Don Kennedy Roofing didn’t need the boost to its credibility prior to its presentation, but after winning 2019 Commercial Roofing Contractor of the Year during the Best of Success conference, contractors were all ears when its leader spoke about how to succeed.
For his presentation, President and CEO Don Kennedy drew inspiration from a book titled, “The Great Game of Business” by Jack Stack. Kennedy explained that this book revolutionized his company and how it operates.
The key to the book’s strategy, Kennedy said, is to make the company’s operations transparent. This meant opening the financial records for all employees to see. Initially, he was met with skepticism, as his employees thought the company’s net profit was 30 or 70 percent. They soon learned the average for the industry is closer to 5 percent.
Even when employees understood how profits and loss work, Kennedy said the company still had a long way to go. He cautioned his fellow contractors that this culture shift takes at least four years to fully implement, so it is not a quick fix.
“If you’re in this industry, this is the hardest thing that you’ll ever do,” he said.
Despite this, the strategy has paid off. By showing employees what the company needs to make in revenue, and therefore increase employee bonuses, they become more invested. The company has seen revenue and net profit increases since 2016.
“We say, ‘You decide how you get that money. Work! You get paid to work, you can work hard or you can work easy,’” Kennedy said.
The strategy is about more than just opening the financial books. Kennedy said the company runs efficiently by having pre-job meetings so all employees are on the same page regarding customer expectations, budgets and hours. Once a job is finished, they hold debriefings to discuss what went right, what could have gone better, and how to improve for the next job.
Kennedy said this is all backed by constant training, adding that “the percentage of training you put in a job is about equal to the net profit you make.”
“If you ask most leaders what they do in their business, what they say is ‘I am here to take care of my customers,’ and that’s all wrong,” Kennedy said. “If you’re a leader and you run a business, your responsibility is to take care of the people that take care of your customers.”
Giving employees the ability to work and act like owners has led to the innovation of what Kennedy calls “profit centers.” These are sources of revenue that don’t require extra work, such as bringing back extra materials from job sites, recycling metal products and weighing metal to ensure what was ordered is accurate.
“You have that opportunity to make a difference,” Kennedy told the audience. “All these people that work for you…they are begging for somebody to follow, and I encourage you to be it.”