking your company’s potential for high safety performance. Supervisors are responsible for directing the allocation of your company’s key assets of people, equipment, machinery and tools that affect the execution of projects and financial results. They are either the vital link or the missing one in a successful construction safety program.
Many construction companies hold supervisors accountable for safety compliance, training, performance and results. Proper safety supervision is the byproduct of defined roles, specific responsibilities, clear expectations and measured accountabilities. Not all companies fully equip supervisors with the tools or resources needed to effectively lead safety in the field. This leads to an unnecessary, yet preventable, safety performance gap.
Understanding the Safety Performance Gap
The safety performance gap is the difference between what is expected versus what is accepted. In other words, the safety performance gap is the difference between what behaviors a company says it expects employees to adhere to and what behavior it actually allows to occur. Put even more bluntly, the safety performance gap is the delta between defining and driving superior performance standards and condoning and excusing less-than-target safety performance. For construction companies, the performance gap applies to other key performance areas beyond safety, including accounts receivable, contract management, IT outages, quality defects and rework and labor costs.
How do company owners and senior leadership teams close the safety performance gap? Leaders can alleviate this gap by changing how safety is conceived, defined and actively communicated within the company. Is safety a core value in your company, or is it regarded as a top priority? Many construction companies say safety is a priority, and they mean it, until push comes to shove against an impending schedule or sequencing change, and safety is compromised. Safety must be conceived as a core value. Priorities shift over time and rise and fall based on perceived urgency. In contrast, values endure the test of time and withstand the changing pressures of project scope, schedule, sequence, quality and budget.
When company leaders view safety as a core value, the proper commitments can be made and, more importantly, kept. This approach leads to a more proactive culture because safety is woven into every aspect of the project life cycle.
Clarifying the Vision, Commitment & Mission
After clarifying that safety is a core value and not just a priority, it is vitally important to provide front-line supervisors with a clear understanding of the vision, commitment and mission of the company’s safety program. This drives and reinforces alignment on safety throughout the organization. It also helps close the safety performance gap by establishing baseline expectations for performance. The following is an example of how this is done.
Safety vision—Your company should aim to not only get employees on projects home safely at the end of the shift, but to also get employees back to work safely for their next shift. This is built on the foundation of promoting safety at work, home and at play.
Safety commitment—Your company should be committed to protecting the safety and well-being of employees, customers, subcontractors, engineers and inspectors and the traveling public.
Safety mission—Your company should create a culture of safety leaders who are empowered to identify and correct unsafe conditions and behaviors and who accept personal responsibility and shared accountability for safety.
Ideally, all supervisors will receive specific instruction in supervisory responsibilities and tools to help effectively implement the safety strategy. A simple way to involve supervisors in the safety strategy is to develop a series of safety objectives or special emphasis programs. These actions will help reinforce the development of a proactive safety culture.
Unlocking Improved Supervisory Safety Performance
Use the 10 questions below as a needs assessment or gap analysis to determine how your company can expand the level of effectiveness of safety supervision.
Does your company clearly communicate the expectations for safety responsibilities to supervisors?
Do you consider safety competencies for supervisors in your hiring decisions?
Does your company consider the core safety competencies for supervisors in your promotional decisions?
Does your company’s performance review process consider safety supervision as a performance criterion?
Does your company’s discretionary compensation or bonus system align with safety performance such that safe work is incentivized and poorly executed performance is not rewarded?
Does your company provide training to supervisors in safety skills?
Do your company supervisors provide job- and task-specific safety instruction to new hires?
Do your company supervisors lead or oversee daily safety huddles or toolbox talks for pre-task planning?
Do your field supervisors and front-line workers have stop-work authority to address safety challenges encountered in the field in real time?
Do your field supervisors and front-line workers actually exercise stop-work authority in the field to address safety challenges and determine appropriate corrective actions?
Although this is an unscored assessment, the questions and your responses will help guide your company to leverage supervisors in your company’s safety program and processes. Too frequently, supervisors are an underutilized resource in achieving your company’s safety strategy. Supervisors who understand their role, responsibilities and expectations can be a force multiplier as your company builds a proactive safety culture.
