Velocity Accelerators®: Creating A Savvy, Motivated, Mutually-Accountable Homebuilding Team®

There is an underlying context – an underlying business logic – to everything we teach in a Pipeline workshop™.  However, since the focus has been on the principles and disciplines of homebuilding production, we have not given that context – that business logic – the attention it deserves;  the “what” and the ‘how-to” receive more attention than the “why” and the “want-to”.

So – this Velocity Accelerator® is a deeper-dive into context and business logic, into two crucial disciplines that work together, inseparably:  Open-Book Management and Team-Based Performance Compensation.

The efforts of a homebuilding company to improve operating performance and business outcomes will fail to achieve what is possible, if it does not succeed first in creating a homebuilding team that works toward commonly-held and commonly understood business goals, versus being a collection of so-called teammates working toward their individual goals.

What would be crucially missing, is an underlying business logic that forms the necessary context for understanding everything else.

That is the role of Open-Book Management.

In order to become the savvy, motivated, mutually-accountable homebuilding team required to effectively compete in the business world, everyone on the team has to learn the “business” of homebuilding, they have to understand their individual responsibilities as part of the overall team, and they have to understand what is at stake, individually and collectively.

And – not just understand the business outcome that is at stake;  teammates must each have a personal stake in that business outcome.

That is the role of Team-Based Performance Compensation.

Open Book Management flows from the work Jack Stack did in the 1980’s as CEO at Springfield Remanufacturing Corporation to rescue this former International Harvester (Navistar) division from almost certain bankruptcy.  Following a 99% leveraged employee buyout, Stack opened the company’s books and made it everyone’s business to improve performance.

Stack recounted that effort in two books (The Great Game of Business and A Stake in the Outcome);  John Case reported on open-book thinking in other industries and companies, in two other books (Open Book Management and The Open Book Experience).

And, in Open Book Management, Case described how Steve Wilson developed the basics of OBM-inspired Team-Based Performance Compensation at Mid-States Technical Staffing Services (now part of Modis);  Wilson subsequently described this work in a publication, titled The Bucket Bonus Plan.

 

We take a very specific approach in our application of the principles of Open Book Management and Team-Based Performance Compensation.

We advise our clients to be transparent (open).  We urge them to demonstrate candor (have the courage to tell and hear the truth) in the constant internal disclosure of operating and financial data, whether in meetings, or through dashboards and heads-up displays.  We advise our clients to impart business literacy (understanding) to teammates, so that those teammates understand the business of homebuilding, not just the homebuilding business, through the teaching of business and production principles.

We advise our clients to adopt a team-based approach to performance compensation, by way of a progressively-weighted milestone plan centered on achieving targeted performance above a baseline in a specific business outcome impacted by the actions of every single teammate.  We urge an approach that is simple, easy to understand;  visible, transparent;  compelling;  fast, frequent;  self-funding, paid from income the company would not have otherwise generated.

In terms of compensation – we urge our clients to make it significant, meaningful.  In terms of participation, we urge them to make it all-inclusive.

We tell them that their Team-Based Performance Compensation Plan should provide only for winners or losers, not winners and losers.  It should give the right to lead and to demand results;  it should give the desire to be lead to deliver results.

Savvy.  Motivated.  Mutually-Accountable.  Team.

 

Come.  Participate.  Learn.

Open-Book Management and Team-Based Performance Compensation is one of the five Velocity Accelerators® highlighted (together with Critical Chain Project Management, Epic Partnering™, Building Information Modeling, and Business Process Improvement) at the next Pipeline workshop™, February 28 – March 1, 2018, at the Ponte Vedra Inn and Club, in Ponte Vedra Beach, Florida.

Cost is $895.00;  for team pricing, inquire here (flgroves@saiconsulting.com).

Delivered by SAI Consulting and Continuum Advisory Group.

Sponsored by BUILDER, BuilderMT, and Specitup.

Details:  www.buildervelocity.com