Reduced Roles

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March 01, 2001

In the beginning, a remodeler may put in 70-hour weeks building a successful, sustainable business. As the business—and the owner—matures, however, work weeks should shrink and other activities come into play. Whether it’s children, community involvement or travel, the professional remodeler uses these activities to balance the passion for the business. For Winans Construction owners Paul and Nina Winans, CRs, this list of outside activities drives their strategic planning. Last year, Winans won the National Remodeling Quality Gold Award, and NAHB’s Research Center noted the company’s strategic plan as a best practice.

PR: How did your strategy evolve?

PAUL: Our plan is not to work for forever. The only way to get motivated is to have an increasingly clearer idea of exactly what you would do instead of working. If there’s nothing that you are interested in doing, the only safe harbor is to keep on doing exactly what you’ve been doing. I have a list, and I have a pretty clear idea of how I’d take advantage of the additional free time.

If they cost money to do them, like travel, that helps you structure a financial goal. [It] gives you a sense of how long you need to keep doing whatever it is that you do that generates the income.

PR: What triggered this process?

PAUL: Involvement with peer groups like Business Networks and Remodelers Advantage. We got outside the box of our own little world, which is filled with day-to-day, "Quadrant 1" things. We were in environments that allowed us to think longer term and to hear what other people were doing or not doing. I’ve always been interested in reading about other people’s struggles to define [success]. To a certain degree, this is a logical outcome of that. Why are you doing this particular activity right now? It has to have some sort of impact on long-term goals, even if it’s to buy groceries at the end of the week. You get that need covered, what is next? Chase that trail all the way.

PR: Have both of you worked on setting this goal?

NINA: Yes. For me, the setting of the goal has opened up possibilities; I didn’t think of them first the way Paul seems to have. [Our goal] is now: "The company’s reliance on any one individual is diminished."

PR: You’re setting up the company to continue without one or both of you?

NINA: That can be construed from the statement, yes. If that’s construed, then it means that we’re in the personal and financial position [to leave].

PAUL: Anything done to further that goal, and the personal financial goals, increases the options that the organization and the individuals have. The options vary: The company continues, it could be sold, anything that’s done to make it so the company continues makes it more attractive for sale.

 

Winans Construction

Location: Oakland, Calif.

Type of company: Design/build

Staff model: Three office, five field

Annual jobs: 33

Sales history: $.87 million in 1997, $1.6 million in 2000

Work week: Nina, 40 hours; Paul, 42 hours

Software: MasterBuilder, Lotus, ACT!

Bio: As a teenager, Paul apprenticed to a European master carpenter and has accumulated more than 30 years of construction knowledge. He and Nina founded Winans in 1978. Nina has been the financial and administrative manager since inception, and Paul handles sales and estimating.

Key to success: "We’re always looking ahead, looking at how things can be done better. We rely on the perspective of others through weekly company-wide meetings, peer groups, and non-industry consultants."

Contact: (510) 653-7288; www.info@winconline.com

For the past three years, Nina and I have been gone from Winans Construction three months each year. That includes the week we’re shut down the end of the year; it includes taking personal vacations; it includes peer group and industry-related travel. If you’re always there, you’re never going to be depended on less. It sounds simple, but it’s the truth.

In order to go away, you need to have things that you want to do. As long as you’re focused on your business, you will never get outside the boundaries that running it places on you. You have to have other interests, you have to have other goals in mind. Paradoxically, where you think that it would create additional stress, it actually frees you up.

PR: Do you shut off the cell phone when you’re away?

PAUL: One of the systems is to not check in. If you want to become free, you can’t keep the chains in place. We do not call in.

PR: How did you determine your financial goal?

PAUL: We worked with a financial planner. This person helps us manage our investments and do extrapolations and projections, which, of course, [always change]. That’s a key point. It’s a long-term proposition. You have to be conservative in your projections; you can’t be optimistic. You’re going to come closer to achieving your goals if you start to formulate them than if you think it’s completely ridiculous to even try and never start writing them down. You might not hit them right on target, but you have a helluva lot more options because you’ve done some work around them.

