Some weeks ago I posted two articles ‘Understanding what impacts your construction company’s reputation’ and ‘Why construction companies should be concerned about their reputation’. In these articles I mentioned how easily reputations can be damaged, even by individuals in the company, and how this damage can sometimes prevent the construction company from winning further work. At the time someone asked the question; ‘How can a construction company recover from a poor reputation?’
Last week I was reminded of the topic when I saw the following article: A major construction company has been faced with damaging allegations of fraud and bribery so after more than 60 years in business they have decided to change their name. Read more. Now this often happens among micro companies that run up large debts or do work badly, and then the owners reinvent their business under another name and carry on business as usual. This strategy works for them because the companies are so small they have an insignificant audience and a limited history. But I’m not sure this strategy is successful for a giant well known construction company that has made the national news headlines in both bad and good ways. Are clients that gullible that they’ll believe that a new name means a clean reputation? Then, what about the history, the good parts of the brand and reputation that are also being disposed of, doesn’t this count for anything?
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How construction companies should deal with a damaged reputation
My recommended action when dealing with damage to your reputation
1. Find out the reasons for the bad reputation. It might be a poor safety record, unsatisfactory quality, ill disciple amongst employees, arrogance, frequent disputes and claims against clients or not completing projects on time.
2. Institute damage control – that is, prevent the damage from spreading and fix the immediate problems. Now some large construction companies will get their spin-doctors out and issue press releases and statements. I’m not sure this is totally effective – and if anything it often spreads the bad news more quickly. Sometimes these press statements are issued too soon and don’t deal with the problem effectively, and sometimes more damaging revelations reveal themselves after the statements. It’s wise for senior management to get involved directly with the problem – don’t rely on reports, rather go and visit the problem and talk to the parties’ first-hand. Clients usually appreciate it if they know senior management is taking their problems seriously. It may stop them taking their actions further.
3. Solve the immediate problem.
4. Ensure the problem won’t occur again. This may include dismissing people who caused the problem, introducing new systems into the company to prevent the problem reoccurring, retraining employees, etc.
5. Now the difficult part of the exercise comes! How do you convince your clients that the company has changed? Some of them may have been impacted by the causes of your poor reputation – it may even have cost them money. But before selling the message to your clients and the public make sure that you have definitely resolved the problems and they won’t reoccur. If similar problems reoccur after you have told your clients they won’t, then they will doubt you even more next time you tell them everything is fixed. The economics of referral
Rebuilding trust in your construction company
Unfortunately clients can be very unforgiving and it could take time to rebuild trust again. Changing the company’s name is a bit of ‘smoke and mirrors’ which won’t fool most discerning clients, in fact it may make them feel like they are being misled.
"Everyone in the company knows what’s been done to fix the problem and prevent in recurring again"
1. It’s important that everyone in the company knows what’s been done and what has to happen in the future. When clients talk to senior management or project managers they must get the same message. That message must be clear and include:
1.1. ‘we made a mistake’
1.2. ‘we acknowledge our mistake’
1.3. ‘we have rectified the mistake by….’
1.4. ‘we have taken the following steps to prevent the problem reoccurring….’
1.5. ‘remember the good things we achieved in the past, what we did right and our past successful relationship and projects’.
Clients need to be convinced that the company has changed and things will be different and at the same time reminded of the things that were done well and worked.
2. Generally the ‘proof is in the pudding’ as they say. So if you can demonstrate a successful completed construction project without the previous problems you are better able to tell your story. However, most clients aren’t naturally going to give you a 2nd chance to win a construction project with them. You may have to do it by giving them an offer they can’t refuse, that is, submit a price that is much cheaper than your competitors – but this could cost you money as your price may in fact have to be below cost, which has its own problems.
3. The best strategy is for senior management to visit major clients to spread the message about the changes and improvements made to the way the construction company will do business in future. Unfortunately often things get blown out of proportion and some clients may not have heard the correct story. However, having said this don’t try and hide, or gloss over, past problems.
4. When tenders (quotations or bids) are submitted ensure that your price is competitive, ensure that you can deliver the construction project to the client’s satisfaction. In addition spell out in your price submission how you will deliver the construction project taking care that the previous problems won’t reoccur. The client will be asking themselves the same questions even before they look at your quotation, so make sure you give them answers that will make them feel confident about using your construction company. Don’t just give them rhetoric, but tailor your answers to their specific project. Remind the client of similar previous construction projects you have done successfully. should you submit a bid with a price less than the project will cost you?
5. Should you be fortunate to be called into post tender (price submission or quotation) meetings with the client make sure senior company management attends. Don’t be scared to bring up the past problems and address these and what will be different on this project. Construction bid clarification and negotiation meetings
Rebuilding a damaged reputation in construction is not easy
If this fails to win your old clients back you may have to look for other markets, new clients, then, if all else fails consider rebranding the company completely.
But, what do you think? Have you experienced something similar, having to rebuild a company’s reputation?
Obviously it’s best to look after your construction company’s reputation and ensure all employees understand how vital it is to maintain the company’s reputation. It’s much easier than rebuilding a reputation that’s been broken.
Thank you for reading this article. I hope you found it interesting. Please like or share the article and add your comments and experiences.
Other similar articles by the author:
Will your construction project be completed on schedule?
Construction is a people business. Employ the right people.
Why should we take construction safety seriously?
Do you want to learn how to manage construction projects successfully
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26/5/2015 03:34:12 am
Another helpful article by Paul. Cheers for that !
28/3/2017 09:22:08 am
Thanks Lisa for your comment. Unfortunately some businesses do need help sometimes - it takes only one bad employee to destroy a company's reputation.
We are grateful to this website for providing extensive information and adding new ideas to the Internet. Hopefully, we will receive more of this information in the future.
30/4/2023 06:11:25 am
I was captured when you discussed that w should choose a construction company with a good reputation. My friend told me that their house needs restumping. I should advise her to hire a contractor that is licensed and insured.
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