Two Heads Are Better Than NONE!

Editor's Note: This is the fifth in our 2009 series, "Earn More, Work Less." 

 

Take Time to Plan Your Strategy

Imagine yourself stranded on a tiny island trying to make a strategic decision about how to get off the island quickly and safely before you run out of food and die. Without any advice or ideas from other people, it would be very difficult to decide what to do next or the best way to get off the island. Now imagine an entrepreneur or business owner sitting in his/her office alone trying to make all the decisions about how to run his/her company. These scenarios are similar. Without input from others, making decisions based solely on what you know and your experiences are no guarantee you'll choose the right path. Your chances are at the maximum 20 percent and might be zero-not good odds when your future is at stake.
Do you continually struggle with big decisions that shape the course of your potential success:

•     "What should my organizational chart look like?"
•     "Do I have the right people in place to grow my company?"
•     "What type of new business should we go after?"
•     "How can I cut or control overhead expenses?"
•     "Who should I fire to balance our budget?"
•     "Should I promote from within or hire a trained manager?"
•     "How can we make more money in the field?"
•     "How can I make my managers more responsible and accountable?"
•     "What financial reports should I be getting?"
•     "How much money should I be making?"
•     "How should I give out incentives and bonuses?"
•     "How can I get my people more motivated?"
•     "Where am I losing the most money?"
•     "What's working and what's not?"
•     "How can I get my company to go where I want it to?

It's Lonely at the Top!

With the fun and excitement of owning and running a company comes much stress and strain. Overwhelmed with tough questions, no easy answers and difficult decisions, frustrated business owners delay deciding what to do about their direction, management team, customers, equipment, marketing, profits, financial reporting, investments and growth. When you delay or postpone necessary key strategic decisions, you continue living with mediocre employees, poor results and inadequate organizational systems. Eventually, you realize you can't do it all yourself and need to seek some help.

Unfortunately, most never get off the treadmill to look for professional advisers and make time to improve their companies. This is kind of like postponing a trip to the doctor even though you know that nagging pain in your chest must be attended to before it's too late, and you have a heart attack.

We all know that two heads are better than one. And guess what? Two heads are better than none, too. If you're doing it alone, you might as well be stranded on an island. The odds are less than one in five (or ten) that you'll make the right decisions when you do it alone.

Me, Myself and I

The best advice you can get is from outside, unbiased professionals who know your business, can give you real opinions of how to improve and are not afraid of telling you the truth and hurting your feelings. And when you ask your managers or key employees for advice, they'll only give you their perspective on what's best for them, not you or your company.

I founded my commercial construction company in 1977. After only seven years in business, I had 150 employees, and we were doing $50 million in annual sales. I thought I was doing great (and knew everything there was to know about business) for a young thirty-five-year-old. A friend suggested that a company board-of-directors could help me take my company to the next level. So, I asked five very successful businessmen to be on my advisory board-of-directors. At our first meeting, I proudly presented my goals, financials and plans for the future. I then asked for their input. One by one, they proceeded to rip me apart and ask questions I couldn't answer.

Their laser-like questions included:
 

 

•     "Is that all the money you make for the risk you take?"
•     "Why are you only doing that type of work?"
•     "Why is your employee turnover so high?"
•     "Why do you do so much of the work yourself?"
•     "Who else on your management team do you review the financials with?"
•     "What is your plan to improve profitability?"
•     "What new customers and markets have you tried in the last year?"
•     "Why are you afraid to let go of major decisions?"
•     "Do you have a strategic business plan?"

These questions and many more made me feel really stupid and about two feet tall. I couldn't provide any good answers. I thought I had done fairly well building a company. But my inner circle and executive management team had consisted of me, myself and I. And I had obviously missed the boat on many major issues required to become very successful and very profitable. Does this scenario sound familiar to you? Are you alone making most of your strategic decisions? Do you continue doing business the same way and only expect better results if you work a little harder?
 

Get Some Help!

My advisory board recommended I hire a professional management consultant and coach who specialized in helping construction business owners grow and make a profit. They also recommended I quickly work with the coach and my management team to draft a strategic business plan before I made another dumb decision. After several days of mourning and being in shock from the reality of the board meeting, I took the advice and decided to invest in the future of my company. I hired a construction business management consultant and coach who helped me look at my leadership style to become a better leader and analyzed our management team to determine who were valuable assets for our long-term growth. He also reviewed and improved our overall operational systems, standards and procedures to help us get organized, systemized and more in control.  In addition, he reviewed our numbers and gave us advice on how to make more money. After getting to know our company, he then did a great job at facilitating our two-day strategic business planning workshop. I could have never made the moves and changes I needed to make without the help, advice and push from an outside person who had no agenda except to make me and our company better.

