Lose Sight, Lose the Fight
Chuck Yeager had amazing eye sight. He also was one heck of a fighter pilot who flew an X15 rocket powered experimental aircraft named Glamorous Glennis for his wife. Yeager was a test pilot and his first flight in the X15 was fundamentally a real-life “rocket ride.”
Another amazing Air Force pilot was Col. Howard “Scrappy” Johnson who was an ace in Vietnam and Korea, meaning he shot down at least five enemy aircraft in each war. I have been fortunate to have many conversations with Col. Scrappy. He set speed and altitude records for the F104 Starfighter, he received numerous commendations and awards, and was a special attaché under President Nixon. Jet fighter pilots are a special breed with combat pilots being even more special.
I have logged hundreds of hours in single and multi-engine civilian aircraft. I flew with Scrappy in his Mooney 231, which IL swear he flew like a jet fighter.
During a dogfight, a pilot always tries to keep visual contact with the target, which is where Yeager excelled. It was his leverage against being out-maneuvered. This superior vision helps the pilot stay in control and in front of an ever-changing situation and environment.
Anyone who has ever watched Top Gun knows this is true: You have to know where you are and have the target in your sights.
After a mission, a debrief session is a requirement with the entire whole flight team in attendance. Pilots and support staff are ushered into a room and all ranks are checked at the door. Everyone is an equal. The mission plan is dissected and evaluated from the criteria of the assets that need to be deployed. Weather determines munitions and munitions determine aircraft. The entire idea is to put positives and negatives on the table so the next mission can be strategically and tactically improved. Following these procedures assures the best possible future outcomes.
So what does all of this have to do with HVAC, Plumbing and Electrical? Obviously, everything!
In our industry, the targets are KPI’s, Key Performance Indicators. A sharp focus on the targets is an automatic requirement for operational and financial success. KPIs are management’s business guidance system for asset deployment. Here are a few that you must constantly keep your eye on.
- Cash – Cash is king. A minimum cash position must be maintained to cover no fewer than 10 days of payroll, operating expenses, and key vendor requirements;
- Break-even – This is a key evaluator because it validates pricing administration, sales processes, installation and service processes, production processes, dispatch processes, branding and marketing effectiveness, and expense control management;
- Company Gross Margin % and Gross Profit $;
- Departmental GM %, GP $;
- Field Labor % to Sales;
- Number of days of labor sold in both installation and service;
- Accounts Receivable aged;
- Average $ installation invoice;
- Average $ service invoice.
And what about the debrief session that follows every combat mission? Yes, at least once a month, you should hold a debrief session in your company with at least the leadership team and representatives from each area of the company. With egos checked at the door, and that means the owner’s ego too, actual performance against the KPI targets for the month should be evaluated. Where did the company hit its KPIs? Can we repeat the actions or activities that helped the company hit the KPIs for the month? Where did the company miss its KPIs? How can actions or activities be changed to make the next month’s mission more successful?
As with combat plans, your business plans must account for the weather so your assets are most effectively deployed:
- Manpower requirements if demand is earlier than expected or later than expected;
- Marketing ready to be implemented when the weather is not helping the phone to ring;
- Selling value;
- New technologies.
A well-done mission plan should have daily, weekly, monthly, quarterly and annual KPI targets, and contingencies for weather. With these in place, actual business performance can be compared to planned business performance with insight, consistency, and corrections when required. And assets can be effectively deployed. Do not lose sight of the targets for profitable business growth or the fight may be lost. Many happy landings.
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