Can you create a world class org?

This guest posting on Bruce Firestone's blog from Dale Craig, Chair of J.L. Richards and Associates, an Ottawa architecture,engineering and consulting/planning practice, is worthy of review by anyone seeking real success in business.

Craig writes:

I think that one of the greatest differentiators between mediocre and superior businesses is the constant desire to excel (both for your own fulfillment and the knowledge that your clients will appreciate the effort) backed up by the inner confidence that you have the people and skills to do so. I truly believe that JLR’s success has been fueled by employee ownership and a top down mutual respect, and support, for each other.

I remember talking to my associates when we were about to embark on the Palladium project (now Scotiabank Place, ed.) and promising them that I would try to get the contract and lead the effort but only if they felt they could deliver a world class product on time and one that we could all be proud of for years to come. Accomplishing those goals on what was our biggest project to that time made us realize we could take on almost anything as long as we believed in ourselves and were honest about our own limitations. That has proven to be right on many occasions since then.

Finally, treating everyone in an organization, from the least to the greatest, with respect and honesty is so empowering that I am amazed many business leaders don’t get it. Witness the result of the unmitigated greed and hubris in the world financial system over the last year. I think to many smart people get caught up in their own self importance and forget that any enterprise is like a chain, only as strong as its weakest link. I believe that leaders should not hog the credit and but rather share the praise (and the wealth) and things will work out beyond their wildest dreams!

These are basic principals and ones which I believe in strongly.

The great competitor

Some days, you can smile about your competitors' misfortunes. If you listen carefully, you can learn why they failed, so you don't repeat their errors.

Paradoxically, however, as I gloated on hearing the competitors' bad news, I felt a slight shudder of anxiety -- the very wrong things the competitors had done that lead to their losses, I had done myself, with undoubtedly negative consequences. The only difference is one of degree.

Rome is burning. Let's build a mansion.

A few years ago, as my business's downward spiral accelerated, we took a family vacation/business trip, visiting a community where we had some employees in a once-thriving (but now declining) market. I took a few hours from the vacation to meet with a key employees, remarking (somewhat arrogantly) that, since this is a valid business meeting, I would claim two nights of travel, plus the direct costs of getting to the meeting, as a tax deduction.

Three weeks later, realizing our business had reached the red line, I gave (short) notice to the employee and made an enemy for life.

He's losing his job, and I'm taking vacations -- and claiming tax deductions as well -- why wouldn't he be embittered.

My competitor took things a step further. As his business hit a rough spot, he devoted his time, resources, and cash from his business to build a really nice home for his family. Trouble is, he didn't bother paying his taxes. The tax authorities, I learned today, seized everything he owned. His wife left him.

We have a relationship. Let's just use it to make some money.

Most of our business sales arise from understanding supply chain relationships, and ensuring we provide our services at exactly the right place where these relationships count the most.

This is powerful stuff, but we've pushed things too far, without respect for the underlying consideration that, when all is said and done, we must deliver more than we take. Thankfully, this kind of business-damaging behaviour can be repaired, when you realize that the relationship should always be founded on respect for the needs and values of your clients.

Today, I read some fascinating correspondence from a competitor to a third party who had lost business and respect by pushing, arrogantly, for sales without communicating real value. Most interesting are the desperate emails when, after losing the business, the competitor tried vainly for a second chance.

We thankfully have received second chances, but the damage control and repair took several years. We don't take our relationships for granted and look, always, at how we can give rather than take.

Delegation is great. I'll focus on fun stuff.

A few years ago, I thought we had a thriving, viable business with everyone working well at their tasks. So I spent time on things that were more fun and rewarding for me, including (this seems really dumb now) fiddling with an airline's frequent flier program and fighting an Internet-based ponzi scam. At the time, I could rationalize purportedly good business reasons for these distractions, but failed to see that the priority should have been the business.