Where Do You Need Help?

Over the last fifteen years as a speaker and business coach, I have worked with dozens of construction company owners who decided they couldn't make all the right decisions about their company alone. They wanted advice from an outside professional who knows what it takes to grow and build profitable companies.

Here are a few specific examples of those business owner's seeking help:
 

 

•     Dave was trying to figure out how to slowly turn his company over to his son, without upsetting the older managers who had been with him for years.
•     Jim was struggling with a shrinking market and tougher competition, and needed help with his business development, marketing, and sales program to attract better and more profitable customers.
•     Art was having field productivity problems with his large crews and needed help creating a program his foremen and supervisors would buy into.
•     Ken's company's safety record was not acceptable and wanted help creating a program to eliminate accidents and motivate his field employees to make safety a priority.
•     Larry was struggling with keeping his project managers and estimators accountable and responsible to bring their jobs in on-budget.
•     Dale asked me to help his twenty division managers work on a plan to expand their services and create loyal customers across the country.

Every small business owner has internal challenges, external threats and tough decisions to make like these people. Some have long-time employees who have stopped being productive. Others have relatives in the company who aren't doing their share of the work. Many just can't decide what moves they should make to make more money or find better customers. Some struggle with incentive compensation programs or basic ways to generate steady and profitable revenue. But without sound advice, these owners try to make sound decisions but usually stay stuck doing what they've always done.

One business owner, Bob, called me and he didn't know what he needed, he just knew he needed help. He hired me to do some phone coaching. In the meantime I was conducted a survey of his employees to determine the real problems and how I could help his company. I asked his employees, in a confidential survey, a series of questions: What works? What doesn't work? What needs improvement? Where are you losing money? Who is losing money? What do you need to change? Which people are productive, good, bad or need to go? What additional responsibilities do you want to accept? What are your career goals at this company? And if you owned the company, what would you do differently? From the results, Bob and I continued our phone coaching and decided to hold a strategic business planning two-day workshop retreat.

What Is a Strategic Business Planning Workshop?

A strategic business planning workshop is a one-, two-, or three-day retreat where company owners and the key management team sit down and hash out the direction for the future of their business. They will develop a one-, three-, or five- year strategic business plan with their mission, key success factors, goals, objectives, targets, strategy and action plans clearly defined and written. The decisions made will answer these eight key questions:
 

 

•     1. What's the owner's purpose for owning the company?
•     2. What is the business mission and vision?
•     3. How are we currently doing business?
•     4. What's working and not working?
•     5. What threats or challenges do we face?
•     6. What additional opportunities are available to us?
•     7. Where do we want to go, and what do we want to accomplish?
•     8. How do we achieve our goals?

 

Invest in Your Future!

Business coaching and strategic business planning takes dedication, time, energy and money. And to implement the plan will take even more dedication and effort. You as the company leader must demand meaningful change in the direction decided to make your company achieve it's goals. Are you up to the task? Are you willing to look in the mirror and face reality? Do you really want to make a positive difference in your future? Are you open to change and improving what you've got? Are you ready to tackle your people, processes, systems, procedures, communications, customers, organizational chart, reporting, chain of command, delegation, accountability, methods, focus, direction and leadership style?
 

What Do You Need to Fix?

To get started, you will need to do an in-depth analysis of where you are today, how you do business, what's working, what's not and what needs to improve. The pre-planning survey approach is a great way to start. But if you try to be objective and get honest input from your employees alone, it won't happen. One company I worked with insisted their employees turn in their pre-planning surveys to the boss's executive secretary to review before she passed them onto me. They assured me their people would not hold back and would be honest about company issues. You guessed it. All of their answers said everything was perfect and everyone at their company was doing a good job. No way!

