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Improve Your Business, Follow These Basic Principles (Part 2)
 The second of two parts.
Following basic principles as a normal and expected part of operating a company is fundamental to any serious effort to produce exceptional results. To live them day-to-day is to create the kind of team and partnerships necessary to achieve success.
There are 10 basic business principles that should be the basis of how a company operates successfully. In the last issue of Nation’s Building News, we covered four of them ― defining processes; defining and adhering to requirements; prevention; and doing it right the first time.
In this article, we will cover the remaining six principles that, regardless of what business you are in, make good business sense.
5. Measurement
Measurements are performed for very fundamental reasons:
- To effectively monitor progress;
- To provide an early indication of problems;
- To allow intervention to take place before a problem occurs
- To provide guidance for additional ongoing improvement
Measurement is a concept that has always been difficult for many to embrace. Many employees fear measurements because they believe their employers are using them to catch them doing their jobs poorly or incorrectly. If measurements are being used this way, they are being grossly misused.
Properly Incorporating Measurement
Before any change to current processes or procedures is made, look at performance results at a specific point in time to establish a benchmark. Then, once adjustments are made, measure the results on an ongoing basis to be certain that the right changes were made.
If it is later discovered that the changes are not producing anticipated results, further adjustments may be required to get on the right track.
6. Customer/Supplier Relationships
This principle involves understanding that you are both a customer and a supplier within your own organization.
You supply a product or service that is essential to someone else on the team — something that enables them to do what they do. In turn, someone supplies you with the essentials you need to do your work, at which point you are their customer. When we see ourselves in this light, teamwork takes on an entirely new and creative dimension.
By respecting and valuing the needs of our “customers” as well as understanding the abilities and constraints of our “suppliers,” we truly come to value those around us. We define more workable relationships and enhance everyone’s ability to be their best.
Over time, these relationships grow. At first, they are characterized by simply keeping agreements but, eventually, real teamwork will develop with genuine respect, credibility, openness and trust. Customer satisfaction is as important for internal customers as it is in the marketplace.
With the Customer/Supplier Relationships principle, we now have the foundation of a workplace environment where our other principles can realistically be applied.
7. Involvement
At the risk of sounding very basic, let’s state the obvious ― people are by far the most important asset of any organization.
Almost everything else in our business depreciates — people appreciate.
Everyone has experience, ideas, values, energy and concern for others, so every successful team effort must allow everyone to contribute their very best. No employee should be wasted or undervalued. Everyone needs to be involved and supported.
8. Continual Improvement
We understand that neither markets nor consumers are static in our industry. Managing change is a real and unavoidable component of any successful business or marketing plan.
When continual improvement is a fact of business, it can be a genuine and substantial competitive edge.
9. Realistic Expectations
A customer expects that everything will work and be perfect from the start. We need to instill realistic expectations with those in whom we are in contact.
Be honest with your customer. While everyone would like a perfect product, achieving that is virtually impossible.
That doesn’t mean you have to lower your standards because you give in to the expectations that there will be defects. Rather, you need to alert your customers to the fact that you may have to make corrections and that you will respond within an agreed upon, realistic time frame.
Keep in mind that what we do every day is commonplace to us, but not necessarily so with our customers. So, it’s important to see the situation from the consumer’s perspective and level of experience.
Establishing realistic expectations will take a great deal of time and patience. Perhaps the first commitment that needs to be made is to this principle: Acknowledge the level of challenge that has been set and the level of patience that it is going to take to get there. Then hold each other accountable for being impatient with the process and infinitely patient with each other.
10. No Mavericks Allowed
Change has to be proactively managed. It cannot be allowed just to happen in reactive and uncontrolled ways.
If these basic business principles have been followed, a system to effect change and improvement will exist.
The system must be adhered to. Individuals cannot take it upon themselves to administer change outside the system. In a situation where there is no team player…try and be the team player.
In part one of this discussion, I suggested that when you read each principle, pause and ask yourself, “What would be different ― and better — about our work environment, product, service and/or relationships, if this principle was lived out in our workplace everyday?”
We are all in this together ― home builders, trades, suppliers and all of their employees, as well as our home buying customers. Our chances of success are enhanced when we follow these principles and team together to accomplish our goals.
To read part one of this discussion, visit “Improve Your Business, Follow These Basic Principles (Part 1)” in the Sept. 5 edition of Nation’s Building News.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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