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Real Estate Technology, Bid Management, Capital Planning, Cost Tracking, Corporate Owners

Managing Construction Costs for Hypergrowth Companies

Hypergrowth” companies feature rapid expansion and compound annual growth rates (CAGR) of at least 40%. Corporate owners experiencing hypergrowth may require construction to build out new spaces. Succeeding at construction and cost management during hypergrowth depends upon several factors. Deploying the right systems and the right people ensures better outcomes.  We recommend 3 additional strategies; growth focus, autonomous operation, and success measurement.

Capital Planning

Growth Focus

“Growth focus” is achieving more by doing less. Sujan Patel, writing on growth-focused companies for Entrepreneur.com, explains, 

“How do you ensure your own success? The answer is to make growth an inherent part of your company. To do that, your organization and employees need to be laser-focused on growing the business, growing it fast and sustaining that growth...Do more with less. When you’re starting out, you have to know how to get big results with little effort.”

Identify a singular focus. Strategic growth is a formula for delivering sustainable customer experiences. When growth includes construction, mastering construction project and cost management is critical to financial success. To support successful scaling, corporate owners should double down on two business essentials: Delivering superior customer experiences while practicing prudent financial management. 

Corporate owners require spaces designed to support their growth focus. Whether retail locations or corporate offices, they are built to anticipate and meet customer needs. Budgeting and timeline estimation is particularly challenging during hypergrowth. For teams without dedicated internal construction subject matter experts, mastering the financials becomes crucial. This operational efficiency improves the team’s capacity for consistent progress as expansion continues.

Cost Management for Corporate Outcome OwnersWith limited time and resources, teams benefit from purpose-built technology to augment their capacity. Technology enabling the team to bid, budget, and track costs effectively becomes a differentiator and competitive advantage. That technology is the common platform capturing all project data. It minimizes duplicate data entry and human error. It is also the centralized repository where decision-makers access the information necessary to move the enterprise ahead. Every project is a learning experience.

Autonomous Operation 

"Autonomous operation" is key to thriving in rapidly scaling environments. Of military origin, the term refers to the assumption of full operational control when the chain of command breaks down. In business and information technology, it is the ability to, 

“adapt the environment dynamically to resolve issues and address changing business demands.” 

Practically, this means building operational efficiencies on systems and technology, rather than individuals or single functions. In an assessment provided by Dan Kindbergh, SVP, Brookfield Properties,  a “digitized, automated bidding and capital project management system has helped enable our team to become more efficient.”

Fast-growing corporate owners may not have in-house teams dedicated to managing construction financials.  Instead, they count on robust, intuitive proptech to manage real estate projects and capital planning. Unwilling to suffer extraneous processes or expense, they maintain lean teams, automating administrative tasks and aggregating information, creating unified financials and cost tracking, from first dollar to final spend.”

Growth focused corporate owners depend on technology and lean teams over headcount. Proptech creates a repository of institutional (legacy) knowledge as teams shift or experience personnel changes. This evolving historical database of information serves as a single source of truth. Teams will spend less time and dollars on projects, over time. They benefit from tech investments made to manage both more effectively. Teams gain additional time back to invest in making strategic, forward-looking decisions. 

Benchmarking Success Metrics 

Effective corporate owners grow knowledge databases. This knowledge does not stem from any single project but rather aggregated success and areas for improvement. Continuous improvement, autonomous operations, and success metrics encourage teams to achieve better, sustainable outcomes with every project.

Create benchmarks using construction data as measures for success. Collecting and learning from data over time, teams refine their ability to execute on brand, on budget, and on schedule. Stakeholders make decisions based on plans and decisions informed by data. Incorporating all the insights and best-practices built by leveraging technology, they evaluate projects. Establishing metrics is critical to achieving their goals. By establishing benchmarks, every project lesson can get measured and evaluated. This builds a single source of truth and consistent measure for success.Cost Management for Corporate Outcome Owners

Grow Revenue, Not Operating Costs

Growing revenue without outsizing operating costs requires diligence. Our recommendations support organizational habits that become practices and strategies most likely to:

  • increase profits, 
  • reduce costs, and
  • accelerate innovation, driving future growth. 

Corporate owners succeed by effectively managing their construction costs in the midst of rapid scaling.  They depend upon solutions that amplify team capabilities, enabling long-term success.

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Rochelle A. Carter-Wilson

Written by Rochelle A. Carter-Wilson

Rochelle is the Content Marketing Manager for Honest Buildings. a Procore Company. She creates stories and other on-brand content to inform and engage owners and other members of the Commercial Real Estate industry.

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