How did you feel when the clock struck midnight entering Jan. 1, 2009? Were you invigorated, looking forward to the challenges and opportunities of a fresh year, or frustrated by the economic and global issues that entered our reality in a dramatic way in late 2008? Was this new beginning an opportunity to reflect on the lessons learned from 2008 and strive to improve - or was it a time for cost cutting and strategic modifications to stay alive in the 2009 business cycle? Did all of these thoughts cross your mind, and even more?
Our industry has been blessed with multiple years of prosperity. The stars have been aligned. The number of properties has been growing, which supports continued reroofing, repair and maintenance growth. There have been significant increases in both the awareness and desire by property owners to invest in better performing and more attractive roof systems. With pricing typically based on a constant percent markup, the rising prices of materials have often increased absolute dollars generated by roofing contractors. With real estate historically a less volatile asset, people invested more in their properties and especially their roof systems. And, there has been a great deal of hurricane and hail activity in the last several years that has propelled industry growth. A core question is, will these blessings continue in 2009?
There have been many things I’ve learned during my tenure in this industry. However, the two most important are that I’m not an economist and I’m not a weatherperson; therefore, trying to predict the effects of the economy and weather on our industry, our customers and our company is generally futile. I’ve also recognized that the two things that impact our industry most also happen to be economics and weather. While these are not controllable, there are many things that we can do to affect our future.
Three Key Lessons That Apply in 2009
When thinking about my role in the future, I reflect on sage advice from various people in my life. Three that stand out are things I learned in school, things I learned from my grandfather, and things I learned from athletic coaches.
In a psychology class in school, I remember learning that the objective of most psychologists in the counseling process is to help their patients understand that they should focus on what they can control and avoid worrying about what they can’t control. The result is that their patients learn to focus energies on things that they are fully responsible for and can effect. They help their clients also learn to avoid having the excuse of outside factors to rationalize their lack of positive activity that is affecting some part of their lives.
When thinking about several conversations with my grandfather, his message was to not let the economy be an excuse for poor individual performance. He shared that even during the Great Depression, despite the challenges, there were some individuals that achieved great success through their perseverance, work ethic and leadership. He was intolerant of excuses. He was a focused and disciplined man who overcame numerous life challenges and contributed to the lives of many others.
When thinking about the mentoring of some of my best sports coaches, their messages were similar: maintain a winning perspective, play to win and ignore what you can’t control. For example in football, the weather may affect how many points our team and our opponent might successfully put on the scoreboard, but the reality was that as long as we generated more points, we won. That’s what counted. In business, that’s equivalent to the perspective that winning is doing better than the competition in profitability and growing market share, regardless of whether sales were up or down due factors outside of our control (such as the weather and the economy).
So, with the insights from mentors in my life, I started thinking about 2009. I began wondering what thoughts I can share as I travel across North America and talk with contractors and distributors who are concerned about the challenges they are facing every day in all aspects of their business.
Some concerns remain the same for contractors and distributors. Unpredictable material costs continue to cause havoc for estimating. Recruiting and maintaining a dependable team continues to be very difficult. Challenges remain in generating leads from property owners who have the need, insight and ability to invest in quality rather than simply price.
What is clearly different about 2009 than previous years that I can remember? Most of the people involved in our industry have never personally experienced the potential economic volatility that is predicted through the majority of the news media. Are they prepared to cope with these leadership challenges?
Frankly, I don’t know what the reality is for our industry. 2009 may be great. It may be good. It may be terrible. What I do know, is that regardless of your opinion about 2009, there is a higher level of negative anxiety “in the air” that you can feel when talking with property owners, contractors, distributors and manufacturers. Like all other years, at best, 2009 will be challenging. At worst, 2009 will be more than challenging. Business is always changing and therefore always challenging. The difference from other years is the negative expectations and the fears and anxieties that accompany those perceptions.
