Dave Yoho Associates, one of the leading consulting firms serving the home improvement, remodeling and home services industries, has a strong history of driving efficiency and net profit for companies in the home improvement industry for over 50 years. As the company's VP, Brad Yoho has supported a vast number of businesses in hitting their goals and has learned much from these experiences.
Here's what Yoho had to say about modern leadership, how to drive efficiency at roofing companies and why it's worth connecting with other industry leaders—even if they're competitors.
What are the key characteristics of a modern leader in roofing and other home improvement trades?
Yoho: Factors such as the labor shortage and the new model of “job value” that extends beyond compensation have led to a paradigm shift in what is required to lead a successful business in our industry. To begin with, you need to differentiate between management and leadership.
Effective managers generally follow, practice and teach an aggressive style that respects and thrives on customer satisfaction—while still working within the system and rules. Successful leaders shape (or reshape) the culture of their company and focus on actions instead of reactions.
However, the modern leader must also:
- Set expectations and communicate them clearly
- Encourage input and feedback, while setting defined boundaries
- Deliver praise in public and constructive criticism in private
- Understand that healthy confrontations are not only necessary but frequently drive productivity
- Promote consistent retraining and coaching, but realize when someone may not be a fit for their business
Why does modernizing your leadership style matter as a home improvement pro?
Yoho: Noted author Ken Blanchard once stated, “The key to successful leadership is influence, not authority.” In 2022, job seekers value companies with a culture of inclusion, opportunities to grow into their position and chances to advance into a long-term role in the organization. The leader of the business sets the tone and must not only talk the talk but walk the walk. This behavior involves encouraging others to:
- Make courageous and fact-based decisions
- Empathize with different perspectives and approaches
- Execute decisions quickly
- Be innovative and think outside the box
A modern leader must also reevaluate their current recruiting, hiring and evaluation process to get the right people in the right roles. These actions help the business stay competitive and grow, even in a changing marketplace.
What is the value of connecting with and learning from other roofing industry leaders—even those who may be competitors?
Yoho: A modern leader is not someone who thinks they have all the answers; they exude humility and seek advice to learn from their peers.
While we never advise our clients to be an "open book” with their competitors, healthy competition is a driving force in any market. It helps businesses improve processes and find differentiators that add value for the consumer.
Try to reframe your mindset. Instead of fixating on everything your competitors are doing, look at them to evaluate possibilities for immediate and long-term growth.
What is the No. 1 piece of advice you give to owners, executives or managers who want to significantly improve their efficiency and scale up their roofing or home improvement business?
Yoho: We recently conducted an industry survey to drill down on the challenges that industry companies are facing, and how these issues may be impacting their net profit. The results showed that:
- 58% have cash flow problems that are impacting payments to suppliers
- 43% have marketing expenses equaling 12% to 20% of their total revenue
- 37% have incorrect or outdated retail pricing methods
- 20% are using obsolete compensation systems
However, the most glaring result was that 41% of the surveyed companies made a pre-tax profit of 3% or less (excluding salary and expenses they drew).
When working with a client—whether on-site or virtually—one of the first steps we take is to evaluate their profit-and-loss statement. When we dig into it, it's rare that a company's bottom line is not being impacted by one of the above issues.
Being a profitable company in 2022 often requires difficult decisions. Sometimes you may have to sacrifice your net sales to earn the net profit to which you are entitled.
Why is it crucial to view recruiting and hiring as a balancing act?
Yoho: The job market has changed significantly in the last two years, and many companies are not responding accordingly. Every business needs to adopt the practice of valuing a new hire the same as a new lead in terms of both investment and return.
You also need to take a hard look at your job advertisements. Do they accurately reflect the culture of your company? Do they clearly define the opportunity for long-term growth? Along with this, once you find someone who seems like a good fit, you must respond rapidly to conduct an initial phone screen or something similar, and continuously nurture the value of the position to help get them in the door.
The second part of the “balancing act” is where many companies struggle in 2022. You cannot afford to be so desperate to hire someone that you avoid challenging them in the interview process and assessing their behavior with a DISC Analysis Profile or similar evaluation process.
The cost of hiring someone who doesn't fit your company is high, and industry turnover continues to rise. If you do not take a measured and balanced approach to hiring, your profitability will suffer.
To learn more from Yoho and his team of experts, you can sign up for the 2022 Growth Mastery Summit, held Sept. 20-22 in the Northern Virginia/DC area. If you are an owner, executive or manager in the industry, you can also claim up to two complimentary tickets to this powerful live event.