CLIP's Tips

In the previous post, we illustrated what piece work is and gave 5 reasons why it should be implemented.

P – Productivity

I – Incentive

E – Enjoyment

C – Cash

E – Enthusiasm

In this post, we will explore the final four.

W – Win/win

O – Owner mentality

R – Responsibility

K – Kick butt!

Win/win

No deal is worth making unless it is a win/win deal. Both parties should benefit from the arrangement. Piece work says to your team, "When the company wins, you win. And when you win, the company wins."

Owner mentality

How many times have you thought to yourself, "I just wish my people would make better decisions?" Poor decision making usually is not due to inferior intellect. Most of the time, the poor decisions are made simply because they don’t have the same mentality as you. They are not nearly as concerned as you are with efficiency, wasted time, equipment maintenance, or customer service.

Why? Because if they are being paid hourly, their paycheck is not on the line–yours is. How do you get them to have an owner mentality? Put their paycheck on the line. Suddenly, their concern for efficiency will match and maybe even exceed yours.

One of the most dramatic differences I have seen is how the crews deal with problems in the field such as equipment breakdowns or difficulty at a job site. When a problem occurs and the employees are on hourly pay, the most common solution is to call a manager and wait around until the problem is resolved by someone else. When on piece work, team members get creative. Mower stuck? They’ll find a way to get it out. Broken blower? They sweep the sidewalk instead.

Responsibility

Responsibility is the natural outcome of an owner mentality. Crews will begin to take responsibility to make sure they didn’t forget something at the shop. They will begin to tell you about things that slow them down. Some of them will take on management responsibilities you never asked them to.

Years ago, before we started using GPS units, I had a crew that demonstrated this kind of responsibility perfectly. Every evening, they would get the route sheets for the next day and take a map home with them. They would spend a half hour of their own time every evening familiarizing themselves with the area and making sure that they had the most efficient route. How’s that for responsibility?

Kick butt!

The inevitable outcome of all of implementing piece work is that your company will kick the competition’s butt. Your reliability and profitability will increase and your headaches will decrease.

In this series:

1.  Why Piece Work? (Part 1 & Part 2)

2.  How to to set up and track Piece Work in CLIP.

3.  Tips for implementing Piece Work in your company.

4.  Common Objections.

5.  Q & A (send me your questions)

Two weeks ago, I introduced the topic of Piece Work.

In order to give you an idea of what is coming up in the series, here’s a basic outline:

1.  Why Piece Work?

2.  How to to set up and track Piece Work in CLIP.

3.  Tips for implementing Piece Work in your company.

4.  Common Objections.

5.  Q & A (send me your questions)

What is Piece Work?

Before we explain why Piece Work is valuable, let’s briefly revisit what Piece Work is.

Piece work: work paid for according to the quantity produced. (Source)

Auto mechanics is a great example of a profession that uses piece work.  Auto mechanics have a reference guide for how long standard repairs should take. For example, changing a transmission might be rated to take 4 hours. The mechanic is paid according to this rate. Therefore, whether he takes 3 hours or 5 hours, he is paid the same–4 hours.

Many manufacturing companies base their pay on a piece work system. An employee might be paid $20 for each unit welded or assembled. No matter how long the employee takes, he or she gets paid the same.

In lawn care, the most common way to implement piece work is to assign a budgeted man hour rating to each job. Then, the employee is paid an hourly rate times the number of budgeted man hours completed.

For example, let’s pretend I have a customer named Mrs. Smith. Mrs. Smith has a 1/4 acre lot. I have estimated that her lawn should take about 1 hour to mow. One hour equals the budgeted man hour rating. Therefore, when I send a crew to do this job, they will be paid 1 hour for completing the job, no matter how long it takes them. If they finish in 35 minutes or 2 hours, I pay them the same.

Now, hopefully you understand the basic concept behind piece work. The next question we must next answer is why. Why should you implement piece work?

Why Piece Work?

I have summarized the reasons for implementing piece work with the following 9 benefits:

P – Productivity

I – Incentive

E – Enjoyment

C – Cash

E – Enthusiasm

W – Win/win

O – Owner mentality

R – Responsibility

K – Kick butt!

Here, we will explore the first five and cover the last four in the next post.

Productivity

Piece work will dramatically increase productivity dramatically in most companies. A 50% increase in productivity is not unusual when switching from straight hourly pay to piece work.

Incentive

Productivity increases because there is now an incentive for efficient work. Good, hard, smart work will be rewarded and thus encouraged within your company.

Enjoyment

Implementing piece work leads to a more enjoyable work environment. As you increase the responsibility, accountability and rewards for your team members, morale is destined to improve.

Cash

The effect of a productive, incentivized and happy team is profit. As the team members gets more done in less time, your profit increases and so does theirs.

Energy

The new goal/reward focus will create a new energy within your company. One of the ways this shows up is how teammates try to motivate one another to be productive. Our team has even developed a "war cry" that we all shout to get each other motivated.

Comments? Questions? Let me know.

Photos: lemmiworld, aresauburn, mattsip

Most of us have probably heard of the 60 second elevator pitch—the quick statement that describes who your company is, why you exist and why anyone should care.  For those of us who could improve our pitch, Harvard Business School has developed a handy online tool for creating and evaluating an effective elevator pitch elevator pitch:

HBS Elevator Pitch Builder

In this video, I explain how to modify route sheets using the following two examples:

• Add the customer cell phone number to the route sheet.
• Make the route sheet notes a larger font.

In order to add the cell phone, you will need to copy and paste the expression below:

IIF(mjobs<2,IIF(pcphone,"C:"+pager,’  ‘),"  ")

How would you like to modify the route sheets?  Let us know in the comments.