Leadership Is Needed Now More Than Ever
In challenging times, the need for effective leadership becomes even more important. Close your eyes for a minute and try to picture in your mind the great leaders that you’ve heard about, read about or witnessed. When I did this, I came up with Presidents George Washington and Abraham Lincoln and business leaders Lee Iacocca (who led Chrysler out of bankruptcy) and Jim Burke (Johnson and Johnson chairman during the Tylenol incident). Now ask yourself, what did they all of these leaders have in common? I summarized the key circumstances and qualities of all the people on my list, which resulted in five core things. First, their greatness as a leader was demonstrated during difficult and challenging circumstances. Second, they all influenced changes in the way things were typically done. Third, they were courageous, helping people overcome fear and adapt effectively to difficult challenges. Fourth, they all inspired a sense of purpose in others and were committed to helping others rather than promoting their personal interests. And fifth, they were all clearly focused on achieving aggressive results.
Leaders must influence change to succeed.
“You must never feel satisfied … teaching is valueless unless someone learns what is taught … forgive your mistakes … do more than is expected.”
- Thomas Watson (Founder, IBM)
Leaders must be courageous and help people overcome fear to succeed.
“Men of character find a special attractiveness in difficulty, since it is by coming to grips with difficulty that he can realize his potential.”
- Claude de Gaule
Leaders must inspire a sense of purpose by establishing a culture of helping rather than convincing.
Two shoe salespeople from different companies arrived at an undeveloped country. One wrote back, “Terrible opportunity - nobody wears shoes.” The other wrote back, “We’ll do great here, because we’ll be a tremendous help - nobody wears shoes.”
Leaders must be focused on achieving meaningful results.
“Cause something to happen.”
- Bear Bryant
So, as I reflect on 2009, I’m frankly excited about the future. While there are certainly short-term challenges, the opportunities for strengthening the future have never been better. That’s because the longer-term opportunities in our industry are still fundamentally improving. Owners of properties will continue to need to invest in repairing, restoring and replacing their roof systems. New construction will eventually be re-invigorated. Roofing system technologies will continue to improve. Regulations will drive out weaker competitors. Economic incentives will drive sales of more environmentally friendly roofing solutions.
If I were a contractor, what core things would I focus my company on through personal leadership in 2009? I’d have three priorities:
1. Increasing our customer value.
2. Improving the capability and commitment of our team.
3. Continuously improving operational processes.
Success Starts With Delivering Added Value
My first priority would be ensuring my company delivers true customer value. Customer value has several names. In school they often call it “competitive advantage.” In the marketing profession, they refer to it as the “value proposition.” For the entrepreneur, it’s “what makes us different.” Customers call it “in addition to a fair price, the reason I purchased.” I like the customer version, proving once again the customer got it right!
Our industry commonly makes the mistake of thinking of ourselves as a commodity. When things are a commodity, it is an acknowledgement of little difference other than price. If I were a roofing contractor, I would never accept that my business is a commodity or that we are in a commodity industry. That’s because I believe there is always a way of adding value, making a difference and succeeding versus others you compete with. In other words, there are always reasons you can create that will lead to many clients choosing to purchase from you over your competitors, even if the investment is higher.
Why am I so certain about the ability to add value and distinguish a company from being a commodity? Look around and ask yourself if there are mistakes by property owners that you’ve witnessed in their choice of roof systems. At a summary level, isn’t it true that when a property owner does not choose the right contractor, or the right system or from the right distributor and manufacturer and without the right warranty, there is a tremendous amount of potential for risks and problems? Making more-informed choices can at least reduce those risks and often eliminates those problems. Contractors should focus their business operations and communications on sharing with potential clients that there are potential risks and problems to their customers making simply price-based choices - and then help demonstrate how their entire company helps provide value by lowering these risks and problems. When you accomplish this integrated value-adding approach, you will generate more than your fair share of business and will make more money.
Capability Is Your Most Valuable Asset
My second priority would be to focus on developing the capability and commitment of my team. There are a great deal of low- and no-cost options to access in our industry that will pay off in capability improvement of your team. Learn from others who are successful. I’m constantly amazed at how many successful contractors are willing to share best practices with others, if asked. Join and contribute to industry organizations. The local, regional and national roofing trade associations are filled with options to help improve the capability of your team. And most major manufacturers I know of are willing to help, if given an opportunity to help.
