Restoring Success Meets The Intentional Restorer: Nothing is Scarier than Scope Creep

I have three simple golden rules with a fourth to beware of that apply to the profitable execution of a scope of work.

  1. Get paid for what you do
  2. Do not pay more than you get paid
    1. Subcontractors
    2. Materials
  3. Manage your in-house manhours
  4. Mistakes happen and cost money; they must be managed to keep to a minimum.  Learn from mistakes and have a spirit of continuous improvement.

If we start with the premise of a job with a thorough and accurate scope of work, we now must execute it to company standards and objectives that may include quality, service, and profitability. The golden rules seem simple and like common sense; however, in my experience, it is the breaking of these rules that often result in missing the mark on profitability objectives.

Scope creep occurs in many facets and a variety of circumstances in our companies. In simple terms, it is when we deviate from the scope of work and fail to account for it in the revenues. It breaks the golden rules #1 and #2. The scope is typically the basis for a bill or estimate that represents the company’s revenues.  When we go outside the bounds of the scope without accounting for it, the operating results on the bottom line, can be quite frightening.

Scenarios

(Technician Level) Last Day of Water Mitigation: A technician is sent to pull the equipment, clean the living room carpet, and get a COS (Certificate of Satisfaction) signed.  

Homeowner: “While you are here, can you go ahead and clean the dining room carpet?”

Technician wants to please the very nice homeowner: “Sure, it would be my pleasure.” And so our well-intentioned technician cleans the carpet in the extra room, notices a red stain, goes to the truck for the spotting kit, proceeds to work on the stain and….

SCOPE CREEP is discovered when the job is two hours over in labor hours and the project misses the profitability target, or worse, that free service morphs into a nightmare.

(Estimator Level) Remove and Reset a Bathroom Vanity:  Homeowner decides they want a new vanity. The estimator/project manager is amicable as it does not seem that it will be any trouble to install the 36-inch-wide vanity that the homeowner will supply.  

Last day of job: Upon unwrapping the vanity, there is damage found to the cabinet. The homeowner asks the carpenter to just go get a new one in stock at the ABC Store. The carpenter goes and they are out of stock; the carpenter now must now schedule another day for pick up and to complete the tasks. This project is now all tricks and no treats and it gets worse when we discover the new cabinet is two inches taller than the old cabinet. Now, the mirror needs to be raised, the plumbing needs to be adjusted and…

SCOPE CREEP is discovered when this relatively small job is 10 labor hours over and has missed the profitability mark in addition to the customer experience turning into a horror saga.

(Executive Level) A Favor for A Friend: The owner or general manager calls all the staff to the conference room to make a special announcement, a good friend of theirs needs something done ASAP. 

When an owner, or a member of the people in a position of leadership team, brings in a project that is personal to them and wants the assignment bumped to the top of the list (regardless of what is going on) as a favor to a friend to make themselves look good, this sends a mixed message to the team. If you spend any amount of time trying to build a culture and a process that optimizes your ability to do things the right way, efficiently and with a touch of excellence, these “favors” demonstrate that there are exceptions to your values.

This favor for a friend is light on details and heavily loaded with unclear expectations. Because the normal processes have been overridden, the project is doomed to result in frustration for all parties involved.

SCOPE CREEP is discovered usually at the end of the project when the customer is unhappy, the production team is frustrated, and the owner is ready to howl at the moon. We can’t even talk about profit as there is none; this is a toxic dump of wasted energies. These projects are doomed from the beginning when they are set up as:

  • Scope = “Get it done.”
  • Budget/Price = “They’re good for it.”
  • Timeline = “Yesterday.”

The lack of an accurate and thorough scope of work and no expectations communicated to the team and customer has set the execution of the job to have the creepiest of outcomes.

Reasons Why this Happens

Emotional Discounting:  A friend of mine recently exposed me to this term and concept and I thought, YES! We do this often from doing little extra things without charging to rendering services free of charge. This article, How to Stop Offering ‘Emotional’ Discounts, explains it well and offers some tips on how to stop or control the phenomenon.

