Sal Ferro Wins the Fred Case Remodeling Entrepreneur of the Year Award

Sal Ferro isn't the complaining type, and you can understand why. He takes great pride in his 105 employees at Alure Home Improvements, a 62-year-old, $50 million company that completes 2,000 jobs a year. He adores his wife and three children and gets tremendous pleasure from helping other families through charitable activities including ABC's Extreme Makeover: Home Edition, on which he and his team have appeared an unprecedented seven times.

Photo Credit: Peter G. Svarzbein / WpN

Not only does Ferro have season's tickets to his beloved New York Mets, but he got to throw the first pitch in 2006 and 2007. On any given weekend, his golf buddies might include former pro hockey players or movers and shakers from New York's business community.

More reasons to smile: Ferro serves on a growing list of boards and has a wall of awards. He's never had to lay off anyone. He also seems to simply relish the little things in life: competing in fierce backyard sports games; chatting with strangers who recognize him at airports; joking around with staff; showing he can still break-dance at age 44; and, especially, watching other people flourish in their own lives.

But there's at least one thing Ferro dislikes, fervently. And today, midway through a painful year for the construction industry, it is on his mind.

"I hate to lose," he tells 17 members of his basement sales team on this morning in early July. The group is assembled in a room of Alure's corporate office, in a nondescript office park on New York's Long Island.

The word "lose" is an overstatement; one of the most successful remodeling companies in the country, Alure Home Improvements has had consistent double-digit sales growth and profits since the mid-'90s, when Ferro began transitioning into the CEO role long held by his friend and mentor Carl Hyman.

Even in the down year of 2008, two of the four divisions that make up the Alure brand — home improvements and kitchens and baths — are on track to grow, and the newest division, sunrooms, is holding steady.

Basement sales, however, are 15% off. Alure pioneered the franchising concept for Owens Corning Basement Refinishing Systems in 1997, and considering that the company sold $22 million worth of basements last year, any slowdown could have an impact on the whole company.

Ferro's pep talk, delivered without notes but with a clear logic, meanders from the Mets' maddening inconsistency to his golf handicap at a notoriously tough course to the paralyzing impact the credit crunch and mortgage meltdown are having on "luxury" investments such as basements.

But whereas the Mets' wounds are self-inflicted, Ferro says, "Our challenges are outside. You are still outperforming the market," the company's finances are solid, and its management second to none. He then lays out a litany of steps he is taking to kick things up, including beefing up training, extending call center hours, and the previous afternoon's "blitz" of having managers personally visit jobsites with Alure yard signs. He urges his audience to step up the energy as well. He asks: Who's planning open houses in the next few weeks? Who's been networking? What ideas do you have for the group?

"It's very easy to invest in a company when things are great," Ferro concludes. "We've got a history of expanding in tough times, and when this cycle is over, we're going to come out smoking."

Paying It Forward

It's that combination of optimism, transparency, and steely determination that makes Ferro such a winning businessman. He's not just admired; people who know him well say he embodies a fundamental decency that has a "pay-it-forward" impact on just about everything he touches, including Alure Home Improvements' stellar reputation as a company that takes care of people.

"He's a guy with a heart as big as the building industry," says Paul DiMeo, a star of Extreme Makeover, to which Alure has donated hundreds of thousands of dollars' worth of labor and materials to rebuild the homes of people in need. Besides Ferro's generosity and sheer competence as a construction manager, DiMeo distinguishes his extraordinary "commitment to the players in his company. He takes care of them and they in turn take care of him," he says. "He can ask them to work 36 hours straight [on an Extreme Makeover project], and they will because they know he's right there in the trenches with them."

"I think Sal's greatest quality is that he treats everyone with respect," says D.S. Berenson, a construction attorney who has represented Alure for many years. "He always makes you feel as if he's listening to your opinion and weighing it conscientiously and seriously. That engenders a loyalty and goodwill that is very, very rare" among highly successful businesspeople.

Leading the charge toward an Extreme Makeover. Other contractors involved in the program “let Sal run the show because he knows how to do it. Failure is not an option with this guy,” says Paul DiMeo. “These jobs are done in extremely diffi cult conditions.”

"Sal treats people extremely fairly, and he's definitely an optimist," says Lisa DiFilippi, an Alure vice president who came on board as a bookkeeper 13 years ago. "He sees the best in people and builds on it," not only finding ways to promote employees far beyond their initial positions but helping them identify and execute solutions to challenges. When referral rates drooped, for instance, it was his and Hyman's idea to launch "PartnerPoints," an enormously successful referral program that rewards clients and staff alike for bringing in business.

