The successful business today must work! Work well, work fast, work lean and produce results. Leading companies today are innovative, creative, cutting edge AND always achieve exceptional bottom-line results.
Old methods of doing business won’t deliver above average results. Old customer pipelines don’t work. Old management techniques do not work. Most business leaders are stuck in their ways, outdated and continually playing catch up with new competitors, new products, new delivery systems and high-tech ideas that appear quickly and intense.
Established businesses sit and wait for some other company to try new ideas or be first with a new type of leadership, system or company operation. Many resist making tough decisions about their future and don’t change until it is too late. Some people hope that everything will work out as it always has before. This type of leadership will only do one thing in today’s exponentially pressured business climate
Today, it takes innovative strategy, decisiveness and a new vision to be successful. It takes guts to make tough decisions that will keep you in business and allow you to emerge as an industry leader. It takes real strength and confidence to BUILD a “Beyond 2000” business.
Start With A Blank Page
To draft and build a “Beyond 2000” business, start with a new outlook. A fresh piece of drafting paper. Ask the question: “If we could start over, how could we design this company to be a cutting-edge industry leader?”. Forget about your current people, positions, procedures, rules or customers. Think new. Think new markets. Think real customer needs. Think creative approaches. Think beyond the same old box. Think DIFFERENT and NEW delivery systems, pricing structures, chain of command, rewards and incentives, management reporting, productivity programs, customer relationships, sales and marketing approaches and profit goals. Think YOUNGER with less control. Think about rewarding and compensating results in new ways.
Think FASTER. Think BETTER than ever before. Think BEYOND. Customers today want it all. Design your product or service for today’s demanding customer who expects perfect quality and perfect service at a great price. Design your company to deliver bottom-line results twice the industry average.
Define What You DO
A “Beyond 2000” cutting-edge business knows what it does best and why it does what it does – its’ purpose. It has a clear vision of why the business exists and what measurable results are expected. In many cases, the owner of a business works too many hours for the return he or she receives. This is common in small and medium size entrepreneurial companies where the owner and business are one in the same. In those cases, the owner doesn’t own a business, he owns a job that doesn’t pay very much. With a clear purpose, one would have specific reasons why one owns a business and what results can be expected.
The purpose of a business is to give the owner what he or she wants. In publicly traded companies, stockholders want two things:
– Quarterly earnings or profits
– Increasing stock values
In private companies, the owner can want a variety of things. The purpose for my business is to accomplish 3 things: create wealth, build equity and give me freedom from the day-to-day operations. I use my company to create opportunities that can reap fantastic returns. In order to do this, we put heavy focus on loyal customers and maintaining a great place to work that attracts and retains the best people in our industry. To reach this objective, we designed a program to share up to 45% of the wealth created with our leadership team. This makes it a win-win-win for me, my great people and our fantastic customers.
The purpose for your company can be whatever the owner wants it to be: freedom, finances, fun, family, faith, image, prestige, community involvement, to help others, provide service or anything else you can think of. The purpose of a business is NOT to keep busy, create stress, work hard or break-even.
Expected “Beyond 2000” RESULTS
For a business to work, expected measurable results must be clear. Some of the results we shoot for in our commercial construction business include the following:
Return On Equity – Minimum 30% pre-tax
Return On Overhead – Minimum 50% pre-tax
Net Profit On Sales – Minimum 3% pre-tax
Total Revenue – $40,000,000
Maximum Overhead – $1,000,000
Loyal Customers – Minimum 50%
Repeat Customers – Minimum 65%
New Customers – 4 per year
# Customer Referrals – 24 per year
Number of Contracts – 16 per year
Minimum Contract – $2,000,000
Employee Retention – 90%
Employee Training – 40 hours per year each
The key to making it happen is to know what you are striving for. Set clear measurable targets and then make people accountable and responsible to make them a reality.
Developing a “Beyond 2000” FOCUS
The “Beyond 2000” focus finds and keeps loyal customers at a profit. This must be the central theme and priority of all business operations at every level in your organization.
At Hedley Construction, we experienced a constant struggle between what we sell and what our customers buy. Customers demanded first class quality and top service but often made their buying decisions based on price. The challenge was how to deliver on all 3 (schedule, quality & price) and still make a profit. It is difficult to be the low bid provider while delivering the best quality and superior service. Our company’s bottom line success dramatically improved when we got our FOCUS clear and on target as follows:
– Our #1 priority – Repeat loyal customers
– Make 30% minimum return on equity
– What we do best – Provide personal service
– Integrity & trust
– What project types we do – Office & industrial buildings
– What size projects we do – Over 50,000 square feet
– Over $2,000,000.
– Where we do business – Within 60 miles from our office
– Who we do business with – Developers & business owners
– How we do business – Full service & full value
– Total project management
– Development services
– Negotiated contracts
We learned that you can not be all things to all people. It doesn’t work. A real benefit of getting focused was the ability to know when to say “no”. When you decide who and what you are, the opportunity to excel increases dramatically. You become laser beam focused and you don’t get off track, both of which improve customer loyalty and bottom line profit.
To achieve our #1 priority of loyal repeat customers at a profit, we rewrote everyone’s job description. Our goal was to create clear expectations in the area of customer loyalty and profit. We also changed our incentive plans based on keeping customers and making a profit. This resulted in productive and focused people, lifetime customers and above normal profits. With continuous repeat customers, finding new opportunities became an easy task for our business development department.
Building “Beyond 2000” Systems
The ultimate goal in business is to be systemized and organized which will produce the same results every time. This requires a set standard way of doing the work. Good systems determine the ultimate success of any business. Good systems equal good results. Poor, unused and unmonitored systems equal sporadic results that are too dependent on great people.
To build this consistent machine, it is management’s job to WORK ON the business and develop, refine and perfect its systems. Priority must be given to dedicating a portion of every day to improving, documenting and refining all operational systems. As you WORK ON rather than IN the business, your role changes from doing the work to managing the systems.
An organized and systemized “Beyond 2000” business will allow your people to respond to customers in a consistent and predictable manner. Building a business that works or rebuilding an existing one is not easy. It takes a lot of dedication, hard work and forceful leadership, but the end results are well worth it
Your leadership decisions determine your everyday results. Weak and meandering actions will not get the results you want. Where are you now? Where do you wish you were? How can you make it happen? Be bold. Be brave. Be radical. Try something new. Set clear measurable goals and targets. Write out exactly what you do and don’t do. To build a “Beyond 2000” business takes hard work, positive decisions and visionary determination. Don’t and you won’t. Do and you will.
George Hedley owns a $75 million construction and development company and Hardhat Presentations. He speaks to companies on building profitable businesses, leadership, and loyal customers. He holds 3-day in-depth “Profit-Builder Circles” open to construction company owners in an interactive roundtable format every 3 months. His “Profit-Builder System” includes proven tools to always make a profit, build equity, create wealth, win profitable jobs, motivate your people, and enjoy the benefits of owning a profitable company.