Craftmanship or Systems: Which is best?

The Mountain Equipment Co-Op building in Ottawa, one of the award-winning projects of Christopher Simmonds Architect.

Yesterday, I met with Chris Simmonds, an Ottawa architect who won the Peoples' Choice Award in the recent Greater Ottawa Home Builders' Association housing design awards competition for a luxurious home in Mississagua, near Toronto. (He entered the home in the "open" category as it is obviously far away from the Ottawa market area.) His practice -- he has a team of about 10 -- has built luxury residences, community facilities, and environmentally sensitive institutional buildings. "Underneath the hood" is an incredibly brilliant designer with a great sense of style and function. He conceptualizes big things with the little details -- and his staff, with various capacities and specialities, execute the vision.

Meanwhile, I'm watching the work of Stephen Sellers, whose "Professional Contracting Association" I discovered by monitoring his Adwords ads. In my conversation with him a few weeks ago, he described a small, part-time business, based on systems. Cautious to give him an unconditional endorsement -- after all, he has a new business, and his market credentials haven't yet been established -- I've been watching as various pieces of his marketing material arrive in my in-box, all building the base for his vision of a stream of increasing income from contractors looking for practical marketing solutions.

As far as I can tell, Sellers built his system in a box; a really comprehensive system with well written and strategized materials. There is a lot of skill in doing this right, but once he's done, his business should virtually "run itself" and generate money, consistently.

Which approach is better? You can't replace the quality and individual attention from Chris Simmonds and he gets to do the type of work he loves. Sure, Simmonds has systems within his practice to allow him to handle the volume of work -- and he certainly appreciates the basis of publicity and communications: Entering competitions where he can win recognition, and then find new business.

Sellers, meanwhile, described systems gone wrong. He had purchased a franchise which simply wouldn't work -- he paid for processes which hadn't been validated in the market. A systems person, he decided to learn everything, and get it right. I think he has.

I think both the systems and craftsmanship models have place within the industry. If you want to grow a really large business, you will probably need to move more in the systems direction, but if you are really good at what you do, you can indeed "have it your way."

Systems, authenticity and marketing

How important are solid business systems? In the last month, we had more staff turnover and disruption than I would wish on anyone; individually the reasons all make sense and, while we can draw some collective conclusions for the reasons, the losses were painful.

But the business is rebounding effectively, operations continue uninterrupted, and while client service continued seamlessly through the transition, it will now improve because of lessons learned and new processes and improvements put in place.

Systems, of course, saved the day. I turned on our "recruiting and employee selection" system several times, and it worked to quickly allow us to make the correct choices. But we modified the rules and processes by adapting, listening, and respecting some flexibility --- this allowed me to speed up some critical hiring decisions, while minimizing risk of bad choices.

Then, the new employees (in one case, a returning employee) generally knew what to do because we have established operating procedures. They of course need some guidance for the exceptions and special circumstances that occur less often, but generally, they could find out what to do and when.

Fair enough. Systems can save a business. But can they make one?

Systems-focused people advocate building the systems into your business from day one. They say you should visualize your end-result and then design all your operations to fit a structured, systematic model -- to avoid the seat-of-your-pants and chaotic environment where your personality and bad choices rule the day.

There are merits in these approaches; you certainly wouldn't want to make all the mistakes I made in my early days (and still do now!)

But there is a problem with this approach, and it is "authenticity". I sense if your business is excessively systematized at the beginning, the creative spark which defines it may be lost. You also risk putting on airs about being something you are not.

If you are operating a part-time, one person Internet marketing service you are not a "Professional Contractors Association" even if the materials you have systematically devised are as good as any I've seen for truly professional associations. (Is that a mixed review? Yes, but you should really read Steve Seller's stuff. His resources are excellent. See yesterday's blog posting for the relevant links.)

Then, can you solve your marketing problems with marketing systems? Here, again, the answer is yes, with a big caution. I'm really wary of prepackaged and ready-to-go solutions sold by third party vendors. These are probably much better than the seat-of-your-pants and hope-for-the-best approaches most start-up businesses use, but I sense the best systems are the ones you build yourself, by combining the best practices and advice of others with your own personality, temperament and values.

