Avoiding A Tailspin

At a company I used to work for, the VP of Sales would say the business was “green” whenever we were doing well. That meant the metrics, leads, and gross profit were all where we wanted them. Green was good.

If the numbers were slipping, the color changed to red. So, if green meant good, what do you think that sales VP would say that red meant? Opportunity.

Nicholas Design Build was founded by Kyle Nicholas, a fourth-generation builder who started out with a few small projects. If Kyle were a pilot, this beginning would have been a solo flight. Then, in 2016, he decided to expand his crew and brought on a copilot, project managers, and office administrators. I started in 2020 as the first salesperson other than Kyle. 

At that time, I thought I was entering the plane as an exit row passenger on an easy flight with extra legroom. I wasn’t thinking about that famous question the flight attendant always asks: “Are you willing and able to assist in the event of an emergency?” 

“Sure,” I replied, and put in my headphones. 

Then came the pandemic. Over the next few years, our average project size tripled, the work became vastly more complex, and we grew by 40% annually. I wish I could tell you that this was the end of the story.

Turbulence Ahead

Along with the fast growth were two other catalysts that caused a lot of turbulence.

First, some key employees left. Over a relatively short time, we lost our CFO, controller, VP of design, production director and a smattering of other team members.

Second, at the beginning of 2020, we decided to split the sales and design department. Many companies combine those roles, and it works for them, but that model wasn’t a fit for us. The change created turbulence.

In addition, taking on the bigger projects we sold during Covid meant a smaller number of jobs overall. That, in turn, meant less people to refer us. We started to get a lot more web-based leads and had a misalignment between the inquiries coming and the types of clientele we wanted. Our GP was slipping and the plane started to bottom out from underneath us. We needed to act.

Identifying the Obstructions

Turbulence tends to exacerbate all of the flaws within a company, and we hit it hard. In our case, panels began flying off the plane, and suddenly I was staring at blinking red warning lights. Have you ever actually read the requirements for sitting in an exit row?

Southwest, for example, says that passengers must be able to, “maintain balance while removing obstructions.” In our case, that was a mental requirement rather than a physical one.

The first step is identifying the obstructions themselves, but that wasn’t easy. It takes courage and vulnerability to be the person who stands up and says, “Hey guys, there’s something in our way. There are issues and we need to call them out.” But without taking that risk, the plane would never get back on course.

Accountability Chart

To relevel, one of the first things we asked ourselves was, “Who are our flight crew and what do they do?” To answer that, we created an accountability chart that laid out the roles and responsibilities of each individual within the company, regardless of title. This helped us clarify that everyone was in the right seat. Without an accountability chart, you may have passengers who believe that they’re pilots or flight attendants who think that they’re passengers. All that creates more turbulence. The chart brought clarity and helped team members avoid stepping on each other’s toes.

Autopilot AKA Strong Processes

The next question we asked was, “How strong is our autopilot?”

A company with a strong autopilot has every system and process written down. We weren’t there. Instead, that info lived in the brains of our flight crew, and a number of them were no longer on the plane.

We created a visual representation of every interaction in the company, from what happens when a homeowner contacts us all the way to the close of a project. Today, our processes are clear, repeatable, and scalable. It’s been an enormous help. 

Clients

The next questions to ask are, “Who are the passengers?” “What type of clientele do you want to bring on this trip with you?” 

For us, we had misalignment around clients who wanted the budget-friendly flight while we were giving them first-class service. They enjoyed the extra leg room, toasted nuts, and special bar cart, yet never saw the value of the price they paid. As a result, we had to change some of our go-to-market strategies and become more intentional about targeting the demographic we wanted as well as vetting clients during the sales process.

Finally, there’s one of most important questions of all: “Are clients happy and are they willing to make a referral?” That applies not only to external clients, but internal ones as well, like team members and trade partners. A cleareyed, honest answer helped guide us toward greater success.

Thinking Long and Hard

My hope is that you ask yourself these questions and think long and hard about the answers. Doing so will help you create a more stable and balanced company. That way, when those red warning lights start blinking and the fasten seat belt sign comes on, you will no longer think that red is bad, because you will be ready and see turbulence for what it really is: Opportunity. 

Editor’s note: This column was based on Jessica Seljan’s presentation at the 2024 Women in Residential Construction Conference.