Project Status Report

Project Status Reports (Stop Pencil Whipping and Go to the Gemba)

In this blog, I want to talk about project status reports or monthly status reports, whatever you call them. I’ve seen a number of different companies use them. Let me say this: I’ve never actually seen them be used to any positive effect. I think that that’s a shame because I think there is a way to do that properly.

In a project status report, typically, you’ll see your financials, you’ll see quality indicators, you’ll see other KPIs, you’ll see schedule indicators, key performance indicators, and maybe a summary, maybe the biggest problems. What typically happens is that it’s an excuse not to go to the gemba and to the place of work, to the field.

Let me explain why project status reports fail and how to fix them.

The Pain of Project Status Reports That Keep Executives from the Gemba

Here’s what happens with project status reports. Executives get very busy and they are incentivized typically to focus more on business things, sales and marketing, which is super fine, and to be about their shaking hands and kissing babies day job. They’re not really incentivized to dig deep into some of these hard issues because digging deep means you have more to do, which brings you closer. And most classical business management leaders think that the better you are at being an executive, the farther you are away from your business working in a four-hour work week in Hawaii somewhere.

And that’s just absolutely untrue and just not the way things are built. So, when they’re reviewing the project status reports and the monthly status reports, they’re just doing a high-level check, maybe making a phone call, but it’s basically pencil whipping and it’s not actually helpful. And the project teams are providing information that not only doesn’t help the project teams, but it doesn’t help the leader and they don’t find anything and nobody is benefited.

And it’s just one big waste of time with project delivery teams who are already overloaded, overburdened and busy. And so, this is a negative thing that we’ve got to get rid of. I very much think this is a mistake because a lean company is a company where leadership is connected to the field and a non-lean company is where leadership is not connected to the field. If a project status report keeps enabling leadership to not have to go to the gemba, to the place of work, to the scene of the crime, to the actual place where something happens, to the front line, then it’s only worsening your behavior.

How to Fix Project Status Reports (Real KPIs and Real Financials)

Now, let me give you a story with this. I remember one time doing a project status report as a project director for a company and I was looking at it and I’m like, “Well, where are the real financial numbers? How do I know what buyout contingency I have? How do I know the percentage of remaining buyout? How do I know labor gains and gains on insurance and gains on rentals? And how do I know what our overall strategy is for this project? How do I know what gross profit targets I need to hit? How do I know?” Anyway, it was like, “How is any of this helpful?” And so, I invented my own.

This is a real story, by the way. It actually forced the company to do better financial projections. And candidly, just in case you think I’m smart, let me disabuse you of that. The situation was that I’m not as good at the button pushing project manager things as career project managers. So, they had to dumb it down for me. But my questions were good because I was trying to make sense of it. And then it forced the KPIs to be good.

Anyway, so we’re going through this. And finally, it’s like, “OK, this is a project status report that I as a project executive and as a team that we can use to actually figure out some good stuff.” We’ve got on our financials. Not only do we see buyout, not only do we see percentages, not only do we see contingency buckets, but we also see our profit strategy and some of the numbers that people typically don’t normally see.

And now instead of seeing how much overall project float I have, which in the CPM system is absolutely worthless, now I see my perfect handoff percentage, my roadblock removal average, and I see the remaining buffer ratio and lots of really cool things that make a lot of sense. And then on and on and on, you know, and just real quick with quality, like instead of just seeing rework, which is like, “OK, how bad did we suck?” Let’s see how we’re doing to get ahead of it.

What is the percentage of crews that are actually using a feature of work boards? What is the percentage of crews starting with an effective pre-construction meeting? These are the important things. And my belief is that if you get the project status report KPIs solid, that incentivizes the right behaviors, according to W. Edwards Deming, then we can actually make some progress.

Here’s what a good project status report should include:

• Real financials, not just high-level numbers: Buyout contingency, percentage of remaining buyout, labor gains, gains on insurance, gains on rentals, overall strategy for the project, gross profit targets. Not just total budget and spent to date.
• Real schedule KPIs, not worthless float: Perfect handoff percentage, roadblock removal average, remaining buffer ratio. Not just total float or percent complete which in CPM is absolutely worthless.
• Leading indicators for quality, not just rework: Percentage of crews using work boards, percentage of crews starting with effective pre-construction meetings, percentage of crews with full kit before mobilization. Not just how bad did we suck with rework numbers.

