Saturday, March 28, 2015

Jim Huston

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Tangled up in the trivial

Industry Voices

March 16, 2015

Jim Huston

Spring is finally upon us and another season is under way. As green industry contractors are gearing up, especially those in the northern climes, I’m beginning to wind down from my winter consulting season when I visit the offices of 50 to 60 contractors. During these visits we prepare budgets, review pricing, implement systems, write job descriptions, adjust company structure and so forth.

By now, contractors should have their budgets in place, sales projections identified, pricing for all of their services and products calculated and ready to go, client contracts approved, spring cleanups and irrigation turn-ons scheduled, crews hired and trained, and the like. Office staff and crews should also be trained and ready to use new software, such as scheduling and GPS tracking applications. I refer to this part of the business as the “little picture.” Such preparation is necessary and very important. However, if this is all that you do, you’ve missed something very big – the “big” picture.
 

The big picture. Peter Drucker, in his classic, “The Effective Executive,” explains that managers are supposed to ensure things get done right. Leaders, in contrast, are supposed to ensure the right things get done. Managers address efficiency while leaders address effectiveness. Is the organization and team focused on the right stuff at the right time? Too often, owners get wrapped up in and overwhelmed by the minutia of daily business operations and fall victim to “crisis” management. The little picture overwhelms them while the big picture is ignored.
 

Stay in the office. A number of years ago, a huge storm hit the New England area. Heavy snow started falling late in the morning on a week day and continued bombarding the area right through rush-hour. Traffic was a mess. One of my clients was manning his office and directing snow and ice operations. Plow trucks became snarled in the chaos of rush-hour commuters trying to get home. Clients were screaming at my client as his plow trucks and sanders attempted in vain to service all of the accounts in a timely fashion. While my client was in the office overseeing the disaster, he was at least able to maintain some sort of damage-control. However, he made a crucial mistake. He decided to jump in a plow truck and help out. Without someone observing the big picture and managing the disaster, things soon went to “hell in a hand basket.” This client lost a number of big accounts because he panicked and focused on the wrong stuff.

A landscape installation client in the southeast called me in a panic in the late fall. He sold a lot of work and individual jobs were going very well. The gross profit margin on the jobs exceeded the bid amount as he brought the jobs in under their man-hour budgets. However, he wasn’t making any money. As it turned out, he had sold a lot of work in the spring and summer. To improve productivity, he decided to work with the crews in the field. That was fine but he stopped selling and he ran out of work in the fall. While profitability on individual jobs looked great, he didn’t sell enough work to cover his general and administrative overhead and his bottom line deteriorated. In both cases, these contractors lost their focus. They got so wrapped up in minutia that they forgot about the big picture – their main job as a leader.
 

Get organized. I have my clients use a bid board to track all of their leads and bids. It’s a simple MS Excel worksheet that provides daily feedback comparing the sales budget for the year to actual sales. The bid board, combined with a monthly profit and loss statement, can help contractors keep their eye on the big picture. Unfortunately, too many contractors do not use such tools to help run their businesses. Email me at the address above for a free copy of the bid board.

Industry contractors need to guard against the tyranny of the urgent and keep their eyes on the big picture. Spring preparation needs to focus on the ultimate goal as well as all the details. Like an NFL coach who decides to don a helmet, run into the game and replace an injured quarterback, entrepreneurs cannot afford to lose perspective. You can’t control and manage what you don’t see. Entrepreneurs have to be somewhat schizophrenic and ensure that everyone is performing at peak efficiency (the little picture) while keeping an eye on the score board (the big picture). Where you stand determines what you see.

 

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Jim Huston runs J.R. Huston Consulting, a green industry consulting firm. www.jrhuston.biz; jhuston@giemedia.com

 

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