OWNERS OWN UP
One “big place that bottlenecks show up is with the owner,” Steven says. Owners can be headstrong. In many cases, they’ve worn all the hats and have done every job in the company. That may be their greatest strength, but it also can be their greatest weakness. Sometimes they won’t get out of their own way, hire others, and delegate; or they make decisions on-the-fly. As their company grows and they hire employees, owners find it difficult to continue working that way.
“There’s a beating of the chest and an I-know-how-to-do-it-and-I’ll-do-it-myself attitude,” says Dave Mackowski, who admits that he was causing the biggest bottleneck in his company, Quality Design & Construction, in Raleigh, N.C. The first problem he and co-owner wife Peggy identified was in production. Dave was acting as production manager but had so many other business distractions that he couldn’t give the role the attention it needed.
“At first, there was some denial,” Peggy says. “Dave didn’t want to admit that he was the problem.” It was their local business coach, as well as their peer review group, that finally convinced the Mackowskis that Dave was holding up the process. Once he left the field and turned production over to his field employees things began to run more smoothly. Still, Dave was doing sales, estimating, and design. “I can only let go of certain tasks at certain times,” he says. Now he’s training two designers who will be able to create an estimated package.
In John Kiernan’s case, as owner and salesman at Kiernan Remodeling + Design, in Bradenton, Fla., he was such a big personality with clients from his extended social circle that lengthy waits between sales and production weren’t a problem. “But,” says Ben DePrenger, vice president and general manager, “we weren’t setting deliverables for ourselves for getting back to clients.”
DePrenger, who has a background in finance, came to Kiernan Remodeling + Design a few years ago and is on track to purchase the company from Kiernan. He saw that projects weren’t being actively managed. Clients were waiting for proposals and designs and would lose interest in their projects. Kiernan sold so many jobs; the business grew quickly. Paperwork got lost on his desk. “I didn’t plan for the expansion,” he admits.
Once DePrenger and Kiernan recognized the problem, they purchased ACT! contact management software in the hopes that it would be the answer for the sales pipeline. But the amount of data they had on hand was overwhelming, so DePrenger developed a sales and design pipeline spreadsheet in Excel (see GoodForm, page 58). It lists all the company’s projects, identifies clients and potential clients, notes project completion dates as well as last items completed on a project, when it was completed, what’s next to do and who should do it, and a ballpark cost.
In addition to that system, DePrenger and Kiernan set up a Monday morning meeting for the sales and design staff at which they update the columns on the Excel spreadsheet. Since creating the system a year ago, “everyone is clearer as to what they should be doing,” DePrenger says. “Design conversions to construction have gone up. Going from a design services agreement to a construction contract now takes about four to six weeks.”
DELEGATE TO THE READY
The recognition that the owner is the bottleneck sends many company owners running to delegate, leaving themselves to focus on sales. But increased sales, in turn, means that the employees responsible for the next steps must be ready to field the play.
When Glen Lumia, owner of Creative Design Construction & Remodeling, in Northvale, N.J., finally let go of finance and production he needed “someone else to put their arms around production” as sales shot up. He put one person in place as a production manager. Though that person worked incredibly hard, “there wasn’t enough time in the day,” Lumia says. “Too many things had to go through him before they moved ahead. One person wasn’t enough.” So Lumia hired two other people and, instead, named all three project managers. They gave up their toolbelts and now do the job of production manager for each job. To avoid a future bottleneck, Lumia is already preparing to create a production manager position to oversee the three project managers.
Each attempt at a solution may not work, as Lumia found. It took his company about six years to work through this bottleneck. You have to be patient and flexible, and anticipate that pushing something through one bottleneck might create another bottleneck further along the pipeline.
WORK WELL WITH OTHERS
Scheduling is ripe for creating bottlenecks, especially the more heavily you rely on trade partners. Morse holds a trade partner luncheon each year — with first-, second-, and third-tier subcontractors — at which he discusses the issue. “We tell them what our expectations are,” Morse says, “how we operate, and the pitfalls of bottlenecks — a poor reputation [to help them understand that] if they foresee being in more than one place at one time, they need to be comfortable giving up a job and see the benefit of doing so.” Because Morse’s company enjoys strong relationships with its trade partners and is able to offer steady employment, the trade partners are willing to work “as part of a larger team.” But having staggered project start dates has been the most helpful in alleviating bottlenecks.
To help this process run smoothly, Morse uses Virtual Boss construction scheduling and project management software. “It sets up a critical path and lets us see how all our jobs are meshing with one another,” he says. “That’s where you can see future bottlenecking. Maybe three jobs look like they’ll be at Sheetrock at the same time. Having this at our fingertips and foreshadowing ahead of time allows us to make changes before we ‘need them tomorrow.’ This way we avoid delays.”
Jim Megna, owner of Megna Building & Remodeling, in Skillman, N.J., mostly uses subcontractors. If subs are busy, he irons that out during bidding and estimating. His simple fix to relieve bottleneck pressures and manage client expectations: He creates two schedules, one for trade partners and one, padded with extra time, for clients. “If I know that a job will take four months, I tell the client six months,” Megna says. “If we get it done in five months, we’re heroes. If we get it done in four, we’re superheroes.”
Solving some bottlenecks requires simple fixes such as Megna’s. Others need much more time and attention. But all solutions require a managed process, employee buy-in, and a system of accountability. And all of it must be focused not only on bottom line profit but on customer service as well.
Once you’ve identified the bottlenecks, choose to fix those that are creating the biggest problem, Steven says. And be open minded and flexible about fixing them, especially if you’re made aware that it’s you who are holding things up.
Keep things in writing. Leave tracks. Take meeting notes. Mark next steps. Documenting procedures will go a long way toward keeping the bottleneck at bay — at least for a while. No matter what your solution is, the company will always grow and change, and new bottlenecks will appear.
“We’ve begun cataloguing procedures into a book,” Dave Mackowski says. “Now each employee has a book they can look at for procedures. It’s a living, growing document” — just like your company.