Are you fit to grow?

Following up on the success of the best-selling book “How Fit is Your Business,” is your business “Fit to Grow”

January 28, 2013

The last five years have been historic—historic elections, dramatic economic changes, changes in consumer priorities, etc. This period has turned many businesses upside down and many other businesses have gone under. We have seen the blend of remodeling projects shift from mostly large projects to smaller ones. Some businesses focused on additions are now doing primarily kitchen and bathroom renovations.

We have also seen a dramatic change in our own disposition and attitude toward growth. Remodelers historically have been cowboys—very independent and willing to take risks. While some of their independence remains, the risk tolerance has really changed. Remodelers, like farmers, now understand the seasonal aspect of remodeling. They prepare appropriately for the scarcity and abundance of projects that exist from winter to summer. The seasonality of remodeling has forced a relatively optimistic peer group to look at its business decisions in a much more cautious way. Most remodeling businesses have not even gotten back to the total sales they experienced in 2007. Many remodeling businesses are now more of a professional practice than the thriving businesses they were five years ago.

The good news is that we now have finally seen some very positive signs in the market place. We are seeing stability in the stock market. Existing home sales are rising. Home prices are inching up. And new residential construction starts have increased dramatically. These are not just blips; these are solid indicators that, short of a new war or a global economic crash, remodeling should be sustainable for the coming future. These indicators, which are validated by the Harvard Remodeling Futures Steering Committee data, give a reason to feel good but also provide a reason to begin to dream again and to position for growth.

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Mark Richardson’s latest book “Fit to Grow” not only examines the themes outlined in this article, there are seven other business themes that Richardson deconstructs in his book. What are your takeaways from this article? Are there specific points, details, or ideas you learned that you can incorporate in your business immediately?

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The last five years have not only put into question many of our basic rules of seasonality and our business models, they have also forced us to look at how we define growth. We see growth through a new lens. We can certainly argue the type of growth that should be of highest importance—market share vs. profit—but most healthy business owners really do want to grow. The question is, “Are they fit to grow?” Having a desire to grow and a feeling of confidence and conviction to grow are a good start, but there are many goals in life that we seek but lack the knowledge, skill, or culture to accomplish. For those who have weathered the storm of the last five years, you should feel a sense of pride that you have survived. This pride and confidence should not be seen as the only ingredient you need for healthy growth moving forward.

Just like other life passages—buying a house or having children—it is important to take some inventory, create a plan, and then properly pace yourself to achieve the new milestones. You certainly would not buy your first house without seeing if you could afford the monthly payments; or, if you knew you would be leaving the area in 12 months, it might be better to rent. Business growth is a similar process; it can be by design or just by responding to business conditions probably like how you got into the remodeling business in the first place. Most remodeling businesses evolved and were not designed.

When discussing the subject of growth with any business owner, I generally like to ask a lot of questions. These questions not only create clarity but conviction. One of the biggest reasons that businesses fail in their attempt for growth is that commitment loses its steam over time. Healthy growth takes the right focus and commitment to be successful. Ask the following three questions to begin taking inventory. This exercise may appear a little patronizing, but try to bear with it.

Why grow? What is your definition of growth? Where will growth take your business?

Spend some time on these questions. Discuss them with others in your business or family. From this exercise, you will gain the clarity and possibly the conviction that can accomplish healthy growth. While there may be some common denominators in your answers, there are definitely different reasons and ways for why and how you should grow.

After you have a better understanding of the subject of growth, then you can begin to better position the business to grow. While today you may have the people and positive culture to accomplish some level of growth, if you seek to grow substantially, you will need ways to make the growth sustainable and scalable.

I studied the subject of growth in the mid-1990s when our business was relatively small. We wanted to grow from a local business to a national presence. At Case Design and Remodeling, this level of growth was driven both by the marketplace asking to use our business tools, and by realizing that this growth would create opportunities for all team members. We realized that what we did at that time was a byproduct of who we were, and not scripted with well-defined rules, principles, and themes. It also became clear that we had a product and an industry in which there were many correct answers to similar situations. The number of variables was much greater than the constants in our remodeling business model. Given our commitment to growth, we needed to invest the time in developing “business themes” to guide both our growth and our day-to-day actions. These themes became part of our DNA and our culture. These themes became part of every team member’s core training and competency (and expectations). And as I look back, these themes became part of the key people. As you reflect and

position for growth, the following themes can be used as a guide or a checklist. Regardless of how you see and use them, they are essential to the question: Are you fit to grow?

Theme No. 1: People are your greatest asset.

Over the years, I have asked many groups what they think this means. I have often heard: “People are what it is all about,” or “Without people there is no business.”

While people are obviously important, the most important operational word in this theme is “asset.” An asset is an investment, and the asset should be treated with a degree of reverence higher than others. If the asset is the greatest investment, I want to see the greatest return.

Often, remodelers get confused. For example, the van or a piece of equipment is a greater asset than the person driving the van or carrying the piece of equipment.

Once you acknowledge that people are your greatest asset, you not only look at people differently, but you also see more creative ways to get better returns.

Theme No. 2: Create clients and business will follow.

We all think and speak about raving fans and trying to create clients for life. However, this theme is the opposite of the way most business models function. If I ask you, “How many clients do you have?” you will probably look at how many projects you have done or how many Christmas cards you sent out last year. While this group is considered to be clients who paid you, it is not the only way to think about the subject of clients. If you turn this around and focus on treating all homeowners as prospective clients, you will see a much bigger number. This theme allows you to control your destiny. This theme creates a mindset within your team that deputizes everyone to create clients and grow the business. For some, it is a little of playing with words, but for those who understand and practice this, the level of growth and success is dramatic.

