Improve Your Business, Follow These Basic Principles (Part 1)
The first of two parts.
I travel extensively throughout the nation to work with clients. Each trip, I need to have confidence that all airline employees have a clear understanding of their responsibilities each and every time they service an airplane. There is no margin for error.
In our industry, even large margins of error seem to be commonplace.
This comparison may seem extreme; however, practicing basic principles every day as a normal and expected part of doing business is fundamental to the success of any venture, and therefore, to the life or death of any business. Obviously, this extends to a logical impact on our staff and subcontractors who depend on our business for their livelihoods.
We encounter numerous situations daily where things don’t go quite right. An option doesn’t get installed, a tradesman shows up with the wrong materials, a start or closing doesn’t occur on time, a staff member performs a task incorrectly and, hopefully, catches it before it impacts others. The list goes on and on. All of these delays and errors cost us time, energy and money. We need to create the kind of team and partnerships in our businesses that will prevent these setbacks.
There are 10 basic principles that should be the basis for how a company operates. These principles just make good business sense, regardless of the business you’re in.
As you read a principle, pause and ask yourself, “What would be different or better about our work environment, product, service and/or relationships, if this principle was followed in our workplace everyday?”
1. Define Processes
Once a company’s vision and mission are clear, the team should begin defining each task and process as clearly and accurately as possible.
When we work with a client to review what went wrong in a situation, we usually find that many of the steps necessary for success were never defined. Everyone involved had a slightly different concept of what needed to be done.
For instance, we recently had a client ask us to develop an outline of how their option selection process should work. We interviewed everyone involved — the option selection contact, the sales team and the construction team ― and discovered that each person had a slightly different idea of what was to be done during the option selection process.
There was confusion about when the selections needed to occur, what documentation the sales team needed for the lender, when the construction team needed to receive the selections and more. There was no written, clearly-defined process that anyone could look at to find where they were getting off track. Everyone believed they understood the right way of doing the job. But in reality, no one completely understood what the job entailed or how to do it correctly.
2. Define and Adhere to Requirements
This principle is an extension of the first. Requirements are a set of carefully-written guidelines, specifications and/or standards that define exactly how a process is done, when it is done and how well it can be done.
Think again of your own situation. When a task was done that did not meet your expectations, would the results have been different if the requirements were modified? What requirements can you change in any of your processes that would allow you to be more successful the next time?
By training yourself to work to this new standard you should open the door for improved results.
Companies typically spend a quarter of their time and money re-doing things — reworking, redesigning, reselling, repairing, reordering, returning, re-inspecting — which adds nothing to their value. They do create significant costs and significant stress in the workplace, however.
We believe that by having high standards that are clearly defined you can eliminate waste. You should not “re-”anything.
One consideration regarding accepting lower standards is that these new lower standards easily become your new standards. Think about it. Anything less than 100% should not be acceptable.
When something goes wrong, you need to fix it right away. After the dust settles, you need to look at what you can do to prevent it from occurring again. You may find that there was no defined process or clear understanding of what needed to be done. You may also find that the requirements were not defined sufficiently.
Prevention is not just solving problems, it is solving systems. You must have the written systems in place before you can attempt to solve the problem.
4. Do It Right the First Time
This principle is an obvious extension of our first three principles. I am sure we all have had the experience, either at work or at home, in which someone presented us with a completed task that was not done well. When we ask why, the response is usually that there wasn’t enough time — enough time to do it right.
Using home building as an example, we have the cost of installing the item to begin with, then the cost of taking it out and the cost of re-installing it. Doing it right the first time will ultimately improve the bottom line.
Next issue: How the remaning basic business principles can help your business will be discussed.
Manny Schatz, MIRM, is founder and principal of Professional Builder Services, Inc. (PBS) in Danville, Calif, which trains and guides home builders in marketing, sales, sales management and construction management activities. Schatz has been involved in nearly every aspect of home building for more than 30 years. He holds a general contractor license, a brokers license and is a member of the Institute of Residential Marketing (MIRM) and has been a featured speaker at the Urban Land Institute, PCBC, the International Builders’ Show, the Sales and Marketing Council (SMC) and other industry events. Schatz is a life director of the California Building Industry Association (CBIA), past chairman of the National Sales and Marketing Council (NSMC) and a trustee of the IRM and the NSMC. He has served as president of his local HBA and SMC as well as PCBC.
For more information, call Schatz at 925-837-1937.
This article has been condensed from its previously published version in BUILDER DIGEST of California magazine, for which Manny Schatz writes an ongoing column.
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