NASCSP Joins BPI's Green Jobs Connection Initiative
The National Association for State Community Services Programs (NASCSP) joined BPI's Green Jobs Connection this month, an initiative that will connect BPI certified workers now employed in the Weatherization Assistance Program (WAP) to jobs within BPI's network of private home performance contractors. All BPI certified professionals are invited to post their resumes on BPI's Green Jobs Connection website, and any contractor or organization seeking to hire BPI certified professionals may post their job vacancies. More information here.
Weatherization earns its keep
The U.S. Government Accountability Office dug deep into Recovery Act use of Weatherization Assistance Program (WAP) spending -- and found that spending and progress are more on track than detractors have suggested. See the report and/or hear the podcast here.
…and New York weatherization gets a boost
Although post-ARRA money for the nationwide WAP program is experiencing painful cuts, one state is digging deep into its pockets to support energy efficiency retrofits: New York is increasing its funding for low income households by $18 million this year. According to the New York State Energy Research and Development Authority, $46 million will be available this year for the EmPower New York program to help low-income families improve the energy efficiency of their homes.
Dramatically better building envelopes
That's what we need to achieve resilient design, wrote Alex Wilson on BuildingGreen.com. "The most important strategy for ensuring that those livable conditions will be maintained is by creating highly insulated building envelopes." This means the 10-20-40-60 rule of thumb for insulation in cold climates, along with airtight construction and top-performing windows.
Does it drive you crazy when homeowners ask how their home-performance investment will pay off? Green Building Advisor's Martin Holladay addresses the "sick and tired of hearing payback questions" crowd with a breakdown of why payback matters, along with a number of different ways to analyze likely payback. In short, whether an investment makes economic sense depends on factors unique to every homeowner.
Approving spray foam here
Open-cell spray foam is now an accepted insulation in the California Energy Commission's building efficiency standards. Under the decision, proposed by the Spray Polyurethane Foam Alliance and finalized December 14, "any home or low-rise residential building insulated with open-cell spray foam installed to the new SPF QII standard is eligible for a variety of state energy tax credits and utility rebate programs." Details here.
Banning spray foam there
The Passive House Institute U.S. erred on the side of environmental caution in banning the use of certain types of spray polyurethane foam (SPF) insulation on projects seeking certification through the institute's more rigorous "PHIUS+" program. Mike Eliason provides an overview of the decision on Green Building Advisor.com.
Zero-sum (energy) new homes...
…are gaining traction in Southern California, where homebuilding giant KB Home's ZeroHouse 2.0 program showcases a home fitted with radiant barrier roofing and "beefed-up insulation," according to Builder Online.
Whole-house efficiency, not just appliance rebates
A report from Lawrence Berkeley National Laboratory calls for utilities and governments to accelerate their shift away from typical residential energy-efficiency programs involving equipment rebates or off-the-shelf improvements and toward those "programs that improve the efficiency of the entire house -- by sealing up leaks, reducing plug loads, adding insulation, and replacing inefficient heating and cooling systems." Middle-income households would especially benefit from such programs, the report says.
What they always ask after an energy audit ...
…is 'why didn't the contractor/builder do whatever he didn't do that impacts the home's performance?'" How Ed Voytovich always answers is "We would be happy, Mr. Jones, to use our experience as retrofit experts to correct your problem for you." More on Remodeling Online.
An energy-efficient night before Christmas
A little late but delightful nonetheless, here's some creative license (excerpted) from efficiency professional John Poole:
There's been a lot of talk lately about "The Bus." Driving The Bus. Putting gas in The Bus. Even getting out and pushing The Bus. And that gets me to one of my favorite topics: making sure you've got the right people on The Bus.
Of course your business needs systems and procedures—and more formal ones as the business grows. But you can have the best dang systems on the planet and they won't add up to a hill of beans if you don't have the right people implementing them.
As I approach my 113th birthday (OK, maybe I'm not that old yet, it just looks and feels that way!), I've also come to realize that you really want to work with people you want to be around. Life is too short not to enjoy some of it. And some of us—especially those of us trying to grow contracting businesses—spend a lot of time working.
The obvious thing is that you want the right people on The Bus, but what sort of people are they?
In contracting, technical skills are obviously important. But more important is the ability to learn technical skills. This is doubly true in the home performance sector which continues to evolve rapidly. Every month we're looking at new products and materials. Our understanding of building science is evolving. Codes and standards change. If your people can't adapt to new—and to better—you are doomed to slowly, or quickly, turn into a company that does things wrong.
We also like people who can exhibit leadership in all levels of the organization, from senior managers to line staff. This makes us less dependent on the Great Guru to walk us through every step. We need people who can follow the systems, but who can also act to solve issues when the systems fail. Likewise, we want people who are passionate and who will stand up and strongly make their case. Whew, we have some pretty lively debates! But once a decision is made we rally around it and do the best we possibly can no matter which perspective we brought to the discussion.
