A couple of months ago Collingwood’s Head of Building Products, Mark Goldsmith, sat down with Dave Jones, MD of uPVC extrusion business Veka UK. What better way of expanding on this window and doors theme than to get an MD’s view on the market from the fabricator perspective, in the shape of Quickslide’s Michael Connor.
Having gained promotion to Operations Director within heavyside manufacturer Marshalls, Michael moved to Quickslide before recently setting up his own operational bias consultancy Clearesult. Here’s what was discussed:
Mark: From heavyside bricks, blocks and cement to the (perceived) more refined market of window and doors, how have you found the switch Michael and what are the main differences?
Michael: There are some fundamental differences between the concrete business and the more niche, bespoke world of fenestration. The brick, block and cement industry (in the main) runs the production of commodity products to fulfil minimum stock levels against sales forecasts and regards all finished stock as profit. Whereas the window industry produces only to bespoke sizes and specifications. This in turn leads to large differences in lead times and availability, also where companies like Marshalls may have an order book of half a year, most fabricators live with an order book of barely a month. Ease of entry into the window industry is also a major difference, a half decent saw, a welder and a bench can get you going, whereas the cost of mixing plants, automated paving lines and huge water recycling systems protects the concrete business much better. That said, in recent years, due to globalisation cheap imports of natural stone from India, China and Turkey have posed their own threat.
I must say the transition between the two industries has not been that difficult. Fundamentally, running a successful business is all about the people and I love working with people, even with all its undoubted challenges. I have been involved in many cultural transformations and the formula for success to me is quite simple, be passionate about what you do, challenge yourself and your teams every day and be completely believable and authentic in everything you do.
Mark: And are there obvious differences to team make up and culture from within Marshalls and Quickslide?
Michael: There are many differences between the two, this is mainly down to the more “corporate” culture within Marshalls, due to its size, and there is more of a “family” feel within the privately owned Quickslide business. Decision making can also be excessively long in a corporate culture, which in some cases is not a bad thing, whereas smaller businesses can be more agile and react quicker to market fluctuations.
In relation to the teams and the people, the only major difference for me is the outlook and skill set of the people running the business. That said, within a corporate culture there can be an added issue with multiple layers of supervision and management, sometimes leading to communication failures, however that is ultimately under the control of the business and can be easily overcome if there is a willingness to do so. Also within a smaller private business like Quickslide you really can’t make too many mistakes as you don’t have the corporate backup if you do, so this tends to lead to people being risk averse. With a business like Marshalls you do have the backup if you want to take more chances on innovation, culture change, or acquisition/expansion. However, I tend to find that in some corporate cultures people can sometimes be more interested in protecting their current position and salary with the outcome tending to be the same, risk aversion.
For me, culture change can be achieved in most instances, if you have leaders with the knowledge, skill sets, experience and above all the belief that they can change anything. These people are passionate, unstoppable and charismatic, whose teams of problem solvers will break down barriers for them. There are not enough of them around in this industry, unfortunately.
Mark: From an operational perspective, what are the most apparent pitfalls and bad habits you see building product companies developing and, without doing yourself out of a job, what are some of the quick fixes you have implemented?
Michael: Without doubt one of the most repeated mistakes I see being made is the use of so called “experts” who are brought into a business to improve “efficiency”. It seems almost universally accepted by companies in our industry that the improvement of their business is not down to them. “Experts” almost exclusively home in on tangible elements of a business, those things that can be seen and heard, usually manufacturing areas. The introduction of 5’S, OEE, SMED, Kanbans etc. These things are usually missing and do produce results; however, they typically end up as islands of improvements and result in no great improvement on the bottom line. Typically, shop floor issues account for about only 5-10% of the problems facing a business. In my experience 90% of the issues exist elsewhere and are usually linked to poor strategy and strategy deployment, poor systems and a base lack of knowledge around margin analysis.
Significant improvement can only be achieved if there is a clear, well thought through strategy that considers your marketplace and its likely future performance. Ignoring the marketplace can mean the greatest of plans ultimately end up as expensive wallpaper in the boardroom.
I like to perform an almost forensic examination of the accounts, for me this is the “one version of the truth” that businesses need as their focal point. And it is the information in these accounts that will then be used to form the basis of all future data driven decision making and meaningful reviews. I use a system of Corporate Planning that ensures there is a plan for the whole business, and this will include a detailed review of the marketplace along with scenario planning, planning for those things that always almost emerge but are not yet known, the plan is always lean and agile and can withstand most market moves.
I employ a “two hands on the wheel” approach, one hand is the management of the business fundamentals, the other hand is managing the future aspirations of the business. Unfortunately, the preference in most businesses is to ignore the fact that the business fundamentals are not in control before moving onto the aspirations and consequently end up moving further away from their intended vision. This is primarily down to human nature where we tend to prefer the exciting, intangible, unmeasurable prize in the future, rather than the more onerous and detailed task of reviewing what we have now and how it is performing and whether it can ever fund our aspirations.
Setting off with the right strategy is, in my opinion, the most important factor in ensuring a successful business transformation. The whole business buying into that strategy is the next most important factor.
Mark: I have worked on two Operation Director roles of recent months, and a big issue particular to building products (and the wider construction market) has been behavioural blockers, unionised workforces and teams who do not wish to change. How have you overcome this in your career (re Behavioural Kinetics)?
