Best Practice on Education: How Does Your Company Compare

Best Practice on Education:

How Does Your Company Compare?

Many senior managers know they should be training their people, especially their key managers. Top performing contractors and businesses of all sizes have formal education programs. People in positions like; project manager, shop manager, senior estimator, superintendent, foreman and certainly top line executives, all need to stay on top of their game. If the only place or way for your people to get knowledge is from on-the-job experience, your company is paying a horrendous price. This puts you a long way from maximizing your company's potential to increase profits.

There is only one reason companies spend money to train their employees. That reason is that education makes companies money, period. The minimum Return on Investment (ROI) you should expect to get from a well designed class with a good presenter is ten dollars for every dollar you spend on education! Motorola, a long time leader in educating its managers and staff estimates their average payback per dollar spent is $44.00.

How do you recruit, keep and bring out the best in your key people? What have you done this year to re-motivate and energize your staff and in particular your managers? Our businesses have a way of sucking the life out of people. Long hours, continuous pressures and problems all create stress. You get tired of it all. How much more do you think this all affects your people? Well designed and led education programs will certainly motivate. But, even more, these programs will make permanent changes in people. A few of these changes are; acceptance of change, creativity, desire to be better, improve quality of work, acceptance of company policies and many, many more areas.

Jack Welch who successfully led General Electric to new highs, credited his management training program that they conducted in-house at Crotonville, NY, for much of his success. Welch used Crotonville not only as a place to educate GE employees, but as a medium to spread the changes in culture and thinking that have helped make GE what it is today. In Jack’s own words, he said "The GE of the future will be based on the cherished values that drive us today: mutual trust and the unending, insatiable, boundary-less thirst for the world's best ideas and best people."

Do you want the best people and ideas in your company? You need to take on responsibility for change. But how do you do this? It is really quite easy and you do not need to have a purse the size of G. E.’s, to do it. Number one, I would recommend that you stop being your company’s “expert”. (The one with all the answers, the one every one comes to get answers.) There is an interesting definition of an Expert. The story goes that an expert is a person who is more than 50 miles away from home with a briefcase!

This story draws from ancient writings about a man who roughly 2,000 years ago stated that “a man cannot be a prophet in his hometown”. In case you do not know who said this, it was said by no less than Jesus Christ himself. You can read his exact quote at Mark 6:4. I figure that if he could not do it, I probably will have trouble doing it. By being the “expert” in your company, you set yourself up for failure.

The best advice on education for your people that I can give you is to bring into your company experts in from outside to say what needs to be said. Your life will be a lot easier. When the expert leaves you just bring up and remind your people of what they learned from the expert.

How do you do this? Companies, just like your company, are planning to bring speakers, educators and experts into their company at this time of the year or early next year. Below are some resources that would greatly benefit you.

By the way if you think that because you send your people to a trade show and sign them up for classes, you are meeting the Best Practice Standards. Well, I am sorry to tell you that you are not there yet. The accepted standard for all management level people (including you), is a minimum of 45 hours a year of continuing education.

I am not criticizing you for sending people or going to trade shows. You should be doing this. I conduct trade show seminars. Here is a link to a video of a class I did at ConExpo (http://www.conexpoconagg.com/). The class was delivered to one of their largest audiences and highly successful. The title of the course is, “How much does that machine cost? Click here to see the video. http://machinecost.blogspot.com/

If you watch this video and you should, you only have 44 more hours to go this year.

If all of this does not apply to your company, please go: http://www.decisivecost.blogspot.com/ and comment on what your company is doing and how your company is actively involved in annual employee and management education. It may be an inspiration for others in our business

Many of you know a little about me from my previous contacts to you. But do you know that every year, I also conduct classes for companies interested in improving their management team? I have spoken to groups, organizations and businesses all over the world. I go wherever you need me to go. I have worked with groups of five people to five hundred. (I have found that doing a two-day class with 500 is interesting, but I’d suggest that if you can, limit it to 25 people for the best classes. If you have a larger group, I might suggest multiple classes.)

Here are some of my classes that may help you and your people to grow. Often these are classes are conducted in one or two-day formats and are modified to better fit your company and its goals.

• Achieving Excellence in Project Management
• Best Practices in Construction Supervision
• Best Practices in Construction Productivity
• Best Practices in Construction Quality Management
• Best Practices in Heavy Equipment Costing

To get more information on any of these classes or bringing these courses for your company or association, just call or e-mail me.

