Less Chaos, More Cash

   If your business grew from $250k to $500k or $500k to $1 million in sales over the last few years, you may be asking another question: How is it that our profits aren’t keeping pace with the increased sales and headaches?
   The reason, according to Vern Harnish, author of Mastering the Rockefeller Habits, is that when a business doubles in size, it becomes 12 times more complex to operate. With complexity often comes chaos. The increase in customers, quotes, contracts, and commitments can put a serious strain on the people and systems in the business that may not automatically evolve when sales increase. 
   This chaos has many forms:
   • Confused and frustrated customers;
   • Incorrect quotes due to increased volume and pressure to get them done;
   • Misplaced or hidden files containing information like material or edge-detail selections that affect the contract; and
   • Overscheduling problems that result from multiple people promising the same install date to multiple customers.
   It’s not so much that the work itself becomes more difficult or complex; a slab is still a slab, and a saw is still a saw. It’s that there is so much more information and responsibility. And, usually, so many more people.
   A common reaction to this phenomenon is to hire people and throw them at the problem like water on a fire. Unfortunately, like dumping water on a grease fire, simply adding more people to the mix only adds to the confusion, not to mention the expense. The result: a hectic, frenzied atmosphere, where everybody is running around like their hair is on fire. (And, in a few cases, it just might be.)
   There is a way to growing a company in an orderly and profitable manner. The simple solution to this perplexing problem is this: Create an atmosphere that ensures everyone always knows what they are responsible for doing, to what extent they are to do it, and – most importantly, how they are to do it.
   In essence, the critical tasks performed in the company must be clearly defined in terms of the following three components: the position, its result, and the operation. It is the P.R.O. strategy employed by every successful growing business. By using the following three step process, a company can begin to regain control of its products and profitability.
   The process is as follows: Assign the Position, Define the Result, and Design the Operation.
  
ASSIGNING THE POSITION
   In a growing organization, nothing ever stays the same. As a company evolves, so do the individual positions and the responsibilities that go with them. Often times, they evolve slowly enough that people don’t really realize that their responsibilities are changing.
   Take for example, the task of putting rods in undemount sink pieces: The sawyer who is tasked with cutting five kitchens per week might also have the formal responsibility of placing the undermount sink pieces upside down, then cutting and gluing a steel rod into the front and back bar of the counters. This is fine until he has more kitchens to cut.
   As the company grows, so does the number of kitchens in the production flow. At some point – maybe the first time he has to cut six or seven kitchens in a week – the sawyer might have to ask the edge-machine operator to help him finish a couple of the pieces he’s prepped. This “job sharing” might go on for a couple of weeks or months and then one day, the sawyer, who’s grown used to the help, just assumes the edge-machine guy is going to do it for him.
   With all that’s going on (the slab handling, cleaning, lay-outs, etc.) one or two sink pieces slip thru the cracks and never get rodded. Result number one is a sawyer who blames the edge-machine guy for not doing his job, and an edge-machine operator stating it was never “his” job in the first place.
   Result number two is a cracked counter on the CNC or a broken piece while loading it into a trailer. This period in which a task is in transition, where the responsibility is uncertainly split between multiple people, is when most chaos occurs.
   It’s the owner’s responsibility to make sure that, as work loads shift with increased sales, those doing the work know their tasks. In this case, the position in the company that is going to be responsible for rodding under-mount sinks must be determined, and the person filling the position must be notified of the new task or responsibility.
  
DEFINING THE RESULT
   Every fabrication company has a unique way of handling operations and tasks; there is a result the owner expects to be achieved. In a company that’s growing, it becomes absolutely essential that the responsibility of each position is clear and written down , because often times new employees are filling roles previously held by seasoned company veterans. It’s no secret that all new hires will have differing opinions on how well a task should be performed, and what the final result should be.
   Butt what is a result? For the estimator, it’s the quote. For the sawyer, it’s the blanked-out counters. For the edge-machine operator it’s a profiled edge.
   Unfortunately, it’s not good enough to leave an expectation that vague. If a stated result is to have any impact, it must contain clear, measurable standards.
   For example, the stated result for the sawyer position reads: To accurately cut all counters and splashes in accordance with supplied templates and dimensions. However, that’s not enough; important considerations like color-matched joints, vein direction, and accuracy tolerances must accompany the stated result. At this point the owner must determine and define those measurable standards.
   How far off the template can a joint cut be? 1/32”? 1/16”? How far off can a wall cut be when covered with backsplash? What percentage of a joint must be color-matched to be acceptable? These questions must be answered and written down in the form of standards that accompany the result, so they may be given to the employee for regularly reference while carrying out the tasks.
  
DESIGNING THE OPERATION
   The process an employee follows to accomplish the task, though, is as important as the standard. In the same way that there’s the right way to replace a valve cover gasket, in terms of applying the adhesive and tightening the bolts, there’s a proper and proven way to produce any specific result that meets a certain standard.
   Again, for the company hiring new employees to meet a growing demand, giving them a road map to follow while doing their jobs is essential. This most often takes the form of a written step-by-step process proven to produce the desired result when followed.
   This usually doesn’t require reinventing the wheel, but merely documenting what’s already being done successfully in a position. In the event that the current person filling a position moves up the ladder, or simply needs help because of an increased work load, a new employee or assistant can step in and easily replicate the finished product.
   The task of designing or documenting a particular operation, which is absolutely necessary for producing the result the owner wants, doesn’t have to be done by the owner. In fact, it’s easily accomplished by the employee currently filling the position. Regardless of who designs the operation, it needs to be done for any position that is experiencing the stress and strain of exceptional growth.
   Growth is a natural and normal phenomenon that occurs when a healthy company takes care of its customers and employees.  Yet that same growth often throws a business into chaos and confusion, while draining it of its once abundant cash; it must be managed and controlled.
   By following the P.R.O. strategy, of assigning Positions, defining Results, and designing the Operation, it’s only a short time before the most-pressing question becomes – again – How are we going to find more sales?
   Aaron Crowley is the founder and president of FabricatorsFriend.com and a prominent stone shop in Portland, Ore. He can be reached at aaroncgc@verizon.net.

This article first appeared in the November 2007 print edition of Stone Business. ©2007 Western Business Media