Sellers acknowledges he is a systems person, but he learned (through purchase of a bad franchise) that systems themselves don't work if they aren't right for the particular business and market you are serving.

One-size-fits all marketing solutions for contractors may deliver core value and can save you a lot of time on the learning curve, but they won't respect your individuality and may be a mismatch for who you actually are.

In other words, learn from others, use systems, but be sure to devise something that is right for you. And be real.

(P.S. The bi-weekly newsletter is a little late -- I expect it will be ready later today but you may receive it tomorrow morning.)

Vapourware? Maybe not.

I don't believe a part-time business just three weeks in operation qualifies as a "Professional Contracting Association" and hate the cheesy squeeze-page set up on Steve Sellers' marketing materials, but behind his site are actually some useful free resources.

Steve Sellers from Professionalcontractingassociation.com, based in New Jersey, responded to my email inquiry when I prepared the Vapourware Marketing posting yesterday. In my email to him, I asked:

If I'm wrong in my assumptions, we should communicate so I can write an accurate story. If I'm right, don't worry, no one should be able to trace you from this posting and I never name individuals/organizations (negatively) publicly in the blog.

If the truth is somewhere "in between" also let me know -- while I can't write an artificially positive review, we can still share notes.

His answer:

"In-between" would be the most accurate. This IS a new venture for me, although I am not new to Internet marketing. That being said, I owned/operated a small construction company in New Jersey (you are right about the Eastern U.S.), and no, this is not my home address--it is an office.

Long story, but we are shutting down our construction business this month... I'll be happy to share all of the torrid details over the phone...

I've tried very hard not to over-inflate my claims and if it appears that I have done so, then any feedback would be highly appreciated!

He followed up with a phone conversation and emailed some rather interesting material behind the site, including a marketing e-book and a six week course on how to effectively structure and operate a contracting business.

It turns out he has a contracting business which he would like to sell or quit; a manager is operating it while he works at another full-time job and he tries to make his Internet marketing business viable.

He told me he got into trouble when he purchased a maintenance franchise; the franchiser didn't know the business, and it lost thousands of dollars until he ditched the franchise and learned how to do things himself. Last year, the business turned a small profit.

"Why not validate your approach by making your contracting business truly successful," I asked him. He said he is disillusioned with the business and the harrowing experience the ill-fated franchise put him and his family through. He is burned out. His manager would like to purchase the business, but of course doesn't have the spare cash.

Sellers' Internet business, meanwhile, has been in operation for three weeks. He has sold one marketing system, a newsletter/email follow up management system provided by The Halos Marketing Group.

His Adwords budget is $10.00 a day, and this generates 15 to 25 leads -- of which about half of one per cent convert to a request for a free newsletter subscription. But since the system operates on autoresponder, it may turn out to be a modest part-time business if he can sell two or three marketing packages a month.

Fair enough. Is this vapourware? Digging beneath the surface, maybe not. Sellers has hard-knock experience. His e-course, which is right now free, is quite well presented and provides practical and useful materials. (Free is also a rather good price!)

I'm not sure I'd pay the fee for the marketing/newsletter package, but you might want to check his free course at http://www.6weekbusinessremodel.com. And since his marketing e-book is also free, you can check it here: http://www.professionalcontractingassociation.com/Marketing.pdf.

I still wish he wouldn't use the word "Association" when he is operating a small, part-time one person business. And I really hate the cheesy squeeze page "Internet marketing technique" format. Every time I see this sort of site, I feel like running for the hills.

Nevertheless, the free stuff is quite good and he really has been in the business, so I'll keep my mind open and grant him a hyperlink for his blog at http://professionalcontractingassociation.com/blog/

Opportunity in crisis: Throwing the rule book away

This morning, we're beginning to absorb the consequences of one of the most surprising (and rapid) business turnarounds I can recall.

Last Friday, I feared we faced a significant operating loss this month. Realizing this loss would be unsustainable, I extended deadlines by a week and then allowed, in fact encouraged, employees to sell without regard for some of our usual constraints.

(The constraints are operational, not ethical.)

