HIP 200 No. 1: Power Home Remodeling
authors Patrick O'Toole | December 1, 2020
It was bound to happen. At some point, a local or regional home improvement company with enough leadership talent, and with enough career ahead of those leaders, was bound to see a pathway to becoming the first wholly owned national home improvement or remodeling firm.
Now, more than a decade along that path, the company seems only to be gaining more momentum. Ranked No. 1 on the QR Home Improvement Pro 200 for the first time, Power Home Remodeling Group posted $793 million in installed revenue last year on 60,512 jobs. And they are really just getting started, says co-CEO Asher Raphael.
Today, the company owns and operates branches in 16 metropolitan areas that it calls territories, which it began opening in 2009. The plan is to open two more territories per year over the next five years, Raphael says, with growth coming from existing branches as well as from those 10 new territories. For example, in Q1 2021 the company will open a branch in Phoenix.
For those trying to do the rough math, it’s important to know how big a territory is expected to get within a very large metro such as Houston, Chicago, Detroit, Washington, D.C., or Dallas. “Maturity” in one of those markets equals $100 million in annual installed sales, Raphael says, noting that cities more like Milwaukee might only be $50 million when they mature.
“Of the 16 territories today, only one or two are mature; the rest will grow by a certain percentage every year. Our numbers start growing exponentially because of the total number of offices, but I want to make it really clear that our goal is never about revenue or ego,” Raphael says. “The goal of the business ever since [co-CEO] Corey [Schiller] and I started putting our thumbprint on it is to create positive change. We want to make a positive impact on our employees, the lives of our customers and in the communities that we operate.”
Some might read this quote and possibly dismiss it as CEO talk. But Raphael and Schiller, as well as co-founder and president Adam Kaliner, are really backing it up in ways this industry has not previously seen.
Power is in the midst of a multi-year winning streak for “Best Companies to Work For” designations in several regions around the country. Fortune magazine named it the No. 3 best place to work in the New York City region, right behind Salesforce and Hulu.
Even when compared with technology firms, Power was named to the list of 100 Best Places to Work in IT by ComputerWorld in June 2020. Yes, Power has that many business technology employees—112 as of late October—where it can be seen as a technology employer.
Twenty of those 112 business technology employees were trained inside Power via its six-month long “Code Academy” for employees from other parts of the business, says chief operating officer Tim Wenhold, a technologist who started as a tech vendor for the company in 2008 and ultimately joined the company as CIO a few years later.
With a total workforce of approximately 2,700 employees, most of whom work in sales and installation, the company’s average employee is in his or her late-20s and early-30s—a hugely desirable demographic for companies in any industry. And they are recruiting this demographic not just by investing millions into facilities or focusing on extras like parties, ping-pong tables and other more superficial attractions—all of which Power does offer.
According to Adam Kaliner, who founded Power Windows and Siding at age 21 with his cousin Jeff Kaliner in 1992 right out of the University of Maryland, the company has always been focused on the well-being of its people. Together, the Kaliners grew the company to more than $20 million in revenue by the mid-2000s.
“From day one, from our first employee, there was just a mindset of doing right by the employee, just as hard as we try to do right for the customer,” Kaliner notes. “And when you have that mindset for all these years and layer down on that mindset consistently and diligently—and with tons of discipline—you can build systems and processes and, over time, you can attract the right people to implement those systems. It really comes down to having the right culture and the right people.”
Asked to describe Power’s culture, Kaliner says that at its core, the culture is linked to a collective belief among all employees “that we can always be better. A Power person tries to be better as friends, better as siblings, better as sons and daughters, better as parents to their kids. They are typically people who are ethical, hardworking [and] team-oriented, but who are also coachable and humble.”
Raphael agrees about the culture. New hires need to be “optimistic and ethical, team oriented, coachable and loyal.” Work ethic is also critical—you can see it in the company environment that has been carefully cultivated, he says.
“Power has an environment where people go from coworkers to friends and family. Yes, we care about winning ‘best places to work’ because I care about how people feel about the organization. But the goal is not to be No. 1 on those lists; I don’t want a place where everyone wants to work.
“Working at Power is not for everybody. We’re a really hard place to work. We are an extremely demanding place to work. We put a huge amount of responsibility on everyone’s shoulders to protect the business, to protect the brand and to protect one another. There’s a lot of self-sacrifice that comes with that, and that isn’t for everybody. This is not a one-size-fits-all kind of business. We are extremely clear and transparent about who we are and what the expectations are in order to work here. Our culture is authenticity. We have to be authentically us.”
