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Component Manufacturing dverti$ dverti $ er
Don’t Forget! You Saw it in the
Adverti$$er
April 2021 #13261 Page #29
Costly Errors from Lumber, Leadership, HR, and BF/Man-Hour
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he new 2021 build season is upon us, and everyone seems to be Todd Drummond excited about the 2021 opportunities that seem apparent with the robust build economy. Many companies had their most profitable year in 2020, yet others struggled, stating that commodity pricing and covid were their major negative factors. Here are four critical areas that your company should review to make 2021 the best year possible. 1. Lumber pricing volatility is not looking any better this year. To say many were caught flat-footed with the skyrocketing lumber market pricing last year is an understatement. Many allowed themselves to be locked into long-term quote pricing that gave them no room for sudden pricing increases. Well, that lesson about lumber volatility was a hard lesson for many that had severe negative consequences for their net profits. At the same time, others had the most profitable year in their company’s history. One of the apparent differences between those who excelled and those who did not: the quoted pricing’s long-term liability was not a huge part of the more profitable companies’ pending orders. Another difference: the profitable companies had someone who could see the upward trends, give warnings, and help them prepare. That type of service can save most companies hundreds of thousands of dollars. If your company was surprised and did not see what was happening, one would think most companies would be willing to seek such expert advisement outside their company if needed. Every company should have a well-thought-out strategic plan to properly manage their lumber purchasing to mitigate this pricing volatility as much as possible. We can help you. 2. A company cannot grow and thrive without good leaders. Leadership affects every aspect of a company’s productivity, quality, and culture. But if we are honest with ourselves, leadership development has been traditionally deplorable within our industry. Regardless of any particular area of the construction industry, it is primarily up to the individual to find the needed leadership skills outside their current employer. Typical within a company, an employee’s development and career path is a laborer in a department, lead person of a small group, then supervisor of the larger group, and finally a possible overall leadership role. Throughout the career path, the employee is thrown into each role without any genuine preparation or formal training. At each stage, they are evaluated as being, “we think he/she will be able to do this job.” Some of the multi-location companies tout their leadership programs, but often it’s more about corporate policies and conformity, not about actual coaching and leadership excellence. Continued next page
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