If your project needs superintendent coaching, project support, or leadership development, Elevate Construction can help your field teams stabilize, schedule, and flow.

Project Status Reports Should Be Reviewed On Site (Not Emailed In)

But I don’t think that those project status reports should be emailed in. I think they should be reviewed on the job site by leadership. Now, if you’re like, “Hey, it would take me three days a month to go visit all the projects or five days a month.” That’s a part of your job, homeslice. Like that’s it. That’s what the do is like. That’s what you’ve got to do.

You want to prevent. Stop spending time with the lawyers in the main office trying to fight court cases. Spend more time with your teams out in the field providing clarity, training and support. Like that’s really what it’s all about. And I think those project status reports should be reviewed on the job site and actually provide relevant information.

Now, one other thing that I would say is, you know, if the project team is like, “Well, we’re having trouble with this trade partner and blah, blah, blah.” And then the owner is like, “Well, you better get on it.” OK, thank you. Like I wasn’t already going to do that. That’s not correct.

If you have roadblocks, if you have constraints that need to be optimized, then you’ve got to have that tiered system to where you know what is at the foreman level and what is at the foreman and super level and what is at the super PM level and what needs to scale to executive level leadership. Because if I’ve heard a lot recently, “Oh, what if the trade is failing? What if they didn’t show up? What if they’re telling us to F off? What if they want to leave with the tagline?” My first question is: Did the president of your company call the president of that company? Because those are high level things that the project delivery team shouldn’t have to deal with on their own.

That’s just a fact. And if we dig in and we stay close to these projects, not only will we develop a relationship where we will be more apt to have those types of calls, but we will also have familiarity with the job and be able to offer real help instead of patting them on the back and then forking off like a seagull cropping on the job and then flying away.

The Power of Macro-Level Takt Plans for Status Updates

And one other thing I would say, I would never want to be a project director or a general superintendent again or a field director without macro status, up to date macro-level Takt plans constantly educating me where the project was. If we can get real visuals, real connection, we can do real work with these things.

So, project status reports are almost as ineffective as constructability reviews in the industry right now. We’ve got to beef them up because if we do it right with the right KPIs, it can be remarkable.

A Challenge for Executives

Here’s what I want you to do this week. If you’re reviewing project status reports, don’t email them in. Go to the gemba. Go to the job site. Review them on site. And fix the KPIs. Add real financials: buyout contingency, percentage of remaining buyout, labor gains, gross profit targets. Add real schedule KPIs: perfect handoff percentage, roadblock removal average, remaining buffer ratio. Add leading quality indicators: percentage of crews using work boards, percentage starting with effective pre-construction meetings.

And if you’re like, “It would take me three days a month to go visit all the projects.” That’s a part of your job. Stop spending time with lawyers in the main office fighting court cases. Spend more time with your teams in the field providing clarity, training, and support. That’s what you’ve got to do. As we say at Elevate, project status reports fail when they keep executives from the gemba. Review them on site with right KPIs: perfect handoff, roadblock removal, buffer ratio. That’s how you connect to the field and provide real help.

On we go.

Frequently Asked Questions

Why do project status reports fail?

Because they keep executives from the gemba. Executives pencil whip them with a high-level check and a phone call. Nobody is benefited. Project teams are overburdened creating reports that don’t help anyone. It’s a waste of time.

What should a good project status report include?

Real financials (buyout contingency, labor gains, gross profit targets), real schedule KPIs (perfect handoff percentage, roadblock removal average, remaining buffer ratio), and leading quality indicators (percentage of crews using work boards, percentage starting with effective pre-construction meetings).

Should project status reports be emailed in or reviewed on site?

Reviewed on site. Go to the gemba. Go to the job site. That’s a part of your job. Stop spending time with lawyers in the main office. Spend time with teams in the field providing clarity, training, and support.

What’s the difference between a lean company and a non-lean company?

A lean company is where leadership is connected to the field. A non-lean company is where leadership is not connected to the field. Project status reports should connect you to the field, not keep you away.

When should problems escalate to executive level leadership?

When the project delivery team can’t handle it on their own. If a trade is failing, didn’t show up, or wants to leave, did the president of your company call the president of that company? Those are high-level things that need executive support.