These constraints are part of business systems developed over the years to increase efficiency and productivity, and avoid time-wasted effort on futile projects. They kept things simple, and prevented us from having to redo our work, or stress out totally on last-minute volume.

When I lifted the constraints, we discovered the shocking results that sales increased by 25 to 40 per cent on the same intrinsic potential business volume. In other words, our well-intended rules had cost us thousands of dollars in potential sales, every month.

Wow.

(I'm not detailing specifics here -- this is a public blog and, after all, these discoveries represent private competitive advantages within our industry -- but it doesn't take a rocket science for anyone to realize that if a little extra work and confusion can generate this much yield, you should take the results very seriously.)

Sometimes it helps to throw your rule book away.

We now are building new systems to accommodate our discoveries.

Do you have similar opportunities in your business, masked by long-established and reasonable operating procedures?

How to grow by shrinking

Last week, as Bob Kruhm and I attended meetings and conducted interviews in the Washington, D.C. suburbs to re-establish Washington Construction News, I felt both a sense of deja-vu and routine. "I've been here before, many times," I thought, as we drove around Northern Virginia and southern Maryland, including the routinely clogged Beltway.

Three years ago, even as the rest of the construction economy enjoyed the tail end of a boom that seemed to have no end, I doubted we would ever return -- seeing the business crumble, first in the financial numbers, then in the personal relationships and attitudes of staff, then, simply in its scale and operations, as I shut down one market after another. Our U.S. expansion in tatters, we held on by the slimmest of threads in the final U.S. market we entered, in North Carolina, thanks to Bob Kruhm's willingness to continue through thick and thin.

I, too, retained a fatalistically optimistic attitude. Our business finances were gloomy, but I also knew the crucial "point of no return" number -- the level at which unsustainable business debt could crush and destroy my remaining personal resources and assets. So, even though I deferred painful decisions as long as possible, as we bumped up at that horrendous debt level, I cut again and again, seeing both revenues and break-even points decline to levels I hadn't known since the earliest days of the business, when there was almost nothing but the inspiration and drive to be a great publisher.

Eventually, we got to the point where we had one part time sales rep, one part time administrator, and some talented pay-per-service independent contractors. I worked for a salary that could be replicated at a fast food restaurant -- writing the publications, answering the phone, and of course leading the selling effort. Then the part-time administrator obtained a better job, and our only remaining salesperson offered to resign. I accepted the resignation. Now we were down to one employee, working six hours a week, to call and collect old accounts receivable.

However, even as the business appeared to be collapsing, in fact, I had solved the problem, combining business practice and structure insights from consultant Bill Caswell, and (after years of distance), getting closer to our clients and marketplace than ever before. I knew we would survive, and in fact be well positioned to grow even as the recession started burning into the marketplace.

Now that we have emerged from a self-induced recessionary wilderness, you may be wondering how you can enjoy the same survival and resurgence. Here are some lessons learned, which hopefully will help you through the seemingly dark days ahead.

• Successful business people always know their point of no return; the level of indebtedness and stress where, if you continue, you know that you would jeopardize personal assets and your life outside your own business. You must be prepared to do whatever you can to avoid crossing that line -- if you act quickly enough (and some sudden external event doesn't destroy things) you can often resolve things without seeking creditor protection or bankruptcy, but if you see yourself and your business heading in these directions, you need to seek competent legal and accounting advice right away -- as you cannot implement the necessary restructuring measures at the last minute without serious negative consequences.

• Remember the qualities, skills and passions that allowed you to start your own business, and rekindle these by doing work you are great at and enjoy -- you may need to get back to your trade and forget the advice that you should work on, not in, your business (at least in doing the daily work). As you get down to earth, you will also become much closer to your clients. Listen to them, see what they require, and adapt your business and products to their requirements.

• However, even as you are shrinking, develop larger-business discipline and processes; set business practices and systems with the structure and co-ordination of the biggest corporations, but without the bureaucracy. We maintained regular weekly meetings and twice-yearly planning/review sessions even as the business declined; and these processes helped us to catch the bottom and return to vibrancy. (The picture above right is from our October planning meeting -- an expense I would have found hard to justify before, but now know to be essential for the business.)
  