My competitor, meanwhile, while building his mansion, failed to show up in the office, leaving his employees to do all the work. Trouble is, he wasn't paying his bills or remitting statutory deductions, and his employees were collecting prepayments from clients for services where (after spending the money on personal needs) he didn't have the ability to deliver the end product.

We're picking up the pieces now, delivering some $10,000 in free services to our competitor's victims, one of which is a three-generation business that has survived good and hard times.

Today, as I think about my competitors' failures, I'm thankful that in making the same mistakes that led to their destruction, I didn't go quite as far or deep down the slippery slope; and caught and learned how to change in time.

You may have the same choices.

Sharing or selling: What should be your priority?

Chase, in his latest blog posting,

Does giving away more then you expect to get back actually help you grow your business?

makes a vitally important point.

It is a great question and sometimes not very easy to answer. This past year my focus has been on marketing our company and increasing our "brand" awareness. This has meant sponsoring events, offering free editorial space and even free advertising to help promote the events we are sponsoring or associations we are part of. By doing this I getting the perception of me always trying to find a new contract advertiser or project to feature a little further away from someones first thoughts and them focusing on me as a person. This allows barriers to come down and people to open up with me and build relationships first and discuss business second.

Chase is absolutely correct in these observations and, furthermore, he observes that the giving should never stop.

The most important thing I have learned is that you still have to keep giving and offering your help. You still need to keep looking for new events to sponsor and committees to get involved with. The worst thing you can do is stop giving and get back to just taking.

In the past, I allowed -- in fact encouraged -- this company's salespeople to think transactionally. They were primarily measured and compensated for their results, not their relationships. But the approach had serious flaws, and I only discovered them as the business began a painful decline. The business began its recovery when we refocused on contributing and sharing. The fabricated, 'take what you can and run' relationships have given way to a more sensitive and respectful approach to the communities where we are participants.

Why is this attitude shift so important, especially in the current economy? Chase writes:

Something to remember with all of this is that the current economic environment forces people to look closer and decide where to spend (their) dollars or where to put their focus, they tend to look at existing relationships a lot more and want to help existing relationships first. Being involved with events and associations will and (has) given me a competitive edge when people decide on which publication to use for a feature article.

I think of these observations with increased intensity now, as we prepare to announce a return to one of our major markets, largely because I am working with one of our key former employees who conducted his business the 'old way'. Can he see that relationships and networks are not based on short-term transactions, or is he going to push for the 'close' and then want to move on to the next file, right away?

The answer, I hope, will be that we achieve sufficient balance here -- his natural hunter-gatherer traditional sales approach will be sufficiently compensated by this business's overall business practices, and his understanding that giving without worrying about return, of truly putting your best effort forward, is almost always the best way build lasting and respectful business relationships.

Generosity, greed and the American (Canadian) dream

This image is from istockphoto.com.

Undoubtedly, our lives will be changed by the political and economic drama occurring in Washington and Wall Street. Our industry -- especially the residential side -- has been the most immediately affected by the current crisis, and only a person without any vision would say this won't influence other elements of the economy.

"What can you do about it?", you may be asking.

You need to respect your own needs and those of others. You need to be fair. You need to be responsible for your own circumstances, and not hold anyone else to blame.

I thought these points late yesterday afternoon when, in the midst of a business meeting to discuss a new project with joint venture partners, something didn' feel quite right. In the project, in an effort to invoke participation and support from the other partners, the revenue sharing balance seemed out of kilter (and unfair to me). So -- a mistake at this end -- after the meeting I wrote an email to the other participants making my feelings clear. (Previous postings have outlined the danger of using email for anything contentious.) One colleague responded in another email that he would be happy to leave the project. We need to talk. Maybe his response is the right solution; maybe it isn't, whatever, we need to respect each other to proceed and of course we need to respect the ultimate clients who will be paying for our services.

These types of discussions/decisions are part of business fabric, both small and large (and national/international). We can resort to deceit, to patchy compromises, to imperfect solutions, but if we respect our own needs and those around us, we have a much better chance of finding the right answers.

