The Design Builder's Blog

Guest Blogger: D.S. Berenson is the Washington, D.C. managing partner of  Berenson LLP (www.homeimprovementlaw.com), a national law firm specializing in the representation of contractors and the remodeling industry. He may be reached at info@berensonllp.com.

Equal Employment Opportunity Commission to Contractors:  Start Hiring Convicted Felons!

Our friends at the Equal Employment Opportunity Commission (EEOC) have recently decided that “equal opportunity” should include convicted felons.  That is according to a bizarre and confusing “guidance report” recently issued by the EEOC directing employers to hire more felons and other ex-offenders .  And if you refuse?  Well, then you risk committing a federal crime.

The EEOC was originally established to enforce Title VII of the 1964 Civil Rights Act – allowing workers to bring suits and claims against employers for illegal hiring practices against minorities.  But like a number of federal agencies, the EEOC seems to be reinterpreting and expanding their mandate to fall into a more “politically correct” frame of mind these days. 

Some History

In the late 1980’s the EEOC sued a Florida trucking company because the company refused to hire a Hispanic man applying for an open truck driver position.  The company, Carolina Freight Carrier Corp., showed the EEOC that the man had multiple arrests and had served 18 months in prison for larceny.  “So what?” said the EEOC, that has nothing to do with his qualifications to be a truck driver.  The EEOC stated that company’s hiring practices created a disparate or unequal impact on minorities - and as a result was illegal.

The case went to court and was heard by U.S. District Judge Jose Alejandro Gonzalez Jr. (and, yes, he was Hispanic).  The judge, in ruling against the EEOC, summed the situation up nicely: "EEOC's position that minorities should be held to lower standards is an insult to millions of honest Hispanics. Obviously a rule refusing honest employment to convicted applicants is going to have a disparate impact upon thieves."

Not surprisingly, the EEOC ignored the ruling and moved ahead anyway. In 2012, the agency formally declared that that "criminal record exclusions have a disparate impact based on race and national origin."  (In plain English, that means that refusing to hire convicted criminals results in discrimination against minorities).

Catch 22?

With the most recent guidelines, the EEOC is now warning employers that refusal to hire job applicants due to a criminal past will be seen as a violation of the Civil Rights Act.  Sadly, the EEOC doesn’t tell us what to do when we hire a convicted felon, but then get sued when the convicted felon commits crimes against our customers and office workers.

For those who believe in the domino effect, stay tuned:  President Obama has just nominated Tom Perez to head up the Department of Labor. Mr. Perez currently sues banks for discriminatory lending practices in his role as head of the Department of Justice’s civil rights division.  His legal theory in these suits?   That employers are liable if their lending practices result in a “disparate impact” to minorities – the same theory now pushed by the EEOC in regard to employers refusing to hire convicted felons!

Guest Blogger: Mark Brown is a student at BYU-Idaho where he studies Construction Management. He currently lives in Spokane, WA, working as a carpenter and studying online while his wife finishes her Bachelor’s degree in nursing. This article is a shortened version of an essay titled “Is Generation Y learning how to learn?” written by Mark for a research writing class. It has been revised to help contractors working with Gen Y employees.

Advice For Contractors On How To Work With Generation Y From One Of Them

“Things just aren’t the way they used to be” is a lament often heard from aging generations. However nostalgic and skeptical this observation may be, it is definitely true. Generation Y (those born between 1980 and 2000) is growing up in a world completely different than their parents. Today we are surrounded throughout our waking hours by new technologies and devices that feed us steady and seemingly infinite flows of information, providing us with instant connection to knowledge that used to be much more difficult to acquire. Obviously, things are not the way they used to be. One can’t help but wonder; how do these changes affect our daily lives?  The way we work?  Our relationships with others?  The way we see ourselves?  How we learn?  

Contractors today face an especially daunting task trying to teach the business to a generation that learns completely different than the average hard-knocks PhD. Understanding these differences is essential to utilizing the huge talent Gen Y possesses and snuffing your own doubts of any hope for the future. 

The way Gen Y learns is fundamentally different than their parents.

They process information about ten times faster, they expect free and instant access to all this information, and they wonder what everyone else thinks about it all. Most have grown up learning on a computer from the time they were in grade school. Google is their main professor and they’ve learned to research as fast and efficient as possible. Capitalize on this. Gen Y can sail through tasks you find yourself poring over for hours like learning new scheduling software, Google Sketchup, or computer networking. They love to share what they’ve learned and can help you learn faster.

