After 15 years working with flooring companies we have identified 5 belief that significantly erode growth, profit and cash.
- We get paid when the GC gets paid
This one is a doozie! The commercial subcontracting industry has accepted the belief that payment for good work done is conditional.
It is not. You are not a bank.
There are proactive ways to constructively get paid more quickly and without argument. We heard it just yesterday—the owner hasn’t paid the GC so the GC is not paying yet (a 90+day receivable). Try telling your bank you are not paying your mortgage this quarter because you haven't been paid! Again, you are not in the banking business and it's your money–ask nicely, but assertively.
- Office and administrative work can’t be standardized
Your staff will tell you every day is different. Yet if you analyze their work you discover two-thirds of their work is repetitive and similar. You can apply the basic shopfloor techniques of standardization practiced by car manufactures to streamline this work.
Long ago, craftsmen’s work on the shopfloor was seen as non-routine. After standardization productivity increased fifty-fold. So can your office procedures.
- Tribal Knowledge is invisible and can’t be tapped
In a manufacturing plant, knowledge accumulated over decades – the experience curve – is valued and documented. It is built into workflows and tools. When employees change, factories can consistently produce using standard parts and methods
In a contractor, experience exists as “tribal knowledge”. These poorly documented assets are crippling every time an employee leaves. We've seen owners in tears when their top installation manager leaves or retires. New hires devise their own personal work methods and introduce further variation.
- Technology will automate your work
When manufacturers automate, they begin by making the products and tasks simple and standard for machines to handle. This is called design for manufacture.
Most contracting companies standardize and simplify very little, making technology implementations cumbersome, inflexible and expensive, resulting in employee workarounds and inefficiency. The biggest complaint we hear from most flooring companies is related to their cumbersome systems.
- Selling is a black art practiced by born experts
Many contractors are “beholden” to salespeople and cannot see into this black art. Salespeople resist any notion that it can be taught or practiced by others.
Yet sales is a process.
It has steps. It can be measured.
Sales are delivered “by the numbers” following repeatable and coachable activities. Delivering improvement is more systematic than just the blunt instrument of the “commission plan”.
Take a moment to reflect whether these beliefs exist in your company. If they do pick one and challenge it!