Mastering Construction: The Crucial Role of Management Skills

Business Management skills

In the construction industry, technical expertise alone isn’t sufficient for success. Effective management skills are equally vital for builders aiming to thrive in today’s competitive market. Reflecting on my journey, I entered the building business driven by a passion for carpentry, believing that crafting quality structures would naturally lead to financial success. However, I soon realized that without solid business acumen, even the finest craftsmanship might not yield profitability.

Builders with backgrounds in finance or real estate often have an edge; they approach construction with a business-first mindset, regularly engaging with financial news and strategies. In contrast, many builders, myself included, focus more on honing technical skills than on developing business strategies. This disparity can hinder growth and sustainability in the construction industry.

Understanding the Core of a Construction Business

A construction company is more than a group of workers building structures; it’s a complex organization comprising various interconnected operations aimed at generating profit. Effective management ensures that these components function cohesively. Even if you’re deeply involved in on-site tasks, activities like bidding on projects, purchasing materials, or handling finances mean you’re actively managing the business. Recognizing and embracing this role is vital for long-term success.

Key Management Skills for Builders

To run a successful construction business, focus on these five essential management areas:

  • Financial Management: Oversee budgeting, cash flow, and financial planning to ensure profitability.
  • Marketing Management: Develop strategies to attract clients and promote services effectively.
  • Human Resource Management: Recruit, train, and retain skilled employees to maintain high-quality work.
  • Strategic Planning: Set long-term goals and outline actionable steps to achieve them.
  • Operations Management: Streamline daily activities to enhance efficiency and project delivery.

By strengthening these areas, builders can create a robust framework that supports both quality craftsmanship and business growth.

Embracing Business Education

While formal business education is beneficial, many builders succeed through self-directed learning. Resources like Peter Drucker’s “The Effective Executive” offer valuable insights into executive thinking and decision-making. Embracing such knowledge can shift your perspective from solely focusing on building to understanding the broader business landscape, leading to more informed decisions and better outcomes.

The Crucial Role of Management Skills

Balancing technical skills with strong management capabilities is essential for builders aiming for sustained success. By viewing your construction company as a multifaceted business and dedicating time to develop in key management areas, you can ensure profitability and longevity in the industry.

Invest in your business acumen today. Explore resources, attend workshops, and consider mentorship opportunities to enhance your management skills and drive your construction business toward greater success.

The Evolution of Prefabricated Construction: Focusing on High-Skill Components

The modular construction industry is undergoing a shift, prioritizing the prefabrication of complex, high-value components over entire buildings. This change addresses the challenges of high transportation costs, labor shortages, and escalating project timelines. The first post delves into this evolving strategy. It highlights innovative solutions from industry leaders such as Green Canopy NODE and Tedd Benson and insights from the European Batimat (Building on Automatic) exhibition. Later posts will explore panelized facades and the growing popularity of bathroom and kitchen units.

A prefabricated bathroom module is being installed instead of constructed on-site. Fully functional bathroom pods, with plumbing and electrical systems, can be rapidly integrated into new builds, dramatically reducing construction time and labor costs. This image is from an advertisement for Baudet, a French bath-pod manufacturer.

In conventional modular housing, the ideal is to construct entire homes offsite, transport them, and install them on a lot—promising speed, factory-level quality control, and lower costs. However, many in the modular industry are rethinking this approach due to high transportation costs for bulky, low-skill sections like bedrooms and living areas. A more efficient method is to prefabricate only the complex, high-cost components—such as kitchens, bathrooms, or wall cassettes that integrate plumbing, HVAC, and electrical systems into a single module.

During my visit to manufacturers like Green Canopy NODE, Dorthy Homes, and Ted Benson, as well as insights from the recent Batimat exhibition in Europe, I explored this evolving strategy. The shift towards prefabricating critical systems could be the key to addressing construction’s most significant challenges: spiraling costs, labor shortages, and on-site delays.

Prefabricating Critical Building Systems

Bec Chapin stands in front of Green Canopy NODE’s patented utility wall, which incorporates a ventilation stack and all the mechanical and electrical systems for the bathroom, kitchen, and laundry.

I met Bec Chapin, Co-CEO of Green Canopy NODE, at the Washington Mall during HUD’s 2024 Innovative Housing Showcase. They exhibited a prefabricated, modular mass timber building system, including a proprietary utility wall that caught my eye. Chapin calls it a ‘Building Kit’ designed to turn construction into assembly. Two people can carry and install the plywood cassette in minutes. Their concept had heavyweight institutional support, including Housing and Urban Development, the US Forest Service, the American Wood Council, the US Endowment for Forestry and Communities, and Mercer Mass Timber. They were also working with Virginia Tech under a multi-million-dollar grant, so I knew the company had to have some depth of thought and execution. I wanted to see the factory when I heard they had used the system on over 400 units.

