Sometimes we wish our businesses would grow like weeds. That can only happen when we provide the correct nutrients and growing conditions. More than ever businesses are turning to technology to help them capture efficiencies to give them an edge over their competitors. It’s true that technology is one of those critical ingredients businesses must leverage to stay relevant and continue growing. However, technology can introduce significant risk and can be difficult to implement.
How difficult? 69% of digital transformation projects fail. By failing, I mean they are completed late, over budget, lack functionality, or are outright canceled. Success is rare, and yet despite that fact, future growth still depends upon successful transformational technology initiatives. That is why I sat down with Jack Szmanda, VP of Preconstruction at the Berg Group, to talk about how they have achieved their growth goals that have allowed their organization to bloom in the drywall construction and prefabrication industry despite taking on a transformational technology initiative on their own.
Prerequisites of Growth
Over the course of our conversation, Jack provided me with multiple anecdotes that revealed several themes. I call these themes the “Prerequisites of Growth.”
The first of which was Jack’s approach to process documentation. His organization adopted a high level of organizational and operational maturity to meticulously document all corporate procedures. I’ve talked about these in previous articles, but the gist of it is that your business processes must be defined, maintained, and publicly shared with the entire team for you to conduct business in a predictable way.
Jack discovered how repeatable processes eliminate errors and decrease training time for new hires, and he adopted a high level of organizational maturity required to harness those benefits.
The second theme was simple yet profound, once you have your processes documented you can now audit and refine them to ensure your operations are as efficient as possible. Jack embraced auditing wholeheartedly.
Lastly, we discussed how the Berg Group has dealt with changes in the market. Growth requires some basic stability in the marketplace to predict what business will look like in the future, and between COVID-19 and the war in Ukraine (this article was published in April 2022), things have hardly been stable in the market lately.
Organizational and Operational Maturity
Jack was able to utilize a high level of organizational and operational maturity without even realizing it. Jack and his executive team made the decision to meticulously document their processes. They discovered the importance of having consistent, reliable, resilient, and coherent operations. I can tell just by speaking with Jack that his organization values an optimized level of operational maturity.
Being able to document, audit, and optimize their operations shows a high level of organizational maturity that has allowed them to think and act adaptively, opportunistically, proactively, and in a manner that fosters continuous improvement.
This is what Jack had to say about how they approached process documentation at the Berg Group:
“We are focused on growing our field operations, and we have had to formalize our internal operations to ensure that they are rock-solid. Scaling our business has required our internal processes to be repeatable a thousand times over while experiencing minimal issues. We really wouldn’t be in the position we are in today unless we took the time to make some targeted improvements in our operations.”
Jack Szmanda, VP of Preconstruction, The Berg Group
Having an optimized level of operational maturity is essential for preparing to grow your business. Trying to grow when the level of operational maturity is too low will yield chaotic and inconsistent results as you try to expand. It is possible, but it will be difficult.
Refining Internal Operations Allows Room for Growth
Internal operations are rarely perfect, and always unique to each company. As Jack spoke about the success that the Berg Group has experienced with their digital transformation, it became clear to me that Jack’s team was fully prepared to audit their processes and change them when necessary to make sure they were operating as efficiently as possible.
“When I took over the division, each of our six regions was acting as their own business unit – their own company. They were not following corporate procedures. In fact, there was no communication at all between our southern California region and corporate regarding what projects to bid, how to bid, what margins to bid, etc. It was necessary for us to reevaluate and redeploy new procedures which has taken time and received a lot of pushback. It took about nine months for everyone to understand why we’re doing these audits, how we execute, and where we want to grow, but our efforts are really starting to show in a positive way.”
Jack Szmanda, VP of Preconstruction, The Berg Group
To me, this statement illustrates how difficult it can be to get buy-in for a digital transformation project. People are your most important resource and getting them to work together to execute can be a challenge. People are resistant to change and the principle of an effective audit suggests finding flaws (if there are any) so that they can be fixed. In other words, audits discover the weaknesses within processes that make change inevitable. If you can get your people to embrace change, then everyone understands the fundamental importance of operating efficiently. The more efficiently your team executes operations, the better you can serve your customers, and you can only grow as fast as you can keep up with the demands of your customers.
It also tells me that sometimes the executive team feels pressured by the amount of time it takes to execute a transformational technology initiative. What if you’re someone who doesn’t have the time to audit and optimize internal processes?
“You must make the time. I’m personally not good at delegating, but you really must build a good bench and give other people on your team the opportunity to grow. You also need to give yourself time to take care of things like the discovery period to understand where your organization is at. You can’t do that if you’re bogged down by the day-to-day.”
Jack Szmanda, VP of Preconstruction, The Berg Group
How Does Growth Continue in a Volatile Marketplace?
Like so many other companies during the pandemic, the Berg Group has had to adapt to some changes in the marketplace. Finding what works despite unpredictable markets and making it repeatable is the only way to grow through uncertainty.
“In the past, Berg’s success has come from large projects with good margins, but the current marketplace is forcing us to change our approach. Labor and material costs are rising, and competition is growing, forcing us to bid work at lower margins. That market of the past in many ways doesn’t exist anymore, so we’ve had to build/find efficiency gains internally to try to capture the benefits of those efficiencies in the field.”
Jack Szmanda, VP of Preconstruction, The Berg Group
Capturing Jack’s “efficiencies” is how he describes utilizing technology to bring positive transformational change to his organization. He is fully aware of the importance of technology to the future prospects of Berg’s ability to maintain growth.
Aligning Your People to Achieve Growth Targets
As mentioned before, people are your most valuable resource in a transformational technology initiative, and you need their buy-in. In fact, one of my associates wrote a blog about it called, Why Digital Transformation Is a People Problem. It’s interesting but perhaps not coincidental that Jack thought something similar.
