by George Hedley
November 2, 2011

Editor's Note:  This is the first in our 2007 series of The Business Owner Toolbox written by our regular columnist, George Hedley.  Each article is written to provide you with practical, immediately applicable business management tools to assist you on your path to building a successful, growing business. 

 

Think back when you first started in the construction business. Your company was smaller, and things were a lot simpler. All you had to do to be successful was "bid it," "build it" and finally "bill it!" To grow your company, you just worked a little harder. To make more money, you just worked a little longer. To get some more work, you just bid a few more jobs. To keep your customers happy, you met them on the jobsite and worked things out. To get paid, you called and asked your customer when you could pick up a check. Simple!

Then things got more complicated as you got more referrals and your company grew. You hired a few people. You had a few more jobs going simultaneously. Different customers had different demands, and they all wanted your full attention. You began to struggle with the everyday tasks of running a business plus running all the jobs. Your job description changed from superintendent and project manager to-bookkeeper/office manager/customer service representative/salesman/bill collector/accountant/purchasing agent/referee.

Think about what it takes to grow and maintain a successful construction business. What are the most important aspects to building a profitable company-doing the work or managing the business? I'm sure you agree it takes both to be successful. Doing work to get your jobs finished takes precedence as phone calls, problems and challenges continually occur on the jobsite. Plus, you've got to keep all of your crews working efficiently, or you'll lose money. But to grow a business, it takes more than getting the work done.

What Plays Should I Call First?

Football coaches need a playbook, assistant coaches to train their players and players to execute the plays. The head coach develops a strategy to win the game and calls the plays. In order to improve and win the game of business, you must create a game plan and then determine what plays you want to call. I hold boot camps for construction company owners who want to get their businesses to work for them. Attendees come overwhelmed and frustrated with so many challenges, problems and stresses they can't think straight. They have failed trying to fix everything themselves all at once. The first thing they say is: "Help! What should I do first?"

Take the "Business Success Test"

Answer YES or NO to the following statements:       

___     Our business vision is understood by all employees.

___     We have written business goals and targets for:
                        - Sales

                        - Overhead

                        - Cash-flow

                        - Profit

                        - Equity

                        - Wealth

                        - Customers

                        - Employees

                        - Estimating

                        - Production

                        - Safety

___      We have a written marketing and sales plan.

___     We have an organizational chart and structure.

___      We have organizational systems to guarantee results.

___     Our financial reporting system is timely and accurate.

___     We have employee incentive and recognition programs.

___     We have an excellent management team.

___     We do excellent and on-time work.

___      We sell more than low price.

___     Our business is organized and in control.

___     My company works!

Are You the Coach or a Player?

Imagine you are a head coach of a major college football team. What would you concentrate your time and energy doing to build a winning team? I attended the University of Southern California from 1967 through 1972. We had great football teams, won the Rose Bowl often and were rated No. 1 several times. Coach John McKay led USC to victory during those years and was followed by another winning coach, John Robinson. Both coaches went on to the NFL as head coaches. After they left, our football program went downhill, and we were unable to put a winning team on the field. A few years ago when Pete Carroll was hired as head coach, USC finally started to win again and was rated No. 1. Why?

Like in football, to be a winner in business you must have all areas working efficiently and at the highest level. You have to surround yourself with the best management team possible. Winning teams are lead by coaches who identify their team's needs, hire assistant coaches who are the best at what they do and recruit and train players on how to implement excellence. The coach is the key. The coach doesn't do the work. The coach's job is to identify the plan of attack and then coach the team members to get it done according to plan. Unlike successful football coaches, entrepreneurs often try to run their companies without a playbook or assistant coaches on the sideline.

Which Position Describes You?

To grow your business and get it to work, you need strong leaders responsible for and managing the four parts of your business. The skills and roles required are:

            - Visionary leader

            - Manager

            - Accountant

            - Worker

The visionary leader is the creator of the business vision, a dreamer, energetic, imaginative, and lives for the future. He embraces change and has a deep need to be in control. The visionary leader has ideas, makes quick decisions, but doesn't always follow-up or stay focused on organizational tasks and systems.

