Where to start when dialing in your operations: Accounting and Job Descriptions

You’re seeing problems in your business. Your team keeps making the same mistakes over and over again, and it’s costing you money and driving you nuts. Problems and fires hit your desk, distracting you from the important work, and you solve them one by one, with no confidence a similar problem won’t pop up next month.

Operations can help. Systems and processes are the key to not making the same mistakes over and over again. Systems and processes will free you from the daily fire fighting.

Create a Culture in Which It Is Okay to Make Mistakes and Unacceptable Not to Learn from Them
-Ray Dalio, Principles

But where to begin?

Is it a quality control checklist? A meeting structure for your internal meetings? A process for employee feedback and reviews? A new software that promises to solve it all?

Don’t begin with any of these things. Begin by asking questions. You need to discern what your most pressing operational problem is, because if you don’t solve that one, the other solutions won’t stick. Solving symptomatic issues, instead of the core issue, is like trying to fix a bad foundation with good framing. It never works.

Below are the questions I ask my consulting clients to determine what we’ll tackle first. I’ll walk you through them so you can begin the process of identifying your real issue.

Okay, ready? I’m going to ask you to rate yourself on each of these categories a 1, 2 or 3.

1 means “This is a disaster in my company. Or we aren’t doing this. Or we don’t have this.”

2 means “This is going okay, not great. It could be better.”

3 means “We’re great at this. We’re nailing this. I feel pretty good about this one.”

Let’s go. Write down each category in bold on a piece of paper. Read the supporting questions, and then give yourself a 1, 2 or 3 for that category.

Accounting and bookkeeping: How do you feel about accounting and bookkeeping in your business? Do you know how much money you’re making? Do you know where it’s going? Is it categorized? Is filing taxes fairly straightforward? Can you produce a P&L when requested?

Job Descriptions: Do you have meaningful job descriptions for everyone on your team? Are they written down? Do you and your team consult them regularly? Are they used in 1-1 meetings, performance reviews and compensation meetings?

Onboarding: How is onboarding in your business? Do you have a process for it? Are your employees signing an employment contract that covers the important points? If you need to hire and onboard someone new, is that pretty easy, or a total headache?

Offboarding: When an employee resigns or is terminated, do you have a process you follow? How do you ensure their secure access to job sites, the office, sensitive files and so forth is removed in a timely manner? Are you collecting company assets, such as tools, electronics, credit cards and keys? Do you have good processes in place to do this respectfully and professionally and avoid employment disputes?

Sales and Revenue: Are you bringing in enough revenue? Does it come in consistently and predictably? Are you happy with your sales team?

Customer Service: Are your customers happy most of the time? Do you get referrals and repeat customers?

Quality of work: How do you feel about the quality of your work/product? Is the quality consistent across your team and across projects?

Scheduling and deadlines: Are your projects typically running on schedule? Do you have a written schedule or a scheduling software? Is your team on the same page about deadlines? Does your team take deadlines seriously?

Risk Management and Compliance: How do you feel about risk management and compliance? Do you have solid contracts that protect you, and are they consistently signed and filed? Do you have the proper insurance in place? Is there a list somewhere you can consult when you want to check? Do you have a process for collecting or signing lien waivers? Are you in compliance with state and federal regulations for your business (such as franchise tax filing, Corporate Transparency Act and so forth).

Security: How do you feel about security in your organization? Are your job sites, office or shop a target of theft, arson or vandalism? Do you have any processes for regularly changing keys/access codes? How do you keep sensitive files secure? Do you have security cameras?

Okay, now review your results. If you gave yourself a “1” on most of these categories, take a deep breath. It’s okay. Many small construction businesses lack solid processes, which is why my consulting firm exists. This just means that a bright future is ahead of you, because if your business is running today with very little structure, imagine how awesome it will be after a tune up.

If you gave yourself a “1” for accounting/bookkeeping or job descriptions, start there. I don’t care what else is broken in your organization. Your priority is to get these two categories to a 2 and then 3 as quickly as possible. If you try to build out any other process for quality or scheduling or any other category, it will fail. This is like pouring a bad foundation, going “eh, we’ll deal with that later” and then trying to finish the house. I don’t care how well you frame it, how well you finish it, that house will never be quite right.

