Business is like sports. Without a scoreboard, players and managers don’t have a clue when they’re winning the game. The game of business is won by being under budget, ahead of plan, making money, finishing faster, or beating the competition. Without knowing how you are doing, you can’t know when you are winning or when to change the plays, players or strategy. Without something to shoot for, any results are acceptable to players who get paid for doing whatever work they accomplish - whenever they finish it - versus winning the game.
No score = no game
If you earned your living as a professional coach, how long would you last if your winning strategy was to tell your players to ‘do your best’ and ‘work as hard as you can,’ without letting them know the score and giving them given specific milestones to shoot for? For example, do you have written goals for your current annual sales and net profit? Without these basis targets, it is impossible to stay on track for the year. Less than half of all small business owners set and track annual sales and profit goals. This is like running your business without trying to make a profit or managing a team without a scoreboard or trying to win.
Most business owners and managers never stop and take time to write out their company targets and goals for the upcoming year. Specific company targets could include:
- sales revenue
- gross profit
- net profit
- profit growth
- debt reduction
- average project size
- number of new customers
- new market penetration
- proposal-hit ratio
- stockholder distributions
- company value
Before you start a project, get the estimator, project manager, field superintendent and foreman together to set overall project goals. Hold a pre-job team meeting to get everyone on the same page. Sit down to plan the project and develop some targets and goals including:
- estimated versus final profit
- proposed versus final completion date
- production crew hours
- equipment hours
- general conditions costs
- safe work days
- call-backs or punch-list items
- customer satisfaction
- increased change order revenue
- prompt payments
From there, follow up with weekly and monthly project team meetings. At the end of the project, hold a general review meeting to decide where you can improve and refine your goals for the next project.
Keep track and provide frequent feedback
Setting goals is just the start of achieving what you want to accomplish. Too often in small companies, a tracking system or providing feedback to players rarely occurs with those who actually do the work. Players need to know how they’re doing during the game if you want winning results. The more often players can see the score, the more often they can make necessary adjustments required to win games. To track company goals, monthly feedback is mandatory. Project teams and field crews need to know their score weekly so they can make strategic adjustments before it is too late.
Do you aim at something?
Do you have specific written targets for every important area of your business? What about your projects or crews? You wouldn’t win many games as the coach of a baseball team without a team goal for winning games, and players without personal goals for hitting, fielding or pitching. Sadly, most companies send their teams out onto the field without targets to aim for or give them feedback and score updates on a regular basis. Do your players know the score? Do they know when they get a hit or make an error, what’s a good batting average, or if they win the game?
People who have written goals are twice as successful as those who don’t. The first step to achieving success is simple: write down what you want to achieve. To set your goals use my ‘swat.com’ method:
- S - Specific
- W - Written
- A - Attainable
- T - Time-Deadline
- C - Challenging & Clear
- O - On-Purpose…On-Target
- M - Measurable
Start with your overall company goals, then write project and individual goals that will contribute to your overall company success. For example, if your company goal is to improve net profitability this year from $100,000 to $250,000, improvement must start with your sales focus and finish at the project level. Specific action goals to compliment this overall company net profit goal could include:
- Seek and secure four new customers who will execute contracts at a minimum gross profit margin of $50,000 each during the year.
- Implement a field productivity improvement system to increase crew effectiveness by a minimum of ten percent and save at least $100,000 for every $1,000,000 in crew costs over the next year.
Use this goal worksheet example to set, develop and track your annual field productivity improvement goal.
Goal: Improve field productivity 10 percent or $100,000 per $1,000,000 in crew cost
Deadline: Design and implement productivity improvement program within 1 month
Deadline: Save 10 percent over next 12 months
Action step #1 - Get project team together to develop program
Action step #2 - Identify tactics and develop tracking system
Action step #3 - Set project team monthly meeting schedule
Action step #4 - Implement productivity improvement system
Action step #5 - Track progress weekly, provide feedback and make adjustments
Incorporate goals into your company mindset. If your priority is to improve field productivity, stick to the program and make sure your team knows it’s a top priority and what the milestones and deadlines are. Otherwise, it is too easy to get sidetracked by “urgent” job problems and miss your annual target.
Weekly target tracking
Use Monday morning team meetings to get your people together and stay on target. Set weekly goals, write them down and give each team member a specific target to hit, regardless of his or her position. For example, to stay on schedule for this week set weekly goals such as dig 500 lineal feet of pipe, or complete all touch-up painting for the project, or get all outstanding change orders approved by Friday.
Monthly target tracking
Get your team together monthly to review overall company progress on targets such as new customers, new contracts, sales revenue, company profit, cash-flow, collections, and progress on company strategic goals. At the project level, review the score on estimated final profit, job schedules, field productivity, customer satisfaction, quality, safety, general conditions, and labor and equipment budget versus actual expenses.
When you set goals keep score, track your progress, and let your team know the score on a frequent basis; you will win more games.
George Hedley works with contractors to build profitable growing companies. He is a professional business coach, popular speaker and best-selling author of “Get Your Business To Work!” available online at www.HardhatPresentations.com. To sign-up for his free e-newsletter, join his next webinar, be part of a BIZCOACH program, or get a discount coupon for online classes at www.HardhatBizSchool.com, e-mail GH@HardhatPresentations.com