I will never forget the day I went into a local Lowe's store and overheard a manager talking to an associate. They were discussing a problem that just occurred. I recall the manager saying, "Go look and see what the SOP (standard operating procedure) says for that." I followed the manager to the service area and watched him take a binder off the book shelf and start fumbling through the pages. Suddenly a light bulb went off in my head; they have a process for everything at Lowe's!
We talk about many things in the landscape industry; I did it this way, or you can do it that way. Have you ever really looked closely to see how two people with the same job trying to achieve the same results get there? Many times it's in different ways.
When I owned my business, I learned early on that no two jobs were the same, not all conditions were the same, and that many things were beyond my control. What I also learned was that I could control what I refer to as the controllable. These were the tangible aspects of my business, or the way we did things. Examples include: How we answered the phone, how we greeted people, how we loaded our trucks, how we cut the grass, and how we planted the trees.
Good processes vs. good employees
Studies have shown that 96% of businesses never achieve the goals the owners had for them when they first started out. The owner is unable to grow the business beyond the dependency on him or herself and the key people in the organization.
The common struggle in the landscape industry is getting over those proverbial hurdles, i.e. the $200k company getting to $600k, the $600k company getting to $1 million, and then $2 million and then $5 million, and so on.
At some point in the process, a company hits a virtual wall beyond which it seems impossible to grow. There are problems with keeping the workflow running smoothly and consistently. Efficiency is only happening through 20% of the employees and they’re working as hard as they can. Things seem to be chaotic and sometimes out of control. Sound familiar?
For a landscape business owner to get over these hurdles, the business must standardize its operating procedures for training, task delegation and accountability. The business owner needs to set the expectation of standardization, and then task key managers with spending time working on the business processes. Only in this way will the business be able to replicate the skill and efficiency of the key people, and in doing so create a business that is dependent upon the business's processes as opposed to the business's key employees.
Time to start the process of establishing processes
Fast forward in my landscape industry career for a second. I used what I saw at Lowe's and applied it to every facet of my business. We created a process for each tangible step of our business. In essence: How we needed to conduct business, how we needed to manage our people, manage our finances, and most of all serve our clients.
What I learned from the results of this painstaking task was that business systemization, also known as business standardization, can lead to increased productivity and employee job satisfaction, reduced expenses and increased profit.
An organization, regardless of what segment of the green industry you are in, is simply a collection of processes intelligently put together to effectively and sustainably deliver a product or service. Business systemization creates optimal processes throughout the organization and documents them so everyone is clear on how things get done. This helps eliminate confusion, dramatically increase productivity and profit, and create the time to allow owners to allow the business to create profit on its own.
With that in mind, most landscape business owners begin the systematization process but fail. They are unable to systemize their business because they don't have a plan. You must understand that this is not a business plan, it is a standardization plan. The plan is nothing more than drafting your thoughts on how to discover, prioritize, document, implement and manage all of the processes in your business.
While there are four core elements of your business (guiding, running, doing and getting), there are seven general areas which you need to systemize.
1. Administration Systems
This is an important area of your business to systemize because administrative roles tend to see a high turnover. A series of systems will reduce training time, and keep you from explaining how the phones are to be answered each time a new receptionist joins your team, for instance.
This is one area of systems that you will need to keep a close eye on—but that doesn't mean you have to do the work yourself. Financial management systems include everything from tracking credit card purchases to invoicing clients and following up on overdue accounts.
These systems will help to prevent employee theft, and allow you to always have a clear picture of your numbers. These systems will also allow you to control purchasing, and ensure that each decision gets the proper sign-off.
3. Internal & External Communication
Communication is a time-consuming yet essential area for any business. Emailed cover letters, sales letters, internal memos, reports and newsletters are items that need to be created regularly by different people in your organization. Most of the time, these communications aren't much different from one to the next, yet each are created from scratch by a different person. There is a huge opportunity for systemization in this area of your business. Systemized communication ensures consistency and company differentiation.
4. Customer Relations
Another important area for systemization is customer relations. This includes everything the customer sees or touches in your company, as well as any interaction they might have with you or your staff members.
Establishing a customer relations system will also ensure that new staff members understand how customers are handled in your business. It will allow you to maintain a high level of customer service, without constantly reminding staff of your policies. It will also ensure that the success of your customer relations and retention does not hinge on you or any other individual salesperson.
5. Personnel Management
As your company grows, you need systems for hiring, training and developing your employees. This will establish clear expectations for the employee, and streamline time-consuming activities like recruitment.
Employees with clear expectations who work within clear structures are happier and more productive. They are motivated to achieve one thing when they know they will receive another thing if they do.
