Archive for July, 2009

Not like yesterday!

A few weeks ago I spoke at the Pella Expo exhibit during the Pacific Coast Builders Conference in San Francisco.  I was thrilled to participate; I was sponsored by Remodelers Advantage, speaking to great remodelers from the San Francisco Bay Area, many of whom I knew from my years of living and working in the Bay Area.  Additionally I am a GREAT FAN of Pella – last year Linda Case and I were fortunate enough to spend a day at the Pella headquarters in Pella, Iowa learning about Continuous Improvement.  Pella does, as near as I can tell, everything right.  Even during the downturn, they’re still taking care of remodelers, still investing in the future!

The icing on the cake, however, was meeting Mark Richardson, who among other things is an important columnist for Remodeling Magazine.  His conversation at the Pella group was after lunch, typically a difficult time to maintain audience attention.  But he hit the ball out of the ballpark and engaged every member when he talked about how and why we have to treat our clients differently than before, how we had to market differently, how we had to act differently!

Read his column in the June issue of Remodeling Magazine where lays out three important strategies to “create a sense of urgency in today’s market.”

You’ll be glad you did!   Read it here:   [http://www.Remodelingmag.com]

Day/Month/Quarter at a time!

Catching up on the ever-growing pile of reading to do,  I was struck by the number of articles across publications which point to the need for flexibility, the need to be nimble and the great deal of uncertainty which still exists in the US economy and across the globe.

Yesterday I received a periodic e-mail blast from Kraig Kramers, author of CEO Tools – a great book by which to manage – who said [I quote the article in its entirety]:

“Twelve Seasons at mid-year:  it’s a good time to re-evaluate economic trends and what they mean for our businesses.

“What many are seeing is the downturn slowing; some are citing hope as the harbinger.  My own view is that some economic indicators are degrading more slowly, yet there are still so many indicators that overwhelmingly say we’re still sliding into this recession headlong.  And, “hope” is not a good business strategy, so please don’t heed the “hopeful” rhetoric from Government and the parroting by media as hope tries to lull you into running your business as if things are on the mend.  They aren’t (yet), except in a few very rare sectors, geographies and industries.

“Unemployment has become the leading key indicator since it has consumers scared to death and continues to cause curtailment of their spending severely.  Many people who were not going to lose their homes now are, and the commercial real estate sector is now showing strong signs of decline, with deterioration not far behind.

“What this implies to me is that we can only see about three months out right now.  The stimulus packages (trillions of our tax dollars) are not being spent, certainly not coherently, and are going virtually nowhere…at least so far.  Less than $200 million of the original $800 billion has actually been spent.  It’s just not happening…yet…and probably not real soon.  Plus, it’s not aimed at most industries, just some.

“The economy continues downward, and some are saying bankruptcies will be even greater in 2010, while they’re already up in 2009 by 240% over 2006.  Again, we can only see with some certainty about 3 months into the future right now.

“So, my thought would be to set your goals and do your plans only 3 months out, and re-assess each month.  As we’re able to see somewhat clearly further out, then open up your range to 6 months and start implementing your growth and recovery plans.  There are some recovery things you can start to do now, but do continue to deal with the downturn while planning for growth.  The really savvy economists are saying we’ll bottom by the end of this year, but have a slow, very drawn-out sectoral recovery (meaning each industry will start recovery at different times and at different rates of speed).  So, watch carefully, frequently, and adjust accordingly.

“Really hope I’m wrong about the economic observations made above and that it’s much better than it looks.  As always, hope this makes sense for you and your business.” [END QUOTE]

That makes perfect sense to me, plan for the next 3 months at max.  Set monthly goals, weekly to do lists and work on a daily basis to make the plan a reality.

Good luck, to all of us!

Leading through uncertainty: HBR July/August 2009

Reading this article in the most recent Harvard Business Review brought to mind dog agility tests. The dog, usually an Australian Shepard, runs manically, through the uprights, over the tipping bridge, under a log and through a canvas tunnel to reach the end line for a tiny reward:  small kibbles.

