Avoiding The Bear
When it comes to managing, what do you need to know and when do you need to know it? If you're like most people who became managers, you probably assumed it was about being slightly smarter, and maybe a little more assertive. Then you found out that's only partly true, at best.
Managing a remodeling company successfully depends on the ability of the manager to acquire the knowledge and experience necessary to thrive in an environment that constantly throws up new challenges -- challenges that can include angry or vindictive clients, mutinous employees, dishonest subcontractors, incompetent suppliers, and the occasional unforeseen disaster. Steve Lusk, owner of Lusk Building & Remodeling, San Diego, offers this analogy: ''Say you're walking down a trail," he says, "and you see a bear. Your choice is either to shoot the bear or run. Learning how to avoid the bear is so much more difficult. Remodeling is a lot like that."
So just what do you need to know, and when do you need to know it? Minneapolis management consultant Mike Weatherbee (www.mikeweatherbee.com) points to three fields of knowledge new or aspiring owner/managers should master.
"The first is technical management. You have to do what you do, in this case, remodeling, or hire someone who can," Weatherbee says. Second is financial management. Budgets, forecasting, accounting, job costing. The third aspect is people management. These, he says, are "a three-legged stool. If you don't have one of the legs, your stool tips over."
The daunting news is that in addition to those three basics, the aspiring manager needs to know, among other things, about selling and marketing, plus human resources issues like how to hire, train, motivate, direct, and, at some point, fire people.
The good news is that there's no shortage of resources for the aspiring company owner who wants to learn how to manage. These include trade shows, association educational materials and certification courses, seminars, videotapes and DVDs, online courses, and audio tapes and CDs. In addition, there are business coaches, some of whom specialize in remodeling, and peer review groups made up of other remodelers.
Find a friend
Experts point out that the time to begin training yourself to manage a remodeling business is well before the doors open. Mark Richardson, president of Case Design/Remodeling, one of the industry's largest design/build firms, suggests aspiring owner/ managers figure out what they don't know and then find someone who does to teach them.
"My advice is, get the skills first," Richardson says. "Or go to work for someone who has that level of skill -- for a prescribed period of time -- and have that person be your 'Remodeling University.'"
Weatherbee agrees. "If you're already working for somebody, you can learn a lot of things by watching what they do well and what they don't do well."
Many remodelers who are just starting out, Richardson points out, know little to nothing about accounting, job costing, taxes, or writing a business plan -- all crucial to running a remodeling business. They will also need to know, he says, how to market their company and sell its services.
Florida management consultant Ken Daughtery (firstname.lastname@example.org) points out that trying to learn these skills as you go isn't impossible, but it does carry a high degree of risk. "Before you get started," he says, "learn how to sell. Learn how to market. Understand finances. If you can't understand a spreadsheet, you're dead. And have a mentor. Put your whole business plan together, including your marketing and selling strategy, and take it to somebody you trust who has background in the industry. Ask them to critique it."
David Bryan, owner of Blackdog Builders, in Salem, N.H., started his second company with relatively little cash after his first operation, jointly owned and operated with a partner, crashed and burned in a year. It was the search for people who'd done it and were willing to share that drove the cash- and time-strapped Bryan and his wife, in their first year, to the Remodelers' Show.
"We put the whole thing on a credit card, " he says. At shows and conventions, Bryan remembers, "I would go to seminars and wait for somebody to ask questions, then hunt them down in the hallway. I was a pit bull. But we started meeting people who were making good money, who had a great lifestyle, who were building a company." Eventually, Bryan joined a peer review group -- in his case, Remodelers Executive Roundtables -- a step owners of many successful remodeling companies regard as crucial. He still belongs.
In 1987, Erik Anderson, co-owner of Anderson-Moore Builders, Pinnacle, N.C., went to college and earned a degree in civil engineering. His ultimate ambition, however, was to own a residential remodeling company. "When you take engineering," he says, "that's all you get, engineering and math. You don't learn a lot about business or aspects of business. I figured that to be a successful businessperson, I needed to get more education. My plan was to go out and work for three years, then get an MBA and, after that, start my own company."
