NRQ 2000

Four years ago, when the NAHB Research Center and the NAHB Remodelors Council introduced the National Remodeling Quality Awards, most remodeling companies struggled to figure out how they could fit in. An award based on the legendary Malcolm Baldrige Award seemed almost unattainable. The principles of consistent business processes and measurable improvement were foreign to many and understood by few.

This year, however, the remodeling industry has arrived.Judges met on April 27 to consider applications for the 2000 NRQ Award. Ed Caldeira, director of quality services for the Research Center, heads up the NRQ program and assembled the judging panel: NRQ Award winners Robert Criner, CGR, Criner Construction Co., and Tom Swartz, CGR, J.J. Swartz Co.; and industry representatives Kermit Baker, director of the Remodeling Futures Program at Harvard University’s Joint Center for Housing Studies; Walt Stoeppelwerth, HomeTech Inc.; and Rod Sutton, editor in chief of Professional Remodeler.

The session revealed numerous quality trends surfacing in remodeling. In the following pages, the judges discuss trends they say will lead the industry down the improvement path.

The path to a National Remodeling Quality Award is not an easy one. The process forces entrants to examine their companies in depth, to look beyond sales data and referral rates. Indeed, customer-
focused quality requires a full-blown commitment to company-wide improvement, from lead generation to customer relations.

Judges recognized this. This year’s panel rated entrants in eight key quality categories: company
vision, competitive strength, customer satisfaction, performance management, constructed quality, supplier partnerships, human resources and improvement results. Full details of the award process, including an explanation of the eight criteria, are online at www.nahbrc.com. Judges delved into each company’s application to understand whether the entrant was managing and measuring for improvement. Those that passed that first hurdle were named finalists and scheduled for a site visit.

On site, the Research Center’s Ed Caldeira and at least one judge spent a full day with each finalist. The finalist explained the company processes and provided specifics that supported information included on the application. Judges interviewed employees, asked for clarification, and toured projects in process. At the close of the day, judges had a clear understanding of the finalist’s operation.

Judges also had a clear picture of current trends in quality and excellence. Finalists portrayed an ever-greater sophistication in management processes. Quality-conscious companies are incorporating an awareness that customer satisfaction results from not only high-quality construction practices, but also from systems that give everyone involved--from client to
carpenter to supplier--information necessary to make the project a success.

"I was quite surprised with how professional the candidates were in trying to run their businesses as a manufacturer [would]," says Kermit Baker, director of the Remodeling Futures Program at Harvard’s Joint Center for Housing Studies. "They were trying to systematize their processes. Most firms who do remodeling treat each project as a new one; they don’t develop these procedures and try to standardize them. [Finalists] were trying to develop a process that would guarantee that quality remodeling services would be delivered time and time again."

Walt Stoeppelwerth of HomeTech agrees. "There’s an organizational approach to construction and customer satisfaction," he says. "Everything’s in local stock [before the project begins], materials are ordered, paint colors are chosen. In the old days, production managers got up in the morning and said, ‘What am I going to do today?’ Now, it’s organized up front; the decisions are made."

Most finalists had put into place written manuals and forms that communicated to everyone in the company what their processes were. Tom Swartz, CGR, J.J. Swartz Co., says this is critical to customer satisfaction. "There’s a trend to having the process in writing and letting the customer know what the processes are," he says. "We get hung up in the day-to-day and lose sight of the big picture. What’s your plan, and when are you going to get it done? It has to be all the way up and down the line. Everyone in the company has to live and breathe [that]."

More remodeling companies are concentrating on communication with the customer in mind, Swartz says. "The [companies] that stay focused on the customers’ needs and set up the process that keeps the customer in the loop are much more prevalent than it used to be," he says. Today’s clients are much more sophisticated, he says, and they demand and expect a high level of communication.

In fact, Swartz says, it’s when communication lags that problems arise. "When we leave the customer out of the loop, we have a much more difficult time completing the job on time and on budget to the customer’s satisfaction."

Customer satisfaction drives the National Remodeling Quality Award, and the Research Center does its own "due diligence" to check all satisfaction claims, Caldeira says. Each finalist is asked for a list of clients from the previous year, and the Research Center surveys those customers. Third-party verification allows customers to honestly rate their experiences with the remodeler. All finalists received exceptional ratings.

Those ratings mirrored remodelers’ own surveys. Quality-oriented remodelers are continually asking clients how they rate. "[Finalists use] customer satisfaction surveys that allow the company to track results and measure improvement,
" Caldeira says.

This year’s finalists excelled in this regard, says Robert Criner, CGR, Criner Construction Co. "There’s always the attention to the details of quality," says Criner, who’s served as a judge each of the four years. "Every year it continues to impress me: the lengths they will go to make sure the customer is truly satisfied and the lengths they go to prove to the company that the customer is truly satisfied.

"[Finalists used] customer surveys, quality checks, and phone calls down the road, following up to make sure the client was not just satisfied, but impressed," Criner says. "[They check to see] not only did the customer get wowed when you were there, but are they still wowed."

Stoeppelwerth says such attention to quality has raised the bar in the industry. "I don’t know if it’s due to the National Remodeling Quality Awards or what, but this industry is starting to measure customer satisfaction [in ways] that five years ago nobody did," he says. "When they finish a project, they get a certificate of satisfaction, they have good follow-up with surveys, and they’re taking care of callbacks."

Standards of employee relations are also higher, he says.
"I think it’s a benchmark that the good companies are developing staff," Stoeppelwerth says. "They’re delegating responsibility and training more. They have a production manager who’s responsible for production; an office manager who sets up the office."

Caldeira says finalists showed a systematic approach to managing their companies. "The ultimate goal of the principals is to step back and let the company run without their day-to-day involvement," he says. "The whole idea of building equity into the company by systematizing processes seems to be a theme."
A refocusing on the importance of the employee extends beyond the mere passing along of the
business, however. Remodelers have felt the effect of the labor shortage, and for quality-focused companies, people make the difference.

"One of the things that impressed me the most was the awareness of the principals to the fact that we’re short in the labor force, and that they were trying to ensure their company had good talent," Criner says. "They were looking inside, looking at people [outside] who had their own company, changing the company structure to support their personnel. Some were mapping out where their people would be going in the company two or five years out."

A company’s ability to plan for the future increases as a result of the NRQ application process, according to past winners Criner and Swartz. Stoeppelwerth, who’s judged the awards all four years, agrees. The application process forces the entrant to evaluate the company in ways few have done in the past.

"I’m more appreciative of entering than the actual award, even today," says Criner, who’s company won in 1996. "It forced me to take a close look at the company and the operation. The cold, hard look in the mirror I was given during the application process allowed me to make improvements that were needed."

Swartz also won in 1996. "You have to take all the commitment and passion and reduce it to writing so everybody in the company can see it," he says."It allows you to take a look at your company from the inside out and see all the bright spots. It also brings out the weaknesses so you can start working on those."
The value of the award transcends the honor received by the companies who win. Obviously, winners can promote to their employees, suppliers and community that they’ve been recognized for quality and excellence in customer satisfaction. But the true
value of the award will be
realized by those companies that recognize the award as a benchmark, as a starting point for further improvement. The
National Remodeling Quality Award is a spring board, not a crowning achievement.

Judges for the 2000 National Remodeling Quality Awards saw increased attention to customer-focused business practices, indicating that quality ideals have penetrated the remodeling industry