21. Using Systems To Maximise Efficiency With Dennis Wong

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Hello and welcome to the Professional Builder Secrets podcast, a podcast by the association of Professional Builders for building company owners, general managers, VPs and emerging leaders. Here we discuss all things running a professional building company from sales, processes, financials, operations and marketing. Today I'm joined by Dennis Wong, executive business coach and mentor for the association of Professional Builders. Dennis, thanks for being here today.

Hi Bosco. It's absolute pleasure to be with you as well. Thank you for inviting me.

Well, Dennis, tell us a little bit about your background and how you got involved with the association of Professional Builders. Tell me a little bit about you.

I graduated from university with a degree in business and I majored in accounting and finance. But I like to consider myself a pretty rounded individual because I worked for over 38 years in a whole range of different roles, everything from accounting to IT training and development, management consulting, HR compliance and now business coaching. And my last full time role was actually as an operations manager for a commercial builder and I was actually there for 10 years and that's where I really developed a deeper understanding and appreciation, I guess, for the construction industry.

Well, it sounds like you bring a lot of knowledge and experience to the different facets of the construction industry. What compelled you to to join the association of Professional Builders?

Well, I guess being business coaching for a number of years, what attracted me to the APB was really the opportunity to combine both coaching and working with people in the construction industry. And I think the other thing was just having access to the whole vast array of training resources and tools that the APB developed that my clients could basically utilize from day one was I think was really compelling for me as a business coach.

So what do you love the most about coaching? You're around people, you're talking to people digitally every day as well. What's the one aspect that you really look forward to when you start your day?

You're right about talking to people every day. I guess coaching has given me a chance to really learn something new every day. I think that's sort of something that as a coach and as a trainer from years back, it's something that I've always try to strive for, continue learning as they say. So when you're talking to builders every day, you're learning more about their businesses, a little bit more about them as individuals. And it's really interesting to find out what builders do differently to each other in terms of, you know, what works and what maybe doesn't. So the learning has added to my personal knowledge base. But the other aspect is I also enjoy working and helping business owners because I not only want to improve their businesses, but at the end of the day, if I can help them improve or make a difference in their lives in a positive way, that's extremely rewarding.

What does, you know, give us a snapshot of what does a normal day look like for you? And do you have normal days?

That's always a good question. I guess typically my workday starts with a short meeting each day, and whether that's with my immediate manager or we have a team meeting or a meeting across the organization, then it's pretty much anything can happen. I would actually go to a typical week. My typical week could include a number of coaching sessions with clients. That includes prepping beforehand as well as setting action items for my clients at the end of each session. Now, the rest of my week might be involved contacting members of the APB who are considering private mentoring, or I'm actually running workshops, strategy sessions and workshops as well during the period. And then of course, there's a bit of admin that you have to do when you're working in any business and that kind of stuff, but definitely keeps me very busy.

You deal with so many different builders and you're talking to different builders from around the world as well. I'm sure that there's some common challenges that you've identified or come to terms with. Can you tell us a little bit about some of these pain points that builders face today?

That's a good question, because I, you know, in working with builders from all over the world, I generally see the same kinds of problems or as you describe, pain points coming up all the time. And they might be things like not closing enough sales, not being able to charge enough on their jobs, adding enough profit margin to their jobs, not having enough good quality leads on a consistent basis. Another one might be not really understanding the financials as well as they would like to in terms of making good business decisions. Also, the challenge of managing that ideal work life balance, that's a big one for a lot of building owners. It's an industry that creates a lot of stress, and I'm sure a lot of our listeners out there will probably identify with that.

It sounds like you're alluding to builders and being efficient, I guess, with their time. And it sounds like I'm getting. What I'm getting here is the theme is efficiency seems to be the biggest challenge here.

Yeah. I think for a lot of our building members and clients is that they are generally very time poor. So if you're trying to be efficient, you need to do more in the time you have available or if you choose to actually work less, you have to get the same amount done in less time. So that's all about efficiency.

Right. So why is it so important for builders to optimize for that maximum efficiency to grow the business?

It's all about creating output. If you basically are working really long hours, a lot of building business owners is probably struggling with balancing the amount of work that they are doing when they're working in the business. And they really are looking at ways that they can spend more time to look at the business more strategically and more holistically. And in order to do that, they need more time. If you're already working between 50 to 80 hours a week, where are you going to find those extra hours? And that puts a lot of pressure on them and then their families. So they need to become more efficient and more effective in what they're currently doing on a day, day to day basis.

