A cold hard truth of life is that before you can fix something, you need to understand that it's broken. For instance, many home builders want to build more homes at better prices, but cite seemingly intractable challenges like the younger generation's alleged distaste for construction and government regulations that seem to multiply faster than rabbits. Yes, these are challenges, but it's my contention that failure to meet them (and others) is the symptom of a deeper, unacknowledged problem.
Builders who transcend big challenges—the builders destined to dominate their markets—are those who know how to innovate. Unfortunately, they're a minority. The rest fail at innovation but not because it's mysterious or hard. It's because they don't budget the time or money needed to ensure their innovation efforts' success. In my experience, most don't even recognize this as a problem.
Which brings us to another cold hard truth: If it’s not in the budget, it's not going to happen. I've seen plenty of builders with long lists of improvements they wanted or needed to make, but who never thought to give those improvements a seat at the budgeting table. It's a blind spot that makes success impossible.
Thinking More Broadly
Most home building companies are set up to build houses in very conventional ways because it's what they know and it's what they've always done. So when budget time comes around, managers naturally focus on important business basics they understand: the lot pipeline, demand for housing, production capacity, and likely costs for land, materials, and labor.
But where are their plans for discussing the people and dollars that the company will need to deliver needed improvements? Nowhere, usually.
The lack of planning doesn't stop companies from announcing new initiatives. They may, for instance, want to improve the customer experience at all touch points, a goal that will require lots of time from cross-functional teams to develop, vet, and implement. Or they may set out to upgrade their scheduling software and methodology in order to bring closings up to the number called for in the business plan. In most cases, they don't take these initiatives into account during the budgeting process.
Builders contemplating a major process change typically neglect to budget enough time and money. If it's a software upgrade, they usually budget for the technology but not for the work required to implement it. Rather than getting the extra help needed to ensure these efforts' success, many companies tell staff members to "just do it," or at least to try harder. Inevitably, the initiatives fall short of their goals, and staffers become frustrated, burnt out, and cynical.
How To Free Up Time
Companies that add change initiatives to the budgeting discussion are able to realistically look at their level of people and dollar resources and compare them with the financial and operational budgets. This helps them determine their reasonable capacity for change. But if they're honest about this analysis, they will uncover another challenge.
The thorny issue here is that all full-time staff are occupied for at least 40 hours per week, and often more, just fulfilling their financial and operational responsibilities. If you're budgeting for a 10% or 20% volume increase in the 2020 fiscal year, you may already need more people just to meet that extra volume. How do you make time to transform the company or implement a major software system?
The only way to make that time is to help your staff become more productive. In fact, productivity improvement is itself an innovation, in addition to one of the most effective levers for organizational improvement and change. Here are some proven ways to go about it.
1. Map Your Processes. Cross-functional workshops to map and/or review processes always identify non-value-added activities that chew up time and sap productivity. They include simple changes or improvements—eliminating duplicate data entry, for example—that bring 5% to 10% productivity improvements for different roles. These workshops also serve as springboards for better ongoing collaboration inside and outside the organization, which is correlated with further productivity improvements, higher quality, and improved cycle time.
A well-run process mapping effort won't require much staff time, either. We've helped builders create a soup-to-nuts map for all their current processes in one day, which included identifying the biggest opportunities for improvement.
2. Create a Responsibility Matrix. As the name suggests, this is a matrix with roles in the columns and tasks or responsibilities in the rows. The team identifies who participates in each task, who makes decisions, and who provides input or information. This helps everyone understand how much time and energy each person is spending on each task. It will identify duplication of effort and also show tasks or responsibilities that need to be added.
It's another way to identify and eliminate non-value-added activity. In fact I've seen this exercise lead to additional 5% to 15% productivity increases.
3. Track Staff Time at a Task Level. Accurate and granular data about the time spent on various activities can yield a lot of useful insightful.
There are plenty of easy-to-use time tracking apps, but in general, people don't like being tracked. The way to overcome this is to give the tracking effort a finite timeline, to make it part of a wider productivity improvement effort, and to assure employees that collected data will be kept within the team that's being measured, not sent up the management ladder. Do these things and most employees will get on board.
It's also important to share the collected data with employees and to make their input part of the analysis. This gives them insight into what enhances and reduces their productivity, as well as a voice to bring frustrating inefficiencies to the forefront.
4. Conduct a Staff Activity Survey. A survey is less accurate than tracking, but it's a good first step and can take the employee as little as 15 minutes to complete. I suggest doing it quarterly. Be very clear about the reason and the intent for the survey, as failure to do so will make it unlikely that you get truly valid or insightful data.
The survey should ask employees to rate their current versus potential productivity, to identify the most frustrating elements of their job, what tasks or activities they would eliminate if they could, their overall level of satisfaction/engagement/frustration, as well as the tasks involved and the processes, systems, and tools they are provided with to do their job.
The Payoffs
The data generated by these activities can reveal great opportunities for efficiency gains. It can identify potential productivity improvements and non-value-add activities. It can clarify the critical tasks that truly make a difference in a builder’s ability to deliver on its commitments to its customers, its employees, and its financial plan.
Just using one of the above methods will provide a more nuanced and accurate understanding of how staff spends their time and what enhances or degrades their productivity. This insight will help your budgeting process become broader and more relevant to the overall plan for the year, rather than being solely focused on finances and operations. Your staff will be smarter about how they spend their time, and you will free up 5% to 15% of many staffers' weekly hours.
However, freeing up those hours won't guarantee that they're put to good use. You have to specifically budget them for work on your change initiatives.
I'll say it again: if it's not in the budget, it's not going to happen.
