You've gotta be able to gauge whether your employees are learning.
Welcome to another episode of Builder Nuggets, the show where builders and remodelers discover how to build thriving businesses while working less. I'm Duane Johns and together with Dave Young, we share the elements of success that have helped hundreds of contractors like you build better lives.
(00:20): Like so many home builders. Our guests today grew up in and around the building trades by high school, he was working with local contractors, building cabinetry in his workshop and doing small remodeling projects immediately after college,
(00:34): He spent the next 15 years building homes throughout the twin tiers of New York and Pennsylvania, both scattered site on your lot and working in established developer communities. He was an early adopter of computer technology. And by the early 1990s found himself becoming a reluctant consultant to other builders and remodelers who were struggling to computerize. It did not take him long to realize it was garbage in garbage out, computers and software by themselves were not going to solve the complex challenges all builders face. And in fact would make things worse. If the companies did not first establish good business systems and the organizational discipline necessary for success, build a true, not embrace continuous learning workforce training. And the adoption of new technologies will become irrelevant. Clients, trades and market partners are going to demand it. The good news is that there has never been a better time to access the resources and information necessary to not only survive, but to thrive.
(01:28): It's my pleasure to welcome Joe Stoddard with mountain consulting group today's show to discuss the benefits of training. Welcome, Joe. Thanks for having me guys appreciate it. Yeah. It says in your bio that you had the PC bug at an early age and, you know, have had an affection for bringing technology into the construction industry. What's the most dramatic change you've seen in your time here, Joe? Oh boy. Well, the most dramatic change, you know, it's gotta be the, the internet. And, you know, I got into this long before, long before there was an internet. So the internet and the rise of mobile technology, for sure. You know, kind of in that order. Yeah. Choice and choice on demand. And how do you, how do you manage all that? It's funny you say that Joel, I'm showing my age as well, but several of us will talk every now and then.
(02:21) And we, we often say, how did we use to do it? I mean, we didn't even have phones. You know, we used to just go to the job site. You, you, you were prepared, you had everything you needed for the day and that was that you didn't just phone home. So yeah, that's a pretty dramatic change. I had PCs long before I had a mobile phone. I mean, my first cell phone was a bag phone probably, you know, early nineties, you know? So, so we had been computerized for several years before that. Yeah. You know, training as you and I had spoke about several weeks ago when we talked it's it is really so underrated. I mean, I think back when we used to have apprenticeships trade schools, there was tons of ways for people to really get kind of on the job training and that's disappeared through the years.
(03:06): And I mean, when you look at it nowadays, w why do you think it's so overlooked in this industry? Well, for one thing, cost, I mean, you know, builders, don't budget for training. I mean, it's, it's gotta be built into your operational budget and into your retail pricing. And you know, that's the first hurdle. If you're not budgeting for you, won't do it. And you know, builders got away without it for a long time. They trained in-house to the extent they could, there were trade programs and trade schools, and that stuff's pretty much all gone away now. So the quality of personnel that you're that's available to be hired is much different than it was even, you know, 15, 20 years ago. So I don't know if that's a good answer, but that's, that's what we've seen. Well, you got w what are you comparing it to is what is where my head goes?
(03:57): So you got the cost of training somebody and what it needs to be compared against this, the cost of not training them, because that's where we see the mistakes on the job site, the frustration not getting the ideal performance out of somebody you just can't grow. If you don't make this investment in your people. And if you're not willing to make an investment in your people, why on earth should they invest in? You invest their, their livelihood and their resources into you as a company. So we got to figure out that this is why we have experts like you on the show is figuring out how do you do, how do you develop a mindset around that training, constant never-ending improvement and empowering other people, Joe, I'm looking at it when I broke it down a little bit, thinking about some of these things around training, and it would cost.
(04:41): That was one of the first things that popped up of may have, well, obviously that's, that's can be a barrier or at least looked upon as a negative at first, but how to do it. And in a sense, I mean, what, what sort of things should companies be thinking about just at the very basic level for training? Like if they don't have training, what are some of the bare minimum they need to be putting in place? Well, yeah, it depends on the department you're talking about, right. But if we're talking about production and production support, I mean three things. I mean, we look for programs and the way we structure our programs, sort of a two or three pronged approach where you've got some immediate training to get somebody up and running, you know, a green horn, this never had had very limited experience, get them up and running.
