How do you control Processes? Months 10 - 12
“Those Things Which Control Consequences”
All right, by now, you have a pretty good idea of what you want and how to go about getting it, but we haven’t identified the most important ways for you to control the final results. As we learned in Section Two, Performance = Profits, and in that section, we identified the tools you are going to use to manage performance. In other words, how is your company going to coordinate and lead it’s efforts to be as efficient as possible?
Section Three is about controlling processes that have the biggest impact on performance. Too many contractors get the work which is the price to play the game, plan for performance to be efficient, but don’t know how to control productivity which is where the rewards are in the game. If Productivity = Actions taken or not taken, why is it so few actually try to control this? Too many contractors are letting their employees and customers run all over them which means by the end of the project, they gave back the profit they planned on.
So, in this section, with everything you’ve identified to date, we’ll have the ability now to Control your Job Profits by Controlling Customer Expectations and Employee attitudes.
Company Processes (Making sure you’re a winner at the end of the job!)
In order to be a winner in the big scheme of things, as we addressed above in Company Performance, you must know first if you’re winning in the trenches. Every job has a story to tell, and you must be able to interpret what that story is and if it’s supporting your overall objectives.
Month Ten will be:
Job Costs
- We’ll recognize the proper ways to determine if your job was built within the estimate budget or not and what it means. I will also provide some formats to be used for those who don’t have this set up in their accounting system.
Overhead
- We’ll recognize the proper ways to determine if your estimate covered enough to pay the overhead and what this means to you.
Profit
- We’ll analyze to total picture and determine if your winning or not, and how to make adjustments
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Customer Processes (Making sure what you sell and deliver are the same, no more, no less!)
Then, on the customer side, “If it ant in writing, it doesn’t mean Sh__.” Construction is a Contract Business, and if you don’t have the proper document to protect yourself and the customer through the Proposal, Contract, and Close Out processes, it’s impossible to always come out a winner. As a matter of fact, we all know it’s hard enough to get all your money even when you are right. It’s very important that you realize if you have customer issues, it’s because you don’t have the right processes in place to minimize any discrepancies, Thus, the customer wins and you lose (goodbye profit).
Month Eleven will be about making sure your documents support your promises.
Proposal
- I will show you how to do your proposals in balance with everything you’ve recognized to date in writing so you can meet customer expectations.
Contracts
- We will identify all the different types of contracts and what they mean.
- I will help you identify what the best contract structure is for your business.
- I will help you with putting the right things in writing to control the desired results according to the business choices you’ve made over the past ten months.
Close Outs
- I will show you different ways to set up Close Out procedures so there are no unresolved issues at the end of the project
- I will show you the best way to tie this in with collecting for your business.
- I will help you put the right things in writing so if there are any legal problems, you’ve positioned yourself.
Employee Processes (Making sure you get as much work as possible out of employees!)
“What I’m getting at here - I see so many contractors work so hard to get the work, but by the end of the project, they’ve thrown all the potential profit away. What good is it to get the work if you don’t know how to control your employees. To this day, I’m amazed at how many owners will tolerate tardiness, laziness, long breaks, screwing off, complaining, quitting early, not caring, etc. without correcting it and then wonder why they aren’t making a profit. We already know the margins in construction are minimal, so how can one afford not to make them work?
In your Employee Position earlier, you recognized the “Culture of Discipline” that you want in your business. Now, what processes must you do well to maintain that level of performance? First, it’s all about hiring the right people and getting rid of the wrong ones. You want a competitive advantage? Get rid of your bad employees so they’ll go work for the competition. Secondly, you need an evaluation process so employees know where they stand (good or bad), and you can help them improve. And thirdly, it’s a must that you live up to your disciplinary processes at all costs with everyone. What’s fair for one is fair for all.
Month Twelve is about you controlling the actions of employees.
Hiring/Firing
- I will help you determine the best ways to recruit employees
- I will show you how to set up the best hiring processes through job descriptions.
- I will help you set up processes for terminations
Disciplinary
- I will help you determine how to control this in your business
- I will help you put the written processes in place
- I will provide you with tools to use
Evaluations
- I will help you understand what evaluations can mean to your business
- I will show you how to use the evaluation process to control employee improvements, pay, and future opportunities
- I will provide some tools to use
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