On Sept. 3, 2015, a press release was issued by the Carson J Spencer Foundation; RK, a construction company in Denver; and the National Action Alliance for Suicide Prevention. This press release was timed to coincide with Suicide Prevention Month in September and World Suicide Prevention Day on Sept. 10 . This press release announced the distribution of A Blueprint for the Construction Industry: Suicide Prevention in the Workplace (aka The Blueprint). One year later, we believe that this document was a catalyst in developing a national movement in suicide prevention in construction. This articles tracks the milestones of this movement and future directions.
In 2010, the National Action Alliance for Suicide Prevention and its Workplace Task Force were launched in conjunction with World Suicide Prevention Day. The co-authors served as inaugural members of the Workplace Force. The Blueprint was intended to create awareness, generate advocacy and spur action in the construction industry around suicide prevention. In addition, The Blueprint provided a toolkit for how to discuss mental health and suicide prevention in the construction industry.
Equipped with The Blueprint, the co-authors began an initiative to break the silence and create a culture of caring. The co-authors sought to gain the attention of the construction industry through a media saturation campaign. The intent was to build a reproducible model within the construction industry that could subsequently be used as a reproducible model by other industries. In short, the coauthors sought to integrate mental health and suicide prevention in safety, health, wellness and employee benefit programs by framing the topics as the “next frontier in safety.”
The Centers for Disease Control and Prevention (CDC) published a report that placed the construction and extraction industry as second-highest in the nation for suicide rates.
But, a year later, The Blueprint has exceeded expectations. It spawned an outpouring of targeted action that is rippling throughout the construction industry. The impact has been felt in: publications, presentations, projects and partnerships.
The publishing of The Blueprint created demand for articles by major independent construction industry publications and those published by trade associations. There have been at least 28 unique articles published since the first one was posted online by the Construction Financial Management Association (CFMA) on Nov. 1, 2015.
These articles have included both in-print and online versions. The articles have begun to cross over from construction into architecture and engineering, to make this an issue that is being discussed in the integrated AEC industry. The articles have penetrated major industry brands, including Engineering News-Record (ENR); the Associated General Contractors of America’s Constructor; CFMA’s Building Profits; Associated Builders and Contractor’s Construction Executive; Construction Business Owner; and the National Association of Women in Construction’s Image.
Once articles were appearing in industry publications, it was easier to solicit presentations. The first presentation that Cal Beyer gave regarding suicide prevention was the September 2015 CFMA Southwest Regional Conference, where he included suicide prevention as part of his company’s commitment to Safety 24/7: safety at work, home and play. The second presentation he delivered was to the South Sound Chapter of the National Association of Women in Construction in November 2015 near Seattle. These two early successes made it easier to “sell” the concept of presentations.
Sally Spencer-Thomas presented at the January 2016 Men’s Health Conversation at the White House in January 2016, while Beyer presented at the pre-meeting at the Department of Health and Human Services. The next two presentations were led by Spencer-Thomas in February 2016 at an executive roundtable sponsored by Lendlease in Chicago and to the Associated General Contractors of Washington. More than 100 attendees heard Beyer’s presentation at the Pacific Northwest Forum of the National Association of Women in Construction in April 2016. Two sessions were facilitated at the CFMA Annual Conference in June 2016. Similar sessions were offered in Portland, OR, in June to the AGC of Oregon and in Boise, ID, in July for the Idaho Chapter of CFMA .
The marquee event was held in Phoenix on April 7, 2016, when more than 100 attendees participated in the CFMA’s Regional Suicide Prevention Summit. Similar summits are scheduled by CFMA chapters for Charlotte on Nov. 9, 2016, in Portland, on Nov. 16 and Chicago on Feb. 17, 2017. A series of summits have been proposed by numerous CFMA chapters in 2017, including: Denver; Washington, DC.; Indianapolis; Houston; and Las Vegas.