(05:23): What's the job, the so-called onboarding right, is the buzzword of the day. But, you know, that's a very important part. And then as they gain experience, we can take them in the deeper aspects of the job. And then finally trade knowledge and awful lot of kids today have had no trade experience whatsoever. They, they respond to you know, to an add in you know, an online ad or something for a builder that builder's willing to hire almost anybody, you know, as long as they, as long as they meet criteria, but, but having no trade knowledge whatsoever, it's pretty, pretty difficult to supervise the construction of a home. If you don't know what you're looking for. So those three things, I guess, when you look so, so those might be some of the basic things that need to be trained in. And in a sense, who a little bit around the, who, who should be doing this, who should be doing the training, does this have to be a particular staff member?
(06:21): Is there outsourcing, I mean, what, who should be doing the training? Well, it's gotta be some of each right. I mean, there are, of course, I mean, because we can always training as part of what we do. So obviously outsourcing is one avenue there's training available through basic training, through builders, associations, and things like that, that you can take, take advantage of. But also I think every builder needs to establish and budget for an in-house training program on various levels. I mean, there's certain things that we can do, we can do remotely, but we can't do, you know, we can't do practical hands-on day to day. So I think it's, re-establishing some of the old you know, the apprentice mentor kind of relationship hire in at a lower level. I think you guys call it the golden retriever, hire a golden retriever, golden retriever puppies versus the purple unicorn, you know, and, and bring people on, bring 'em on younger train them to your corporate culture and your organization.
(07:26): And really, I, you know, I was thinking about this after we spoke the other day, if you happen to find, you know, your purple unicorn, I mean, you can, you can recruit for that purple uniform. Like, let's say you need a director of construction, or even just a project manager, a good project manager. Well, it's gonna take you six months to find a candidate and another six months to get them up to speed, right. Drop them in. And that's assuming that, you know, somebody is going to relocate and all that sort of thing. Well, in a year, you know, you can, you can take an intelligent kid and create a very good superintendent in a year with a focus training program. So time-wise, you're, you're speaking our language, man. That's something that we are certainly embracing and trying to get out there. Cause it's, it can be it's, it's tough.
(08:16): I know there's, there's builders remodelers out there that they can't get their head around the fact that can someone that has very limited construction knowledge walk on my job site and actually get the job done. Well, the answer is yes, if with the proper training and it's all trainable, I mean, we all learn this craft is trade. So, you know, taking that time put into the golden retriever puppy is huge. Problem has now the employer's got to take a more active role in it. I mean the, the training is not there. That was there. You're not going to have people coming through trade school. Construction management programs are scaled back at the, I mean, there's college construction management programs. Sure. But like all like here in New York and Pennsylvania, you know, we had, we had both season in New York and we had the, the various community college programs in PA that taught all types of, of trade activity and construction management.
(09:10): And that's all been scaled way back. I'm not sure if there's even wood shop in the high schools anymore. Not many, very few and far between Dwayne and I were talking about that the other the other day. But one of the things you said, Joe, what I think is important when you're talking about, you know, obviously there's a learning outside, but when you mentioned in-house training, Dwayne and I talk about this a lot is, is you're, you're also training on your culture. You're training on the client experience. You're training on, you know, we deal with custom home builders. It's a very personalized experience and you want to be able to put that human touch on it. If you want to be able to scale a culture, you need to be able to have that in house training. And you need to have people who understand the vision and the mission of the company, the ideals and the things that you're trying to achieve together.
(09:58): And you're not going to learn that by sending somebody out to boot camp somewhere that you need to develop and foster you've also got, I mean, the, all the, you know, it's, it's also the trade base, right? Knowing the trade beans and in a lot of cases, Southern builders using more Hispanic trades. I mean, it's the language barrier too, you know, all these things. So all important. Absolutely. It's a tricky, it's a becomes a very tricky dynamic cause you've got, and it's a huge problem. So, so you've got all the dynamics of the industry itself, the myriad of choices, all of this stuff, the cultural issues, site-specific things, regional different regionals knowledge, that's required, different laws. Even in some cases, it just becomes more and more clear that as an owner, you need to have this culture of education built in where were asking like, Hey, where, where do you start with this?
