Everybody knows the secrets of success, at least in general
terms. But making them specific and putting them
into practice is something else. Here’s how Dennis Higdon,
president of MidIllinois Companies, Peoria, Ill.,
defines his three criteria for a successful job, and, even
more importantly, found a way to implement them to
give him a competitive edge.
But first, a bit of background. The company was started
in 1970 by Dennis’ dad, Dan Higdon, who is now
semi retired but is still active as the company’s
safety director. Joint ownership
has now passed on to Dennis and his sis-ter,
Debra Young. She has the corporate
tide of secretary/treasurer. But, as Dennis explains, “It’s a 50/50 sharing. She
focuses on the estimating, and I on the
other aspects, but we confer on all
important matters and make sure we
have a consensus.”
The business started in residential painting
and drywall, but now is almost completely
commercial, and encompasses
light gauge metal framing and structures,
drywall/sheeting/plastering systems,
access flooring, painting, vinyl
wall coverings, doors/frames/hardware,
acoustic ceilings, cabinet/casework and,
most recently, firestopping/fire safety.
“We have three criteria for a successful
job,” says Higdon. “In no particular
order, they are a high level of customer
satisfaction, profitability and safety.”
Here’s how Higdon puts them into
practice.
Secret #1:
Customer Satisfaciton
One of the key ways Higdon makes the
tired phrase “customer satisfaction”
fresh, to the mutual advantage of both
the customer and the company, is a simple
post-job survey. A copy is usually
presented to two people, the owner or
his representative, and the project manager
or architect. The customer checks
off how well the work was done in terms
of the field, the office and service. There
is a space for comments and suggestions.
“A lot of wall and ceiling contractors
might meet with the customer for only
a few minutes, so his main impression is
going to come from those in the office,
and especially in the field,” Higdon says.
“Along these lines, I put the dynamics
here in terms my employees can relate
to. For instance, I ask my foreman if he
goes to a restaurant and gets a good
meal, but lousy service, is he going to
leave a good tip or recommend it to his
friends! It helps them if you give them
real life examples.”
Higdon says a lot of people in the construction
trade in general “don’t take
into account that it may take a customer
two, three or four years to do the planning,
get the financing and approvals
and so on for a job. The construction is
simply the final phase. Construction
personnel should be aware of how they
are supposed to fit in the customer’s
overall picture.”
Customers may not visit a new construction
site that much, but in remodeling
work, which Higdon does a lot of,
as he says, “The customer is there all the
time. Workers tend to think that as long
as they are working there, it is their area.
But it’s not. They often don’t pay attention
to the customer’s own health and
safety requirements, internal housekeeping,
rules such as no smoking or
food or drink in certain areas, environmental
concerns, such as the impact
dust might have on electronic equipment.
They lose sight of common courtesies.”
The customer satisfaction survey keeps
Higdon’s employees aware of just what
their customers think of them. “The
surveys from past jobs are kept, and they
are analyzed. Employees who do well are
congratulated, and we learn from our
mistakes and see what it is we have to
work on,” Higdon says.
He adds that even a small imperfection
on a job might not be enough to have
the customer call the contractor back,
but it will always remain there, and it
tends to fester. The survey is a mechanism
that helps get corrections taken
care of right away.
But doesn’t this open a Pandora’s box,
encouraging customers to call him back
for every little thing? “Not at all,” Higdon
replies. “We find that they are very
impressed that we are trying to focus on
their satisfaction and it tends
to open a dialogue. And
since our employees know
these surveys will be filled
out, they serve as a good motivational
tool so they want to do
their best to please. They have
gone a long way to raising
the bar.” Higdon encourages
customers to name
particular employees
who did an especially
good job so that management
doesn’t take all of the
accolades. Bonuses are not
given for these positive comments,
since the emphasis is on
teamwork, and the bonus
structure is tied to total profitability, But those who do get individual
praise get recognition and a pat on
the back, and that’s proved to be a sufficient
motivator to keep maximizing the
level of customer satisfaction.
Secret #2: Profitability
“One of the key things we do for profitability
is to share all the costs down to
the foreman level,” Higdon says. “It’s a
very thorough process in which the foreman
meets with the superintendent and,
in most cases, with the estimator. He
gets an overview of the blueprint specifications
and spends a day or so brain-storming
the scope of the work, taking
off production rates and the hours needed
to complete the different phases. He
thus understands expectations. A lot of
companies want to stop the financial
sharing with the superintendent. But if
the foreman does not know what is
expected, how can you be critical of
him?”