Projects and Partnerships
The first partnership was established with CFMA through publications — including the first article as well as two custom PDF publications highlighting both the “why” and “how” to address suicide prevention in construction companies. Moreover, CFMA launched the aforementioned Construction Industry Alliance for Suicide Prevention and created an executive committee task force.
Clare Miller, the Executive Director of the Partnership for Workplace Mental Health, has been distributing periodic updates on the construction industry to her organization’s members. A partnership was formed with the JP Griffin Group, an employee benefits consultancy in Scottsdale, AZ. The Griffin Group created artwork for four custom poster templates that has been provided to the construction industry at no charge. Hoop 5 Networks, an IT system consulting company from San Diego, provided web development services for the Construction Working Minds website maintained by the Carson J Spencer Foundation.
Union Pacific invited Spencer-Thomas and Beyer to present in Omaha at the Railroad Suicide Prevention Summit on Aug. 24, 2016, so that rail industry leaders could transfer the lessons learned from construction to their own industry. Likewise, the U.S. Department of Veterans Affairs requested the construction industry be represented at its roundtable on suicide prevention on Aug. 30, 2016. While Beyer was not able to attend, he invited representatives from the CFMA and ABC associations to attend.
Finally, the best example of the growing partnership is the creation of a construction subcommittee on the workplace task force of the National Action Alliance for Suicide Prevention. There are now nine members on this subcommittee, and it is the largest subcommittee of the workplace task force. These subcommittee members represent a broad cross-section of the construction industry. The nine subcommittee members are:
Cal Beyer; Risk Management Director; Lakeside Industries, Inc. (Issaquah, WA)
Dr. Morgan Hembree; Leadership Consultant; Integrated Leadership System (Columbus, OH)
David James; CFO; FNF, Inc. (Tempe, AZ)
Tricia Kagerer; Risk Management Executive; American Contractors Insurance Group (ACIG); Dallas.
Joe Patti; Vice President & CFO; Welsbach Electric Corporation (College Point, NY)
Christian Moreno; Vice President; Health Risk Solutions; Lockton Dunning (Dallas)
Bob Swanson; Retired President; Swanson & Youngdale, Inc. (Minneapolis)
Sally Spencer-Thomas, CEO, Carson J Spencer Foundation (Denver)
Bob VandePol; Executive Director, Employee Assistance program; Pine Rest Christian Mental Health Services (Grand Rapids, MI)
Michelle Walker; Vice President Finance & Administration; Spec ialized Services Company (Phoenix)
Thus, in less than one year, the construction industry has moved from not thinking about suicide prevention to being a leading industry in the effort. In fact, in May 2015, Forbes published an article called, “What Construction Workers Could Teach Other Industries About Mental Health Awareness.” This demonstrated how broadly this awakening and action has been felt.
This first phase of garnering awareness and political will is critical in starting this national movement. The next phase is to institutionalize these efforts by bringing best practices in suicide prevention to companies, researching outcomes to better understand what works and developing policy and procedures that support mentally healthy, resilient and psychologically safe workplaces.
A contractor’s most important resource, and one of its leading costs, is its employees. By investing in employee, supervisory and leadership development programs, those in construction and facilities management (CFMs) can expect positive ROI and other measurable outcomes in both risk management and human capital. This strategy combines organizational development practices to leverage human capital risk management and protect a company’s bottom line.
What Is Human Capital Risk Management?
Defined as leveraging human resource assets to achieve an organization’s strategic and operational goals, human capital risk management implies the following realities for CFMs to consider:
Human capital is a tangible asset
Human capital yields tangible and intangible results
Human capital can generate a positive or negative rate of return
Human capital risk management can create a sustainable competitive advantage
Benefits & Consequences
There are numerous benefits of leveraging human capital risk management strategies. Likewise, there are serious consequences for failing to effectively manage human capital risk management strategies.
The categories of human capital costs include salaries, health and retirement benefits, workers’ comp and other required insurance costs (e.g., state and federal unemployment taxes). Other possible human capital costs stem from losses attributable to consequences from unsuccessful human capital risk management practices, including: fraud and internal theft; absenteeism; substance abuse; and costs of incidents, accidents and injuries that include workers’ comp losses and resulting third-party liabilities. These costs can be affected by the type of contractor, where the contractor (or project) is located, whether the contractor is union or merit shop and other variables.
