Scaling in Construction

Why Scaling Revenue Without Building Capacity Destroys Construction Companies (And How to Build People Before Buildings)

Here’s the mistake that kills construction companies trying to scale: you focus on winning bigger work without building the capacity to deliver it. You go from $60 million annual revenue to $250 million. You land the work. You bring in key people to help win projects. And then you realize the people who actually have to deliver it your project managers, superintendents, field engineers they’ve never run work at this scale. You take somebody who’s run a $10 or $15 or $20 million job and put them on a $300 or $400 million project. And in order to have a $250 million business, you’ve got to have two or three $400 million projects running simultaneously. The math doesn’t work. The capacity doesn’t exist. And the company collapses under work it wasn’t ready to execute.

Mark Story from Commercial Construction Services has been doing this for 37 years. He’s been part of major general contractors. And here’s what he told me recently: “I don’t know if I’ve ever been in a conversation with leaders that talk about this what are we going to do to scale our people in order to scale to get into the business we want to grow to be?” That’s the uncomfortable truth. Companies plan revenue scaling. They don’t plan capacity scaling. They assume if they win the work, they’ll figure out how to deliver it. Hire some experienced people from competitors. Push harder. Work more hours. And it doesn’t work. Because you cannot scale your business successfully without a plan to scale your people first.

So, let’s talk honestly about what actually happens when construction companies scale revenue without building capacity, why this pattern keeps repeating across the industry despite destroying companies, and what great builders do instead creating training camps that build people before they build billion-dollar buildings.

When Companies Scale Revenue But Not Capability

Let me tell you a story that illustrates this perfectly. We were working with a company based out of Wisconsin, just north of Chicago. They wanted to scale operations. They went from doing $30 million jobs to $250 million jobs. And they said to us “we’re not ready.” So, we did a visioning exercise for their business. This is called yokoten in Japanese direction management. It means you can’t take the company somewhere and have everybody else going in a different direction. You’ve got to be heading in that direction together, and all systems must support it.

They did a good job with the yokoten, the visioning, the clarity document. They identified five key things inside their thematic goal that would tell them where they needed to go next. I was so proud of them because they nailed it:

Their Five Scaling Priorities (That They Identified Correctly)

• Enhance our recruiting and hiring efforts to bring in talent at scale
• Build training programs for our future leaders before we need them
• Enhance department capability to support frontline teams as we grow
• Create builder training so we have advanced project management techniques
• Adopt lean principles so we scale properly without chaos

I remember looking at this and thinking “oh my gosh, this is so beautiful. They understand exactly what needs to happen.” The problem was and this is really sad as soon as they saw it, they said “yeah, this is what we need to do.” And then it died on the vine immediately. It was like okay, now it’s time to beef up this department, actually create a training program. And they got into the tyranny of the how. “Well, do we really have the budget? Do we want to spend the time? Who would actually do this?”

They got paralyzed. Six months later they would have only gotten so far in six months, but at least they’d have been moving they got a $280 million job. And they panicked. Instead of having their own people that they’d been developing, because they ignored the vision they created, they said “let’s hire from somewhere. We need this person with specific experience.”

The Disaster That Predictable Failure Creates

They hired somebody as general superintendent. When Kevin from our team went out to help this person, here’s what this general superintendent said in the meeting. I’m going to give you two examples that tell you everything. Number one: “It’s not my job to do planning for this job. The trades need to figure it out.” Number two and this one still makes me angry he walked into the meeting and said “You know what? I don’t put up with anything from the trades. I’ll tell you a story. One time I walked through fresh concrete for the concrete contractor to teach them a lesson because they didn’t clean up an area I’d asked them for the day before. So, I walked through their wet concrete.”

Kevin called me and said “Jason, what do I do? This guy does not get it.” And you see the pattern clearly now. This company had the ability to manage the direction of their company and build capacity and capability. But instead, they let it die on the vine. And now they’re hiring superintendents who are not planning and bragging about walking through fresh concrete. I’ve used that fresh concrete story in two or three chapters in the general superintendent book as examples of what not to do.

