The eight areas of business critical to success
By Daniel Paulson, InVision Development International, LLC
We live in interesting times. Costs are rising. Supply chain disruptions affect the production of materials, causing delays. Then there’s labor. Skilled help is in short supply. Yet most companies I know have more work than they can handle, making it even more frustrating to meet deadlines and customer demands.
It’s enough to stress anyone out, and when I talk to owners that is what I hear along with frustration, and sometimes anger. After all this hard work you may even feel like giving up. Yep, I’ve heard that too. That makes it even harder to believe when I say right now could be the beginning of your best time. Developing a business you can enjoy owning is right in front of you. In a matter of time, you could have a high-performing company that will be a valuable, sellable asset. You just have to make some changes. Where do you start?
A business has many moving parts. Even small companies can have a lot going on. Much of it just happens. No documentation. Knowledge is commonly held by you, the owner, and others who work for you have just enough information to help get the work done. You may feel like the Oracle. Everyone comes to you for either permission, or asking what to do.
For you to build the business you want you have to improve in the following areas:
Every business has a culture. It is usually created organically and acts as an extension of the owner. Sometimes conscious effort is placed on designing an environment that promotes high performance, talent building, organizational growth, and staff retention. My experience with contractors is there’s still a lot of “old school” behaviors. Maybe tempers and yelling worked in the past. Today they are a sure fire way to send your employees packing. Right now they have more choices than you do.
Companies thrive, or die, based on how well communication occurs. Many of us don’t realize that what we assume we say is often implied. Our lack of clarity causes slowdowns, mistakes, and cost overruns. It can lead to anger and frustration. Communication needs continuous improvement. Different methods should be used. By habit, we tend to default to our preferred. Maybe it’s email or text. Sometimes it means telling. Yet, people process information differently. The best method for one may not work for another. Repetition is also necessary. The one and done approach rarely works as expected. How is your communication?
We all know what makes a good leader. It’s rarely a skill that comes naturally. Some of us are lucky enough to be surrounded by the right people, and we learn how to be effective in a supervisory role. Many are thrown into this responsibility unprepared. High performers are often made leads, supervisors, foremen, etc. Maybe you launched your own company which placed you in a leadership role automatically. What we should remember is that the skills that got us here won’t get us there. Success in leadership means developing new skill sets. Anyone can learn, but mindset matters.
Probably the biggest cost many contractors are facing right now is labor. Acquiring talent is a seller’s market. Employees are holding the cards right now. I’ve heard many owners complain that workers want to do less and will quickly leave for better pay and benefits. That is our reality right now, but that doesn’t mean there’s nothing you can do about it. Leading involves coaching. Coaching means listening. Listening should lead to adapting. If you wish to keep your best people, you need to adjust to worker needs in a way that still achieves performance expectations. Today’s generations want coaching and support. Most managers don’t make time for these activities. Instead, they are buried in daily operations. Finding ways to keep your people requires an individualized approach, and a different type of hard work than your management team is used to.
Establishing the right attitudes, habits, and behaviors is important for setting up the must-haves of documented and followed processes. Many times I’ve worked with businesses focused on process improvement only to eventually learn those procedures aren’t followed. Let’s face it. Old habits die hard. We fall into our routines, and it requires a commitment to stick to a change. Once that commitment is made, you need to offer consistent processes to make sure work is completed efficiently. Often companies can see a 20% improvement in overall performance with well-documented procedures. The time invested in creating these workflows easily can pay huge dividends in reducing cost overruns, production bottlenecks, planning difficulties, and cash flow issues.
Great processes need effective project management. This is what construction is all about. It ensures work is done on time, under budget, and with the highest quality. A great project management approach leads to a positive service experience and happy customers. All this ties in to People, Process, and Planning. It is a failure in at least one of these areas if you have projects that consistently fall behind. Sure, there are issues that are beyond your control, and part of good management is actively forecasting potential bottlenecks and adjusting. How is your project management doing?
Budgeting and Planning
As a result budgeting and planning are a rarity. Budgeting is part art/part science. It involves looking back at past performance then using data to support future revenue and spending. Budgeting is an effective tool to track spending and manage financial decisions for the coming year.
Planning is another important tool business owners should be using. If you want to have a successful business by design, you need to be ready for future opportunities. This doesn’t need to be a long, drawn-out process. The best plans are only a few pages in length and regularly updated to adjust for changes. Common planning processes are information-heavy, rigid, and dropped faster than a gym membership in February. It is one of the most important skills for you to develop and carry out. Plan accordingly.
Some believe you are profitable if there’s money in the checking account. Many owners don’t routinely review their numbers. Cash flow can be pinched as a result. Sometimes companies can be put in a situation where one job funds another. Other times receivables are allowed to slip resulting in money shortages. All can be corrected with proper procedures, effective management, and good communication. We don’t know what tomorrow brings and there’s a lot of uncertainty right now. Staying on top of cash will keep you in good shape no matter what happens.
Business can be complex. Just like construction. There are many parts of your company that need attention. It’s easy to get lost in the weeds, which creates more stress for you and challenges for your business. If work is getting out of hand, you need to make changes to get the results you want. Just because something is complicated doesn’t mean it can’t be easier. You work hard and you’ve been successful.
It’s time to reap the benefits of your efforts. Take a moment to rate the eight areas of business. Which ones concern you? How are they influencing others? Now is the time to discuss the categories you want to improve.
Dan Paulson is the CEO of InVision Development International. He helps business owners and executives build high-performance companies. The result is a company designed to give you the freedom to spend time doing the activities important to you while increasing sales and profitability. Dan grew up on a dairy farm in Wisconsin. After graduating from college, he went on to work for some of the largest employers in the state. In 2005, Dan launched InVision to help business owners and leaders who aren’t afraid to get their hands dirty roll up their sleeves and build better businesses. Please visit danpaulsonletsgo.com to learn more.