A Surprising Business Parable From an Unlikely Source

By  Gregg Schoppman, FMI Corp

My wife has a great heart.  Last summer she decided to help a few of the local neighborhood kids by hiring them to clean our garbage bins.  In full disclosure, it was their choice, not ours.  For $15, they would fully clean our large garbage and recycling bins.  My only responsibility was to pay them. After a full day of work, it was about 7:45 in the evening when our doorbell rang.  We both looked shocked since neither of us were expecting someone so late.  Much to my surprise, I was met by eight eleven-year-olds at my front door, who I’m pretty sure were wired on sugar drinks and a lot of PlayStation games.

“We’re here to clean your garbage,” said the one that I was pretty sure was the project manager.

“Oh yeah, well the can is out front.”

“It is? Must have missed it.”

Scratching my head, as there is a huge blue can in our driveway.  This was going to be a long night. I went back to my wife and said, “Hey, this is your project, good luck.”

The doorbell rings again. They needed our hose. The doorbell rings again. They needed some paper towels. My wife then went out to “inspect” to find they had cleaned out our bin and let the residue run down our block, allowing us to pollute our neighbor’s property. She had to now remind them to clean up after themselves. Finally, after thirty minutes of “water games”, she paid them the $15.  You could tell the leader was getting antsy and called his #2 over, who whispered in an agitated manner.

“Do you think we should ask her when we should come back for another cleaning?” said the ‘project manager.’

“What are you CRAZY?!? This ain’t a business, we’re just trying to make some money!” said his “wise” cohort.

My wife came in, soaking wet, sweating, and laughing. She looked at me and said, “No good deed goes unpunished.”

When she told me what unfolded in our driveway, I sat back and said, “there is gold in our garbage bin.” More importantly, the business lessons of these kids unfold every single day in construction organization and projects.

CREW SIZING, PRICING, PROFITABILITY

There were some that might have missed the small details.  Eight crew members for thirty minutes of work (?) for $15.  Sure, the materials were “owner furnished” but was this an effective crew blend?  There are 1,500 houses in my community.  Assuming that there were at least 50% other suckers, I mean kind souls,  would this operation ever have been productive?  If you are eleven years old, this might seem like a profitable venture, until you notice some of the crew “free riding” (in this case, riding their scooters while you are doing the hard work in the Florida heat).

This same thing occurs all the time on construction sites.  Are we effectively analyzing the crew sizes or are we simply taking the status quo and proceeding with the crew blend we have used every single project prior?  Projects require strategic thinking and so should how we approach crew productivity.

THE LONG VIEW

Are you simply “trying to make money” or are you running a business?  Put another way, too many businesses run season to season or think granularly about how they focus their business efforts.  That is playing small ball.  I get it, the kids were going back to middle school and running a business in July probably would have dug into their summer.  However, too many business leaders think like this.  For instance, these are example of how they fail to capitalize on long range thinking:

• Training and Development – Failing to focus on talent development because of immediate project needs that may get in the way
• Investment in Capex – Failing to see the ROI on potential investment opportunities because of the short-term impact to cash flow
• Investment in Hiring – Failing to develop/hire a bench because there might not be work “right now”
• Strategic Thinking – Being myopic in one’s world view and only focusing on short term prospects rather than long-term bets

CUSTOMER MANAGEMENT

When my wife told me about the “project manager”, I almost ran out of the house and offered the eleven-year-old a job on the spot (Hey, they give top athletes scholarships right?). Think about it. He had the wherewithal to ask my wife for future business. He may have been shut down by his #2 but he had moxie and big picture thinking.

Now, ask yourself this – do you project managers, superintendents, and foremen ask for repeat business? I recall being on a cruise recently and every person asked me to remember them when I completed my “Post Cruise Evaluation” and to provide them with Five Stars. Some people might cringe and it was a little awkward at times. Then I got to thinking about it – the most awkward time was when the service wasn’t five stars. What if your people were required to ask for a testimonial/letter of recommendation/etc. at the end of the project? The client can certainly say “no.” That by itself is telling.  If they are doing their job throughout the project and delivering five-star service, there would be no issue in providing a rave review or letter. This also doesn’t mean they waffle on change orders or billings as there is a backstop to protect against those things. The point is that an eleven-year-old knew that to grow a business, you need repeat clients. You need to have people that are willing to want you back and if they don’t, you need to hear that feedback to make corrective actions. Maybe next time, they’ll bring their own paper towels.

About the Author

FMI is the largest provider of management consulting, investment banking, and research to the engineering and construction industry. FMI works in all segments of the industry providing clients with value-added business solutions. For more information visit www.fmicorp.com or contact Gregg.Schoppman@fmicorp.com.