Over the last several years, as the company continued to grow quickly, it expanded talent recruitment initiatives not only to attract a young, entry-level demographic, but also to formalize programs with aggressive goals for hiring more women, more minorities and more military veterans. COO Tim Wenhold says 50 percent of the company’s business technology team “identifies as women, veteran or CD (culturally diverse).”
Across the organization, the company is committed to diversifying its talent pool to 35 percent this year and also working hard towards diversifying its workforce long-term. Wenhold says it’s akin to the flywheel concept: It’s hard to get going, but once it is moving, it becomes almost self-sustaining. Once you have found a way to attract more women and minorities, the more you will attract.
Kaliner describes these programs as big opportunities for Power and a source of pride. “We’ve found women are often more successful here than men. They are thriving and becoming leaders here. As far as being more diverse, for us it’s about finding like-minded people who have different backgrounds and different stories to tell. So, we’ve made a conscious effort to be more diverse, going back about four years.
“What we’ve found is that becoming diverse is fairly easy, but if the people don’t feel comfortable inside of your walls or are unable to be themselves, then you are not inclusive. The key to making Power a better company today is that we are way more inclusive and still striving in that direction. It’s something that we are really proud of—to be a place where people can be themselves.”
Leadership and Growth
It is not unusual in the home improvement industry to see a company add a branch to accommodate the leadership talents of one of its people. In fact, there are many examples of these types of arrangements, both formal and informal. With Power this has become a formalized process through its Unit Model, which began to take shape in 2008 and 2009 as Raphael and Schiller began taking over portions of the leadership load from the Kaliners. The two arrived at the company in August 2003 after they graduated from American University, where both played on the soccer team.
Raphael’s older brother had been with Power since 1995 and hired them into the company, Raphael says, and they soon began to see the opportunity offered by the industry. “Adam and Jeff were people-first type of owners. They had an amazing training program, and it gave us a skill set to be successful right away. We were in the home talking about energy efficiency in 2003, and we saw that we were somewhat ahead of the curve on that.” By the mid-2000s, the company decided to bring all its talent under the same roof in order to refine its processes and build its bench.
By 2008, they had refined their processes and procedures and built their bench of talent to the extent that they felt ready to open locations in Central New Jersey and Maryland/Virginia, as a demonstration of the unit model concept. They sought to maintain their Brookhaven, Pennsylvania, home office for activities like a call center, marketing and administration.
To make it happen, Schiller and Raphael hit the road for the next three years, personally opening branches to ensure their initial success, beginning in 2009. In 2011, the company ventured much farther out. After boosting its home office to 55,000 square feet and opening offices in Southern Connecticut and Long Island, the company opened offices in Boston and Atlanta. There was a steep learning curve about the best way to open an office from the ground up during 2011.
By 2012 they had much better footing as they opened an office in Chicago. “By that I mean we knew whether our people were trained well enough. We identified the right people to move. We knew to better understand their motivations for moving and a number of other important factors,” Kaliner says.
In 2015 they opened up an office in Houston with 20 people who were fully functioning “Power People” on day one. “And our success in Houston made the future seem real in that going to Dallas didn’t seem as daunting, and going to Denver from there and a third time zone that we were dealing with,” Kaliner says. “So, we just started understanding that if we go to a territory with the right people who have the right motivation [and] are trained the right way, that we can open up in any metropolitan city in the country by building the right team and absorbing the growth. And the growth was enormous. They were putting up numbers we never thought were possible.”
The year prior, in 2014, the company opened an office in Detroit, where only four people raised their hands to move. While the Detroit branch ultimately succeeded in launching, Kaliner says they learned a valuable lesson: Going forward, they would ask people where they wanted to move.
At a company conference later that year, they put up list of six cities, and a number of people wanted to move to Houston. Since then, the willingness of trained people to move to a certain city guided the expansion process. To no surprise, they were popular places to live: the Dallas, Denver, Tampa, Austin, Charlotte and Nashville branches resulted from this approach.
When the company opens a territory today, it does so with three vice presidents and various staff transfers from other territories, with many of those people getting promotions in the process. The company offers a $20,000 relocation bonus for people who are selected to relocate and open an office. To make these transitions as seamless as possible, starting with the opening of its Phoenix office, the company is flying the team to the city well in advance and setting up meetings with real estate agents, organized neighborhood tours and other types of individualized support to make the relocation process smoother.
