High-Performing Contractor newsletter - July 2007

Leadership

I was preparing an organization to submit their application for their state’s quality award when the lead writer said. “our organization has no values!” What she meant to say is that her organization had no formal statement of values. This company is like many contractors who have never created a formal statement of the core values they live.

Core values are guiding principles to how the company acts. Different than a vision statement, the values statement is not what we want to become, but are what we are today. These values are not dreamed of, but discovered. Every company, like every individual, has values it live by. Some may be bad, others good, but all have ways that they act or behave towards others within and outside the company. Most contractors reflect the values of the founding owners. However, as the company gets larger and expands beyond the original founding workers, new employees may not share the same values. This creates a mixed message. Customers are told the company lives a certain way but see employees not acting that way. A formal statement of company values is the first step to obtaining consistency in how customers are treated.

What good is having a formal statement of core values? BY formally stating the values of the company, it is useful in hiring people who share these values. Would we want people who have opposite values to work for us? The formal values can be useful in testing to see if one has the right customer and suppliers. Doing business with a customer that has very different values can be difficult. Having a formal statement is useful when coaching employees about situations where “failure to live the values” happens. Discussions with employees are much easier with written values than values as envisioned in one’s mind, but never stated. Whatever ways value statements are used, the most important part is that they are lived by managers, especially those at the top. Value statements are only good when management lives them!

In coaching companies in identifying the values of their company, I have found it useful to have a task force do it. This task force need only meet a few times and would consist of the owners, other senior managers and a few long time company leaders from various levels and functions of the company. The meeting starts out by brainstorming what everyone thinks are the values. By answers questions like:

  • What do we live by in how we treat others?
  • What matters most to us in performing our work?
  • How do customers/suppliers describe us when they speak well about us?
  • What makes you proud or upset?
  • If the circumstances changed and penalized us for holding to our core values, would we still keep them?
  • What core values do you personally bring to work?
  • What would you tell your children are the core values you hold at work and hope they will hold when they become adults?
  • Once a list is developed, it is then refined, combined and reality checked to make sure it represents the company’s core values.

Value statements need to be clearly written and defined so everyone knows exactly the behaviors that demonstrate the stated values. There should be only a few core values (three to five), not a list of 20, 40 or more are hard to remember. Values are timeless; they stay true even if the outside world changes ideas weekly. Values require no outside justification. It helps to be clear not only on what the values are but the priority. Is safety more important that speed? Is customer satisfaction more important than company policy? Employees will behave as expected when they are clear on what is important and expected. A formal value statement is a sign of a mature management culture.

Customer Focused - COPIS – starts with C

A very usable and practical approach for process improvement is to try the COPIS method. COPIS stands for Customer – Output – Process – Input – Supplier. Use COPIS in a team situation when looking at how to improve a specific function or process such as material delivery, payroll, tools repair, etc.

COPIS starts with identifying the customer requirements and determining how well the requirements are being fulfilled. There are multiple ways to obtain the customer’s current and future requirements. Customer surveys, focus groups, one on one interviews all provide listening posts. Once the requirements are identified, review the outputs needed to meet the requirements. Does outputs match customer needs? Are priorities aligned? What is missing? Which outputs fail to meet the requirements?

Next examine the process, look at all steps that produce the key outputs. Do the steps add value? Fully review the process steps that fail to meet requirements. Where in the process flow does the failure start?

After examining the processes, examine the inputs. “Garbage in garbage out” is the rule. Failure may be due to bad inputs. Almost in sequence with examining the inputs is a review of the suppliers. The root cause of failure to meet requirements may be a failure in the supplier’s processes.

COPIS works backwards. The process starts with what the customer requires. Working backwards avoids conducting an entire analysis based on misinterpretations of what is most important to the customer. Through this analysis, barriers and problems are uncovered, root causes discovered, and preventive or corrective actions taken. COPIS is very useful and simple to apply.

Employee Focus - Money Money Money is that all that motivates workers?

In 2006 the voluntary job turnover rate was 11.6. That means a lot of workers chose to go elsewhere for work. In a recent survey of over 5000 US workers by Yahoo HotJobs, nearly half said they plan to search for a new job in 2007. What would losing 50% of your workers (craft and non craft) do to your company’s ability to deliver your jobs?

Companies are getting more creative in their strategies to hire and retain the best employees. One “emerging trend at some companies, according to Compdata Surveys, is to offer enhanced compensation packages to key employees. That includes things like picking up more of the tab on healthcare coverage as well as offering flexible work schedules.”

However these ideas do not match some recent research by IndustryWeek. Doing more to keep employees doesn’t necessarily mean giving out more money. The IndustryWeek 2007 Salary Survey, asked, “What matters most to you about your job?” and here’s how the answers lined up:
18% said base salary
17% said recognition of one’s importance to the company
16% said job stability
15% said career advancement opportunities
6% said benefits
4% said flexible schedules

While base salary is the biggest draw it is not by much. There are many other reasons why employees come to and stay with a company. As the challenge to get and keep good employees heats up, consider what you can do besides giving out more money. Giving recognition and providing stability in the work can go a long ways. No one but the employee wins a bidding war. Note that spending more money on benefits and flexible schedules did not score as important in the survey.

Source: David Blanchard, IndustryWeek Forums 2/16/07

Process Management

Meeting management tip: If your meetings tend to be dominated by a few people, try passing out five pennies to each meeting attendee. Attendees must "spend" a penny each time they talk. And no borrowing allowed!
Source: www.effectivemeetings.com

Learning Opportunities You don’t want to miss

You may be interested in attending one of these training seminars taught by Dennis Sowards.
Sept. 27, 2007 – Lean is not a Fad Diet – it works in construction too! – Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy at pipetrust@qwest.net
Oct. 21, 2007 – Lean Works in Construction – an Update of resent research - Las Vegas, NV SMACNA National Convention, contact: www.smacna.org
Oct. 25, 2007 – Performance Measurement - How to use measures to manage and improve Performance - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy at pipetrust@qwest.net

Thought for the day

“The bottom line here is that in the commercial marketplace the customer is up for grabs. For the mechanical contractor to be a winner in the contest, he or she must have an edge. The contractor who finds the customer’s hot buttons and is prepared to invest in the technology and training to address and solve those needs will be the one able to marry that customer to his or her company.”
- Michael Weil - Contracting Business, Nov. 2006