You of course cannot change your external environment; if no one is buying what you've been selling, and the fundamental market has changed for good, you need to adapt and revise your model -- but you can find hope and strength in realizing and remembering these basic principals.

Simple systems

How much complexity does your business need?

Well, obviously if you are building complex structures, or need to meet detailed specifications, you had better have these things right -- with appropriate fail-safe and verification resources. But if you are looking at marketing and general business management, then indeed keeping it simple makes a lot of sense.
You certainly need systems that transcend individuals, of course. If you are making all our business decisions seat-of-the-pants, or because someone with a strong personality (perhaps yourself) are driving things, then you need to take a step back and determine if your business is operating properly.

Far too many AEC business owners just go with the flow, and don't really look at how their business operates, and catch things when they are wrong. You need to systems and procedures to deal with these things.

I abhor administrative bureaucracy as much as anyone else, but have learned that regular and routine staff meetings are vital, and annual planning processes are essential. You also need a reliable employee evaluation system, clear policies regarding client service and communication, and enough phone lines! (Yes, I received a call a few minutes ago from a client who had been trying to reach us all day yesterday to get only busy signals. Ouch!)

Your systems

If you want to be successful in marketing (and business) you need a replicable system and specific processes and policies, but your clients should not feel they are cogs in the system's wheels. This is basic stuff, but too many contractors either fail to understand what needs to be done to make their systems effective, or how to design their systems so they don't offend the people who count the most.

Here, for example, is part of our client feedback/follow-up system. We invite feedback and response from our clients not by structured surveys, but through follow up thank you cards (handwritten) or when we produce features, free copies of PDF files of the features. Then we listen. Most of the time the clients are happy (even enthusiastic) or at worse, remain silent. But sometimes things aren't quite right. Then I get involved -- VERY involved.

Around here, even the simplest indication of customer dissatisfaction is like a clanging fire alarm with red lights flashing. Crisis, crisis, crisis, pull out all the stops, drop everything, make it right. We won't permanently change all our processes because of one complaint (but we will make every effort to resolve it), but if the complaints are happening with any frequency, we'll look into our systems and change things.

So, for example, you have a great service, and rely on referrals. That is great. But what is your system for managing, encouraging, and serving referrals? Do you have routine processes for follow ups, do you have an incentive program to encourage referrals, do you have a system to thank the clients who refer you, and do you have measurement resources to track and assess the value and source of your referrals?

If you are playing these things by the seat of your pants, take a step back, and figure out your systems. You don't need a bureaucracy, you don't need to make things excessively complex, but you need rules in the game.

Then, periodically, stretch yourself, go out of your comfort zone, visit another city, try something different, and plug it into your processes. That's the innovation stuff.

P.S. If you think these observations are right out of Michael Gerber's E-Myth materials, you are right, though I don't recommend you spend large sums of money on his programs (I did). I firmly believe that your consultants, while having their own systems, must be much more connected to your own business -- and responsive to it -- and Gerber's cookie-cutter approach is of relatively limited value. But his books are good, and so is the underling philosophy he encourages you to adapt.)

Freedom and systems

So, what do you find when you search for a Google Image for "freedom and systems"? I came across Freedom AC-Heat-Metal in Santa Fe, Texas. I don't know them well, of course, but their website suggests they combine the right mix of employee freedom and business systems to thrive as a local contractor.

I have always perceived that the best and most satisfying business is one where employees and contractors are free to be themselves, to use their own imagination and skills with minimum direction and supervision. This freedom, I postulated, would coincide with higher levels of achievement and greater work satisfaction, more satisfied clients, and overall a much healthier and more sustainable enterprise.

Through several long years of agonizing business decline, however, I realized that freedom has its limits and that a business built entirely on free agent spirit will crash under the weight of, for want of a better phrase, unenlightened self interest. We had writers doing the bare minimum with us to maintain their freelance income compensation; administrative employees picking when and where to work, regardless of operational requirements for someone to be in the office during regular business hours, and salespeople effectively piling up the orders, while building fiefdoms of power and (sadly) alienating the marketplace because they were 'efficiently' doing nothing but selling, forgetting that non-selling personal relationships are equally important.