Here’s why that is true.

If you don’t have your accounting and bookkeeping in order, then you don’t honestly know if your company is headed in the right direction. You don’t know if you’re profitable and how profitable. You aren’t holding the dollars you spend accountable to results. And you’re a target for embezzlement, fraud and theft. Once you do have your books in order, you can look at them and make some clear, smart decisions. Do you have enough staff, or too much? Are you pursuing the right projects? Would you be more profitable if you did less work with a smaller staff, or do you need to scale up? Which of your projects are profitable, and which are not? Are you on track to be profitable next year? Until you answer these questions, don’t waste your time building processes that may be obsolete.

How do you start solving this issue? Get the right accounting and bookkeeping team in place. I’m no longer surprised when I talk to company owners who say they’re behind on bookkeeping and need to sit down and make themselves do it. “Wait,” I ask, “why isn’t your accounting team doing this and then just brining you questions they need help with?”

This is something I help my clients get sorted. If you don’t have the right accountant now, I interview and present a handful of accounting firms that know your type of business and we choose one together. I also manage your accounting firm for you with your input and consent along the way. Imagine that instead of you having 5 boring hour-long calls onboarding a new accounting team or redirecting your current one, I take 4 of them and you join 1 to give everything your stamp of approval.

Now let’s talk about job descriptions. I can guarantee you that if you don’t have written, meaningful job descriptions, you are not getting as much out of your team as you could be. There are certainly unspoken assumptions and expectations on both sides of the equation, for you and your employee. They think you want something different from them than you do. You think they know what you want, and they don’t. The only way to be sure everyone is on the same page is to put it on one page.

If you want everyone on the same page, put it on one page. -Something like that said by someone important

Everyone on your team should know their primary responsibility and enthusiastically agree to own that. They should know who they report to. And they should know what specific benchmarks you are measuring to determine if they have met their responsibility. When this happens, all kinds of problems begin to disappear. First, people who cannot or do not want to perform the role you need them performing either exit the organization or find a new place within your organization that is a better fit. Employee stress goes down. Gossip, workplace drama and unhealthy politics decrease. With clear direction, your people start working more productively and they’re happier. They appreciate each other more for what each team member brings, because what their colleagues contribute is clearer. Resentment among the team decreases because low performers who are hiding behind (or struggling because of) a lack of clarity either level up or get out. Compensation and performance improvement conversations become much less emotionally charged.

If you don’t tackle this, and instead try to implement, say, a scheduling process, I can tell you what happens, because I made this mistake.

I was once hired in a construction organization that did not have meaningful job descriptions. My role evolved over time from sales and investor relations to COO. Before I was COO, I saw problems leaking over from construction into my domains. Deadlines missed, miscommunications about specifications that upset buyers, unexpected budget overages and so forth. I was regularly communicating bad news to buyers, agents and investors, and I didn’t like it one bit. Being operationally minded, I start trying to solve the problems one by one. When we’d have a scheduling issue, I’d sit down with construction and discuss how to fix our scheduling. We’d talk in circles, getting nowhere. Frustrated, I started proposing solutions. Let’s use this software. Let’s do this kind of update together weekly. None of it worked. The solutions would be half-heartedly adopted by everyone for a week, then kicked to the side. The scheduling issue would pop up again, we’d meet again, and the cycle would continue.

Without meaningful job descriptions, this is the fate of any process you try to implement. Nothing will stick. Until you communicate clearly to your people “Here is the responsibility I am holding you accountable to, and here’s what I will be looking at to determine if that’s happening” any process you try to implement is a waste of time.

So let’s say your accounting is in good order and you have meaningful job descriptions. What should you tackle next? That depends on where else you have a “1”. If you don’t have enough revenue, for example, that would be an important one to tackle. But if you don’t have enough revenue and your quality isn’t great either, you might choose to work on your quality so you can keep your current customers happy and generate repeat business and referrals. But then again, if your quality is not great and you only have two customers right now, you might need to ram up your sales and then immediately turn your attention to quality. Trust your gut. From here, it’s really a bit of an art. If you’re struggling and need someone to help you think through this, that’s where I come in.

If you want to talk more, book a call. Let’s chat.