That guy got fired immediately. The job tanked. And that company is just off in the weeds now. Why? Because they are not preparing to scale. To Mark’s point: you cannot scale until you’ve prepared and built the system to scale. It’s like Field of Dreams if you build it, they will come. But you have to actually build the capacity before you expect people to show up and execute at levels they’ve never operated at before.

Why Training Has Disappeared From Construction

Everywhere I go now, I talk about creating a desert training center, a training camp for your people. When you’re building massive data centers, what’s the first thing you build? The GNB tents, the big domes. The first thing you do is build the domes, build the bathrooms, start training programs, create capacity to build this mega project. The problem is we’ve got small contractors that are thankfully getting bigger work kudos to them but they’re skipping the step of building capacity.

Here’s what Mark said that really hit me: “I’ve been doing this for 37 years, and I don’t know if I’ve ever been in a conversation with leaders that talk about how we’re going to scale our people in order to scale the business.” Think about that. Thirty-seven years. Major general contractors. And capacity building is not in the strategic conversation. Everyone talks about revenue targets, winning work, expanding markets. Nobody talks about systematically building the people who will deliver that work.

And here’s the uncomfortable thing I’ve been scared to say, but I’m just going to say it: nobody in this business knows what they’re doing anymore. And that’s sad. Not because they’re bad people absolutely not. But because nobody is training. Fifteen years ago, there was a 1.5 billion dollar company that scaled to 12 billion dollars. Their training department is the same size. They have less training for individuals than they ever had. We are not building people.

The Truth About Hiring Experience From Competitors

You cannot go hire a superintendent from someone else somewhere else who knows what they’re doing in these systems. They might have experience. They might have been in construction for 30 years. But if they weren’t trained in pull planning, Takt planning, Last Planner System, pre-construction planning, systematic coordination they don’t have the capability you need. You’re hiring years of repeating the same broken patterns, not years of systematic excellence.

So, any time I talk to Google, any time I talk to overseas companies building light rail, Meta, SpaceX I say the same thing: we need to create a training camp for humans. That’s your number one thing. Start building humans. You can talk all day about building great plans. But if you don’t have great humans that tie into the system, they’re great people, but you don’t have A+ prompting and training for those humans it’s not going to work. You’re wasting your money on planning if you don’t invest in building capability.

What Happens When You Don’t Train People

Mark shared a story that captures this perfectly. He went to a project where the team had been on site for two years. They did a flow analysis of the schedule, made it very visual like we always do. And several team members told him that day they said it in front of the entire team “I just learned more about our project schedule in the last two hours than I have in the last two years.”

Mark said “I was very glad, but at the same time I was very sad for that person, because they’re bullet smart, hardworking, don’t know what they don’t know. And it’s because there has been zero training for that person.” He said something that really hit me: “My kids are 23 and 26 years old, and I’m working with so many project engineers those same ages. And I’m like, I hope people are teaching my kids while they’re out there.”

You don’t know what you have in these people until you pour something into them. Sure, they’ve got to have grit and curiosity and intelligence and hunger they need all those natural skills. But they’re not going to become those great builders we absolutely need unless we give them more than just a paycheck. And the outcome of that investment pays tenfold to the company.

How to Actually Scale: Work Backwards From the Goal

Here’s how this should work, and I learned this recently from working with InTakt software. They’re open to developing the software properly and doing a very good job. We literally sat together in a room and said “what do you want to achieve for the market?” Then we said “okay, so what features does that need?” We worked it backwards. We created a Takt plan for the features. Then we said “now how many developers does that take? How many designers? What financing do you need?”

We worked it backwards. It wasn’t “this is how many developers we have, this is how many designers we have, this is how much money we have.” We said “where do you want to be? What do you need to get there?” And now it’s the job of the CEOs to go get those things. We can get financing. We can get developers. We can make it happen. But we start with the goal and work backwards to capacity requirements.

Working Backwards for Construction Scaling

When a construction company is scaling, here’s what should happen. You say “we’re going to do $250 million this year, up from $60 million.” Okay, what does operations look like for $250 million? How many trained people do we need for that? What does a training program look like to build those people? Work it backwards.