Today, senior business leaders are looking to the HR function to provide innovative solutions to attract, retain and grow their talent. The evolution of HR to a talent management model focuses on processes leading to organizational development. As a result, the modern HR department is responsible for seven fundamental functions:
1) Compliance – Ensure regulatory and legal compliance
2) Recruitment – Find a work force
3) Employee Relations – Manage a work force
4) Retention – Maintain a work force
5) Engagement – Build an engaged work force
6) Talent Development – Create a high-performing work force
7) Strategic Leadership – Plan for a future work force
Investing in human capital makes good business sense, especially considering the costs to recruit, onboard and train a new employee. Not only is employment advertising and recruiting costly, but there are also other adverse impacts to the business. Work previously being done by the exiting employee still needs to be completed, so it falls to teammates and the supervisor.
A new employee typically does not reach full productivity until at least four to six months into her new role. In total, the lost productivity costs to turn over one employee is at least six months.
The Link Between Employee Engagement & Business Performance
Engaged employees want both themselves and the company to succeed. However, companies often only focus on employee satisfaction, which can lead to complacency and a sense of entitlement. Employee engagement is frequently defined as the discretionary effort put forth by employees – going above and beyond to make a difference in their work. Discretionary effort is the extra effort employees want to give because of the emotional commitment they have to their organization.
Unlocking employee potential to drive high performance results in business success. However, according to research by the Employee Engagement Group, 70% of all employees from all industries are disengaged. Employees with lower engagement are four times more likely to leave their jobs than highly engaged employees. And disengaged managers are three times more likely to have disengaged employees.
Research shows employees become more engaged when business leaders are trusted, care about their employees and demonstrate competence. By working to engage their employees, contractors can improve their productivity, innovation and customer service. They can reduce incident rates and decrease voluntary attrition.
One of the earliest links between employee satisfaction and business performance appeared in First, Break All the Rules: What the World’s Greatest Managers Do Differently, which includes a cross-industry study that demonstrated a clear link among four business performance outcomes: productivity, profitability, employee retention and customer satisfaction.
The organizations that ranked in the top quartile of that exercise reported these performance outcomes associated with increased employee engagement:
50% more likely to have lower turnover
56% more likely to have higher-than-average customer loyalty
38% more likely to have above-average productivity
27% more likely to report higher profitability
Recognizing and acting on the correlation between engaged employees and business performance will directly affect the bottom line. Some strategies employers can implement to increase employee engagement include:
Focus on purpose and values vs. policies and procedures, which has led companies to outperform their competitors by six times.
Encourage empowerment and innovation, then reinforce and reward the right behaviors.
Unleash the flow of information and ensure individuals have a clear understanding of how their particular job contributes to the company’s strategy and mission.
Understand and demonstrate that work/life balance is important.
Developing Sustainable Leadership & Human Capital Strategies
Many organizations are hyperfocused on implementing training programs and processes. However, training should not be the only activity. Effective human capital management demands forward thinking and strategic planning about how contractors can engage their human resources to make a difference in driving the business forward into the future.
A spectrum of sustainable employee, supervisory and human capital and leadership development strategies includes orienting/onboarding, performance reviews and developmental plans, coaching/mentoring, job rotation and cross-training, 360-degree feedback surveys, defining career paths, work/life balance and competency assessment.
Research & Connect With Peers
Developing a sustainable human capital development program can seem overwhelming, but that does not need to be the case. Reach out and connect with peers and subject matter experts to identify and share best practices and challenges. There are many resources available that can be tailored or adapted to meet your business needs.
Define & Align Sustainable Long-Term Human Capital Strategies
It is essential to not only align human capital strategies with core business strategies but to also continually review them to ensure long-term sustainability and to address areas for development and improvement. Connecting these areas of focus will ensure a consistent vision is communicated and executed throughout the organization.
