Great Insights

January 28, 2008

Flying out to Florida on Sunday I was reading the lastest copy of Fortune magazine and came across a couple fantastic tid-bits of insight that everyone could benefit from. 

 The first comes from Melinda Gates -

"If you are successful, it is because somewhere, sometime, someone gave you a life or an idea that started you in the right direction.  Remember also that you are indebted to life until you help some less fortunate person, just as you were helped"

We could all benefit from feeling a little more indebted and seeking to help out others. 

The second great piece came from Robert Polet who is now the CEO of Gucci and discussing a time when he was first put in charge of all Malaysian operations for Unilever when he was just 35 years old. 

One day when faced with a particularly tricky issue, Polet put in a call to Unilever's head office to ask for help.  The advice that came back was simple:  Take a piece of paper, write down all the options available, and pick the best one.  "The next morning I said to my wife, 'They're right,'" Polet recalls.  "It's only by going through tough experiences that you can grow."

I think that a lot of times we all forget this.  People often forget that most of their most difficult times were also those that taught them the most.  Don't think that you are being a good boss by "helping" people past those difficult experiences.  You are really doing them a dis-service.  The best thing you can do is to actually make sure that your high-potential people get as many chances to go through difficult situations as possible. 

Cutting The Fat - Slow Down Survival Tips

November 25, 2007

Action is the key to success. Here are just a few tips on leaning out during a slow down. This is a first of an upcoming series on surviving the market slow down.

Look around your company for those employees that just don’t shine quite as brightly as others. OK, now trim the fat. It’s that easy. Use this time to get rid of non performers. Think very carefully before cutting key employees. Replacement many of the costs for replacement are hidden. Long term employees know and understand your business. It’s essential during vast change to keep together a cohesive core.

Where did salaries go through this last building craze? Through the roof. Guess what, the slope just changed. Take command of your company. Trim just five or ten percent across the board while it’s here. Will it go over well? Probably not. However, having a job is much better than standing in the unemployment line.

Be sure you’ve scrutinized your insurance policies. Be sure to adjust estimated payrolls for projected premiums. Look at your estimated tax payments. Be sure they are re-aligned. The impact on cash flow from adjusted tax deposits and premiums can only be of help.

Many costs as you downsize naturally fall. Look at your floor space. It’s not going to shrink. If like many contractors you own the building, cost compare renting a smaller space, leasing your space to a more another business. If you’ve recently built, the change may pencil.

Keep the knife sharpener handy. Cuts don’t have to be deep nor drastic by any means. From toilet paper quantities, to pencils, to the cell phone plans to benefits synch it in. Lock it up if you must and designate a gatekeeper.

Hold brain storming sessions on how savings can be achieved with key employees and their subordinates. Create departmental teams and offer incentives for finding ways to save or increase efficiencies.

Take a very close look at your material handling or lack thereof it. Take your field guys to the conference room. Audit material handling and develop strict material handling training and processes. No nail shall go unclaimed. No board shall be cut too short. Use them as your tool for coming up with best practices. Most of it should stick when the heat dials up again. You’ll be operating as the new trimmer you.

Renegotiate with vendors. How low can they go? Negotiate a long term relationship to stabilize your costs if at all possible. Be sure to leave market adjustment allowances built into the agreements.

Stay tuned for more. Coming soon are moves that generate cash plus tips on running a successful construction company.

Good Marketing - Good Company

October 05, 2007

This morning on the way to the office I got a phone call from Allied Decals in Florida. They call on a regular basis - about once every 9-12 months to follow-up on an order that I placed several years ago just to make sure I'm still happy and the decals are doing what we wanted.

What they had printed for us (when I was at Royal Electric) were a bunch of "24 Hour Service" labels for equipment that had a reflective background. These looked great and make it easy for maintenance personnel to find the company's phone number if they were looking for an equipment problem in the dark.

Anyway, the company did a great job, the labels looked and worked great. I would recommend Allied Decals for any label job.

But the biggest thing to note is the power of making regular phone calls to existing, potential and old clients. If you are just waiting for the phone to ring you are probably leaving about 50% of your business results behind!