Fifteen things you can do today about the cost of fuel

Fifteen things you can do today about the cost of fuel
Or
Are you running your business like fuel still costs $0.60 cents a gallon?

1. Track the consumption of fuel per machine or truck. Every gallon used should be should be accounted for, by machine, job or project. You would not normally say to an employee; “Here is $90.00 in cash. Spend it and by way, you do not have to report back to me what you spent it on. So why is fuel any different?

2. All fuel storage tanks must be metered and the meter is calibrated. The data you will be getting is critical business information. You do not want to be running you business on bad information

3. Record the hour meter or Odometer information with every fueling. Without this information you will not be able to created critical calculations that will affect your company’s profitability.

4. Balance the “Cash Drawer”, with every storage tank fill. Every day, every bank teller balances his/her cash drawer all over the world. Your fuel tank has money in fuel coming in and going out. This needs to be accounted for and balanced. If you are out of balance, you will not keep your job very long at the bank.

5. Require fueling records to be turned in to the office. They should be turned in at least as often as time cards are turned in.

6. Calculate fuel burn in gallons or liters per hour for machinery with every fill. For trucks you will want to add in additions to hours, mileage or kilometers. Generally, for light trucks we don’t track hours)

7. Track and document work package level fuel consumption. You will be surprised and how this number changes from work item to work item or project to project. (If you are not breaking out work packages in your estimating detail, you are not estimating, your guessing.)

8. Replace broken hour meters and odometers, immediately. How can you track oil changes and services if you are “flying blind”?

9. Account for all hours on all machines. If you don’t have a problem with off-hours or off-job use of you machines, I don’t’ either. But, I do have a problem if you don’t know for sure how many hours and what those hours actually cost you.

10. Calculate your cost per hour for fuel per work item. Fuel is your largest machine operating cost item. If you don’t know how much consumption a work item take and what fuel cost, you cannot do this calculation. How do you know if your estimating is correct?

11. Don’t use average fuel consumption data. Averages are for people who don’t have a clue what their fuel really cost them. You need to know; the highest consumption level, the lowest and at what consumption rate this work package was estimated. Only real world measurements give you the first two of these.

12. Consider buying a hedge position in the Heating Oil market. Many fuel and heating oil supplier can help you with this.

13. Investigate and consider Idle Reduction Technology. This small device shuts down diesel engines when in an idle mode for a certain time. It does not allow the engine to cool to below a set point so that restarting is always easy. (You can contact us for more information.)

14. Investigate state-of-the-art fuel tracking and dispensing systems. These systems will help solve accuracy and recording issues. Make sure they will meet all of your recording requirements before investing! (You can contact us for more information.)

15. Use a customized database program (like DecisiveCost) to track and calculate all this information. Paper forms just get filed away. You need actionable business information! Spreadsheets are a nightmare to update, proof and do not begin to produce meaningful reports that a custom solution produces.

Do Something Today! “Lead, follow or get out of the way” as someone said.

Dedicated to your success,

Dan Rooks
President
Decisive Systems, Inc. "The Owning and Operating Cost People"In the U.S.
Call 800-232-5767 International 941-926-9260
drooks@decisivecost.com http://www.decisivecost.com/

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Does $100.00 a Barrel for Oil Mean $4.00 a Gallon for Diesel (in the U.S.)

Does $100.00 a Barrel for Oil Mean $4.00 a Gallon
for Diesel (in the U.S.) is Right Around the Corner?

Are You Letting “Business Conditions” Run Your Business?

When fuel went to $1.87 for off-road fuel in the U.S. market, I thought the machine owners would come un-glued. When it went to $2.50 I was sure they would change their business practices. I was wrong on both occasions.

Many are doing the same thing at three dollars a gallon that they did at $1.20. This is a big mistake that is costing machine owners billions of dollars world-wide.

A smart few have gotten mad as heck and done something about this!

You have to be sick of being the tail not the head. Sick of sucking up anything and everything dished out to you. You have to get mad and say “I am not taking it anymore!” As long as you think you don’t have any choice or say in the matter, I assure you…you will not have any choice! I love what Henry Ford once said to his engineers. “If you think you can, you can. If you think you can’t,” you can’t. Do you desire a change? How badly do you want it?

When you get mad enough to start to ask questions like “How should I, or can I modify my business system to protect myself and profits from changing fuel costs? What changes do I need to make today? Who could best help me to look at my business differently? I know how I have done it all these years …but who could give me a different prospective?"

