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Table of Contents
Why Do You Track What You Track?
Dave Says - Creating a No-Gossip Culture Special Announcement - Labor Pricing For a Profit Update ProfitMaxx: Talk About Maintenance Agreements Team Solutions: Are You Too Social? Small Business University: Conquering Unrelenting Information Overload  This e-mail address is being protected from spambots. You need JavaScript enabled to view it This e-mail address is being protected from spambots. You need JavaScript enabled to view it This e-mail address is being protected from spambots. You need JavaScript enabled to view it |
A Message from Grandy & Associates
by Tom Grandy
I heard a great story recently. Two guys were up in a hot air balloon and within a very short time they found themselves in the middle of a cloud. Minutes turned into hours until finally they exited the cloud having absolutely no idea when they were. One of the men looked down and saw two men in a field so he yelled down to them, “Where are we?” One of the men on the ground yelled back “You are up in the balloon!” The balloon floated off at which point one fellow in the balloon turned to the other and said, “That guy on the ground must be an accountant.” His flying partner than asked the obvious question, “What makes you think that?” His friend said, “The information he gave us was 100% accurate but it was totally useless!”
Why do you track what we track when it comes to your business? Did an accountant tell you to track it? Perhaps the previous owner or manager created the report so you just continued the tradition. Did you read it in a book, pick up the idea at a seminar or hear another contractor suggest you track this or that. Maybe you started the tracking process yourself ten years ago, but you aren't sure if the information is still valid today. Again, the bottom line is the same. Why do you track what you track? Does it have value? Do you or others actually use the information? Is it passed onto another department where some other manager uses it?
When I graduated from Virginia Tech in 1970 with an industry engineering degree, another fellow and I started an industrial engineering department for Leggett & Myers in Durham, NC. In case you are unaware of what an industrial engineer is trained to do, we basically look at situations or processes with the objective of finding ways to do the same thing faster, better and more economically. Bottom line – simplify the process. You could not have even imagined how many monthly reports were generated by this Fortune 500 company. It seemed your value was measured by how many pounds of paper you generated per month in reports.
After tracking some of the reports and finding few were actually read, we came up with an idea. It was simple, but it worked. We received permission from upper management to literally stop the production of every single report that was generated on a monthly basis. Those that generated the reports were told not to say anything to anyone, just stop producing the reports. They were also instructed to begin reproducing the reports only if they were contacted by the end user who was asking “Where is my report? I need that information.” The results were amazing. Believe it or not, less than 20% of all the reports generated were actually used by someone else. The rest generated dust, filled trash cans and/or were filed away in (or on) cabinets.
It’s good to simply stop and ask ourselves why we are doing what we are doing. It might be a process we perform, data we gather or a report we generate. Remember that great Apple commercial of years past? Three guys are behind a two way mirror watching a class of students use different kinds of computers. The objective was to find out who had the best computer. The first person suggested this computer for that reason, while others drew different conclusions. The third man was silent for a few seconds, at which point he made a profound statement. “You guys are both wrong. The best computer is the one the students are actually using!” Never overlook the obvious.
You have an assignment this month. I encourage you to make a physical copy of every report that is generated within your office. Next, find out who receives the reports. The final assignment is to go to those people who receive the reports and ask if they use the information. If they say yes, great! Then ask which pieces of information on the report they use. The response may surprise you. Often you find a huge amount of data was generated, but a very limited amount of that data was actually used. If that is the case, simplify the report. This will same time, money and will make the entire process more beneficial.
Step one is to find out what information is currently being generated that is totally useless. When you have accomplished this, we will move toward step two next month, when we will focus on three pieces of information that will actually help you understand what is going on within your company from a profitability and cash-flow standpoint.
By the way, the two guys in the field made a profound deduction as well. They surmised that the two guys in the balloon had to have been contractors. Why? They were moving full speed ahead with no idea where they were going or how they were going to get there!
By the way, check out this months Website Special. It features the following top ten presentations of our Small Business University Audio Series. The download price is normally $9.95 each, but the following bundle of cost reducing, profit increasing, presentations are reduced from $99.95 to only $49.95. Just one great idea gleaned will pay for your investment many times over. The topics and authors are below:
• Selling to Women - Sharon Roberts
• Be The Brand - Russ Evans
• Doing Business In A Small Community - Jim Brown
• Time Management for the Entrepeneur - jeff Davidson
• Fred Factor - Mark Sanborn• How to Use Part Time Office Help Effectively - Roger Fouche
• Make A Decision To Be Profitable! – Roger Peugeot
• Nine Marketing Mistakes – Adams Hudson
• Pizza Hut Ruined the Market - Tom Grandy
• The Check Is NOT In The Mail - Leonard Sklar
Tom Grandy
Grandy & Associates
Special to Grandy & Associates' eNewsletter
The new Ask Dave series is brought to your by the Dave Ramsey EntreLeadership team. In this series, Dave Ramsey will answer questions that come into his radio show or at his live EntreLeadership events across the country. Dave will address a couple of questions each month with the same methodology that he uses everyday in running his business.
