Cut costs with better foremen and field leadership

Contributing editor Monroe Porter of PROOF Management. Obviously, there is no magic formula for developing foremen. But by developing and maintaining stronger field supervision, you can concentrate your effort where you will have the greatest financial impact. So how do you get started? To begin, don’t have your construction or maintenance manager baby-sit a foreman. Someone checking to make sure your field employees are doing their jobs is an extra layer of management that can be extremely expensive and prevents your organization from having better field people. For example, a general field supervisor with a truck will cost you at least $50,000 per year. If you have five crews, you are paying $10,000 per crew when spread out over five foremen. And if the average supervisor works 2,000 hours a year (40 hours a week times 50 weeks), the cost is $5 per hour. Why not develop better foremen, pay them better, and stop babysitting people who cannot do the job? Of course, building a better field organization and, in particular, better field supervisors means having the right people with adequate potential. Also, you must train and communicate with them so they feel part of the company and are team players. Finding the right candidates requires an honest evaluation on your part. Start by looking within yourself and your company. Are there career opportunities within your company? And are you making enough money to attract good people? If your answer to the latter is “no,” then it can be tough to pay what you need to find good people. In fact, too many people use the “half-a-brain” theory. They hire someone who is not what they want but is who they can afford. This person, coupled with another half-a-brain person, will total a whole brain. The problem? Two empty halves tend to merge, and you end up with a brainless crew. If you are going to promote from within, hire people who can become foremen. Then start a training and communications program that builds them into that position—and reinforces their growth potential within your company. What you actually teach is not nearly as important as the fact that you have some type of program. Here are some musts: Paperwork: Have a general meeting regarding paperwork and review the forms. Then, set times for your office person to go over paperwork issues one on one or in smaller groups. This not only trains the foreman, but also develops a relationship between the office person and foreman. Job procedures: Critical job times are the beginning and end of a job. Start with standard procedures. Re-view how you want employees to handle complaints, such as what they can take care of and who they should call. Make foremen aware of the scope of work issues and when change orders are needed, and how the company’s change-order system works. Safety: Your insurance company, association, or even OSHA can require safety training information. Include driving and seat belt requirements. •Customer presentation: Have a customer discuss what it is like to work with your company and what is expected of a contractor. Estimate jobs: Have a foremen put numbers together for a potential estimate. When working on problems, put foremen in teams of two or three, but make sure they are not with their buddies, as problem solving is easier to do in groups. Communication skills: Take a shot at training in the areas of communication, problem solving, and human behavior skills. Communication habits involve personality, lifestyle, family, and many other issues—and won’t quickly change. Hire a professional, if necessary, to achieve this goal. Developing foremen certainly requires having people with the potential to handle the ob. But, perhaps just as importantly, you must communicate with these key people so they feel committed to your company. Avoid costly management mistakes Managing people is challenging, and most business owners and managers learn by trial and error. Here are 10 mistakes to avoid: 1. Expecting employees to think like owners. Employees, supervisors, and managers are not owners. They don’t think and act like one. If they did, they would be a competitor. 2. Thinking out loud and making inappropriate comments. Running a business is a lonely proposition. Talking out loud before thinking things through can get you in trouble. People remember the good part, not the bad. If you need a sounding board, get a dog. 3. Being buddies with employees. Some people can separate socializing with the boss from work; others cannot. People need owners to be leaders, not buddies. 4. Hiring quickly and firing slowly. Most contractors don’t take the time required to fill their constant employee demand, leading to warm bodies with performance issues. Be careful whom you hire and address problems quickly. 5. Taking the easy way out by hiring family / friends. If many of your employees know each other intimately, personnel issues can become more difficult. Firing one person can lead to firing half of the company. Rather, establish a system whereby you are always recruiting and developing new people. 6. Failing to hire people with a work ethic. If you hire people with work ethic issues, you are going to have work ethic issues throughout their employment. 7. Messing with people’s pay. People will forgive you for much, but cutting their pay isn’t one of them. If you are going to start a bonus, commission program or give raises, think it through before doing it. 8. Failing to establish clear performance expectations. What might mean a “good job” to you may mean something different to others. As an experiment, tell your teenager to do a good job of cleaning up their room. 9. Failing to have a current compensation system. Contractors tend to hire as they need people. Failure to keep aspiring employees current with local pay rates may mean the only way they can obtain a raise is to quit. 10. Not training and developing leaders. Develop a program where key people learn new skills and become more company oriented. Such development helps offset other issues. Contributing editor Monroe Porter of PROOF Management presented further insights on supervisory skills for project managers at EDI’s 2007 ProductFair “The Big Show.” Porter consults with contractors. He can be reached at 1.800.864.0284 or at monroe@proofman.com. For more info, please visit www.proofman.com.