McCadden: Do You Have a System or Many Systems?

by Kyle Clapham

Many remodeling business owners have systems. This might sound like a good thing. Rather than just “wing it,” it makes sense that businesses standardize their procedures. Don’t get me wrong: Systems improve the operation of a business.

However, you might be making a big mistake and losing a lot of profit by operating many systems. I suggest your business and the owner need to think in terms of having one system. Sure, you can rationalize what I just said by calling it semantics. However, I ask you to read on and really think about it.

Example: System vs. Systems

Recently a remodeler shared with me that business growth was catching up with him and his production manager. Both were stretched too thin. The owner, as the only salesperson, was having challenges keeping up with sales.

And his production manager was spending so much time in the field directing and answering questions from his lead carpenters that he couldn’t keep up with the tasks needing attention in the office. To solve this problem, the owner wanted to hire a new person as field manager. He or she would be the connection between the production manager and the lead carpenters.

The reason I knew he had a collection of systems, instead of one cohesive system, was the need for the new position. For a true lead-carpenter system to function—one that enables real lead carpenters to do their jobs—the business must be able to do a proper handoff from sales to production.

The handoff is just one cog in the overall business system, put in place so the lead carpenters can take full ownership of their assigned projects.

With a successful handoff of what was sold, a true lead carpenter is empowered to build what was sold without the need for constant micromanagement. Keep in mind my example assumes the business has real lead carpenters who can build from a complete set of plans and specifications, not carpenters falsely given an unearned title.

The Downside

The problem with having many systems is you’re likely putting your business at risk of becoming an operation with good stand-alone procedures, but they do not function well together. The business owner in our example is so busy keeping up that he’s not investing the time needed to write detailed specs and the required details to facilitate a proper handoff from sales and design to production.

The cogs aren’t properly meshing together. The result is a whirlpool that the business and its employees experience.

The owner sells a job using inadequate specifications. The production manager then assigns a lead carpenter to the project, but he or she isn’t sure about key details. As the lead carpenter moves the project forward, constant questions arise before the project can continue.

He or she then seeks answers from the production manager, who guesses the answer or asks the owner, who then relays the information back to the lead carpenter. That’s what happens on Monday. Then, it likely happens again on Wednesday and again on Friday.

Unfortunately for our example business owner and the business, this dysfunction is multiplied by the number of lead carpenters and the number of projects in production. It’s easy to see how this cuts into profits.

Unfortunately, the business owner’s solution of adding the new field manager position will only add to the cost of production. And this will be a much higher cost than simply creating adequate specifications and an efficient job-handoff process.

Systems Can Slow Things

One negative effect of many systems is it holds back your business as well as your employees. Rather than hire the field manager, the business would be better served to add another salesperson, so both the owner and new salesperson will have the time to properly specify projects before they reach production.

At the handoff, a lead carpenter can and should be empowered to decide if he or she has the information needed to build the project without constant follow-up questions. If not, the handoff should stop, and the specifications should go back to the sales team until the package is complete.

One way my remodeling business ensured good handoffs was to hold back any sales commission on a project deposit until production accepted the job package.

The lack of an adequate handoff package also slows down your field employees. How can a real lead carpenter excel at his or her role if they don’t have good information? How can a lead carpenter mentor new carpenters to become the business’ future lead carpenters if he or she can’t even fulfill their own potential? It slows down the advancement and earning potential of the field staff.

Besides, who likes to be micromanaged? The longer a real lead carpenter is micromanaged, the sooner that person will likely leave for a better opportunity. That too will slow your business down. Why are you reinventing the wheel?

A consistent reason the scenario I shared above, and many other similar scenarios keep repeating themselves within the industry, is because too many entrepreneurs like to reinvent the wheel. Whether it’s pride, stubbornness or myriad other reasons, they prefer trial-and-error over putting in place best practices already created and tested by others.

When it comes right down to it, most operate this way because they think they’re saving money by doing it on their own. Or they think getting outside help is too expensive.

Remodelers whom I’ve helped establish a single system (where once there were many systems) are earning far more profit than I earned before I retired. I know this because they call me to thank me. QR

Shawn McCadden is a speaker, business trainer, columnist and award-winning remodeler with more than 35 years of experience. He can be reached at shawnmccadden.com.

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