OK, so you have everything in place for your team to operate effectively: You have a killer production management system that includes pre-construction meetings, weekly project meetings, an app to track schedules and change orders, and most importantly, a detailed project manager manual. In your mind, everyone on your production team knows exactly what you expect from them.
Except at almost every project meeting, the discussions seem to center on schedule overruns, missed change orders and profit slip. How can this be?
I feel your pain! This was a huge source of frustration for me while running my company. And it wasn’t only related to production, but the other departments as well.
My business coach at the time who I was lamenting (OK, complaining) about this to, asked if I could read his mind, to which I answered, “No.” He then asked if I thought my team could read my mind. Again, I said “No” (thankfully). But with all the systems we have in place, they should know what I expect from them without having to read my mind. “Well, yes,” he said, “but have they agreed to do what you expect?” That’s when the light went on.
Expectations vs Agreements
An expectation is a strong belief that something will happen in the future. I expect you to complete this project on time and on budget, after all, that is one of the job description requirements. But that is my expectation, your expectation may be that neither of those are likely as our subcontractor base is stretched and the budget was created six months ago. That is the insidious nature of expectations. If you do finish the project on time and budget, well, you just did what I expected. If you don’t, then I’ll be disappointed in your performance and feel let down.
An agreement, however, is a negotiated arrangement or understanding between people as to a course of action or outcome. And while we often think of agreements as a written document, verbal agreements can be just as powerful in establishing a mutually agreed upon outcome between two or more people. greements they require discussion, negotiation and a common goal to exist. For example, we agree that in order for you to bring the project in on time, I will provide additional subcontractors. We also agree that the budget is low due to recent price increases, but that you will see what price concessions can be negotiated with the suppliers. We further agree, that we will update each other on our progress at the next project meeting. Our agreed upon obligations are clear and any violation will be readily evident. No mind reading, but a lot fewer unexpected outcomes resulting in stronger and more trusting relationships.
So unlike expectations that, when they are not met, create frustration, disappointment, resentment and a possible breakdown in trust, a good verbal agreement will provide clarity, specifics and mutually agreed upon outcomes or goals.
Communication is Key
Good systems and processes are important when managing people, but you have to have an environment of open and clear communication for them to work effectively. Systems don’t operate in static environments, so there needs to be a discussion between all employees involved any time an event or circumstance changes an established goal (like a project schedule or costs), so that a new goal can be agreed upon. Additionally, this new goal needs to be discussed with the client if it affects their expectations as well.
Verbal agreements can be a very powerful management tool when implemented across all of your business functions. Here are some examples:
Sales can use them with prospects to create mini-commitments during the sales process:
“I will put together a scope of work based on our meeting today and send that to you tomorrow. Can we agree that you will review it and get back to me with any changes by the end of the week?”
“I will have your proposal ready later. Can we meet tomorrow to go over it?”
Production can use them with subcontractors and suppliers to emphasize quality, schedule and price:
“I have your pricing schedule. Can we agree that you will hold these prices for the next six months?”
“I have your frame delivery scheduled for a week from today. I will call you if we have any delays in the meantime.”
“Since this is your first project with us, I will meet you on site prior to you starting your rough so that we can discuss any issues and agree on their solutions.”
As you see from these examples, not every verbal agreement will have the word agree in it. But every one does state what is expected and provides the opportunity for discussion and negotiation.
So, drop the mind reading and start using open communication and active listening to forge verbal agreements in all of your business and personal relationships. They are a powerful, yet woefully under-utilized management tool to help you achieve greater and more sustainable success.