Don’t say “we have X superintendents and Y project managers, therefore we can take work up to $Z.” Say “we want to do $250 million. That requires two or three $400 million simultaneous projects. Each needs a superintendent who can run $400 million work. Each needs PMs and field engineers at that capability level. We need 20 new PMs and superintendents trained to this level. How do we build 20 trained people by next July?”

And then you create the training camp. You can do it virtually you don’t even have to fly people somewhere. Get them through training step by step in the systems. Train them on the meeting system. Train them on pre-construction planning. Train them on Takt planning. Train them on Last Planner. Train them on how teaming actually works. Get them to Super PM Boot Camp. And if we do it on this calendar, we’ll have 20 trained people ready by next July.

Picking Projects to Protect, Not Recover

Then instead of picking projects you need to recover, pick the projects that are most crucial to your bottom line. Make sure at least two of those 20 trained humans are on those crucial projects. We tackle out ahead. We’ve already been saying this to companies: let’s get ahead of it. Not only will we build the pre-construction plan, but we will build the pre-construction humans.

Somebody might say “you don’t need to build people.” Yes, we do. They’re just like AI, you prompt them and they work well when trained properly. But without training, they’re just expensive employees generating expensive mistakes.

The Company That’s Doing It Right

Let me give you a positive example. Joris in Texas called recently and said “Jason, we have a bunch of projects coming up and we want to get ready. We want to build capacity. Will you do First Planner System training with us?” I was so proud of them I said “I’ll do it for free, as long as you’re on with cameras on and we get to put it on YouTube so everybody can learn.”

For a couple months now, we’ve been getting together and talking about First Planner System. Then the leader Jeff, who’s amazing, said “okay, now we’ve got this group of people ready and trained. Now we’ve got a couple high-risk projects. Let’s do advanced pre-construction planning on those out ahead. And as we go into operations, let’s make sure we have the right structure.”

They’ve got a great general superintendent, great field and office leads. And they’re taking everything we talked about and building structure around it. I’m not trying to sell work we’re more than happy to help them in pre-construction but they’re saying “we need you here, here, here. We’re going to get ahead of this. We are not going to write down jobs. We’re not going to get in trouble. We’re not going to fight. We’re not going to react. We’re getting ahead of it.”

That’s the message starting to stick. The companies that know what they’re doing build the system before they go into the work.

Why Owners Need to Stop Throwing Money at Problems

Now let me talk to owners, because this affects you directly. Mark and I were discussing financial incentives. When owners on big projects want to incentivize a contractor to hit a milestone let’s say a year milestone how much money do you think gets thrown at contractors to hit milestones or accelerate trades? Is it $2 million? $4 million? $6 million?

Mark said on a $5 billion project, incentive milestones can build over time starting at like a million and continuing to build up to a hundred million dollars. A hundred million dollars in incentives. And he heard recently about an electrician on a mega project where the owner said “we will pay $2 million to expedite them.”

I hope every owner gets this message: those dollars are all wasted. The contractors are just going to throw additional labor at the problem. They’re going to be running around. There’s no preparation. Roadblocks aren’t cleared. The site’s still dirty and chaotic. You just threw $2 million down the drain. Here’s what you should do instead: create training camps. Get one of those big tents out there and start mass-producing trained individuals. Actually, implement the right systems.

The Math That Should Change Everything

You could probably get that done in a year for $500,000. Easy. Pennies compared to the acceleration bonuses. And you wouldn’t spend the $4 million on bonuses. You wouldn’t spend the other $2 million on fake recovery efforts. You wouldn’t have the chaos. You wouldn’t have the blown milestones. And you’d literally build people at the same time who could deliver your future projects.

Owners, we have got to stop throwing money thinking that money and acceleration will help. It’s not accelerating anything. CPM crashing activities is a lie. Let’s take a fraction of that bonus money and build training camps. Literally build humans, build people before we build things. And our problems will go away.

