(The Saga of RB Builders©, written by Fletcher Groves III in 2007, looks back futuristically from the perspective of 2012. It is being republished this year, as a nine-part series in BIG BUILDER. It is a glance into the process of continuous improvement, a glance into the never-ending quest for better operating performance, and higher economic return)
In 2007, RB Builders had generated $50 million in Revenue, on the sale of 200 homes in a down housing market. Determined to improve operating performance and business outcomes in 2008, the owners had begun discussions with a new consulting firm, to work with RB Builders under a new, radically-different consulting arrangement, in large part, because the high six-figure total the company spent with various consulting firms over the previous 10 years had not accomplished anything worthwhile.
The new, intrepid, results-based consultant started out by offering RB Builders some assurances.
She told RB Builders that her firm would be compensated on exactly the same basis as everyone else. She told them that there was no limit to the time and effort her firm would expend to achieve the outcome, that she would work hand-in-hand with them, and do whatever it took to reach their goal. She assured them that she would do whatever it took to help foster a willingness and capacity for change, create a sustainable capability for implementing the things that would continuously improve operating performance and business outcomes, increase innovation and learning, and make RB Builders less dependent on their consultants. She assured them that she was content to remain in the background and to never accept any of the credit.
The new, intrepid, results-based consultant then demanded some assurances of her own.
She made it clear that this was a client-consultant partnership, and that (because the consultant’s compensation was completely results-based, of finite duration, and self-funding) her firm was assuming the higher level of risk. She allowed that the new, results-focused consulting arrangement they were jointly undertaking did provide ample incentive to everyone for taking action, making changes, and improving operating performance and business outcomes, but that there also needed to be an understanding.
She told RB Builders that she (and her firm) were as serious as a heart-attack about getting results. She made it clear that she had no intention of wasting her firm’s time and effort. She informed RB Builders that they did not have to do everything she told them, but they did have to come to terms with her. She wanted assurances that the company would, in fact, take action, make needed changes, and do whatever it took to achieve the targeted results, or–if there was no action, no change, no results–then the responsible heads at RB Builders would roll.
The intrepid, results-based consultant continued, making it clear that–for this new results-based approach to work (and as a condition of her firm’s involvement)–RB Builders would have to make some changes.
She told RB Builders that it had to end its practice of paying individual bonuses based on multiple measures, and replace it with a team-based approach focused on performance related to a single business outcome. Next, she told the company that it had to change its current thinking on cost behavior and cost reporting (by adopting variable costing methods, by embracing Cost-Volume-Profit relationships, and by preparing financial reports that included a Contribution Income Statement). Then, she told them that all of the current manifestations of improvement initiatives–failed or otherwise–had to be subordinated to the new approach.
Finally–the intrepid, results-based consultant spoke with RB Builders about the candor, purpose, will, rigor, and risk this arrangement would require, and about her expectations, in regard to their intra- and inter-relationships. She told them she expected them to speak–and to hear–the truth, to pursue goals that seemed unreachable, to see every situation as they chose to make it (not as they were told it had to be), to stick to agreements and keep commitments, to trust each other.
She told them failure would not be an option.
- Part III: A New and Difficult Course (May 2016)
- Part IV: A Stake in the Outcome (June 2016)
- Part V: Setting Out: 2008-2009 (July 2016)
- Part VI: 2010: Farewell to a Trusted Advisor (August 2016)
- Part VII: Pre-2012: A Changing Market (September 2016)
- Part VIII: More-for-Less (October 2016)
- Part IX: 2012: Beyond Current Possibility (November 2016)