Creating a no-gossip culture
Dear Dave,
I have a small business with 17 people in the main office and another 44 mobile techs in the field. We had a merger last year, and although we’ve overcome rivalries and other difficulties, gossip is a huge issue in the office. How can we solve this problem and still maintain morale?
-Chad
Dear Chad,
I have a zero-tolerance policy for gossip. Gossip will absolutely destroy an organization, and most places that have gossip running rampant are just cesspools. I can’t imagine wanting to be a part of a situation like that. Gossip is small-minded, it shuts down everyone involved, and the worst gossip of all is when workers gossip about the person who pays them!It’s really simple at my place. My team knows they need to go to someone in leadership if they’ve got a problem or something’s bothering them. They know better than to stand around and complain to the receptionist about something someone in another department did or said. Negatives go up, and positives go down. If you’ve got a problem, you take it to someone who can fix the problem.
If I walked into the kind of mess you’re talking about, I’d call a staff meeting, and we’d definitely cut that cancer out. I’d have no problem telling them if they want to keep their jobs they’d better cut out the gossip and stop acting like a bunch of teenage drama queens. I’m not talking about being a bully. I’m talking about being clear and blunt about what will and will not be tolerated in your organization.You may have to be a tough guy for a while and fire a few people. That’s okay, because there are lots of folks out there looking for work who can take their places. But as a result, you’ll be left with people who want to work there, who want to be responsible, mature team members, and a culture that defends itself against gossip! —Dave
Set aside enough money
Dear Dave,How much money should I have in my business emergency fund? My annual sales are about $100,000, and I currently have a couple of months of general and administrative expenses set aside. -Anonymous
Dear Anonymous,You’re getting there! I like the idea of a small business having about six months of expenses set aside. Having that kind of cushion provides a ton of options, and lots of peace. It also eliminates the need for borrowing money, because with that kind of cash sitting around, you basically become your own line of credit!
Having a personal emergency fund set aside is a little different than having one in place for your business. When it comes to personal finance, I usually recommend setting aside three to six months of expenses. But the basic idea is the same, regardless of whether you’re talking about personal finance or the financial health of your small business. A fully-funded emergency fund can turn a disaster into nothing more than a minor inconvenience! — Dave
To learn more about Dave's EntreLeadership program, visit his website at www.EntreLeadership.com.
Labor Pricing for a Profit Software Update We have released an update to our Version 6 Labor Pricing for a Profit software. We are always looking for ways to make it better. We know that you are planning your business around the projections that come out of it and therefore, anytime we fine even the slightest issue, we want to fix it.
This release dealt with a few run-time errors that would occasionally occur as well as a calculation error that understated the potential profit increase if you reduced your non-billable time.There is no cost to our version updates and don’t worry – the update will not affect the data you entered in any way.
To learn how to see what release you are running and to download the update, click here.
Talk to Your Techs About Maintenance AgreementsBy Tom Grandy
Have you ever been in a position where you were 100% sure you told your child/wife/technician/customer something, but the reality is that you never did? It happens all the time. We assume we passed on valuable information, but somehow it just didn’t happen.
We assume a lot when it comes to maintenance agreements. You as the owner know the benefits:
- Consistent cash flowYou schedule work (less non-billable)
- Guarantees service work during year
- Eventual replacement of equipment (sales and labor)
- Employee job security• Happier customers
- Tech who learns to sell M/A - can sell anything
- Ability to increase customer base
Value to the Company – Briefly mention the above “company” benefits so the tech know what’s in it for the company
Slow Days – The average company has 90 slow days per year where there is not enough work to keep the service techs busy. The only way to fill those hours/days is to perform maintenance agreements. Assume you spend 1.5 hours performing a maintenance agreement per year (could be one-time call for 90 minutes or two 45-minute visits). Ninety slow days with 50% of the time normally billed results in 360 billed hours that need to be filled. That means each tech needs to sell 240 maintenance agreements to fill their slow time. Keep track. Set goals. Post results. When the tech has sold 240 maintenance agreements he will be the last to be laid off because he has produced enough work for himself to fill in the slow days
Do your techs know the customer benefits? – The customer normally gets annual or semi-annual maintenance of their system, discounts on labor and/or materials, or if additional repairs are needed during the year they get priority service. Techs usually understand the basic benefits, however, do they also understand the below benefits:
- Equipment lasts longer
- Lower fuel bills
- Consistent comfort
- Safety
Give your techs a FREE maintenance agreement – Wow, are you kidding? No I am not. What’s going to happen when your tech makes a great presentation, at which point the golden question is asked: “By the way John, do you have a maintenance agreement on your system?” If the answer is yes, and John tells him about all the benefits he has received…the sale is made. If the answer is “I don’t have one,” the sale is gone!
Script and Role Play – Do you know what your techs are telling the customer about maintenance agreements? The answer is usually no. Have a general discussion with your techs about maintenance agreements. Discuss their concerns and why then are not talking about them. Ask for their input about how to best approach the customer. The final product needs to a rough script of what to say. When completed role play the situation with our techs…over and over again. Until they are comfortable talking in front of you they will never talk it to the customer.
