It takes a great leader who understands his team and the company’s purpose to deliver great service. Paul Sutton, the Founder and President of Paul Sutton’s Peak Structural, Inc., shares what his business is all about, who their clientele is, and the services they specialize in. As the company grows, so does the pressure and the demand for more employees. With this, Paul talks about how they cope with their growth, confront their weaknesses, and unleash their people’s fullest potential to achieve their company’s mission and vision. Know more about Paul’s method in rearing his team and leading his company to greater heights in this episode.
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Growing Your Company By Unleashing Your Team’s Full Potential with Paul Sutton
We’re at the headquarters of Peak Structural with Paul Sutton. He’s the owner of Peak Structural. Paul, thank you for taking time out of your busy day.
I’m happy to be on the program.
Tell us about your business and who you serve.
We serve a primarily residential clientele. Literally, 90%-plus of our work is going to be on, around or underneath the home. We do some light commercial work as well, but most of our products and services are geared toward the residential market space. Geographically, our area covers upwards of Longmont on the north side of Denver and up there in Loveland, Boulder, Westminster, all the way through the Denver Metro and then all the way south down to the New Mexico border. It’s quite a footprint. It’s quite a large sandbox that we play in.
For the folks that aren’t in Colorado, that’s a stretch with traffic.
That’s several hundred miles north to south along the interstate corridor. You’ve got a major metropolitan area with Denver, Colorado Springs up and coming and then Pueblo to the south. The three different distinct metro areas amongst a lot of other suburbs and hamlets scattered in there as well.
What are the problems that you guys solve?
Sometimes we’re initially confused with some steel erection company. We put up skyscrapers or something like that, but that’s not the case. Our company specializes in foundation repairs, permanent solutions to foundation problems that homes here in Colorado can get into and elsewhere in the country as well. It’s certainly not unique to our climate here, but we do have some very active soils here in the front range. That can lead to instability with the home’s foundation itself; it can sometimes settle or crack or even heave upwards, and then an ancillary service that we work with is concrete leveling. Before a foundation is ever going to move, you’re going to see movement in a concrete slab typically. Driveways, porches, sidewalks, stoops, patios- those things readily move.
When they do, oftentimes they can create trip hazards and become more of a nuisance, even become a real hazard to health for folks coming and going. The concrete leveling is another aspect of ground movement that we provide services to mitigate against, correct those problems, put a long-term warranty on that as well. We’ve got two other services that also pertain to the underbelly of the home. That would be basement waterproofing, which goes hand-in-hand with structural problems. If you have too much water present around or underneath a foundation, it’s going to find a way in. In many homes and other structures, if you’ve got finished space below grade, you’ve got a problem.
You’ve got wet carpet or moldy sheetrock or damage to furnishings; things like that. From the health aspect, when you’ve got a very humid or dank environment in a basement, you’re inviting and encouraging mold to grow, which can be a real health concern for folks. We want to come in and install a permanently designed solution that’s going to provide everything that’s needed to keep the whole basement dry all the time, as we like to say. The fourth service line would pertain to crawl spaces. It’s typically in those areas of the home that a lot of people may not know a lot about or may not want to go and get involved and get their hands dirty in a nasty crawl space. What we’ve learned over the years is the research on building science has shown that dirt crawl spaces are a really bad idea and they were provided for the building code for decades. The thought was if we put vents on, we can get the air moving through it so that it won’t accumulate moisture and cause problems with mold, rot, things like that. The research has actually shown that the opposite is true – that the best thing you can do for a crawl space that has those problems is to seal up those vents, put in an insulation system and then have a thick vapor barrier to isolate the home above from the damp earth below.
We completely encapsulate the crawl space, which does a lot of things that lower the humidity and prevents mold from growing. It’s a conditioned environment so that the main floor above it is not cold in the winter anymore. You don’t have that cold winter air blasting in there. You’ve got a conditioned, much more comfortable space. Those are the four things in terms of what we’re known for and what we specialize in, structural foundation repair, concrete slab leveling, basement waterproofing, and crawl space encapsulation.
I think I’ve had all of those between a house here and a house in Tennessee where there’s a lot of moisture, flooding, a tornado shelter, had heaving driveway from all the years and whatnot and all the issues. The one thing I know from the house in Tennessee is that it’s for sale and anytime you get anything that remotely resembles anything in a foundation that a potential buyer goes up and left quickly. Your house is virtually unsellable until you solve the issue.