This summer I will be posting a series on piece work.  For those who don’t know, piece work is an incentive based pay system where workers are paid for their productivity rather than for their clock time.  CLIP Lawn Care has used this method to create a company with super-competitive pricing and maximum efficiency.  Many CLIP software customers have implemented piece work and consistently testify to its value.

Whenever we discuss this topic, we always get lots of questions.

Therefore, I want to hear from you.  Please let me know what you would like to be discussed in this series on piece work by posting a comment or emailing me.

Have you ever had the situation where you are working in one screen of CLIP, and need information from another part of CLIP?  For example, sometimes when I am working on payroll reports, I need information about a job’s history from a customer record but I can’t access it without closing the report.  Having to close the window, get the information, and then open the window again is frustrating and time consuming.  That’s where this tip comes in:

Quick CLIP Tip:  You can open multiple instances of CLIP on one computer.  After opening CLIP the first time, just go ahead and open it again.  You will now have two copies of CLIP open at the same time.  CLIPxe comes with multi-user ability so that both copies will always have the exact same information.

After using CLIP for years, I just discovered this trick.

Are there any tricks you’ve discovered recently?  Let me know in the comments.

Here are five high value activities to do when you lack direction on what you should focus on:

1. Eliminate

Think about things that you do right now that could be automated, outsourced, delegated or deleted.  Remember the 80/20 Principle? Eliminate your low value activities.

Examples:

• Get rid of customers who only give you headaches.
• Stop doing payroll yourself and hire a payroll processing company.
• Unsubscribe from all of those magazines you don’t read anymore.
• Think about these 80/20 applications.

2. Expand

Are there new areas where your company could expand to, or are there new services or business opportunities you should pursue? Take some time in front of a whiteboard and brainstorm.

Examples:

• Look within your service area for new opportunities.
• Should you add irrigation to your line of services?
• How about looking into government contracts?

3. Streamline/Create Systems

Make your business run without you.  Create manuals, procedural videos, and checklists.  Set up Know-It-All as your company knowledgebase.

Examples:

• Are you the only one who knows how to do monthly billing from start to finish? Create a manual so that anyone can do it without you being involved.
• Install and set up Know-It-All.

4. Clean

It is amazing what energy and creativity can be produced when you do a simple thing like clean out your desk drawer.

Example:

• Clean a drawer, your office, your shop, your truck.
• Delete old programs from your computer.
• Organize your files.

Photo: p373

5. Think ahead

What obstacles or opportunities do you see in the near future?  What can you do right NOW to prepare for these possibilities?

Example:

• You sense unrest among some members of your team—what can you do to prevent it from getting out of hand?
• You know that online marketing is the way of the future, but you’re not sure what that looks like for your business.  Do some research at the library or online.

Application Action: Choose one of these ideas and spend at least an hour on it by next weekend.  Let us know in the comments how you applied these ideas.

Photo credits: Ben+Sam, TheTruthAbout…, p373

Don’t skip this blog post.  Doing so could cost you dozens of new customers and opportunities.  This is a wonderfully enlightening section from Chapter 11 of Ready for Anything by David Allen:

All of us, personally and organizationally, may be unconsciously holding back new and better things from ourselves, because we feel that we won’t be able to handle them successfully or sufficiently.  Most of us think we want “more” of many things.  More money, more clients, more responsibility, more fun, more time.  But do we really?  I’ve learned that what I consciously want is only a fraction of what directs my creative energies.  Many times what I think I’ve wanted has lost out to other forces.  I’ve had many opportunities cross my path—for more money, clients, responsibility, fun, and personal fulfillment.  But because some part of me wasn’t really prepared to handle them (or what came with them), I didn’t recognize them in the moment; and even if I did, I found subtle ways to push them away.

Pay attention here.  Does this apply to your company?

Years ago, a mentor of mine, who’d consulted with several health-care organizations, told me that whenever the front office of a clinic cleaned up its backlog of claims and paperwork and streamlined its workflow, patient volume invariably increased dramatically.  He suggested that as long as the reception staff experienced new business as creating more stress (due to clogged systems), they would unconsciously turn it away.  Many organization are exhorting their people to be “customer driven” and to “go the extra mile” to add a competitive edge of extraordinary service that will win more business.  But they may note be addressing the ability to handle that added business.  Everyone can sense this on some level, and if their environment is already stressed to the max (as most are), that extra mile extra smile will not surface when it’s need the most.  When you front line feels overwhelmed, watch out for resistance to new customers and opportunities!  When a ringing phone creates stress at the spinal level, though the words may be “Can I help you?” the underlying communication is “Go away!  I can’t handle you!”  Not the first message you want to give to the people who ultimately pay your rent and salary.

If it does, it is time to ask your team what they need.  It is time to focus on your systems.  It might be time to hire.  Or it might be time to raise your prices.

What do you think?  Is your company ready for more?  What do you think you need to get there?  Let me know in the comments.

While this idea may not fit exactly into the “technology, business management, and productivity” theme of this blog, I thought it could be helpful to some of you.

Waste Management now has an in-between solution for when you need more than a trash bag but less than a dumpster.  They call it The Bagster.

The Bagster is a 3 cu. yard bag made of tarp-like material.  You can buy the bag at a local home improvement store and have it picked up from your location.  The price is $129.99.

Some ideas for use:

• Take it to jobsites—eliminate the need to haul the waste away yourself.
• Use it instead of taking your yard waste to the dump.
• Keep a Bagster at your shop for miscellaneous bulk trash from repair, maintenance, construction, etc.

Check out the site to see if Bagster is available in your area.

www.thebagster.com

Related to the last post on checklists, I also recommend, The Checklist Manifesto by Atul Gawande.  This books reveals the truly life threatening consequences of not following a defined procedure.

Buy it on Amazon