Is Your Management Team the Greatest Risk of All ?

When we (http://www.dynamisolutions.net/) roll into a production builder, we do an evaluation/analysis that involves a lot of fact-finding... investigation about workflow/process... analyzing existing data structures and documents...looking for product line opportunities... on and on. We call it a "Blueprint" (catchy, huh?) and the deliverable is a lengthy written implementation plan...before one lick of software is touched. Our "Blueprint" is primarily to figure out the best way to deploy our services...but if a builder is also considering a new accounting system or whatever else Dynami doesn't sell.. we use it to find those opportunities for our clients as well.

SMA (http://www.smaconsulting.net/) called this approach a "Scorecard"... Shinn Group does something similar. I'm sure every good management consultancy has their own approach to the same end. ( and if they don't.... run).

By the way...I've seen a lot of stuff out there (so-called small-builder or remodeler "management systems") that might ask the right questions... but they don't provide any answers beyond stating the obvious ("Are You Profitable" "Are You Backing Up Your Data", etc.) That's only 1/3 the solution. Before you decide on a course of action, you will need:

1) The right questions (What does my mark-up need to be for "X")

2) The right answers .... (here's your target, you're currently 10% under the average capture rate for "X", and this is what that means in terms of sales...)

and finally ...

3) The tools to get it done. (Here is the procedure, the software, the whatever to increase your capture rate by 10%)

Smaller operations might not need a "Blueprint" or a "Scorecard" (but it couldn't hurt).. but you still need to follow exactly the same approach.

THE TOP-DOWN APPROACH:
By now my readers are probably sick of this diatribe, and I hope you've all memorized it.
When evaluating anything, including technology (but also new work products, new hires, a new truck, different tools, an office party...) use a "top-down"approach. You can't move down the ladder until you have absolute clarity on the step above .

Here it is again in case you missed it: Top-Down means thinking in terms of...

WHY (Your mission/vision/purpose generally) --> then
WHAT (Your OBJECTIVES for this project specifically) --> then
HOW (the strategy.... in this particular case the software/tools you're going to use) and finally --> (drum roll please....)
WHO/WHAT/WHERE .... (the Action Plan)

= SUCCESS !!!
Bottom line, projects that take the top-down approach, are very likely to succeed, projects that don't are very likely to fail.

YOUR TEAM'S PROJECT READINESS = YOUR PROJECT RISKS:
Assuming you get through WHY,WHAT,HOW, you're still not out of the woods. The last step - the "Action Plan" requires RESOURCES. WHO=people WHEN=Time WHERE=Geography. Also money, another important resource to keep things rolling.

So, in addition to the vision, objectives, and strategy... you have to couch a project terms of your company's READINESS to take on a project of the scope required. This is one of many project "RISKS".

RISK #1: BITING OFF MORE THAN YOUR TEAM CAN CHEW:
Risks are very important to know - they are your crystal ball as to whether your approach will work, or leave you back whining about the latest shelfware you purchased. Minor "risks" can slow down a project or reduce your ROI.. major risks (also known as "terminating factors") can stop it in its tracks or put it in the ditch altogether.

Sure... standing up "BuildWhatEver", the latest/greatest end-to-end ERP solution might be the perfect solution from a feature/fuction standpoint... but do you REALISTICALLY have the resources internally to pull it off ?

To figure that one out, you need to know what it's going to take, specifically . (1550 MH of product planning.....1250 MH of proof of concept and Use Cases....1500 MH for deployment.... etc.) . A work-year is 2100-2500 hours rough and tough for most of us. If you are a one-man band with a part-time receptionist... you are NOT going to complete a project that requires an additional 4500 man-hours in the same year. But you MIGHT be able to do one that requires an extra 450. Then... next year you might be able to take on another one... etc.

The trick then, is to figure out which approach will give you the most bang for the buck within your capability to execute that approach. Some small companies can pull off an extra 1/2 time assignment... others not even close. It takes a lot of leadership to squeeze extra productivity out of staff in order to get it done... and it takes UNENDING commitment from the small business owner. The project might replace all your free time, weekends, and that yearly hunting trip to Montana. How bad do you want it, really ? Process/workflow improvement is hard work, but the results can be spectacular.

Of course, there is a lot more to this than the 4 one-liners in "top-down". Getting to clear mission and objectives can take weeks of soul-searching. Developing strategy around those objectives can take more weeks of elbow grease. Luckily there is are many pre-defined strategic planning methods that will get you there.

You can do it yourself if you're a small biz, but I don't recommend that approach. I think you'll do much better with:

1) Help from someone familiar with standard strategic planning process , and
2) Some objective new eyes on your operation to help you determine capacity.

THE AD HOC BOARD OF DIRECTORS/ EXECUTIVE COMMITTEE:
If you have the resources, you can hire a consultant to come in and help you... We're available. But whether you do that or not, the most effective thing a smaller company can do is establish what we would call an "Ad hoc board of directors" or an "Executive Committee". Builder20 clubs provide a peer-to-peer environment you can use.... or just "run it up the ladder with your wife and kids" is probably better than nothing. At some point I'll upload an excellent article on the ad hoc BOD , written by my mentor and friend Bob Whitten. Bob knows this better than anyone. Using an ad hoc BOD is a big part of the reason he was able to grow Wayne Homes of Ohio organically from a 200 to a 600 unit builder... and sell them to Centex in under seven years.

The main thing I'm trying to get across here is that YOU, the owner, needs to climb up to the 30,000' view so you can think outside the pressures of your day-to-day operation. The minute you become dis-engaged from your IT/SOFTWARE/PROCESS project, is the day it will start to fail.