Old ane new: Employee (and employer) accountability and communication

Last night, I reviewed the departing memo from our former administrative employee. She described the woeful inadequacies of our computer systems and the horrible state of our office. She also had a few less-than-enthusiastic words about my own behaviour. Ouch.

Her complaints are well taken, and I appreciate the initiative of another of the company's senior employees in co-ordinating the exit interview/report (to be given to me only after the departing employee left). After all, as company president/owner, I am truly accountable and responsible for everything that happens here, and it is important for me to learn what is really happening, not what people simply tell me because I am signing their paycheques. (Spelling here is Canadian.)

Nevertheless, what should I do with this information, and why do we have these problems?

Part of the issue of course is the recession's lingering austerity. Systems/office maintenance and upgrading are expenses that can be deferred, at least short term, and when cash is in short supply, they are. Another issue is the communications dynamics between me and the former employee; our business operates on a fairly loose and entrepreneurial manner, employees are encouraged to speak their mind, advocate for change where appropriate, and then, where possible, to take action themselves to solve problems.

(In earlier years, I interpreted this philosophy far too loosely, causing employees to act from self interest rather than the company's best interests -- now, these are aligned through the business planning and meeting system.)

I've forwarded memos and discussion papers to the new employee and explained straightforwardly the negative reviews of the previous employee (though of course respect confidentiality and haven't sent the actual review to anyone else). My goal is to allow the new employee to know exactly what she is taking on and give her time, as she works out her notice at her current employer's place, to think about strategies she might want to implement to solve the problems.

Next week will be interesting, in that word's bigger sense. As we wait for our new administrative employee to arrive, we are evaluating a new sales candidate in the office, and a temporary employee must fill the administrator's desk -- as we conclude production of our January issues in time for the Christmas deadline. I hope things won't be too chaotic. On the other hand, I'm excited about the energy this change brings to the business, allowing us to set the stage for a dynamic New Year with much growth and progress.

Responsibility

Yesterday, because of my screw up, I created stress and emergency planning responsibilities for others. As manager of my son's minor hockey team, I booked the team into a "contact" tournament, when our league plays by non-contact rules.

Not everyone reading this blog knows much about hockey, but it is the major sport in our region and at professional level can be quite intense and physical. Body contact rules are in place to ensure younger players and those without training in the more forceful aspects of the game are not put at risk.

But, in going ahead with the tournament booking, I failed to check a website which would have confirmed we were heading into the contact space (at age 11-12, many leagues consider the kids old enough to play contact hockey, but our district doesn't, at least for recreational or house league play.)

Parents arriving early saw intense body checking and naturally were fearful for their kids.

On arriving at the scene, our coach convened emergency meetings with parents and the tournament organizers. He took responsibility and leadership to obtain the tournament organizers' co-operation in arranging unofficial rule modifications, gave the players a crash course in some things to watch out for, and (after concurring with the parents), decided to go ahead with the tournament, with the understanding that if conditions appeared unsafe on the ice, we would leave the game immediately.

As it is, all went well, the kids had a great day, and we ended up dead last.

Can lessons be learned from this experience relevant to Construction Marketing?

Details are important, even for non-detail people. A simple check with one website would have avoided the problem.

Mistakes can create opportunities. We all learned from the experience, and I think grew. Our kids saw how hockey can be played differently -- but were reassured after the day that we would properly revert to our own league rules.

Cultural and rules variations can exist within specialized areas. Smiths Falls and St. Isidore are the same distance from Ottawa, but the separate leagues play by entirely different "contact" rules. We should not forget these nuances in our marketing because they can be important.

One person's error can affect many. Here I feel the pain (and relief that all went well).
We must accept responsibility for our decisions and actions. No one else is to blame. Notably, our coach accepted responsibility for MY mistake; he needed to quickly adapt and adjust the program to accommodate the special circumstances here.

Who is responsible?

