Five Questions With: Rick Lierz
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Human Capital is defined as: “the skills, knowledge, and qualifications of a person, group, or workforce considered as economic assets.” – Merriam Webster
THE REINVENTION OF HUMAN CAPITAL in the LUMBER & BUILDING MATERIALS INDUSTRY
A Q & A Series Conceived and Hosted by Matt Meyers of Yesler
Featuring Rick Lierz of Franklin Building Supply
How has human capital evolved at Franklin Building Supply?
I think about human capital and understand that it must be a focus if one is running a company. There must always be an understanding of where you’re currently positioned vis a vis the workforce, as well as a distinct idea of where you’re headed. Having a clear sense of the necessary direction that is required will promote a greater ability to advance and solve problems. We will always want more labor or enough of the right labor, or put it in human capital terms, the best skill sets, the most positive attitudes, the best balance of diverse representation which will help us advance our mission. There are many different contexts in which to evaluate human capital, and acknowledging it as important is a critical start.
How do you tackle the requirements of human capital in our current world and society, particularly when there is so much complexity and disruption which is out of your personal control?
As an employee owned company, our focus on human capital issues are even more relevant and accentuated. All of our employees have the opportunity to become owners of the company. And so, we call ourselves an “employee first company.” We believe in communication, and we strive to be as forthcoming as possible. There are certainly a lot of issues of which we have no control or influence, but we can decide as to how we wish to address certain issues, how we talk about it as a group, or one-on-one. Having consistent discussions and being open is paramount in an effort to assuage assumptions and conjecture.
When COVID started, like so many, we had a lot of employees and their families who were scared and unsure of how their jobs would be impacted. We tried to fill that information void as much as possible. We were successful in being proactive. Communicating our plans, discussing how or whether it included them and answering the important questions of: What if I get sick? What happens? Do I lose my job? How are we going to get through this unknown?
Communicating in a personal, sincere way paved the way for people, our employees to have a sense of generosity. They exhibited grace. Not everyone will react the same to any situation, whether positive or challenging. Not everyone will react the way you want them to react to whatever set of circumstances. It goes beyond a pandemic. It impacted the last nine months with the supply chain. Just being generous with one another and giving them some space, helping them understand, not jumping to conclusions about other people’s motivations, and talking about the things we can communicate, with honesty and clarity.
How do you tackle human capital in strategy and planning?
We want to become the type of company in LBM that attracts the best. Doesn’t matter what gender or race, we want the best people, the most talented, the most energetic, the most in line with our philosophy of helping customers, and we want to have a talent pool where the best people in our industry want to come to us because they want to work with us. It is a consistent message that we want to impart. It is our opinion that top performers want to work with other top performers more than anything else. It doesn’t matter what they look like or sound like. We have a growing population of employees in which English is their second language. Who cares? As long as they’re top performers. Unfortunately, half the workforce, aka women, are sadly unrepresented in our industry and our company. We need to change that. We need to change assumptions about people’s capabilities. This industry, at least on the LBM side, has been slow to that evolution with women in particular. And it needs to pick up pace because we’re leaving half of an immensely talented workforce population untapped.
Is there a skills gap between what is being developed and finding the people who can complete those tasks?
It is as if there are two populations to consider. There is a generation which is older. They have all the product and processes knowledge about our industry, how things are bought and sold, how things go together, how you bring them a house, and how you work with a builder who’s framing a house, but they have huge needs in learning the technology which is now at the forefront of our industry. Then there is a generation raised and reared in the wake of all things technological, however they really lack basic knowledge of how to do things, how to use a hammer, how to use a saw, skill saw, or a table saw.
We started changing how we trained at the outset of employment. We found that we had to start with the basics and take them through how to use power tools, for an understanding of safety and appropriate usage. We consider it our skills training center, and every new employee has to go through it, no matter what their job. And if the job is going to involve certain instruments, they get more training in those specifics. Everyone needs to understand the basics and have a similar baseline to be successful.
How do you find the high performers?
I believe that if you are a high performer, you will want to work with high performers. It’s somewhat a natural reaction to have less patience when working with folks who aren’t high-performers, as they are likely to cost you time and efficiency. So, rely upon high-performers to help you recruit and identify other high-performers. More lacking than in technology, are high-performers in manual labor functions. We need the folks building loads, working in the lumberyards, getting product moved around and delivered to customers with efficiency. We burn a lot of time and money by not having high-performers in this critically important arena of manual labor.
What is the role of technology in the industry? Will it evolve?
As prominent as technology already is, it is still accelerating. Our company has been successful in keeping current. However, that is not necessarily the norm. Lumber companies, in particular, need to accept the fact that there is a necessary expense and investment in technology. It has become an imperative in doing any business, and most businesses recognize the ongoing investment in both software and hardware.
For a long time, the only technology involved in our industry was the basic sales process invoicing. Historically, LBM is a credit business, almost everything was sold on short-term credit, but there has been an evolution, and now the use of technology may impact every facet of our operation, from ordering materials, receiving materials, inventory management, moving inventory, how it’s stored, and tracking technical tasks. Where builders once had a set of physical blueprints, now everything is completed on the computer, and the plans come in a file.
We also moved our company forward in both the IT and the HR departments by incorporating Zendesk. We have people using technology to do cycle counts every day, so that we have an actual ‘live’ look at our inventory across the company at all of our locations. I predict we will get to the point where we will have a precise understanding of where every stick is, where every nut or bolt is. We haven’t taken that step yet, but if that information becomes beneficial, then we will have the opportunity and capacity to track this information. There are technological advancements that I don’t even understand, but they’re out there. Fortunately, I have colleagues with whom I work who understand what is coming and can lead us toward that. Technology touches everything we do and will continue to do so.
What was your start in the industry? Is the business still exciting?
I was 18 years old when I started, but left the industry for a significant period of time. I came back when I was 39 years old and joined the company again. And I’ve been with the company ever since.
I love the pace of what we do. I love the pace of change. I think the goal of bringing diversity in to our present day excites me as much as anything. The LBM industry has changed. When I joined the company, the people running each store sat in the corner, out in the open, and customers, the actual home builders, came in every day and had a cup of coffee. We had popcorn machines in all of our stores, and they’d get some popcorn and talk about the lumber market. This routine was nearing an end when I came aboard. Now, that experience would be a rarity and would only be likely in a smaller community. In our larger communities, the builders are also executives, and we provide services from organizing their jobs, to framing and installing a variety of products. Our communication is also much different than it used to be. The natural evolution and change of business practices is something that I choose not to worry about… the things I can’t control. I like to focus on where we are headed as an industry. It is exciting, and where we are headed as a company is positive and exciting.
What is your take on the next big moment in the industry, from a progress evolution and/or innovation prospective?
I think the future centers on labor and available labor throughout the home building industry especially as it relates to offsite construction. There are some companies doing offsite construction in various and successful ways. I think that despite what everybody in our industry tends to believe, that will continue to evolve and grow. The concept is to build the house and components, offsite, bring it onto the job site and put it together like Legos. This approach will continue to increase and evolve and have more success in the future.
This means that we have to improve our skill set to which services we can deliver on the job site to builders. And also, as things evolve, and offsite construction companies evolve, we need to understand and have focus as to how we can implement and provide value to them as a distributor. And beyond that….I would say that is as far as my crystal ball can see.