Not understanding the scope:  If those who are charged with executing the scope are not trained to understand it, scope creep is inevitable. Within most of the estimating systems used in our industry, a line item includes a very specific amount or type of activity, labor, and materials. If those executing the scope do not understand it, it will be challenging or impossible to manage it to budget and/or know when to communicate/address deviations in the scope through your company process (i.e. supplements and/or change orders).

How do we train and empower our team to prevent scope creep?

In the carpet cleaning scenario above, it’s important to understand the motivation. The technician wants to do a good job, they want to please the customer, and they should be empowered to find ways to make this happen. I try to train our teams with the mindset of:

  • Do It Right
  • Do It Efficiently
  • Do It Excellently

While well-intentioned, what are a few of the things that could make this carpet cleaning and red stain removal scenario into a Nightmare on Elm Street? Have you heard the saying, “No good deed goes unpunished?” Whether we are doing scope work, change orders, or complimentary add on, we need to document our scope, clarify the expectations, and track the cost (even if it is a no charge). Within the organization, clear protocols on any deviations of scope and/or supplements need to exist and be clearly communicated to team members.

Small favors like carpet cleaning could lead to our team owning a carpet that we cleaned as a gesture of good faith. That tiny red stain could become the Creature from the Loom Lagoon, leading to a spread of toxic ooze. Additionally, those two unaccounted for hours could set the technician back from their next project and the accumulation of upset customers grows into a horde of Zombies who want to eat our flesh.

One suggestion would be to bake in the carpet cleaning after a mitigation or repair project as a satisfaction add. The book Be Intentional: Estimating outlines the importance of developing a consistent estimating process to produce better insurance claims outcomes. Empower technicians to understand:

  1. The law of unintended consequences, not making them cynics but considering the big picture.
  2. Understanding that even if we do something for “free” we need to document, get authorization of the agreed scope/outcome.
  3. Communicate with the whole team so the impact to the schedule can be accounted for.

How to Minimize SCOPE CREEP

Training and education will help minimize scope creep. From understanding scopes to company-specific processes, training should be position-appropriate and timely to the individual’s ability to contribute to the successful execution of scopes. Some team members may be responsible to execute a work order or specific instructions and not necessarily follow a complex scope, following instructions is a skill that should be deliberately developed in team members and will help control scope creep that occurs when instructions are disregarded or not followed. Scary things happen when, People Don’t follow Instructions.

Metrics and Review Systems are important to be able to proactively manage scope creep and develop the team’s abilities. Red Flags can help you identify a job that may be going in the wrong direction, identify team members that may need training, and/or identify weaknesses in company systems.

Empowerment and trust in the team will help engage them in keeping scope creep under control. Empowerment includes giving appropriate authority to execute or manage deviations from scope. For example, different positions may have different levels of authority to fully execute a change order. Give the appropriate tools and resources and the ability to use discretion and exercise good judgment when appropriate.

Don’t be scared of scope creep; manage it proactively as a team. Although it is in our nature as restorers to go above and beyond to help those we serve through a difficult time, margins are thin and overhead continues to grow. We cannot afford excessive scope creep even when it is well=intentioned.

Thank you to Jon Isaacson, The DYOJO Podcast for collaborating on this edition. Some bonus thoughts and tips from Jon to help us enjoy Restoring Success…

Those in a position of leadership must lead by example or there is no standard.

In the scenarios involving estimators and owners above, the issue is with lack of clarity on the scope, expectations, cost, and duration of the project. While emergency response is inherent to our work, chaos should not be accepted and The DYOJO shares ways in which an organization can reduce dysfunction in their video on this topic.

When a client makes a “small request” for an alteration to their project, they often honestly have no frame of reference for how this new scope affects the existing production plan. Unfortunately, many estimators and managers don’t understand these impacts either.