They can learn fast and perform consistently

Like a Southern California piece-work carpenter, Gen Y loves to have their work lined out and ready to tackle. This may be frustrating to those who value someone who can see what needs to be done and figure out how to do it, but think of the value of someone who can learn fast and perform consistently. Gen Y is also extremely adaptable, so they can learn how to be the leader who takes charge. They just need a better reason than, “Because that’s how it’s done you idiot!”

Can, will you give them what they want?

Gen Y has often been accused of wanting everything right now that their parents spent 25 years earning. However fair the accusation may be, it definitely reveals something about Gen Y. You’ll be hard pressed to find a more ambitious bunch. If they know that you can give them something they really want, they will follow whatever path you draw for them to get it. You can build them in ways that you never could with a burnt out 50 year old carpenter who’s been swinging a hammer the same way since he was 18.

The construction industry has seen some dismal days as of lately and those who have spent nearly a lifetime in it may not wish others the same. But, I hope they can see the promise that exists in the younger generation and take some time to be coaches and mentors to those who are ready and more than capable of taking the industry to the next level.

How To Have A Rockin 2013!

A new economy and a new marketplace are both here now, and they are what they are; for now.   Old ways of doing business or just waiting for something good to happen for you in the New Year are strategies that are probably not going to help grow your business and or your profitability.  Here’s my list of three things remodeling business owners can do to make sure 2013 will be the year they set their businesses on a new path towards success in a constantly evolving marketplace.  Don’t miss the video treat at the end!

#1: Choose your niches: You can’t serve everyone or anyone

When you serve anyone and are willing to build anything your business misses an opportunity to really stand out.  Lots of businesses already follow that model.   If you follow it too you will be just another one in the crowd.  Instead, by choosing specifically who you will work for and what work type or types you will concentrate on, you can then create and build a brand that attracts your targeted niche.  Make sure the niche market you choose to serve can support the required margins your business needs to do so and make sure to consider the skills required to sell to that niche.  Remember, the economy will be soft for at least several more years, so choose niches and work types that will be in demand in your market.   As Mick Jagger of the Rolling Stones sings: ““You can't always get what you want. But if you try sometime, you just might find, you get what you need”

#2: Identify how you’re unique

Don’t be different in the same ways other remodelers are different.  Sounds stupid but why copy another business and call that being different.  Besides, when you’re just like all the other companies the only differentiator in the eyes of the consumer might be price.   Instead, be unique.  Find ways to really stand out from the crowd in the way you do things and or the things you do.   For example maybe you only hire female field staff to build your projects.  Maybe you and your employees always wear company uniforms and name badges with your picture on it whenever you and or they show up for a sales call, service call or the first day at a new project.  Or, maybe you will only install American made products (assume that is really possible these days!).   As Jerry Garcia of the Grateful Dead once said: “You do not merely want to be the best of the best, you want to be considered the only one who does what you do”

#3: Build the right team 

You can’t do it all on your own and still have a life.  As the legendary Canadian Rock Band Bachman-Turner Overdrive sang: “I've been taking care of business, it's all mine. Taking care of business and working overtime”.   If running your business requires too much time away from the things you actually work to have or enjoy, you need to change how you do business.

Building the right team requires some engineering.   First, identify the organizational chart of job positions and the number of employees needed; today and at other predetermined milestones as your business grows and evolves.  Then, find employees who complement your and current employees’ strengths and weaknesses.   When filling job positions consider whether the assigned employees should be global or linear thinkers.   If you want employees who think like owners, hire the right ones and then give them the same experiences an owner has so they can actually think like an owner thinks.  If you want to use a lead carpenter system then hire true lead carpenters, but first make sure your other business systems are already in place and designed to support a true lead carpenter system.

I hope you enjoyed the “rockin” theme of this blog post.  

What inspired this approach you might ask.  I recently went on the Rock Legends Cruise II and had a blast.  Here’s a video I shot on the cruise of the Lynyrd Skynyrd tune “Give Me Three Steps” performed by the Artimus Pyle Band.   Artimus is one of two drummers who played for Lynyrd Skynyrd.   What’s special about this recording is that Bob Burns, the other drummer for Lynyrd Skynyrd, is on stage and both Bob and Artimus are playing drums at the same time!  I’m not sure that has ever happened before.  I hope you enjoy this recording as much as I enjoyed it live!  Artimus really pulled together the “right team” for this tune!

Artimus Pyle Band with Bob Burns and Artimus playing drums at the same time!

