Bob Bell, owner of Bell's Remodeling in Duluth, Minn., has two employees, both of whom have been with him nine years. The company does about 50 jobs a year for an approximate volume of $440,000. It uses subcontractors for electrical and plumbing, and sometimes excavation and cement work. Jake Schloegel, owner of Schloegel Design Remodel in Kansas City, Mo., has 20 employees. The 24-year-old company does about $3 million a year in kitchens, baths, additions and whole-house remodels. Bell and Schloegel discuss with Jud Motsenbocker the challenge a company owner faces in finding the happy medium between micromanaging and letting employees run projects.
Jud: Why is it important for a manager to be hands-on?
Bob: You really keep the pulse of what's going on in your business. You know what's happening per job and with your employees. The larger you get, the more delegation you have to do.
Jake: As my business started to grow and I started to delegate more, I started to see people doing things the way I wouldn't do them, and at first, that upset me. Over the years, I learned how to put systems in place.
Jud: Why should a manager be hands-off?
Jake: One, to facilitate growth. The second thing for me was quality of life. I could work 50, 60, 70 hours a week if I wanted to, or I could bring in people to help me.
Bob: If you want to spend more time on managing the business or running the business rather than running the day-to-day, then hands-off is the way to go.
Jud: Does too much hands-on management limit professional growth for you and your employees?
Bob: If you want to stay where you are, then you try to use hands-on management to hone the skills to make your company the size you want it — a smaller company but more profitable. I don't feel it takes away from professional growth. I bring my two employees to shows occasionally and have education locally for them.
Jake: If you're setting goals and creating plans, you have to let go and let people either succeed or fail. If they fail continuously, then it's time you get rid of them and get somebody else. As I was starting to do hands-off, I had a tendency to come in and rescue a lot.
Jud: I've been down that road. Does hands-off management result in reduced quality?
Jake: My quality of product actually improved because I was never as good a craftsman as I thought I was. In terms of the service we deliver, if you don't have the means to follow up and to monitor, I think you're set up for failure.
Bob: If you have the systems in place and have checks and balances, it can work just as well and maybe improve in some cases.
Jake: We've established some standards,and through our training of these standards, we hope we are communicating our expectations. I still go out to every job site once a week, and I'll see what's going on, talk to the homeowner. At the end of the project, we have a walk-through system to bring the job to closure, and that's documented. It's setting the expectations, monitoring and follow-up.
Jud: Can you just train people to do a job the way you would do it?
Bob: I try to say, "This is how I would do it. If you can come up with a better way, a more efficient way, go for it." They're going to work harder to accomplish something they've come up with on their own than if I say, "Do it this way." But it has to be monitored. How do you develop any training manual that covers everything we deal with and all the types of people we deal with every day? It's pretty near impossible.
Jake: You try to train as best as you can, but they're still going to throw in traits of their own, maybe good, maybe bad. We struggle with the training issue quite a bit. Training is expensive, and there are so many facetsinvolved in our work.
Jud: Do you think employees get lazy if you don't manage them closely?
Jake: Very old Theory X and Theory Y of management, that blue-collar workers are all lazy thieves that'll steal from you and you've got to watch them, or that no, they're all productive, and we manage them to less productivity. My approach is that the people we hire are good people, and it's our job to keep them that way and not let them slip into less productive ways. Based upon our database of costs, we track how productive people are relative to the quality of work they produce.
Bob: I would go along with that and try to give them additional incentives other than their paycheck. It's not the answer to everything, but it helps spark them a little bit. "Gee, they really appreciate me. I got a bonus this quarter for doing good work and doing it on time." Incentives may help keep them on track.
Jud: Either one of you run into the problem of employees who get resentful if you try to manage them too closely?
Bob: Occasionally. Then you have to step back and look at what you're doing. You get so far into the trees, you can't see the forest. Sometimes you have to learn to step back and say, you know, maybe he's got a better way, or maybe I should butt out and let him do what he's doing.
Jake: Five or six years ago, we started muscling up on our systems and procedures, and we've pretty much had a complete turnover in our lead carpenters. We were kind of baby-sitting through the '90s because we'd take a good carpenter and make him a lead carpenter, and he really wasn't a lead carpenter. You know, they are to start and finish the project and take care of it during the warranty period. We had a fair amount of crybabies, whiners who weren't buying into that. As we set our expectations and held them to those expectations, they became unhappy, I became unhappy, and we separated.
Jud: Should there be a middle-management area to make this work?
Jake: Middle management to me now is having a production manager operating lead carpenters. We're thinking about eliminating the production manager's position and just having project managers, where our salespeople work directly with project managers, and our project managers work as a team on hiring and management issues of carpenters and laborers. We're looking at eliminating the lead carpenter system as well.
Bob: For me, it would be an extra expense, unless you define middle management as a part-time accountant who comes in and does the paperwork and sends out the thank-yous and evaluations and receives calls and stuff like that. The more layers you have, the more potential you have for problems.
Jud: Is the lead-man concept a good hands-off idea?
Jake: The lead carpenter system was designed for projects smaller in scope and not as complicated as some projects we're doing today. I want a project manager to own his project so that he'll carry the vision of the company and the culture and all our expectations. I couldn't get it with a lead carpenter. That's why I needed a production manager. But that's expensive. So we're going to this new process where we've got project managers who focus on management.
Bob: I like to have my two guys on the same job. Maybe their productivity isn't as great, but I'm more comfortable from the safety aspect. I'm not a real hard-driving production manager. If it takes them a little longer to do the best job possible, that's fine. They follow that and keep my customers happy.
Jud: How big a company do you need to have to be a totally hands-off manager?
Jake: When we started reaching the $1.5 million mark, hands-on really became more demanding. When we were $1 million, $1.2 million, I was still making daily calls to the guys to make sure they had their materials lined up, coming on the job each day. But as the company continued to grow, I realized I wasn't really doing a service to my clients, and I didn't have the quality of life I wanted.
Bob: The quality of life, how much you can handle and your customer service are more the qualifying determination than a specific dollar volume. It depends on each individual, at what point they want to start delegating and enjoying life.
For audio clips of this conversation, visit www.HousingZone.com/HZradio.remodex.