In his book, Joy, Inc., Richard Sheridan shares a simple process that his software design team uses for project management. I was surprised in reading the book how many parallels there were between scope creep in these two disparate industries. To ensure that clients, team members, and the organization are on the same page, the aspects of the work are assembled on index cards. An index card associates scope with time budgeted to complete the task.

The design team regularly meets with the client. In these meetings, if a client wants to make a change without affecting the duration or cost, they must pull index cards from the project board. There has to be an equal reduction of scope/cost/duration to account for new items. This is a simplified account of the process but there is nothing better than making it visible and helping all parties to see the impacts of “just a little change.”

  • Doing it right as a company includes ensuring the client, carrier and your production team are clear on what the scope of work is as well as what it isn’t.
  • Doing it efficiently as an organization means that all parties in the process are engaged in being able to read the scope, execute the scope and communicate when there are legitimate deviations.
  • Doing it excellently as a team requires everyone to be trained to read a scope clearly, communicate consistently and hold each other accountable to doing the right thing the right way.

Restoration Operations Overview With iRestore – Free Webinar Sept. 29, 2020

 

Restoration industry experts Ryan Smith and Lisa Lavender will be hosting a free webinar on Tuesday, September 29, 2020 to discuss insights and ideas of managing a restoration company through iRestore Restoration Industry Software.

Let’s face it, managing an efficient and smooth functioning restoration company can be chaotic and overwhelming. With so many moving parts and pieces in a restoration job, organization can become a challenge. In this webinar, We’ll go over some proven tactics in managing individual jobs, relationships, people, equipment, vehicles and more. 

Whether you’re a seasoned veteran in the restoration industry, someone who’s just got started, or someone who’s considering joining, this webinar will be beneficial to your goals and vision for your company. iRestore Restoration Industry Software has proven time and again in being an effective tool in keeping the processes of your business moving, allowing you to better serve your clients. 

We look forward to connecting with you at the webinar!

Registration Instructions:

Register in advance for this webinar: https://tinyurl.com/yx8ps5lp

After registering, you will receive a confirmation email containing information about joining the webinar.

Who should attend: Restoration and Service Companies that are looking for a comprehensive software solution to run jobs and their company. Current iRestore companies who want to check out some new features or have any of their team members get an overview.

Access PDF here: iRestoreWebinar9-2020

The New Age of Restoration Training

One of the greatest challenges in our industry has been finding “good” people. Once you do find a good one, they still likely need training and on-boarding, the next challenge. The year 2020 will go down in history as the year of challenges and it is in the spirit of overcoming these obstacles that rapid developments and opportunities present themselves. Training, employee development, and on-boarding solutions that are now at the forefront of our industry and may be the keys to overcoming many of our age-old challenges including but not limited to:

  • Technical Training
  • Soft Skills, Operations, Management Training
  • Employee Engagement and Development
  • On-boarding
  • Accessibility of Training
  • Time/Resources/Money
  • And more

The Journey of the Restoration Technical Institute

As I reflect on the last six months and how it has impacted training for the Restoration Technical Institute, the individuals, and the companies in our industry, I cannot help but to think of one of my favorite stories about a farmer, “Good Luck, Bad Luck, Who Knows?”. As events unfold, we do not know what is next, we do not know the end of the story; it’s not a single event that will define an outcome, but rather a series of events.

2018: We began “dabbling” in the world of on-line training. We had long-term goals and visions. However, for the next two years, our focus and development were on our in-person programs and hands-on approaches to training.

February 2020: Our training center was full of cheer as we held packed classes of IICRC WRT (Water Restoration Technician) and IICRC ASD (Applied Structural Drying).

March 2020: We had to cancel five months of classes that were planned more than a year ago. Thankfully, earlier in the year, RTI teamed up with ISSA to provide training and education for the cleaning and restoration industries.

April 2020: RTI recognized that ISSA offers a very robust Online Learning Institute, which is stockpiled with courses and content that is needed by everyone in cleaning and restoration. Although we have been working informally with ISSA for several years, the time came to go to another level. We are now a training partner with ISSA.

