The year 2016 was an eventful one for home building.
Scott Sedam: How do you lead a leader?
Without buy-in from top management, Lean practices are sure to fizzle out over time. Lean operations expert Scott Sedam contemplates what it takes to get support from the very top.
Without buy-in from top management, Lean practices are sure to fizzle out over time. Lean operations expert Scott Sedam contempl
During my nearly 40 years in business, with more than 30 of that in consulting roles, the most difficult question people ask is, “How do we convince the company president?” I have heard the desperation in this query over a vast assortment of issues, including a failing project, a lousy plan, a problem trade, an ineffective supplier, a senior manager who has become a cancer in the organization, and the need for a new hire, among others. How do you convince the top executive to take action, change, open up, or just listen?
Last month, I received one of those impassioned emails asking this very question from Carol, a bright woman who came up to talk after my keynote presentation at the BuilderMT annual conference this fall. She’s a VP in a company that is exploding out of the downturn, growing at more than 50 percent, and, by outward appearances, could do no wrong. What Carol described internally, however, was a veritable train wreck. She knew that for each dollar put in the company’s pockets, they left others buried in the foundation, dropped on the sales floor, tied up in paperwork, or lost in a turf battle between departments. She believed that Lean process could provide the vehicle to get the company focused on the issues. Carol went back with my slides, brochures, articles, and client list, but after a month trying to convince her president to talk to me on the phone for just 15 minutes, she had no luck. The subject line on her email read, “HELP!!!”
To address this, allow me to relate from my personal business experience how I thought I knew the answer to this question, but had to conclude I was wrong. A few years ago, two clients — exceptional men both in business and personally — called me on the same day to harangue me about something. Each of their firms had gone through a project with us a couple of months prior. The first call came from Bill Saint, formerly CFO of Simonini Builders in Charlotte, now president of Classica Homes. He almost shouted into the phone, “Sedam! I have to talk to you about our Lean project. You’re going about this all wrong!” Of course, I immediately thought the worst and wondered, did Bill not like the format? Did our facilitators mess up? Were the numbers not coming through? Was the follow-up not working? I was wrong on all counts. Bill proceeded to explain how, when I originally presented our Lean process to his management team for consideration, I had stressed primarily the tremendous financial impact.
“The numbers were great, better than my expectations, but you are missing the biggest impact,” Bill stated. “We had always had good supplier/trade relationships, but this process has taken them to a whole new level. We’re changing the culture here, and everyone is benefiting tremendously.” Bill went on excitedly, giving multiple examples about how everyone had opened up new possibilities, giving them a new language to use and a new vehicle to move their ideas forward.
Bill’s call was gratifying in many ways, but a question gnawed at me so I stopped him to ask, “Bill, this is great to hear. I love it. But think back to that initial management meeting and tell me truthfully. If instead of the financial return, I had mostly stressed the benefit of significantly improving your supplier/trade relationships, would you have signed up?” Bill was quiet for a minute, then laughed and said, “Probably not!”
An hour later, while discussing the implications of Bill’s call over lunch with my associates, the second contact came, this one from Buz Hoffman, president of Lakewood Homes in Chicago. Whereas Simonini built high-end units averaging well over a half million dollars, Lakewood specializes in affordable homes, building as many as 1,600 annually and competing very successfully with the nationals. Given the considerable differences between these two builders, imagine my surprise when Buz shouted into the phone, “Sedam! I have to talk to you about the Lean project. You’re going about this all wrong!”
I listened in amazement to almost the exact speech I had heard from Bill, except that Buz spent more time talking about the impact on his internal team. Buz had required each of his senior managers to participate in the process, and he reported enthusiastically how they were opening up both to each other and to new possibilities on a whole new level. Like Bill, Buz stressed that we should emphasize the cultural impact rather than the financial gains, which he was quite pleased with.
It was another gratifying call, for sure, and given that I had spent years prior to the downturn giving presentations, writing articles, and consulting on the importance of a fully developed company culture, I was no stranger to the importance of what Bill and Buz described. But I asked the same question again, in exactly the same way, “Buz, this is great to hear. I love it. But I want you to think back to that initial management meeting and tell me truthfully: If instead of the financial return, I had mostly stressed the benefit of significantly improving your internal team, would you have signed up?” Buz was quiet for a minute, then laughed and said, “Very doubtful.”
So is this the answer? All you need to do is appeal to the pocketbook of the president or owner and you get the change you seek? Simply put it in the financial terms he or she understands, explain how it impacts the business, and emphasize near-term results, and you’re there? Although that has worked for me about 100 times in the past six years, I’ll admit that tactic has also failed about 100 times, as well. I thus have painful evidence that merely selling the boss on financial terms is not the whole answer, even when you have hard-core data to back you up. This has prompted a lot of discussion in our office, and no real conclusions.
Readers of my articles and columns over the past 15 years are used to me publishing lists of eight or 10 things to do, telling you exactly how to address problems like site waste, plan deficiencies, or trade shortages, among a host of others. I regret to write that I have no such list this month. I am turning the problem over to the readers. Write to me at firstname.lastname@example.org. I’d like to hear from those who have gotten a tough president or owner to open up. What did you say? What did you do? What did it take to crack the code and get him or her to make a truly significant change?
And for you presidents, I ask the same questions, from your perspective. Tell me so I can communicate back to Carol — and to your people — how they can get to you? What works? What doesn’t? They ask me all the time and I want to give them good answers. I’ll include your ideas in a follow-up article and draw some conclusions. But to get this together for next month, you have to send me your response right away. So sit down and do it now. Maybe it will make things easier, for Carol and for all of us.
Scott Sedam is president and founder of TrueNorth Development. His articles appear monthly in Professional Builder and his Lean Building Blog appears each Tuesday on www.HousingZone.com. Sedam welcomes your questions and feedback at email@example.com and encourages budding “Leanistas” to join the LeanBuilding Group on www.Linkedin.com.