Now you are really starting to bring in fresh ideas.

You have to believe that someone out there in the world might know something that you don’t know. One of the smartest businessmen I know said to me, “Dan, when I go into a board room, if every person around the table is not smarter than me, I have got the wrong guys at that table”. You have to believe that it might be possible to do things differently and make more money in this business, and have less risk, than you currently have today.

Last, you have to be willing to take action. Just saying “I am not going to take it any more” with no action, will avail little. It is like the little boy saying about the bully, who has been bothering him a school…“I am not going to take it anymore”. So what are you willing to do or going to do to change situation?

According the heating oil futures market experts whom I have been listing to on CNN CNBC, MSNBC and Fox Business, the prognosis is YES, fuel prices are going up. One said $4.00 by Christmas! I don’t know the future any better than you. But I do know that you have to stop being passive about the cost of diesel fuel and machine cost in general.

It is going to take:

• Desire
• Belief
• Action

It takes more than just these three things for success. However, without these three, we don’t have chance. We are doomed to be the tail and just let the “river of life” carry us where it wants to go.

If you have even a shred of any of these three things and you are willing to change your business systems, processes and procedures, call me. We may be able to work together to come up with a plan that will protect the fine business that you have been blessed with and bring new Best Practices to your company.

Oh, by the way, even if you don’t believe you can do anything about the high cost of diesel fuel and gasoline, Click on this link www.DecisiveCost.blogspot.com and click on the link Fifteen things you can do today about the cost of fuel. If you have even a shred of any of these three things and you are willing to change your business systems, processes and procedures, call me. We may be able to work together to come up with a plan that will protect the fine business that you have been blessed with and bring new Best Practices to your company.

Oh, by the way, even if you don’t believe you can do anything about the high cost of diesel fuel and gasoline, click on the link on the right, Fifteen things you can do today about the cost of fuel.

Dedicated to your success,

Dan Rooks

President

Decisive Systems, Inc. "The Owning and Operating Cost People"In the U.S.

Call 800-232-5767International 941-926-9260

drooks@decisivecost.com http://www.decisivecost.com/

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Is Your "Inner" Asset Manager In Hibernation

Is Your "Inner" Asset Manager In Hibernation or

Your “Opportunity Antenna” Switched Off?

A friend of mine recently told me a terrific story about a meeting he had with another equipment owner. Not terrific in that this guy's business is worse off than he knows. However, this is a sensational example of why most equipment owners and managers are not bothering to pick up on huge opportunities lying at their feet. Opportunities that with the tiniest bit of initiative, would result in monumental leaps in net income.

First, the story…

“My good friend is a young entrepreneur who had opened his own contracting business. This young man had started the business several years ago with the dream of owning a profitable business where he could ‘call the shots’ and operate it the way a contractor is supposed to be operated. But, fast forward several years and this contractor is still struggling to pay the rent.”

He was frustrated and shared his misery with my friend. “I don’t get it. I offer a much better, more personalized service for my clients. Just try to get the kind of personalized attention I give, at one of those other contractors! I’m really starting to hate this business.”

My friend said, “You know, I know I should raise my rates. But there is always someone out there who is willing to take the work for less. I cannot change my prices.”

Yes, this is a true story and I’m sure you can already see what’s happening here. Yet it begs the question, are YOU overlooking niche markets and opportunities that, right now, are lying at your feet just begging to be realized?

I would ask this equipment owner several questions if I could.

When are you going to stop allowing your competitors to tell you what you have to charge? They don’t know your business or expenses. I doubt they know their own costs. So...., how long are you going to let them tell you what you have to charge?

When are you going to stop allowing your clients to tell you what you have to charge? They don’t know your business or expenses. They think you are making a 50% profit margin! So clearly show a client WHY you charge, what you charge. You need to take a detailed computer print-out of your exact machine or truck cost and demonstrate why you charge what you charge. Your competitor is not going to do this. Many clients want reliable service with machines that don’t break down. They want to know that you are not going to come back and ask for more money due to poor estimation of costs or un-substantiated change order requests.

When are going to realize that you will never win every bid or tender? If you are going to loose business – loose on all the bids or tenders on which you cannot make money. Many contractors loose 3 out of 4 bids. Let me show you how you can actually raise that number and make MORE money.

