Countertops Magazine Archive

Growth - The Double-Edged Sword

If your phones are ringing faster than your office staff can answer them, you are not alone. If your staff is working overtime to get quotes out the door, what a great problem to have and what a great experience to share with fabricators all over the country.

And it is a shared experience.

In recent weeks I’ve talked with many countertop fabricators from all over North America and the story is the same with everyone: demand for premium counters is increasing and there is a sense that it isn’t a temporary spike. It’s not out of control, but judging by the way the numbers look and the way the market feels, growth is not only expected, its happening.

The great thing about growth in demand is that prices will rise because the supply is limited. When customers clamor over a limited supply or capacity, there will be a period (until supply expands to accommodate the new demand) where they will pay more to get their projects completed on time! Higher prices equal higher margins and higher profits!!!

But, higher profits are by no means guaranteed in a growth phase.

The fact is that growth – profitable growth – in a custom manufacturing environment is very difficult to achieve if it isn’t managed effectively. In most shops, work will be scheduled faster than manpower and capacity necessary to deliver it is added. This creates strain and stress on the existing operation and people and things can get out of control (and costly) quickly.

When critical tasks that are crucial to keeping the promise to the customer easily slip through the cracks, it causes embarrassing delays and expensive mistakes that must be corrected at the expense of other profitable work.

This happens because growth changes the operation in ways that are often too subtle to notice until after a critical task has been overlooked and profit consuming chaos takes charge.

The change means greater workloads for individual employees in many forms. Higher call volume reduces time for other important tasks like passing important messages to key people. More drawings to quote reduce the time for following up on quotes that have already been sent out. Additional counters to cut reduce the available time to assist in setting up the counters for fabrication.

In this situation, most employees will quietly request the assistance of another employee to help them accomplish their tasks. “Can you grab that call?” or “Can you layout that next slab for me?” are common responses to the rising water of demand seeping into the operation. Unfortunately this well intentioned job sharing will evolve into uncertainty as the line blurs between whose job it was and whose job it is to help finish tasks. Imagine someone in the office thinking, “I got the last call, it’s clearly his turn to grab this one” as the phone rings yet again, but this time unanswered.

At this point the nagging uncertainty as to who is really responsible for answering the phone, interpreting the drawings or laying out the next job becomes good old-fashioned confusion. Wondering whose job it really is will inevitably put someone in a position where they have to choose between doing the job that they know they were hired to do and the one they have informally assumed by agreeing to help an overwhelmed employee.

When employees choose between two tasks, it means one will get done and the other one will quietly slip through the cracks.

Then it’s no longer just confusion, its chaos. And it compounds an already straining operation. Employees who don’t have time to get all their work done the first time surely don’t have time to redo it. But redo it they must, and at the expense of the other work that still needs to get done!

What starts out as a welcomed development and opportunity to grow the bottom line can become a great big headache that strains relationships with valued clients while producing even lower profits than were generated on previously lower sales volume.

So where does that leave us? Should we fear growth? Should we avoid growth?

No and no. We should control growth. We should manage growth. Instead of selling everything we can sell we need to sell only what we have decided we want to produce and have planned to take-on.

First we need to have an idea of what the actual growth might be. The only way to do this is by objectively comparing current sales activity with previous periods. If the number of quote requests in the last four months is up 20 percent over the same period last year, it is a reasonable expectation that demand will continue to exceed your current capacity by the same amount.

Second, we need to know our current capacity so we can regulate its expansion. Whether it’s the number of kitchens, square feet or a combination of the two, truly knowing and understanding the current capacity is crucial if we seek to profitably add to it.

So what is your daily, weekly and monthly average output? If you don’t already know the answers to these questions, stop! Don’t add a job to the calendar until you have evaluated the last four months to determine your current output.

Understanding current capacity and then deciding what the next level of capacity will be not only establishes a measurable target to increase capacity to, it also limits the tendency to over-commit. If your capacity is five kitchens a week but you agree to do a sixth (a 20 percent increase), costly chaos is going to follow and when the dust settles your profit will not be 20 percent higher. More than likely it will be a lot lower!

Third and last, we must communicate with our staff. It is absolutely crucial to inform your staff that you have made the objective decision to take on work and add capacity to deliver it long before that additional work starts to show up on the calendar.

Once that additional work is scheduled, the communication becomes even more critical. Because growth changes the complexion of an organization very subtly, it is hard to predict where the strain will show up first. Daily communication between departments and staff will turn those quiet requests for assistance into declarations that increased demand is threatening to overwhelm so formal decisions can be made to eliminate the uncertainty and confusion that would otherwise occur.

Resisting the urge to take on more work because its there for the taking requires enormous self-control. Managing that work requires an understanding that while growth solves many problems, it can create many more.

Growth is a sharp sword that cuts both ways. So embrace the blessing of our improving economy and increasing orders for countertops, decide if and how much you want to grow, then prepare to work even harder to make it all worthwhile!

About the Author

Aaron Crowley has worked in the countertop industry for 19 years, the last 15 as owner of Crowley’s Granite Concepts, a six time Angie’s List super-service award winner. Aaron also developed the Fabricators Friend line of stone-shop gear, founded and authored the book Less Chaos, More Cash. He speaks and writes regularly about business management in the countertop industry, and can be reached at [email protected].