A couple hours a week of phone time will yield HUGE results.

Workforce Quality or Management Quality?

August 24, 2007

I'm in Florida this week and was reading an interview with Stuart Graham, the CEO of Skanska, a construction company listed as 125 on the Fortune 500. They have construction projects worldwide so a natural interview question was:

QUESTION: Where in the world do you find the most productive workers with the best work ethic?

ANSWER: We have 12,000 projects, so I see vast differences in productivity. But I can't attribute it to a country or a culture. I attribute it to the management on a project. Productivity is not the willingness of the workers but how good and demanding the supervision is.

I haven't been on 12,000 projects but have been involved in a significant amount of project turnarounds and have NEVER had to replace the workforce in order to turn a bad project around. This is the fault of the industry, not the individual foreman, superintendent or project manager. There is a significant amount of craft training but very little management training.

Companies who are looking to succeed will be the ones who are building strong construction management and leadership training programs.

"Master Plan" or Rapid Experimentation?

August 05, 2007

Tom Peters posted some very interesting thoughts "The Right Plan Is to Have No Plan" which touches both on why a lot of foreign aid programs fail and how that applies to business execution as well.

At the heart of the matter is a difference in execution styles - some companies and people want to try to plan out every single detail having meeting after meeting working on a grand "master plan." Over time these companies build cultures that are afraid to experiment and believe they need every detail planned out in order to get anything done.

The other execution style focuses on getting the major pieces of the plan worked out and then gets to work rapidly implementing. They rapidly try things out - often trying several small things at once. As soon as they find something that works they build on it. When they find something that does not work they ask "how could it work?" and "what did we learn?"

While the "Master Plan" approach may seem great from an acedemic perspective it rarely works in reality because there is no way for anyone to be able to see all the details in a complex system (like a company with more than 1 employee!) to be able to create that "Master Plan" no matter how many meetings are held.

The rapid experimentation, if built into the company culture properly will always perform the best. While this method may seem like chaos - it can be very effective is the chaos can be controlled just a little. Managing the chaos is very challenging and you will always be working in the gray area between total chaos and restrictive bureaucracy.

Managing the chaos should come in a few stages:

1. Set clear goals for “RESULTS” – not “PROCESS”

2. Encourage the team to “EXPERIMENT” with different “PROCESSES” to attain the “RESULTS” – if at all possible have more than one team working on the problem separately

3. Push for experimentation and thinking outside the box – ask “WHY” (5) times at each step of the process – including “Why even do this step?”

4. Reward even failures – the constant “EXPERIMENTATION” is the key to long-term organizational success

5. “MEASURE” the differences between the different “PROCESSES” and the actual “RESULTS” achieved. Discuss the various experiments rigorously with the team(s) and determine what the best “PROCESS” really is

6. “DOCUMENT” the process thoroughly including descriptions of why and anticipated results

7. Setup “VERIFICATION” systems to ensure the new “PROCESS” is being followed including reports and visual indicators

8. “TRAIN” everyone across the company in the new “PROCESS”

9. “VERIFY” that everyone is using the new “PROCESS” consistently – in the long-term any “system” will beat any “non-system” in performance

10. Once everyone is using the system consistently encourage people to start “EXPERIMENTING” again on refinement. There is no “PROCESS” that will last forever so constant reinvention of the systems is crucial. Go back to step 1.

Online Applicant Screening Idea

May 02, 2007

Last night I was doing some research on the Boston Consulting Group and came across their online interview preparation process.

They base part of their hiring decision on the questions that people ask. When you really think about it there are such things as "stupid questions" and it's a good tool to use to judge a potential applicant whether they are applying for an electrician slot or senior management.

See the Boston Consulting Group example

Start Slow - Finish Fast

April 08, 2007

If you want to master change, the first thing you have to do is become a student of change. Try things. Watch the results. Talk to others. Read about how people deal with change.

Change RARELY originates at the top.
Change NEVER “happens” at the top.
Change, like evolution, happens SLOWLY.
Change usually starts as a GRASSROOTS effort and bubbles up.

