Scott

Scott had been running his earthmoving and civil contracting business for nine years. eighteen people. $5.2m revenue working across mining site preparation, infrastructure earthworks, and civil construction in the pilbara and midwest regions of western australia. the work was counter-cyclical by nature: mining companies increased maintenance and site preparation activity during periods of commodity price stability and reduced it during peaks when they were running equipment hard. Scott's order book was rarely empty. his personal capacity was.

Scott was the technical authority on every significant job. site supervisors ran their crews well day to day. every scope variation, every equipment decision above a threshold, every partner conversation that went beyond the routine came back to Scott. he had two senior operators who had been with him for seven and eight years and were technically the equal of Scott on the majority of the work the business took on. neither had been formally given the authority that their tenure and capability warranted. both had been with Scott long enough to have stopped asking for it.

the pricing structure had a specific problem. Scott priced work on gut feel and experience. he knew what jobs should cost. he had never built a formal back-costing process. a review of the prior twelve months showed three job categories consistently returning lower than the estimated margin. Scott had been attributing the variance to conditions on site. the conditions were part of it. the estimating assumptions were the rest. he had been systematically underpricing a category of earthworks for two years without the data to see it clearly.

the two senior operators ran three significant jobs in months three and four without Scott being involved in the day-to-day. all three were delivered on time and within scope. Scott spent the recovered time on two new mining company relationships he had been wanting to develop for eighteen months.

both produced work within six months. revenue grew from $5.2m to $7.1m in fifteen months. Scott took two weeks off in month nine. not one site issue reached him.

Scott had been the technical authority on every job for nine years. the senior operators had been ready to lead independently for years. and the margin problem that had been attributed to site conditions was a pricing problem. visible only once someone built the process to see it.