Add to this, I made business decisions under the pull of employees personal self-determination, rather than the best interests of the business (and I am one of the people who stand accused of this failing). So we expanded to markets where we had no business being, and I engaged in diversions which, while emotionally satisfying at the time, proved costly in managing the business operations.

I learned my lesson. We now have a few rules which are clearly articulated in our processes and systems.

New employees are hired through a careful, work-focused evaluation process.

We want to see initiative, self-responsibility, and talent -- and the ability to work with others in the team -- before hiring anyone. So candidates are invited to prove their abilities through defined processes. These vary depending on the position; our guidelines are different for administrative, sales and editorial employees, but everyone within the category must follow the procedures to be hired.

Everyone must attend the weekly meeting; and our bi-annual 'deep' meetings, except in the most exceptional circumstances.

This is not an onerous burden, of course -- the weekly meeting never lasts more than an hour and if you are out of town or exceptionally busy, you can attend by teleconference. The bi-annual meeting is a free all expenses paid trip for out-of-town employees. The meetings allow us all to connect and update ourselves on progress -- and hold ourselves accountable for commitments -- and I can use the meetings to gage the mood of the business, and the work of individual employees. (I caught a major problem with one former employee just a few weeks ago by noticing a subtle inconsistency in his behavior at the meeting.)

I will act decisively -- and quickly -- if our basic business guidelines are not met.

If an employee is not performing, doing the work required, then time is not wasted in addressing the problem and seeking out causes and solutions. This is not an arbitrary or brutal process; under performance issues are handled with respect and sensitivity, and everyone is given more than one chance to improve.

Freedom is respected, and rules are kept to the minimum.

With these ground rules in place, I revert to my 'old' values of encouraging independence, respecting freedom and allowing innovation. Successful businesses thrive when processes work smoothly, but administrative and management bureaucracies and empires are kept to the minimum. You need discipline, accountability, and mutual respect, of course, but you don't achieve this by forcing everyone into the same corporate straight-jacket.

Eight guidelines for business/marketing success (or eight lessons learned the hard way)

The rowing together image is from the Caswell Corporate Coaching Company home page. We learned our meeting system and policies from CCCC's Bil Caswell.

This blog's launch (you can see the early entries deep in the archives) co-incides with the inflection point in late 2006 when my business hit bottom after a painful three year decline. From 20 employees and publications in five Canadian and U.S. cities, we were briefly down to one part-time employee. The painful failure and surprising resurgence have taught me some important lessons about business. The school of hard knocks can, indeed, teach us some important lessons.

1.You need to have a staff meeting at least once weekly, no more than an hour.

I used to hate meetings and ran the business without them except in exceptional or special circumstances, considering them to be a waste of productive work time. Bad mistake. Meetings serve some important purposes including managing work flow, setting priorities, and ensuring alignment amongst everyone. Our meetings have an agenda (there is always room for 'new business' and late additions), and are co-ordinated with "Action Items" so we can track on work progress. All salaried staff are expected to attend and independent contractors closely associated with the business are invited. Notably, a sign of the meetings' success is that the independent contractors -- who don't need to come -- generally show up! (We have several out-of-town employees who attend by teleconference; local employees are encouraged to be in the office but can join in by phone if it is inconvenient to get to the office.)

There are other good meeting formats -- some businesses find the Daily Huddle to be very effective -- here everyone in the work group gets together for no more than 10 minutes for a quick update and progress report. People who use this methodology say it saves time as back and forth discussions one on one are reduced during the day and all issues are addressed quickly. We will probably go to the huddle format when we are a little larger.

We learned our meeting approach from Bill Caswell of Caswell Corporate Coaching Company (CCC).

2. You need a full scale planning meeting once a year, and probably a six month secondary evaluation/co-ordination meeting.

These are major events -- "the management retreat" -- and in our business, involve all employees and contractors. The cost is high --- I need to fly in several people from out of town locations, and hire professional facilitators, but I realize now these meetings are where the company sets its course and where people who can't see each other routinely have some important face-time with peers. For a small business (presently) we are spending a truly significant amount of money on these meetings but I realize they are a cornerstone of our growth.