ISSA has a history of developing content and certification, with self-paced online learning. CMI, a division of ISSA, offers a high-quality learning management system (LMS) that is full of content and tools to engage subscribers and manage the learning process. Cleaning, disinfection, sales, management, and safety are just a few of the related subject matters that ISSA and their divisions offer. It is with great excitement that we have been given the opportunity to collaborate with and add to the vast amount of resources and expertise available through ISSA and its divisions.

May 2020: As the IICRC adapted, many of our courses became approved for online live stream. We hosted our first online, live-stream water class.

June – September 2020: The last several months have been an amazing whirlwind with the objective of offering accessible and affordable training and resources globally. The highlight reel of the last couple of months includes but is not limited to, what I describe as our continuous learning, adapting, and pivoting to the world, opportunities, and most importantly to the demand and expectations of those we serve:

  • LMS Subscription: Working diligently on content and curriculum to serve our industries.
  • Instructional Design: Learning about the technology, approaches, and the discipline of instructional design. Collaborating with instructional designers to develop courses and content that are effective for today’s learners.
  • Continuously evolving our live offerings both on-line and in person.
  • Self-Paced Course Development: Creating content, videos, and courses to present.

Learning Management Systems & Self-Paced Learning

In a Fresh Look at Online Training, you will gain some insight to the general training landscape, the benefits and some tips to utilize the new opportunities available to you and your teams. Although e-learning is not new (in 1924 the first “automatic teacher” was presented), if you have some reservations about the effectiveness of self-paced learning and learning management systems, I defer to many other industries in a variety of disciplines who have successfully utilized this approach and have enjoyed positive outcomes and some statistics:

Events that initially seemed like bad luck for industry training have turned into really, good luck. Learning management systems and self-paced learning are two viable solutions to some of our industry’s greatest hurdles. If you have not experienced these types of training approaches, it is not what one may imagine when you think of a recorded type course or training. It is not just a recorded voice and power point slides. Some of the elements you may see within this realm include but are not limited to:

  • Gamification: Content may be presented in interactive ways that help teach and engage the learner.
  • Knowledge Checks: Interactive and well-timed knowledge checks are used to engage the learner, give confidence in the understanding of the materials, and reinforce important learning objectives.
  • Video Demonstrations: Videos help to mix the media and can be used to communicate and tie together a variety of topics. Video demonstrations are particularly helpful to present practical applications and demonstrate tactile skills.
  • Micro-learning: As an approach, you may find content divided into small sections of approximately 10 minutes or less. This approach is getting a great deal of attention based on a variety of results and feedback from learners.
  • Experienced instructors guiding learners through curriculum and demonstrations.
  • Soon, expect to hear more about virtual and augmented reality as the technology and its availability is rapidly evolving.

The training world is evolving rapidly and could help us all achieve more, Restoring Success.

Originally Published: R&R Magazine Online

Transparency in Our Restoration Companies

restoring success, restoration management, restoration business management, restoration business leadershipChelsea Mihalko and Lisa Lavender, M.T.R., M.F.S.R., M.W.R.

 

Last month’s Restoring Success, Morale and Engagement Built on a Foundation of Trust, we explored the importance of trust and the leadership role in fostering a culture of positive morale and engagement. Stephen Covey’s Speed of Trust presents 13 key behaviors that are instrumental to us as individuals and leaders in building and fostering trust. One of these behaviors is to create transparency:

Behavior #3: Create Transparency

Be real and genuine and tell the truth in a way that people can verify. The opposite is to obscure, and the counterfeit is an illusion of pretending things are different than they are. You can establish trust quickly by being open and authentic, erring on the side of disclosure and not having hidden agendas.”

Transparency is a broad concept and behavior in which some may struggle on finding the right and appropriate level of in their organization. As a side note, I firmly believe that this behavior and competency is most important in positively leading the team through 2020, the pandemic, and the continuous challenges. Metrics seem to be a common area where the best-intentioned of leaders have concerns. It is important to consider that not demonstrating the appropriate level of transparency, even with numbers, can have a detrimental unintended consequence.