Following these 9 steps will produce the best results and will build an organization that is great at change over time. Too many people want to run out and do everything all at once - SLOW DOWN if you really want to GO FAST.

1. Pick one SMALL thing you have control over.
2. Work UNDER the radar – less people = more results.
3. Work like CRAZY to change that one thing.
4. Document RESULTS thoroughly.
5. BRAG loudly about the results.
6. Give other people CREDIT as necessary.
7. If no one responds – WAIT and try again later (go back to #1).
8. If people respond positively, try something BIGGER.

A Few Good Expenses

April 01, 2007

Ordinarily I can't stand email jokes because most are simply dumb and a waste of time. Because I'm so harsh on this I only receive the "best" jokes people find. This one was sent out last week by a very good friend (name hidden to protect the guilty) and it was just too darn funny not to post. Back to more serious stuff later but for now laugh!

Does this resemble anyone you know (possibly yourself)

The Winning Thought Process #2

March 24, 2007

I just finished reading Losing My Virginity - by Richard Branson again. It is a very good book and makes you realize more than anything that if you simply have the right mindset you can achieve anything. Richard Branson lived on the edge of constant failure for more than 20 years while building the Virgin Group which was basically started on a payphone and some free shop space in a not-so-great area of town for the first Virgin music store.

Someone noticed me reading it the other day and I commented on how Richard Branson "just did it" when most people would worry about things and do nothing. No matter how much I tried to explain how he got started and struggled all she could see was that today, almost 30 years later he is rich. She could not make the connection that she could actually achieve the exact same thing if she "just did it" the same way Richard Branson did.

Again, this is the key difference between those who win and those who don't. Quite simply it is all in the thought process and how you frame things. If you never take a risk it will not guarantee that you will never fail but it will also guarantee that you will never win big.

It reminds me of a quote I keep on my desk at all times:

"Some people succeed because they are destined to but most succeed because they are determined to."

Winning Personality

March 19, 2007

I read a quote from somewhere and I can't fully remember it but the basics boiled down to this:

"Whether you think you will succeed or think you will fail either way you will be right."

I can't even begin to say how true this is. In the companies we meet this is the biggest single deciding factor in how quickly they can move from point 'A' to point 'B'.

You can take the exact same situation and one person will choose to be positive while one chooses to be negative. Even if the person with the negative outlook has way more skills they will almost always be outperformed by the person who believes they will succeed.

It's simple - think positive and you will win!

Engineering & Construction in Dubai

March 10, 2007

These slides got forwarded to me by a good friend, Ethelyne Molnar of Brown Construction. I'm sure that almost everyone in construction has already seen these or some form of them but the magnitude of the engineering and construction still amazes me!

Electric Smarts - Contracting Profitably

February 03, 2007

A while ago Bill Floyd of ElectricSmarts commented on one of our articles (Pre-Planning Projects Means More Contractor Profits). That got us into a discussion on how contractors and distributors can work together to enhance profitability for both.

The slides to go along with the audio are below

You can also download the Contracting Profitably slides in high-resolution if you want to use them in your company to help convey these points to your team or contact us for more information.

Customer Satisfaction For Contractors

I saw this short story on Seth Godin's blog this morning and it got me thinking about a formula I heard a long time ago regarding customer satisfaction.

Customer Satisfaction equals

the Cost to the customer for that product or service

This is so simple and so true - it has been part of my philosophy for negotiating projects and change orders ever since.

Why is this so hard to grasp for contractors? First of all it is because there is a serious lack of financial training at all levels in the construction industry. What little training there is centers around estimating where you figure out YOUR costs and then mark them up to create a "sell price."

The formula for customer satisfaction has NOTHING to do with what your costs are - it has to do with the cost to the customer.

If you want to make more money AND have happier customers then figure out how to raise "Perceived Value" at a greater rate than your costs.

CFMA - Construction Technology Overview

February 01, 2007

We do a variety of training both in groups and tailored for specific clients and are constantly adding to and refining our collection of slides that help communicate ideas. We have been experimenting with a tool called Slideshare that is used for online archiving of presentations. We are constantly seeking ways to share information more effectively to help contractors grow.

