High Performing Contractor - Mar 2008

Submitted by Dennis on 11 March 2008 - 6:41pm.

High-Performing Contractor - NEWSLETTER

March 2008

Leadership – customers

George Hedley owner of Hedley Construction writes about leaders who make customers a priority:

I have some deep concerns about the future of your company, the management team you have assembled and your leadership. Your business is not growing for one reason: You and your management team are not making customer relationships, selling and creating new revenue a priority." This is the opening to a letter I recently sent to a start-up company I invested in. I wanted to get them focused on the real business problem, which was causing low profits. Often times, business owners or managers tend to blame bottom line issues on the economy, competition, market or their employees. In reality, results are the biggest indicator of leadership. Making a profit and growing your business is simple. It starts with creating revenue. No revenue = no business = no profit. Successful leaders are big-time revenue generators who constantly sell. The fastest way to fix a company's profit or growth problems is to generate more revenue. Look at what some of the greatest business leaders say about selling:

"Anyone can manage. Leaders go out and create revenue."- Sam Walton

"Anyone can mind the store. Revenue takes inspiration and excitement." - Jack Welch

"Anyone can organize. Leaders cold call and close sales." - Lee Iacocca

"Anyone can stay busy by selling low price. Leaders create loyal customer relationships." - George Hedley

For me, selling doesn't come naturally. I don't like to spend my day cold calling on potential customers who don't really want to talk to me. Selling is uncomfortable. Selling is not my gift. Several years ago I tried to fix this problem by hiring a salesperson. I figured this would remove me from the sales process. Guess what? It didn't work. He continually kept asking me to go on sales calls with him. This ticked me off! Now what? How can you grow your business without selling? You can't! The leader must carry the sales torch. In my construction business, clients want to know me and know I will be the project leader (not manager) before making a decision to hire us.

The only way you can grow your business is to take personal responsibility to create customer relationships and profitable revenue. You must be the leader and spend lots of time building customers relationships. The highest return on your time is time spent with customers. What is your personal commitment to leading, selling and creating customer relationships? This week? This month? This quarter? This year? Leaders use a personal sales and face to face appointments with their top 20 customer targets on a regular basis. Every breakfast and lunch is an opportunity to be with one of your targets. Every day arrange at least 1 or 2 meetings with potential and current customers from your target list. Give your management team a weekly progress report to show your commitment to making sales happen.

Source: Hardhat Hedlines, Oct. 1, 2007

Customer Focused

Most contractors tell me they capture 20 to 30% of their bids. The industry average is around 28%. That means that most of the effort put into preparing a bid is wasted time and resources. When we lose a bid, we often attribute it to fate. We say, “that’s the way of construction” and accept it. Some contractors feel that it is impossible to get all they bids but if they keep the volume of bids churning, they will capture enough to stay afloat.

Consider that if you could capture 50% or 80% or 99% of the bids you submit, what would that do for how you run your estimating and sales process? By winning more bids you can be selective in the jobs you go after and save wasted effort. Winning a bid is great and losing any bid is not. We need to learn from our loses and improve. When a customer chooses a competitor, the first thing you should do is to find out WHY, and fix it. If you don’t, it will happen again and again. To succeed, you have to be the contractor of choice; second choice never put food on the table. Find out why you lost and do whatever it takes to fix it. If it wasn’t a job you really wanted, then why even bid it? If it was one you wanted, then work to be the winner. I feel that contractors who get serious about what jobs they bid and how they bid them can improve they success rate and gain more work with less.

Employee Focus

“In the Average Organization, 74% of All Employees are Either Unengaged or Actively Disengaged! Operating at Only Two-Thirds Capacity, this Results in a LOSS of About One-Third of the Organization’s Payroll!”

Source: The Gallup Organization
__________
Are your employees engaged in helping your company succeed? How do you know? Do they show up for work each day with passion and purpose? Do they make suggestions for improving the business? Are they loyal to you even when another contractor offers more money?

If you answered "no" to any of those questions, you should be concerned. Companies, who do not have engaged employees, are missing out on significant cost-savings and profits.”

