Relationship builder Featured

4:47am EDT March 27, 2006
Growth is the Holy Grail of business objectives.

Every business leader, whether his or her company is large or small, public or private, service-oriented or production-focused, is striving to increase the organization’s bottom line. And for every business with growth as the ultimate goal, there is a different approach to achieving that goal.

Take, for example, Paul W. Hemmer Jr., president and CEO of Paul Hemmer Cos. Successful growth, he says, is the natural result of satisfied customers.

“I learned a long time ago that it’s so much easier to expand on a relationship and do repeat projects than it is to always find new customers,” says Hemmer. “And the only way to keep a customer is to provide an outstanding service and value.”

For Hemmer, the leader of a commercial and industrial construction and building services company, his outstanding-service theory is just one vital component of a successful growth plan. While service and value are necessary, they don’t do much good without internal structures to support growth managerially and financially, and to ensure quality in a rapidly changing environment.

It is the combination of these three elements that has helped Paul Hemmer Cos. grow into a diverse, quality-focused organization.

Quality, service, value
At Paul Hemmer Cos., quality, customer service and value are intertwined. A quality product can only be achieved through exceptional customer service and solid communication with the client, and those elements together create the value in a company’s offerings.

But according to Hemmer, of the three elements, quality is most important.

“Ultimately, the customer is looking at the quality and value and timeliness (and consistency) of the service, but quality is the forefront in my mind,” he says. “If you do your job right, it just makes everything else so much easier.”

It’s easier because superior quality work reduces or eliminates the need for rework, helps ensure that the client is happy and goes a long way toward building a solid company reputation, which, in turn, attracts new clients.

The company has instituted procedures to ensure that all projects meet quality standards.

“Every customer has a team leader,” says Hemmer. “And that team leader, it may be a manager, it may be an executive, but (they’re) the one that’s totally responsible for the customer’s total satisfaction.”

These team leaders are part of a leadership group responsible for primary contact with all clients. To ensure that these leaders are equipped to provide the best possible service and ensure high-quality work, they go off-site each quarter for training that is focused on communication, management skills and building a framework for team growth.

When a client queries Paul Hemmer Cos. about a possible job, he or she is assigned a team leader, and the quality-control process begins. The first step is establishing what the client is looking for.

“To satisfy someone is to meet their expectations or exceed their expectations ... so we take a lot of time before we start a project to truly understand (the client’s expectations),” Hemmer says. “Typically before we’re engaged to provide a service, there are 10, 20, 30 meetings. Part of it is listening and part of it is sharing our experiences to help tie the pieces together.”

Once the team leader and the client are on the same page regarding expectations and Paul Hemmer Cos. has been hired, the project begins.

During development or construction, or throughout the duration of the service contract, the greatest obstacle to quality is poor communication. If Hemmer and his leadership team aren’t aware of client concerns or problems, they can’t address them. So, the company has developed and implemented a technology platform that allows clients to remotely monitor a project’s progress, understand the issues and challenges the project team is facing and remain in touch with the team leader.

“Issues arise,” says Hemmer. “And what we try to do is address concerns and correct any problems that might exist. There’s a systematic way we run our projects, and this systematic way allows the customer to review and participate along the way, so ideally, it’s not something that happens at the end. (Problems are) identified in the process, and we resolve them.”

That’s not to say that a final review isn’t conducted. In fact, even though the client has ample opportunity to address problems during the project period, there is always a post-project evaluation.

“At the conclusion of the project, in the case of a building or real estate project, we do surveys and interviews with our client, and in the case of lease-hold improvement, we do annual surveys to ensure that we’re doing everything we can, whether it’s in our control or not,” Hemmer says. “We want to be a conduit for quality if it’s not in our control, but in the case where it is in our control, we want to make things right.”

These quality-control and communication procedures help the company greatly with already-established relationships, but what about establishing new relationships? Two years ago, Hemmer came up with an idea: Take the company’s emphasis on total customer satisfaction and turn it into a marketable guarantee. It is aptly named the Total Customer Satisfaction Guarantee.

“It’s our commitment to provide a satisfactory experience when a client works with Paul Hemmer Companies, and it really revolves around a pledge of integrity, responsiveness, enthusiasm, efficiency and value. ... This guarantee is a very visual representation of who we are, and for people that know us, they don’t need that. It’s when (we’re) trying to develop and expand a relationship that this does set us apart.”

With its upfront guarantee of customer satisfaction, supported by its quality-control procedures, Paul Hemmer Cos. has found a way to ensure superior project results and thus, satisfied clients, as it grows. But there is another component to successful growth, as well — corporate structure.

Supporting growth
In early 2000, Paul Hemmer Cos. operated as a single group, with all of its services — construction and building, real estate and project development, and various building maintenance services — under the same management umbrella. As Hemmer looked ahead, he saw that the economy was headed toward a downturn and realized that in order to continue to grow, he needed to make changes.

So he took his executives off-site for a three-day workshop to discuss the future of Paul Hemmer Cos. When they emerged, they had an answer to Hemmer’s concerns: diversification. Not only would this give the company a better opportunity to display its complete line of related services, it would also lay a solid foundation for future growth.

The company began by restructuring its service groups. Where before, all services had been lumped together in a single group, Hemmer and his executives created smaller, independent groups — first, a construction services group, then a real estate and development group and finally, a building services group.

These groups served to broaden Hemmer’s service base while simultaneously drawing focus to each individual group.

“When you think about diversification, you think about the opposite of focus,” says Hemmer, “But I think what we’re trying to do is focus on our core competencies and the customers.”

By focusing on service groups with dedicated employees and management, customers receive more attention and work with employees who are more knowledgeable about specific product areas.

The separation of related but independent service groups also prevents services such as commercial cleaning from being overshadowed by more traditional services such as renovation, or from being lost in a list of hundreds of offerings. Now, with all of its services receiving equal attention, Paul Hemmer Cos. is taking advantage of the opportunity to cross-sell to clients.

“We’re trying to develop training that will allow everyone to communicate some of the other services that are available to that particular customer. You don’t want to say, ‘Here’s a hundred things that we do,’ but you might want to say, ‘You own a building. Have you considered using us for your building maintenance or building care?’” Hemmer says.

The diversification has benefited employees, as well. Now, each service group has its own individual management structure, which means there are more executives, more managers and more opportunities for advancement.

But finding and providing growth opportunities isn’t cheap, and in a fast-growth company, capital can be scarce. Who can afford to pay all of the building materials, licenses and labor expenses out-of-pocket? So, Paul Hemmer Cos. turned to outside investors to help support its growth.

Typically, the company capitalizes 25 percent of a project and finds the remaining 75 percent of funding from investors. In this way, it isn’t hindered by a last-minute cash crunch, and Hemmer and his team are able to focus on getting the client on board and finishing the job to the client’s satisfaction.

Focusing on quality, services and how the company is structured has brought positive results. In 2004, revenue was $80 million; in 2005, it rose to $106 million. And Hemmer doesn’t see growth stopping there — he’s predicting revenue of $150 million in 2006.

“What I hear all the time, and something I’m proud to hear, is that the reputation of the company continues to build and be strong,” Hemmer says. “Oftentimes, when a company grows, that’s when you lose control, and it becomes impossible to maintain the standards. But I feel confident we’ve balanced that.”

How to reach: Paul Hemmer Cos.,