During the last half of the 1990s, just about everybody in the remodeling industry found out what success tastes like. In fact, we gorged on success. Success was easy, and it was everywhere.
That was then. Just when you thought you'd finally found that bulletproof place, you're actually at your most vulnerable. I was reminded about the dangers of too much easy success while listening to Richard Teerlink's keynote address at the 2002 Remodelers' Show last October in Indianapolis. A standing-room-only crowd had assembled to listen to Teerlink tell the story of the near-death experience of Harley-Davidson. As Harley's former president and CEO, Teerlink had presided over the company's miraculous climb from hogwash to hog heaven.
What I remember best is Teerlink's warning that when companies are most successful, they become most vulnerable to one or more of three "sins" -- greed, arrogance, and complacency. Manufacturing motorcycles may not seem to have much in common with residential remodeling, but Teerlink had struck a nerve. The more I thought about it, the more I realized that, now that the economy has cooled down, many remodelers are in danger of becoming victims of their own success.
Greed. In the late 1990s, it became routine to land big-ticket jobs, the kind that had always promised to solve all your problems but were always just out of reach. Remodelers who had never completed a project larger than $200,000 suddenly found themselves embarking on $1.2 million whole-house remodels. Soon, they also discovered that the big money brings with it big risks and even bigger headaches. Understaffed and overcommitted, many small remodeling company owners were quickly overwhelmed and watched a decade of profits and good will slip away.
Arrogance. Demand for remodeling services in the past five years was as high as anyone can remember. Many companies turned away a volume of work that in a less prosperous time would have satisfied annual revenue goals many times over. That kind of success builds confidence, but it can also lead to a feeling of superiority and invincibility that clouds judgment. If a company owner grows too full of himself, it rubs off on employees, and quality and customer service suffer. Customers are tolerated, not served; quality is taken for granted and standards retreat to the mediocre; and employees start to think of themselves as infallible.
Complacency. This can be the most devastating consequence of all, mainly because it develops quietly and stays under the radar until it's way too late. When the phone is always ringing even as you turn away work, it's easy to forget the importance of marketing. In fact, with so many potential customers with expansive budgets vying for a spot on your booked-solid schedule, it's easy to forget what it means to sell a job instead of just taking the order.
As many of you have started to notice, the 1990s are over. I doubt many of you escaped unscathed, and I'm guessing you all succumbed, at least partially, to one or more of these three evils. Still riding high? Think you've dodged a bullet? Sounds like arrogance to me.
Sal Alfano, Editor-in-Chief email@example.com