The good news though in that is most people find when they look at their options and see what’s out there and consider, “What might be the best thing to do for this house before I sell it?” Generally, what people find is that the cost of the repair, the well-designed engineer repair that is going to be permanent will be far less than the discount taken at the closing table. If you go ahead and market that thing with the unknown structural defect, you can take a beating on the price. In some cases, you’ll find that your typical owner-occupier, single-family home dweller is not interested in buying that house. It becomes an investor opportunity, of course they’re going to be grinding hard to get that price down. The good news though is that the repair will normally cost you far less than selling the house and getting beat up on the price because of the defect that you left unaddressed.
Do you think the average homeowner knows that?
It’s hard to say. That’s something that we try to educate folks about. Some people may say that’s self-serving. How convenient that you can repair my home for weighing the economic scales as you’re describing, but that’s the reality of it. Housing values vary drastically depending on who’s listening to us and where in the country. Let’s say you have a $300,000 home, nothing extraordinarily out there in terms of price or square footage, a reasonably modest home that you might find in many markets in North America. That thing’s got a structural problem. As a seller wanting to liquidate, wanting to move on and sell that place, you could be looking at a 10%, 15% maybe even 20% discount off the cost of that property if you market with that defect. You’re looking at $30,000 to $60,000 discount you’re going to take. Those dollars will go a long way. There are relatively few structural problems we run into that get into that kind of money.
I think the buyer has the uncertainty that they deal with, “I have no idea what it’s going to take to repair,” or it’s the investor and he goes, “I know exactly what it’s going cost to repair and I can discount it and make this work.” For the uncertainty of the purchaser, that’s one more uncertainty you don’t have to answer. In my personal experience, it’s a whole lot better to address the problem than not.
An alternative to the seller fixing the problem first may be the seller provides a proposal from a company like ours to the buyer and says, “We have this issue, but here’s a credible company that can take care of it. Here’s what it would cost.” Let’s adjust that off the price. If you’re the buyer, you’re like, “Is that all that’s wrong? Is that the complete scope of work that’s needed?” There’s that skepticism that’s going to probably translate into maybe a less robust offer. Whereas if the seller takes care of it, it’s past tense, it’s done. Here’s the contract, here’s the warranty behind the company. I took care of this so that you wouldn’t have to.
You guys have been around a long time.
We’ve been around since 2002.
We were talking a little bit before the show and you have a general contractor background before you decided to start this business. When you started this business, how many folks were involved in the business?
It’s like so many other American small business stories – we’re very typical in that sense. My wife and I started the business with a little home office and a rented storage locker. It was myself working most actively in the business with a handful of two to four other individuals initially as you tend to do. In starting so many small businesses, you’re bootstrapping it; you’re doing a lot of functions yourself. Everything from marketing to estimating to sales to scheduling to production, installation, accounting. That’s how it sometimes goes in a lot of small businesses. The initial few employees were crew members. I needed some help and some skilled labor so that was what it looked like at the very beginning.Reality has a way of talking to you and telling you what you need to hear and where you need to make changes. Click To Tweet
To contrast, how many employees do you have now?
We have 84 employees now.
I think about that transition over the years and go, “That’s a fairly large percentage increase of employees.” As you look back over that journey, was there a point where you said, “We need to take and start thinking differently about the company or about expanding or how many employees we have?” Was there a point where that came to mind?
There have been a series of points along the way. Reality has a way of talking to you and telling you what you need to hear, what you need to adjust. I find that not only does that reality exist within the mind and emotions of the entrepreneur, the pressures that they’re dealing with and the problems that they’re solving. It also exists in the mind of the customers and the general public out there. One of my mentors told me years ago, he said, “The marketplace is an incredibly efficient feedback mechanism.” If we ever forget about that as a business owner, we maybe feel like, “This customer’s being a little bit unfair about the situation or what have you,” I find that all it takes is to flip the tables around, to put me back in the customer’s shoes, which all of us are customers every day.
We’re buying and we’re consuming services and products so we’re always the customer. We’re never far away from that role. We can easily remind ourselves and recall how quickly we may get our hackles up over something less than stellar service or something less than a good value in a product that we bought. We know what that’s like to feel like, “I put that in my good hard-earned money here and I don’t like what I got for it.” Sometimes we need to be reminded of that as business owners that folks will tell us where we need to improve and we can ignore them to our own peril because they’re trying to help us become better.