And at the end of the day, at least as important as the above are honesty and integrity, team spirit, the ability to work with others. You need people who will lift the organization up, not drag it down. All told, the right people are more about character and core ability than about industry background.
How do you find the right people? It isn't always easy! I'm reminded of the Yogi Berra quote, "If you don't know where you're going, you might not get there." Knowing what you're looking for is a great start though.
The resume or job application won't tell you everything. Interviews are important— you need to ask the right questions to tease out character, ability to work in your environment, and problem solving. Here are a handful of questions to help gauge these during the interview:
- How did you change a system or procedure that you used in your last job?
- Which sort of manager or co-worker do you find hardest to work with? What did they do that bothered you?
- Give me an example of a recent conflict situation with a co-worker that you were involved in. What was your part in it? How did it end?
- Have you ever had a situation where you found mistakes on an assignment someone else gave you (wrong equipment, bad invoice, etc.)? What did you do about it?
- How many furnaces could you fit in a school bus? [we're not looking for the perfect answer, just gauging their reasoning ability and their reaction to the unexpected.]
- How many boxes of caulk would it take to caulk every window in the Empire State Building? [ditto]
- How do you think that you might fit into this company?
- Tell me about a time an idea or task of yours was criticized.
- Tell me about an important decision or judgment call you've had to make on the job in the last month.
- Describe the worst decision you ever made and how you corrected it.
I might want to know that a candidate has installed 1,500 furnaces. But I also want to know if she can respond appropriately if our advisor makes a mistake and specs the wrong furnace on a project. Can she turn that into a save or a win? Reference checks are useful, too. And our company policy includes background and other checks.
Know this going in, however. You are going to make mistakes hiring. We sure do. Those who've seen me speak at conferences have heard the story of a guy who peed in a customer's sink. They've also heard how that particular employee no longer works for us! If you look at our employees, most have been around for a long, long time. Where we have turnaround is in the first several months.
But whether a new employee or someone who's been there for ages, when you know you've got the wrong people on The Bus, it's time to make the change. You want to be fair. You need to provide a chance for improvement. And you also want to make sure you don't just have the right person in the wrong job. As soon as you know you don't have the right person, however, you need to make a change. Yes, it's hard. Yes, it's disruptive. And yes, you really need to do it!
Finding the right people is difficult. But there are some sure signs that you've got the wrong employee if any of these apply:
- Creates customer satisfaction issues and call-backs
- Comes in late or is absent without warning or notice
- Doesn't wear the company uniform or meet appearance standards
- Blows off company meetings
- Gossips / bad-mouths other employees
- Doesn't respect the company vehicle—driving it, cleaning it, or littering it with McDonald's bags
- Drags down morale
Really! Remember, the employee who makes a customer unhappy may have just cost you many referral sales. Do your best to get the right people on The Bus. Get the wrong people off the moment you know they're wrong—that makes more room to find the right people. The right people will keep the bus moving for you, even if they have to change a tire or get out and push.
At a recent energy convention in California, I spoke with a young entrepreneur about his home performance business. He had recently hired several more employees to handle his growth. After asking him a few pointed questions, he had a little epiphany and said, "Blaine, from what we're talking about, it seems like the busier I get with this program work, the less money I'll make." Simply put, his profit margins aren't going to support his rising overhead.
At the same convention, I talked with a colleague –a very senior building scientist– who had resigned himself to the fact that he needed to stay on the research and science side of the industry instead of the business side. When I asked him why, he said, "I realized that I am a true believer in home performance to a fault. I would bid a job correctly, but then I would direct my crews to do more extensive work than the customer was willing to pay for. It didn't take long for me to have a very unprofitable business."
To me, these are cautionary tales of what can happen to a home performance contractor who does not establish and execute sound labor management principles. A challenge in home performance contracting is that many jobs that stem from energy audits are low-material and labor-intensive. That's why you need to have a laser-like focus on labor utilization to keep your retrofits from slipping into unprofitability. Instead of potentially losing money on jobs, you'll be building a sustainable foundation.
There are two components of labor management that will ensure success on your jobs: personnel and process. In this article, I'll focus on the critical steps to finding and putting the right people in the right positions.
1. Defining the Best Attributes in Your Installers
Modern management isn't about hard-nosed, top-down management. It's not about micro-managing your installers until you get what you want from them. Management today is about finding the right people with the right attributes, properly setting expectations and empowering them to succeed.
When hiring installers, look for people who "live to work." These are people who are genuinely happy and excited when the job board is filled and backlog is strong. They are naturally energetic and aren't intimidated by tough, physical challenges or the extremes of hot and cold weather.
Trustworthiness is one of the most important attributes any of your employees should possess. Since the nature of home performance takes your installers into every nook and cranny of customers' homes, crews will be working in the intimate spaces of the house. It's sacred space to most homeowners, and your crews must work with a high level of trustworthiness. This attribute goes beyond just customers. It needs to apply to the relationships between employees, crew leaders and supervisors as well.