Anderson did exactly that. After working in commercial construction, he returned to school and graduated with an MBA. In 1996, he and a partner started their company. The MBA, he says, proved useful in many respects. For instance, accounting courses "taught me a lot about cash flow statements, income statements, how to read a balance sheet, and how those three come together," he says. "It made much more sense than trying to learn it in on-the-job training."
In economics and marketing courses, Anderson learned how to identify and target a specific demographic. Marketing courses, he says, teach you "what potential clients are looking for and what they prefer."
What he didn't learn in classrooms, Anderson says, was how to price his company's work to make a profit. In its first few years, the company was barely profitable and survived only because of its low overhead expenses.
"If you're not going to price your work well enough to make a profit, then being a good manager isn't going to do any good, because you'll be out of business," Anderson points out. "Learn to estimate. Learn to take overhead into account." He and his partner learned the importance of correct pricing and estimating when they, too, joined a peer organization, Remodeler 20/Rhinos in their case.
Be the leader
For many aspiring company owners, the people management leg of the stool can be the most neglected, because it's viewed as simply a matter of common sense. As a beginning company owner, "you can build the product, do the accounting, make the sales," Daughtery points out. "You can pretty much do everything. But after a period of time you have employees. You're their manager. And you could find that you're overwhelmed and starting to make mistakes."
Successful leadership is a two-fold process. First, learn to manage people as individuals, using tools like direction and feedback. Second, create systems within your business so that the systems manage the people and you manage the systems.
"In our second year," Bryan recalls, "I hired field employees. And in our third year, we hired our first business employee. I realized," he says, "that the reason my first company failed was not the bag-of-nails part, it was the administrative part. So I spent some time putting in process and structure -- being more organized. Ultimately, I became enthusiastic about letting go of stuff and getting as much input and feedback from employees as possible."
Management consultant and author Paul Pease (www.speakpease.com) says many people who start up businesses feel compelled to control everything and never lose the habit. "But if you're going to have employees," he says, "you're going to have to become the consummate trainer. You're going to have to train employees how to do things the right way. And you're going to have to allow them to make mistakes."
Ask Bryan today what he learned about managing employees and he will tell you it's that the company owner sets the pace, determines the direction, and creates the style. "Are you going to be a dictator, a team builder, or a cheerleader?" he asks. The trick is to be consistent and work constantly to create a positive atmosphere. Employees are "incredibly observant of the subtleties of how you manage," Bryan says. "For instance, I don't post my personal mail on our postage meter. I don't want them seeing me do something I wouldn't want them to do."
On Down the Line
Finding and training your company's new leaders takes time, money, and a system.
Six years ago, Patrick O'Neill drove a UPS truck in Morton, Ill., where he also owned some rental properties on the side. When a fire broke out at one of his buildings, O'Neill called Menold Construction, an insurance restoration and remodeling company. He ended up working for the company as a painter.
Today, O'Neill runs Menold Construction's restoration division. Somewhere between 12 and 25 people report to him, depending on the season. His boss, company owner Tom Menold, has high praise for O'Neill -- praise that rings especially true because Menold, like most remodeling company owners, has had his share of bad managerial hires.
Whether their responsibilities involve project management, administration, or finance, the individuals you hire to help you run your company will succeed or fail based on two factors: whom you choose and how you train.
Before you can get to the second part, you have to tackle the first. Florida-based management trainer and motivational speaker Lou Heckler (www.louheckler.com) advises owners looking for employees with management potential to watch for three qualities:
Initiative. "The best leaders are people who aren't afraid to take action," he says.
Personality. Managers should possess the ability to collaborate rather than confront.
Curiosity. Look for "someone intrigued by and drawn to new things to learn," Heckler says.
Often, potential managers step forward and ask for responsibility. "Winners," says Missouri remodeler Scott Mosby, who recently hired a business coach to work with his production manager, "bubble up to the top."