Let's dive a little bit deeper into that. You talked about they need to be really efficient. Where should builders look to create better efficiencies? You referenced time as being, you know, that, that key factor here. Are you asking them to record what they do or have a timesheet? Where should builders start when it comes to looking at efficiencies?

Well, that's an excellent question as well. And I think when you look at efficiencies, I think we look have to look at it from two different points of view because one is really at the individual business owner level and one is really at the overall business level. So there's, you know, efficiencies at the individual level and efficiency at the business level. Now if you first look at the personal level, I think what you need to really look at is where is it that you're spending most of your time? Are you doing the kinds of tasks and activities that you're not so good at that someone else in the business might actually do better and maybe even faster than you can? So you need to consider tasks that are absorbing most of your time and then really look at it and say, is there something I can do to either eliminate those tasks, can I automate it, or can I actually delegate it to somebody else. So those are the kinds of avenues that you might take. Now, on the business side of efficiency, I think pretty much every builder wants to build on time, on budget, and at a high quality, because if you can do that, you're going to maximize your profitability. You're going to minimize costly reworks eating to your building schedule, which just delays the completion of a job. So on that business side, you really need to look objectively at the systems and procedures across all areas of the business. You know, that means sales and marketing, construction, hr, financial management, and what you need to do there. You need to identify where cracks might have formed in the business that are really costing you time and money and look at ways that you can then eliminate them. Because in building, time is money. You need to get it right the first time, and you don't want to keep going back to a job to rectify defects. Delays in completing a job just reduces your net profit on the job. So the idea is you need to get in and get out and, and move on to the next job as efficiently as you possibly can.

Is there a podcast blueprint on a process for builders? Can you give me a quicker version of what the process looks like when it comes to maximizing this efficiency? Where do they start?

The starting point is really doing a sort of audit on their business systems and processes. Because at the end of the day, until you've got system processes in place that are repeatable, you can't really analyze how efficient they are or look at ways to improve them. So the starting point would very much be that, I think, do that audit of your internal processes and see what's actually happening in business right now and then identify those gaps.

So you, what you're talking about is analyzing the opportunities that may come from that. And then what happens when you start to see those gaps?

What do you do next? When you start seeing those gaps, Then what you need to do is the first step is analyzing the gaps, and then the second step is to then start putting together a process to minimize the gaps or strategy to minimize the gaps. It's the same strategy again. It's either you're going to eliminate the gap if you can, you want to automate the process if you can, or you want to delegate the process to somebody else so that you don't need.

To worry about it and you follow that order as well. Eliminate first and then automate or delegate, or do you sort of go with what works best?

I think the order makes sense because if you have a problem if you can eliminate problem, then that's in the story. You don't need the process to fix it. But if the problem exists and you cannot eliminate it, then the other two options are left. You either look at how can you streamline it and make the problem, minimize the problem, or can you then pass it on or literally pass the box to somebody else to then take care of it.

Now, as a coach, I'm sure you get a lot of excuses or you get a lot of reasonings as to why people aren't being efficient. What are some of the most common excuses that you may hear and how do you overcome these excuses or how do you create that transformation?

That's always a good, a good, challenging question. I think for a lot of, a lot of our clients, the first excuse that normally says, oh, you know, that's the way we've always done things. And it's very hard to instill a new process, a new habit. So I think. So the starting point there is that we really need to change the mindset and we need to help the, our clients to understand that there is actually a better way of doing things. And just because you did the same thing five years ago, doesn't mean that you should just continually blindly repeating the same process. Have the mindset being open minded and have the mindset that something in the business can always be improved.

Now, you must look at metrics or you must look at some form of measurement to tell you if a building company is efficient or is maximizing their efficiency. Where do you, Dennis, where do you look at or what type of metrics or core measurements do you gauge that gives you an indication that a business is doing well or what are the levels of performance when it comes to efficiency?

Yeah, look, metrics are obviously a valuable tool to measure efficiency. And depending on what areas of the business that you're trying to measure, you would then come up with a number of different metrics. So for example, if you, if I was looking at the construction side of the business, some of the metrics that you could use is, you know, you might look at the number of defects coming up on a particular job and how much time it's actually costing the business to rectify the defects. Are they spending weeks or even months after the job's been officially handed over still rectifying these minor issues that just drag on. And really how much cost is actually, is the business incurring in rectifying these defects? So those will be some of the areas that I will look at in the construction side. Now in the estimating and the sales side of the business, for example, you might want to look at your conversion rate. In other words, how many jobs are you winning, how many jobs are you losing? So your win loss ratio. The other thing that might be very efficient in terms of looking at the estimating side is how many contracts versus total contract submitted are you going through at the moment. Or there is another term that we use is called estimating velocity, which is the number of contracts submitted over the working days. So that that way you can actually measure the efficiency of your estimating staff. And another metric that you could use in terms of overall employee productivity, because we know that in construction it is quite labor intensive. One of the metrics you can use there is calculate your average revenue over the total number of hours worked. So in other words, you get a revenue per hour worked for every member within your.