To gain a better understanding of your company’s human capital strategic thinking and planning, conduct a needs assessment or gap analysis. Based on the results, a human capital action plan can be developed to help guide your company’s future human capital leadership and investment.
Integrate Human Capital Strategies With Organizational Culture
All human capital strategies should closely align with a company’s intended organizational culture. The strategies may require a shift in culture, but not so much that it creates implementation barriers. Having a formal rollout and communication plan developed in advance will help prepare employees for the coming change.
A variety of communication approaches helps to reach all intended stakeholders and should include what, why and expected outcomes. To ensure all employees “hear” the message, communicate strategies that outline a clear plan and are easy to follow through creative visual and auditory media. Examples include interactive meetings to communicate coming changes, postcards with graphics that present the message, e-mails that are fun and positive, conference calls so people can participate regardless of location, as well as podcasts, webinars, Skype, etc.
Implement Talent Review & Succession Planning
To create a culture of learning and development, contractors should include all employees in their talent development practices rather than focus only on preconceived “high potentials.” Through an effective talent review process, managers can determine the potential future and developmental needs of all employees.
Effective talent review discussions will unveil high-potential employees, which will help populate employee development
and succession plans. True high potentials should be given stretch goals to be accomplished throughout the year to aid in assessing and developing their readiness for future roles.
Everyone Is a Leader
At the end of the day, it is not realistic to expect companies to provide the same training to all employees. However, it is important to remember that everyone is a leader in what they do. Setting these expectations better prepares employees for future leadership roles and helps to build accountability across the company.
Importantly, not all leadership competencies and behaviors will apply to every position. However, by consistently applying higher performance expectations across the organization, employees who were not previously considered high-potentials might begin to excel and even surpass previously identified potential levels. You never know when a new rock star employee will emerge!
Case Study: Lakeside Industries’ Annual Leadership Conference
Lakeside Industries, Issaquah, WA, is a third-generation family-owned business operating for more than 60 years. A producer of hot mix asphalt and paving contractor with 20 locations in Washington, Oregon and Idaho, Lakeside Industries has a total of 625 employees and is signatory to various locals of three labor unions: Laborers, Operating Engineers and Teamsters.
The vision of the company’s third-generation President Michael Lee is to “attain exceptional performance in everything we do.” In this case, “exceptional” has been further defined as aspiring to attain “world-class” performance. He says:
“Several years ago, we realized the need to invest in its leaders. We know that effective leaders translate to improved quality, employee engagement, better communication, fewer incidents, higher production, etc. Each of our 12 divisions operates as an individual entity with its own crews, shops, plants, and fleets. Geography and diversity produce challenges related to training.
“We started with two groups. Managers and PMs were in one group, and superintendents were in the other. Each group met once a year locally to share ideas, procedures and challenges.
“We also used this time to conduct leadership training. Sometimes instruction was internal, and sometimes we brought in external experts. While this was a great start, we knew we needed more consistency communicating company objectives, ethics and expectations. Many of our foremen never had any formal leadership training.
“So, for the past few years, we’ve had one annual meeting that includes every employee in a leadership position. Managers, PMs, superintendents, foremen and anyone who supervises another employee is invited; about 175 people attend annually. To remove distractions, we hold the three-day meeting in Denver, CO.
“Each year we decide which company goals are our top priorities. We bring in a speaker to communicate those goals and to motivate and train our leaders.
“A very popular component is the breakout sessions. All PMs and superintendents meet in groups, as do paving foremen, project superintendents, traffic control supervisors and so on. There are usually 10-12 breakout groups that are conducted by a facilitator in a roundtable format to address issues specific to their positions. We have also conducted breakout sessions by division. It’s an opportunity for division leaders to communicate outside of their daily busy environments and set goals for the coming year. We ensure training is interactive and effective. There is also time for relationship building with recreational activities.
“An important component of this concept is follow-up. It’s essential to repeat and reinforce what was learned when we return home to our busy routines. HR and risk management/safety work with division managers to integrate learned concepts into daily operations. Key learning points are communicated to all of our employees.
