The word “quality” suffers from the same problem that “team” does in U.S. business. For the past 25 years, companies insist that they do quality work and that all their employees work as a team. Yet, when forced to put their money where their mouths are, not everyone can back up their claims. In design/build quality, those who actually practice what they preach insist that quality isn’t an add-on, it is part of the culture.
HartmanBaldwin, a design/build firm in Claremont, Calif., does about $10 million in annual business. “We do a lot of marketing and advertising, but referrals and repeat business are our life blood,” says Bill Baldwin, principal. “To get referrals and repeat business, we have had to build a reputation on quality.” He defines three elements to success in this area — management commitment, careful hiring and client interaction.
Regarding management, according to Baldwin, any quality program has to be ingrained into the management culture from the top. “For example, I make a habit of personally walking through projects to make sure we’re maintaining our quality levels,” he says. “Furthermore, everyone in the company knows that we place quality above economics.”
When hiring, the company looks for applicants who make quality a high priority. “A lot of people say they’re carpenters, but they can’t seem to read the small marks on the measuring tape,” he jokes. HartmanBaldwin looks for applicants who demonstrate character and a personal pride in quality.
On the architectural side, he admits, it can be a bit more difficult identifying applicants with quality commitments. “We receive a lot of high-quality résumés,” he explains. “But all that means is that the guy’s wife has a degree in English. What we look for is someone who demonstrates a commitment to quality during the interviews.” The company’s long probationary period helps to determine whether to retain someone as a permanent employee or not.
The company spends a lot of time educating potential clients about quality so it can differentiate itself from the competition. Then, once it gets the business, it conducts frequent client surveys throughout the project to make sure clients are satisfied with the work being done. Quality is a major component of the survey, which utilizes a 1-to-5 scale. Currently, HartmanBaldwin averages a 4.8 rating. “If we get a 3.0 or below from anyone, we figure out why,” he emphasizes. And if a project is rated below 4.6 in total, people don’t get their bonuses.
Christo Design/Build in Lincoln, Neb., with annual revenues of $1 million, hires subcontractors for new home construction, but maintains its own small crew for remodels and additions. “We also use our own employees for specialized new construction work, such as building arches,” explains Jim Christo, president. Like HartmanBaldwin, Christo Design/Build sees success in quality as being the result of management commitment, careful hiring, managing of employees and subs, and surveying clients.
Similar to HartmanBaldwin, Christo depends on referrals and repeat business. The company’s approach to quality is succeeding. “About 80-plus percent of our work comes from referrals and repeat business,” he reports.
A nearby community college’s building construction technology program, for which Christo is an adviser, is used as an employee farm. “In the past eight to 10 years, I haven’t hired anyone who hasn’t been a graduate of that program,” he states. This reduces the likelihood of getting employees who aren’t fully committed to the profession.
When it comes to subcontractors, Christo is aware that everyone who has been in business a few years claims to be a quality contractor. “But how do you define quality?” he wonders. Christo was on a National Association of Home Builders’ committee a few years ago that was involved with rewriting residential construction performance guidelines. “This really helped me to define quality,” he says.
Following this experience, Christo and four other builders decided to develop a “scope of work” document for subcontractors, which explains their expectations for jobs when they are completed. For example: The foundation can only be so far out of square, so far out of level, etc. “When a subcontractor is done, I do a check-off, and everything has to be completed before they receive final payment,” he explains. Christo has found that good subcontractors have no problem with this. “Real craftsmen are proud of their work, so they don’t mind being held accountable for it.”
Christo sends customers a four-page survey asking what the company did right and what it could have done better. Since it takes customers some time to complete this survey, and because its completion is so important to Christo, he includes a $100 gift certificate to a local landscape retailer as an incentive to complete it quickly.
Housing quality program
In the past five years, the Las Vegas home construction market has jumped from No. 9 to No. 1 in a J.D. Powers survey. “The Southern Nevada Homebuilders Association has been very clear that they believe the reason is because of the National Housing Quality program,” says Frank Alexander, director of National Housing Quality Programs for the National Association of Home Builders Research Center, Upper Marlboro, Md. Las Vegas has the highest percentage of NHQ-certified builders and trade contractors (about 80 to 85 percent) of any market in the country.
“While we don’t believe there is a huge quality problem in the industry today, buyer expectations are continuing to rise, so as an industry we need to keep up with this trend,” explains Alexander, while discussing the roots of the program.
Actually, the idea was launched in 1993 when CertainTeed, an insulation manufacturer, explained to the NAHB that it made a good product, but was frequently involved in lawsuits. “They felt the reason was their products were not being installed properly,” Alexander recalls. “They asked us to develop a program, which included a management process that an insulation contractor could follow to ensure proper installation.” The program, introduced in 1995, was successful. In fact, today the NAHB Research Center still recertifies about 200 insulation contractors a year for CertainTeed.
The next phase occurred shortly afterward, when the Department of Housing and Urban Development (HUD) found out about the CertainTeed program. “HUD encouraged us to do something similar for framing contractors,” he continues. This included requirements related to using proper materials and proper workmanship to make sure frames are plumb and square, etc. The NAHB Research Center launched a pilot program in 1999 and achieved similar results.
This again sparked the interest of HUD, as well as the Southern Nevada Homebuilders Association, for a program that could be expanded to all trades. At the time, the SNHA was in the midst of problems related to proposed legislation in the state on construction and product defects. “They encouraged us to design a program that could be applied to any trade, not just insulation installers and framers, from the guy who surveys the ground to the guy who plants the last bush on the property,” Alexander says.
The NAHB Research Center piloted this for about a year with key trades in Las Vegas, Maryland and the Midwest. The resulting program, called the Certified Trade Contractor Program, is now in place. “It is catching on, and it is making a difference in the industry,” he emphasizes. To date, about 1,500 trade contractors have gone through or are going through the program and are on their way to certification. In January 2005, the NAHB Research Center rolled out the next phase — the Certified Builder Program — which certifies general contracting companies.
Following are a few benefits of certification, aside from the ability to advertise nationally accepted certification:
- Contractors are experiencing cycle-time reduction, according to Alexander. One reason is they spend 40 to 50 percent less time on callbacks to correct defects. Another reason is increased jobsite synergy among trade contractors. “They used to look for opportunities to stab each other in the back,” he notes. “Now they cooperate with one another.” When Alexander talked with a home builder in Texas, he learned he had been able to reduce their overall cycle time by 18 days.
- Contractors also are seeing reductions in the cost of general liability insurance. According to Alexander, some of the major insurers are providing discounts to builders who are certified under the NAHB program and/or have a critical mass of their trade contractors certified under the program. “We are hearing of savings between 2 and 20 percent,” he says.