(10:57): And it's, you know, maybe go outside to get some of the education, but it's becoming more and more clear that if you want to be attractive, you've got to be able to have a training program where you're investing in your people. They feel that they know what they're going to be, come in and be competent with their jobs so that they can succeed after that 90 or, or 120 days or whatever your onboarding period is. But what I'm interested in seeing, or hearing from you, how you build out an internal program and how you document that. Because one of the things we see across the board is when we ask somebody, okay, what do you do for training? Oh, well we just show them what we want. Or, you know, they shadow somebody or there's nothing formalized. So can you work sort of nuggets? Can you share about, you know, if you're starting from ground zero, how do you create a training program?
(11:45): Do you get a consultant to help you develop a training program? Is that something that you guys ever enter into at that? Yeah, I mean, because we aren't consultants, I mean, that's what we do obviously, but you've gotta be able to gauge whether your employees are learning, right? So a couple things have to have a number one, you, as a company have to have your act together. You, you can't, you can't train people on systems that you don't have fleshed out. That's so true across the board, every department. Right. And, and a lot of times, you know, getting back to why don't builders train well, cause they don't have anything to train. They're really not. They're really not all that organized as business people and, and their systems and processes need a lot of work before they're trainable, right? So that's the last that's number one.
(12:35): But assuming somebody is on sort of that best practice runway and has together what they need, of course, you got to have documentation, right? This is what we do, and this is how we do it. And then your program, you've gotta be able to gauge how your employees are learning and if they're learning. So there has to be, you know, some kind of, for lack of a better word, a testing standard. What we do is, is pre-assess like here, okay. So here's incoming. Here's what, you know, here's what we're going to teach you. And then after we teach you, we're going to task you and see how you did. And we're going to repeat that until you get it. And you know, if you're not doing that, you're not, you're not really training you. You might be feeding information to people, but they may not be getting it.
(13:27): And then the, the other part of that is the practical aspect of it, right? I mean, you gotta be able to go out and actually perform. So it all ties into, again, the builders quality standards, the builders, basic financial metrics. We're very much a believer in an open management kind of a scenario. So we need all the employees to understand the impact of gross profitability. And we need all the employees to understand the impact of waste and what it means to reduce waste all these things that for years builders sort of can't be aware of the dog, right? Nobody wanted anyone to know the numbers other than the office. And we sort of take the opposite approach that we think everyone needs to know all the numbers and understand them sort of the, there's a book that great game of business by Jack stack. And that's one of our favorite references.
(14:24): And that's kind of the approach we take to training the way you said that it's really like pre-assess and then constantly reassess. Yeah. You have to, and continuing education to, you know, the any good training program is going to have a continuing ed requirement. So that training continues. And if you set the right environment, that'll be something and, and make those resources available. It's something that your people will want to do because they will want to have superior knowledge. You know, you can set that up as a competitive advantage or just, you know, for their own personal satisfaction, but you get the right people on the bus and the right kind of program in place. And they'll take to it. And it won't take a whole lot of coercion to make it happen.
(15:13): A quick reminder that the best way to get the most out of this podcast is to engage with the builder nuggets community, visit our website@buildernuggets.com and follow along on Facebook. And Instagram
(15:27): Sounds like the starting point is the leadership team is, is what you said to take a second. Don't train on chaos for starters. So don't train the chaos, stop the chaos, get yourself systematized, structured, organized, figure out what you want to be, figure out your business rules, figure out your infrastructure and take the time to document that map out where you're going with it. Then it sounds like, and this is something that Dwayne and I believe in a lot to be transparent in your mission, your objectives, your, your successes and your failures, so that the people that are learning right along with you, or that you're teaching understand what a good job looks like, what a good result looks like, what a poor result ends up in for the company, so that they can have the impact. They can have the kind of impact that they're capable of to drive your business, but without all that rules and structure and everything, it's exactly that it's, you know, you're trying to scale the chaos and we know it doesn't work.