For instance, when Menold posted the supervisory position, he didn't specifically have O'Neill in mind. O'Neill -- who saw the ad in the local paper -- approached him with a proposal. "I went in and asked him to give me the opportunity," he says. To emphasize his seriousness, O'Neill agreed to perform the supervisory job at painter's wages for a year, "and if they were satisfied, we could negotiate."
Culture key to success
Michigan remodeler Allan Lutes, whose company, Alpha Contracting, employs 23 people, says that when he has a management position to fill, "the first thing we look for is integrity, an attitude, and ethics, plus a work ethic that matches our company culture."
Agreement on those fundamentals, Lutes says, lays the groundwork for decision making. Employees faced with hard decisions need to make them on the basis of the company's core values. For any level of manager -- from lead carpenter to vice president -- the ability to communicate with clients regularly and positively is essential to the success of a project, and ultimately of a company. For this reason, many remodeling companies find that their best managers come from inside, because these are people already familiar with the company culture.
Stan Friesen Jr. started as an 18-year-old laborer with the Neil Kelly Co., in Portland, Ore. He still works there today, 30 years later, as a project manager. At Neil Kelly, lead carpenters report to project managers, who are responsible for making sure anywhere from five to 13 jobs stay on schedule and result in satisfied clients.
Friesen applied for the job as project manager five years ago, after a fall and resultant back surgery made it difficult for him to continue as a lead carpenter. "I asked them if I could be a project manager," he recalls. "They said, 'We were wondering when you were going to ask.'"
Friesen was assigned to work with, or what the company calls "job shadow," another Neil Kelly project manager. He also entered an eight-week company training program. Ten different classes were included, covering subjects such as working with subcontractors, designing kitchens, estimating, time management, accounting, gross profit, projecting and managing budgets, and use of Timberline software. Sales/design consultants, project managers, and others teach classes. At the end of the second month, Friesen was taking classes on customer satisfaction, part of which involved "a lot of role-playing," with project managers impersonating irate clients.
The classes proved invaluable, though Friesen still feels his work experience was his best training. "The hands-on out in the field was probably more useful," he says. "But I could not have done my job without that extra training."
Pass it on
Training doesn't necessarily need to be a formally structured curriculum. For small companies, it can simply be a step-by-step plan to equip trainees with the skills and information to perform the job to the best of their abilities. Remodeler Brian Altmann, president of Dutchess Building Specialists, in Poughkeepsie, N.Y., waited until his business was generating almost a million dollars annually before he hired someone to be his office manager.
Altmann knew he needed someone who "understood business and customer service and how it works," as well as an individual who was "supremely organized." He approached Bob Lutz, the manager of a local printing company with which he did business.
"He was successful, friendly, made me feel important going in there, and wanted me to be happy with the product." Those were all qualities Altmann considered essential in an office manager, who interacts with clients, lead carpenters, and suppliers all day long.
But then there was the question of how to train someone with no background in construction. Unlike for carpentry, accounting, or selling skills, there's not a lot of formal training available for individuals hired as office managers at remodeling companies. So what Altmann found, three years ago, was that to make the new position work out, he had to personally train Lutz. And mostly what that meant was paying attention.
"I took the time," he says, "to explain something to him, rather than just saying, 'Oh, forget it, let me do it.' He'd say, 'What's brick mold?' And I'd draw it out and say, 'Here it is.'"
Lutz estimates it took him about a year to get the job down. He points out that when he started, what Altmann wanted was for him "to get to the level where I could assist the 12 carpenters in the field -- to provide them with the assistance to help their jobs run smoother," he says. "He spent a lot of time with me. He was patient and knowledgeable. When I was ordering doors, for instance, he would explain grilles, he'd break down all the components."
Altmann also familiarized Lutz with area building departments and introduced him to local inspectors. "We started prepping jobs together. He'd take a contract, and we'd break it down together. He'd spend about five hours a week, just giving me direction.'"
One element essential to training an office manager, Altmann says, is "getting your staff in the field to have patience with the new person. This is very critical. They're up on a roof and they think, 'What the hell is this? He doesn't know what a drip edge is?' Everybody's got to help out." Altmann says he spoke with each of the company's lead carpenters. "I told them, 'This will help us get to the next level,'" he recalls. "You're going to have to show patience.'"