Many of Higdon’s profitability concerns
have, due to the skyrocketing interest
rates, taken on a defensive stance. He
acknowledges that one mistake he made
is remaining with the same insurance
company as his company grew. “You
should have trust, but it doesn’t hurt to
check rates,” he says. Now he does a very
thorough job of shopping for insurance.
“We’re very fortunate in having an office
manager who knows the intricacies of
that market and spends a lot of time on
it,” he says. “You can at least be aware
of what is going on and control those
expenses.”
Higdon also points out that now many
owners and/or general contractors are
inserting provisions requiring the subcontractor
“to provide insurance coverage for parties over which you have no
control. It’s easy to just sign and overlook
the fine print. But you should have
those provisions at least modified, if not
stricken.” Higdon also advises to watch
out for exclusions such as for mold issues
and protection for applicators of exterior
insulation and finish systems.
A Winning Combination
Mid-Illinois Companies, which averages
about 45 employees and has an annual
volume of between $4 million and $5
million, has come up with one innovative
program that combines both customer
satisfaction and profitability.
Higdon has, in the past, received a certain number of smaller jobs passed onto
him by competitors who don’t want to
be bothered by what they consider nuisance
work. But Higdon saw an opportunity
here. So, about four years ago, he
started a direct sales effort to end customers,
as opposed to just waiting for
bids from general contractors. He started
going back to jobs he’s already done
through general contractors he already
knows the jobs done, materials used and
maintenance issues. He’s also started
contacting people that oversee large
commercial developments, either owners
or property managers. And he and
his staff have become more involved in
organizations such as the chamber of
commerce and Rotary Club for networking
purposes, on the basis that people
tend to buy from those they know.
A key dynamic to this approach was to
put in charge of this separate division a
foreman who was skilled in a variety of
areas, and to staff this division with multi-talented people. One problem with
making this type of commitment is that
all this big talent may be going after
small jobs. “Sometimes you have to go
through several small jobs to get a big
one,” Higdon acknowledges, “but you
build the trust and find you are included
on the bids for the large ones; sometimes
you are the only one. You want to
send your best people because they are
equipped to solve a number of small
problems, and know how to get into
and out of an existing building, quietly,
without disturbing the environment.”
It was hard to get started, Higdon
admits, but he says the gamble has paid
off. “Our direct sales was only 7 percent
of our total volume when we started
four years ago. But it’s grown an identi-cal amount every year, and now represents
32 percent. That tells me two
things. We’re on target, and once we
start on a project, we know how to stay
on it, even after it’s finished, so we’re
there for the new projects.”
Secret #3: Safety
“Safety has vastly improved since we
implemented a number of changes,”
Higdon says. These include forming a
safety committee comprised of four field
employees and Dan Higdon, the safety
director. They come up with a variety of
programs, determine how to implement
them, how to reward safety on a bonus
system, and meet once a year with the
workers’ comp officials and insurance
representatives, asking them to conduct
a safety audit. Especially effective is Dan
Higdon visiting each site before the job
starts, to check out hazards, and walk
the foremen through the ways to avoid
them.
He keeps the site replenished with first
aid kits, fire extinguishers, fall equipment,
protective glasses and so on, and
makes sure everybody knows where
these items can be located on the site.
Dan Higdon also visits the site while the
job is in progress with a safety checklist,
with a special eye toward the areas he
considered potentially dangerous prior
to startup.
Ongoing quality improvement also
helps the program. For instance, at one
time the toolbox talks did not appear to
be very effective, and few employees
were turning in their attendance sheets.
“We found out the talks were not always
relevant,” Higdon says. “For instance, if
someone was hanging drywall, why
should he hear a talk on fall protection?
We improved this situation by giving
the foreman a full file of toolbox presentations,
and he can pick the one relevant
to the job. He has the attendance
list, and the employees simply sign off
on this one list.”
When asked where he gets his innovative
ideas, Higdon replies, “I’m inspired
by the Association of the Wall and Ceiling
Industries. It’s a terrific organization.
And AWCI’s Construction Dimensions
is passed all around the office and read
cover to cover.”