“Our vision is for the entire company – from divisional and departmental managers to field staff – to understand and implement our goals and expectations. We want all employees on the same ship, sailing in the same direction, and we work on this all year.
“We started with the goal of training effective leaders, but we’ve unexpectedly achieved so much more. There is improved communication among peer groups including:
we have innovation, new lines of communication, collaboration and lasting relationships;
our leaders are now united and understand the company’s vision; and
our leaders make better decisions and communicate more effectively, resulting in more engaged employees, improved quality, and what we call safe production.
“The bottom line: This leadership conference is absolutely worth the investment.”
As the construction labor market tightens because of demographic, societal and industry shifts, finding and keeping skilled workers will become increasingly challenging. Progressive workforce development strategies can differentiate contractors as employers of choice.
CFMs who think strategically recognize that employee, supervisory and leadership development programs, processes and practices can provide a competitive advantage. Investments in human capital yield tangible and intangible gains that improve productivity, quality, risk, safety and financial performance. This should neither be unexpected nor surprising: after all, people are our greatest asset.
This article was co-written by Tana Blair and Tammy Vibbert. Tana Blair is responsible for organizational and leadership development at Lakeside Industries in Issaquah, WA. S he can be reached firstname.lastname@example.org. Tammy Vibbert is the director of human resources at Lakeside Industries in Issaquah, WA. She can be reached at email@example.com.
Although the long-term forecast for the construction industry is robust, it is experiencing malaise as it recovers from the recession. Week after week, positive reports from the government are offset by negative industry news reports, only to be followed by yet another optimistic outlook. So goes the rollercoaster recovery.
The continuing uncertainty of the economic recovery makes strategic risk management more important than ever for contractors. Insurance and risk management — which are major expenses — can be a source of competitive advantage or disadvantage for construction firms.
Insurance is an important product, and its purchase should never be considered as a commodity. The value of having the right insurance coverage (by means of policy, endorsement or extension) and limits cannot be overstated. There are direct, indirect and opportunity costs, all of which can affect your bottom line. The intelligent buyer knows there is a difference between price and value.
Insurance is also an important service. The existing trends and emerging opportunities in the construction industry are driving specialized and customized insurance, surety and risk management solutions. The discipline of strategic risk management is one such development. It is recommended that your company partner with your insurance adviser to conduct a strategic risk analysis and to evaluate your company’sresilience and risk accountability culture.
It is important to embed a risk management mindset into strategic business planning processes. As a strategic discipline, risk management serves several important purposes, including decision making, risk and cost allocation and business-process improvement.
Contractors need to be mindful of two important concurrent developments:
1. Pressures in the construction insurance market
2. Changing nature, scope and complexity of risk in the construction industry
Pressures in the construction insurance market
The construction insurance market is experiencing pressure from various disruptive forces. Some of these occurred independent of the recession while others were made worse by the recession. In either case, these trends will continue to be disruptive:
• Growing severity of workers' compensation losses
• Escalating alternatives to traditional insurance including captives, owner- or contractor-controlled insurance programs (OCIPs/CCIPs) and subcontractor default insurance
• Increasing number of owner insolvencies and subcontractor defaults
• Increasing challenges on property and builders risk placements with coastal wind and other catastrophic loss exposures
• Rising threat of increasing general liability premiums
• Growing pressure on professional liability because of increasing frequency and severity of large design-related liability losses
• Increasing regulatory and administrative requirements for employee health benefits under the Affordable Care Act
Expanding risks in the construction industry
To further complicate matters, the level of risk in the construction industry continues to expand. A number of industry developments are continuing to change the risk profile at the individual company level and for the industry as a whole. The following representative eight industry trends illustrate the growing nature, scope and complexity of risk to be managed by contractors:
1. Expanding use of alternative construction delivery methods, including design/build and integrated project delivery
2. Growing number of accelerated fast-track projects
3. Changing project finance methods, including public/private partnerships
4. Expanding number of joint ventures to meet project capitalization and surety obligations
5. Reemerging skilled workforce shortage
6. Growing reliance on technology, and vulnerability to disruptions of business systems and networks
7. Expanding use of building information modeling (BIM) and online collaboration on construction design
8. Continuing migration of construction defect claims and litigation from residential to commercial construction
A word of caution: This list of risk trends and developments is not exhaustive. Other risk exposures and issues may be important for your company depending on your scope of work, industry sector and geographic region.
