by Clark Ellis, Senior Avid Advisor
Collaboration has become a buzzword in that lots of companies talk about it but few do it right. That’s unfortunate because knowing how to collaborate is critical for today’s builders, as a shrinking labor and management pool forces them to squeeze more productivity from fewer people. Those who do it well are rewarded with faster cycle times, higher profits and fewer problems with quality and cost management. Builders that fall short are penalized in each of those areas.
Much of our consulting work consists of helping builders create and manage collaborative efforts among and between employees, departments, technology companies, suppliers, subs and customers. As a result, I’ve learned what works and what doesn’t.
This is the first in a series of articles about how to build a culture of collaboration that will help you solve business problems and build higher-quality homes for more profit. Before getting into the details, however, I need to start the same way I do with anything: by offering a couple of examples to help you understand what collaboration is and isn’t.
Most people have only a superficial understanding of collaboration, usually the dictionary definition of “working together.” But the fact that the people in your company are working toward the common goal of getting homes built doesn’t necessarily mean they’re collaborating.
A true collaboration is where key individuals work together to solve specific business problems. To be effective, the effort needs four structural elements:
- Clear goals
- A process for reaching those goals
- A framework in which that process can unfold
- The right people involved
Take the example of a builder whose homes are coming in late. Angry customers have been leaving bad reviews on social media channels and in whatever review system the builder uses. The builder may have to spend some money to try to keep the customer somewhat happy and is getting more warranty calls on homes where crews rush to finish last-minute tasks.
In a collaborative effort to solve this, the goal would of course be to get homes done on time. The framework would be a cross-functional team that includes land development, architecture, sales, development, and construction.
The process would start with each of them weighing in on what is having the most impact on problem. Once the group generates a list of possible causes, it might then be asked to vote on which one to should tackle first. I suggest giving everyone two votes and letting them vote twice on one thing if they think it’s important, as this almost always identifies the most pressing problem.
Say the group identifies the main problem as salespeople letting customers choose options after the deadlines the builder has set. The group leader will ask each member to weigh in on the problem from their perspective. This may be the first time a lot of them learn how their decisions affect other people in the company. For instance, the people in options sales may have no idea how a late choice affects purchasing and how the consequences cascade through the schedule.
As for implementation, the builder may decide to enforce deadlines or may decide to allow later changes but to create a system for making sure the customers understand and sign off on the new move-in date. Having the right people involved includes the expertise to understand the root cause of the problem and to develop a viable solution; and the decision-making authority to commit the builder to get the solution implemented.
Another example of a collaborative effort is a properly run trade council.
The trade council is a great framework for solving problems. So then why does the typical council start out strong then fizzle out? The answer is that it’s not properly led. It has no clear goals and no process. It lacks the needed structure and processes that would make it last over time, and devolves into a bitch session where people complain about problems but don’t solve them. Trades eventually vote with their feet and stop showing up, thus removing many of the key people from the process.
By contrast, an effective trade council has a clear mission and strong leadership.
Take the example of a builder that decides to focus its trade council on reducing variance. The leader of the effort would by start interviewing the trades and asking two questions. 1) What is the builder doing that will help you accomplish this goal and 2) what is the builder doing that makes the goal harder to accomplish. Possible answers include:
- Jobs that aren’t ready. The painter may complain that homes aren’t properly cleaned after drywall finishing. He is then forced to ask the painting crew to clean the house and charge the builder for an extra, or go ahead and paint anyway and raise the chance for a callback caused by drywall dust getting in the paint.
- Inaccurate deliveries. The framer may report that material shipments are often incomplete or incorrect. The framer must have the builder order additional studs and submit a variance P.O. to cover the cost.
- Insufficient detail. If plans are vague in key places, the trades will need to get clarification from job superintendent. If they don’t get an answer right away, they may need to make decisions that have to be corrected later.
- Chaotic scheduling. If schedules tend to be crunched at the end of the job, and the builder tries to solve it by sending too many trades in at once, they end up tripping over one another and making mistakes that lead to callbacks later on.
The leader shares the list of issues with the builder then brings it to the meeting, where the participants work through a prioritization exercise like the one mentioned in the previous example. And like the prior example, the trade council will only work if the right people are involved from the trades and the builder. This means that they must understand the problems, have the expertise to create solutions and have the authority to commit the builder and trades to making the required changes.
With an ongoing collaborative effort you may eventually want to break it up into functional groups. In the trade council one group might be focused on structural issues, another on mechanical, electrical and plumbing, and a third on the finish trades.
Again, the key to getting an effective collaboration is asking questions that help everyone uncover problems and look for solutions. The framers might say that short takeoffs mean they always seem to need more studs and more random-length 2×4’s. If it’s only happening on five or ten plans, you might then go back to your designer and estimator to determine how they’re drawing plans and calculating takeoffs.
In some cases it can be helpful to hold meetings at a jobsite. The trades are in their element here, and the visual cues all around them will make them more apt to give helpful feedback.
You might meet in a framed house with the foundation guy, the framer and the lumber supplier. You could even walk the house, count the sticks and compare the tally to what’s being sent. If there’s no disconnect, the problem may be how the lumber is being used. How is the framer managing the material? Is he moving lumber from job to job? This may be something the framer has never considered a problem.
While efforts like these don’t cost a lot of money, they do take a commitment from the builder. But if you get in the habit of collaborating this way the rewards go beyond tackling specific problems. You end up with a more efficient operation that makes fewer mistakes, and culture of teamwork that attracts the best employees and subs. If you chose not to collaborate this way, be ready to lose those employees, subs, suppliers and … customers, to builders that do.
Tune in next time as we break down the impact that culture can have on collaboration and how to tell if you need to work to change your culture.
Structural Elements of Collaboration
- A Clear and Measurable Goal – the goal must also be specific, so that there is no ambiguity about whether it is achieved or not
- Process for Achieving the Goal – analysis, prioritization, implementation, evaluation and adjustment as needed
- Framework for the Process to Operate – forum to resolve questions and make decisions, levels of hierarchy as needed
- Right People Involved in the Right Roles – balance of expertise and decision-making authority to carry solutions forward to implementation, but commitment to the collaboration is mandatory
Clark Ellis is a Senior Avid Advisor for Avid Ratings, a leading provider of customer loyalty research and consulting to the homebuilding industry. Through the Avid system, industry-leading clients improve referrals, reduce warranty costs, and strengthen their brand. He can be reached at email@example.com.