Customer Focused - You don’t have to be a Commodity!

Scott McKain, a noted business writer says, “If you’re not different you’re a commodity! “

The “C” word often surfaces within the various trades in the construction industry. Are we becoming a commodity? Especially in this price driven economy, is your company being selected by its customers solely on low bid? Why would any contractor want to be treated like a commodity? Those companies usually deal with low profit margins, intense competition and have few loyal customers. I don’t know any contractors that consciously volunteer to be a commodity, yet many seem to be there by default.

Customers make choices based on the differences they see in what their suppliers offer. In general, customers are interested in quality, schedule and price. All contractors claim to do quality work. If true (it isn’t), then to the customer this is no differentiator for quality! All contractors claim to meet schedule and I have found this to be a partial truth - they meet the revised, renegotiated, revised schedule. Again, if it were true, then where is the differentiator? That leaves price and takes us to the commodity world.

Why play this game if you don’t have to? You can differentiate your company from the herd if you choose to. We are not helpless victims of the poor economy and careless owners and general contractors. Here are four ways to make a difference:
Process improvement – quality comes by having processes that work right every time and are doing the right thing. Contractors suffer from inconsistent methods from ordering, detailing, fabricating, delivering, storing and installing products. There are many opportunities to improve these processes. Do process improvements.
Add Value as determined by the customer. I would be very rich if I had $100 every time I heard a contractor say they are customer focused. Most have a very limited understanding of what the customer values. In good times, most contractors are successful by just completing the job. In hard times, it is the few really good contractors that are doing better than just surviving. These high-performing contractors know how to deliver the project early and under budget while maintaining high quality. They get the jobs because by adding value and the customer knows it. Applying Lean techniques will help improve the value to a customer and eliminate waste. (Value is the opposite of waste and there are seven types of waste. How many do you address?)
Provide real service. If all contractors are doing quality work and delivering jobs on schedule, then service is the way to gain advantage and avoid price wars. High-performance contractors know how to improve service, the rest only think they know. One proven technique to improve service is to identify the moments of truth a customer would have with the company, and design each moment of truth so it is a positive experience for the customer.
Improve customer relationships. Many contractors think this means to be drinking buddies with the customer and or give them free tickets to sports events. To develop any meaningful relationship it means investing time and doing a lot of listening. Listening is not the same as sales or parties. Listening includes customer surveys, exploration meetings, and even involving the customer in meaningful post project reviews.

If you do what you have always done – you will get what you always got – no change. The economy is terrible. You can live in a reactive mode hoping it will turn, or you can be proactive to develop ways to differentiate your company from the rest. The opportunity is there, where are you investing your time?

Employee Focus

A recent survey on the best strategies companies should apply in the 21st century found that worker training is being neglected. World-class companies provide more than 40 hours of annual training, yet the survey found that 29% of the companies provide eight or less hours of formal training per employee per year. Only 10% of the respondents reached world-class levels * If we are not investing in our employees, how can we expect them to be loyal to us? Ironically, the survey respondents rated having “engaged employees” as one of the most important strategies to pursue to be successful. How will a company have engaged employees when it doesn’t invest in their development? How much training did your employees receive last year excluding craft apprenticeship training? How many hours of training did your PM’s receive? How much did you receive? Investing in training is a success strategy for a weak economy.

* Source: IndustryWeek, “Next Generation Manufacturing Strategies Work Wisconsin manufacturers using strategies to deliver world-class performance” by Adrienne Selko
Dec. 4, 2008.

Process Management

George Hedley, owner of a general contracting company and popular speaker on construction management discusses quality work at job sites, he says,

“I don't understand why an architect ever has to make a final job walk-thru to identify the remaining punch-list items required to complete a project. The field foreman or superintendent has supervised the installation of the materials, walked the job a hundred times, and still can't see what needs to be completed to produce a finished project? This is unacceptable to me as a construction company owner. It makes us look bad to our customers and creates an impression we don't know how to perform quality work. And what about safety issues? Why do I have to constantly remind my foreman to be safe, shore up trenches, wear safety equipment, install required barricades, keep the job clean of debris, fix unsafe conditions, and use proper fall protection methods?

“In reality, everyone wants to build a quality project and be safe. But they don't always make it their number one priority on an ongoing basis. So we created a system to insure quality and safety are a mandatory part of their jobs. We require superintendents and foreman to dedicate at least ten to fifteen minutes every day to quality and safety and perform a quality and safety walk-thru inspection. They fill out a report of what they observe, what needs to be fixed, by what date, and by whom. Our goal is to fix every problem immediately if urgent, or by no later than by the next week. Don't wait until the end of the job. It is too hard to get crews back to do the little things. For subcontractors issues, fax them your punch-list weekly and require them to complete their items immediately or at least by the end of next week, or you will complete it and back-charge them.”

George Hedley, Hardhat Hedlines, December 2008.

Managing Meetings

Do you hate meetings? Do you wish they went faster and more useful? Here is an article in SNIPS magazine - the Jan. 2009 issue that may help. They do not have it published electronically by itself, so if you don’t receive a hard copy of the magazine here is how to read the article. Go to this web site: http://www.snipsmag.com/digitalmagazine/SWF/SNIPS/0109/index.html

Click on the view table of contents button in the upper right side above the “I” in SNIPS. It looks like a page inside the button. Once in the table of contents go to the Business Management section – page 80 and click. It takes you to the article. An alternative way is to use your mouse to turn the pages one at a time to get to page 80. That way you can browse through the magazine –they like that. A slightly faster way to get there is to go to the end of the magazine and page backward.

Learning Opportunities

You may be interested in attending one of these training seminars by Dennis Sowards:
Feb. 19, 2009 - Eliminating Treasure Hunts”– Applying the 5S’s for Lean Construction – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
March 19, 2009 - Job Planning that Really Works – The Last Planner System, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
April 16 & 23, 2009 - Making Meetings Work for You (must attend both session), – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
May 14, 2009 - Problem Solving Lite (No Carbs) - Getting to the Root Cause, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
Sept. 17, 2009 - Customer Loyalty by Design, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
Oct. 15. 2009 - Introduction to Lean in Service, – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy

Contact Dennis Sowards if you want a customized workshop exclusively for your company.

Thought for the day

Vitally important for a young man or woman is, first, to realize the value of education and then to cultivate earnestly, aggressively, ceaselessly, the habit of self-education.
- Charles Forbes - founded Forbes Magazine.

For more information about the High-Performing Contractor assessment process contact Dennis Sowards at 480-835-1185 or at www.YourQSS.com

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