When are you going to start to accurately cost your machines and trucks? You know labor and material costs for the bid or tender you submit. If diesel fuel just went up $0 .12 cents a gallon, how did you immediately change what you have to charge on each machine starting TODAY? We can show you how to do this.

One of the most important lessons I learned was about the importance of mindset and belief systems. Ask anyone why they are not achieving a goal or result that they want – can be anything. Money. Weight loss. Time off. Pick one.

Instantly, they’ll tell you their story…

“Well, I can’t do costing right now because I want to have a life -- and if we do costing, I’ll end up getting more clients and have to work 70-80 hours a week…and I just don’t want to do that.”
Here’s another popular one: “I’m just too busy to do cost my equipment and track its fuel and utilization.” The truth? They have themselves convinced that they HATE paperwork, they’re not good at it, and therefore they make sure they are “too busy” to spend any time on it.

It’s an excuse.

Machine and truck costing does not get done by people with nothing else to do. It’s forced into the schedule. You have to know your cost. Unless you are making a 50% mark-up on work, you better know your machine cost, exactly. Besides, machine costing is not just about data and software, it’s about strategy work. It’s about finding the answer to the question, “How can I double my revenue while reducing the number of hours I work in the business?”

Our goal is to implement a system that once in place, you can know the cost, utilization and fuel consumption for any machine, or truck, under any operating condition or project work task. This system, will tell you exactly what your cost is in 2 minutes or less!

But no one ever seeks answers to THAT riddle because they have themselves completely convinced that it’s not possible. Second reason: they stay “too busy” in their daily habits of doing the work instead of taking time to look up from the hole they’re digging to make sure they’re digging in the right spot.

Challenge someone on this and they will get down right nasty defending their belief. “What do YOU know? You don’t have to deal with the same clients/situation/family/employee issues that I have to deal with! Easy for you to say because you have the advantage of being in a different city/business/client base/family…”

Are you getting the picture? Could YOUR inner Asset Manager be hibernating? Could you be overlooking HUGE opportunities to gain more freedom, money, and easy success?

What’s YOUR story?

Now, a more important question…

Are you courageous enough to quiet your ego and start findings ways to make more money, attract a better quality of client, command outrageous fees, all while taking more time off?

If yes – and you can handle the heat – call me at 941-926-9260 ext.104. If I am on the phone or tied up, I will return your call. Be sure to leave me your cell phone number in case its more than five minutes until I can return the call.

Dedicated to your success,

Dan Rooks
President
Decisive Systems, Inc. "The Owning and Operating Cost People"

In the U.S. Call 800-232-5767
International 941-926-9260
drooks@decisivecost.com
http://www.decisivecost.com/

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You are not a "Joe’s Backhoe Service"

You are not a "Joe’s Backhoe Service" – So why are
you Managing Your Equipment the Same Way?

I was flipping through a copy of ENR and several other trade magazines the other day and was, yet again, disappointed by the unbelievable lack of information on how smart equipment owners are managing their fleets more effectively. I think it is this incredible void of good examples that makes this industry rife with equipment management methods that just plain suck.

Not one mention of machine Cost per Hour or costing methods. Not one headline. Not one specific, meaningful benefit of knowing and tracking cost. No case studies or testimonials.

What was there? Cute and clever ads asking you to buy a new machine or something. What about all the machines you already have? All that space wasted with meaningless fluff, and vague generalities – absolutely NO meaningful Machine and Truck Asset Management techniques to help make the machine owner money.

I’ve often wondered if more of the machine owners will ever wake up and actually hold each machine accountable for a measurable amount of work and profit instead of pumping millions of dollars into a black hole of terrible fleet & heavy equipment management practices.

Listen – as a business owner, you can’t afford to make dumb mistakes like this and the ones listed below. If you spend $1 today, you need $2 back tomorrow. Your fleet & equipment asset management practices have to be held accountable just as an estimator would be—if the estimator doesn’t produce, he or she get fired, plain and simple. After all, how long would you keep an estimator on staff who wasn’t producing winning bids or an estimator that was not bringing in profitable jobs? Would it be worth their salary and your time and effort to know that they are "at least getting your name out there?" Absolutely not – and your fleet management efforts and practices should be held to the same level of accountability.