Risk is inherent to the construction industry. Risk management is the bedrock of the construction industry. There is opportunity in risk. Strategic risk management is not about saying no to opportunity. Rather, strategic risk management is focused on protecting your business from being blindsided by hidden risks and cascading costs.
Strategic risk management will help you remain calm and composed during the rollercoaster economic recovery. More importantly, strategic risk management helps contractors identify factors and make decisions that improve their competitiveness, growth, profitability and reputation.
The construction industry’s dependence on information technology systems continues to expand with the dramatic shift from document management to data management. With this reliance comes an increased vulnerability to business disruption. Data management, business continuity and post-disaster data recovery requires a shift in mindset from firefighting to fire prevention. Zero disruptions is a bold strategic imperative that provides a competitive advantage by enhancing field productivity, increasing office efficiency, reducing downtime and preventing data losses. Effective data backup and post-disaster recovery protocols are the essential steps to minimize business disruptions.
Data management today requires an enterprise view integrating a company’s increasingly complex networks. Data must be construed to encompass all information generated, received, transmitted, stored and retrieved throughout the organization. Additionally, data must be incorporated from its various physical and virtual locations, including mobile devices. Following are IT trends affecting AEC companies:
expansion of email as the predominant form of intra- and inter-company communication;
growth of online data mobility project management tools using smartphones and tablets to access and transmit data;
increased adoption of document imaging to replace paper recordkeeping files;
growth of enterprise resource planning (ERP) platform systems and integration with best-in-class specialty software programs;
estimators’ use of the same database to work from multiple locations on complex projects;
increased adoption of, and massive data files generated by, BIM;
emergence of hosted and cloud-based data recovery systems;
expansion of e-discovery in litigation, which raises expectations for (and increases the risks of ) record retention; and
proliferation of social media networks combined with bring-your-own-device policies, which creates new portals for hacking, malware and viruses.
The severity of natural disasters and the escalating number of man-made emergencies and technological disruptions compounds the construction industry’s dependence on IT systems. Many of these disruptions “only” result in temporary IT system shutdowns, while others pose a threat to the viability of the business.
A company’s vulnerability to data loss can be increased or decreased by the actions taken (or not taken) with regard to data backup and recovery. A robust business continuity plan is the first step. Companies have many choices when selecting the best way to back up their vital information and mission-critical data.
The Need for a Comprehensive Business Continuity Strategy
Automatic offsite (hosted or cloud-based) data backup protocols at regular intervals are the best prevention for data loss. These backups must be set for every type of data and for every type of device accessing, transmitting or storing information.
Another data recovery strategy is imaging the company’s server and running the restored replica image from a new server in a remote location. However, this strategy requires pre-planning. In a large-scale disaster, obtaining replacement servers may not be possible.
Causes, Costs and Consequences of Data Loss
Data disruption is a reality of the modern work environment. Causes of data loss include:
failure to initiate or maintain regular data backups;
human error resulting in accidental deletion, overwriting of data or forgetting to add new IT systems/devices to backup protocols;
failure to test the backup and data recovery restoration process to determine adequacy;
software or application corruption;
power surges, brownouts and outages;
computer viruses, malware or hacking;
theft of IT equipment; and
hardware damage or destruction from vandalism, fire and water (rain, flood or sprinkler system discharge).
The consequences of lost data include direct loss of revenue from missing bid submissions or customer orders, direct expenses to pay for technical specialists to help recover data, decreased productivity during the shutdown and costs to re-key or obtain replacement data. For contractors selling directly to consumers, the loss of Internet connection for any extended time could prove costly. Lost data also can result in litigation for breach of confidential information plus adverse publicity.