Rebuilding Your Construction Business On Purpose in 2013

Most remodeling and construction business owners didn’t start with a plan for where their business would end up; they just ended up where their businesses took them.   As they did business the employees and subs who worked for them, the clients who bought from them and the project types they bought are often the factors that eventually defined the business and therefore defined who their target customer type and job types are today.  If you’re not happy with where your business ended up, and you had to downsize during the recession, your current position might just provide an opportunity to rethink how you move forward before the economy and your business picks up.  Here’s a path to consider if you want a different business going forward.  Reflect back on and take advantage of lessons learned in the past as you map out your plan.

First establish goals for your business.  

Make sure the goals support both your professional and personal ambitions.   If you want to work to live, rather than live to work, now is your opportunity to make the change happen.

Your goals must be measurable

Next, establish metrics by which you will measure whether your business is on the right track and is achieving those goals.   In your metrics include ways to measure things like financial health, quality of service, quality of work, company culture, when you will be ready for the next stage of growth and the related employee growth or advancement that needs to be achieved. 

Decide who you will need for employees

Now that you have a clear idea of your goals and have defined objective ways to measure whether you’re achieving them or not, you can develop organizational charts for each stage of growth as well as job descriptions and candidate profiles for the people you will need to hire and advance.   Rather than let who you hire define your business and the job descriptions for those people, you will this time be able to proactively define, seek out and better qualify the right employees for each job position you will need to fill as the business grows. 

Here are a few examples. 

If you want to use a lead carpenter system, hire field staff with both trade and management skills.  If you can’t find real lead carpenters with management skills (because in reality very few exist) find good carpenters with the cognitive abilities and desire to learn and use those skills.  Then, train them yourself or find someone else to properly train them.  Your lead carpenter job description will help define the training you will need to provide.   If you want managers who will lead employees rather than supervise them, make sure you include that consideration in the employee profiles you will use to complement your job descriptions and hiring decisions. 

Putting the pieces together

If you hire the wrong managers you will be compromising your ability to hire and keep the right employees to do the work.   If you have to compromise on who you hire to do the work they will not be able to live up to your metrics or you will have to lower the standards by which you measure their performance.   If you drop the bar on your metrics you will either have to accept that you will never achieve your business and personal goals, or you will have to drop the bar on those too.

One definition of insanity is to keep doing the same things but expect different results.  If you want 2013 to be the year you changed the direction and performance of your business, you would probably be insane not to consider the path described above.

Thinking about figuring all this out on your own? 

If you and your business have the ability, the time and the money to learn all this stuff on your own check out this list of Five Great Books for Remodeling Business Owners.

Rather work one-on-one with a coach to help you?

Contact Shawn to find out how he helps remodelers and other construction related businesses all over the country achieve the business and personal results they desire.  If you're not earning and keeping enough money for your retirement yet he can help you change things.

Interesting Considerations For Putting The Right Employee On The Right Job

Just like business owners, all employees have their own strengths and weaknesses.  The key to efficiency and making money is recognizing these differences and putting employees in job positions and on tasks that they can be successful at.   One consideration is how employees learn.   As a business owner I came to discover that some employees are sequential learners while others are global learners.  How they learned new information and used it helped me decide who I should hire or not and ultimately what job positions and activities they should be assigned to.

Sequential Learners

Sequential learners learn best when information is presented to them in logical step by step order.   By presenting information to them in the order tasks should be completed, they can see how one step prepares for the next and or how subsequent steps are dependent on the previous step.   These employees are typically successful at repetitive activities, even activities that require a high level of skill.  Examples could include install crown moldings or estimating projects that can be done using a unit cost method.  However sequential learners might not make for good lead carpenters at a business where every project is different and or projects are highly detailed.   A sequential learner lead carpenter may be challenged if the business does not provide adequate project specifications and facilitated planning opportunities before the project begins.  Also, a sequential learner might not have success selling Design/Build projects to prospects who are global learners.

Global Learners

On the other hand global learners can take in random bits of information about a project or task and can quickly connect the dots between that information to assess a situation or assemble a solution on their own by quickly understanding the connections between those bits of information.   These employees can be very successful at job positions like handyman repairs, troubleshooting roof leaks and or gathering information from Design/Build clients who know why they want to do a project but might not know yet how to get started or what needs to be considered.   Also consider these employees might quickly become bored with repetitive activities or duties.

Why care?

It is important to recognize that every successful remodeling business needs employees with complementary skills.  A team dominated by one or the other of these learning types would definitely run into challenges.   Learning how employees and recruiting candidates learn and process information can help you make better hiring decisions and help promote employee retention.  Having the right employees in the right job positions can also help free the business owner up from “in the trenches” involvement in the business so they can concentrate on big picture and high value opportunities.