The bad fleet and equipment asset management practices I am talking about are like these, to name just a few:

• Setting your price for a machine based on someone else’s price.
• Not knowing what each machine or truck in your fleet really costs you.
• Charging the same price for any and all type of work on a machine.
• Charging the same no matter which machine you use or bring to the job.
• Incorrect machine or truck costing based on fixed costs in place of Dynamic, ever changing costs.
• Incorrect machine or truck costing based on what your accounting system says it costs you. Accounting systems were never designed for costing machinery and trucks. Your Accounting system costs vs. real, true Dynamic Lifecycle Cost per Hour are entirely different!
• Incorrect machine or truck costing based on spreadsheets with partial costing information.
• Wrong Costing based on what some book says is your "Cost".
• Setting a price once a year (or maybe every three years) for a machine.
• Not tracking machine utilization rates and operating hours at least weekly.
• Not tracking fuel used and burn rates in gallons or liters for each machine by projects and work package.
• No Shop Rate established for In-house service. Comparing the cost you pay a mechanic of say $18.11 an hour to a dealer’s service rate of 75.00 hour and assuming this means you can do it cheaper.
• Using equipment management practices that worked when your company bought a gallon of diesel for $0.59 and a D-5 Dozer sold for $22,000.

Very small companies like our fictional "Joe’s Backhoe Service" with one or two pieces of heavy equipment might be able get away with not knowing their equipment cost, fuel and utilization information. But your company has grown larger. You have to run your company using the Best Management Practices available today to give you a hope and prayer chance of making money.
One of the problems you have today is that you may be showing a profit but loosing your shirt due to incorrect machine and truck costing and rates. I can help you with this, only once you understand why this statement is true.

When it comes to equipment management, you need to not only get the attention of your entire staff of senior managers, project managers, shop manager, estimators, superintendents and machine operators. You need to build trust and confidence and get them to respond so that they are moving in the direction of this change in business practices. That’s what I teach in the articles I write on this page, in the various software tools I sell, in the live events I conduct around the U.S. and in personal one-on-one engagements in your office.

Your equipment needs to generate a profit. If you don’t know your true cost (not accounting cost) and actual, accurate utilization, you cannot determine profit. Lowering cost and improving profits is the by-product of the type of equipment management methods I teach.
Some of our clients have started their business after working for a larger company. Unfortunately, many of the clients who come to me have to unlearn everything they’ve been taught to do by these big companies. They’ve been „sold" that you don’t need to know cost, only to learn what the competitions is charging. Being big is different than being good. They think that they have to meet all competitors’ price to get work. I will show you why this is NOT TRUE. As an example of this, recently I worked with a commercial contracting company doing $330,000,000 dollars a year and they never bid one job.

And if you want to unlearn the bad habits you’ve acquired in Equipment and Truck Asset Management and learn exactly what you need to do to generate a boost in new clients, sales, and profits, then get your butt and call me.

I will fly out to your company. Sit down with you and the senior managers of you company. Review your present equipment management policies and procedures. First I need to see the way you do it now. Next I will offer you a plan that is customized to your business that will get your company up to date. I will do all of this for $500.00 (Continental U.S. only) plus travel expense. If you don’t like our plan. That’s it. I go away and you go back to the way you are doing it now. No further expense or obligations.

Want references? Ok, I can give you a bunch. But come on, were talking about $500.00 and some valuable information that you can make up your own mind about. Do you really care if some guy in Bayonne, New Jersey or some place other place liked what I did for him. This is about you and your company and what I can do for you.

Right now, many days over the next 60 days are SOLD OUT (we are very close to 100% booked in December), and the days before and after December are going to sell out too.
You might guess that I cannot afford to fly around the country for $500.00 per day forever. This offer is for right now! I cannot promise you I can do this at this cost again. Once it’s gone, it’s gone. Do NOT miss this opportunity or you will be very sorry you did. The need to manage your equipment and trucks, and win more bids will never go away – so why would you let anything stand in your way of calling me.

One other thing you need to know. I cannot extend this offer to everyone that wants it. If we feel you will not benefit enough from this one-day engagement, I would rather tell you up front. So we have a few qualifications to receive this special offer. Call me and we will discuss if it makes sense for me to come you. If by chance you don’t qualify today, I will still try to help you by phone. So you have nothing to loose, Call me now, If I am tied up on the phone or out of the office, just leave a message with your cell phone on my personal extension 941-926-9260, Ext. 104. I will return your call.

Dedicated to your success,

Dan Rooks

President

Decisive Systems, Inc.

"The Owning and Operating Cost People"

In the U.S. Call 800-232-5767 International

941-926-9260

drooks@decisivecost.com

http://www.decisivecost.com/