7 Questions with Cynthia Paul

As part of our “Inside FMI” series, we’re interviewing our industry experts who work with companies across the built environment on what they’re seeing, how they help clients and trends that are shaping the business environment.

In this edition, we talk with Partner Cynthia Paul, who has spent decades working with clients across the industry to identify market opportunities, analyze internal company infrastructure and drive consistent performance. She’s considered an expert in business development, marketing, sales and customer experience.

Question: You wrote a book on creating profitable projects. What inspired that work, and why is financial understanding so important in the construction industry?

Cynthia Paul: Honestly, finance has been made far too complicated. When something feels complex, people set it aside until they have time to really dig in, which rarely happens. Days become weeks, weeks become months and that deeper financial understanding slips further out of reach. Most people then get by on what they’ve picked up informally, which leads to a fragmented view of what their project or business is actually telling them.

That’s why we wrote the book. We wanted to decode financial concepts and turn them into practical, applicable tools for everyday decision making. You simply can’t manage a project or a company effectively without understanding its economics. The book was built for real industry professionals: project managers, estimators, superintendents, business development leaders and executives.

Question: How can clients integrate broader economic trends into their business plans to enhance profitability?

Cynthia Paul: Contractors tend to know their competitors’ behavior including what they chase and how they position themselves, but they rarely understand their competitors’ financial performance. By using ratios and comparing your company to industry trends and targets, you gain a deeper sense of how well your business is operating.

These benchmarks help you understand not just your own strengths and weaknesses but also how the broader industry is shifting over time. Many sources benchmark the bottom 25% and top 25% of companies, which gives leaders clear insight into what good really looks like.

Question: What financial ratios are most important for construction executives to master?

Cynthia Paul: At the company level, I always focus on liquidity, leverage and performance, which are foundational categories. Here are a few ratios I encourage clients to examine:

• Working Capital Turnover: Revenue divided by working capital (current assets minus current liabilities). This measures how effectively your working capital supports your revenue. A healthy target is 8–12 turns per year, which typically aligns with strong profitability.
• Revenue per Full-Time Employee
• Net Operating Profit per Full-Time Employee

You need to examine the trend over time, not just once. They reveal workforce efficiency and indicate whether your organization is getting healthier or drifting in the wrong direction.

Question: How can engineers, architects and others who work alongside contractors use this information to better serve their clients?

Cynthia Paul: First and foremost, understand that contractors operate on thin margins. Small deviations from plan can erase profitability quickly. The project schedule drives cost and exposure, so anything that keeps decisions timely and the schedule moving is invaluable.

And if you influence payment cycles, pay attention: timely payment is essential. Delays increase project risk and directly reduce contractor profitability. Supporting schedule flow and cash flow is one of the most meaningful ways partners can add value.

Question: Can you share an example of a client who improved their results after applying these principles?

Cynthia Paul: There are many, but here are two that stand out and they both start with education.

One civil contractor invited us in to train their teams, beginning with field superintendents and continuing through leadership. By teaching the concepts, especially those in chapters one and five of our book, they saw a measurable reduction in projects with gross margin fade and fewer days outstanding on receivables. When people understand how small changes impact financial results, they focus their attention more intentionally.

Another building contractor formed a book club with their project teams. Each month they read a chapter and then discussed how that chapter applied to their active projects. The combination of self-directed learning and practical application was powerful. Their monthly reporting accuracy increased, fee erosion decreased and teams became more disciplined in forecasting.

Question: Tell us about your approach to strategy development. How do you integrate these financial and market principles?

Cynthia Paul: Strategy is fundamentally about choice, what you will do and what you won’t. Those choices should be rooted in facts. Understanding a company’s financial performance allows us to identify where it is truly most profitable.

One tool we use is completed contract analysis, where we review past projects across dimensions like size, type, complexity, location, customer and contract type. The goal is to uncover where the company performs best. When we overlay that with win/loss patterns—where they tend to win disproportionately—we establish the foundation of a strong market strategy.

Question: Given today’s technology and AI tools, how is FMI’s market strategy development process different? What can clients expect?

Cynthia Paul: AI is incredibly helpful for gathering insights, generating ideas and highlighting trends. But AI alone can’t determine which market opportunities are best aligned with your capabilities, competition and long-term growth potential. And considering that seven out of 10 growth initiatives fail, chasing what others have done often unsuccessfully is risky.

It takes discernment to filter abundant information into the few strategic choices that will genuinely move the needle. Success isn’t just about selecting the right market; it’s about building the capabilities, talent and infrastructure required to win.

Our approach meets in the middle from two directions. First, we help improve the client’s hit rate on work they’re already pursuing. At the same time, we build the strategy for capturing the customers and markets they want in the future. Strategy takes time to yield results, so relieving some of the pressure on near-term backlog gives teams breathing room to develop the capabilities they need to grow sustainably.