A signed contract sits on a remodeling company owner’s desk. Several jobs come in at once and there aren’t enough carpenters. Sales promises a client a start date that can’t be met. Materials haven’t arrived. Any of these events can create a bottleneck, restricting the workflow or decision-making process.
Identifying a bottleneck and its cause, and finding a solution, takes time, effort, and possibly money. “Bottlenecks are a symptom that something isn’t working quite right in the company,” says Richard Steven, owner of Fulcra Consulting, with offices in St. Paul, Minn., and Seattle. “If you can identify where they are, they can be avoided and planned around, with forethought.”
DEFINE AND CONQUER
Bottlenecks can happen anywhere in the remodeling process and often occur when the baton gets passed, such as when a job goes from sales to estimating or sales to design, or design to production. They can occur when ordering materials and making selections. Or when a client hires Uncle Jeff to be the electrician. “Monitoring the bottlenecks is key,” says Iris Harrell, owner of Harrell Remodeling, in Mountain View, Calif. Harrell likens the process to the image of a long-necked bird swallowing a big fish. Little by little it gets digested, but there are bulging stops along the way. She thinks of each system as “throughput,” and sees a relationship between it and bottlenecks. Asking questions and anticipating the stops are necessary to continuing throughput.
“How long does it take from the time the client signs a design contract to their signing a construction contract? If you have a signed contract but can’t start a job for a month because the long lead time on materials wasn’t addressed,” Harrell says, “that’s a bottleneck and a problem with throughput.”
Harrell still wears a lot of hats — administration, marketing, sales, design, and being the CEO — but knows what percentage of her time is spent in each category. “We know this for each employee,” she says. “That’s a way to monitor bottlenecks.”
For Marty Morse, owner of Morse Remodeling, in Davis, Calif., what’s important is analyzing where jobs are in the design process and structuring production so that there are no stagnant jobs. “We have a foreshadowing meeting in which we look at the future workload of production.”
Morse and his staff figured out how many jobs one project manager could handle without affecting quality and timeliness. Based on their average job of $200,000, the optimal workload is four jobs. “As long as we stagger jobs — put them into production sequentially — we won’t overload the project manager and can keep steadily progressing,” he says.
You can’t monitor what you can’t see, though, and it’s often difficult to find a bottleneck. William Connor, at Connor & Co., in Indianapolis, uses his management committee to do a flow analysis. “We agreed that we needed to look at the processes we had and how things flow through the company,” Connor says. With a business that includes a separate handyman division, Connor’s team had 540 jobs on its docket in 2007. “That’s a lot of invoicing,” he says. They discovered that the billing process was bogging down at the point where the clerk had to get invoices out to customers. “There was no consistent communication about a job being complete.”
As a group, Connor’s staff came up with a written policy of how to handle billing — something that had never been done. They established a weekly billing meeting, out of which comes a report. It took a month to refine the process. “It’s not rocket science, but it took a lot of thought to look at the process and see where the breakdowns were,” Connor says. Because he included members of his team in creating the policy that would address the billing bottleneck, the employees were more apt to buy into the process and readily follow the meeting agenda.
Other owners use business coaches or join peer review groups such as Remodelers Advantage Roundtables, Business Networks, or the National Association of Home Builders’ Remodeler 20 groups to help them uncover and find solutions for bottlenecks. “It’s hard for an owner to see bottlenecks,” says Steven, who works almost exclusively with remodeling companies. “It’s easy for an owner to focus on their strengths and not give enough credence to the ways things could be made better through changes.”
If you’re not ready to invest in a coach or peer review group, any outside person you trust can help. Former remodeling company owner Mike Weiss, who now teaches for the National Association of Home Builders, says that when he was having a sales bottleneck — clients he was sure of weren’t signing — he called in his son who knew nothing about the process. His son acted the part of the client, while Weiss role-played a sales call. “He told me I was giving the clients too much information. What I thought was the cure was the poison,” Weiss says. His sales soon recovered, and he believes it’s because his son was able to ask him “uneducated questions, which can sometimes shine a light on a bottleneck.”
