Miners used to bring canaries underground with them because the birds were more sensitive to the presence of deadly gases. If the canary keeled over, it was time to get the heck out of the mine.

A remodeler also needs to be alerted to threats to the health of his business. But unlike a canary, which croaks to signal danger, you need monitoring tools that you can use over and over again, and that are sensitive enough to give you enough time to resuscitate your operation.

Feed Forward
I once heard from a remodeler who had read about something he called "feed forward." He explained that it was a way to use feedback from past business events to make improvements or changes to future business events or practices. The expression is full of truth, but I couldn't help wondering how a remodeler might actually go about collecting the required feedback. Few remodelers ever take the time to do so, and others can't sort false warnings from the real thing.

Most remodelers use standard feedback loops: They conduct a customer satisfaction survey after a project is completed, and they conduct exit interviews with employees. The crucial question about these methods is whether they provide a complete and truthful picture. And if they do, then what is the best way to put that information to use? To make your business really sing, you need to actually do something with that feedback to propel your business forward.

The Customer Audit
In my experience, customers who have an issue with the work you did or with one of your field employees are not likely to tell you about it in the customer satisfaction survey. Homeowners tend to be non-confrontational; they don't want to make you feel bad, and they don't like having to justify a complaint.

Still, that's no reason to let them off the hook. Instead of simply mailing the survey, follow up with a phone call to encourage them to be truthful. Remind them that their satisfaction is important, and that genuine feedback is the best way you can continuously improve serving them.

The Exit Interview
When an employee leaves a company, it makes sense to find out why. Statistics show that the majority of employees leave their jobs because of their supervisors, so the employee's direct supervisor is probably not the ideal person to conduct the exit interview. By putting a neutral person in charge, you are more likely to gather the most insightful information for moving your business forward.

Similarly, don't let an employee's worries about receiving a good reference limit his willingness to give constructive feedback about your company. Head him off by providing a reference letter at the beginning of the exit interview.

Owner's Invitation
There are two types of business owners: those who welcome and encourage feedback and suggestions, and those who let everyone know that when they want input, they will ask for it.

If you recognize yourself as a member of the latter group, you're taking a big risk. Your employees and your customers have invaluable insight that can forewarn you about serious internal problems. Every business owner needs to watch these "canaries" for signs of impending danger. When the canaries start to wobble, it's wise to pay attention. You have the power to do something before your business suffocates from lack of attention.

--Shawn McCadden recently sold his Arlington, Mass.-based employee-managed design/build remodeling business. In his second career, he is Director of Business Innovations for DreamMaker Bath and Kitchen by Worldwide. shawnm@charter.net.