Working Hard Is Not Enough; Managers Must Make Things Happen

March 17, 2017 Bill Lee

One of the mistakes I believe we make in the building supply industry is failing to spend enough time outside our industry looking at success stories and figuring out how to execute similar success strategies in our own businesses.

To be at the top of your game; that is, to achieve your full potential as a company, you must have goals, and next, you must develop a structure and a strategy to achieve those goals.

Does your business have a strategy that your management team has hammered out that will allow you to take market share away from your competitors without lowering your prices?

Does each of your departments have measurable goals they are held accountable for on a monthly, quarterly and annual basis?

Based on a lifetime of working with building supply dealers, I believe only a few owners or managers can answer yes to these questions. If this is the case in your business, I challenge you to make 2017 your breakout year.

Please take a fresh look at the title of this article: a critical component of success is putting together a team that can make things happen in spite of the obstacles that are certain to crop up from time to time.

Where do you stand right now? Do your best to answer this question honestly and realistically. How does your company stack up against your competitors with respect to market share, profitability, quality of personnel and customer service (as perceived by your customers)? Do you have the talent on your business team to win the battle for market share in your trade area?

What has your business accomplished over the last few years? What is your history and your company culture? Has your company had a history of rewarding hard work to the detriment of developing a culture of planning, strategizing and measuring your performance against measurable goals?

What are you willing to commit to in the future? In measurable terms, what do you want your company to be? What do you want your company to achieve? What obstacles must you overcome to achieve your aspirations for your company?

Just because you don’t have a formal strategy written on a piece of paper doesn’t mean that you don’t have a strategy. But without a written strategy that all key personnel understand and strive to execute, your strategy may be limited to a personal vision your associates are unaware of.

I find compounded sales growth goals to be extremely helpful. If your company were to set a goal to grow sales at, say, a 15% compounded rate, then by applying the Rule of 72 (72 divided by your rate of annual sales growth, i.e., 15% = 4.8) you’ll discover that if you compound your sales growth at the rate of 15%, then your company’s sales will double every 4.8 years.

This tells me I must be prepared with enough working capital to see my investment in inventory, A/R and equipment double every 4.8 years. In addition, I can better plan my future needs in the yard and warehouse. I can better plan my personnel requirements.

The road to a greater return on stockholder’s equity is made up of five hurdles, all of which are measurable: improve gross margin, reduce operating expenses as a percentage of sales, improve sales, improve inventory turnover, and reduce average A/R collections days.

Establishing these goals is half the battle. The other half is coming up with an action plan to make sure your company’s goals are achieved. I’ve found it most effective to get all members of the management team involved in and enthusiastic about the action plan and actively participate. At least monthly, hold a meeting and advise all management team members of the team’s progress.

The final success principle is this: You Manage What You Measure.

About the Author

Bill Lee

Author Bill Lee has nearly 40 years of experience in the construction supply industry. A seminar leader and consultant, he is the author of two books: Gross Margin and 30 Ways Managers Shoot Themselves in the Foot. You can reach Bill at,, or 800.277.7888.

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