When water starts dripping from your ceiling, you can put down a bucket, repaint the stain, move the furniture, or secure a tarp over the leak. Those actions might temporarily make the room more comfortable, but they don’t solve the problem. Until you find and repair the leak, the damage keeps spreading.
Construction firms often approach executive turnover the same way. They add bonuses, increase compensation, improve benefits, or introduce new perks. But those solutions only delay impending departures rather than addressing the source of the problem.
To stop a leaky leadership team, you have to move past the surface-level fixes and repair the underlying issues.
Evaluate Your Problem Areas
A ceiling leak usually comes down to a gap between materials. Maybe the wind blew off one of the shingles on your roof, and rain can get in. Or one of your pipes may have a loose connection, letting some water escape.
Most turnover in construction leadership stems from gaps between your structure and your executives’ needs. The following three examples are some of the most common problem areas in construction companies’ C-teams.
Undefined Authority Between Executives
If your architecture, engineering, and construction teams operate under the same roof, it’s harder to define project ownership and decision-making. Any confusion about authority between your executives creates pressure in your C-level team.
If a director of construction and the lead engineer both expect to own the project delivery, for example, their collaboration becomes a power struggle. Consciously, they may try to exclude the other from meetings and establish their authority. But even if they really want to work together, they’ve been trained totally differently. Their decisions are likely to clash when they don’t have clearly defined roles.
This kind of conflict doesn’t usually spark immediate quitting. Professional executives can handle a little tension during a project. But if no one resolves the issues and defines ownership, the pressure builds. And like a leaky pipe with increasing water pressure, something or someone has to give eventually.
Roles that Don’t Fit the Leaders
Each of your leaders is a person in their own right. How they make decisions, engage teams, take ownership, and navigate complications makes them unique. So just like you’d have leaks if the fittings are too big or too small for the pipe, a role that doesn’t fit your executive’s individuality strains your leadership team.
Say the candidate you hire as your Vice President (VP) of Operations has a reputation for quick decisions and aggressive deadlines, because they focus on data and operational efficiency. But this role in your company primarily collaborates across departments, receiving and providing project updates.
The way you have structured this role at your construction firm doesn’t align with the candidate’s strengths. Your current VP of Operations will struggle to fit into your structure for a time. But before long, their discouragement and frustration will show up as disengagement, tension between colleagues, poor performance, and eventual resignation.
Unclear Expectations From Stakeholders
Most job descriptions for executive roles in construction describe the responsibilities and qualifications. But these criteria don’t provide executives with enough information about your expectations of their leadership.
Consider a Chief Financial Officer (CFO) hired to increase shareholder value for a construction firm. The executive decides to fill that responsibility by maximizing margins and returns on invested capital. But when they make these suggestions to the Chief Executive Officer (CEO), they are consistently rejected and told to come back with new ideas.
The board really wanted to increase shareholder value by rapidly expanding and acquiring other companies. But no one told the CFO the real expectations for their role, setting them up for frustration and failure.
Align Your Leadership Pipelines
Once you identify the problem areas in your construction company, the solution seems obvious. You replace the lost shingles or tighten the plumbing to fix a leak. And you fix issues in your leadership pipeline by recruiting C-level executives in ways that align with the realities of the role and your company’s needs.
Clarify the Leadership Structure
Before you start an executive search, clarify the existing structures in your company. You want to clarify who owns what within your C-team and senior leadership before you look to fill any empty holes in your structure.
Your executives will always need to handle some ambiguity in integrated construction firms due to the overlap between departments. But designating chains of command, reporting pipelines, and key decision makers for each component of your projects helps everyone work together more comfortably.
Clarity should also include defining the values and team dynamics your construction company relies on. For example, integrated firms need people who can collaborate on decisions and handle role ambiguity. Your organizational culture contributes to your structure and successful leadership retention.
Define Success for the Role
Once you clarify the broader picture for your company, you can define success for the specific role you need to fill. Build your job description based on the new leader’s decision-making authority, project ownership boundaries, and collaborative expectations. This information gives candidates a sense of how they would fit into your construction company.
Expand that foundation to include what stakeholders actually want from an executive in this role and when they expect that success. In the examples above, tell the CFO that you want a plan to acquire another construction company within six months and to begin a buy-out within 18 months. Explicit goals tied to timeframes keep everyone aligned.
Limit your key performance indicators to the most important goals. Executive recruiters in the construction industry recommend selecting three to five outcomes to avoid overwhelming a new hire.
Align Stakeholders
The person who handles recruiting details is not usually someone who handles the company’s broader plans. So before posting your job description or reaching out to potential executives, review the leadership structures and goals for the role with your stakeholders.
Aligning your CEO, board, and leadership team can be time-consuming. But you save time by making the effort early on. Otherwise, you may realize that your stakeholders can’t agree on a final candidate after months of recruitment and have to start over.
You also save money. Each round of executive hiring can cost a company upward of $1 million. That figure reflects only part of the real cost to construction companies, since a leadership gap also affects active projects and client relationships. It’s well worth the effort to get your key stakeholders aligned from the start.
Match Leadership Style to the Role
A construction leader who fits the role, understands the ownership and collaboration expectations, and shares the organization’s values is far more likely to stay. The job matches how they lead, so they can use their talents and skills to really make a difference.
To hire that kind of executive, you need to continue matching candidates to your leadership structures and company culture throughout the process. A good retained executive recruiter can help here. They can help you find candidates who thrive in opportunities like yours. This may include candidates who aren’t actively looking for a job but would consider a move for the right offer. A recruiter can build interview questions around fit, vet candidates for compatibility, and communicate with potential hires about their comfort with the environment.
An approach focused on matching leaders to the role is much more likely to hire the right candidate. And getting the hire right from the start is the best retention strategy available.
Fix the Leak and Recruit for Retention
Compensation packages, retention bonuses, and executive perks can cover the strain on your leaders for a while. But the pressure usually builds into serious retention issues unless you fix the leak directly. And that means realigning your leadership pipeline.
When you build a hiring process with clear expectations, defined roles, aligned stakeholders, and leadership styles that match your organization, you prevent misalignment before it starts. Turnover becomes far less likely.
Treat the leak and recruit leaders who will stick with you for years to come.