Consider the following findings:
Gallup International reported that businesses in the top 24% of employee engagement had less turnover and remarkably higher percentages of customer loyalty, profitability and revenues.
Extensive studies by HayGroup revealed powerful links between employee engagement and productivity, which ultimately impacts the bottom line.
The Towers Perrin study found that companies with the most engaged employees collectively increased income by 19% and earnings per share 28% year to year.
Source: IndustryWeek Dec 2007.

Business leaders and managers take note: You can make and save money by keeping employees engaged. JoAnna Brandi, a popular business writer, suggest these nine management tips for creating and sustaining employee engagement:

“1) Let go of any negative opinions you may have about your employees. Approach each of them as a source of unique knowledge with something valuable to contribute to the company. Remember that you are co-creating the achievement of a vision with them.” [A Towers Perrin survey found that only 10% of employees feel their senior managers treat them as part of the company – Source: IndustryWeek Dec 2007.]

“2) Make sure employees have everything they need to do their jobs. Remember when you started a new school year and you'd prepare by getting all new school supplies? Why not build just such an opportunity into your department simply by asking each staff member, or the team as a whole, ‘Do you have everything you need to be as competent as you can be?’ Remember, just as marketplace and customer needs change at daily, so do your employees' needs change.

“3) Clearly communicate what's expected of employees - what the company values and vision are, and how the company defines success. Employees can’t perform well or be productive if they don't clearly know what it is they're there to do and the part they play in the overall success of the company. Be sure to communicate your expectations - and to do it often.

“4) Get to know your employees - especially their goals, their stressors, what excites them and how they each define 'success.' I'm not suggesting you pry too deeply or start 'counseling' your team members. What I am suggesting is that you show an interest in their well being and that, when appropriate, you do what it takes to enable them to feel more fulfilled and better balanced.

“5) Make sure they are trained - and retrained - in problem solving and conflict resolution skills. These critical skills will help them interact better with you, their teammates, customers and suppliers. It's common sense - better communications reduce stress and increase positive outcomes.

“6) Constantly ask how YOU are doing in your employees' eyes. I know it can be difficult for managers to request employee feedback - and it can be equally if not more challenging for an employee to give the person who evaluates them an honest response. To get strong at this skill and to model it for employees, begin dialogs with employees using conversation starters such as, "It's one of my goals to constantly improve myself as a manager. What would you like to see me do differently? What could I be doing to make your job easier?" Be sure to accept feedback graciously and to express appreciation.

“7) Pay attention to company stories and rituals. Are people laughing at each other or with each other? Do they repeat stories of success of moments of shame? Stay away from participating in discussions that are destructive to people or the organization, and keep success stories alive.

“8) Reward & recognize employees in ways that are meaningful to them (that's why getting to know your employees is so important). And remember to celebrate both accomplishments AND efforts to give employees working on long-term goals a boost.

“9) Be consistent for the long haul. If you start an 'engagement initiative' and then drop it your efforts will backfire, creating employee estrangement. People are exhausted and exasperated from 'program du jour' initiatives that engage their passion and then fizzle out when the manager gets bored, fired or moved to another department. There's a connection between an employee's commitment to an initiative and a manager's commitment to supporting it. A manager's ongoing commitment to keeping people engaged, involved in and excited about the work they do and the challenges they face must be a daily priority.

“Ultimately, you must keep in mind that employees are a company's greatest assets. Their collective ideas, feedback and enthusiasm for what they do can help your business grow and succeed. Some people are naturally wired to give their all and do their best no matter where they work. But the majority of people require the guidance of skilled managers who welcome their ideas, ask for feedback and generate enthusiasm in order to have a sense of purpose and energy about what they do.” (1)

Engaged employees make winners of the companies they serve. How engaged are your employees? Most employees come to a company ready to work, but are not usually engaged in their commitment to the company. The high-performing contractor works to get their employees engaged. The typical contractor just takes the employees for granite and wonders why his employees show little loyalty. What type of employees do you want? What type do you have today?

(1) Source: JoAnna Brandi is publisher of the Customer Care Coach and several books about keeping customers and employees loyal. March 30, 2005