The program's ultimate reward is an all-expenses-paid Caribbean vacation with Ferro and other Alure staff and trade partners. In four years, 57 couples and 30 Alure employees have been treated to this sun-drenched celebration of the tropics — and, more subtly, of the Alure culture. (See video testimonials on www.alure.com.)

Even when the news is difficult, Ferro has an almost mystical ability to deliver it in a positive way. "Sal never kicks somebody when they're down," says Mike Camastro, a 29-year Alure employee who now manages the 200 or so trade partners that do the bulk of the company's production work. "He's got a unique way of giving you the bad but making you feel inspired to go out and do better."

Hyman, whose father, Sol, founded Alure in the 1940s, says Ferro is "a strong, inspirational leader, especially in tough times." After the attacks of September 11, Ferro gathered the team in his office, where he managed to both respectfully share the gravity of the situation and rally the Alure team to support one another and emerge stronger.

"His team will run through a brick wall," Hyman says.

"One thing Sal says is, ‘When you need me the most, you'll have me the most,'" says Mike Kuplicki, manager of Alure's basement sales department. "He doesn't just dump problems on your head." Nor does he avoid confronting them. A few years ago, Ferro invited Kuplicki to join him on a drive. After a while, "he turned to me and said, ‘Mike, how do you think the ladies in administration feel about you?' I figured they loved me," Kuplicki responded.

They didn't, he learned. "Sal said, ‘Would you be surprised if they think you are a little tough to work for?'" He then itemized a few examples. Kuplicki was briefly stunned, then defensive, "and then I got into my recovery mode because Sal is great at getting to that. He gave me a huge tune-up in the car, and he helped me see that my job is to motivate and inspire people, not to dominate them."

Leading With His Chin

One of the better-documented accounts of Ferro's motivational skills took place in New Orleans in March. Ferro had flown in 22 staff members and trade partners, including basement installer Robert Viola, to participate in the rebuild of a storm-battered church and home for the Extreme Makeover season finale. The project kickoff was held in a packed church, and the owners of the 12 key companies involved in the makeover had been asked to say a few words.

Ferro would speak last, and Viola worried that his friend would wilt under the pressure of the crowd and the TV lights and cameras. "By the time the mike reached Sal, I was sweating for this guy," he remembers. "What could he say that hadn't already been said? I wanted to hug him."

Viola's fears vanished the minute Ferro began speaking. "I couldn't believe what Sal pulled out of his hat," he says. "He gave the most beautiful speech. People were in tears. By the end, he had the entire place giving him a standing ovation." That's par for the course, say others who have observed Ferro at high-powered charity and networking events. "Some people are ubiquitous at these events," says Jed Morey, who runs a marketing and media company on Long Island. "The difference with Sal is that he is the room when he enters it."

But although Ferro is an inordinately good schmoozer, he is selective about the causes he supports, which run the gamut from local hunger-relief organizations to a green communities initiative to the Boy Scouts. And when Ferro is passionate about something, his room-filling warmth is both genuine and charismatic, which contributes beautifully to Alure Home Improvements'

"Their marketing works because Sal is the figurehead," Morey says. "He believes in his products and leads with his chin, and if you see the TV commercials" — on which Ferro himself appears, as he does in nearly all Alure marketing — "you know he is for real. Everybody's got a contractor nightmare story. You want to work with this guy."

But don't mistake Ferro's nice-guy demeanor for softness, says David Yoho Jr., a speaker and consultant with many construction clients. "This man has gone out of his way to build relationships to the degree that few people can find fault with his business behavior," he says. "What's interesting is that although Sal likes people and is a hugger, the man sets standards, and you're going to meet them. He has an intensity and a competitiveness. There isn't a second in this man's day that isn't about winning."

Making It Happen

To understand Ferro's intensity, consider a few defining moments in his rise to the position of corporate CEO. Salvatore Ferro was born in the Bronx in 1963, the fifth of eight kids of a taxi and limo driver and a housewife, both of whose parents had emigrated from Italy. In 1971, the family moved to Long Island, drawn by its schools and suburban promise, with Sal senior working two jobs to support the move.

When Ferro was 10, his oldest brother was killed in a car accident. Eight years later, his father died the same way. Ferro left college after just one semester to help his mother and siblings, working construction for his two brothers-in-law.