Example of why you might need both learning types on staff and in the right positions

Installing windows these days requires building science knowledge and an understanding of installation options regarding the methods and products that can be used.   A lead carpenter who is a global learner can be real good at understanding the science considerations and specifying appropriate installation details.   With those project specific details in hand a sequential learner carpenter can then be instructed by that lead carpenter, right at the jobsite, on how to install all the windows.   While the carpenter installs the windows the lead carpenter can be making the materials list for the next phase of the job so the materials will be ready for the carpenter when the carpenter is done installing the windows.  Unlike a production manager driven production system, because a lead carpenter driven system is being used, the global learner who specified the installation method is at the job site to oversee and if needed trouble shoot the efforts of the carpenter.  With a production manager driven system, after being instructed, the sequential learner carpenter might be on his own without anyone overseeing his or her activities to be sure the windows are being installed correctly. 

Right or wrong?

If you’re frustrated or disappointed with your current employees’ and or your production system’s performance you might have the wrong employees.  On the other hand you might have the right employees assigned to the wrong job duties.   Considering how they learn and process information might be the insight you need to get them and your business on the right track.  Let me know if I can help!

How Will The Fiscal Cliff and the Elections Affect Remodelers?

The threat of a year-end perfect storm of expiring tax cuts and massive defense and domestic budget cuts could push the economy back into a recession.  A recent article on the Fiscal Times website offers some insight into this possible reality and points out that many voters are clueless about the cliff and are in for a shock.  Another article posted on Reuters warns the cuts could cause the loss of nearly 1 million jobs across the country.   Remodelers trying to work on business planning, marketing and budgeting for the New Year may also be in for a shock if they make decisions without first considering the cliff and the outcome of the elections. 

Making any business decisions in a down economy can be difficult and risky.  

Unfortunately in addition to a bad economy we also have a lot of uncertainty about what the government will or will not do.  I think the problem, at least for those who keep an eye on the economy and the political arena, is having any confidence in making long term investments and decisions.   The fiscal cliff could really challenge the economy if across the board cuts are made as planned. And because the current administration has not clarified or committed to what will be cut, we don’t know how or in what market areas the economy will be affected most.  Unfortunately, true discussion about all this by our elected leaders won’t even get started until after the elections.

The economy and remodeling could take quite a hit if our politicians can’t come to an agreement.  And, even if they do come to an agreement, what will it be and how will it affect the economy?  If it gets pushed off into the future again, it will leave all businesses including remodelers in this unconfident position for a long time.  If consumers remain unconfident, and or get laid off as a result of the cliff, they probably won’t be spending money on remodeling.

Remodelers need to be very cautious about investing in capital assets.   

If the current tax deductions for capital asset purchases go away, the cost of those assets will in effect increase.   Waiting to make such purchases is a gamble.  If remodelers invest in capital assets now before the deduction possibly goes away, the question to ask is whether they will be able to meet the payments on those assets and or actually be able to make use of them if the economy does not improve or gets worse?  If they wait to see what happens they may miss out on the tax savings if the deductions are eliminated.  Making the right decision is hard without knowing who will be elected or which party will be in control after the election.

Should remodelers consider hiring more staff if they are seeing a work backlog building up?  

In my opinion, as long as they are selling work at a price that meets their overhead costs, remodelers must decide if they will use the gross profit to hire office and management staff and reduce their workload, hours and or stress; or work all those hours and keep the gross profit as their own compensation.   On the other hand if they are not selling at prices high enough to support the overhead, hiring more staff or buying more assets are not sound financial options.  I suggest waiting to see what happens with the elections and the cliff before making any long term business investments.   If you have money you are willing to invest, I suggest using it to improve your marketing and sales skills.   Those are investments that can help a business regardless of the economy and can even give you an advantage over your competition when it comes to capturing the limited amount of work available during a down economy.

Three Considerations for Controlling the Destiny of Your Remodeling Business

Many remodelers start their business with little real planning or consideration for the future other than to grow the business and make money.   For many this tends to work out alright, particularly during a good economy.  But the current recession has definitely exposed to remodeling business owners some of the natural consequences that come along with a lack of a long term vision for their businesses. A couple of obvious examples might include the current cost of excessive overhead accumulated when work was strong, and the overwhelming workload and responsibilities the business owner had to absorb due to staff layoffs.   However, an anticipated improvement in our economy offers an ideal time for businesses owners to rethink how they will move their businesses forward as the economy eventually improves.  Planning for the future now can definitely put you on a much better path and using what you have learned in business so far makes that planning much easier and more likely to protect your business when the next recession shows up.