(16:33): It doesn't work. Dave mentioned culture, and this really has to be baked into the culture. You have to get it to a point where everybody becomes a bit of a trainer. I mean, you know, you think about the most seasoned on your staff, what a great mentor, what great experiences that person has to share with these younger folks that are coming in and vice versa. You know, the young folks probably have some leg up on maybe the technology and, and they can help some others. So if it's baked into the culture, it's going to be much, it could be embraced by everyone a whole lot easier. It's not just staff either. You know, like of course, you know, we teach lean concepts and one of the primary ways in lean is under utilization of your human resources. And so I want to include, you know, staff and senior management and all that, but also your trades, your vendors, you know, bankers, inspectors.
(17:27): There's a lot of people that have a lot of knowledge and want you as a builder to succeed, but you've got to bring them into the fold. And, you know, it's sort of overused, you know, the idea of a trade partnership, but it's gotta be a partnership on a certain level. And again, you know, it, can't constantly be the looking for the least trade vendor, whatever. I mean, you need, you need quality on all counts and then you've got quality that can help men. Are your people. Well, yeah, if you're, you know, again, back to the culture thing, I think if you're training your team to work with the best, you know, the people that are going to align with your values and do the things you want to do versus, you know, if you've got folks that are just going out there looking for the lowest price people to work with, and then you're going to be training folks on how to put out fires know, I, you know, let me say this.
(18:20): That is still a problem. Industry-Wide that we see, you know, there's still this DNA, this builder DNA that we're looking for, the cheapest price versus the best value and it's pervasive, you know? And so a lot of what we do, you know, getting a trade realignment, you, you teach a builder, Hey, you spend a little bit more for a train category. You might be in a completely different level of competency in quality from that trade. And a lot of times it's not a lot more, you know, it's a, it's a difference of 10, 15% maybe right? In a given trade. And suddenly instead of working with fly by nights, that are not going to help your business, you're working with a real company with real craft people with real trucks and real insurance and all that stuff. And it makes a huge difference. But you know, it takes a long time for that, for that light to come on.
(19:17): But if you're, if you're talking about resources for young superintendents and gaining trade knowledge, that's the kind of trades you need on your job. You need the people that know, know what they're doing and are, are proud to do it. Joe, would you say there, I think is so huge. And Dave, I, I would say the commodity mindset probably comes up on more episodes that we do than anything else. And that's exactly what Joe's talking about is that builder's DNA of getting the lowest price. I mean, yeah, there's, there's certain cases where things are commodities. You know, your sheet goods, your plastics, but not, not your resort and your people, not your human resources. It just might not be a commodity. You know, you need to, your people are the most valuable resource that you have. And if you're using a project management model and you're billing for your time for the services that they're providing, and part of anybody's model is billing for their time, no matter how you structure it, but this is how you grow is by making your people worth more, making them more valuable to your team.
(20:20): Clients will pay more for them. And then, then you're getting, like not only are you growing everything, you're getting a return on your investment. So I think one of the things we look at or encourage people to do is, is see it as an investment, look at each of your staff members as a potential committed profit generator. If you structure your business correctly, then you, you know, every dollar that you put into training comes multiple pools, a hundred percent. So, Joe, I was thinking something I'd love to ask you. And I think our listeners would too, is if maybe even in a scenario, let's say that someone comes to you and there's obviously different ways that folks can go out there and get training and start training programs. But just in this case, if someone wants to come to you or you're working with a builder for the first time, what does it look like?
(21:08): How does that transform through, you know, they come in your door, maybe it's a mass who knows they don't have anything all the way through to putting an established training program in place. I mean, what, how do you guys start? Is there some sort of assessment to kind of see where, yeah, I mean, we do a scorecard, you know, it's it's sort of a balanced scorecard developed with, with SMA over the years. And we, I mean, that's always the starting point, right. To figure out where the, where the company's at and to prioritize what they need to do, you know, first, second, third, depending on their financial situation and market and all that. So yeah, that's always, you know, obviously you've got to do that first before you can do much else. And then what do you do from that point? How do you start setting up a training program for them?