Recently, Bob Kruhm in North Carolina forwarded me an excellent posting from Don Short II, Economic Survival Lessons From Peter Kiewit at ENR.com. The article is well worth reading, but what I found most interesting is this anonymous comment attached to the story:

I have recently been a victim to the economic crunch, but I realized that my problem started years ago in the boom times, not today. The quote above, "It takes competent estimators..." or the lack of that caused my problem. Years ago an inexperienced estimator for a subcontractor mis-worded a quote that made his bid too broad. A less than ethical GC held him to the extra work implied because of the GC's bad estimate on the entire project forced him to get the work done at the lowest price.

Three subcontractors down the food chain and several projects and years later, this subcontractor can't pay my client who can't pay me because he is still trying to recover from the GC's bad estimate. The GC is not even involved in my situation. His bad bid years ago still ripples thru the local industry in many trades. Are the low bids of today discussed in other ENR articles starting more of these ripples?

I don't want to leave this on a negative note with no solution. Support the American Society of Professional Estimators (ASPE) and your local chapter. If you don't have one in your city, look into starting one. Five of us started one four years ago and now have 50 members. I know it can be done. ASPE is dedicated to education and training and offers training classes all over the country that will teach your estimators how to put together better bids. Don't complain about bad times, support the solution. Go to http://www.aspenational.org/ learn what you can do.

The anonymous writer makes some important points about surviving in the industry. And his thoughts link to three perhaps contradictory observations:

• Our fates are often determined by events and circumstances far outside our control and power;

• We are responsible for finding solutions and resolving the challenges we face;

• No matter how good we are at selling and marketing ourselves, if we screw up the estimate (or the actual job) we are goners!

Hopefully, none of us are responsible for causing the recession, but we all have to live with it.

However, we are responsible for our pricing, overheads, and business management.

If we are not winning any jobs, but keep our overheads and business expenses high, we fail. If we win jobs, but price them incorrectly, or accept work from organizations who won't pay their bills in a timely manner, we lose.

If we learn how to market effectively, seek advice and guidance from knowledgeable and experienced people (but always keep the advice in balance with our own perceptions and understandings) and manage our affairs prudently, we will survive, even thrive.

Linked with these observations:

• Dumb things can haunt you if you are not careful and don't learn from your lessons;
• Quick fixes and miracle cures sometimes work, but if you are relying on them for your survival, you may not live in business too long;
• Don't give up -- but don't throw good money after bad!

Your employees and your brand

This Rubik's Cube image is from a brandchannel.com article "Are your employees puzzled by your brand" which discusses the challenges when a company decides to change its brand -- and needs to engage its employees in the process. This of course is the top-down "marketing department" approach to branding, and has some relevance in corporate take-over situation, but for most businesses reading this blog, the actual employee involvement in the brand really arises (with leadership at the top, of course) at the grassroots level. This is why I am wary of "rebranding" campaigns.

Your employees are the key carriers of your brand. The meaning of that simple sentence may fly over your head -- it would have mine just a year or two ago -- but its underlying importance is vital for you to appreciate if you wish to achieve even the minimal success in marketing in the construction industry.

Your brand, for want of a better description, is the sum total of impressions about your business that cause potential clients to consider doing business with you in the first place, and continue to do business with you, even if your price may be somewhat higher than the competition, or (and this is important for your survival) you occasionally make mistakes and need a second chance.

Building your brand is what marketing is all about -- creating a perception that transcends, but is still rooted, in reality that causes your business to be worth more than the bricks and mortar, or cash in the bank. A great brand, I think, correlates well with really high "Goodwill" on your accounting statements. It also really helps your retained earnings in good times, and allows your business to survive and recover even when the objective circumstances aren't so great.

But if your employees screw things up by disrespecting clients, abusing the trust they are granted, and not respecting and building and sustaining the kind of relationships that support and enhance your brand, you are in big trouble. This can be especially serious if they are acting without supervision, and you lack enough oversight to see the damage they are doing. (Of course, if you are the owner/shareholder of the business, it is your responsibility, ultimately, and no one should be 'blamed' but you for your failure to see what is happening around you.)