3.You need to connect face-to-face with your community and market

For years, some of our salespeople insisted on doing everything by phone -- or, in the rare cases when they would meet someone, the meeting had a sales purpose in mind. Our editor would go out to some events but in the latter stages, as cutbacks intensified and demoralization set in, he started relying as well on the phone and press releases! Bad move. Face-to-face contact without worrying about or forcing the actual sale is really important in business, especially these days when so much is conducted online and by email. When you see people, you get feedback, interaction, mutual respect, and new ideas. Get out there.

4. You need to adapt and introduce the new technologies but (unless you are in the technology business), you don't want thinking about these things to overtake you.

I'm wary of "simple" systems integration and CRM (Client Relationship Management) programs, at least the formal kind that are centralized . In the prefect world, these tools should allow you to seamlessly communicate with clients adapting the product and message to them, and allowing great teamwork. The reality is that many of these things just don't work very well, and force sales people and administrative staff into straight jackets of process rather than substance. We patch our IT systems together to get the job done -- yes, we will need to refine and revise things as we evolve and grow, but I'll always as CEO keep the "efficiency+effectiveness/cost" ratio in mind when evaluating projects.

5. Your employees need a mixture of freedom and accountability (with the emphasis on freedom)

Pure unbridled freedom invites abuse and abuse by one employee can spread to others, resulting in a breakdown of order and priorities. Equally, employees are adults and should be treated that way -- I respect the people who work in our organization to be able to think for themselves, solve problems without running to the boss, and respond swiftly when something isn't right. In exchange they don't need me breathing down their backs.

6. Hire carefully, slowly, and with clear guidelines

Our hiring system is elegantly effective. We (initially) don't read resumes. Instead we send all candidates a questionnaire with a brief job description. If you don't answer the questionnaire, you don't get the job! (Duh). If you do, we then compare the questionnaire responses to the resume to check for inconsistencies -- and people who pass the initial screen (about 1/5 of the people who send us resumes in the first place) receive a phone call.

Then, depending on the job, we either use an online test or go directly to a paid freelance or working assignment for finalists. This serves as the "interview".

Our hiring system works because I realize people spend too much time faking up resumes and "dressing up" for interviews -- two things which mean very little in the real working environment. We want to know instead: "Do you really want the job? Are you capable of the work? Would you work well with us?" and we don't want to spend hours 'sifting resumes'. The system works.

7. Have systems but remember people, ideas, and clients make the business work

We obviously have systems, but are not bound in knots by policy rules and directives. Take for example our travel policy. You can stay where you like, eat what you want, and do what you like -- just use common sense and think about it as if you are spending your own money. Once, for fun, I bought a full fare business class ticket for a key employee so we could go to the airline lounge and sip on a few drinks. We then refunded the ticket, and hopped on another flight with a discount airline. We won't do that every trip, but I shudder to think about how that would fit within any 'travel policy'.

8. Have fun

When business becomes (mostly) unpleasant work, change things so that you can enjoy yourself again. I can't see anything worse than being stuck in a dead-end and demoralizing space because you need the money to survive. I realize that not everyone has this freedom, but I think we can all take at least small steps to gain control and have some satisfaction in our work. As an employer, I want to be sure that this company's employees, most of the time, really enjoy what they are doing. This is common business -- and marketing -- sense, because if the employees are happy they will interact with current and potential clients with the same level of enthusiasm and, indeed, that is the best way to find new business and grow the current one.

People and systems -- the (one sided) balance

This graphic is from the EllisDon web page article headlined: "EllisDon Ranks Number One on Canada’s 50 Best Employers List". We can learn a lot from the business practices of the most successful companies in our industry.

At a recent Ontario General Contractors Association forum, Geoff Smith, President and CEO of EllisDon, a multi-billion dollar general contractor, explained some of the basics of his company's business success.

"If you don't have good people on the projects in your area, your head office won't save anything," he said. "Systems never cause success. You either have good people and set them free or you don't."

He added an interesting second point. "People say 'we're here to enhance shareholder value. That's BS -- no one gets up in the morning to enhance shareholder value.