“We don’t hire people to sell windows; we sell windows to hire people,” Raphael notes. “Five years from now, what will we be doing nationally? How significant a role will we be playing in each one of our communities? How many employees will we have? What is the median income going to be for each of our departments? If the company is going and if were generating more revenue, but the average employee in each department is making less, who is that success for? Speaking for Corey and I, who grew up blue-collar kids, when we think about growth for the business, it is that we work for our employees, not the other way around.”
Built Not Bought
Back in 2007, when Power was still under one roof, Kaliner maintained all the company’s commission reports locally on his desktop. At the time, the company was billing approximately $35 million in revenue, and Kaliner wanted a better way to stay on top of commission reports and allow reps and managers to know where they stood with the company. That was when the company hired Tim Wenhold’s firm to write a program to allow for real-time commission reports.
According to Wenhold, it was a lucky bet they chose to create a web-based interface, one that would be compatible with what was then called Web 2.0—or what we know today as the cloud. Wenhold said he liked the clarity of their direction about the project and that they were doing it for the sake of transparency. “That’s the way the world should work,” he recalls.
At $35 million in revenue, they were not big enough for buying an enterprise solution, so the timing was right for the company to build a solution. The success of the commissions application built by Wenhold led to the development of additional software designed for the particular needs of Power. Eventually they gave the software platform a name: Nitro.
“It was very successful to the extent that the software began to guide the company in a certain direction. It became the way we talked about the business. It allowed us to what we wanted to do, the way we want to do it,” Wenhold says.
He added that if the company had made a different choice and gone out and bought an enterprise software package, there would a have been an 18-month integration process, and the company would have ended up using only 20 percent of its capabilities while paying for 100 percent of its cost.
As was previously mentioned, today the company’s business technology department employs 112 people strong. Forty to 50 of them are coders; they work on software affecting all aspects of the business, everything from improving user experience to upgrades to the systems that run the company’s 200-person contact center to in-home design and estimating software.
“I think of our developers as creators. You’ve got UX (user experience) people. You’ve got scrum masters. Some of the projects involve revamping. We have an in-home process estimator, and we’re building a new one called home tour where a remodeling consultant can walk through the house taking pictures and generate an estimate on the spot. From a developer’s standpoint, they are happy that the work they are doing is useful to the people they are sitting next to. It’s immediate gratification.” Wenhold explains.
To keep up with the massive job of onboarding new hires in all parts of the country, the company’s business technology team built a training program that allows for various types of on-demand training with testing afterward. “Basically, Nitro is a digital twin of everything Power does,” Wenhold says.
COVID and the Future
Entering 2021, Power is operating full-steam ahead and expanding its headquarters to 175,000 square feet, despite the dramatic impact of COVID-19 on the company this year. In March, facing the complexity of various types of lockdowns within the states it operates, the company took very bold action. They furloughed 85 percent of their workforce for three months. They paid full benefits for employees and their families and conducted weekly meetings throughout the company. By July 1, all of their furloughed employees had returned to work.
During the company shutdown, the management team embarked on a series of “sprint” projects that had been long delayed. Kaliner, Raphael and Wenhold agree they would never want to go through something like a shutdown again, but that the company had benefited from the work they had done. As a result of the shutdown, the company will not grow its revenue for the first time in its 28-year history, but they are very encouraged by the record months they’ve posted consecutively since coming back.
In addition to its plan to roll out 10 new territories in the next five years, the company is working hard on a beta test of a new solar division in New Jersey. Ten years ago, the company launched roofing in its territories, followed by insulation a few years later.
Kaliner says the potential line extension into solar is consistent with the company’s longtime sales and marketing strategy of selling home improvements based partly on a homeowner’s desire to make their homes more energy efficient. Solar is a much more complex opportunity, one that involves the electrical trade, but they are seeing a pathway to launching the offering to other markets in the coming years.
“No one has really conquered solar to the scale that we think that we will be able to do it,” Kaliner says. “But we’ve been testing and learning and absorbing solar for about five years now to eventually make it another mainstream product for us. It still isn’t quite there. And we’re very intentional not to disrupt the apple cart. We want to be very disciplined in staying focused on what we do.” QR