There are a few approaches and technologies where I would specifically focus my team’s attention and capability development initiatives in order to lay a stronger foundation for the future. I would market green roofs. I’d develop a first-class repair and maintenance division. I’d start learning about the solar roofing systems, and plan on becoming active in this segment within three years.
Isn’t it true that many people in our industry immediately categorize a green roof as a garden or vegetative roof? This view is bad for our industry, bad for your company and bad for your clients.
Think about an architect, roof consultant or even a wealthy property owner discussing their involvement in construction. Isn’t it true, that they want to say, “I’m doing some environmentally green things?” And when they ask our industry for green, we are essentially saying, “Unless you can afford the investment of a garden roof, sorry.” That’s just crazy. We have what the customer wants: green roofing. However, it seems we don’t realize that we have great green solutions. We’re just not thinking of what we do today as green!
Wouldn’t you agree that the concept of green is relatively simple: being environmentally friendlier? And with this definition, our industry has a great many green solutions. We often use recycled or waste material. After all, even asphalt is essentially a waste product that remains from the refining process. We have products that are reflective and reduce energy use. They are available in various asphaltic and single-ply membranes and coating options. There are multiple recover roof systems that are great for “capping” and therefore significantly reducing landfill use. And, for those customers who have the investment dollars, garden roofs can roofs can be a great choice. Solar is becoming economically viable in some states now due to various incentives from federal, state and local utilities. With costs of solar declining rapidly and technology improving, solar will likely be a good investment in most states very soon and certainly within seven years!
Building capability as a successful repair and maintenance business will continue to be more critical for a successful roofing contractor. As property management consolidates and adds even more professional managers, the requirements of both life-cycle roof management and preventive maintenance will increase. A roof that is kept in good condition with preventive maintenance is most likely to perform well. A roof that performs well generates superior customer satisfaction. Customer satisfaction generates more use by your clients for other facilities they own and increases referrals to your company.
If You’re Not Improving, You’re Falling Behind
My third priority would be to make sure that my team was focused on continuous improvement, in a serious and disciplined way. The reality of any business is that there are really only three reasons anything can go wrong. First, somebody didn’t understand what they were supposed to do. Second, the process to get things done needs to be modified. Third, somebody’s attitude was lacking. Great companies have documented processes or checklists to ensure consistent results. Think of airline pilots: they’ve flown the plane over 1,000 times but still review a checklist just to make sure they don’t forget anything. And, if an accident occurs due to a process issue, the checklist is updated so that problems are prevented before they can be repeated.
I generally can identify the fastest-growing and most profitable roofing contractors from less-successful operations within minutes of arriving at their offices early on a Monday morning and observing what they are doing. In the best companies, the senior team from operations and sales is reviewing everything that didn’t go as expected the week before. They discuss and evaluate why each activity did not meet expectations. If it was somebody not understanding what they were supposed to do, they educate them. If the problem was the result of a previously unrealized process flaw, they modify the process checklist. If the issue resulted from somebody’s inadequate attitude, they discuss it with that person and remove him or her from the team if the attitude continues. By using this disciplined approach of focusing on preventing problems by identifying and acting on one of the three causes, their company is constantly learning lessons and implementing and improving best practices.
In 2009, our industry and your company will benefit from the greater leadership from every one of us. Are you up to the challenge? Are you willing to invest yourself in that responsibility? Change is happening, and the short-term future is uncertain. Courage is required because fear can be debilitating. People act when they are inspired by purpose and will follow the direction of their leaders if the path is clear. And focus is demanded because it creates the difference between adequate and successful.
The reality about the future of 2009 is that no matter what happens - good or bad - we’ll get through it. We always do. History has taught us that the best approach for preparing for the future is to focus on improving the foundation of our businesses and our personal lives now, and not wait for tomorrow. The more challenging the environment, the more important our enthusiasm becomes. Nobody ever built a monument to a pessimist, and nobody really likes being around negative people anyway. Remember, you’re already working hard, so don’t try to work harder. Its cliché, but success comes through working smarter.
I read in a fortune cookie today “The first step to better times is to imagine them.” That’s wisdom.