We, owners of remodeling companies, employees of remodeling companies and the myriad consultants, groupies and hangers on, of whom I count myself one, might be feeling like that dog right now.  Running, jumping, leaping and navigating tight quarters, often in the dark, to receive a tiny reward, at least tiny compared to two years ago.

Some perspective on the matter, however, might cheer us all:  if you’re still in business, if you’ve got sufficient cash flow, if you count hard working and engaged employees in your group, and among your clients satisfied long-term relationships, if your health is good and your family safe — you’re a lucky person!  And, just like that dog, ready to run the current obstacle course.

So let’s take this one step at a time.  One of the GREAT articles in the current Harvard Business Review is Leadership in a (Permanent) Crisis (page 62). The first paragraph reads:

“It would be profoundly reassuring to view the current economic crisis as simply another rough spell that we need to get through.  Unfortunately, though, today’s mix of urgency, high stakes, and uncertainty will continue as the norm even after the recession ends.”

Further on, it states:

“Crisis leadership has two distinct phases.  First is that emergency phase, when your task is to stabilize the situation and buy time.  Second is the adaptive phase, when you tackle the underlying causes of the crisis and build the capacity to thrive ina new reality.”

I hope by now most of us have stabilized:  gone through the heart-wrenching difficult tasks of letting people go, of changing the rent structure – perhaps even moving the office back into the home – and built a “starvation” company budget for the remainder of 2009.

Now comes phase two, “the adaptive phase”.  In this phase we’ll have to determine our new reality by re-thinking what we sell, to whom and how we sell it and how to best produce great outcome both in terms of customer satisfaction and quality construction.  Efficiencies, both in the production process itself as well as in economics of scale, should be put under the microscope for improvement.

Tackle, as always, the issues with the biggest payback first, leaving less vital considerations to fall off the ‘todo’ list over time.

Start now, prepare for the future by engaging your brain as well as your employee’s brains, ask your customers what they need most immediately and what they hope for down the road.

“Jack be nimble” should be our new mantra.  Starting today!

[Download reprint RO907F from HBR.org]

10 Trends: Harvard Business Review July/August 2009

“…there will be no going back to the precrisis world.”

HBR [page 57] cites 10 trends you have to watch in the July/August 2009 issue.  Only some of these trends relate to remodeling.  I’ve noted the most vital below.  Download the article, Reprint RO907E, at hbr.org.]

“Trust in business running out:  The relationship between business and civil society was showing signs of strain even before the crisis.

“… a low-trust environment makes everything about doing business more difficult.

“The strategic imperative for most companies is to do what they can to regain the trust of stakeholders and to more effectively manage relationships with them.  This starts at the top.

“Regaining trust also means dispensing with the view that the only objective of management is to increase shareholder value.  Broadening the list of key stakeholders to include employees, customers,suppliers, communities, the press, unions, government, and civil society will help companies rebuilt credibility.”

“Shifting consumption patterns: Crisis or not, it was inevitable that the US consumer-spending growth would slow.

“Focus on older consumers:  Within five years, more than half of all consumer spending in the US will be by consumers over 50.”

“Find ways to offer luxuries on a budget.  Tighter household budgets don’t mean lower aspirations.  Our research shows thatt stretched consumers in slow-growing economies will still want to feel that they are living the good life.”

What do these trends mean for remodelers?  For one thing, we’ve all got to get back to executing on a higher level.  Take complete responsibility for the client experience, add personal touch and value to every contact: with clients, employees, vendors, consultants and suppliers.  Reach out into the community as well and be sure that you and your company name is known for commit ed involvement year round, not just when things are slow.

Develop depth in your offerings to older homes and to older homeowners, become CAPS certified, investigate home performance contracting – starting with upgrades to insulation and house envelopes.

Seek out and provide ways to add fun, sparkle, excitement and a sense of ‘luxury’ on even the smallest budgets.

Read everything you can, talk you everyone you meet with the point of view of an investigative report, question past clients, and slowly you’ll develop a plan for dealing with the future.

Trends look forward to the longer term – these are ideas to implement, starting today, which will help your company move forward in the future.