June 2008: Business Building

Words: George HedleyJune 2008 Business Building

Replace Yourself With Systems

You can't do it all yourself.

George HedleyBy George Hedley

During my first seven years starting and building my construction company, I tried to do it all myself. I did all the estimates and presented the bids; signed all the contracts, subcontracts and change orders; made the big field decisions; purchased all materials and equipment; awarded subcontracts; went to all the job meetings; supervised concrete slab pours; and made every personnel decision. This made me crazy, raised my weight and caused most of my hair to fall out!

One evening, I took my family for a "happy" meal at McDonalds. I noticed the boss wasn't there, the employees were 16 years old, customers were happy, and the food was consistent and relatively edible. I thought, "How do they do it without the owner supervising and making every decision?" I asked a server to show me the secret. He took me behind the counter where they have pictures clearly displaying how to build different hamburgers and menu items.

Good people or good systems?

Wow! A huge company runs smoothly using pictures of the finished product. This guarantees consistent quality. Plus, the owner doesn't have to be on site all the time, making every decision for every customer's order. If I could do this in my business, I could also build an organized company. This could reduce my dependence on having great people.

A systemized business produces consistent performance and results. How much money are you losing when you rely on your people to do their best, but not follow company installation and operational standards?

The results of owning a systemized business include:

 
  • On-time projects
  • Quality workmanship
  • Staying on budget
  • Safe projects
  • Repeat customers
  • Always making a profit.
 

All these results occur with or without you being everywhere all the time, and maybe you can take a regular vacation some day!

Good systems are simple

Excellent companies have simple systems. Outline each system on one piece of paper, writing or drawing a detailed picture of the end result desired to meet your company, customer or project specification. The best systems are team designed by the people who actually do the work and know how to do it best.

For example, at hotels, all rooms look the same when ready to occupy. How is this done? It's simple. A picture of a ready room is shown to the housekeepers and the supervisors explain what is expected. They don't care how the result is accomplished, just that the room is perfect when completed. This simple approach can be applied to every part of your business.

Create a "DO" manual

Organizing and systemizing your company requires time and money to produce consistent results and get everyone doing business the same way. Create a "DO" manual of pictures, checklists and guidelines as your company minimum standards. Build a three-ring binder of standard systems for every aspect of your company and field operations. Include everything from how to prepare a timecard or calculate change order markup, to how to install slab expansion joints, form door openings in concrete walls, do monthly job close-out, and get paid. Focus on the important things first that will make a difference in your bottom line. Make a goal to create one system per week, and you will be organized in a year.

Best-selling author and professional speaker George Hedley helps entrepreneurs and contractors build businesses that work. He is the author of the "The Business Success Blueprint Series," available in eight workbook and audio CD sets. Contact him to present to your organization on his proven system to build profits, people, customers and wealth. Construction company owners are invited to attend his two-day Profit-Builder Circle boot camps. Email George at gh@hardhatpresentations.com to receive a free copy of his book "Everything Contractors Know About Making A Profit," or signup for his free monthly e-newsletter. For more information call 800-851-8553, or visit his Web site and bookstore at www.hardhatpresentations.com.

Seven Steps to Create Systems

1) Identify areas to systemize. Start a Fix-It list identifying everything you need to fix in your company. Keep this list handy and add to it when things go wrong. At your manager meetings, pick the top one or two items to systemize every week. 2) Assign system team.
 After choosing a system to create, pick three or four people to work on the company standard. Let them pick a convenient time and location to work together for a few hours. Involve those who actually work within the area being systemized. For example, your team might include a project manager, foreman and journeyman when systemizing a field standard. 3) Draft minimum standards. Create checklists with pictures of the desired end result for each system. Draft it on a standard paper for three-hole punching into a binder. 4) Formalize it. Assign a staff person to be in charge of formalizing and distributing the systems. 5) Try it.
 Let the team who created the system try it and work out all the bugs for a few weeks before implementing it companywide. 6) Implement it.
 At regular monthly meetings, have the team who created the system present it to the entire company. You must insist everyone do the system per the company standard — no exceptions, including yourself. If someone protests, let him put the item back up on the Fix-It list for further revision. 7) Follow-up.
 After six months, revisit the new systems to insure they are still being used and working well. The beauty of systems is not worrying whether every project will be built the same way. This will allow you to spend your time on important matters as little problems go away. To get started, create a Fix-It list today, and you will be organized sooner than you think.

George Hedley, HARDHAT Presentations. 3189-B Airway Ave., Costa Mesa, Calif. 92626      
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