A few considerations:

  • Trust: If we agree with Covey, that transparency is a key behavior of trust and that it is the leader’s job to extend trust first; we are behaving contrary to building the foundation of trust when we are not transparent.
  • Accountability: It is difficult to hold others accountable without giving them access to the appropriate information.
  • Open and Constructive Feedback: Transparency is a key behavior to have a culture that embraces open and constructive feedback on job and company performance in the spirit of continuous improvement.

After a great conversation about trust and transparency with a restoration company leader and friend, I asked her to share her thoughts and perspective.

Chelsea Mihalko Trimbath presents the following on trust in our restoration companies and being transparent with numbers:

What do most relationships thrive on? What drives loyalty? What is stability built on? The answer is TRUST. Stability, honesty, loyalty, drive and motivation are all qualities managers wish to see in their employees. These qualities do not necessarily exist or at their peak on the first day with a company. If we are lucky, after years of service, these qualities develop, and the relationship built on trust grows.

Our goal as leaders should be to build trust with our employees, to show that not only do we trust them and that they can trust us, but also, that we are dedicated to seeing them excel in every aspect of their life. One way to accomplish this type of relationship building is through transparency. Now wait, before you roll your eyes, let’s dig deeper.

Transparency comes in all different forms at all different levels. We cannot expect some of the people in our organizations to understand what overhead consists of just as we cannot expect some people to understand how to perfectly install a wood floor. Members of the team contribute to the organization in a variety of unique ways but leading someone blindly is a path to failure. Failure not only showing in your bottom line, but also, failing the individuals by not motivating or giving clear objectives. Transparency can be instrumental in engaging and holding the team accountable.

As a leader of an organization, it’s our job to know the direction of the company and have clear goals along the way. Members of the team should have clarity of objectives and transparency in information necessary to reach and manage their individuals and company goals.

Many goals, quotas or milestones are measured in numbers in our business.

  1. Labor Hours: Increase productivity through responsibility by being transparent.

Labor hour goals are simple numerical goals that can be conveyed throughout the organization. If a certain task should take 5 hours to complete to hit average profit goals, we can set the expectation as 5 hours. A motivated and skilled employee that can finish the job in 3 hours can still be motivated by the 5-hour max and enjoy the satisfaction of beating the goal and potentially increasing his value to the organization. Being transparent with the allowed maximum hours gives individuals the opportunity to apply themselves and work towards the goal and potentially create drive and innovation to complete the work in the most efficient and effective way possible. Providing employees with the opportunity and information to make decisions that impact themselves and the company cultivates trust.

  1. Employee Cost – Build relationships through genuine understanding

Have you ever had someone come and ask for a raise that was just given an extra week of vacation and the latest new model iPhone? Does that person truly know what they cost the company? Do you really know what that person values as an employee? Another opportunity for transparency! An employee should know and understand the value of what they are being paid including their wage, benefits and perks, including but not limited to: vacation, health insurance, retirement, life insurance, phone, vehicle (including gas allowances and insurance), computer, etc. Educating the team and being transparent regarding the costs of things can create a better platform for open discussions. For example, during a performance review, there may be an opportunity to learn that someone highly values their family time and prefers additional vacation days rather than a monetary raise. These meaningful conversations will help build a culture of trust and a depth of care from management.

  1. Overall Profits – Increase innovation and motivation

This one is scary for a lot of business owners. They want to keep their numbers under tight wraps and closed away for only their eyes. But going back to the above point, how can we expect our managers to hit company goals without giving them all the information to get there? Direct project managers will be better able to control their jobs if they have access to job profitability numbers, budgets and goals. They will be more equipped to negotiate material pricing, providing budget selections and understanding labor hours to meet profitability goals. Transparency on labor hours inflated costs (per hour cost per employee + benefits) so they are better able to choose who will do the best trade on each job. Transparency to our estimators and project managers about the cost per lead (marketing), any software or management fees per job (overhead). If owners plan to place high standards on their managers, the managers will perform better with a general understanding of business operations and costs. And while owners may choose to keep certain numbers under wraps, profits, expenses and overhead per job should be direct and easily accessible so managers can be checking in constantly. Providing this open communication will foster innovation and allow for more creative flows to happen. Mangers will feel empowered knowing they have the authority to make decisions that directly affect them and the company, their confidence and motivation will grow along with the numbers.