Innovative concepts in modular mechanical cores often remain experimental, serving as demonstrations of potential offsite construction methods. However, Tedd Benson, CEO and founder of Bensonwood and Unity Homes, has been at the forefront of transforming these ideas into functional systems. His work with the Open Source Building Alliance (OSBA) and the Open Prototype Initiative (OPI), facilitated through MIT’s House_N, aimed at integrating sustainable building practices with advanced technologies to create homes that are not only adaptable but also highly responsive to environmental needs. A key advancement from this work is the core wall system, which integrates essential mechanical, electrical, and plumbing (MEP) systems into a streamlined, modular unit. This core wall, initially developed in a German R&D project with Hans Porschitz—now Bensonwood’s Operations Officer—embodies a major step forward in the efficient, offsite assembly of homes, allowing for faster installation and improved sustainability.

Besonwood and MIT House_n developed the core wall concept as an infrastructure backbone. Digital representation of the core wall by MIT House_n and Bensonwood Homes. Source: (Open Prototype Initiative 2006), as published in “Evaluating the Utility Core in the Prefabricated Building Industry – past, present and future,” December 2017 Enquiry the ARCC Journal for Architectural Research 14(1):37-47 by Carlo Carbone, Université du Québec à Montréal.

Benson explained that while the core wall succeeded as a proof-of-concept, full-scale production has been challenging due to diverse project portfolios and varying local codes. “We need a minimum of about 250 projects per year to commit to allocating the required personnel and production space at the factory. At that scale, we think we can be cost-competitive with on-site electrical and plumbing work,” explained Benson. However, the main obstacle comes with diverse local regulations, making standardizing units across regional markets impossible. 

I read Benson’s comments to Chapin when I visited their factory in Seattle, Washington. They explained that the company overcame this obstacle by designing an open box that a building inspector could scrutinize on the job like any other construction project. It also helps that Green Canopy NODE develops multifamily complexes, builds for others, and sells the Building Kits to third-party developers; this varies in their operations and provides multiple outlets for the kits—all in all, they hope to ramp up to 500 units annually by 2027. The concept for the kits came about as a joint venture between Chapin’s NODE, a small modular company, and their partner Sam Lai, founder of Green Canopy, a developer, and CAO of the combined enterprise.

According to Chapin, the “utility kits” are manufactured offsite in 23 hours, plumbed, and pre-wired. They require one hour for installation and 2.5 hours of plumbing and mechanical hookup. The electrical work does not add time, as it’s done at the shop. The electrician only needs to connect cables to the sub-panel. They claim to close an entire project in 30 days, having completed nearly 400 homes.

Chapin describes their work as a partnership of two “place-based businesses.” Manufacturing is place-based, and so is construction. The obstacles between them are always distance and the need to move manufactured components from the factory to the job site. Green Canopy NODE is developing a ‘pop-up factory’ to manufacture components on-site, reducing transportation challenges. Supported by a Department of Energy grant, they are piloting this model at Virginia Tech while continuing to streamline their building kits for greater efficiency. In the meantime, Chapin and their team continue perfecting the building kits to simplify and streamline the manufacturing process.

Green Canopy NODE’s plywood cassettes snap together with precision, similar to Japanese joinery, eliminating the need for fasteners. Modular kits use sub-components, such as shower or sink modules, separated by spacers, allowing flexibility while maintaining production efficiency.

Net-zero townhouses developed by Green Canopy NODE on Bainbridge Island, Washington, all featuring the Building Kit to rationalize the service core.

Many small innovations help speed up assembly at the shop and in the field; for example, they install Romex wiring into slots rather than drilling holes. Plumbing walls have several positions for waste lines, so the installer can easily adjust to the exact location of a drain without requiring a new wall configuration. 

Rather than drill holes and pull wire, Romex slips into slots routered by the CNC machine.
An ABS drain has three can fit in one of three positions on this bathroom vanity wall to more easily accommodate minor variations in cabinet and sink locations.

Mass timber framing is another integral part of the Green Canopy NODE system, including a raised platform subfloor. Spacers between the structural floor and a ¾-inch plywood layer create a gap, allowing wires and pipes to run diagonally without drilling through joists. This design also reduces sound transmission between units. While adding cost, Chapin explains that labor savings in the electrical and mechanical trades and noise reduction more than offset the expense.