Merchant Magazine - December 2013

When it comes to premium profile products, give your customers an edge-with UFP-Edge.

UFP-Edge is made from the highest-grade lumber available, free of wane and with only small, tight knots that highlight the warm characteristics of natural wood. Hand-selected. Carefully cut with blades we sharpen and maintain ourselves. Manufactured near customer locations to eliminate the damage associated with storage and multiple transports. With UFP-Edge, you can offer the finest pattern, fascia and trim products on the market today. UFPEdge.com

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ATRADITION OFqUALITY

Go with the flow!

ffevtNc RETuRNED pnon back-to-back events, including the NAWLA Traders Iltvtarket. with continued signs of the industry being upbeat, perhaps now is a good time to finally recognize the industry upturn. Yes, it's not where we would all want it, but we have seen the turn of a very deep curve and are positioned to start the growth that we all have been waiting for. It's good to see smiley faces again. While 2013 will be up (although maybe not quite to economic forecasts), 2014 should head even further north. While the industry will still have its ups and downs and growth will bring its own issues, it will be a much better place.

As business starts to grow again, we are all probably feeling a bit stressed as we likely have 50Vo less staff around us now compared to pre-recession. As the market grows again and companies still are reluctant to hire, this is perhaps the time to review how we as individuals are performing and measure how productive we really are. The reality is that many of us waste a good part of our working day, which has grown substantially worse withcell phone and Internet usage in the office.

So the question as we look at our day is where can we save time to cut costs, improve productivity, and, most importantly, add value to our companies? Imagine that you are a systems analyst analyzing yourself. How do you really spend your day? If we're truly honest, I suspect most of us are wasting25To ot more of every day.

If you start by breaking time into minutes, how many minutes did you spend reading emails? Answering them? Deleting? Tweeting? Facebooking? Making phone calls? Actually, my questions are not how many minutes did you spend on all the above for business reasons, but for personal reasons. How much time did you take from your company, which is paying you to be productive, during working hours? Now add to that the long lunch hour, the late arrival, chilchatting in the hallway, waiting for meetings to start, and you can easily see the time lost before you even start to analyze real work.

In some companies there are processes that haven't changed for ever. Think about a nut and a bolt. How many turns does it take to get to the final quarter torque to tighten it? The reality is you may turn the bolt 10 times, yet that last turn is the only one that adds real value. So how do you reduce the other nine turns to save time and increase productivity? It is the same with what we do every day in the office or in the plant. If we can be honest with ourselves, how many of these turns could be eliminated with not one iota of difference to the end result?

How much time do we spend looking for things because we are not well organized? How much "stuff' do we hold on to? How is our desk organized? How much time is lost due to multi-tasking and getting distracted? I know for me that the technology in our company always seems to be behind where it needs to be, regardless of how we tryto improve it.How much time is lost in unproductive meetings (even waiting for them to start)? How often does the printer run put of paper?

For me, the secret to higher productivity is to finish one task and flowto the next one-unlike this month's column, which has taken four attempts to finish. Now if I could only practice what I preach!

To all our readers, much thanks for your loyal support to our publications. To our advertisers who loyally choose us, which allows us to publish each and every month, a BIG thank you. My big wish to all is that you have a wonderful, happy and healthy holiday season and that you get to enjoy it. See vou next vear on our travels.

Alan Oakes, Publisher ajoakes@aol.com

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The road ahead in EWP Q&A with new APA president

f nsr MoNrH. APA-The Engineered LWood Association bid farewell to its president of eight years, Dennis Hardman, who is retiring after more than 30 years with the organization. Stepping into the presidency is Ed Elias, a 35-year veteran of APA who has served in numerous roles, including technical, financial, and international marketing.

We asked Elias to offer his perspectives on how APA and the engineered wood industry viewed 2013 and what dealers can expect Ln2014.

Q: Wt ut expectations does APA have for housing in20l4?

Elias: Along with the rest of the world, we're forecasting housing demand in 2014 and global economic growth in general with cautious optimism. The economy is slowly improving, and the housing market is recovering in many areas. APA is forecast-

ing 1.1 million housing starts in the U.S. in 2014,up 167o from an expected 945900 starts in 2013. In Canada, we are expecting overall housing starts to remain similar to 2013 at 187000.