You build a company, you must come across a lot of blind spots for builders as well. Being a coach, what are some of the most common blind spots or hotspots that builders should be paying attention to? You know, it sounds like financial awareness and metrics are really important, but you know, if you had to rank the top two or three core blind spots, what would they be?

Definitely financials. I think builders, a lot of builders are very skilled craftsmen. You know, they get industry because they're passionate about creating and building something from scratch, but nowhere really in the journey are they sort of did actually go through any form of training about learning how to be a business person. And financials and numbers is generally not something that a lot of builders are naturally comfortable with. So it's something that some have to learn about. So I find that probably financials is probably the biggest blind spot in understanding what the numbers tells you about their business and the story and identify potential issues. The other area I find is that builders can also sometimes be a little bit overconfident and thinking they know everything. If you have that kind of mindset, then you're not really going to be open to new ideas or areas for improvement. And I think that can be a major limiting factor for a lot of business owners.

So it sounds like you're also trying to help them to get out of their own way. How do you have those conversations? Because I would assume that's a pretty difficult conversation to ask a builder to self assess and get themselves out of their own way and change what they think they know. How do you create that awareness of that ability to go, perhaps I need to be doing something different?

I guess as a coach that's where you try to create that aha moment for them. You don't try to tell them how they should be doing, but you hope you lead them down that journey where they discover and come to that realization themselves and say, oh, so that's, you know, I've been doing that, you know, that same thing for the last five years and now I've realized that I can do it completely different. It's going to make a huge impact in my business and suddenly that becomes important and that's their light bulb in the head moment.

So you must rely on data then to get to that sort of acknowledgment as well.

Yeah, absolutely. So a lot what we do in our private mentoring program is that we do have to rely on, we talk about metrics, the numbers. So a lot of what we do is data driven. So we rely on evidence that actually shows us what's happening in the business in order to measure, be able to see a measurable progress so that we know that the business is on the right track. And if the numbers are not improving, then we need to help the business owners to continually tweak and adjust their plan a little bit to help them look at those improvements. And we then track those improvements to then confirm that we're actually making good progress.

Now, Dennis, there's an old saying that says that it's easy to get to the top, it's hard to stay there. Is it the same with optimizing for maximum efficiency? What happens when you have taken a business through the efficiency points and they are becoming efficient? How do you keep them consistent?

In most businesses, I think you go through that 80, 20 rule. You can get 80% of your improvements with really 20% off the effort initially, but it's then hard to stay the course and then find that last 20% improvement. And you're spending a lot of time and effort, 80% of time and effort, just to get that little extra improve, 20% improvement. So I think the same applies for any building business or pretty much any business in general. So the key thing is to build the systems and processes that are going to help the business to be systemized so that it starts to get repeating. And that's where we get the efficiencies from. And like any, in terms of where the, where the business evolution is, as they become more and more systemized, then the opportunities for further improvement starts to decrease. And I think what you said is quite right, that it's, it's going to be, it's more challenging and takes More work to identify where those extra 20% improvements are going to come from. So we can generally help our clients get up to major improvements very quickly. But it then takes a lot more time and effort to then do that fine tuning and tweaking for that extra improvements at the end.

So you talked about systems and systemizations as well being a crucial factor. Are they any systems that you encourage when you take on a new client? I'm sure the association of Professional Builders has a plethora of systems, but what are some of the core tools or resources that every builder should have or at least should get when they're starting out?

A couple of areas that building businesses tend to struggle with is generally find in the marketing area and in sales. So there are a number of areas that we would then focus a lot of attention on. So how do we improve the sales process? How do we streamline that to make that more efficient? Because at the end of the day, what you want to do is you want to bring in your prospects into your business and convert them into genuine sale as quickly as possible. So you don't want them sitting there in your sales process and stagnating. So that's one area that we would focus on. Another area, as I mentioned, marketing is an area that a lot of business owners are not really familiar with. It's not a space that they're very comfortable with. So looking at how we can introduce marketing and make it effective. Because if you don't understand marketing, you don't know where you're throwing your money. It's like you're just throwing money into the wind and you're not able to really gauge how effective or efficient your marketing process is. So having some metrics around your marketing activity is really critical to be able to measure that and to then determine, depending on what your marketing strategy is, each path that you take, whether it's actually working or not. So having those metrics around it. The other area for efficiency is really around the organizational structure, you know, managing the teams. Because if you don't have structure around that, people really don't. You know, people don't really have a clear idea what their roles and responsibilities are. There's a problems with communication among the different levels in the organization, and then a lot of inefficiencies occur there as well. So those are probably the three areas that I would generally target with most of our clients.