Regardless of your position about transparency, it is an important behavior to reflect upon and consider. For many reasons, it may be one of the most difficult behaviors as a leader and one that causes concern or fear. If you have a sense that being more transparent can help foster trust and a positive culture, take one small step at a time.

https://www.randrmagonline.com/articles/89054-transparency-in-our-restoration-companies

Morale and Engagement: Built on a Foundation of Trust

July 2, 2020

It is difficult to challenge the notion that good employee morale and strong engagement is important in our industry. In fact, being “happy” may be critical to our customer service. We spend much of our time at work, have 24/7 on-call rotations, and serve people who have experienced disaster, so why not do it with joy? In Is Your Organization Happy?, you will find some considerations and tips about creating a “happy” environment.

Morale and engagement are complex and have many contributing factors. Procedures, best practices, training, etc. will have limited value to your company if the individuals and team lack positive morale and are not engaged. Although there is much we can do in our day to day for Employee Morale Year Round, consider the notion that morale and engagement are built on a foundation of trust.

Trust is a big word that has many elements, synonyms, and influences in a variety of aspects of our organizations and lives. At times, there may be relationships within the organization that have voids of trust. If trust issues become widespread and unresolved or there becomes a feeling of distrust towards the organization itself, it will be challenging to successfully employ any morale-building and engagement initiatives.

Imagine for a moment…

  1. You are with a group of people you trust and are working together, collaborating, getting things done; you probably feel good and happy. If one of these people gives you a cookie and a note thanking you for a great job, it would make you feel good, happy, and encourage you to continue to contribute to objectives or the purpose.
  2. You are with a group of people you do not trust. The mistrust could stem from a variety of reasons, behaviors, and experiences with the people in the group and/or you may not even be clear on what is causing the mistrust; it is possibly just a feeling. If one of these people give you a cookie and note thanking you for a great job, may feel like there is an alternative motive, suspicious, and may not even want to eat the cookie!

Same gesture, same note, but different impact based on trust.

A culture filled with fear and mistrust will be a culture with a disengaged and unhappy team. Feelings of fear and mistrust could be a great motivator when perhaps running from an angry bear but imagine going to work every day feeling this way.

Start with reading “Speed of Trust” by Stephen MR Covey. If you are pressed for time and want to fast track your organization and team, watch the video: The Speed of Trust – Stephen M.R Covey @LEAD Presented by HR.com. You will gain the ability to understand, articulate, evaluate, and build trust within your organization. He presents what he refers to as three big ideas:

Trust is an Economic Driver

Trust is the #1 Competency of Leadership

Trust is a Learnable Competency

Where does it all begin? According to Covey, it starts with leadership.

#1 Job of Leaders

Inspire Trust

Give Trust

In building morale and engagement in your company, start with the foundation, trust. A person who is expected to engage in the mission, values, and goals of an organization needs to trust the organization and the leadership. As Covey breaks down the elements of trust, he lists the following “behaviors”:

1. Talk Straight
2. Demonstrate Respect
3. Create Transparency
4. Right Wrongs
5. Show Loyalty
6. Deliver Results
7. Get Better
8. Confront Reality
9. Clarify Expectation
10. Practice Accountability
11. Listen First
12. Keep Commitments
13. Extend Trust

These behaviors are a great place to start if evaluating or building your foundation of a happy, healthy, and productive work environment. The men and women in our restoration companies are the most valuable and important assets. They deserve to feel good and happy at work.

Share topics and ideas that you would like to read in future Restoring Success editions.

Happy Restoring Success.