Companies that can afford to often bolster in-house training by using off-site resources such as associations, local schools and colleges, and other remodeling firms willing to share time and expertise. For instance, after Patrick O'Neill was hired as restoration supervisor at Menold Construction, he spent several weeks working for other area companies. This included a three-week stint working with a crew on a Springfield, Ill., hotel. He took classes in carpet cleaning and dust cleaning sponsored by the Association of Specialists in Cleaning and Restoration. "As the year went on," O'Neill recalls, "they sent me to some conventions to learn the equipment. A lot of it was hands-on, common sense."
Julia Spence, vice president/human resources for the Neil Kelly Co., says off-site training is a key part of educating managers there. Those resources might include continuing education classes, half-day or full-day workshops and seminars in communications, or even 10-week courses in construction project management at community colleges or Portland University.
That the company is willing to spend money educating new managers off-site also boosts morale and, with it, the chances for long-term success. "A management class at the local community college," says Lou Heckler, "buying audio tapes and CDs -- it says the hope and trust management has placed in this person is real."
That hope and trust can also pay off in a high compliment: "We tap a lot of internal resources," Spence says. "So if someone's really good at time management, for instance, we'll have him teach a class."
Into the Field
Training crews ensures a quality job and better client relationships.
Training production crews used to be a matter of passing along tried-and-true installation techniques at the jobsite. With the right combination of seniority, technical expertise, and leadership qualities, capable helpers eventually worked their way up to lead carpenter. Crews rarely were asked to give much thought to how they fit in the company's business plan or client relations.
Though on-the-job training remains a critical piece of the training puzzle, contractors today expect even more from field crews. Beyond framing and installation, remodeling companies train crews to act in ways that reflect positively on the company's image and to understand the consequences of their work practices on company profits.
They're also being asked to take more control of the remodeling process. In addition to banging nails, multitasking lead carpenters schedule subcontractors, communicate with clients and vendors, and hire and train their helpers.
First things first
In an industry where internal labor expenses account for one-fifth to one-quarter of a project's cost and total project quality determines the word of mouth that existing clients spread about a contractor's work, training field employees cannot be overlooked.
"Training is a growth strategy," says Mark Richardson, whose business is projected to generate $35 million in revenue this year.
Most contractors are convinced that technical skills can be taught but that employees must be temperamentally receptive to training. That's why training begins with hiring, and why a job applicant's personality may sway an employer as much as his dexterity with a hammer. Richardson's company puts all new hires through a three-hour-long "cultural training" indoctrination. "The [employees] we get to 'drink the Kool-Aid' are usually the ones who will be two times ahead of everyone else in training."
Some contractors supplement what crews learn in the field with weekly and monthly meetings, or classroom-type sessions on subjects ranging from safety to staying on top of paperwork. Many owners turn for help to association certification programs, trade show seminars, instructional DVDs and CD-ROMs, and in-field training from suppliers (see "Suppliers and Demands").
People hired for crews usually have basic installation skills, and companies offer better pay to those who are competent enough to be lead carpenters. Getting new recruits off the ground, though, is a challenge when their talents are raw. "Regrettably, the [installation] standards out there are very low," says Steven Howell, who owns Howell Design and Build, a $2.4 million company in Andover, Mass., and has personally trained every person on his seven-man production crew.
Prime Construction in Burlington, Vt., with 23 carpenters on staff, has even worked with local social services organizations to try out unemployed people who have expressed an interest in carpentry or construction. "If they show potential after a few weeks, we'll hire them as apprentices," says company owner Michael Gervais. The Wills Co., a design/build firm in Nashville, Tenn., starts its workers as support carpenters, "so they understand the renovation side first," says production manager and partner Wendell Harmer. And Richardson notes that apprenticeships at Case can last anywhere from 18 months to seven years, depending on how soon a helper demonstrates a self-starter attitude.