What tip or advice would you give a business owner? Building a business owner that's looking to communicate with the team, you know, what's the best. Is there a sequence, is there a frequency of how often they should be a format or an open format? How should a business owner communicate with their, with their team members?

Well, it's like you can never communicate enough. I think that's the, that's the bottom line. I think if you don't, if you're not communicating with your team even on a daily basis, then you're probably not being as effective as you could be. It doesn't mean that you have to lead every meeting, for example. Well, we're just talking about organizational structure. If the organizational structure was seen in such a way that there are different levels of management, for example, you should not have to be dealing with everybody, but you can expect one of your line managers to be actually having those discussions and have regular meetings. But essentially you should be communicating on a regular basis and really daily with every team member and not just assuming and leaving them into their own devices. Because everyone needs clear direction and they need support. And I think the only way you can have that is by regular communications.

So you don't recommend leaving team members to be left on their own devices is what you say?

Absolutely not.

Okay, well, let's take a stab in a different direction. Tell me a little bit about your take on the state of the residential and construction industry. What is it evolving to? Because you're around the front lines, you're around builders. What are some of these critical insights that you're getting from the industry for the future of this industry?

What I'm hearing from a lot of our clients is that a lot of clients that our builders are working with in the residential building industry are becoming more discerning and they're having higher and higher expectations. So the clients that the builders talk to, they demand quality at a fair price, but they also expect a very high level of professionalism and service from the builders that they're dealing with as well. So in order to be a successful builder, you really need to be a professional builder. You need to be more than just a guy that's very good on tools. You need to be able to talk to talk, walk the walk. You need to be able to communicate very well with your clients. You need to be able to do a bit of selling, you need to understand the marketing process, you need to understand how to actually hire and manage people in the business, and you need to have a good understanding of the financials as well. So you need to be a pretty well rounded business person these days in order to be successful.

Now, I'm sure you must have come through some amazing discoveries doing the line of work that you do. I'm just curious, as you're coaching different builders from around the world, what has been one of those shocking truths or moments of aha, moments for yourself? From the intelligence of the construction industry as well as the builders that you work with, has there been a defining moment or moment that really surprised you?

What I found is that building industry is actually a very tough and competitive industry. A lot of builders work incredibly long hours and it means working in all kinds of environments. Rain, hail or shine. They have to deal with challenges like supply issues, deal with staffing and subcontractors, demanding clients meet tight deadlines and in a financial sense, they often working without making the ideal margins or as much margin as they would really like. And some of them actually have to deal with quite substantial cash flow issues as well, you know, when clients don't pay on time and that kind of thing. On the whole, I found that the industry is quite a stressful one and that builders on the whole are a very tough and resilient lot. In order to be able to put up with all that and to be able to stay in the industry for as long as many of them do, you know, many of them come out, get into an industry literally when they leave school to the time they retire. So I would say they are, you know, as I said, there must be a very tough lot.

And it sounds like they're going on a journey. Like you said, they get into this industry as craftsmen or tradesmen or women. It's almost like they pick up these business skills along the way. What is your take on how builders or what builders need to do to prepare for the future, especially a future of uncertainty. What should be at the primary focus for builders out there?

I think for builder, the builders need to try to be as agile as possible. They do need to keep abreast of what's happening in industry because you can't really continue working in industry with your blinders on. So you need to be aware what's constantly happening and there's always something unexpected that's going to happen. So it's very important for building owners who be aware of what's happening in the industry and how that's going to impact on their businesses ultimately and to put themselves in position where they can then adjust and adapt to the changing environment as rapidly as possible. And we often use that term agile, and I think that's a key part of it. So business owners have to continually keep an open mind, as I said earlier they need to be willing to keep learning and look at continually improving the way they do things in the business and just not accept the status quo.

Now you must address a lot of issues around efficiency and optimizing for maximum efficiency. Take me through your process of what are some of those common problems that you help resolve on your coaching?

