National Harbor, Md.—Organizational health remains a continuing theme for FEI Group as it hosted its annual convention here last month. Three specific areas were focal points this year—generational transfer of leadership, data and talent—and this focus extended across all divisions.
FEI Group now has six divisions, including Home Solutions (builder) and Multifamily Solutions (property management). Both contain between 50 and 55 members. Other divisions focus on kitchen and bath, cabinets, roofing and traffic safety. It is estimated that about 30% of Home Solutions members have expanded into cabinets and countertops.
The group has realized the face of its membership is starting to look different. “The next generation is starting to take over high-level positions,” said Max Holland, executive vice president and COO. “So we need to make sure our members are equipped to pass that baton and get that next generation in the right spot.”
Much of the challenge with the next generation is understanding that they are different than previous ones. “We [prioritized relating] to that generation,” said Michael Haley, Haley’s Flooring & Interiors, Huntsville, Ala. “We looked at how can we get this next generation to perform inside their cultural mindset. We found they just need bumpers, like on a bowling alley. Give them bumpers, let them figure out what they need to do, set the goals for them, give them the roles, make sure they are very clear what those roles are, what the expectations are of them. What surprised us was how creative they were. It was all about figuring out that next generation of leadership, how we approach them and how they will relate to our clients. We lift them up as people.”
Data and decision making
Data is one major area in which FEI Group is focused. “Data has to become the fuel for everyday innovation and solid decision making,” Holland explained. “Everybody talks about having data, but getting the right data in front of the right people at the right time is critical to making good business decisions.”
Haley Norman, co-owner, Direct Traffic Control, Muskogee, Okla., agreed, noting, “As we transition from the first to the next generation of leadership, data collection and inspection has been important. We have a saying here: ‘Expect what you inspect.’ We found it hard to inspect if we didn’t have the data. We still work to dial in on what the right metrics are, constantly asking ourselves whether we have the data we need.”
Norman said she has spent a lot of time, effort and investment to have the right data at hand. An example is overtime hours. “Once we put the pencil to it, we realized we can knock this down, and it has had a big impact on our bottom line,” she said.
Joe Hoffman, CEO, Hoffman Weber Construction, Minneapolis, said he collects as much data as he possibly can. “If you can’t measure it, you can’t improve it. Feelings lie. You can feel like your salesmen are closing every deal when they are actually closing 15%. Or you can feel like every customer is pissed off when you actually have 95% satisfaction. Having an emphasis on accurate data can help mitigate that.”
Hoffman said he is also all about getting the right data to the right people with perspective. “If you present all the data to everyone without the right story behind it, they can draw their own conclusions. For example, roofing is a cyclical business in Minnesota. We can lose a lot of money the first four months of the year. If employees see that the net profit is negative, pretty soon they start getting spooked and will jump ship. They don’t have the context. Now fast forward to October and we could be printing cash. Employees may be asking why they aren’t getting raises.”
FEI Group is also doing its part to provide members with data, particularly as it relates to benchmarking. Through its partnership with Nationwide Marketing Group, FEI has access to a huge platform called Prime Metrics, which the group hopes to roll out to members very soon.
Prime Metrics is a benchmarking tool that helps with purchase data as well as sell-through data. “Where is the sell-through happening?” Holland asked. “How can a national view help someone make better decisions locally based on comparisons, for example, of data sets from like-sized, like-minded businesses across the membership?”
FEI Group already provides a litany of benchmarking tools. For example, Big Rocks Financial Workshops allow members to look at each other’s financial statements and compare. “We give them true values, real-life situations on the same business path,” said Amie Foster, vice president of flooring. “Whether they’re a $10 million contractor or a $100 million contractor, they can compare themselves to like-sized businesses.”
In addition to Big Rocks, FEI Group also offers Climb Leadership Development every other year (2025 is an “off” year). This two-day workshop always sells out. “We might need to increase that 100-person capacity because of this generational transformation of leadership, and we may need to do it more often,” Holland said.
How it works: Each member can nominate someone within their organization they see as high-potential talent and would benefit from some leadership development. “When you ask people what they get out of FEI Group membership, they almost always say the opportunity to come together and network, share best practices, because that is something they wouldn’t be able to do on their own.”
Leadership incentives
One initiative on tap for 2025 is Project Benchmark, an operational best practices deep dive study that FEI is conducting for the first time in more than 15 years. “It’s one of the most requested things we do,” Holland said. “We do massive surveys with every member to get their operational best practices, but we also conduct onsite visits for select members, which deep dives even further.”