Coordinating People Is as Important as Coordinating Processes
Imagine how productive your team could be if you had the right talent in the right seats and everyone knew how their individual role affected the team’s larger success. That’s exactly what Jack was able to do at the Berg Group, and it’s an important ingredient in enabling technology to take hold. Once everyone aligns with the corporate objectives, there are no limits to growth.
“The most influential part of this experience has been evaluating our current talent and refocusing them on the needs of the company. You need to discover the needs of the company first but having that information about each individual – whether they’re on the boat or off, is necessary to cultivate good culture within the company, promote personal growth for your employees, and drive traction on the initiative. If an employee doesn’t feel productive in their work, how engaged are they going to be?”
Jack Szmanda, VP of Preconstruction, The Berg Group
“Sometimes, for example, you must redirect the focus of certain resources towards the discovery of the organization’s utilization of ERP and that can help you move forward. There’s always somebody that’s not fully utilized, so finding the people that are willing to step-up and fill the gaps has really helped us accomplish our objectives. You must understand the talent within your organization, which means knowing each of your resource’s strengths and weaknesses and where they are best deployed.”
Jack Szmanda, VP of Preconstruction, The Berg Group
“You know a big thing is that growth in the organization needs to be bought in from everybody. It can’t just be the executive leadership team (ELT) team and everyone else is left lagging behind. It needs to be everybody. They need to understand why you’re pushing to achieve certain things. If you don’t get buy-in, you’re not going to get anywhere.”
Jack Szmanda, VP of Preconstruction, The Berg Group
Individual Growth Translates to Revenue Growth
I got the sense that Jack was all about letting his team rise to the challenge. It may have been difficult for him to initially see the value that each team member could bring when given road to run, but personal growth is an important element to reaching those corporate revenue goals.
“Be careful of giving people too much freedom. You don’t want to be a micromanager, but a huge part of delegating is giving your team the necessary runway to do what needs to be done. That doesn’t mean that you can turn them loose without giving them guidance and direction. It just means that you need to be careful and cognizant of what they are working on to not set expectations too high or too low for what you need them to do.”
Jack Szmanda, VP of Preconstruction, The Berg Group
Part of what Jack is talking about here is making sure you have the right people in the rights seats, but it’s also about enabling your team to carry out your vision. They won’t succeed if you don’t remove roadblocks for them and prepare them adequately. Your initiative won’t succeed unless you remove the roadblocks your team is facing and enable them with proper training and support. That brings us to the final piece of Jack’s advice which is having a roadmap and documenting measurables.
Make a Growth Roadmap
You don’t want your digital transformation initiative to be a bridge to nowhere. To get where you want your company to go, you must first know where you are and then design a plan to move in the right direction. This is called the mall-map concept.
The Mall-Map Concept
Imagine walking into a mall you’ve never been to before. You need to go to a specific store, so you approach the nearest directory. On the directory, you can locate the store, which is where you want to be, but for some reason there is no indicator of your present location! How frustrating! You know exactly where you need to be, but you have no idea how to get there!
Digital transformation projects can be the same way. For your initiative to be successful, you must first document your processes in the here-and-now. Then, you can create a roadmap that takes you from your present location to your desired location.
“The only way to capture the benefits of those efficiencies in the field is to document our processes to decrease training time and errors for every new hire that we have. Whether the process is right or wrong, documenting every process we have allows us to understand how or why it could be wrong and then gives us the opportunity to improve the process.”
Jack Szmanda, VP of Preconstruction, The Berg Group
Jack didn’t know that he was utilizing the mall-map concept at the time, but it is a very useful tool when considering the areas of your business you want to change to enable growth.
Measurables
Lastly, Jack spoke about the importance of creating measurables for every objective of the project. It’s a crucial “nutrient” to making sure your organization is ready for growth. Without measurables, your team can’t be sure when their work on one task ends and another begins, and that’s a recipe for burnout.
Here’s what Jack had to say about the situation at Berg:
“When I started at Berg, everybody seemed to be overworked. When I took a closer look at the situation, I realized that they weren’t overworked. They were doing a lot of things the wrong way. It seemed like morale was beaten down and the culture wasn’t that great. The previous regime here had this crazy, lofty goal of being a billion-dollar company in ten years. To everyone here, that seemed unrealistic, but it also put a lot of pressure on everyone. We had to shift from the low-overhead, high-margin mentality to a philosophy that prioritized our people and work-life balance. We knew that we needed to provide support to our people and properly staff our projects throughout the country. The growth we’ve been experiencing since we shifted has been more natural because people are getting happier in what they do, and they understand how they contribute to the company’s success.”
Jack Szmanda, VP of Preconstruction, The Berg Group
To eliminate the possibility of burnout, Jack made the decision to apply measurables for key objectives. That has allowed him to coordinate his people better and increase their productivity and job satisfaction.
“Providing oversight and defining the measurables is key before you kick off the project. We also have structured one-on-ones where we go through each project contributor’s work and provide feedback while reasonably monitoring how they conduct their work.”
Jack Szmanda, VP of Preconstruction, The Berg Group
Conclusion
Jack’s experience is something from which everyone can learn. While there may be some things that Jack unknowingly did like adopting an iterative/agile method, there are other very specific steps Jack took to increase his chances for success. To Jack, the most important aspects of preparing for technology-enabled growth were:
- Documenting, auditing, and refining business processes as a prerequisite of growth
- Aligning your people to achieve growth targets
- Making a growth roadmap with measurables
Jack is still working on his implementation, but I think it’s safe to say that he is well on his way to fully realizing the intended benefits of the transformational technology initiative they set out to implement at the Berg Group. I for one, can’t wait to check in with Jack in a few months to see how things have progressed.
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