To get truthful input, it is best to use a neutral party to help you discover what must happen to fix your problems and take your company to the next level. Asking customers, subcontractors and vendors for input can also be helpful to discover others areas of strengths, weaknesses and potential business opportunities. After gathering as much input as possible, you are then ready to meet with your team and get to work. Select a comfortable meeting location at least one hour from your office to get attendees out of their work mode and into the planning mode. Everyone should leave their cell phones behind and be ready to interact, work together, and build a team focused on the future. Often a business hotel or retreat center works great. This allows for relaxation and thinking during the breaks and evening hours. Your company owners, executives, managers and key employees should attend the retreat. The right number of attendees depends on the size of your company-around eight to fourteen is a good number to be most effective.

Each participant must come prepared with information about his/her area of responsibility so the team can make good informed decisions. Have them bring the company financials, budgets, revenue, overhead, profit, current organizational chart, marketing and sales information, estimating information, project and customer lists, equipment lists and any other items you think you may refer to while making decisions about your company's future.

What's Your Mission?

Over the next two days, your planning facilitator will help you take a hard look at your company, people, systems, operations, customer base, profitability, strengths, weaknesses, market opportunities, external challenges beyond your control and your future. Then you'll create a mission statement outlining your vision for your future. At a recent strategic planning retreat I facilitated, we developed the following company mission statement:

    "The mission of the ABC Construction Company is to be the market share leader in transportation projects and heavy highway public works construction in the Southern Counties of XXX State by providing competitive and superior workmanship using quality methods, equipment and materials using well-trained employees in an ethical, safe, efficient and highly profitable manner."

Note how simple and focused this mission statement is. It is very clear what they do, how they do it and for whom they do it. How focused can your company be without a clear mission of your exact customer targets, pricing methods, people standards and a goal to be highly profitable?

After you draft a clear mission statement and list out your strengths and weaknesses, it's time to begin. You want to develop objectives to move your company toward the targets you want to hit. First, you start by identifying goals in the important areas of profit and revenue needed to meet your financial requirements and minimums the owners want or demand. With this in mind, you then outline targets for customers, projects and markets. You may choose to set goals for operations, management, field, project management, estimating, standardized systems, people, training, safety, technology, administration, finance, accounting, other business opportunities and investments. Additional goals may also emerge depending on your company situation, threats, challenges, direction and needs.

Decide What to Do First!

After your team has created a long list of company objectives, goals and targets, you'll realize you can't work on all of them at once. Too many goals are worse than no goals at all. So the planning team will need to prioritize which goals are the most important and will make the biggest impact over the next few years. Obviously, revenue and profit will be on the must-do list. Typically I recommend only tackling five to seven goals at one time. You can always add more goals after the first few are accomplished. It is best to start with goals that'll make you the most money or give you the biggest competitive advantage.

Next, the planning team will work together on each of the top priority goals. They will clearly define the objective, provide measurable targets, set a goal deadline and assign a responsible team captain. Here's an example of a few strategic goals can include:
 

 

•     "Increase our total annual sales revenue to $40 million next year and then increase it by 20 percent per year for five years while we improve our pre-tax net profit from 2.5 percent to 5 percent of sales in the next three years."
•     "Create and develop a complete marketing and sales program to generate $20 million of new revenue and customers in the medical and hospital market by January 1, 20XX."
•     "Develop a complete comprehensive program to improve field productivity 20 percent by July 14, 20XX including a tracking system, job cost system, training and accountability."
•     "Install a complete cutting-edge technology solution for our company by September 1, 20XX, to allow for growth during the next five years, which will include accurate and timely accounting, job costing, estimating, project management, tool inventory and equipment management."

For each of these goals, a team captain must be chosen to lead the initiatives. The captains will ask other managers and key employees to help on their team committees. Involving lots of people will enhance the success toward accomplishing the ultimate goals and strategic plan's objective. The team captains will work with their teams to create action plans, additional committees and deadlines for the many tasks needed to achieve their assigned goal. The company owner must hold mandatory strategic planning team captain update meetings every month to review the progress of each committee. Without strong leadership from the company owner, the strategic plan implementation will never become a reality.

And the End Result?

Fast forward one year after your strategic planning workshop retreat. Your company will have made incredible progress and accomplished more than you would have ever hoped for. You will have improved your bottom-line profit, revenue, customer loyalty, market share, employee morale, teamwork, systems and overall operations.

But without a plan, nothing will get better. Why? Because: "When you aim at nothing, you hit it every time!" Make a decision to stop making all the decisions yourself. Invest in your future. Get a business coach. Hold a strategic planning workshop retreat. Set goals. And let your company become the best it can be.

Construction Business Owner, May 2009