High Performing Contractor - Jan 2007

This e-newsletter is dedicated to supporting High-Performing Contractors and all contractors working to become one. Written by Dennis Sowards

Happy New Year

**************** Leadership - Focusing on the wrong problem
No doubt one of the hot topics this year will be the scarcity of employees in the construction industry. Almost every construction business magazines carries least one article giving solutions to this problem. While there is a shortage of key skills and crafts, the degree varies by location and company. High-performing contractors always seem to have less of a problem. This shortage problem is compounded by the tendency to blame all problems on the people running the work. If a project goes sour, the first thought of many executives is to replace the project manager. This can create the perfect storm when the company is constantly replacing people for work failures and at the same time cannot find competent replacements. There is another answer to consider

A recent Harvard Business School study concluded that when business management makes the replacement of people as their main way to try to problem solving; the problems usually remain unsolved.

The research found that companies who try to solve complex business problems by "changing the players" usually end up as poor performing companies. The companies blame the people for all the failures and keep replacing them only to find that the company itself fails.

The study identified four basic elements that contribute to a company performance: goals, roles, rules and people. They defined these in this order of importance:

“GOALS - This is the company game plan that will define the level of achievement required by the team to assure a predetermined level of business success.
ROLES - A definition of the jobs to be done and who has the accountability and authority to execute.
RULES - The policies, procedures and processes that form the basis of consistent action and performance excellence.
PEOPLE - The players that make up the team; a company’s most valuable asset.”
When a company establishes its goals (I call this the company’s vision and strategy), defines the roles, and documents and lives the rules; the study found that the people problems disappeared. The need to "change the players" goes away.

As the new year begins, do your own assessment - are you attacking people problems? Instead, set the right goals, clearly define and communicate the roles and rules and the people problems will usually take care of themselves. High-performing contractors start from the top down and don’t blame their most valuable asset.

Source: Bill Gaw MBBP Bulletin - Resistance to Change, 09/10/07

**************** Customer Focused
Jeffrey Getomer says Customer satisfaction is dead! consider his views:

“Oh, there are a bunch of huge companies that haven't figured it out yet. And there are a bunch of hotels and airlines that haven't figured it out yet. And some (OK most) will never figure it out.

“There are even organizations that give out "Customer Satisfaction" awards. (J.D. Power and Associates is among the most notable.) And the companies that win the "satisfaction awards" - especially the WORST SERVICE PROVIDERS IN THE UNIVERSE (like airlines and automobile manufacturers) -- brag to everyone. They take out full-page ads. And they put up banners in public places as though it will change the mind of the public that already knows the score.

“Another word for satisfaction is: mediocre. How would you like to win an award for mediocrity? "We are the highest rated mediocre company in the universe!" What a joke - and not a funny one.

“TRUTH: Anyone that posts a "satisfaction" award has an army of people that hate them for the lousy service they provide, AND a bigger army of people laughing at the audacity and the phoniness of the banner.

“Satisfaction is the LOWEST level of acceptable service. And in the end, it means nothing. Companies like AOL measure "satisfaction," while they lose thousands of customers a DAY because of lousy service and apathy. Why measure?

“THE FACT IS: Customer LOYALTY is all that matters.

“And many companies are (finally) coming to that realization. I define loyal customers as people who will do business with you again, tell others about you, and refer others to do business with you.

“Most large companies spend all their time worrying about "share-holder value" and do nothing at the source of the opportunity: loyalty value.

“THE REALITY: To GET loyalty, you first have to GIVE loyalty. Loyalty is a chain. It starts with a corporate philosophy. One that is created and written by the owner or the CEO - NOT the marketing department, HR people, or some ad agency.

“The CEO has a vision beyond self-service. His or her vision of the company is the one mission that must be carried out. How can anyone march to a philosophy or a vision that's not created by the creator? Can you imagine God saying to his marketing department, "Hey, you guys create a bunch of commandments, and run them by me before you carve them in stone. Oh, and make it an even number, like ten or twenty." Not too authentic.

“Here's what you can do:
Loyalty starts at home. Loyalty to employees - taking care of employees is the number ONE job of any business owner or CEO. Happy people, respected people, cared-for people, and empowered people are more likely to transfer those feelings to customers. And vice versa.

“Take loyal actions. Loyalty to customers stems from the actions that are taken, and the words that are spoken from employees. It's not just "business as usual" - it's going the extra mile and taking a proactive approach to communication. Get the idea now? Loyalty is earned.

“Earn loyalty and you'll get it. Loyalty from customers is a result that occurs when all the other elements of your business have been mastered. Loyalty is not a report card. It's THE report card.

“Make loyalty the imperative. From the CEO to the person that answers the phone. From sales to service. From shipping to purchasing. Make loyalty the corporate language. BUT to make it work, there has to be total senior-level support. If you concentrate on loyalty, satisfaction is no longer relevant.

“Start with attitude. You can't teach loyalty, but you can teach and instill positive attitude among all the people in your company. Loyal action and great service STARTS with people who have a positive attitude.

“Measuring satisfaction? Waste of time, waste of money, waste of customer interaction. BUT it's the PERFECT "c-y-a" vehicle for middle management to justify their job and existence.

“Here's the real world measurement:
Will they do business with me again?
Will they refer someone to do business with me?
Will they give a testimonial?
Measure loyalty? Easy. Count the number of repeat customers. Count the number of referred customers. Count sales. And count profit. The rest is bogus.”

Source: Jeffrey Gitomer's Sales Caffeine Issue 307

**************** Learning Opportunities
You may be interested in attending one of these training seminars by Dennis Sowards:
Jan. 15 & 17, 2008 – How to Make Meetings Work (For You) - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy at pipetrust@qwest.net
Feb. 21, 2008 – Lean applied to Construction - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy at pipetrust@qwest.net
March 20, 2008 - 5S’s Any CEO would Love - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy at pipetrust@qwest.net
April 3, 2008 – Lean Contracting Practices, SMACNA – SMWIA – 2008 Partners in Progress, Las Vegas, contact http://www.pinp.org/conf08/registration.htm
April 17, 2008 – Job Planning that Works - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy at pipetrust@qwest.net
May 6, 2008 – 5S’s in Construction – ASQ National Conference, Houston, TX
May 15, 2008 – Problem Solving Lite: Root Cause Analysis - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy at pipetrust@qwest.net

**************** Thought for the day
Take care of the means and the end will take care of itself.
M. K. Ghandhi

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