That being said, confidence among consumers and builders is still fragile and challenges, from a tight lending market to labor issues, remain. Of particular note is the fact that multi-fami ly construction is up 32Vo for 2013, relative to single-family starts at 167o. This trend is expected to continue for several years, based on the assumption that as household growth among young people picks up,their first move is going to be into a rental apartment and not toward the purchase of a single-family house.

On the positive side, home prices are generally higher by l27o relative to a year ago. Real gross domestic product is expected to average 2.87o through 2018, which is potentially high enough to improve the employment rate to levels where housing starts by 2015 could be as high as 1 to 1.2 million units per year. By 2018, APA forecasters are projecting that single-family housing starts could reach 1.05 million per year and multifamily 0.5 million starts per year.

Demand growth in other end-use sectors, such as repair and remodeling, non-residential construction, and industrial markets, is expected to average 3Vo in20l4.

Q: Ho* will APA approach these changing market scenarios?

Elias: As an association, that means keeping a focus on our core goals and services while remaining open to opportunities to expand our programs to new and developing engineered wood products and systems. Specifically, related to housing, the association is pursuing the mainte-

nance and expansion of structural wood-based panel wall sheathing. But, we have also continued to support the growth of engineered wood floor systems and reduced callbacks through installation education and the proper specification of standard compliant products by engineers, architects and builders. For example, through our APASimplified Wall Bracing program wearepromoting the value proposition for the use of fully sheathed walls in low to moderate wind zones. Four states incorporated these provisions intotheirbuilding codes this past year-North Carolina, Georgia, Idaho and Montana.

The association has also promoted the expanded application of wood structural panel sheathing used in combination with systems other than foam sheathing to meet energy code and structural building requirements through our Advanced Framing construction program.

More at the trade level, we have also focused on expanding the technical information available on mobile platforms such as iPhones, iPads and Android devices. Basic mobile Builder Tips related to the prevention of panel buckling, proper panel and nail spacing, squeaky floors, and care and handling of stock on the building site were successfully introduced in 2013.

Q: Wttut are the biggest challenges for engineered wood manufacturers in the present economy and marketplace?How will those challenges affect LBM dealers and their customers, if at all?

Elias: Recovering from our recent recession, there are no shortages of challenges. Overall market demand remains the primary challenge faced by the North American engineered wood products industry. North

American structural wood panel production in2Ol3 is forecast to reach 21.3 billion sq. ft. on a 3/8" thickness basis. We remain well below the 43 billion sq. ft. of production during 2005 and the peak of our housing market that totaled 2.3million housing starts that year.

Government fiscal policy is a challenge that we cannot directly address but clearlyimpacts labor markets, interest rates, and consumer confidence. The trend of depressed employment rates across all age classes, most notably in the under-35 age group, continues to adversely impact household growth and homeownership.

Global supply and demand of wood products may also impact future consumption patterns of North American construction materials. The cost of raw materials and labor, and the availability of transport for distribution, will need to be balanced against trade policies between developing and developed nations. Competitive use of wood fiber for non-structural applications, such as wood pellets to meet clean energy targets, could also impact future availability. Other potential constraints deal with expanding regulatory concerns on formaldehyde emissions and those of methanol, as well as green building legislation.

There are no shortages of challenges; prioritizing them will be a key role of the association. its board of trustees, and membership.

Q: Whut" the industry production forecast for 2Ol4 and beyond? Which categories are expected to be the strongest performers?

Elias: For 2014, we forecast U.S. and Canadian plywood and OSB production to rise by 1.9 billion sq. ft. reaching 25.7 billion ft., up 97o from 2013. By 2018, U.S. and Canadian structural wood panel production is expected to reach 27.4 billion sq. ft.

For 2014, North American production of engineered wood products, such as glued laminated timber, structural composite lumber, and wood Ijoists, are forecast to improve by 5Vo, l2%o andTTo,respectively as the North American economy improves. Overall glulam demand in North America is expected to grow from 251 million bd. ft. in 2013 to 328 million bd. ft. in 2018. Structural wood I-joist production is expected to grow from 625 linear ft. in 2Ol3 to 887 million linear ft. in 2018. LVL volumes will increase from 61.5 million cubic ft. in 2013 to

79.8 million cubic ft. in 2018. An increase in housing starts is expected to be the main driver for this increasing demand for engineered wood in North America. We also believe that recovery in non-residential construction will lag behind but follow home building. In this latter sector, we expect to see 3l%o growth by 2018 in comparison with 2013.

