The most important factor of a successful company
There is so much that can go wrong, or right, for a green industry company, and these troubled economic times highlight the need for more things to go right. It’s a matter of survival. One of the top organizational consultants in the country is convinced that management simply needs to focus on “the people.”
By people, Bill Arman means creating “real” leadership within the company, then getting “real” with employees and their jobs, and finally getting “real close” to clients. Arman, co-founder of The Harvest Group (www.harvestlandscapeconsulting.com), a landscape industry business consulting firm, contends that people are the most important factor in a company. Whether they are in operations or sales or support, they are the core of an organization and will be the primary reason for its success or failure. Furthermore, any company that wants to expand or improve its operations will have to address the three important categories of people in order to accomplish the task.
The first order of business in a company is for the owner to look at the leadership. If a company is failing, those supervisors are likely the root cause, in addition to the owner, of course. Arman says that the owner must find a way to look objectively at his leadership, because in failing companies, the owners often have a false sense of reality masked by the daily routine of work. It turns out that those companies invariably have poor business and people systems. Even successful companies can fail during hard times if that is the case.
“They have been enjoying the success, but don’t know how to sustain it,” Arman says. His company works primarily with companies in the annual revenue range of $500,000 to $3 million, because that is an area where companies begin to fail or don’t know how to expand to the next level.
Arman recommends that a company set up a way to objectively measure its business practices, in the areas of gross margin and customer satisfaction, for example. That will tell the owner how the company is doing. For a company to thrive, the owner must find and retain the right people. The one sure way to sink a company is to take away its quality leadership. Retention is accomplished with good pay, but even more important may be other rewards and recognition, opportunities for advancement and providing challenges that keep employees interested in their jobs.
“It’s not all about money,” he says. Factors such as whether the owner keeps his promises to his managers and supervisors are important to retaining them.
Another emphasis must be on providing leadership with a clear vision of where the company is heading. Every company should outline its “strategic intent,” or a view of the goals the company has. They can be communicated in a mission statement or in regular meetings, and expressed in terms such as profit goals or long-term goals for company size. Once the company’s leadership buys into the vision and the goals, they will be motivated to help the company get there.
Leadership people will usually work better if an owner learns how to delegate authority, involve those supervisors in making decisions and encourage them to take initiative. “It’s not just command and control. You can’t just bark out orders all day,” Arman says. By stimulating involvement and empowerment, the owner not only brings out the creativity of his staff, he also improves morale.
The other leader who must be encouraged is the owner himself, Arman points out. In addition to learning the strengths and weaknesses of his employees, the owner must learn his own. At that point, he can hire the people who complement his own strengths and cover his weaknesses.
In the category of getting “real” with employees, Arman explains that the owner must bring them “clarity of expectations.” In his work with green industry companies all over the country, he is stunned by how often employees don’t know exactly what their jobs are, and owners don’t have systems set up to make this clear. He asks questions such as: What are you supposed to be doing? How well are you supposed to be doing? What do you have to learn? If you fail, where do you go?
“You have to have a measurement tool. What gets measured, gets managed. What gets managed, gets improved,” Arman says. Elements that should be measured are quality of work done, quantity of work done and how satisfied the customer is with the work. In addition, measurements of efficiency (is the job within budget and on time?) and estimating skills (what are the real costs of the job?) are extremely important. Once those elements are known, the owner can hone employee skills needed to deliver what the customer wants and expects.
Arman notes that out of about 70 companies the Harvest Group worked with last year, less than 10 percent had measurement systems in place. “People are winging it,” he says, and owners typically don’t even know the basic key number needed in order to make changes. That is the company’s hourly average wage. If a company doesn’t know this basic measuring tool, it is floundering in an industry where budgets and outcomes are based on labor costs.
Once the owner and management have clear expectations, every other employee from the office worker to the irrigation installer must as well. Arman has conducted a lot of on-site job analysis, and he often finds that workers don’t know exactly what they should be doing. Often they have been told, but not shown, and they are doing the job poorly or inefficiently. Every project can be streamlined if good company systems are set up to carry it out. Job sequencing analysis can yield huge benefits in the carrying out of tasks more efficiently. Supervisors and foremen should be clear on the most profitable way to carry out both routine and nonroutine tasks. Arman looked at one job at a company last year that had budgeted 32 hours for the project, but with good job sequencing, it was done in about half that time.
“It’s all about the gross margin,” he emphasizes. He teaches that every successful company has to find, get and keep the right employee and the right customer, as well as deliver consistently and make a profit while doing it. When an owner becomes distracted by the frenzy of day-to-day operations, necessary systems, such as accurate estimating and proper training, can fall by the wayside. The ultimate correction is when the employees understand the linkage between what they are doing and where the owner wants the company to go.
Employee orientation, training and certification are the means to this end. Then, a third-party evaluation and verification of the work is helpful. Once that is accomplished, a company will have clear systems leading to continued success. Arman emphasizes doing a companywide assessment “at least annually,” and placing all the people on an organizational chart that allows them to be ranked for both potential and performance.
“We call it a people map,” Arman says. Once the owner can clearly see how his people are doing, he can work with them on improvements. It is also important to have a succession plan in place in case key employees leave, and to look after them so that they don’t leave. That all goes back to having a good retention strategy. “The first line of defense is to make sure the good ones are taken care of.”
Finally, the other important people in the equation are the customers. Arman advises company employees to engage clients from start to finish. First, of course, have a good selection process so that only quality, paying customers are on the list. Then, communicate with them, figure out how to help them achieve their goals, be aware of factors such as lagging accounts and change of ownership. Make sure every contact by your company, from the owner to the field worker, is a positive one. Form a relationship. Take it from vendor to client then to partner.
“All of a sudden, you’re indispensable,” Arman says. Some of this background work takes place in the landscaper’s own office. For example, teach the receptionist to be friendly. Create a client profile, outlining everything from his/her business needs to his personal life. Draw up a client map showing who reports to the client at every level.
Of course, the best customer relationships are established in the field. Arman says that when beginning a new project with a client, everything should be planned and carried out absolutely correctly. Do the preparatory job walk with him. Have a good communication process throughout. Conduct a job walkthrough at the end, because that period after a successful completion is one of the best times to touch base with a customer.
So many of these elements are difficult to carry out. Each one requires extra commitment and work, but Arman advises to go even further. He has found that some of the most successful ways to form an unbreakable relationship with a client are to get feedback through a survey or hold a focus group. The latter isn’t as difficult as it sounds. A few clients can be invited to a nice restaurant, where they are fed and asked questions about the working relationship. With key personnel listening and taking notes, the focus group leaves with a feeling of being appreciated and respected.
Don Dale resides in Altadena, Calif., and is a frequent contributor to Turf. He has covered the green industry for more than 10 years.