I was originally planning on sharing tips on bonus plans but tripped across a topic that doesn't appear to get much attention: operations manuals.
You see, I was giving a two-hour workshop on communication for a contractor and was second on the agenda. I arrived early to meet the attendees, and watch how they interacted.
The first presentation was a page-by-page walk-through of the company's operations manual. As the company runs projects in 21 states for a very picky clients, consistency of performance is mandatory and their ops manual is the tool to assure consistency.
It was amazingly well put together. It hit on everything a project manager or site superintendent needed to know in order to bring their jobs in on time and in budget. The manual had the side benefit of not being overbearing or a burden.
Truth be told, this was an EXTREMELY well organized contractor.
Operations manuals are THE place to document the systems you need running smoothly in order to grow your business. You will probably need two versions: one manual for your project managers and office staff and one for your field leaders.
Your field leaders' manual will be smaller, more concise. You need to adjust the amount of information in the field leaders' manual based on the decision making authority you grant them. Your business should be running on forms, check sheets, examples, and flow charts. These are the tools of systemization. Your manual should be loaded with them.
Project management runs on paperwork. Gone are the days that you can SAFELY run your business on handshakes and phone calls. Forms are required.
Your manual should contain three versions of each form: blank paper, completed sample, and electronic. Some foremen and superintendents, generally those born before 1977, will prefer paper. Others will feel paper is stupid and want to use a computer. Make your procedures flexible enough to accommodate both.
Here is the minimum list of forms that should be in your manual:
- Time Sheets
- Daily Log
- Change Orders / Work Requests
- Requests For Information
- Lien Releases
- Production Reporting Sheets
- Employment Applications
- Accident Report
- Equipment Maintenance & Repair
- Take-off Sheets
- Vacation Notifications / Requests
- Performance Review
- Interview Summary
- Job Description
- Crew Activity Plan
- Action Plan
- Project Summary (who, what, where, deadline, goals)
Your manual must clearly present the minimum craftsmanship required by your company. Present two sets of standards:PREFERRED and ACCEPTABLE.
PREFERRED is the goal. It is the performance you're looking for. ACCEPTABLE is the quality level at which the crew should not rip it out and do it over. This is very important to get across. You can't afford to rip out work that is acceptable to the client.
The best way to communicate quality standards is through a combination of pictures, procedures, and check lists.
We are taking a trick from the auto industry, made famous by Toyota. Nothing communicates quality standards better than pictures. Use editing software to add comments pointing out important details. Pictures also work well for communicating a procedure.
Most construction workers can "see" things. Present information to them in a visual format as much as possible.
Document important work procedures. Use either a written sequence (okay), a flow chart (better), or numbered pictures with text (best). Hit the important steps and key decisions.
The easiest way to get started. Turn critical check lists into forms that contain a place for the employee to initial upon completion.
Establish a spending limit for each position. Explain where tools and equipment are usually purchased. Provide a list of suppliers from whom materials may be ordered. Indicate when material should be pulled from inventory and when it should be bought from a supplier.
Describe the paper work required for purchasing and / or receiving tools and material.
In this day and age, keeping people safe is not only a moral obligation, it makes financial sense. Weekly meetings are required onsite. Provide safety talks in the operations manual. Show the procedure for reporting an accident. Clarify the need to report even the most minor reportable.
This section should start with a copy of all job descriptions. All employees need to know who does what in your company. That awareness alone saves lots of hassle and lost time.
For recruiting and staffing; include a list of all resources used to advertise openings, sample help wanted advertisements for use online and in print, bonus program for new employee referrals, and pay scales for field positions.
You also need to present a summary of the EEOC guidelines to ensure no one steps outside the lines when writing help wanted ads and during the interview process.
Provide detailed interviewing instructions including a flow chart showing the process, sample interview questions, an agenda for running interviews, a list of people involved and their roles, and any tests or surveys to be used.
Clearly explain the following policies and procedures:
- Performance review
Project Management Procedures
Your firm must perform several project management tasks well in order to be profitable. You operations manual is the perfect place to capture the means and methods of performing them.
Explain the following procedures:
- Job Costing
Sure, your manual is going to be a monster but it will be invaluable to your company's growth. Think of it as the history of your company's development.
For that matter, you can really bring your manual to life by starting it off with a message from the founder, an explanation of how it got to where it is, and the legacy you hope to leave.
More than anything, your operations manual is your library of best practices. That is a term that has faded away to some extent but it is a great term and a great goal: constantly be improving and documenting the best practices used in your business. Your business' performance and value will escalate as you do.
If you would like assistance with the creation of your operations manuals or find yourself far short of having the described procedures and systems perfected, give me a call (913-961-1790)
Ron Roberts, The Contractor's Business Coach, teaches contractors how to turn their business into a profit spewing machine. To receive Ron's FREE Contractor Best Practices Newsletter visit www.FilthyRichContractor.com.