(21:54): Well, I mean, first of all, if they're deficient in certain things, and as we, as we, you know, as we talked about, like, for instance, you can't train a purchasing system. If there isn't one, right? You can't train washing system. If there isn't one, you can't train quality assurance if there's no quality assurance program. So all those things have to be prioritized and put in place. And there's a lot of systemization that really does have to occur, especially on the production side, you know, for a builder to get out, you know, a lot of backup for just a minute. Cause I, when I, I mean, I grew up in kind of the custom builder environment too. Right. And I went from doing that to building in communities and so forth. And when I, when I started to work with much larger volume builders, 2, 3, 4, 500 units or your builders, I was shocked.
(22:45): I mean, one, one of the biggest problems that I encountered and I mean, this is, you know, we're 30 years ago now. Right. But it was, it's the same thing today. One of the biggest problems that I encountered was that people are buying things, features, options, upgrades, whatever. And they're not showing up in the houses. They're not getting bill. You know, they something as simple as, Hey, we want an extra outlet for our Christmas tree. They buy it, they pay for it. It doesn't get installed. You know, we want arch door openings. They buy them, they pay for them, they get square door openings, they wanted a nine foot patio door. They get a six foot patio door. And that was shocking to me because from a custom side, as you guys know, that would never happen because somebody would be on top of that every minute of every day to make sure that those details fell into place.
(23:36): Right. And yet that still plagues the production housing industry. So it's getting from that specification into an, in the purchase orders, in the documentation, into the field and then some kind of a daily, a daily quality assurance protocol that may sure that those things actually happen. So every step of the way that requires training in some department or multiple departments to make that happen, it requires a lot of documentation and it doesn't require technology with technology. Sure. Makes it a lot easier if your people are properly trained in that area too. And so, you know, that's another battle. That's another battle. Although nowhere near as bad as it used to be, these very various technology systems started to show up. And I was like, Hey, is there going to be a magic wand? And they're going to, they're going to solve all of our workflow process and documentation problems.
(24:38): And of course they don't. Yeah, there's, there's a little something called adoption that comes into play there. I mean, any more than any more than a circular saw is going to build the house without a carpenter's hand. You know, technology of any kind in fact could be, could actually be a negative. So I mean, in a lot, a lot of times, and this is going to sound crazy. I know that you, you guys know that, you know, I've written extensively on these topics, but a lot of times we, we back companies off of technology and re-establish manual processes, and then re-evaluate their actual technology requirements. And a lot of times it means stepping down to something much simpler than what they were trying to do. So, you know, you got to get alignment on all those fronts and get something that's actually gonna work before you can train it.
(25:28): I guess, you know, if we're talking about strictly training, you've got to start at that point, right? You gotta have, you gotta have something that's actually going to, going to do the job and then train that. But it doesn't, you know, as we said, it doesn't do any good to train K on this. I mean, you can in Lena, we call it organizing waste. You could make something look efficient, but it can still be riddled with waste because all you've done is organized the waste. You haven't eliminated any of that shuffle on the deck chairs on the Titanic.
(25:59): You're talking our language when you talk about simplicity and that's always, you know, when you go back, if you're starting over, keep it simple at the beginning, that's a huge piece because the more complex you make it at the beginning, the Harrier, it is the harder it is to explain to somebody else, keep your arms around and to adopt. Keep it simple forever. If you can, if something is overcome, I mean, over-processing right. That's another one of the, of the eight primary wastes in lean, you know, keyword being processed. So you're making it more difficult to train. You're making it more difficult to accomplish. You're making it more difficult to inspect on and on and on. And, you know, builders also seem to lose, lose track of that fact. And, and they'll, they'll think that they're systematizing when really what they're doing is just, over-complicating something, you know, needing 10 approvals for a variance purchase order is not going to reduce your variances. This has been a great conversation, but we're going to stop here for today. Be sure to catch our next episode for part two of purpose, actual training with Joe Stoddard, remember new episodes drop every Tuesday.
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