I feel in providing a better service, a higher level, a more consistent service in our company, in the case of a company like ours, which is entirely service-based in the home improvement space. It’s always about the service. The market will give us lots of feedback, lots of signals, as well as the stresses within the organization as you grow. To relate to your question about some moments of awareness may be where you begin to have these a-ha moments and say, “Things were running pretty smoothly last year at X level, but now we’re at X 1.5 level and I can see that we need to do some redefining of how our systems work internally. We need to change our internal communication. We need better training for our employees.” As you begin to grow and scale-up, the pressures of that growth finds the cracks and weaknesses in your structure and forces you to confront them.
I think about that and as you’re faced with that, you either have a mentor or you have an inventory of tools or you hire an outside coach for lack of a better term. For you guys, I was going through your website and looking at the reviews and so on. You have an awesome culture within your team. I can see it in the reviews and you wouldn’t have great reviews if you didn’t have a good culture. How do you take and transmit that culture from top-down throughout your service teams?
That’s a big hot topic these days. Every organization is for the most part highly aware of and focusing on building that culture. There may not just be one answer to that question. First of all, I think that for the owners and depending on whatever the team or organization looks like, probably there are some other key leaders, influential people that are looked up to within the organization. It certainly starts with those at the top. We believe that people are what matter most, beginning with our team here, our employees, our family here, they matter most. We actually have one of our big stated ideas that we run the company on is our purpose which is to redefine our industry by growing our people to their fullest potential.
I believe that. I get energized by that. I hope that I have attracted a handful of leaders and managers here that also share that same value, that same genetic predisposition if you will, that we want to do some good in this world. There are financial realities and every business needs to be profitable and those things are always there. Once you get a little bit beyond that as far as you’re driving and what’s motivating me now when I come into work and you begin to think about it at a little bit higher level. For us, it’s about the people here. One of the current gurus, is Simon Sinek, who famously said, “Before customers can love a company, the employees have to love the company.”
We believe that culture begins with taking care of our people, training them, growing them, developing them, holding them accountable. There’s a hard edge and there’s a soft edge. The soft edge is training. It’s an encouragement. It’s a relationship. The hard edge is, at the end of the day, every human activity in a business can be reduced to a number. If you doubt that, take a look at your paycheck. Those are the hard edge aspects of the culture that we are here to perform. We are here to get results for people. We care about each other on a personal level and we want to nurture those relationships and so forth. At the same time, we’re here to get better together. Iron sharpens iron. We’re here to improve our skills and our abilities together so that we can be more effective for our customers. I could talk for hours on culture, but what I’m trying to get at here, I hope, is that culture starts with owners, shareholders, stakeholders, leaders and managers within any organization. If they don’t believe it, it’s not who they are on the inside. It’s not going to happen. It won’t manifest within the organization.
I was thinking as you were talking of measurement and leadership and leaders. I was at a big talk for some guy who knows something. He was talking about the difference between engagement and being fulfilled in your work. You can be busy and yet not find meaning in your work or being fulfilled by the work, which I think is what you were touching on when you’ve got the folks who are believing in the mission. The other thing that struck me is as a client of some of the repaired space where it quit leaking, the absolute relief that you experience when you go, “What do you mean it’s not flooded now?” No, it’s not flooded now. “What about tomorrow? It’s not flooded tomorrow?” No, it’s dry again. For you, that’s an extraordinary tangible result from really good work that your customers experience.
There is that emotional sense of relief and confidence. I don’t have to worry about if I go out of town over the weekend and we’re in a rainy spell. What’s happening in my home when I’m not there? I don’t have to have that worry anymore because I’ve done what’s necessary to ensure that I’m not going to have a problem there. Whether it’s 2:00 AM and there’s a thunderstorm rolling through or whether I’m home during the day or whether I’m gone on the weekend, whatever it is. It’s gratifying to be able to give people that peace of mind and know that valuables and potentially heirloom materials or memorabilia that they have stored in their basement, they don’t have to worry about. We love being able to do that.
For the folks that have never had that problem, I don’t know that they can quite grasp how good it feels. From having had the problem, I’ve belabored the point I’m sure, but it’s amazing how much better you feel as if, “It rained hard.” Everything’s dry. Don’t worry about it. That’s a big deal.