"We think that why our company exists, why did the founder start the company; it is what (our employees) love doing -- it's the kind of people hanging around it . . .The employees come first. This is the company which exists for its employees."

He added: "We are going to be entirely open about this company; we share the financial statements with all the employees, we share all the problems -- (and) by the way, you are accountable . . . you are accountable not to me but to everyone else who works in the company."

So, here are the three basic themes of EllisDon:

• Set them (employees) free
• Make the priorities based on the employees
• Give them all the information and make them accountable to each other.

"Some days it works better than others," Smith concluded.

Aha, here is the balance, the opportunity, and the challenge in business -- finding the right balance in business overall and, in specific, marketing construction services: Finding the right balance of freedom and accountability -- and using systems to enhance rather than restrain your vision, whether you are an employee, owner or both..

The challenge is finding this right balance; in my first (ill-fated) business expansion, I didn't understand the practical application of business systems and management 'controls' -- and only discovered almost too late the limitations of seat-of-your-pants management without proper accountability.

Too much marketing is done that way -- a salesperson pitches an idea and you purchase it (worse, a telemarketer encourages you to advertise in a Police Journal and you say yes, or you don't know your employee is authorizing the wasted purchase) -- or you try this or that, hoping something, anything will work. You really need a planning and budgeting process; a set of rules and processes to guide your decisions and strategies, and if you wish to move from these plans, have an understanding of how and when the deviation is appropriate and wise. sadly, I see most construction businesses don't get the basics right and either market haphazardly, not at all, or with inconsistent and ill-planned methodologies.

But equally, despite my previous blunders about not understanding systems and processes, I may have been closer to being on the right track than executives in charge of many autocratic and bureaucratic organizations.

"Systems never cause success." Geoff Smith says. He is absolutely right. We need them, of course, but you should not be ruled by them. Just make sure if you set your employees free, you also have systems to ensure they are accountable to each other.

Branding, systems and price

What do you find when you ask Google for links from the keywords, branding, systems and pricing? Nothing to do with marketing, it seems; at least obviously; one of the first listings is for "Brand Energy and Infrastructure Services," which, I learned, is the parent company for Aluma Systems -- I have heard of Aluma, but never "Brand". We learn new things every day.

A lot of successful "small guys" have a great brand. Their reputation for quality and reliability is impeccable and they have no trouble finding clients. I see this among several of the renovator members at our local home builders' association. They win awards for design quality, keep up with industry developments, contribute to the community; in fact they are all-round good people to do business with -- but they don't consciously think in terms of branding and systems, and (this is somewhat disturbing) they price their services as if they are competing in the commodity-based open market.

To make your brand work best for you, I believe, you need to get the other two elements of business right -- systems and pricing. Systems are your rules, procedures, guidelines and processes. In the purest format, they are often written down in a policy/procedures manual, but the manual doesn't need to be written if the systems are simple, easily understood, and no one is going to mess with them without authority and planning.

(I would argue that the best systems in fact are easy to operate in an unwritten format -- they are a sign that you are not getting caught in bureaucracy and paper-shuffling to run your organiation, and that your internal communications and relationships among employees and management is so smooth that this documentation is simply not necessary. I would further admit, however, that after a certain point of business growth, you need to document things properly, regardless of simplicity.)

Understanding pricing, and having good rules and processes here, is also essential, because if your brand is good, you may be underpricing yourself if you are simply thinking in terms of commodity pricing models. Your reputation and quality may be so high -- and your ability to recruit sufficient employees to continue/maintain this quality so limited -- that the only way you will make 'real money' in your business is to raise your price since your volume cannot increase sufficiently. Of course you are really hitting the jackpot if you can either simplify your systems so that less-skilled people can do the jobs required to the highest quality; or you devise a truly effective recruitment/training system so you can attract and maintain the highest quality labour force, and obtain more employees when required. Here, of course, great branding is also helpful.

As Sonny Lykos noted in his most recent comment, you can have a great automobile brand; but if the car is missing the steering wheel, it won't run. Business is like that -- to get to where you really want to go you have to put all the pieces together properly. You may be fortunate enough to have a great brand. If so, look at your systems and prices to capitalize on it.