P.S. Here is an a meaningful and relevant posting in Jeffrey Gitomer's most recent newsletter: Why do businesses succeed or fail? HINT It's not just sales.

The power of respect

The crisis started at our regular 1:30 p.m. Monday staff meeting when I sensed something was not right. By 3:00 p.m., at the regular monthly meeting with consultant Bill Caswell, I received some advice (not followed exactly the way I should!) that helped set the course to address and resolve the problem I perceived needed urgent attention. We resolved the situation and concluded the story (at least this chapter) today.

How do you handle difficult business relationships and challenges -- especially when you face potential conflict and hostility? As I gain experience, increasingly I'm sharing the values of our primary business consultant Bill Caswell, who advocates the concept of "respect" -- that is, seeing things from the perspective of the other persons and seeking to understand and acknowledge their fundamental human decency, no matter how aggravating the circumstances.

This week, I faced the respect test at a high level, but paradoxically (and out of respect for the person involved) I cannot go into details here. The challenge involved many hours as I soothed sensitive client relationships. With some real drama in the office, I haven't had the time or energy to blog like usual -- and while my "big pen" (big mouth) would love to share some of the really interesting stories that evolved this week in the presence of this company's other employees, I know that won't do anyone any good.

I can say, however, that I applied the principals of respect, coupled with a significant amount of common sense, to arrive at the fairest resolution possible and achieve results that are rare if not downright exceptional in conventional business practice.

Here are some of the guidelines I followed:

• I listened and heard 'warning signs' because my ears were open. This gave me the opportunity to confront the situation decisively;


• I consulted with trusted advisers, in confidence, to validate and correct my course where required. But I still took responsibility for all my actions;


• I accelerated the lines of communication and information gathering. This allowed me to catch a truly major potential client crisis immediately, and take remedial measures within minutes;
  
• I 'slept on it' when facing major emotional and confrontation issues -- avoiding email and allowing others to speak first;


• I allowed sufficient time to ensure that I had enough information to reach a fair and reasonable conclusion about the circumstances;

and, most importantly, even when we reached the end of the road;

• I left the door open for future relationships and possibilities.

Lots of "I's there, I realize, but this is a personal story. The basic guidelines however transcend any selfish perspectives. We all are better off if we listen, consider all the circumstances, and do whatever we can to mitigate problems. Then, even the most difficult circumstances can lead to improvements and new opportunities.

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.

Openness and respect

Unilever Australia's Code of Business Principles appeals to me -- of course the challenge is implementing these ideals in practice.

Tomorrow, all the company's employees and some key contractors will see the guts of our financial data -- the company's weekly financial report. This decision to carry the philosophy of openness to the highest level is contrary to the advice of some of my best (and most successful) business friends -- they advocate compartmentalization; only letting your employees know what they need to know to do their jobs; certainly not the whole picture.

I've never been comfortable with that approach to business, but equally, it took some serious blunders for me to realize that just being open, easy-going and fair doesn't always work in the real world. People don't always get it, and many times, see things from very narrow (and selfish) perspectives. The answer to the dilemma is to connect openness with responsibility and respect -- we'll respect our employees, but ask them to behave the same towards themselves and others on the team.

Respect isn't that complex a concept. It is important to show up for work on time and do your work to the best of your abilities. Respect also connotes taking into account the very real needs (human and emotional) of your peers, clients, suppliers, and even complete strangers. This isn't sucking up; nor is it pandering, nor hopefully is it playing organizational games to curry favour. Respect, intriguingly, also recognizes there are times when it is best to not share everything; to keep confidences, to understand that misplaced words and expressions can do far more harm than spouting the 'truth' in a noisy outburst of reaction. (And it certainly doesn't require us to be totally open with everyone about everything -- I am certainly not posting the confidential business information to be shared with our employees on this blog!)

Communications, responsibility and leadership

This image is from an article "Listening First Aid" , about Empathic Listening Skills by Gregorio Billikopf, University of California, Berkley.

Three big words: Three simple principals essential for Construction Marketing success.