His father's loss both matured Ferro and gave him direction. While holding two jobs, he returned to school and completed his studies at SUNY Farmingdale. To this day, he attributes his accomplishments there — honor role, business club president, homecoming king — to convincing himself that he "could achieve anything," he says.

Another defining moment came when Ferro was 25. Newly married, and fresh off a miserably brief career as a stockbroker, he was again juggling two jobs (one for his brothers-in-law) and considering starting his own construction business. On a lark, he called Alure Home Improvements first.

Then largely a painting and wallpaper company, with revenue in the $3 million range, Alure was just getting into the home improvement sector. The position advertised was junior production manager, and the first person to screen his call was Freda Krackow. "He was so cute," recalls Krackow, who still works part-time, at 71, surveying clients about their experience with Alure. (She loves her job, she adds, because the average rating is 9.37 out of 10.) "I asked why he didn't want to stay with his family business, and he said, ‘They don't take me seriously.'"

No fair-weather fan, Ferro has followed the New York Mets all his life; twice, he’s thrown out the opening pitch. He weaves sports analogies into his conversations and pep talks as both a motivating device and a point of common interest.

Among his accomplishments was resurrecting the company's new but foundering kitchen and bath division. He created systems, a pricing structure, and a team. "And guess what?" Hyman says. "Within six months he totally turned K&B around."

"We were incredibly different in a lot of ways," Ferro says of his relationship with Hyman, "but we were both passionate. He was brilliant and forward-thinking, and I was the charismatic sales guy" who also happened to be good with numbers, honest, an outstanding delegator, and action-oriented.

"It was clear he had a business owner's mentality," Hyman says, and in the mid-'90s the two men worked out a seven-year plan under which Ferro would transition into the CEO role with a growing ownership stake. (Hyman is now semi-retired; four minority owners include Kuplicki and Hyman's brother, Bob.)

Getting It

In those seven years, protégé and mentor accomplished much. They worked with Owens Corning to franchise its basement refinishing system, and then developed the sales and installation processes for the system. They pioneered a proprietary software program that has the stunning effect of letting clients visualize their home with hundreds of exterior combinations, all on a 42-inch screen in the Alure showroom. They assembled innovative pricing structures and expanded Alure's presence into Westchester County and New Jersey.

Other defining moments were Ferro's alone. In 2001, at a week-long training seminar with Raving Fans author Ken Blanchard, Ferro had an epiphany that guides Alure today. Essentially, everything about the company — sales and marketing, construction, warranty, employees' behavior on and off the job — would leverage and reinforce the Alure brand as the most trusted home improvement company in its markets.

That same week, Ferro wrote the Alure vision statement: a 70-word ode to a culture of customer service, high ethics, and "superior results." Today, all Alure employees carry a wallet card printed with the statement and can recite it with a sincerity that suggests they actually believe in the words.

Berenson says they do. "Alure is one of those operations that really gets it," he says. "If a customer has a problem, they take care of it" rather than squabbling over a few dollars. This attitude inspires incalculable goodwill that is perpetuated through repeat and referral business, a virtually spotless complaint record, and happy and loyal employees.

In fact, certain phrases are part of the culture at Alure. All start with Ferro and find their way into the entire team's vocabulary and work ethic. "Having skin in the game," for example, reinforces how even minor efforts can have a positive impact on everyone else, including companywide profit-sharing. "Always be promoting" is a reminder to promote and represent the Alure brand in every interaction possible, even when out of uniform.

And then there's this: "Be their friend in the business." The goal, Ferro says, is to make genuinely positive connections: by listening, helping, and being there for people long after their remodeling project is completed. Behavior is key, he says. "We're always being watched in this industry." Think of everybody as a future client, he says, and it starts to come naturally.

About the Fred Case Award

Sal Ferro is the second winner of The Fred Case Remodeling Entrepreneur of the Year Award, established and endowed by the founder of Case Design/Remodeling, one of the largest full-service remodeling companies in the U.S. The award comes with a cash prize of $12,500 ($10,000 plus $2,500 for each of the four finalists, including Ferro).

Three judges evaluated nominees based on three principal criteria: their business acumen and their company's financial strength, their community and industry involvement, and their entrepreneurial spirit.

"Sal represents not only entrepreneurial thinking but entrepreneurial action," says Mark Richardson, president of Case Design/Remodeling and a judge. Besides Ferro's generous charitable work, Richardson cites his lead role in developing the Owens Corning basement franchising program, his innovative approach to "packaging" bathroom remodels at different price points, and his use of design-imaging software to differentiate Alure Home Improvements from its competition and distinguish siding and other exterior products as much more than commodities. "Alure is a breeding ground of ideas," Richardson says.