As you have alluded to, if you haven’t had the problem, it may not feel as tangible. The magnitude of what that’s like to have your home invaded with water and have all the damage and all the loss of furnishings. It’s a little bit hard to put yourself in that person’s shoes if you haven’t had that experience yourself, but it is no fun.Culture begins with taking care of your team and training, developing, and holding them accountable. Click To Tweet
For the folks that have been in those shoes, they’re all going like, “We get it. You bet.” You were talking a little bit about the measurement in financials and so on and rolling the clock back to the early part of the years, typical P&L, you did what the CPA would say. From the progression of your financials, would you say that your financials are much more robust now for looking at the leaders in your business and what to pull on what’s going on?
Without a doubt, yeah. We’re able to understand our profitability per job, per service or product type, and see where either pricing may be off a little bit or maybe we need to get a little bit more efficient in how we’re installing something. There are lots of opportunities to improve efficiencies through logistics in a company like ours. Are we buying things as efficiently as we can? Are terms of our inventory, our products, are we ordering smart? Are we consolidating freight charges? There are so many things that go into the profitability of a job or a month or a quarter or whatever unit of measure you may want to look at. Having a professional company controller and accounting team here now has brought a tremendous amount of clarity in the areas that we never used to quite know exactly what the numbers were.
I was talking to a business valuation person, “You should have good financials.” You go, “I should be taller?” What does that mean? Does it allow you to take and make intelligent decisions about feed starve, which is doing well and so on and so forth? Do you remember back when you first got a big a-ha from your financials and what that looked like or felt like?
I do. There was a particular product line at the time that was generating most of our revenue, but was actually marginally profitable. When I finally did business with that fact and the a-ha moment, that was not a fun a-ha moment. It was like, “This is one of the things that we do a lot of and here we are struggling to make it work financially.” That leads of course into some of those questions about the efficiency of our operation. You can’t raise prices all the time. Part of the wonder of a free market and the competitive marketplace is that there’s always the pressure to deliver the most value possible for the price that you’re charging.
There’s a limit. None of us have the luxury of raising prices indiscriminately. We work in a competitive environment. If our pricing is where it needs to be, why aren’t we profitable in this area? That’s where you look at the training, you look at how efficiently a crew is operating on installation day based on the preparation and training that we’ve given them leading up to that. You find where areas are that need to improve. Reality is trying to talk to us all the time and trying to tell us where we need to make changes.
Many will have an internal narrative. This is what I think this is, a preconceived notion. You look at the facts and they don’t jive with the preconceived notion and you go, “There’s a disconnect.” It’s hard when you’re knee-deep in the business to step back and look on the business. For you, if you were to look at the difference between being in the business and on the business, how much time do you think you’re on the business as opposed to in it?
At this point, I’m probably 80% on it. I am involved in some of the day-to-day, but it’s more of an advisory capacity than it is actually doing it. I take a look in one of our departments and spend a bit of time, they’re asking some questions, peeling back a couple of layers and getting into some of the weeds in terms of the function of what goes on in that department. Usually, it’s not for the purpose of, “Let me show you how to do this better. Watch me, I’ll teach it to you.” It’s not so much that as it typically is asking a lot of questions, getting the best understanding that I can get of what the challenges are there and then trying to get the resources needed. Whether it’s different equipment or different training or a different process that could help to improve our efficiency there and to try to advise and guide those types of improvements.
In a very small organization, we talked about as I got started with this thing, just a few of us, you not only get to do a whole lot of different things, but you better do them pretty well. You have to be competent. If something’s worth doing, you better do it well. There comes the point where overtime I realize there are people here that are more expert than I am, more specialized than I am, more knowledgeable than I am in some aspect of what this company does. Some function that takes place here and they’re better than I am and I’m okay with that.
That’s an interesting spot to get to, from I drive my own company and I’m responsible and I’m the technician. One day you wake up and you go, “This person over here is infinitely better at that task than I ever was.”
I think it’s a great place to get to it. You get a chance to check your ego, to admit to yourself that, “I’m not the be-all, end-all of every skill, every bit of knowledge, every bit of expertise that this company needs to have.” You have to be able to say, “I’m okay with that. I don’t have to be the man who’s got his fingers in every aspect of things here.” You have a chance to check your pride. Maybe you’re carrying a little bit too much there and those are opportunities to do that. There are the excitement and the relief of saying, “We’ve got somebody who’s outstanding in this role doing better than I did with it when I was in this role years ago,” and that’s a relief to me. That doesn’t have to be a pride out of my fingers thing. I can let go and give this person the freedom, the empowerment, the resources to excel in that role and that’s a good thing for me. That’s one little piece of my life that I get back. That’s the way I look at it.