Communications: Everything you say, do, write, ignore, express, relate, and decipher affects the marketing process. Little things count. Returning calls promptly, being on time (just a little early, not too early for meetings), respecting cultural sensitivities (in some cultures being 'late' is normal), understanding how and where you listen as well as speak/write are all essential to the marketing process. You need to know your cues.

Responsibility: The Blame Game is deadly. Attacking or disparaging competitors, levelling barbs or insults on others, or failing to accept responsibility for your own blunders or even minor errors will destroy your place in the marketplace much more effectively and quickly than whether your price is low enough.

Leadership: No one needs to be a stereotypical charismatic leader to be successful in marketing, but you still need to have the right mix of self assurance and respect for others to influence them and define/draw out the desired results to succeed. Unless you are a one-person organization, you'll need your team's support. And unless you are marketing/selling to yourself, of course, you won't achieve much in winning new accounts and maintaining/developing new business without some leadership skills.

So how do you develop these talents if you don't have them? I wish I could come up with a magic one size, fits all action, but can't. Then again, maybe one word counts more than any other.

Listen.

Change orders, prime consultants and relationships

The Ottawa Construction Association tackled three of the thorniest and most important issues at its annual Construction Forum yesterday evening. And in it, the dynamics, controversy and underlying issues affecting the industry overall were clear to see both in the panelists' direct remarks, and (more importantly) the indirect interplay between the people speaking at the event.

There is lots of food for thought here -- too much for a blog entry and, frankly, for our November print issue, which was past deadline and virtually ready for the printers. So I'll write a news story to post on the OCN website tomorrow (Saturday) and prepare much more thorough reports on two of the topics -- the value of prime consultants and change orders -- in the next couple of months.

"Relationships that work" however is a topic that should never be delayed -- it is the foundation of this blog. I've always advocated that what you do when you are currently working with your suppliers, colleagues and clients sets the stage for your marketing future, especially within the ICI sector. Sure, some residential contractors can maintain viability by an organized marketing and sales strategy; constantly finding new clients through various forms of advertising. But when it comes down to building schools, hospitals, commercial fit-ups and the like, you aren't going to win the really good jobs unless you have satisfied your current clients; referrals and recommendations are vital here, so do positive references, unless, of course you simply want to spin your wheels on low -price open bids, only to find you can't win these jobs for one reason or another (and those that you win, you can't earn a decent profit.)

So I listened with interest the observations of the various speakers about how to develop and maintain good relationships, and will share these observations over the next few blog entries.

Doug Brooks, senior associate with Barry Hobin and Associates Architects, made these points:

Most successful projects and relationships have four or five key factors

Most successful projects and relationships have four or five key factors.The first one starts with the client, on every job, total success starts with good client. It has to be a client who understands that you as a professional are tyring to offer service to them to the best of your ability. There are no hidden agendas -- we’re all tyring to be as efficient and effective to give client what he wants. (Good) clients are open to that understanding,
Secondly, is respect. They (clients) respect what you are trying to do for them; that respect goes through the whole project team. You have to respect what each team member brings to the table-- you have bring out those strengths.
Third is communication, identifying early on what everybody’s objectives are, and ensuring those roles and responsibilities are clearly defined.
Fourth is building a team, (you need a) familiarity with the work you are doing but also people you are dealing with, you build understanding of what their expectations are, what you are starting with and to where you are going.

Brooks is right that the client certainly sets the project's stage and tone. It certainly can be difficult if you are lower on the pecking order in setting the stage since you don't control the show. But in some respects you can. If you apply the principals he outlines here to the areas within your scope of responsibility, you'll achieve much the same results as if you are fortunate enough to be working for the ideal client. (And there is an argument, not always easy to observe in practice especially in tough markets, that you should only elect to work with clients who respect you.) So, yes, communicate well, build a team, and respect the point of view of others. And, if at all possible, find a way to bring everyone together early in the process to establish effective communications and responses to the situations that will arise on the job site.