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The Long, Slow Productivity Slide

Construction costs would be 25% lower if we found a way to return to the same productivity our industry had in the nineties.

Construction productivity has been decreasing at the rate of inflation for fifty years. It's no coincidence that the rate of productivity decrease is the same as the average national rate of inflation. For far too long, we’ve been able to shrug and pass the cost along to owners. Our industry has been working on productivity since 1997 when the Lean Construction Institute was founded.

And yet productivity has continued to slide, year after year.

We believe this is because we’ve been trying to optimize the job site instead of the company. It does no good to need three people less on site if you need four more elsewhere. We need to think of productivity the way economists do. If your company has fifty employees and does $50 million of revenue in a year, a good measure of your productivity is $1 million per person.

A 20% increase in productivity means doing $60 million of revenue with the same fifty employees, without burning them out. Every business and every project should set that sort of goal. Énska develops a strategy for how this can happen on your project and then assembles a team that's fully committed to dramatically increasing productivity on your project.

The key to success is a system of shared incentives where every project participant is financially motivated to improve productivity. The financial upside of productivity improvements can't accrue to one project participant. It needs to benefit all participants. Énska has extensive experience designing and implementing these incentive and governance systems.


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