While there are encouraging signs out there, it's unlikely we'll see any sudden, dramatic turnaround in the construction economy in the near term. As such, it's important to stay focused and set realistic goals for your business for the remainder of the year.
In the article "Setting Obtainable Goals in a Down Economy", Les McKeown, president & CEO of Predictable Success, believes the economic cycle makes no difference when it comes to setting goals, since the five core principles remain the same. They include:1. Hire people who have a track record of achieving their goals. McKeown admits it may seem strange to talk about hiring in this economy. Yet, the time will come when you need to expand your workforce again, and a down market presents a unique opportunity. Reduced competition for workers can produce a desirable talent pool from which you can draw - often at attractive wage rates.
"When you do start hiring again, don't just take the 'first live pulse' that comes along, or settle for the 'least worst' candidate," he states. "Instead, commit to using the opportunity to raise the average competency level of your team."
2. Set goals early, then revise the goals regularly in light of hard data on actual performance. Trying to forecast potential construction activity can be like trying to hit a moving target. The dynamics of the market are constantly changing, and even more so given the recent infusion of federal funds to state governments. That's why you need to review your sales goals on a continual basis as new information becomes available.
"Your goals should be reviewed at least monthly," says McKeown, "and you should be keeping a rolling 90-day forecast, which should always be reviewed and reviewed in the light of the previous 30 days' performance."
3. Use data for 70% of the goal-setting process, intuition/judgment for the remaining 30%. While it's important to trust your gut, "If you genuinely want Predictable Success," says McKeown, "you need data. Not lots of it - just enough."
4. Build goals from the bottom up, not the top down. "Your people on the front line know more than anyone else what is achievable," McKeown points out. "If you do go to the trouble of hiring good people, then why not trust them to build their own goals?"
Rather than rely solely on senior management, work with managers at every level to encourage goal setting based on their detailed knowledge of facts and market realities. Then, "insist that they reach down at least one level to get the salient information from the people that report to them."
5. Reward success; penalize failure. Overly optimistic forecasting can be a drain on a company's success. "It reduces goal setting to a process of sandbagging, where the organization's senior management spends the first quarter of the year finding out no one really believes the budget numbers that everyone worked so hard on," McKeown comments. To minimize this tendency, he suggests putting a compensation structure in place to reward good forecasters and penalize the bad ones.
For further tips on setting goals in the current economy, read the full text of McKeown's article in the Running Your Business section of ForConstructionPros.com.