As you look at where you are in the business now and you look at the early years where you were in the field doing, what value does the experience of having done help you when you’re working with team members now to have an understanding of what they’re tasked with?
I think it behooves a CEO to have a commanding grasp on the nature of the services, the products. You want to have somebody that’s been hands-on that understands the work that’s being done and the value that’s being delivered to the customer. I don’t think that’s a bad thing. I do think that can hold a CEO back in a growing organization if he or she can’t shake loose of that and can’t realize that, “This organization needs me to be somebody now that I was not a few years ago. This organization needs a different leader than the leader of 2016 or 2012 or whatever. If I’m too attached to the work that we do and the technical aspects of those services and whatnot, then I can’t become the leader that this organization needs me to be.” I don’t know who came up with these analogies, they’re all over the place and they get bounced around in different books, seminars and podcasts. The bottleneck is at the top of the bottle. That happens so often. I’ve been there with this company as we’ve gone through different levels of growth where I was a little bit slow to let go of something and replace myself with somebody who was more competent than I was.
There’s perceived risk in letting go.
It’s scary because that’s another salary, that’s more overhead. That means that what we did last month that worked, we have to go out and do it again next month. The last month can’t have been a fluke because we’ve now added staff, we’ve brought in additional overhead commitments and whatnot. It is scary. It can be nervy. It’s not as though the path is always flat, solid and broad in front of you. It doesn’t feel that way usually.At the end of the day, every human activity in a business can be reduced to a number. If you doubt that, take a look at your paycheck. Click To Tweet
You’ve been through some interesting economic times, 2008 timeframe comes to mind. The business up to 2007, they go along. 2008 to 2010 was a significantly different business environment. If there were one or two lessons that came out of the ’08-’09 timeframe, what were they?
For us, they were that confronting a recession or confronting a slower business cycle needs to be looked at differently depending on the size, market share and the charity of the company. In those years, ‘07 to ‘10, we did nothing but grow. If you think about it, at a super basic level, the economics make sense because new housing construction was way down. Our business is not tied to new housing construction and it’s not really tied to interest rates either, for the most part. If you’re not going to move up and move on into a beautiful new home, you’re going to stay where you are and you’re going to make it work. There’s an inverse relationship there for us that a slow housing market is probably favorable in the sense that people will be calling us more because they’ve got to take care of the home that they’re in. We grew through those years and we were smaller at the time. Our growth was probably taking up market share that other companies were feeling pinched on at the time.
The size of the company, it was a good time for growth and we didn’t have a lot of exposure. We didn’t have a lot of overhead. For where we’re at now in terms of our overhead commitment and the critical mass the company is at, I feel we need to take the possibility of slower economic times very seriously. I’m not saying that we’re some big thing these days, but we have taken a lot of market share. If the water level, if the tide level drops as it does in an insignificant recession, I expect that we’re going to be challenged with that more so than we were several years ago when we were a much smaller team.
Pretending that you’re a crystal ball and you go, “I see recession fourteen months and three days down the road.” Based on that as the directionality owner, we’re going to prepare by this and execute on that. Do you have any thoughts about what you would do looking forward if a recession showed up?
I attended a seminar where that very question was posed and we did an exercise. The question was, “What would you do if your 2020 revenue was down 20%?” We got to wrestle with that, do business with that, really think about how the company is structured. Are we as efficient as we need to be? I’m talking about internal structure now, talking about how workflows happen, how chains of accountability happen, layers of management, so to speak. You have to look at all those things and say, “Where can we be more efficient?” If the day comes as it inevitably will where fewer people are calling for our help than they are now, how do we ensure our future and our success through that time? Looking at those what-if scenarios and not just thinking, “Maybe someday, several years down the road, we might have to deal with this.” It could be a reality in the sooner than later timeframe.
There’s value in knowing what you’re going to do. If it’s two years to ten years down the road, trees don’t grow to the sky and the economy doesn’t necessarily go always up. When you went to that get-together, was it industry peers or broad industry or broad business owners?
It was a broad-based meeting of all kinds of industries. It was called a Vistage CEO Summit in Denver. You and our readers may be familiar with Vistage. It’s a CEO peer group. In one of the breakout sessions, that was one of the questions posed to our group was put yourself forward a year wherein 2020 revenues have slowed 20%, what will you do? What will you need to do if this happens?