Why Japan Is Japan: Training

Paul Akers, when we were in Japan and we’re sending 12 of our people there soon, which costs a lot of money Paul kept asking “why is Japan Japan?” And the answer to everything was: training. Why do they act like they act? Training. Why do they do what they do? Training. Why are they all on one side of the escalator? Training. Why is there no trash on the streets? Training. Why are they all considerate? Training. That’s what it all comes down to.

The Military Analogy That Should Shame Us

It would be like the military saying “let’s take hundreds or thousands of brand-new college kids. We’re not going to train you, but we’ve got this killer plan. Here’s money as an incentive if you beat the enemy.” We would never win a battle or war if we did that. And that’s not how our military works. We have the logistics and we have the training intensely. The rule is one-third, two-thirds: we spend at least one-third of the time planning, two-thirds in execution.

But in construction it’s like “hey, people who have never been trained, here’s a bunch of money and there’s big responsibility out there and a bunch of people’s lives at stake. One, two, three, go.” It’s insane when you say it that clearly. But that’s exactly what we’re doing.

Stop Being a Blunt Object

Mark said something brilliant: “Let’s stop being this big blunt object that we’re just throwing at projects. Let’s be sophisticated. Let’s make sure we have the tools available and let’s grow our people. We’re not going to be perfect every day. There’s things that get in the way. But we can be a hell of a lot better.”

And let’s build people and capacity before we go build things. If you see owners that are tired of the nonsense and want to get this done, if you’re a company trying to scale and you’re tired of writing down projects because you didn’t build capacity first, if you want to create training camps that build systematic capability instead of hoping experience will somehow appear this is the work. This is how companies actually scale successfully instead of collapsing under revenue they weren’t ready to deliver.

Resources for Building Capacity

If your company needs help scaling from $60 million to $250 million or any other growth trajectory, if you’re landing bigger work but don’t have people ready to deliver it, if you want to create systematic training instead of hoping to hire capability from competitors, Elevate Construction can help your teams build the training camps, capacity, and systematic capability that enable successful scaling through people development before project delivery.

A Challenge for Construction Leaders

Here’s the challenge. Stop focusing on revenue growth without capacity growth. Start working backwards from your revenue goal to the people capability required. If you want to do $250 million, figure out how many trained PMs and superintendents you need. Then build a training calendar that develops those people six months before you need them. Create your training camp virtual or physical and systematically build capability.

Stop throwing money at acceleration and incentives hoping problems will go away. Start investing a fraction of that money in training camps that prevent the problems from existing. Stop hiring “experience” from competitors and hoping they know your systems. Start building people in your systems who can deliver at the scale you’re growing toward.

Be like the military: train extensively before missions. Be like Japan: make training the answer to every “why do you do it that way?” question. Be like the companies that are getting ahead of it instead of constantly recovering from disasters they could have prevented through systematic capacity building.

Build people before buildings. Scale capacity before revenue. Create training camps before taking on work your current team can’t deliver. As Mark said: let’s stop being a blunt object thrown at projects and start being sophisticated about growing our people so we can successfully deliver the work we win.

On we go.

Frequently Asked Questions

How long does it take to build capacity for scaling?

Plan six months minimum to develop 20 trained PMs/superintendents through systematic virtual training covering meeting systems, pre-con planning, Takt, Last Planner, and teaming before they’re needed on projects.

Can’t I just hire experienced people from competitors?

No. They have years of experience, not capability in your systems. You’re hiring people who repeated broken patterns for 30 years, not people trained in pull planning, Takt, Last Planner, systematic coordination.

What should I do first when scaling?

Work backwards from revenue goal to capacity required. Don’t say “we have X people so we can do Y revenue.” Say “we want Z revenue, therefore we need Q trained people by R date.”

Why do incentive bonuses fail?

They just throw labor at problems without removing constraints, training people, or fixing systems. You burn millions on chaos that training camps could have prevented for hundreds of thousands.

How do I convince ownership to invest in training?

Show the math: $500K training camp vs $4M in bonuses + $2M in fake recovery + write-downs from failed projects. Training is pennies compared to the cost of scaling without capacity.