Fred Case, though not involved in reviewing nominees, is "very impressed with [Ferro's] professionalism, his work with the basement franchise, and the administrative systems that he's developed," Case says. "He runs a sharp operation in a very competitive market," and Alure's diversification and name recognition have helped him take intelligent risks and grow at a manageable pace, he adds.

To learn more about The Fred Case Remodeling Entrepreneur of the Year Award, visit www.casedesign.com and click on "press."

Web Extra

Additional CEO Best Practices from Sal Ferro

Sal Ferro is the CEO of Alure Home Improvements and the recipient of the 2008 Fred Case Remodeling Entrepreneur of the Year Award. To learn more about Ferro, see the original article as it appeared in the print version of the September issue of REMODELING.

Here are four additional best practices that reflect Ferro’s personality as an unusually hands-on and charismatic CEO:

The final interview. Prior to anyone being hired at Alure (there are more than 100 employees), Ferro always holds the final interview. "We don’t hire any inside staff without me interviewing them," Ferro says. At this point, the hiring manager has already indicated that he or she wants to hire the candidate; Ferro’s main goal, he says, is to "have them understand our vision as a company and for me to see who they are as an individual." The conversation is friendly, but Ferro is paying close attention. He has the final interview for two reasons.

One, he says, "Whether I ultimately want them or not, I want them to leave the interview saying, ‘Oh my god, I want to work for that company. These guys are incredible, and I feel like I’m 10 feet tall.’" Many of them have seen Ferro in Alure’s TV commercials and/or on Extreme Makeover: Home Edition, "and they can’t believe I’m spending 45 minutes talking to them," Ferro says.

Two, Ferro is extremely careful about only hiring staff who have the attitude and work ethic to become "raving fans," a concept derived from the book of the same name.

"People say, ‘Are you a control freak?’" Ferro says. "No. If you understand the ‘raving fans’ concept, you know that there are two kinds of customers. The internal customers are my employees, and we owe it to each other to be sure everyone who comes on board will also be a raving fan."

Transparency. While not entirely open-book, Ferro frequently shares company financial data and trends with his staff, particularly managers, in regular meetings and extremely detailed budget planning and tracking. Ferro receives daily lead reports and works closely with key staff to tweak practices – staffing, call center hours, marketing approaches, advertising, etc. – as needed.

"Transparency is a very important facet of my job," Ferro says. So is being inclusive: "I’ve got to make my employees a key part of the solution."

Staff retreats offer more opportunity to share this kind of information. "He took the entire management team to profitability boot camp, but it had nothing to do with the profitability of the company," says Lisa DiFilippi, vice president. "It was basically about looking inside yourself and your people and identifying them as assets – their strong points, their personality type, and how to get the best out of them."

The personal touch. In conversations or even everyday small talk – and there’s a lot of this, as Ferro is extremely friendly with virtually everyone on his staff – he almost always says the first name of the person he is talking to, in just about every sentence. "Thanks, Christina." "John, I like what you’re doing." "Nice work, Lisa."

"People love to hear their names," Ferro says. "It makes them feel good about themselves – this is Dale Carnegie 101." So conscientious is he about learning and repeating individuals’ names that when he once "messed up" the name of someone he hadn’t known long, he e-mailed them an apology. Needless to say, the gesture was appreciated.

Visibility in the community. Besides being Alure Home Improvements’ marketing figurehead, appearing in much of its TV and radio advertising that runs in heavy rotation on Long Island, Ferro appears often at community and civic events. These events are usually by invitation, and often (but not always) in conjunction with awards he’s been given.

For instance, Ferro has made many visits to elementary school classrooms to talk about Alure’s community service projects (including volunteering at soup kitchens and spearheading seven Extreme Makeovers for families in need). He gets hand-scrawled and hand-illustrated thank-you cards every week from grade-schoolers – and it’s not uncommon for him to respond personally.

The payoff is both personally and professionally gratifying, and perhaps unquantifiable in the goodwill it brings Alure. "We get tons of e-mails about Sal," says Seth Selesnow, director of marketing. "About 80% of them are along the lines of, ‘Wow, you’ve restored my faith in humanity.’ About 10% are ‘Will you remodel my house for free?’ Another 10% are: ‘Is Sal married?’" (The answer is yes – Ferro has been married for more than 20 years and has three children.) –Leah Thayer