I think about the value of outside perspective and cross-pollination for lack of a better term. You see the other business owners and some have been through the ’08 timeframe like you did and that was actually good for you and other ones were selling appliances and that was not much fun. Their perspective is different. Looking back over your business, there might’ve been a time where something didn’t quite work out like it should have or like you thought. You go, “There was a lesson learned,” and rolling forward, how did you take that particular challenge and learn and do better from it? What was that like?
I’ve got painful examples to share with you. In Q4 of 2017, we launched a product that we endeavored to promote and get some traction with as we went through the winter months of 2018. That product we called Smart Foam that product was a spray foam insulation that can be used for retrofitting homes, attics, crawl spaces, etc. The reason you may wonder if somebody may ask, “Why would you get into home insulation? That seems outside your strike zone a little bit.” I talked about how we do concrete lifting and leveling, that’s done with a foam-injection process. Some people get that confused with mud jacking and think that we’re doing mud jacking. It’s not that at all. It’s a completely newer technology, different technology and involves putting two different chemicals together in a reactor, spraying it out and it expands. Many different grades of foam can be used for many different things. We can lift concrete with it, but during the winter months when it’s too cold for us to work on concrete slabs because they get frozen underneath, it gets stuck to the frost and you can’t move them. We thought, “We’ve got these trucks and this equipment. What if we could use them through the winter months and wouldn’t the wintertime be when people are interested in beefing up their insulation?”
It sounded totally logical. We thought we had done our homework, done our research, but as we got into it, we had trouble estimating accurately. We had complications on the installation side with the production crews. It’s a very different animal crawling through someone’s attic where you can step through, hurt yourself or damage something that is standing out in the driveway and pumping foam underneath the concrete. There were challenges both on the sales frontend or production on the backend. We struggled with it for a few months. In June 2018, we finally said, “This is killing us.” Our launch was not successful, we’re willing to admit that. In fact, it’s hurting us because not only is this new product division not thriving, not getting traction yet, but it’s caused us to lose our sharp edge in some of the other product lines that our salespeople need to be good at.
Those traditional core lines, the foundation repair, waterproofing, those services. We had gotten distracted and diluted a little bit in our focus. That was a hard pill to swallow last June 2018 where we just said, “We’re pulling the plug on that. We’re not going to be promoting that, marketing that, selling that anymore. We’ll install the jobs that we have already sold, but we’re going to get back to the basics. We need to do some retraining here. We need to look at our competencies and our results in the core line things that we’ve become known for until, prior to here as we’ve tried to launch this product line.”
That sounds like the silver lining, a refocus on core competencies and sharpening the saw.
It’s certainly been that for the last several months now. It’s been a period of, particularly in the sales department, it’s back to boot camp. It’s back to the basics. It’s calisthenics. It’s the mental exercises, the technical training, the product application knowledge, the diagnostic skills that we need our people to have when they go out to a home. They first have to understand, “What’s going on here?” You can show up in places it’s never been. If we only had a nickel for every time a customer had said, “I’ve lived here many years and my basement’s never done this before and now all of a sudden I got two inches of water.” Water can behave in unpredictable ways, but what’s incumbent on us is to understand those ways and understand how to discern what’s actually happening around under the home so that we can make recommendations that are going to solve the problem. You can fix a basement with good intentions. You have to do it right.
You’ve got the junior guy and you’ve got the senior guy. This guy says, “That came in from over there. I saw him when I came in.” They’ve seen it before, then you’ve got the new guy. How do you transmit the knowledge from the experienced person who can figure it out where you have a leak to the brand-new person? How do you do that?It's a little bit hard to put yourself in another person's shoes if you haven't had that experience yourself. Click To Tweet
The biggest thing that we’ve found is that it routinely takes six months and it can take up to twelve months for a design specialist, which is our term and title for our sales staff, to become fully-versed and seasoned into everything we do. They’ll do about 350 to 400 home inspections in a year. It’s about two a day, four days a week. They have the fifth day a week that they have open to catch up on paperwork and make sure that they’re taking care of that. What we find is that over those months and as they go from their first few inspections to a few dozen to scores to eventually a few hundred, that there is more and more knowledge and experience that builds upon itself as they go. There’s a seasoning that takes place in that six to the twelve-month time frame. You may wonder if somebody may ask, “What about when they’re learning? Are they out there on their own doing who knows what?” No, we have a very rigorous program of support in the sales department where they have a lot of ride-along assistance where we have a senior manager or design specialist riding with them on appointments, teaching, training as they go.
