Strategic Planning

What business worries keeps you up a night? A recent survey of small business owners done by the National Small Business Association asked owners to rank the worst threats to their company’s survival. The top four vote getters were:

• Economic uncertainty
  
• The decline in customer spending,
  
• The cost of health insurance benefits,
  
• Regulatory burdens and taxes

Notice that we can’t control any of these and, in most cases, we have little influence over them. They are type three problems – “no control or influence” problems. Type two problems are ones that we have some level of influence and type one problems we can change. While type three problems make headlines and the 6 O’clock news, all they really do is give us ulcers and worry. High-performing contractors (HPC) focus their energy on type one problems – strategic issues that we can address and solve.

Strategic planning allows managers to focus their energy (and worries) on solving problems. Our worry level decreases as we identify actions and countermeasures. Yet many contractors fail to plan beyond the next bid. Some of those contractors are no longer around and more will follow. Where is your company going? If you are not sure, then any way you go is OK – according to the Cheshire cat in Alice in Wonderland. Some ways are better than others and HPC leaders determine the direction they will go.

Don’t stay awake at night worrying about type three problems. Identify the problems you can address, and set a plan. It’s not that hard and will help you sleep better at night. If you need help doing strategic planning – let me know.

Employee Focus - Five ways to improve employee performance reviews

It is still summer, especially in Arizona where I live, but Fall is right around the corner and soon it will be time for the annual ritual no one loves, except maybe the evil HR manager in the Dilbert cartoons. I am speaking of the annual performance review. What no one has the courage to do, but should do, is to stop doing them. They are sadistic game managers and employees are forced to play with little real benefits of driving performance improvement.

As managers, we fool ourselves into thinking we can objectively evaluate another’s performance when we have few concrete methods for measuring performance. We think we are measuring an employee’s performance when in reality we are measuring the system that supports (or doesn’t) the employee. There are a few employees who don’t do anything right either by intent or default. If the issue is training then provide it. If the issue in incompetence or insubordination why wait to the annual review to identify it? The sooner an infection is addressed the sooner it is healed. The annual performance review process is a game like Russian Rolette and should be stopped, and those doing it should be treated for insanity. (They keep doing the same things while hoping for different results.)

If you are like most people you do not have the authority to stop doing annual performance reviews. If that is true, here are five things you can do to make them more useful and meaningful:

1. Remember that 19 out of 20 times most people do things right. It’s human nature to remember the one out of 20 that someone biffed it. Keep the review positive and honest. Look at the whole picture of performance and avoid singling out the one bad time.
2. Don’t focus on money. One of the biggest roadblocks to honest performance reviews is when money, either annual bonuses or raises are attached to the review’s ratings. There are other ways to determine how money is distributed. People will not have an open and honest discussion about performance when they feel it impacts their pocketbook.
3. Do reviews more than one per year. The annual review is so challenging because we don’t remember what happened six to eight months ago. We don’t document very well either. So we only remember recent events and the halo effect occurs. If we remember a good happening, we rate the employee high, and the opposite also holds true. Neither way usually yields a real representation of a whole year’s performance. Why not meet monthly, or at least quarterly, and discuss performance in a learning approach. Meeting more often can also remove the tie to money issue stated above.
4. Don’t rate employees. No ones likes to be rated unless it is high. A few years ago a survey was done where random people were asked to rate themselves between 1 and 5 with 5 being a great performer. Most people rated themselves between 4 & 5. Everyone feels they are top performers. The performance rating systems are subjective and not useful. It doesn’t drive improvement, only fear - especially if the rating is tied to money. So stop it. Use words like needs improvement, meeting expectations, or exceeding expectations. Then back the words up with examples. As an exercise in how to break up a relationship, try rating your spouse or boy/girl friend. Tell them what you rated them, then watch the sparks fly. If it doesn’t work to maintain good relationships, why do it in working relationships?
5. Involve the employees in improvement plans. Rather than dictate what an employee must do to improve, ask him/her to identify how they will accomplish it. They may come up with the same answers you would suggest but now it’s their ideas. They may also surprise you with more creative ways to improve. Getting the employee to own the improvement plan is critical to it being followed. Coach them in developing the plan.

These ideas take time and run opposite of how most companies do annual reviews. BUT they will yield better results. I know, I have applied them myself. They are not hard or complex to do. If you have to do reviews, then try it this way.

The Fifth Annual Muda Walk for a Month is coming this September.

There are opportunities to remove waste if you watch for them. You won’t see them sitting in your office! It’s time to get out and look for waste so you can be more competitive.

“Muda” means waste in Japanese. During September, I will email participants weekly themes to use while doing a Muda (waste) walk in their company. The walk may be at a job site, in the shop, office or even a service truck. During the walk, participants will look for ways to eliminate waste and improve operations. The Muda Walk challenge is to do a walk at least one hour a week, and best if it is done one hour each day. That may sound like a hard commitment to make, but those who invested the time in past years have reaped useful rewards.

Read about Muda walks in Contractor Magazine - http://contractormag.com/columns/sowards/muda_walk_find/index.htm

For more details on Muda walks see my blog at: http://mudawalkforamonth.blogspot.com/

This is a free service, but participants must sign up by Aug 26, 2011.The first week of the Muda walk will start on Sept 1, 2011. To register, just email your request to dennis@YourQSS.com

Help Stamp Out Muda!

Learning Opportunities

You may be interested in attending one of these training seminars by Dennis Sowards:

• Sept. 22, 2011- Getting to the Root Cause: Real Problem Solving- Sponsor – P.I.P.I. & 469 JAC – Phoenix, AZ - contact Cathy Mayeux at cmayeux@pipetrust.org for details.
• Sept. 26, 2011– Industrial Fab Productivity – Breakthrough Performance through Lean Practices - SMACNA 2011 National Convention - Colorado Springs, CO. Details at http://www.smacna.org/events/annualconvention/
• Oct. 20, 2011- Designing and Achieving World-Class Performance in Construction- Sponsor – P.I.P.I. & 469 JAC – Phoenix, AZ - contact Cathy Mayeux at cmayeux@pipetrust.org for details.

Contact Dennis if you are interested in having a customized workshop specific to your company’s needs.

Thought for the day

I like to say that if there were four dry cleaners in your town, and now there are two, those are the two that never ruined people's shirts."

--Chris Reilly, president of CIT Small Business Lending, as quoted by Entrepreneur.com



For more information about the High-Performing Contractor assessment process contact Dennis Sowards at 480-835-1185



PRIVACY STATEMENT: I respect you and your privacy. Your name or e-mail address will never be sold, traded, rented or bartered, or given away - nor will it be used for any other purpose than to communicate with you. Period.



If you find this newsletter helpful, please forward it to anyone you know who will benefit from this information. You may help them improve their company.