Tool #9 – Two Heads Are Better Than One!
Does it often seem like you can't get your key employees to
accept more responsibility? You try to get your people to take on
more accountability, but they keep asking you to help make every
decision for them. And when you tell them to make a decision, they
never seem to get it right! Now what?
Years ago, as a progressive leader of a successful growing
construction company, I wanted my key project managers and
superintendents to accept more responsibility and make more
decisions on their own without having to check with me first. As a
result, I decided to delegate as much of the work to them as
possible including writing subcontracts, ordering materials,
signing contracts and approving change order requests. Time went
on, and my review and detailed inspection of their work and
decisions became less and less as I trusted them more and more.
Eventually worst scenarios happened which caused us major
financial setbacks. In one case, a long-time customer pressured a
project manager to agree to some contract clauses that seemed
innocent. Little clauses like 'this contract includes all
requirements of the city to obtain a final inspection.' Months
later, when the project was nearing completion, the customer held
us to this clause which added lots of additional items into our
scope of work we never had intended to perform or had in our cost
estimate. Upon my review, it was obvious the project manager had
agreed to contract terms he didn't fully understand.
This caused me to take a hard look at how we do business. I
discovered many other problems existed with our 'trusting'
responsibility system we were using. Some project managers were not
getting the complete scope of work included in subcontracts they
were writing thus causing cost overruns via change orders on their
projects. Some managers were not properly reviewing employee
timecards and keeping track of all vacation time they were taking.
Some managers were approving expense accounts without reviewing all
reimbursable invoices in detail. The payroll department wasn't
always charging costs accurately to the right jobs or cost codes in
every case. And I found some people were stealing from the company
using creative accounting tactics. Oh well, so much for trusting
your longterm employees 100 percent.
It is my opinion people over time can feel entitled to a little
extra, the longer they work for your company, if you give them the
chance to take advantage of the situation. Little things like
leaving early without docking their own pay, asking a supplier for
some material for their home remodel, filling their car with gas
using the company credit card, and lots of other small things that
can add up to big bucks.
Put a protection system in place!
To remedy the situation, we re-implemented our written company
policies we weren't enforcing. We also made it clear there would be
no exceptions for anyone regardless of their tenure, relationships
or position in the company. These newly enforced rules required two
people (for example: myself as president or a management team
member and the project manager) to review and approve every
decision involving company contractual commitments, estimates,
change order costs, financial obligations, payments or monetary
transactions including all checks issued; contract and subcontract
pricing, awards, terms and conditions; expense account approvals
and employee reimbursements; credit card statements; overtime,
vacation, time-off and sick pay requests; and project payables.
When someone has to review and approve important matters with
the person in charge of making these decisions, your company will
avoid mistakes, omissions and indiscretions that can occur. Two
heads are better than one. Reviewing decisions with another
responsible manager requires a second set of eyes to ask how these
decisions were made. When a subcontract is awarded, we now have the
project manager review all the bids, inclusions and exclusions from
all the bidders, and then decide which company is the best choice
for the job. He then reviews his decision with the president, the
estimator or another project manager who initials both the
spreadsheet and draft subcontract. Then the contract award is made
and contract is executed. By adding this one simple review simple
step, you can be assured your projects will have less cost overruns
and issues to deal with during the project.
To get people to make more decisions and take on more
responsibility, give them a system that allows them to do most of
the deciding themselves. And when you want to get a second opinion
or have someone review their decisions, make sure you have a system
in place that requires a review. A little investment in time will
guarantee you make less mistakes and make more money.
George Hedley is a licensed professional
business coach, popular professional speaker and author of "Get
Your Business to Work!" available at his online bookstore. He works
with contractors to build profitable growing companies. To request
your free copy of "Profit 101 For Contractors," sign up for his
free monthly e-newsletter, hire Hedley to speak, be part of his
ongoing BIZCOACH program, or take a class at Hardhat BIZSCHOOL
online university, visit www.hardhatpresentations.com or email