They also have the ability to reach out to our production managers here if they have a question about, “I’m looking at this situation here. Maybe this is something that’s a little bit of a different wrinkle about it. Is this something that we can handle with this type of product?” They can make that phone call. They can also reach out to our engineers. When I refer to our engineers, I’m not talking about payrolled employees, part of our team. We have independent, third-party relationships with engineering firms that provide that oversight and that professional design assistance. The newer guys or any of the sales guys really, but particularly as they’re learning in those early months, they’ve got direct access to the engineers to call with questions and get help on diagnosing and things like that.
For you and looking at your allocation of time, what does a typical day look like for you if you had a perfect day and you allocated your time as you want it?
Many of my days I’m in a lot of meetings. Those would typically be department-level meetings and I do that to maintain my situational awareness of what’s going on. We have reporting mechanisms and other things where I am kept apprised of what’s happening. There’s certainly a place for a live conversation if you’re dealing with maybe a tricky personnel challenge or a customer issue. Some of that’s got to be worked out with dialog and our teams here are well able to resolve problems that come up and challenges. As a business owner, I don’t dare be blissfully ignorant. I want to maintain awareness of where the challenges are, where the pressure points are. To your question, I’m in quite a few meetings.
There are certain outside vendor relationships that I’m uniquely qualified to engage with. That might not necessarily be the vendor that we’re buying our nuts and bolts from, but it might be others. It might be engineering firms that we’re building relationships with. It might be banks and financial vehicles involved with the BBB, involved with my CEO peer group, those things where I can get outside perspective. A couple of days a week, usually I’ll have a lighter schedule on meetings and I try to get out to the field. I try to get out to job sites. Situational awareness, I want to see if the crew is doing what they’ve been trained to do. I’m certainly not the only oversight they have, but now and then I don’t think it hurts at all for the owner to show up unannounced when they’re not expecting. I don’t come in heavy-handed with the inspectors’ clipboard and attitude of, “I’m looking to catch you guys missing something.” I come in with cold Monster drinks, a bag of chips and a little encouragement, a little refreshment, things like that. “Thanks for the hard work. I appreciate what you’re doing for our customers.” I do get that chance to see what’s going on maybe behind my back when they don’t know I’m looking, but suddenly there I am.
I was at General years ago and getting the field and we’d go to the motor points, we’d go to the training exercises, and then we’d get out. The General goes straight to the private or the NCO route on the front line go, “What are you doing here? When was the last time you ate a hot meal? What’s your mission now? What did you learn?” Not picking on anybody, you go, “Did it come from here and go down to here? Are they still doing it that way?” I think the people that you go visit and see you out there go, “He’s in the field just like I’m in the field.” There’s enormous value.
There’s this concept that you sometimes hear in management circles called management by walking around. Here in the building, I do that by checking on how the afternoon load-outs going. The crews have come back for the day from their jobs. They get the trash off their trucks, they bring back leftovers and checklists into the warehouse. They reload their trucks for the next day. I want to see how that’s going. How efficiently are we turning that around? I can look at reports, but sometimes you want to see. You want to talk to the guys and ask some questions. Likewise, I’m wandering around the warehouse out in the yard. I ask questions about, “This inventory doesn’t belong here and it’s been sitting here for a week. Why is that?” It’s some of those things.
We’ve got a mechanic’s bay here in the building, a full-time mechanic to work on that fleet and keep things on the road. Sometimes there are questions there about what’s happening. You can’t be an effective senior manager or owner if you’re always behind a computer. You have to get out and connect with your people, connect with your customers. That’s the other fun part about getting out to the job sites that it seems like probably three or four times out of five the customer’s home, I’ll get to meet them, shake their hand, introduce myself, thank them for their business.
That’s a big deal.
I don’t think it’s a big deal to meet me, but some customers enjoy that. They feel honored that I took time to come by their home, check on things, say hello and thank them. It does matter.
We’ve been nowhere on the script at all and been chatting away here. I guess for me, looking out for several years. What things are you framing in your mind as you’re considering if you have a good market share penetration? What are you considering to grow your company?
That gets into the area of vision. Vision as I have learned and what has been modeled for me in terms of those that have mentored and helped me grow, the vision is that hoped-for future state. It can be aspirational. It can be a little bit idealistic. It can be what Jim Collins called the BHAG, a Big Hairy Audacious Goal, one that you may never fully realize. 80% of the BHAG is pretty good. Here’s our vision. You’ll find this in our founding documents, you’ll find this on the wall of our training room, “Every home and workspace stable, warm and healthy.” If you look at our immediate geographic territory in the front range of Colorado, we are talking about easily an $80 million to $100 million a year market.