Michael: I believe there are two different issues when looking at change management. Firstly, we must consider why we are changing, is this yet another “flavour of the month” management scheme that we all know will fade into the background if we ignore it for long enough. Or is it a change that is absolutely required and has total buy in and commitment from everyone in the business, is it believable? You only get one chance to make an effective change and make it stick, if you don’t really believe in the change and more to the point, your people don’t believe you, then it really is better not to start.
Fear of change is perfectly normal and should be expected, using tools such as the SCARF model can aid in preparing for this change process.
However, one of the most useful tools I have employed, on almost all occasions involving change, is “Behaviour Kinetics” the science of behavioural change. This approach explains how behaviour drives performance and I have found it to be quick, effective and most importantly a measurable way of ensuring behavioural change occurs.
Behaviour kinetics looks at (and lists) the 3 key sets of management behaviours that most effect the change process:
- Sustaining behaviours
- Accelerating behaviours
- Blocking behaviours
Each of these behaviour sets have a prescribed list of actions that you commit to either stop doing or displaying immediately or enhance and improve further, these can all be measured through a 360-degree appraisal and the biggest difference in using this method is that you, as an individual, are scored by the people who work with you, on your displayed behaviours, not what you say you are going to do. There is no hiding place in this system, it is brutal in its assessment because it is what people see you doing every day, every week and every month, you must change!
The biggest impact you will ever see in a business is when the senior management team sign up to stopping all blocking behaviours immediately, aligned with knowing they will be scored by their teams in anonymous appraisals. You can understand how big the impact of this is by looking at the list of blocking behaviours you commit to stop practicing below:
I will not….
- Criticise people in public
- Vent my anger and frustrations openly
- Make it difficult for people to challenge my decisions and opinions
- Alter my stated opinion rather than get into an argument (conflict avoidance)
- Bend the rules to keep the peace
- Avoid giving people negative feedback
- Guard information and not share openly
- Make it difficult for people to contact me
- Avoid making decisions on controversial issues
I have of course seen this process in action and if carried out by the whole team at the same time it is amazing for others to experience and immediately signals something major has changed. However, you must commit and you must realise that some of the team will not make it, I have never gone through this process without losing some members of the team, be prepared for that.
Mark: A lot of this involves total engagement from the staff you inherit. What tactics have you employed to ensure buy-in from teams?
Micheal: “We judge ourselves by our intentions. And others by their actions” Stephen Covey
We must realise that our natural inclination is to criticise others and over-praise our own actions, this does not help when looking at a consistently fair and honest way of working. I am a firm believer that if our teams do not know everything that we know then how can they have the same buy-in and commitment that we do? Communication is key, we should set out, clearly and concisely what we are trying to do, and what measures we are putting in place to ensure we get there, and why. We then open that up for feedback which we take on board, reset the plan if required, commit and get on with it. I have a very simple set of core values (by Don Miguel Ruiz) that I work to and that I expect everyone else to work to:
- Never assume
- Don’t take things personally
- Always do your best
- Always be impeccable with your word
I lead by example and I expect all my teams do the same, I expect fairness and consistency in all things. I use Emotional Intelligence indicators to ensure I have the right people who display the right behaviours, always. I set clear boundaries and expect them to be tested but never moved. I find that if people know what is expected of them and know the consequences of poor performance there is very little friction. People value honesty, fairness and consistency, even if they won’t admit they do.
What I have found over the years from poorly performing teams are a set of characteristics which are barriers to performance:
- Unclear job expectations
- No standards
- Lack of feedback
- No consequences for good or bad performance (managing poor performance is simple but almost universally avoided, praise is avoided in the same manner)
- Task interference (poor planning and execution)
The biggest single people problem I have seen in every business I have worked with is the tendency for supervisory management teams to spend 90% of their time on negative people. I simply don’t allow this, I insist 100% of my managers time is spent on positive people, a very simple switch in thinking but one that has very quick and dramatic results. Negative people end up either working themselves out of the business or are managed out by their colleagues or they change, for the better, for good.
Mark: Having worked within fenestration for some time now, from a fabricators perspective, where do you see the market heading and what potential dangers should manufacturers be aware of?
Michael: From my experiences of the fenestration industry so far, I must say it does seem very insular and does not necessarily acquaint itself of all the latest business management tools and techniques, particularly in considering market analysis, competitor analysis or scenario planning. There seems to be no consideration of the buyer cycle and the subtle changes taking place with our customer base. It seems as if there is a “laissez faire” attitude in the management of some businesses, coupled with the misconception that the market will grow continuously and if we increase capacity and reduce prices this alone will ensure long-term survival, still seem to prevail. The latest Palmer market research predicts a contraction of 4-6% next year and then a further two years of contraction between 1-2 %. Many bigger players in the market seemed to have expanded at the same time and are now fighting for a smaller, not larger, market demand. This continuous price war would have done much more damage to the industry if the protagonists had not miscalculated that at the same time the market is contracting the demand for cheap white windows is also declining. I believe the market has subtly changed and people armed with more information than ever, thanks to the digital era, are now looking for, and really understand, true added value. Viewing windows as part of the furniture of their homes, and as such the mechanical look, painted and foiled styles are prevailing. Some businesses recognised this move earlier than others and this is why I believe there is such a conflicting view on how well the industry is performing.
The businesses that realise the value of corporate planning, employee engagement and continuous improvement will be the ones that will ride the market turbulence ahead. With Continuous Improvement, on average, returning savings of 13-17% (of turnover) this strategy well deployed would, on its own, protect the future of any business. Transformational rather than transitional change is what is required, the businesses that recognise that and deploy it right, first time, are the ones that will come out of this market dip the strongest.