Archive for February, 2009

The 4+2 Formula for Success

In an old issue of Leadership Strategies (www.briefings.com/leadership) a small insert caught my eye:

The 4+2 formula for success quotes Harvard Business School professor Nitin Nohria who concludes:

“Success requires leaders to be masters of four fundamental business practices – stategy, execution, culture and organization – and excel at two of four secondary functions: talent, leadership, innovation and mergers & partnerships.”

She goes on to say “you must perform at least six of those functions well to be successful.  To do poorly, all it takes is one of six badly executed functions.”

And I ask you: which of the four fundamental business practices still need your attention?  And which 2 (out of 4) secondary functions are you great at?

These answers should help you better focus on your management goals for 2009.  Good luck!

My Father’s Files – Estimating in the “Old Days”

My father, who died in 1977 at a very young 54 years, was a management consultant to airports.  During that time he amassed a huge file of articles, many of which pertain to the construction industry.

A recent finding was entitled “Estimated Costs < Final Costs: Why the Difference?”.  It was written in 1964 by a chief estimator for Bank of America who says boldly “The proper application of the square-foot cost analysis method will result in a ‘reasonable’ estiamte of costs.  Until the reliability of crystal balls is improved …. reasonable estimates are all we have.”

Although the article discussed in great detail the applicaton of a square foot cost estimating procedure, the prospective building was a tilt-up warehouse without doors and windows.  This is not exactly the same building which most remodelers find in tackling a new estimate.

However, the idea is the same:  find and use reasonable square foot estimates for your remodeling projects, differentiating by type of remodel (kitchen/bath/whole house/basement, etc) and modifying based on finish levels (A/B or C).  Put together a portfolio of photographs from recent (within the last 3 years) jobs of the same type,  stating the level of finish.  Protect the owner’s privacy by not including the owner’s name or address nor the finished price for the project.  When discussing a new project with a potential client use the portfolio to help them get an idea of the range of square foot prices and how they vary depending on finish, access, level of detail, etc.

So even though you don’t have that crystal ball the estimator hoped for in 1964, you can still maintain client confidence by focusing on reasonable square foot prices based on real-time history.

Train Wreck or a Plane Crash?

As an economics major I’ve watched the economy ‘unravel’, to use Paul Krugman’s term, with a sense of increasing fascination combined with dread.  I’ve often called it a ‘slow train wreck’.  As a consultant to the remodeling industry I’ve noticed  a certain tension in the air since spring 2008 as even the most successful and knowledgeable  owners of companies and leaders of the industry held fingers to the wind in an attempt to ascertain speed and direction.  And having recently finished “Outliers” by Malcolm Gladwell  I was struck by the similarities between his description of landing a jet on a slippery dangerous runway in the middle of a windstorm and our current economic  situation.

Dictionary.com defines “wind-shear: a  condition, dangerous to aircraft, in which the speed or direction of the wind changes abruptly.”  On the same page it suggests comparing that definition to “Micro burst:  a sudden, violent downdraft of air over a small area. Microbursts are difficult to detect and predict with standard weather instruments and are especially hazardous to airplanes during landing or takeoff.”

So between these two metaphors: the train wreck or the plane crash – which more closely describes what we’re experiencing?

I’m leaning toward the plane crash because of the greater complexity of maintaining control of a plane and its greater vulnerability to erratic phenomenon – wind shear among them.  The article below from Time Magazine lists the 12 primary causes of this crisis according to its author, Justin Fox, and seems to support my analogy by the sheer magnitude of the combined failures, any one of which alone might have led to a minor train wreck instead.

http://www.time.com/time/specials/packages/article/0,28804,1869041_1869040_1869030,00.html