The key to everything within an organization is communication. Think about the things we just discussed and talk to your techs. They are a huge part of your team and they need to be involved in process of designing and selling maintenance agreements.Want to learn more about maintenance agreements.
You may want to consider attending our three-day Basic Business Boot Camp. If you are interested in setting specific goals in the area of maintenance agreement, and measuring against those goals you may want to take a close look at our ProfitMaxx software which measures the techs performance against 24 KPI’s all of which automatically flow into the Tech 500 Bonus System.
Name change for Hiring Solutions! We are excited to announce a name change for our Hiring Solutions line of tools that help you not only Hire the Right Person for the Job…The First Time, but also help you coach your existing staff. On May 1, 2011, the name changed to “Team Solutions.”
Team Solutions:
Can You Be Too Social?
By Bill Kinnard
Can you or your employees be too social? That’s a good question. After all, you are in the service industry, which means dealing with customers every day. Regardless of the trade you are in, you are in a relationship business, and people buy from those people who they know, like and trust. If they don’t know you, like you or trust you, they are not going to buy from you.
In order to answer this question, we must define what we mean by "social." We are in the middle of a several-month series talking about motivators. If you understand what motivates your employees -- what gets them out of bed in the morning -- then you have one of the keys to maximizing their productivity. If you can match the employee with a job that rewards those motivators, their performance will skyrocket. You will see them approach their job with a sense of purpose and energy that employers can only dream of.
Traits of the Social Value System
Those who score very high in the "Social" value set have an inherent love of people. Because the social person prizes other people, he or she is, therefore, kind, sympathetic and unselfish. They are likely to find the Theoretical, Utilitarian, and Aesthetic (more on this one next month) attitudes cold and inhuman.
Many times the Social value drive rises to the top of an individual’s set of values after the Utilitarian value is satisfied. In other words, once you feel comfortable financially and have achieved personal material goals, they will feel an obligation or duty to help others less fortunate than you. On the top level, people with a high social value system are more concerned with the welfare of others than they are for themselves. On a day-to-day level, Social individuals place helping others very high on the list of personal priorities. This can be a conscious effort – such as volunteering at a soup kitchen, organizing a fundraiser for a literacy program, or lobbying for medical care for poor children. Social individuals tend to also have many more unconscious traits that commonly appear in their daily lives such as:
- A real, genuine concern for others.
- A strong ability to be empathetic and a willingness to listen.
- Generosity with time, talent and resources.
Social people, at their best, are caring and compassionate. They are effective at using those traits to achieve great things to help other people. They are also conscious of their own value in helping others, and they may be good at encouraging other people to give of their time and resources to help. Just like with many things, any strength carried to the extreme can also be a weakness. At their worst, social people may be prone to self-sacrifice, helping others even to their own detriment. Strong Social people often have difficulty saying “no” and may exhaust themselves with long lists of tasks related to helping other people. In addition, some social people will avoid confrontation if there is a difficult situation that may harm the relationship.
The Problem Scenario
This value system is can help the relationships with your customers but can also create many devastating problems within your company.
- If your Service Manager has a high Social score, he will have a tendency to go easy on your service techs when it comes to discipline and holding to the rules. When it comes to resolving customer complaints, he will tend to be pulled into siding with the customer whether this means giving a price break or going out of the way to resolve the issue.
- The high social Residential Salesperson may feel compelled to give a break in the price to customers that he feels need a change out but doesn’t feel can afford the system price.
- Your Lead Installation Tech may want to do a little extra work that isn’t included in the price of the job because he feels the customer needs it, but the Residential Sales person wanted to charge the customer for it even though they couldn’t afford it.
When you have a benchmark in place, this becomes your measuring stick. As you are looking at moving a person, whether a current employee or a new candidate, into a new position, have them take an assessment and compare them to the measuring stick to see how they measure up. If they are not a good fit, they will never be a good fit. Find someone who measures up well and you will have someone who will approach their job with the passion that you do when you’re working on your favorite part of your business. You will see the “fun” and excitement in everything they do.
Learn more about Team Solutions assessments and how they can help you build a more productive team that approaches their job with the same motivation and drive that you do.
Conquering Unrelenting Information Overload by Jeff Davidson
We are living in a unique time. Information is coming at us from every direction. In the old days, it was pretty simple -- information came from newspapers, TV, radio and a full mailbox. But today it’s coming from everywhere, all the time! If it’s not a text message or cell phone beeping, it’s the internet, Facebook, Twitter and dozens of other sources. It’s information overload! The format of this presentation is a bit different. A man by the name of John is actually interviewing Jeff Davidson. John will pose a question pertaining to information overload and then Jeff will respond with practical suggestions. Hopefully listening to this presentation will provide a bit more order to your day and peace in your life.
The following are some of the topics covered during the interview:
- Why are we, as Americans, overloaded?
- How to get off those lists!
- Realizing you DO NOT need to keep up with the latest and greatest all the time!
- Secrets for getting things done
- How to get clarity for the day
- The art of doing one thing at a time and completing it
- Kids and technology• The pitfalls of multi-tasking
- How to immediately attack paper piles on the desk
- How to stay informed without being overwhelmed
- How to make effective decisions