Planning for Success with Standardized Operational Systems

Systems are the only way the owner can take the information and expectations out of their heads and effectively pass it on to the employees.  If all the necessary information is stuck in the owner’s head, the business will constantly be dependent on the owner to make every decision, to inspect all work, and to be responsible for ensuring proper execution and methods.  This responsibility and work will decrease the owner’s quality of life and limit the growth and success of the business.  In this article, I’ll be examining the role that operational systems plays in inventing a successful future.

Operational systems

Operational systems include people, processes and culture. The first thing to focus on is people. Great companies are made of great people.  You need great people to build a great business. The next part is processes to keep the best people and, lastly, you need to focus on culture.  Know that constant reminders and enforcement is essential for culture as changing or creating company culture is often a slow and gradual thing.

People:

If you ever hope to have a normal work-life balance and have a successful company, you need two critical components – good people and good company systems.  

So what type of people will help take your business to a better place? According to Jim Collins, author of “Good to Great,” there are five things we need to look for in our people:

1. Your people must share the same core values as the institution you’re building. Collins insists that, despite what other experts suggest, core values are ingrained in our systems. They cannot be taught. We are raised with core values and these principles stay with us. Your best bet is to find people who ALREADY share the same core values as your institution and get rid of those who don’t.
2. The right person is not someone who you need to manage and compensate for.
3. The right person should have the potential to be the best in the industry (Collins is not saying that they necessarily have to be the best, but that they could potentially be the best). In other words, they have the capacity to excel.
4. The right people understand the difference between having a job with you and having a responsibility within your company.
5. Lastly, you know you have the right people working for you when, if given the opportunity to go back and hire them all over again, you would without a doubt.

Processes:

Most landscaping companies do great work, but it’s the processes that lead to great businesses. Standards and procedures are what empower your employees, so you don’t need to hold their hands to see that the work get done to your standards. Processes also boost productivity. If you have processes and systems in place, and you train your people to use those processes and systems effectively, you have a business that runs itself at maximum efficiency.  With the right systems and training in place, your people can be more responsible and more accountable, taking over roles such as job planning and management.

When everything exists in “the owner’s head”, you have a company dependent on the owner for every decision and task. Think of your company like an orchestra. Your systems need to be clear and documented – like sheet music. By following clear systems, your people can execute the right tasks (notes) at the right times. The owner’s job is to be a conductor.  Your job is not to tell them what to play – your job is to ensure everyone is playing in unison. Taking what’s in the owner’s head and translating it into clear checklists, procedures and responsibilities takes effort – but no less effort than trying to stay on top of everything all the time. If you ever hope to build a better company that doesn’t need to you be involved in everything, you need better systems.

With everything standardized, profits increase. Mistakes and waste bubble to the surface, becoming obvious to all. Every problem in your business can be boiled down to two simple reasons:

1. System problems
2. People problems

If problems are occurring in your company because your people didn’t have clear instructions and information – you have system problems. Build systems to fix the mistakes, so they don’t happen again. If the instructions and information was clear and the people didn’t follow them, you have people problems. 

So what systems are key for a landscape company? I look at my systems across the following areas:

• Sales – Do all our people understand our sales process? Do all leads follow the same process through qualification to final contract?  Does all my front line staff communicate the same brand message?
• Estimating and Pricing – If I’m the only one that understands where the company is going and how we’re getting there, then only I can accurately price work. Estimators need a clear system for pricing work accurately, and according to my plan for profit. 
• Hiring Systems – Are we finding the best people in the least amount of time?  Your hiring systems will help you ensure you’re finding the best people in the least amount of time. Without a hiring system, you’re hiring and firing 100 people to find 1 good one. That’s a very slow and painful road to success.
• Production – Do the field crews understand exactly what the estimator was thinking when the job was bid? Are they working towards goals? Do the foremen have the necessary information to manage the job so that we don’t need supervisory/overhead staff making decisions for them?
• Job Costing + Accounting – Is the owner able to measure the results from the field in both time and costs? If not, why not? Job costing is critical for the owner to make sure that the company is heading in the right direction. What information is being captured that is not being used? Do we really need all that information?
• Equipment – Is our equipment being inspected and maintained according to company and manufacturer specifications? Is it being operated safely and by trained operators? Are repairs handled efficiently? Equipment downtime means increased labor costs and decreased productivity. Equipment systems are critical for efficient production.
• Safety – What is our schedule for regular safety training? Are we reviewing and controlling hazards regularly? Is everyone aware of their responsibilities?

Left unchecked, these key areas of our businesses will become unraveled.  Staff will simply put their heads down and work, owners will scramble around, over-working to try to keep their head above water and when things fall down (and they will), the stress and frustration of having to do everything on their own will be overwhelming. 

The solution? Everything should be standardized, including your order of operations. Your staff should know the first and last thing they need to do for each and everything. Your systems need to answer the following questions:

• What needs to be done?
• Who is responsible for doing it?
• When does it need to be done?
• How are things expected to be done?
• Why is this going to benefit us?  (Don’t forget to answer the why!  Is it safer?  Will it help to improve profits and rewards?  Will it make work easier?)

Culture:

Worried about change? The only constant is change. Once you create a culture, change is the new norm because you’re constantly working on improving and upgrading your systems and people. And this is a good thing because, ultimately, change creates the opportunity for growth. Don’t put your emotions into your business. If you have a well-managed business and your ducks are inline you can make big decisions – that would have caused stress before – with confidence. And while the idea of change may be concerning to your staff, explain the benefits that come with operating under standardized systems. They’ll have more knowledge about the business, more authority if they prove they deserve it, and more rewards if they share in making your company profitable. It’s a win, win for everyone.

In conclusion, I’ll refer back to the airplane analogy. Just as pilots are required to operate under standardized systems and processes, they’re also trained to adjust to the circumstances of each flight. They know when to ease off on the throttle, when to speed up, when to shift gears and how to respond to turbulence to keep the plane up in the air. The art of flying is the art of business. As owner, you need to know how to plan for the circumstances ahead and how to adapt to the changing environment. Your staff needs to be trained to handle the ever-changing climate of your business as well. After all, the ability to stay on top and thrive during times of turbulence is really what defines a successful business. 

Read how Oriole Landscaping used standardized operational systems to turn their business around.

To learn more about implementing systems for success, visit www.landscapemanagementnetwork.com. LMN has created over 600 systems and procedure documents for landscape contractors.  Get information out of your head and into the hands of the people who do the work.