There are other important skills that you want your installers to possess, like being a creative problem-solver who can come up with innovative solutions "on the fly" or being flexible enough to adapt to unforeseen challenges on the job site. But it's the core attributes – strong work ethic, professionalism and trustworthiness – that every install mechanic must possess to be best-in-class.
2. Rewarding the Behaviors You Want
It's good business to align your workforce behind select key performance indicators (KPIs) of your company. If the company is successful, then employees at every level can share in that success. Here are three considerations for structuring an installer incentive program.
Superior Customer Service – How the homeowner feels about the entire experience of working with your company from inquiry to energy assessment to finished work, will ultimately influence whether or not you get a referral, which after all, is the most efficient way to acquire new customers. Your customer experience should be measured through simple post-project surveys or through "The Ultimate Question," which is "How likely are you to recommend us to friends, relatives or neighbors?" Answers are ranked numerically on a scale of 1-10. A respondent who feels the service experience ranks as a 9 or 10 is considered a "promoter," and the install crew that consistently contributes to such high scoring should be rewarded.
High Quality Workmanship – Two holes in the bucket of both reputation and profitability are callbacks and warranty calls. An install crew who can consistently limit unplanned callbacks to less than 3 percent of jobs is performing exceptionally well, and this should factor into their bonus/incentive program.
Meeting or Exceeding Profitability Targets – The crew who brings jobs in on time and on a consistently profitable basis is a beautiful thing. It means the crew is predictable and dependable. You can be confident that they will bring you the highest gross margin dollars per man per day, which is the most important metric you'll need to best measure labor utilization. If you're not already familiar with this metric, you should be. Here's a quick example:
- Your crew completes a job that sold for $5,260. The job took a two-man crew two days to complete (a total of four man-days.) The cost of goods (COGS) on the job was $2,532, resulting in gross margin dollars of $2,728 for the job. Since it took four man-days to complete, this job resulted in $682 of gross margin per man day.
It should be very clear to you that the most successful contractors are those that consistently achieve the highest possible gross margin dollars per man per day.
3. Evaluating Your Existing Personnel
We've defined the necessary attributes for both the installers and the company to be successful. And we've identified the key performance metrics. The logical next step is to evaluate your existing personnel and perform a gap analysis, which will determine the steps you need to take to move personnel from their current state of performance to the optimum state.
For example, you may have an installer who moves really fast and brings all of his jobs in under the labor estimate, but the workmanship is suspect and callbacks are high. If it's determined that the gap between his current performance and your expectations can't be filled through coaching and training, then you may have to consider reassigning the person to another role in the company, such as a delivery or support role where they can still contribute in a meaningful way. If this isn't possible, you may be better off having them work for your competitor.
In the next article, I'll discuss the second part of sound labor management: the development of the process by which you execute your work to ensure profitability. Until then, I hope you've all had a very successful start to the New Year.
We received some creative answers to last month's puzzler; and it was a stumper – nobody got it quite right! Loyal readers will recall the problem involved a timber beamed 60+ house with an occasional strong smoke odor. The smell was worst in the front vestibule with a half bathroom and a vented exhaust fan (even though the fireplace was in the back of the house). Above the bathroom was a dropped ceiling and a small gas furnace servicing an additional room. The vent fan duct had been run into the return air of the small furnace. Our big hint was that two conditions had to be met for the smoke odor to occur.
Everybody knows how smart BPI certified folks are, but this stumper proves it's possible to be too smart! Like David Fay from Energy Metrics in Still River, Massachusetts, who surmises that air could be coming from below the fire box in the rear of the house if the pressure there is negative with respect to the basement or crawl space. Or Charles DeMario of Utilivate Technologies in Chicago, who guesses that when the small furnace fires it creates a suction that draws air from the livable space into the attic, which depressurizes the home. He says that since the vent duct from the exhaust fan is connected into the furnace return air, when the exhaust fan is on it could cause a local depressurization in the home but add pressure to the vent registers.
Jerry Blemel of Florida, who sent in this stumper, tells us that what actually happened is much simpler, and far more dangerous, than those scenarios. The smoke odor rarely happened because the two conditions needed were for the furnace and the vented exhaust fan to be on at the same time. Because the vented fan duct had been run into the return air of the small furnace, when both were running, this caused a flame from the burner box to roll outwards, charring an old 12 inch beam nearby. The beam was charred like charcoal; had Jerry not discovered it, it would have been only a matter of time until disaster struck.
Video is Worth a Thousand Words
Next time you get frustrated trying to explain the whole house-as-a-system thing to your client, stop trying! Show them this nifty video instead! We're taking a break from this month's Stump the Chump puzzler to bring you this video from the Weatherization Assistance Program Technical Assistance Center.