Business components included are finances, warehousing, purchasing, human resources talent acquisition and more. “The last time we did this they identified 88 best practices,” Foster said. “Then we bring the membership together in a two-day workshop setting in Naples in May and share those best practices, so again they can see how they compare to like-sized businesses.”
She noted that it doesn’t end with the workshop. “We’ll continue to deliver on particular modules throughout the year. There will be a ton of data points within that survey, and we want to make sure we’re serving that up to members long-term. So we may be homing in on a different component each quarter or each month.”
Another Nationwide platform the group will tap into is something that will be called FEI Group Learning Academy where all content from all FEI suppliers will reside in one place. “So today, if one of our members was trying to onboard someone and provide some basic one-on-one knowledge, they would have to send them to each supplier’s website with separate logins,” Foster said. “We will soon give them one place to go where they can log in and get content and certified in training from all our manufacturers.”
Tackling talent
The third component of this organizational health focus for 2025 is talent—the ability to acquire, onboard, train and deploy talent in a way that gives membership a competitive advantage in the market. “One of our Learning Academies this year is geared specifically around predictive index,” Foster said. “That includes helping the employer identify an employee’s personality traits and what drives them, who they really are at their core and how that aligns with the job description; how they marry up so both employee and employer are succeeding in that business. It’s not a tool for hiring, but it’s a tool for utilizing the employees they have now. Do you have them in the right seat?”
Flooring & Interiors’ Haley noted that it’s important to hire the person first. “If you can make that employee enjoy going to work, that’s one step,” he said. “Hire for talent and teach knowledge. The training is out there. You don’t have to employ someone from your category.”
Direct Traffic Control’s Norman agreed. “If we can find a culture match, that’s 90% of it. We can find the training, get all the certifications.”
To that end, Norman said her job descriptions look a lot different than they used to. “We talk about who we are and our values. People tell us they don’t even read the job description bullet points. They just say this is the kind of place where I want to work.”
She added that compensation packages today, too, are not a one size fits all. “We individualize the compensation packages and figure out what is most important to this person. It’s not about what the job pays and how many days off; it’s about having a conversation with them. As an example, we may offer additional percentage points on a 401k for those who prioritize their retirement. On the other hand, we find admins like flex schedules and miscellaneous time off.”
Business conditions
Generally speaking, economic conditions lend themselves to either Home Solutions members or Multifamily Solutions members faring better. Oftentimes, geography plays a role. “In general, our single-family business is much stronger this year than multifamily,” Holland said. “But multifamily still has some bright spots. New construction up until this point has been very strong, but that pipeline is starting to dwindle. But with single-family, although they’re waiting for interest rates [to drop], members are bullish that business is going to come out very strong.”
Foster noted that new construction starts are up. “Resale is where there’s a bog down in the pipeline,” she said. “But on the turn side, it’s an affordability issue. People are staying in their apartments and condos longer because even if there’s new construction available, they can’t afford it. Insurance is a huge factor on the multifamily side. Those two components aren’t going to change when interest rates drop.”
There may be a positive to all this, Foster added. “It’s causing members to look at their businesses,” she said. “What’s next for me in multifamily? Do I add another revenue stream? Do I add another division? Do I look at another opportunity? Whether it’s lighting, plumbing, fixtures— whatever—it’s really about expanding that organization now to combat what may flow into 2025 and beyond.”
Foster said she’s “cautiously optimistic” for 2025 although more so for the second half of the year. “The first six months are a little bit more of flat-to-low digit increase. Where we see the positivity is that second half where some of these things through the pipeline are starting to develop.”
Consolidation
Consolidation always seems to be a story line at every level of the floor covering industry, whether manufacturer, distributor or retail. FEI Group is not immune from this but, according to Holland, it has not had a major impact despite one company dominating one side of the business.
“We have always allowed the independent business operator to thrive on his own terms,” Holland explained. “Our biggest member now is Artisan Design Group (ADG) on the Home Solutions side of the business. There are 25 now, and I think 18 of those were originally FEI Group members. And as they’ve expanded outside FEI Group, those new divisions have become FEI members.”
The key, Holland said, is that although ADG has done so much consolidation, they have decentralized command. “Each business operator has P&L responsibility and operations responsibility at the local level. ADG knows all politics are local. All those relationships are local with the builders and property managers. So they still fit our model perfectly.”
The same dynamics hold true on the multifamily side of the business, where its largest member, Redi Carpet, was purchased by Home Depot Supply a little over a year ago. “They also maintain an independent business operator and who has independent P&L responsibility at each division,” Holland said.
The post FEI Group focuses on leadership, data, talent appeared first on Floor Covering News.
FEI Group focuses on leadership, data, talent Posted First on https://fcnews.net
No comments:
Post a Comment