So your employees really need to "get it".

But here rests another problem. You can't get employees who "get it" with a dictatorial, autocratic style, I think. Employees who are tied to a procedures manual, denied freedom to express and innovate, to try new things and sometimes fail, will convey, I think, exactly the wrong impression among your current and potential clients. No one I know wants to work with a bureaucratic drone. So you need to risk some brand-damaging mistakes, or you won't achieve the brand building freedom and confidence needed in your work force. (Really healthy businesses are often employee owned, but they only receive their equity when they truly appreciate the nature of responsibility and ownership, and pay for their shares with sweat and cash.)

The best approach to this branding dilemma is to appreciate your leadership responsibilities. If you are the owner/primary shareholder, you cannot simply abrogate your responsibilities and live the good life, dumping everything on your employees. You need instead to delegate effectively, letting go of the reigns to allow enough freedom to err, but showing enough involvement and compassion in your own style and practices so that you connect with the employees and your clients. This allows you to catch problems quickly, and resolve them.

And that is the great thing about building a great brand -- if you do it right, your current clients will tolerate some mistakes, in fact, in your resolution of the problems, you may actually enhance the brand. Your business will thrive even when things go wrong.

(Do you see some autobiography in this posting?)

Accepting responsibility, respect,and open book business management

In searching for an image to go with this posting, I found this article about initiative: "A Message to Garcia" by Elbert Hubbard, written in the early 20th century and posted by Foundations Magazine.

We all have our own unique personality and business style. One of my good friends, for example, operated his business the old-fashioned way. He built up a successful local publishing company (with a few missteps and crises along the way) before selling out just at the right time and reaching semi-retirement while still in his 50s. I've probably got another decade to go before I reach true financial independence. My friend believed in controlling the business, in compartmentalizing operations, and certainly had no intention or plan to give his employees any more than the lowest salary he could get away with.

I've always taken a different view of things; of openness, respecting individuals, providing freedom and empowering others. Nice talk, of course, but these ideals backfired badly when my former employees, thinking as individuals, and without a cohesive or responsible leadership from me, started doing their own thing, too much. Ultimately, the business almost failed because everyone acted in their own personal self interest without seeing the overall direction and vision required for business success.

I survived the painful three year downturn in 2003-2006 by remembering the crucial life lesson I learned during my first business crisis, in 1990-91. Then, my new publishing company had hit the hard wall of the early 90s recession. I had burned through our small reserves, and a grant from my mother. Now, it looked like we were about to fail.

I recall returning to my modest apartment, at age 38, thinking all would collapse. Then, I had one of those insightful flashes -- recalled from a Brian Tracy motivational tape. "I am responsible for myself," I thought. "No one is to 'blame' for the problems I'm experiencing -- but I have my health, my self-will, and I'll do what I can to make good and make things right."

Simple concepts, of course, but at the time they were revolutionary to me. I vowed to practice affirmations, to speak out loud the expression of self-reliance, and began rebuilding my life -- and the business.

As the second crisis in 2003-2006 deepened, I also accepted responsibility -- and faced a crucial decision-point when I realized the only hope to survive would be a brutal personal salary cut and my taking on virtually all of the writing and editing of our (remaining) publications. This meant hours of roll-up-your-sleeves work, but proved to be successful, as I got closer to our markets, uncovered several deep problems in our business practices, and began hiring people who could capably take overall control of the business within the next decade.

Is my approach to business better or worse than my friend's? I cannot be sure, but believe it is -- if the goal is to build a business that will thrive and survive in future generations and operate in many markets, including cities many miles away from Ottawa. Some entrepreneurs, of course, hand their successful businesses to their children as they grow up -- but I sense Eric will be happiest using his probable relative financial freedom to do other things (as are my friend's sons.) I would rather the company's employees take on the ownership role after, over time, paying me fairly for their shares (while earning fair salaries for their work.)