Establishing a clear training manual will also save you and your staff the time and hassle of training each new staff member on the fly.
6. Sales & Marketing
This is likely an area in which you spend a large part of your time. You focus on generating new leads and getting more people to call you or walk through your doors. These efforts can be systemized and delegated to other staff members.
Use the information from this process to create simple systems for your basic promotional efforts. Anybody on your staff should be able to pick up a marketing manual and implement a successful direct mail campaign or place a purposeful advertisement, for instance.
Operations is one of the most important external parts of our business process. This entails how you and your team get the work done. Operations is an area where, as I like to say, we are "people brokers". Every move we make in operations is tied to dollars-and-cents and customer satisfaction. It is imperative that your operations and processes are mapped in order to eliminate wasted dollars by creating effective productivity and resource management.
3 steps to move the process forward
The successful implementation of business systematization assumes that you will set expectations and engage outside partners as needed to select the right program for your business, train the selected employees, and guide the project management process so that it is completed as you intended.
1. Step-by-step instructions. Define each internal and external business process using step-by-step instructions that make sense for the people who will be using it. There are a variety of ways you can create systems for your business. Easy steps are short and simple or a written process coupled with visual illustrations. Visual steps enhance the standard operating procedure by outlining each segment of the process step by step.
Another option is using technology. At GreenMark Consulting Group, we have a technology platform that helps you manage your business standardization processes and then migrates each one down to the responsible position on your company organizational chart. Today there are numerous software platforms to address the entire business operation process.
Regardless of which process you deploy, there is a logical progression from start to finish. You want qualified employees writing out each of the steps involved in completing their tasks, with as much detail as needed for a stranger to follow. Then, have the team leader review the step-by-step guide with the employee(s) who regularly complete the task, and allow them to share feedback. Once their input has been groomed, decide the right format for the system, i.e. manual, laminated instruction sheet, sign, office memo, etc.
2. Test each process. Test each business process to make sure it clearly and accurately describes the task or duty. Now that you have created a system, you will need to make sure that it works. More specifically, you need to make sure that it works without your involvement or the employees who developed it.
Implement the new system for an appropriate period of time, perhaps a week or even a month, and then ask for input from staff, suppliers and vendors, and customers. Evaluate if the process is informative enough for your staff, seamless enough for your suppliers, and whether or not it meets or exceeds your customers' needs. Take that feedback and revise the system accordingly.
Your team will rarely identify all of the steps and write them down clearly the first time—but be patient. The process will identify questions, unknowns and new opportunities for improvement, which is part of the pay-off.
To keep everything relevant, your systems will also need to be re-evaluated and revised on a defined schedule to ensure that your business processes are kept up to date. Structure an annual or biannual review of systems, and stick to it.
3. Train staff, gather feedback. Train your staff on the new systems, and gather their feedback on how well they work. As described above, it will be essential to involve your employees in the process. These are the people who will be using the systems. They have a wealth of knowledge to assist you in this process. They are also your first line of defense in finding out what outside stakeholders think.
Although employees draft the systems and your project managers review them, you should schedule time to review everything before it ends up in your Standard Operating Procedures manuals, training methods, job descriptions and performance evaluation tools. This will ensure that the systems are relevant to your employees, in line with your strategic vision, and capable of helping you achieve the results you expect.
So what’s the difference between Lowe’s and your business when it comes to optimization? They have the staff with the training and responsibility for building these systems. You’re running lean and mean. There’s a lot of software on the market that claims to make it easy. But you probably don’t have the time to tackle this yourself, and your staff probably isn’t qualified.
When considering the best way to take your business to the next level, instead of looking for do-it-yourself software, consider a partnership. Find the right consultants who can lead employees from each department through a process of getting best practices from everyone and loading it into a system. Every department has “controllables”. Allowing everyone to contribute their own best practices will create buy-in. Involving leaders in collating the most effective practices into your systems will create consistency. Finding the right partners to keep the project on track will create new results—and a more optimal business.
A more optimal business can be translated into real dollars. The SBA has a model to determine the lendable value of a business being sold. The less systemized a company is, the less value it has to a buyer and the less financing is available. Two companies with the same average cash flow for the last three years could sell for vastly different amounts if one is highly standardized and the other is not.
In the end, change is hard for people. Work habits are created based on cultural and operational influences. When you introduce new systems or processes into your company, there may be a natural resistance to the change. People become set in the way they are used to doing things. But remember, once you have your systems in place, you will be able to delegate leadership roles to trained, trusted employees and basically clone yourself. That's the big pay-off you're looking for.
*Article originally published in 2015