Most of the problems that I deal with on a day to day basis pretty much resolve around just four things. It's usually around time, money, people and strategy. When it comes to time, people just don't have enough time, doing too much, working too long hours. When it comes to money, not making enough money, whether that's in turning over revenue or not making enough profit. When it comes to people hiring the right people, dealing with high staff turnover and the industry seems to because it is quite stressful, staff turnover industry generally is quite high. And the other side coin is how do you then retain the good people that you've got working in the business? As competition for skilled people continue, you have to keep paying more money. How do you compete in that space and then retain the people that you really need? And in terms of strategy, business owners need to have a business plan in place which are going to have realistic goals for them that are setting goals and targets for them to actually hit over the next anywhere from 12 months to the next five years.

What critical advice do you give to a new builder or a builder that isn't a member of the association of Professional Builders or considering joining the membership as well? What advice do you have for them?

My general advice is don't accept the status quo, be open minded, always challenge yourself and aim to do better. An American author by the name of James Clear in a book he wrote called Atomic Habits and he talks about continual improvement. So just imagine if you can get better by 1% each day for every year. In 12 months you'll actually end up being 37 times better than you were a year ago. So it's all about consistent, continual improvements, making small changes every day that's going to benefit you and your business in the long term. So for any builder I think is be prepared to work on improving the business and look for those small wins and continue changes because that's going to have a major impact on the business going forward.

Is seeing success in this optimization space really fall under personal habits and mindset? How much of that mindset and habits plays a role role in being a successful building company?

Habits is really key because we know the definition of insanity, right? If you keep doing the same thing day in day out and expecting different results tomorrow, that's not going to really happen. So if you're looking to create efficiencies in the business, you need to do something that's going to be quite dramatic. It means that you've got to shift yourself out of comfort zone. And the only way you can really do that is to actually start cultivating some new habits, some new daily changes in the way you think and the way you act or the way you talk. So habits is a key thing and actually being able to move yourself out of the comfort zone and look at things in a different light.

Now, I always like to get all my guests to share some secrets. Hence secrets is the theme of our podcast. But tell me a little bit about some of the secrets around the successful builders that you're coaching today, because I'm sure that most successful builders have some successful habits. If you can share some of the most common habits that you see as a common trait for a successful builder, what would that be?

The biggest one is probably discipline. Because I think a lot of builders come to us, they've all got great intentions. They say, oh, you know, we need to learn this, we need to implement that. But something always gets in the way. And the successful clients that are able to break through that barrier are the ones that actually have a strong self discipline. They want something so badly, that becomes their major priority. And because it's a priority, it becomes important to them they find a time to do that. So if it's about learning something, it's about implementing or planning something in the business that's going to make a change to them in the long term. Those people with that sense of self discipline will somehow make the time to make it happen. Without that self discipline, you find that other builders will get distracted. They can't keep focus because something else will creep in, is that the phone rings up, or they got to pick up the phone and answer the call, or they got an email they need to address, or something that just distracts them from the actual direction that they're working. So we often define the things that everybody does into. We categorize into three things. Sand, pebbles and rocks. The sand are the things that are not important. Pebbles are a little bit more important. But the rocks are those critical things that really impact the business in a big way. So for the successful business, I think the big difference is those builders that can see the rocks and get focused and actually spend time on those rocks, because that's going to be the major difference to their business.

That's a fascinating analogy. I really like that. I'm going to ask you one final question here because this interview has been really insightful as well. Has there been a book that you've read that has either shaped your career or impacted you to become the successful coach that you are today? Looking back at your career, there's many.

Books that I've read across over the years. While we're talking of habits, I think the one that probably sticks in my mind is the Power of Habit by Charles Duhigg. We were just talking about cultivating habits. I think I read somewhere that you can develop a bad habit like eating chocolate within minutes. But there's that 2190 rule that if you want to develop a new habit, it takes 21 days of actual deliberate practice for that to be new habit. So it takes time and effort. So whether you're going on a diet or trying to go on an exercise regime, it takes time to reprogram your body and mind to the habit. But it really takes you 90 days until it almost becomes completely automatic and part of your lifestyle. So from my perspective, when we're talking about changes and looking at improving yourself as an individual, the Power Habit was a book that I would highly recommend.

I think Habit is a good one to focus on. I think it sounds like it plays a really crucial role into building maximum efficiency as well. So, Dennis, I'd really like to thank you for your time today and appreciate your insights. We look forward to having you back on the episodes as well. And again, thank you for your time and energy.

Well, thank you very much, Bosco. It's been an absolute pleasure.

Awesome. Well, look forward to hearing from you soon. Cheers.

Thanks a lot.

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