Contractors still depend on lead carpenters to train helpers and monitor their progress. Mark Troyer Remodeling in Plain City, Ohio, gives helpers three months to prove themselves.
The Wills Co. teams helpers with lead carpenters and reviews their work after three months and one year, says Harmer. To help leads train their helpers, Harmer developed a manual that details quality standards on everything from demolition to how windows should be set in place, which he issues to every carpenter.
But contractors admit that certain construction techniques or procedures consistently frustrate their training regimen. For Don Jones, vice president/general manager of Cincinnati-based Champion Windows, Siding, and Patio Rooms, it's post-construction procedures like jobsite cleanup. "You can do an expert installation but if you leave a nail in the driveway, you've failed," Jones says. To find out just how crews are doing, Champion contacts homeowners one month after the company completes a job and asks them to rate their experience, from the time the job was sold to completion. Those ratings help the company evaluate and upgrade crew proficiency.
Crane Builders, a Nashville design/build firm, holds weekly office meetings where its four lead carpenters talk through product, personnel, and installation problems. The company also has monthly safety meetings for its production staff of one production manager and three helpers. And once a year, the whole company goes on a retreat where, according to owner David Crane, suppliers have been invited to discuss their latest products and installation requirements.
Last April, John Scroggins, "business coach" for Mark Troyer Remodeling, started what he calls "tool belt" meetings, 30- to 45-minute training sessions for carpenters that focus on personal needs. The meetings cover "soft skills" like customer service and paperwork management and "hard skills" like installation and product knowledge. Some information is presented in lectures, some in hands-on demonstrations.
For many companies, letting someone else conduct, or at least supplement, the training is the way to go. Four lead carpenters at Mark Troyer Remodeling are certified under NARI's Certified Lead Carpenter program, and the company gave a $300 bonus to each for passing the course. Contractors like Case Design/Remodeling -- which has 40 certified lead carpenters on staff -- and Prime Construction -- with three certified carpenters and one in the process -- are committed to these industry-devised programs. Others view them as ways to provide ambitious workers with an avenue leading to management.
In September, Champion sent an employee to a six-day class, conducted by the American Architectural Manufacturers Association, to become a certified instructor. That employee will then be qualified to train other Champion employees to become certified window installers. One of The Wills Co.'s lead carpenters, Brian Krueger, who passed NARI's program, is qualified to teach other carpenters to become certified. Regis McQuaide, owner of Master Remodelers in Pittsburgh, says he plans to send his production manager through training to earn his Certified Graduate Remodelor designation, the certification offered by the NAHB Remodelors Council. (The next PREP test is at the Remodelers' Show in Baltimore this month.)
Crane Builders recently paid $600 to buy a carpenters' training course conducted through 20 DVDs, produced by Xactware. Other contractors are also seeking those kinds of training aids, and they aren't restricting themselves to looking for technical training. Gervais says that his company is in the market for a disc-based training program that focuses on non-technical issues such as "respect for customers, cleanliness, and protection of property." Next January, Mark Troyer Remodeling plans to initiate a "character training" curriculum, developed by an outside firm called Character First (www.characterfirst.com). The program touches on 49 different character traits, like diligence and cautiousness, business coach Scroggins says.
Some contractors, though, are skeptical about book or classroom instruction as training methods for people who earn their living with their hands and their backs. "I've found that guys in the field don't retain what they've read and are trained better by us showing them what to do," Howell says.
Indeed, NARI's CLC program, launched in 1996 and charging $335 per carpenter, hasn't exactly caught fire within the industry. Carpenters study from a 500-page, 21-section manual and must answer correctly 65% of a 350-question test. The certification also has a review process in which contractors must document that they have attended educational courses. As of early July, only 1,200 lead carpenters had gone through the certification program successfully. "That's a tiny portion of the total," concedes Dan Taddei, NARI's director of training. "It's difficult to convince owners that book learning is important to their carpenters and their business."
Drive to Succeed
Florida management consultant Ken Daughterty says that of all the various ways a business owner can educate himself, audiotapes are the best.