If we were to make significant strides toward the fulfillment of that vision, there’s that much need out there. That’s many times the size of our company now. We’ve got all kinds of growth opportunity. In our admittedly idealistic view of things, if every home and workspace were touched by our company, our communities would be much better off. If we could make those places stable, not subject to damage, movement and loss of economic value, if we can make them warm through our crawl space insulation products and other things. If we can make them healthy, which we do through lowering humidity, getting rid of mold, things of that nature, I’m going to be pretty happy with that at the end of the day.
I have a client that’s a professor at Stanford. He’s an architect and he’s talking about the clean homes and healthy homes. For years and years, I was not well-understood about how sick you can get from your own home. I have a client in Texas that was living in a home that had black mold, she had MS symptoms. The place got cleaned up and she has no symptoms anymore. You think about the mission of trying to do your part to make people lead a healthier and happier life. That’s a pretty good mission.
We think so. The way we see it, we’ve got it broken down into four big ideas, our purpose, our vision, our mission and our values. That purpose is to redefine our industry by growing our people to their fullest potential. Somebody might say, “What do you mean? Isn’t it about fixing foundations? Isn’t it about houses and repairs?” That’s what we do. That’s more in the area of our mission. The reason we do it, the thing that gets me up in the morning, gets me fired up is growing our team members, seeing their families prosper. It’s seeing young guys come in here and learn a skilled trade and go from a rattle trap buggy that they were hardly getting to work into buying that first nice, reliable or new vehicle. Likewise, it’s seeing young families. We’ve got a few couples that have gotten together here over the years and started families and seeing them buy their first house. Seeing them begin to grow their family, that is very exciting to me to be able to help them along their journey in those ways.
For us, that’s the purpose. I mentioned vision, every home and workspace, stable, warm and healthy. If that’s the goal and we live in a very populous area with lots and lots of need. We’ve got a lot of work to do. We’ve got a long runway ahead, a long way to go still. The mission for us is to consistently deliver remarkable experiences. We work in the environment in the context of home repair, but you can hire any Tom, Dick or Harry. You can hire any Joe in a pickup truck and get something done. To consistently deliver a remarkable experience that makes that customer want to fist pump and want to tell their neighbors about how much value they felt they received. What a great manner in which we took care of their problem, that’s the magic. That’s what I felt was lacking in this market seventeen years ago when I first became aware of this specialty niche. For us, that is what we’re all about. The core values we’re borrowing this from Pat Lencioni. Hungry, humble and smart are what we value. It’s what we look for in those we hire, in those we promote. If somebody has a disciplinary problem or a need for coaching or redirection, it’s probably because somewhere in the area of hungry, humble or smart, they’re coming up short. Those are core values here that we hire, train, promote, and de-hire when necessary on those values.
Paul, this has been a joy. I love hearing about your business and the success. I look forward to hearing of all your continued success as you take in help homeowners, preserve their home and make it healthier.
Thanks. It’s been a wild ride. It’s been a lot of fun, pretty stressful at times, but we’re coming through and we see a bright future head. It’s been fun to chat with you. It’s a real honor to be on your show.
Thank you so much for your time.
It’s my pleasure.
About Paul Sutton
With over 20 years of experience in the construction and repair industries, Paul Sutton is the founder and president of the Peak Structural team.
Paul is a 2nd generation builder, and began his career while still in college in Dallas, TX in 1986, where he met his wife, Lisa. For many years, he owned and operated a successful general contracting company in the Midwest and has served on the board of NARI- the National Association of the Remodeling Industry.
Paul went on to complete comprehensive training at the Basement Systems Institute in Seymour, Connecticut, as well as study structural foundation and soil dynamics at Supportworks in Omaha, NE. Since launching Peak Structural, Paul joins the ranks of a network with over 200 of the best basement and foundation service companies in the world.
Paul enjoys using his skills and experience to provide insightful, knowledgeable, and value-driven designs for both residential and commercial basement and foundation needs of all sorts.
Throughout his career, he has consulted with countless homeowners wishing to finish basement space or solve challenging water or structural problems, and has designed effective solutions for every one of them.
Paul takes personal responsibility for customer satisfaction on every job and insists on the same values for each and every member of the Peak Structural team.
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