Best in field

On the face of it, encouraging any company to adopt best business practices should be an easy task. After all, you're trying to show them how to do things in a way that measurably improves their business or enterprise so that it continually offers or secures the best value for money. But if it was that easy, there would be no need for organisations like Building Services Best Practice.

Why is it that some companies take to best practice, which is not a black art, but a buzzword for good business practice, while others appear to resist it? Is it complacency, confusion or something else?

Certainly, when talking to people who don't 'do' best practice, a lack of available time regularly comes into the equation. "We're understaffed", "we've got too much work" or "there's too much stuff to look at" are common complaints. And when time is not the issue, "we wouldn't know how or where to start", "the material out there is too generic and full of buzzwords" or "it's not suitable for our market" are given as reasons for not following best practice.

A recent survey by the Construction Best Practice (CBP) revealed that 48% of non-users of CBP services were simply happy to continue as they were. They were either not aware of the best practice services or thought that they were irrelevant to them.

In today's dog-eat-dog world, this could be deemed as complacency, especially when it is considered that of those users who have adopted best practice methods 96% have reported an increase in sales. More importantly, they expect these benefits to recur annually.

In addition to a combined £56 million of additional profits, each user saved an average of 12 days and £3300 through better business practice and improved productivity.

Company types
Another survey, conducted by Databuild, an independent market research consultancy, has identified four distinct types of company, which they have called insulated, complacent, coasting and committed. As would be expected, these companies have developed differently and have completely distinct characteristics.

The survey was relatively small, involving 20 companies, but represents a microcosm of the UK construction and building services industry.

The complacent companies are generally negative and non-receptive to best practice, set in their ways and not understanding the need to improve their way of working. They are typically well established, with a small client base built on long-term relationships and their management is generally approaching retirement.

Although not recognised as best practice per se, they do use some basic business measures to monitor their performance, but in general are complacent about business improvement.

Not surprisingly, these companies feel threatened by the changing procurement strategies of those key clients who are responding to change under the influence of younger, more progressive management.

The insulated companies are not actively interested in best practice, although they often have some engagement with best practice without recognising it as such. Several firms were engaged with partnering; others were involved in supply chain management or the use of integrated teams, but they did not identify these activities as such.

Typically, these companies are performing well, not aiming to grow, but operating with a reasonable level of security. They are often backed with some form of asset or income, for example from property, that they use to supplement the business. Their managers tend to be older, mostly in their late 50s, with no academic qualifications, having been in the industry for their entire working lives. They are aware of key industry issues and are enthusiastic about their work.

Although generally positive about the concept of best practice, most feel uncomfortable with its aims, feeling that they are unrealistic: "Good in theory but it won't work" and not really of use to them.

Companies in the coasting category are most often younger businesses that are part of a larger organisation. Their management team is commonly larger than the two previous groups mentioned and displays a positive and active approach to change.

They use detailed performance management measures and are likely to be benchmarking their performance with other companies using some form of key performance indicators (KPIs). Their attitude to best practice is positive and they are able to articulate their concern about the lack of involvement across the supply chain, with cultural barriers named as the most significant factor affecting this.

Although viewing best practice as a means to all parties working together to make a fair profit and focusing on the basics of build quality, they have yet to experience significant benefits. Companies in this category clearly feel that best practice is an important and potentially effective strategy, but need to be convinced further.

The final group, the committed companies, are well established medium to large-sized firms, whose management is more likely to have received a university or professional education. These companies have target areas for change and more comprehensive performance measurement systems in place.

Generally their measurement involves project reviews, regular reviews of the business plan and monitoring targets for costs and sales. Most businesses in this group use KPIs, and some have received in-depth assessments from the Benchmark Index, which has led to further action. One company in the survey even worked alongside its competitors to share knowledge and expertise and to benchmark. This had been enabled by their trade association and was considered very useful.

Survival tactics
What does this division of attitudes tell us? A number of factors stand out.

First and foremost, those companies that do not open their eyes to the changing dynamics of the marketplace are going to struggle to survive. The pressure is on everyone to work smarter and this involves being constantly on top of your business and operational processes, and benchmarking them against your competitors and other best-in-class performers in the industry.

The day of the long-term relationship is over. Younger, better educated, more aware management teams are coming in and are challenging the old, traditional ways of doing things. Unless complacent organisations wake up to this, they will struggle to survive.

The Databuild-led survey showed that there is confusion about best practice and some companies think that its aims are unrealistic. In the simplest terms, best practice is about doing the right things right. No more, no less. What is confusing about that?

There are signs that the confusion about best practice is clearing. Many firms are now starting to enjoy some of the benefits of doing things better, but remember: it is a continuous process of plan, analyse, act, review, repeat.

Building Services Best Practice (BSBP) and its partner organisations offer tools to help start if you have not yet made the move, or to develop if you need expert advice. See the BSBP web site (www.bsbpp.org.uk) for a comprehensive, one-stop source of information, with tools to help you analyse your business processes, opportunities to network with other practitioners who have already started to benefit from business improvement and case studies showing how others have already adapted best practice.

In addition, BSBP is planning to publish the 12-page Guide to performance measurement, which will provide a simple, step-by-step guide for small and medium-sized building services firms wishing to make a start.

What makes companies adopt best practice? Consider the alternative!