The slides below are from a presentation we did as part of a panel for the CFMA (Construction Financial Managers Association) that focused on the use of technology for contractors.

To download these slides and see other currently posted presentations go to http://www.dbrownmanagement.com/about_speaking.htm

Problem Solving Flowchart

January 30, 2007

Last week I was visiting a client that we have been working with to help streamline their project management processes. I guess my constant nagging about flowcharts and efficiency got to them because one of the PM's took me into his office and was very excited to show me their latest "flowchart" for a "very important process."

View in full-screen

Turns out it was a joke e-mail. I had seen it a long time ago but it is still very funny. Just had to share...

On a serious note, flowcharting of a process across all functions really can make a huge difference in the organization. Learn more about workflow improvement and process documentation for contractors.

Herding Cats

January 06, 2007

The larger a team or company gets the more the job of leading feels like herding cats. This is an incredibly funny ad from EDS about technology but is just as applicable to anything else. Nothing too deep but anyone who manages people or projects for a living will laugh out loud at this!

Click the Play button below:

Link to Video

Great Marketing Idea For Service Contractors

January 04, 2007

I just saw an ad for NeighborMail which is a program offered by Armstrong Air for their dealers. It looks like what they do is send out a targeted direct mail piece for 20-30 houses immediately surrounding an installation you have already done.

This is geared towards HVAC and they manage the program for you but what if you tweaked it a little to use it for your own service business...

Imagine building a system so that everytime you did a service call or small project you logged into Sales Genie (www.salesgenie.com) or a similar database and got 20-30 contacts from neighboring businesses or homes.

Create a template mail-merge letter that includes a description of your services and highlights a project that you have just done, or are doing right in the neighborhood along with contact information to get an instant referral from your customer. Of course you would have to check with the customer for permission to use them as a referral but most customers will say yes.

This mailer goes out within 48 hours of you completing every job or service call. Many times people have a need to have work done and they are just procrastinating - just like many people would like to stop by and check in on a neighbor.

You can kill two birds with one stone - you are giving a neighbor a chance to stop by or call a friend and you are also getting your name in front of people.

Use a tagline on the outside of your envelope that says something like "Checkout The Project We Just Did For ______" or something along those lines.

I bet if you made this a habit after every service call or small project you would end up doubling your work in a matter of a couple years just by enhancing the word-of-mouth marketing that good service already generates.

You would then send out this letter to all the surrounding homes or businesses.

True Rewards – Mastering Your Craft

December 31, 2006

If you are a true craftsman you will never master your craft – you will always be working on it, getting better each and every day. Last week I got to know Jim Woolems (Founder/Owner of Woolems, Inc.) a little better and he is a great example of a true craftsman. He has built a great business focused on high-end homes and commercial properties.

Jim truly enjoys all aspects of the building process and on this trip to their company I got the opportunity to see what he does for fun on the weekends. Guess what it is – he builds things, constantly working on mastering his craft as a carpenter, welder and builder.

Being a craftsman is not about having a job in the construction industry. That is just the beginning. Being a craftsman is about truly taking pride in building things. It is about constantly working to expand your knowledge of the craft and of the industry. It is about helping others get involved in the industry and helping them achieve more. I believe to some degree we have lost sight of that in today’s construction industry.

Bottom line - we need more leaders like Jim Woolems passing their craft on to others.

Marketing Should Be The Customer’s WORST Experience With Your Company

December 30, 2006

Counterintuitive? Hear me out…

A few months ago I commented on a great post about why marketing should be involved in every aspect of the company. I firmly believe in this because marketing exists to help polish the company’s image.

This week I was in Florida with Woolems, a high-end home builder in Palm Beach. When I first arrived I was having dinner with the VP of Operations, John Rogers and he said something that really hit home:

“I want people to meet Jim (the owner) and have that be the worst experience they have with the company.”

John could tell I was looking at him a little funny and he continued explaining that he wanted to make sure that every interaction the company had with the customer after they met Jim would only serve to enhance and polish the image of the company.

