Right To Left Thinking with Todd Dawalt
CLICK BELOW TO LISTEN TO THE BLOGCAST OF THIS POST.
Todd and I discuss a simple yet profound planning strategy he calls Right To Left Thinking.
In construction, we often plan our projects and our businesses from right to left, or from the start date to the finish date. Todd reveals how planning your projects from finish to start (or Right to Left) can have a profound impact on your business.
You can watch the video of our interview here, read the transcript below, or click the here to listen to the blogcast of the interview.
Click here to listen to an episode of Todd’s podcast where I was the guest and we discussed how to create the skilled labor you need for your construction business.
I just came up with this language for this, but it’s Right to Left Thinking.
Because typically most people I’ve dealt with operate from left to right, so if you’re looking at Gannt chart schedule, the typical approach is well we’ve got our back log of business and I’ve got my guys, my equipment, my tools, and then we’re just gonna work left to right, do the best we can.
Then at the end of the month hope things work out well.
Then typically it doesn’t, so typically they have cash flow problems or there are things that get delayed and they have scheduling problems. All these other issues, so one of the things that I did several years ago, was establish a revenue target for each month. Just for cash flow purposes. We’ve got to have this many dollars come in every month. I don’t care how we do it, but to solve our cashflow crunch, we have to have this. When we work from right to left, break that into weekly targets and then break those weakly targets into project weekly targets.
Then you know the what or the how much, and then you start pulling levers and building the machine that’ll get you there.
Maybe you need to staff up, maybe you need to outsource, maybe it needs a subcontract, but that, very much like what you’re talking about with scheduling, you can do the same thing with your revenue and figure out not only what do you need to get accomplished, but what are your targets for the year, for the month.
You can do the same thing not only with revenue, but with quality, safety.
Yeah you can do it with everything. That is … I love that. I love that.
It’s a different way of thinking. Really there’s probably a lot of other industries where that’s the natural tendency, but with us, we have so many variable maybe, it’s like well we’re just gonna go in and start this project.
We’re very start centric. We’re very focused in starting.
Just well, we’ll figure it out when we get there because we’re fire fighters and we’re smart guys and … and all this other stuff.
I have seen it so many times where projects run long, companies have cash flow problems because they’re not … because they’re working from left to right, versus right to left.
When I talk to people about that, the lights really go on.
Like, I didn’t think that way. Even when I had my own business I didn’t think that way. It took me a long time to figure that out. That’s something that I found to be extremely helpful.
Reverse engineer your business. I love that right to left thinking. That is so good.
Take your revenue and increase it by 15%, that’s the target revenue.
Divide by the number of employees to get your revenue per employee, ’cause you don’t know any other numbers.
You haven’t tracked anything else, but you probably know your total revenue and the number of employees.
Divide that out per quarter. Then break it down and then look at January.
Do those numbers match up? Do you need to increase productivity? Do you need to just sell more? Do you need to hire somebody else?
Knock out January’s numbers. If you don’t then knock out increase February’s numbers, you know.
So I love that.
That’s great and that’s I also teach my clients to say a lot of times too when their subcontractors, the general contractors say, “when can you start?”
And I say to tell them,” well what does it matter when we start? When do you want us to finish?” ‘Cause we’re not gonna be able to start next week. You want warm bodies on the job site, no, but if you need it to be done eight weeks from now, if that’s really the target date, which is what everybody wants. They wanna be done and work it back.
You’re a genius dude. Right to left, I love that.
I don’t know about genius. A genius would have figured that out probably when I was 25 years old in stead of 18 years later.
Profound. Then I’ll say it’s very profound.
You’re a profound man Todd.
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Shawn Van Dyke is a construction industry consultant, business coach, and mentor to skilled trade business owners. He is a Brand Ambassador for Fine Homebuilding, travels across the US as a keynote speaker, seminar presenter, and the author of The Paperwork Punch List: 28 Days to Streamline Your Construction Business.
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