“How do you change culture?”
Let’s face it. It’s not impossible. It’s not easy either.
Small businesses may want to change their culture for many reasons. I know of one small business that desperately needed change. It was an Engineering business.
I asked the small business owner. What’s your top challenge you face in your industry?
And he told me “We missed sales projections this year. And we missed gross margin targets.” That’s a double whammy! I said.
So I thought of 3 ways I solved a similar business problem for a different client. And it worked. Let me share it here.
1) Focus On Customers Long-term
It’s easy to go for short-term gain when margins slip. Instead, focus on long-term customers. Even at the cost of short-term loss that’s favorable.
Match competitor offers. Even if it means greater scope for projects, book them.
Find ways to cut fixed costs. Increase efficiencies through Lean manufacturing methods. They’re valid for every business, not just engineering.
Book new projects using a risk review method. It doesn’t need to be complex. You could use a simple graph shown here.
Meet your sales team. Get your project managers to approve proposals.
Tighten contracts.
Check skills available in your business. Check if you have the right numbers of people to do the work.
Decide if you should do the project first. Commit later. Continue focus on existing customers. Harvesting is 10X easier with existing clients.
2) Shift Focus To Culture
Get your team to innovate. Answer more “why” questions in your methods. Focus on innovation means a strong project focus.
Give project managers full authority to carry out work. Make teams report to them.
Make project managers expect change orders. Then, get customers to sign up. Clear up expectations.
Coach them to solve customer problems for long-term. This could take time. Invest in it, anyway.
Reward people on both behavior and results. Make rewards forward-looking. Consider future skills small business will need.
3) Review Projects Consitently
Use team meetings effectively. Meetings end with actions. Standardize the content.
Make the right people take part in project reviews. No one will accept work if it isn’t in their area. Include project managers, contracts and finance at the least.
Ask questions so teams get better next time. Include risks in the review. Check their chances to happen in the future and how they could affect results.
Make it clear there’s no penalty for candid answers. Explore beyond the project. Check if we can sign service contracts beyond the warranty of the project.
These 3 steps worked for an Engineering small business. They cleared the confusion and made the small business more competitive. Apply them and check it out for your small business.