A 2012 study commissioned by cloud-based data backup company Carbonite revealed 45% of small businesses (defined as fewer than 1,000 employees) had suffered a data loss. Fifty-four percent of the data losses were attributed to hardware failure, and the average cost for data recovery was $9,000.
Real-World Data Loss Scenarios
Laptop motherboard failure. A project estimator was working offline when the motherboard crashed. Because of a tight deadline, he had to restart the estimate from scratch. Although the bid was successfully submitted on time, the estimator fell behind on pricing other jobs that the company failed to win.
Lost iPhone. Pictures of a project safety incident with documentation of a mismarked “one-call system” utility spot were lost. The photo documentation had not been transmitted to the office, and the contractor lost the request for damages against the utility locating service. Moreover, the smartphone was not properly password-secured, allowing unauthorized access to contacts, client information and company data.
Desktop computer backup location not properly mapped to server. When a workstation was upgraded with a new desktop computer, it was not mapped to the server for automatic backup. The computer hard drive crashed, and no files were backed up. Recovery using the old desktop computer was slow, and data created on the new computer was lost.
New database not added to the nightly backup protocol. A company purchased a new customer relationship management database and, after a power outage, realized it had not been added to the nightly data backup protocol.
Onsite data backup location destroyed. The building housing an onsite backup server was struck by lightning, which started a fire and resulted in a total loss of all current and historical data.
Disaster recovery software not properly configured. While conducting a test of a company’s disaster recovery plan, it was discovered that some critical data was not being captured in the backup files.
Laptop and tablet stolen from a jobsite trailer. The field equipment had not been backed up for several weeks, resulting in the loss of key project documentation.
Best Practices for Data Management
Data management and IT network administration is a strategic, unique function for all companies. It is not possible to delineate all data management best practices, but the following guidelines should help enhance most companies’ post-disaster data recovery efforts:
Determine the company’s recovery-time objectives, and plan and budget accordingly. Identify which functions and systems must remain operational at the time of a disruption or disaster. This requires advance planning and budgeting for necessary systems and technical support services. It also helps prioritize risk-reduction strategies, including investments in data management backup system and security upgrades.
Develop a written business continuity plan that outlines specific responsibilities for protecting vital information and mission-critical data. The business continuity plan should include protocols for backup and synchronization of all office systems and virtual/mobile devices. It also should address the frequency and format for testing data management integrity and security, as well as how gaps will be identified and addressed.
Inventory the company’s vital information and mission-critical data, and verify it is being backed up. Key considerations include how the data is being backed up, by whom and how frequently, as well as where the backup data is stored. It is important to ensure the data backup and restoration process work as designed.
Initiate automatic scheduled backups, ensure the backup data is stored offsite, and test the adequacy of the data backup and restoration methods. Consider the added benefits of imaging the company’s servers to achieve a complete restoration of the data management system
Develop a comprehensive diagram of the company’s integrated data management network, including all physical and virtual/mobile subsystems. Ideally, this will be an “as built” blueprint of the company’s configuration consisting of the hardware, operating systems, software and applications that make up the data management network.
Institute policies regarding the use of the company’s Internet, including security protocols. Implement policies for user authentication, password verification, unacceptable personal devices and reporting of lost equipment. It is essential to communicate these policies and security protocols to all users and to train new employees.
Establish proactive management of the company’s data and IT network. Ensure the company’s network administrator has state-of-the-art tools, including remote access, help desk diagnostics and anti-spam and malware protection. Request periodic updates on all software licensing audits and verification that all security patch updates have been installed on a timely basis. Establish a fixed replacement schedule for hardware and software.
There is good news and bad news regarding business data management and recovery. The bad news is that the need for post-disaster data recovery can no longer be ignored. The increasingly complex and connected business world demands pre-planning for business continuity. The good news is that data management and recovery services are scalable to meet the custom needs of every business regardless of the size and scope of the operation and its degree of data dependence.
Reprinted with permission from Construction Executive, January 2014, a publication of Associated Builders and Contractors Services Corp. Copyright 2014. All rights reserved.