That simple statement and explains John’s painstaking attention to detail in every aspect of the business. They build homes of phenomenal quality but they also go way beyond that. John is looking at every single point of customer contact from the way estimates are presented to how Woolems prepares homeowners on what to expect when building a house to how the bills are processed.

The results show and I only wish more contractors realized how critical every single customer interaction is. There is no such thing as a detail that is too small when it comes to pleasing customers.

Today Matters!

November 24, 2006

You are standing where you are today because of things you did or did not do in the past.

What you do today will determine where you will stand in the future.

Tomorrow will never come and all the money in the world will not let you re-live today.

Make one more phone call.

Send one more e-mail.

Have another cup of coffee and write down some details about that idea you had this morning on the way to work.

Develop that marketing piece.

Start that new business.

Spend some time researching that new technology you read the headline about.

Go home early and spend two extra hours with your family.

Whatever you decide to do - just do it. Do it with urgency. Do it 100%. Do it with passion.

How To Lose & Then Regain A Customer

November 19, 2006

I spend a lot of time traveling between client sites that are a ways away from my office. The two places I usually choose to spend that time are Starbuck's and Borders Bookstores. They both have T-Mobile and are nice places to work. If I have a long period of time I will usually go to a Borders and when I get stuck or just need a break from what I'm working on I will walk around and pick up magazines, books, CD's, etc. I can also get something to snack on and the all-important coffee jolt to get me through the day!

Being a lover of knowledge I spend a ton of money on books every year. The tactical ones I know I want are usually ordered on Amazon for the convenience. It's the things I see when wandering around that I will buy at Borders or in the airport.

Now I'm sure that I'm not alone in this and there are hundreds of thousands of professionals who have similar habits out there. I also bet that these people make up the majority of the profits that a book store sees because of the average purchase size being $100+ and frequency several times per month.

So, what got me irritated?

In the last few weeks I've been having several meetings near a Borders in Sacramento in a higher end shopping center and down the street from CSUS campus. My guess is that there are a higher percentage of people like me in this area than in other areas - just a thought.

What do I need when I go to a Borders? Just a table and power outlet. Give me those two things combined with snacks and coffee and I'll likely spend $50+ between books, magazines and food over the course of a couple hours.

What does this Borders have? No power outlets except one in the corner where they moved all tables away from and put a sticker on it saying "DO NOT USE - NO LAPTOPS" Basically "GO AWAY AND DO NOT GIVE US YOUR MONEY!" Last night after my laptop dies but a couple hours before I was going to leave I still wanted to buy a few things that I was looking at. After standing in line for 10 minutes I gave up and left. They got a grand total of $1.90 for a cup of coffee.

This morning I went to another, friendlier Borders and they also only have one outlet but they have put a long table right next to it, added a second outlet on the column and even put up a sign saying that this table was "Reserved For T-Mobile Customers."

What a contrast! Well, I got a coffee - then a water - then a snack - then got some work done - then left buying $90 worth of books.

I'm sure that the few dollars it cost them to add the second outlet in next to the existing one so that 4 people at a time could take advantage of the one table has come back to them many times over. It made me think about how much money the other Borders saved on electricity from pesky people like me "stealing" their power.

But wait - the story gets even better. Back to the first store. When I was working last night I saw what looked like a management team walking around doing inspections and generally looking to improve the place. I asked if they truly wanted my opinion - and they actually said yes. I told them everything I stated above and they nodded and thanked me for my input.

Honestly I figured it was the usual worthless "we want your opinion as a customer but not really" thing that is so common in today's business world. What amazed me is that tonight I returned to that Borders and in less than 24 hours they had moved a large table next to the outlet!

Simple fix - and as I write this I'm sitting here next to another business owner and we both have a stack of books we are getting ready to buy.

Are you doing simple things that seem smart (like saving pennies on electricity) but keep your customers from spending as much money as they can?

Do you take customer feedback and turn it into action that quickly? I am confident that my purchases this evening will more than pay for not only the electricity that I used but also for the labor it took to get this table moved into location.

I bet you can look around your business and find at least a dozen things you do that irritate customers just a little.

I bet you can solve all these problems for pennies.

I bet that the improved customer satisfaction will show up on your bottom line.