BY TROY GUEVARA
About 12 years ago I noticed a tow truck dropping off my neighbor’s car in his driveway. I went and asked my friend if he needed help and he laughed and said, no I need a new engine. To his dismay, his daughter had driven the car beyond the point of overheating and subsequently ruined the engine. My friend knew this car was getting old, but his feeling was if you keep an eye on the gauges, you can prevent catastrophe. As his daughter approached he asked her “didn’t you notice the gauges, the warning lights or even the heat waves coming from the hood?”. Her simple reply was “no”.
I don’t know if her response would have been different from any of his other children, his wife, any of our neighbors or even myself. I know where the gauges are on my dash, but mostly just pay attention to the fuel gauge. Up until this day, I had never been consistent in reading my gauges.
But my friend was different, he was a military helicopter pilot with a substantial amount of combat experience, which tells me he is a pretty good pilot. His training taught him to be constantly surveying and observing all conditions, including a large number of gauges in the cockpit. For him, distraction meant death, so the complete observation of all his surroundings has saved his life many times.
For me, the experience of talking to him about his job and his training got me thinking about how I do my job. As a contractor, was I constantly observing all the conditions, was I reading the gauges and making immediate corrections? What would be the consequences of not reading the gauges, could that be fatal to my business? The more I pondered this principle, the more I realized that not only could this save my business, it could lead to substantially greater production, material controls, and overall profitability. It was at that point that I gathered our management team and asked for help. We had the tools in place and we were collecting the data, but not reading the gauges. I was no different than my neighbors’ daughter driving her car, I had gauges telling me everything I needed to know, but I was too distracted with everything else to read the gauges and make the necessary corrections.
The changes we needed to make weren’t hard, it was just a different way of thinking. I felt it important to involve my accounting team, my PM’s, the foreman and our estimator. With each person, I felt that the way we viewed things individually would help each of us in our jobs collectively and more importantly, help our employees in the field.
The first few weeks were a bit overwhelming, but we were determined to press on. Persistence paid off when we began to see results: First, both production and performance improved. The employees liked being held accountable and they expected their peers to do the same. From this not only did we save labor dollars, but we had fewer fixes. The second thing we noticed was the accuracy of material orders was better, so we were better able to take advantage of material discounts and better manage our cash flow. Our estimator began to use the labor and material data to “adjust” his estimates and change orders. I cannot say if we won more jobs but it felt as if we did, but I know our change orders were more profitable. I can for sure tell you the largest gain we enjoyed was an increase in our profitability.
I am grateful for my helicopter pilot friend and the lessons he has taught me. Sometimes we don’t know what we need to fix and the irony is the solution to the fix is right in front of us. Most contractors already have gauges such as daily reports, timecards, production numbers, schedule of values and material invoices. What they don’t know is that these are the gauges they need to more efficiently manage their business and grow profit. I show companies how to do this every day and the results are astonishing.
Do you know what gauges to read? Do you want an easy way to increase profit? Email me at firstname.lastname@example.org, I am happy to help.