A Winning Business Model Can Also Combat Labor Woes
By John McGrath, Executive Director, International Standards & Training Alliance (INSTALL)
Contractor Gary Johnson thinks he has figured out the formula to a successful business model. It just so happens that this model also combats the construction industry-wide crisis of labor shortage. But it’s not just conjecture on Johnson’s part. His company, American Flooring & Interiors is a Toledo-based floorcovering and painting business with 40+ employees with a running list of noteworthy business achievements. For starters, American Flooring & Interiors has grown 500%+ in the last five years. Numbers like that have gained national attention.
A Look at the Numbers
The Initiative for a Competitive Inner City (ICIC) is a nonprofit research and strategy organization and the leading authority on economies and the businesses that thrive in U.S. inner cities. Founded in 1994 through Harvard Business School, ICIC provides businesses, governments and investors with the most comprehensive and actionable information in the field about urban market opportunities.
Every year, with the support of partners Staples, Inc. and Chevron, ICIC identifies and supports the 100 fastest growing inner city companies. These firms represent the kind of innovative and diverse organizations that create significant economic growth in inner cities. Remarkably, these companies derive more than half their revenues from regional, national and international sales. The Inner City 100 Companies produce jobs in their local communities, competitive advantage for their business partners and profits for their investors. Across all sectors, Inner City 100 firms are more productive than sector peers throughout the U.S., according to U.S. Census data.
In 2014, the study ranked American Flooring & Interiors #1 in the construction industry for The Inner City’s Fastest-Growing Companies. The same study also ranked American Flooring & Interiors #11 overall for The Inner City’s Fastest Growing Companies.
The Secret Formula
So what is Johnson’s secret? Simply put, he invests in the right people and then provides them with the right training and certification. When hiring installers, Johnson identifies core personality characteristics he believes distinguish the kind of person that will succeed:
- Outstanding work ethic
- Sense of loyalty
When he finds people with these invaluable characteristics, he then invests in their future knowing that it is in turn an investment in his company. He does so by providing the employee with access to the most superior training and certification program in the industry – INSTALL.
“Our business philosophy is that nobody is more important than the next person. Whether you’re the person delivering the materials to the job site to the person installing the flooring, if one person fails, we all fail,” says Johnson. “It’s very important to me that everyone who works for me is on board with that mission. By partnering with INSTALL for training, I have people at my disposal who are already on board with that philosophy. There’s a built-in trust in the people I’m getting.”
Gaining Competitive Advantage
The personal and professional development that employees at American Flooring & Interiors receive through INSTALL is just one of the ways Johnson differentiates himself from the competition. Aside from providing an installation team that is guaranteed to meet a high level of performance and quality – one that will limit the number of callbacks he receives in a year – he is also able to bid on projects larger than a firm of his size would normally even consider.
Johnson recognizes a significant advantage in his ability to handle larger contracts by gaining access to a pool of experienced, certified installers from across the country that he can pull in as needed to support any size contract or bid. Other firms without this access to labor can experience the full brunt of the industry-wide shortage of skilled labor when they have business opportunities but don’t have the people to complete the work.
Johnson often relies on INSTALL’s bank of trained professionals to support his team when they’re bidding on a large-scale project. This allows his relatively small company to accept work on large multi-million dollar projects.
Johnson’s business model of starting the right person and then building them up with the right training is a direct method for pulling new blood into the skilled labor force. Said Johnson, “If more floorcovering businesses adopted this model, using INSTALL as a key tool in developing new workers, the country would be on a better path to combatting this and any future skilled labor crises.”