PR: Has that number affected the way you run the business, or has it just put you on a timeline?

NINA: It’s made us more focused on our personal financial goals, which drive the business’s financial goals. [Personal goals] go out one, five and 10 years.

PAUL: If you work your personal financial needs backward, it translates into monthly sales targets [or gross-profit] goals that help drive those sales targets. [It affects] production goals [and] acceptable slippage.

We had been operating out of our house until 1987. Then we rented a space from contractors who had bought the building and fixed it up. Being the fast learners that we are, we decided it would make sense to be part of our plan instead of their plan, so we bought a building. We bought the building personally, and the construction company pays us rent, which is part of the plan.

It’s a dynamic process. It’s never done; it’s never over. If you go into this thinking that if you engage a business consultant and you set a target and you’re going to have this plan and all you have to do is follow the steps, that’s not the way it is. The act of planning is more important than the plan that results from it.

NINA: The initial plan is laying the groundwork for future plans. You do need to constantly review and monitor.

PAUL: The truth is, the person who engages in the activity of looking ahead and planning irrespective of whether they meet their goals or not, will have more options than the individual who does not engage in that investment. One of the reasons it makes sense to do what needs to be done here inside the company is to be able to fulfill the goals that we’ve set on a personal basis. That’s the primary motivator.

PR: How do you monitor your goals?

PAUL: [The two of us] interact quarterly around our personal budget. It includes goals for making savings investments. We monitor that. We meet with the financial person at least once a year to review how we’re doing in regards to our retirement goals. In the business, it goes without saying. We meet and review P&L statements and a balance sheet every month.

PR: The personal and business goals are monitored simultaneously?

PAUL: Not really. The personal is kept at home, and it’s completely separate from the business. We don’t sit around here, review it, and talk about it. We do that on the weekend at home. The business is kept here at the office, and it doesn’t leave here. It’s two distinct conversations.

PR: How often do you find yourselves coming out of a personal financial update and saying, "We have to tweak the business?"

NINA: We haven’t done that, and one of the reasons we haven’t is because of the economy. Maybe next year we’ll start doing that.

PAUL: That is one of the things that that sort of planning—both on a personal and business level—will give you is the ability to deal with a downturn, not without stress, but with less stress.

PR: Does the potential sale of the company play into any of these goals?

PAUL: In terms of doing our personal planning, we place no value on the asset the company is. We do not say it’s worth $50 or $100 or $300,000. That’s useless in terms of planning. On the other hand, [it] is a great motivator to work on systems. It reduces the company’s dependence on any one individual’s head. If there is the anticipated consolidation in the industry, and somebody with a lot of money is looking to either buy a good company with a great reputation in the East Bay marketplace, and/or get a good systems set in place with which to create other companies, those two things are highly motivating for me in making the decision to invest in both of them.

PR: When you hit your target, are you willing to say goodbye whether or not you have somebody willing to take it forward?

NINA: I am, but I don’t have as much invested emotionally as Paul does.

PAUL: Before the day actually arrived, I would have made a carefully considered decision about the benefits one way or the other. Then I would be prepared to live with the results. [Today,] I see myself transitioning. This is a passion that is almost irrational, so I wouldn’t walk away from it 100 percent at all.

PR: Even though this is a passion, you’ve made that list.

PAUL: Yes. I would not feel I had been responsible to myself as an individual—forget being a business owner—if I didn’t give myself a shot at seeing what it would be like to do some of these other things. The truth is, there are other things I would like to do. I don’t have the time to do them.

NINA: That all being said, everything changes. If the economy takes a huge nosedive, maybe we’ll be out of business sooner. Or maybe we’ll have to be in business longer in order to meet the financial goals.

PR: But when it comes down to the list and the financials vs. the passion for the business?

NINA: I always have been the person in our relationship who seems to feel they could change their lifestyle a little bit. So I’m still out of there.

PAUL: I have a fairly clear idea of some of the things I would like to have happen, and I would keep on wanting to get that funded, short of some catastrophic collapse that made that not likely to be possible in the foreseeable future. It’s been a longstanding conversation.

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