Ghange we can believe in

(-)xav, you'RE 65 and blessed with four daughters, who \-/aren't interested in taking over the business. If you're George Senkler, second-generation owner of Concord Lumber Corp., Littleton, Ma., you've got some choices. Sure, you can parlay with a competitor. But if you sell, instead, to your own staff, you can create a win-win situation that reaps you the important tax benefits of such a sale while assuring them they'll still keep the jobs they love.

It gets even better. Under Concord's ESOP (Employee Stock Ownership Plan), employees' retirement benefits are 100% funded by the company (meaning, no need to pitch in to a 401(k). And their shares of stock are likely to increase in value: After an ESOP was initiated, Concord experienced a "long, strong boom" of double-digit growth in years following its inception in 2001.

"Nice," agrees president Rick McCrobie, who started out here in counter sales 30 years ago, "but long-term." To underscore a more immediate pay-off, the ESOP fully funds Concord's health insurance program, a benefit that translates to $13,000 per family per year.

Run by a board of directors (Rick and his v.p., retired owner Senkler, the former c.f.o., and an attorney specializing in ESOP law), the plan is a boon to management, too. "We're able to retain good employees-make them want to work here, and work a lot harder-whereas, in private companies, the owner takes the risks and also all the profits. If employees own the company, they share in its success-and that empowers people to look beyond their job description and think about how they can improve the business.

"In turn, we offer a very transparent operation. Employees all receive the financial statements and have access to all company records. Plus, at company meetings, we put out our current position, a three-year plan, a five-year planand how those may have changed," he demonstrates.

And changed they have, both positively and, like any lumberyard alive today, by undergoing some "corrections." Whereas Concord formerly supplied builders' entire subdivisions and custom McMansions, today the focus is more scaled to single home builders and remodelers. Due to sound fiscal policies and astute expansions of market share, the books are still written in black ink and next year's outlook is beginning to brighten, Rick notes.

To supplement its yards in Concord and Littleton, the company has spawned several divisions aimed at capturing a larger slice of the building pie. The Concord store had always offered a couple ofkitchen vignettes in spare corners of its lumberyard, which satisfied contractors-but the lady of the house, not so much.

"So we decided to take it to the next level and launch Kitchen Works, a separate showroom," Rick explains. "It's a matter of perception: People view a showroom as a more professional presentation. We're known locally, so folks have a comfort level with us, like 'They do things right.' We've been around-which is far different (in establishing confidence) from searching the Internet or Yellow Pages."

To capture another segment of the package, Concord launched Forester Millwork. a whole-house. trim-to-baseboard, stairs-to-cabinets operation geared to serving middleof-the-road to high-end homes. Likewise, the purchase of Forester Moulding four years ago, Rick says, "made sense for us. We launched the Concord Collection-chair rails to crown moulding-to drive business not only for us but for our builders. It offers them an opportunity to set themselves apart from the guy down the street-to offer a bit more 'bling.' We manufacture in quantity to keep the cost down, so they can add that extra pizzazz for just a little more money."

Making customers' lives even easier, Concord hosts its own in-house architecture department, employing a staff architect and two assistants, who can provide "relatively inexpensive plans to homeowners and builders-even subdivisions," says Rick. "We also do beam calculations, the engineering aspect."

And then-voila!-they also install. Windows and doors and kitchens. at least. with more on the horizon. This ser- vice, added in 2O01, calls on a corps of chosen contractors who have completed a training program. "Sure, we're competing with contractors, but not our contractors," Rick explains-"rather, the Renewal Windows of the world. And the advantage for the pros we use is, we take over all the headaches of the install business-advertising and marketing, measuring, ordering, scheduling' We offer a five-year warranty. Now they don't need to work nights and weekends doing quotes and chasing business. And we pay them every Friday. And, if, by accident, one of our contractors is bidding on the same job, we back off."

Teamwork in aggressively following up leads is vital to Concord's effective operation, and is another obvious winwin scheme in an organization whose employees all benefit monetarily from any one person's success. Thus, the architecture department passes on leads to Concord's team of l3 framing salespeople, each boasting a loyal customer base built upon years of service. The framing guys, who notify the moulding, millwork and kitchen departments, receive an incentive bonus when that additional work is snared.

Keeping ahead of the curve keeps Concord a major player. "The business is changing. It's more and more serviceoriented," Rick takes note. And acts upon it.

Counter to popular wisdom generated by the recession' Concord has not slashed inventory nor compromised on customer service by trimming to a bare-bones staff. "We didn't want to be bogged down in that downward spiral," attests marketing manager Kristen Koehler. "Instead, we're seeing new customers coming to us because they can't get served at other local lumberyards. We've actually added more sale staff during the downturn to capitalize on the problems some of our competitors are having."

In another proactive move, Concord has established an education series that, says Kristen, "has brought a lot ofnew customers through our doors. For virtually every event, we've had an existing customer say, 'I know another guy who'd be interested. Can I bring him along?' So now our online registration includes a line to add a guest-and we capture that info. Contractors are busy and don't always have time for a sales pitch, but if you offer something they need, and can benefit from, you can get your message across at the same time."

This is just part of the robust marketing initiative launched in 2008 to improve outreach within the constraints of depressed market conditions-which translates to looking beyond simply selling products to adding concrete value for customers. By increasing its presence in the downturn, Concord is positioned to emerge even stronger when business picks up. So, to continue the dialogue with its contractors-even those who are not yet back in a buying modethe company converted part of a warehouse into a seminar room to offer classes. These go beyond the been-there, done-that product training to business practices, such as a recent session called "Websites that Work," another on the importance of contracts and use of liens, and yet another coaching remodelers on selling to homeowners-even installation clinics to prep crews for spring.

And during lunch breaks, builders can walk though the moulding and millwork operations to spark the "Geez! I never knew..." fever. "Our sales force also can use these training sessions as a value-added offering when approaching new costumers, so it's less of a cold call," Kristen adds.

"Because we realize that architects are important influencers for our window and moulding businesses, we organized a CEU event that put our Forester Moulding profile binder into the hands of 40 new architecture firms, which has driven an increase in their specifying it," she reports. "similarly, our three kitchen-planning events-open houses for homeowners with wine and cheese-each generated at least two new kitchen sales, to say nothing of cross-sales of windows installation."

Concord Lumber, under Kristen's lead, has revamped its weekly email newsletters to reach beyond the blah feel of an insert flier to cover such topics as the new EPA ruling on lead paint. "We were the first in our area to bring EPA certification in-house and had builders from our competitors calling to get into the class." Result: an over 507o increase in newsletter subscribers, who now have come to count on Concord as the go-to folks for vital current information. (Homeowners and architects each receive their own focused newsletters, too.)

What's ahead? Whatever develops, Concord's renewed focus on relationship-building by adding valued services is destined to pay off. And, who knows? Acquisition of another yard may be more than likely-made all the easier by its ESOP profile. "The owner gets the tax benefit, and it also relieves him because his employees won't have to underso the stress of lavoffs. Instead, they'll become owners, which makes him more likely to sell to us than to our competitors," Rick is convinced. "We're set to grow. To diversify."

Carla Waldemar cwaldemar@ comcast.net

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