Here's why. If you drive to work, and your commute is, say, 20 minutes, and you spend 15 of those 20 minutes listening to personal development tapes, you're learning for one hour and fifteen minutes a week. Listen for 15 minutes coming home, and you could learn twice as much.
"Imagine you're sitting in a classroom," Daughtery says, "learning about management, sales, and marketing. And it didn't take any time, because you've got the time. You have to get to work."
Daughtery advises aspiring managers to borrow tapes from local libraries or, better yet, "start building your own reference library" of personal development tapes.
The Leadership Workshop
Some of the industry's larger companies selectively recruit management candidates from among their ranks, then put them through a training course. Many companies also include a budget to send their people to off-site training in communications, human resources, time management, and other issues.
Ongoing internal training, to refresh and expand the skills of managers and managers-to-be, can help prepare employees to lead. A year ago, Case Design/Remodeling, with 250 employees, picked 15 of its 30 to 40 middle managers for a pilot program called Leadership Workshop. The workshop has two parts. The first is a monthly event in which outside speakers are brought in to talk about leadership subjects. In addition, each month participants are assigned a book, along with assignments for discussing it with the group. At the end of the series, Case management distributed a questionnaire to participants, asking them to list, among other things, what they feel are their top three leadership strengths, top three weaknesses, and how they feel they improved.
The program lasted nine months. Case will repeat it at the end of this year. Case president Mark Richardson says the program is designed to prepare middle managers for top positions. "The reality in life is that we tend to focus on what we do rather than on improving ourselves," he says. "By setting these expectations, they're forced, in a positive way, to improve."
Suppliers and Demands
Regis McQuaide, who owns Master Remodelers, Pittsburgh, has found that training carpenters often starts with their following a manufacturer's guidelines. McQuaide points specifically to an installation booklet provided by Alcoa, his siding supplier.
"Manufacturers understand that training creates loyalty for their products," says Mark Richardson, president of Case Design/Remodeling, where monthly product knowledge seminars include reps from Andersen, Velux, and DeWalt.
Other contractors sometimes find themselves tapping into the army of field service reps to hone their crews' skills. Denise Bottrell, a spokesperson for James Hardie Siding Products, says that its 100-plus field reps devote half- and full-day sessions to familiarizing crews with the right tools to install the company's fiber-cement siding. James Hardie will schedule training for vinyl siding installers who seem to have a harder time making the transition to fiber cement than those working with wood siding.
Karen McGowan is a certified Tyvek specialist (one of 145 in North America) who covers a five-county area in New Jersey and just completed her fourth year of continuing education at that company. When she's on a jobsite, McGowan works with a crew's lead carpenter to conduct installation demonstrations, sometimes in Spanish as well as English. (Tyvek offers installation literature in those two languages, plus Polish, Korean, and French.)
Communicating with contractors on their terms is important for suppliers, which is why Paul Kouri, who owns Life Deck Specialty Coatings in San Diego, writes his product specifications in a straightforward manner. This concrete resurfacing and deck waterproofing supplier has produced training videos and conducts monthly training seminars at a facility in Santa Fe Springs, Calif., which draw between 20 and 100 applicators.
"I find that people who take responsibility for the complete job are more apt to come in for training," Kouri says. "What I don't see are contractors who complain all the time that there aren't good installers out there setting aside the time to train their people."
Better-trained crews aren't the only plusses contractors realize when suppliers are summoned for training. Trex, the composite decking supplier, has a program called TrexPro that certifies installers after they're trained by the company's reps or its distributors and can construct a Trex deck to the company's satisfaction. In return, Trex provides homeowner leads and ad materials and posts that contractor on its Web site, according to marketing director John Burns.
Another advantage for contractors is reducing botched installations and the liability headaches that follow, says Jeff Klein, an architectural rep for The Dale Co., a Nashville-based Marvin Window distributor, which has trained crews across the Southeast. "Marvin has a 10-year transferable guarantee on its windows and a 20-year guarantee on its glass, so it's best to make sure that installers are doing it right up front, so that they don't get a call a year from now and we don't have to deal with warranty issues."