This summer I will be participating in several Remodeler Summits sponsored by Marvin Windows and Doors to be held at their training center in Warroad MN.  As part of the Summits I will be presenting seminars to attendees to help them strategically grow their businesses.  Here are three things I will be asking the attendees consider about themselves and their businesses before new opportunities for business growth appear as the economy and the remodeling market improves.

(1) Are you an Entrepreneur or a Craftsperson?

This should be your first consideration.  Be honest with yourself.  Do you really want to be a business owner running and growing a business where your role is to develop your business so it creates the opportunity for employees and subs to perform the work, or is your love for the tools and craftsmanship what motivates you to go to work each day?  Either one can be a good choice, but the business you build will be dramatically different depending on your choice.  If you choose the craftsman route be sure to consider your age and health; now and in the future.   Will your body be able to handle the work type your business sells as you get closer to retirement age?   Also, as you age, will you be able to maintain the productivity required to earn the money you need to live and eventually retire?

(2) Will you hire to complement your skills or to maintain your authority?

Regardless of your choice to the consideration above, few business owners can know and or do everything needed to run a profitable business and still have a life outside work.   When seeking to add new employees, consider how you chose your previous employees.   Did you hire people who required constant supervision and instruction, or did you hire people who added skills and knowledge to your business that you didn’t have yourself?   Who you hire going forward will make a big difference in regards to what you will have to do yourself and how much of your time will be spent where.

(3) Will yours be a Practice or a  Growing Business?

A business that is a practice depends on the participation and the skills of the owner every day.  If the owner is on vacation or can’t come to work for any reason the business stops operating very quickly.  If you plan to run your business as a practice keep this reality in mind.   Your ability, as well as your employees’ abilities, to pay the mortgage and feed the kids can quickly become compromised.   Be sure to consider options like disability insurance and a reserve fund to protect yourself.  If you plan on growing your business be sure to take the two considerations above very seriously.  Also, make sure you choose employees with the cognitive abilities and desire to grow with your business.

There are two schools of thought regarding destiny

Destiny is often seen as either a fixed sequence of events that is inevitable and unchangeable, or that individuals choose their own destiny by choosing different paths throughout their life.  Marvin Windows and Doors is helping contractors shape the destiny of their businesses.   How about you:

Will you let destiny happen for you and your business?

Are you shaping your destiny on your own?

Are you getting help shaping your destiny, and if so, who's helping you?

Please share your comments and thoughts.   Other contractors looking for options could benefit from what you have to offer!

I’m Afraid To Hire Production Employees For Fear I Would Run Out Of Work For Them

While at JLC LIVE last week in Providence RI Many remodelers shared with me that they were seeing positive signs like increased leads and project budgets, and are now booking more work recently than they have experienced in the last several years.   Having scaled back their staffing due to the recession they expressed concern about hiring production employees to meet the demand only to have to let them go if the demand softens.   They were looking for solutions for their businesses that help keep good employees working full time.  There are no guaranteed solutions.  However with some planning and committing to some changes about how you do business, you can make it happen.   Here is some of the advice I offered these attendees:

Such a problem to have!

It’s a good problem to have, provided you can find a solution.  Unfortunately there is not a single silver bullet solution. Success with this challenge requires the remodeler look at and adjust several areas of his/her business.

One thing I recommend is finding a real lead carpenter who can actually manage the job onsite with little interaction with the business owner after a proper hand-off of the project.   For this to be successful the remodeler must look at what information needs to be collected and prepared before the hand-off from sales to production, conduct a successful hand-off, and actually empower and allow the lead carpenter to be a lead carpenter. 

Unfortunately many remodelers are challenged by this because in the past the hand-off after the sale involved the owner handing off the project to himself; so the business never developed processes and project information packages adequate enough to successfully delegate to someone else.

Can you go it alone, or will you need help?

This change in business style is understandably difficult for someone who has in the past been in total control of everything in their business and has relied on micromanagement to get things done.  Making the change requires new business practices and the changes can be fast-tracked with some mentoring/coaching to help the remodeler get through the structural and emotional adjustments required.

The main reason I suggest adopting the lead carpenter system and hiring a lead carpenter as a major part of the solution to this challenge is because if successfully implemented, the system allows the business owner the time and ability to concentrate on doing more marketing and selling, thus making sure there is adequate work coming in to keep the new hire(s) productive and continually employed.   

If you are looking for help with this or similiar challenges contact Shawn about his Consulting, Coaching and Mentoring Services to discuss how he can help.