Theme No. 3: Business is about the experience.

Your prospective clients called you because they want to solve a problem or complete a project. What they buy from you is a kitchen or a deck—the project—and not a new friend. However, how they judge you is more about their experience and relationships than the product itself. How they speak about you and the memories you instilled are more about how they were treated than the craftsmanship.

How many times have you had a past client call you and thank you for providing them with the wonderful high-performance glass in the windows or compliment you on how well the new front door closes? Not very often.

The realization of this theme was born as the result of hundreds of letters I received from clients about their experience—and rarely about the project.

One widowed client thanked me so much for assigning a carpenter to the project who, incidentally, spent two hours walking around the neighborhood looking for her lost dog. Another client shared how, after a snowstorm, our crew spent over an hour shoveling her car out so she could get her kids to school and make it to work.

These letters are about the experience, not the product. The reason they come back and are loyal to you is because of the experience. Creating experiences and memories, however, needs to be who you are and what you do. Not just a reaction to a situation. If you adopt this theme for everyone, the level of potential growth is easily attained.

Theme No. 4: ‘1 + 1 = 3’

No, this is not a math error. Nor is it puzzle that you need to think about or solve. One plus one equals three is synergy, where the sum is greater than the individual parts. We see this with people in everyday life. It could be a husband and wife. Individually they are unique and valuable, but together they create magic.

It can be seen in sports with a great championship doubles tennis team. Even though they may be a winning doubles team, they may not even be ranked as individual players. This is a very powerful business theme, too; and if you proactively adopt it, you can see results that were never achieved without it.

I found by putting dissimilar roles or people together to address issues and opportunities that this synergistic concept comes to life in business. For example, many years ago, I was looking for a unique gesture that could help our clients remember us after we completed deck projects. We could have gone out and bought a plant or another special gift to give to the client. I was speaking to one of our craftsman about the yearning to create a special memory on a job site. He suggested we make something with the leftover scrap decking materials that we generally hauled away.

So, in working together we came up with an idea of making a simple child’s picnic table with the extra decking. It took the craftsman only about 30 minutes to cut and assemble the table.

Not only did it reduce the materials sent to the dump, but it became a great memory and gift for the client. We also got requests from neighbors to build one for their kids. This picnic table became a signature gesture from which fond memories were made. This only came to be because of a synergistic discussion between a

designer and a craftsman. If you can make synergy a part of how you approach many opportunities, it becomes an automatic mindset, and the level of business and team growth is dramatic.

Theme No. 5: Aggressive but realistic

In addition to knowing how to look at people, knowing how to see your clients, and being creative through synergic thinking, your

business needs to function at the right pace before you can grow.

Pace is a subject that we all understand but don’t always

appreciate as important in business. Sometimes we are out on the highway, and there are cars that are traveling much faster than the speed limit. We get frustrated and annoyed.

Other times we have someone driving below the speed limit in front of us, and we get frustrated. While we have speed limits that guide us as drivers, many drivers take the freedom to widen the gap dramatically. Businesses also have speed limits and pace. Unlike the highway, though, the business does not have speed limit signs hanging in the hall. We need to find a way to communicate pace.

I have found and tested the words “aggressive but realistic” as a means of communicating pace. Unlike driving, there is an element of pace that needs to be understood in words rather than miles per hour.

“Aggressive” has a meaning. It means we need to have an edge, we need to stretch our energy or muscles, and we need to work hard and pay attention. “Realistic” means we cannot fail, we need to take into account history, and we need to keep in mind other things we are doing at the time. When you marry the two, you end up with a great way to communicate pace or cadence in decisions and the growth of a business.

For example, when a sales person says they will sign three projects this month, you simply ask, “Is that aggressive but realistic?”

When a project manager says the crew will complete a project on Friday, you simply ask, “Is that aggressive but realistic?”

This simple question creates the alignment and consistency that we are all rowing on the same cadence. Much like a cycling peloton or a crew rowing together, you achieve not only harmony but also 20 to 30 percent more performance when you are aligned. By making this theme part of your DNA, it becomes automatic, and the pace in the business is in sync.

Additional themes to learn

There are seven other business themes that complete the puzzle. Once you have read them, you can make them come to life in your business.

Bringing these themes to life is not only the hard work but also the mastery. A friend of mine in sales used to say, “The real work happens after the sale.” These themes, when understood, not only give you answers on how to grow and address situations in business, but they also create alignment among others that is essential to growth.

Many times, an article ends with an exclamation point or a surprise statement or insight; other times, it will end with a comment that allows readers to fill in their own conclusions. I would like to end this article with neither. I would like to end with a challenge–a challenge for you to go deeper into the themes mentioned in this article and determine how they might influence who you are and where you will be.

It is only with this fundamental fitness to grow that you will be able to attain sustainable growth. And as a wise man once said, “If a business is not growing, it is dying.” PR

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Mark Richardson, CR, is an author, columnist, and business growth strategist. He is a member of the NAHB Remodeling Hall of Fame, a Fellow at Harvard University’s Joint Center for Housing Studies, and was named an Ernst & Young Entrepreneur of the Year for Construction and Real Estate. He authored the best-selling book, “How Fit is Your Business” and the forthcoming book “Fit to Grow.” Richardson will also be the keynote speaker at Professional Remodeler’s Extreme Sales Summit in September 2013. He can be reached at mrichardson@mgrichardson.com or 301.275.0208.

 

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