Trade Partnering

This month, Paul Winans, CR, will host a breakfast meeting for all of the 40 trade contracting firms with whom his company, Winans Construction Inc. in Oakland, Calif., does business. It will be a relatively short meeting from, 7 to 9 a.m. But that does not diminish the importance of the business at hand. Winans is among a large group of remodelers who place stock in elevating their relationships with the trade contracting firms on which they rely for quality work.

Winans’ breakfast, the second of its kind for the company, is planned as an annual event to create dialogue on process and operational improvements that can help both sides make more money, says Winans. There will be non-monetary awards for companies who achieved various objectives: on-time performance, creating goodwill among customers, etc. And there will be light-hearted awards to build camaraderie. “We try to make it so everybody gets some kind of award,” says Winans, who was recently installed as president of the National Association of the Remodeling Industry (NARI). But the bulk of the meeting is an open forum on a number of pre-determined agenda items. As an example, the topic of helping partners make more money will be on this year’s docket. To this point, Winans says he will use various on-the-job scenarios to generate conversation.

“If an electrician stands on a marble vanity top to install a light fixture, he might be saving some time upfront,” says Winans. “However, we want to point out that a scratched surface throws off the whole job schedule as someone needs to be called in to buff out the scratches. And then there’s the issue of who pays for that work.

“So, in the short term, this behavior made more money for the electrician but nobody else benefited from it. And the electrician should know that he did not benefit in the long run because he just made a lot of work for the general. That is the thrust of this upcoming meeting: what are the behaviors that actually support that mission of making money for everyone. And what are the behaviors that run counter to that mission.”

In the world of quality management practices, vendors and suppliers work closely with a company’s management to achieve mutual goals. Through continual communication, they share information about production schedules. They clarify each others expectations for the working relationship. They make each other stronger in the process. Likewise, a growing number of remodelers, like Winans, realize the advantages of working more closely with trade contractors and raising their stature as full partners in the success of their remodeling company.

Variations on the partnering theme
The idea of working closely with trade contractors to control quality and to ensure the generation of repeat business is not new. But what varies and seems to constantly evolve is the number of creative methods remodelers employ to actually make that closeness and partnership meaningful.

Some remodelers, like Jim Strite of Strite Design and Remodeling in Boisie, Idaho, offer incentives to their subcontractors who buy into a list of performance expectations. In exchange for their buy-in, Strite offers them the ability to get paid twice a month, provided that all work is completed and the invoice is signed by the project coordinator.

“We bring them in and review our trade agreement with them,” says Strite, whose company remodels 40 to 50 homes each year on revenue of more than $2.5 million. “We set these expectations and the compensation for that. If your invoice is in by the 10th and approved by the project manager, it is out to you on the 15th. We feel that for the agreement to be fair that we are going to demand quite a few items. In return, we are going to provide them with payment twice a month.”

Strite also encourages his project managers to reward trade contractors who go out of their way on behalf of a client or the company. Project managers can send trades to dinner, buy movie tickets, give them a car wash certificate, etc. These spiffs are presented in a formal thank you note originated by the office receptionist.