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May 13, 2019
How strategic are your General Managers?
Builders Millwork (BMI) is a $20M company headquartered in the heart of the Dairyland – Mondovi, WI. I first met Jerry Jehn, the owner, in 2008 walking into his office greeted by a life-size Wisconsin Bucky Badger Football player Fathead leaping off the wall. BMI is a great company with great people, providing architectural door and hardware products to general contractors focused on multi-family new construction projects in the upper Midwest. BMI’s model has supported a 15% growth rate YOY for the past 10 years. The shocking aspect of their business model, they have no sales team. Can you imagine your competitive edge being so great you have no need for a sales team? Well the BMI team not only imagined it, they did it.
How do you build a business model without a sales team?
Multi-family, commercial projects have been plagued by the Hardware Room for decades. The Hardware Room is a single room secured and designated to hold all door locks, hinges, closures and entry hardware needed for the project. One key is handed to the job superintendent to guard. It’s proven to be an efficient path to having lost products, hardware applied on the wrong openings and general time and money suck for everyone: general contractors, installing sub-contractors and the supplier. Jerry and the BMI team developed a solution – presorting the doors, millwork and hardware per unit. A 200-unit assisted living project will receive 200 materials packages, each marked and sorted by unit and phase. Hardware is palletized. This allows for easy and immediate distribution throughout the building and eliminates the need for hardware rooms and empty units for staging product. If units are ready, all materials can be delivered directly to the respective unit. Less time is spent handling the product and mitigating the risk of damaged or lost material. The BMI On-Site Optimization Program, the trademarked name for this process, has become the oxygen their customers need to survive.
Impact: Inventory shrink solved. Installers save on labor and stress. General contractors close projects on time. BMI does not have the headache of proving what was delivered and who is responsible for the loss.
Greater impact: Subcontracted installers demand BMI as the preferred supplier on their projects. Subcontractors have become the BMI sales team.
Jerry: “The BMI Value Proposition is our employees and their Midwest roots. Coming from a largely agricultural, hardworking heritage, our employees realize the value of hard work and are rewarded accordingly. We create an entrepreneurial culture where all employees participate in improving the company. Their opinions matter. Let the employees that are doing the work come up with the solutions. They share in the success and more importantly, take pride in being a part of the success. They take ownership.”
BMI is a team, no lone ranger swaggering sales persona driving their sales volume. No salesperson capable of moving their accounts to a competitor after a disagreement. The competitive edge was created by solving a major on-site construction problem, positioning them to operate without a sales team. What are the elements of your offering that are different from your competitors and in high demand? Clue: it’s not “on time and in full (OTIF)” or “customer service”.
Jerry is humble; make no mistake the quality of the team is a reflection of people the leader attracts. The competitive edge of the business model starts with a strategic thinking leader. You can measure the strategic abilities of any leader by their expenses on outside sales compensation and entertainment. High commission sales expenses and Canadian and Alaskan fishing trips might be a sign your competitive edge is over-reliant on your sales team and not the competitive edge of the business model.
Here are my top 6 strategic vetting questions:
1) When have you developed a market competitive edge? (proven history of success is must, looking for multiple examples of when it was done)
2) What did you inherit and what was the result? (must be reported in hard P&L numbers)
3) What is the process for developing a market competitive edge? (the answer must be focused on collecting facts directly from the customer base and defining the problem to be solved)
4) What is your problem-solving process? (looking for collaborative, team-based answers – instant fail grade if the leader says “I” or “my team” as it’s a clear sign of narcissism)
5) What are the common obstacles and how do you navigate them? (people not embracing the facts – poor ranking and prioritization)
6) What have been your biggest mistakes? (not having any examples is a clear sign of an egocentric leader – instant fail)
If your hiring process does not have multiple leaders in the final stages that score high on these questions, you are likely not accessing the hidden top-tier industry talent. Don’t settle, reach out to our experienced team and interview the talent you are missing.
Hire Smarter – Tony
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