So the employees are now seeing the books -- something my friend would think to be heresy --The employees even see when I use owners' prerogative for personal advantages (I explain the reason, show the financial implications, and offer examples of how these practices must be limited in an employee-owned business). Equally, despite this openness, I am increasingly involved in setting standards and requiring accountability, while actively contributing to sales, and writing.

How can you apply these concepts in relationship to construction marketing?

• Consider your market, your relationships, and your own personality style -- I'm not sure there is one 'right way' but know the right way for you must be consistent with your own values and principals.


• Then, as much as possible, see the world through the perception and mind-set of your current and potential clients. Respect them, and their perspectives.


• Ensure your employees values are aligned with yours and your clients. The goal is to create harmony -- a situation where the natural comfort and relationships build without stress or artificiality.


• Don't be afraid to lead, to say 'no' or to demand that employees do the right thing and your clients fulfill their part of the bargain (which may simply be paying you fairly for your work on time).

With these attitudes and practices, I think you'll find you retain your existing clients, attract new ones through word-of-mouth referrals, and use other marketing resources effectively including outbound 'push' marketing (such as canvassing and telemarketing), bidding on projects through RFPs/tenders and lead services, and advertising. And you will succeed in growing your business.

Folly, foolishness, and hope

Wikipedia explains the crisis.

In some markets, especially the residential construction industry in parts of the South, things are dismal. The mortgage crisis has threatened the entire U.S. economy and in fact disrupted the world economic situation. And, I'm troubled. Why?

Who thought it made sense to push loans and home ownership on people without enough credit and financial resources to obtain a mortgage in the first place? And which brainwaves came up with the brilliant idea that it makes sense to 100 per cent -- or more -- leverage your home with the delusional perspective that home values only go up, and homeowners with bad credit, unstable income, and not enough cash to meet regular living expenses let alone inflated mortgage monthly payments, could actually afford these houses.

Does any of this make sense to anyone with even a little intelligence and social responsibility. I'm thankful that the North Carolina legislature saw the folly of this unbridled and ill-thought "capitalism" by introducing legislation to eliminate the worst excesses. But where were all the big thinkers in the other markets and in the investment banks in New York to allow this to happen? Who will -- should -- take responsibility?

Here, my Canadian conservatism takes hold. In Canada, mortgage interest is not tax deductible unless you are using the mortgage loan to invest. That is, you could mortgage your home and purchase stocks or put the money into a business, and claim the deduction, but you don't just get the deduction by borrowing against your home. This seems a perfectly rational and responsible approach to me -- people wishing to take risks -- to play the limits -- can -- but most people living ordinary lives (and most astute businesspeople!) know that it doesn't make good sense to load up more mortgage on your home than you need; and it makes lots of sense to pay it off as fast as you reasonably can.

So, when I married Vivian (later in life than most), we purchased our home and Vivian paid 50 per cent down with the proceeds from her own place. I had the mortgage. I decided to live modestly, cut expenses, and cleared the mortgage to zero in six years. Good timing. Because just as I made the last payment, my business entered a major crisis and cash flow got really tight. But we owned our house, and of course, didn't have to budget any more for the extra high mortgage payments (extra high because I wasn't just paying the amortization down, I was paying the principal!) So we survived the downturn without stress and anxiety you might otherwise expect.

I wonder about business owners who live high for the short term, and lack longer range vision. I wonder about greedy brokers, agents, and "marketers" who think it is right to push junk business deals on unsuspecting and unsophisticated people. Where does making some money and living a little high need to be put into context and thoughtful, respectful and responsible living values overtake the superficial and stupid greed and ignorance that shaped some important markets in recent years.

Yes, I feel sorry for the innocent victims of this carnage -- the people who worked hard, tried the best they could, and now are losing their homes, experiencing family break-ups, and deep unemployment. But I also know that we all have to be responsible for the decisions we make; and here, a lot of people made a whole lot of very wrong decisions.