The manager is organized, systemized and in control. He makes lists and follows up on tasks. He holds people accountable for their actions and he keeps to schedules and budgets.

The accountant keeps track of past performances, finances, achievement and progress. He likes to make and present reports to the leaders. He likes detail and sweats the small stuff!

The worker does excellent work in a particular area of the company. It can be in sales, estimating, project management, field supervision, production, customer relations, quality control or another work area.

Growing businesses struggle most when the owner continually tries to be all four of these people at the same time. Many parts of the business actually get worse as the owner's workload increases. And owners often attempt to handle areas they're not talented in. In other words, the owner fails as by not delegating what he shouldn't be in charge of in the first place!

Fill Your Gaps!

My personal talent and gifts are in marketing and estimating. In other words, I can get lots of work at the right price. But my weakness is managing people and holding them accountable for results. In order to grow my business, I had to make it a priority to balance my weakness with leaders who are better than me at managing people, projects and keeping track. What area of your business do you need to improve? Where are you weak? To grow, look at your negative responses to the "Business Success Test," and determine which gaps to fill.

Look at Microsoft. Bill Gates is the visionary and creator, but Steve Balmer is the manager and responsible for getting the work done. This partnership works. My recommendation to most struggling construction company entrepreneurs is to hire strong managers in their weakest area to help them grow their business. I know they can't afford it. That's because they can't profit by doing work they aren't good at! With the right people around you, your business will grow and make more money. Without the right people, you'll continue to struggle and never make the money you should.

Chart Your Perfect Playbook!

As you design your company to grow profitably, look objectively at how you run your business. List below who is currently accountable and responsible for every area of your company today. I'll bet you're responsible for most of the areas. As your business grows you won't be able to continually fill all the positions in your company. Decide who's best suited to take over for you in the future in all areas. If you don't have a person currently ready or qualified to accept more responsibility, leave that future area blank. Your goal is to design the perfect playbook, organizational chart and a game plan which will allow your company to grow. This exercise will help you map out and identify your future management team needs.

                                                            Today                                      Future             

            Visionary Leader :        __________________            __________________

            Field & Production:      __________________            __________________           

            Project Management:    __________________            __________________

            Sales:                          __________________            __________________

            Marketing:                    __________________            __________________

            Estimating:                    __________________            __________________

            Pre-Construction:         __________________            __________________           

            Administration:  __________________            __________________

            Finance:                        __________________            __________________

            Accounting:                  __________________            __________________

Call Your Next Play!

Now for the hard part. Do you start working on one of your weak areas identified in "The Business Success Test"? Or do you start looking for a senior management team member to accept some responsibility for making your company work? Your first tendency is to work harder and take on more work yourself-a natural reaction for entrepreneurs who want to control everything while not spending any of their hard earned cash. Look at successful competitors who do well. Do they hire people to do more, or do they take on more themselves and do less?

Winning Coaches Make Bold Calls!

Coaches who win national championships are confident in their team's ability to achieve goals. They're willing to risk the entire game on a single call. Are you willing to take bold steps to promote and/or hire key managers to fill in your organizational gaps before you can afford to? The time is never right. Are you willing to make your company work, or are you going to continue to try and work harder? Fill those key positions and put others in charge of scoring points and getting results. Then, concentrate on areas where you're best suited and can make the biggest difference in your team's success.

With these positions filled, look at your weaker business area,s and assign your new leaders to create solutions and systems to get your business working exactly the way you want it to. Give yourself three to six months to fill each slot needed. This will give you a slow and steady path you can accomplish. Don't try to fix it all today yourself. Make it your priority to find talented players you know you need. The future is your choice. What winning plays will you call?

 
Construction Business Owner, January 2007