Q: Wttat are some of APA's chief highlights from 2013?

Elias: APA's website, www.apawood.org, had almost 5,000 visits per day, every day of the year. Nearly 6,000 end-users had technical issues addressed by the APA Product Support Help Desk. New and updated technical publications were added to our library, and close to 150,000 publications were downloaded.

We developed a bi-national ANSI standard for cross laminated timber and published a performance-rated structural insulated panel ANSI standard for use in wall applications. Promotion and education supported several APA wall sheathing systems to expand the specification and application of structural wood panels.

APA established a strategic partnership with WoodWorks and, with the U.S. Forest Products Lab, hosted two Carbon Challenge competitions. Our field services staff hosted six dealer training events in the past year and presented a variety of educational sessions around the U.S.

Q: Wttut resources can engineered wood retailers and end-users expect from APA in2014?

Elias: We will continue to support the cost-effective use of structural wood wall sheathing to meet state energy and building codes. We will promote the preference of continuously sheathed wood structural panel walls to builders and code officials through field calls, publicity, seminars and publications.

We will also continue to promote the specification and proper application of engineered wood products in APA wall, roof and floor systems, both in residential as well as commercial construction applications. The latter will be in conjunction with the industry-wide WoodWorks campaign.

As well, increased incorporation of web-based programs, mobile applications, and social media will continue to be a priority.

Engineered Wood Panel Demand Growing Sharply

Demand for OSB and plywood structural engineered wood panels in North Americais expected to reach about 30 billion (3/8" basis) sq. ft. in 2013 and grow to nearly 40 billion sq. ft. by 2016, according to Principia Consulting.

SpecialtyOSB and plywood panels are the fastest growing segments within the business. Specialty panels offer value-added performance benefits compared to commodity panels, which enable manufacturer product differentiation in the market and some protection from competitive pressures through specificationselling, leading to steady demand and higher margins.

"Industry pricing and margins are subject to wide swings due to the cyclical nature of the structural engineered wood panels business," said Steve Van Kouteren, Principia's business director-industry reports. "As manufacturers bring capacity back online and plan new greenfield plants for the next growthcycle,awell-positioned specialty panels business provides higher margins and price stability during these cycles."

Building codes are a key driver of specialty structural engineered wood panels demand. A complex maze of building codes with varying adoption rates by states and local municipalities are driving changes in how homes and commercial structures are designed, built and remodeled.

For example, energy codes are affecting demand for radiant barrier sheathing (RBS) and weather-resistant coated sheathing. California's recently updated Title 24 energy codes require RBS at the roof in specific climate zones, and the 2Ol2 IECC residential energy codes are driving product innovation and demand for air and moisture barrier products, including coated structural engineered wood panels. Other building codes affecting the demand for specialty panels include fire, seismic and wind load.

To quantify these industry dynamics and trends, Principia will release a new study, "Structural Engineered Wood Panels 2Ot4, Specialty Applications in Building and Construction," in the second quarter of 2014.

[1nnlclslcY IN THE warehouse is I)lparamount to the success of any LBM company. It's amazing how simple tweaks to processes can have big impacts on efficiency-and an organization's bottomline.Despite this, many companies fail to make the necessary changes.

Here are five simple things that can improve efficiency in warehouse management:

Get a WMS

A warehouse management system can provide your company with greater inventory visibility and improved warehouse efficiency by enabling more accurate delivery of customer orders. Expedited orders can be reduced, and the ability of staff to quickly pick and ship products is made much easier. If your organization hasn't implemented a WMS, it is time to start considering it.

Double-check orders

Humans are prone to lapses in judgment. As the saying goes, cross your T's and dot your I's. This has never been more of a requirement than in the warehouse. The cost to send out an order for the second time, after messing up the first order, is typically more than $100 (more than double the cost of sending a first order). That

means every order mistake costs you double. No matter how large you are, this is unsustainable for the financial health ofyourcompany.

The simple fix is to always doublecheck an order. Make it a policy, create a system, put a sign up so everyone remembers, do something! This is especially important when you have new hires picking orders.

Keepyour warehouse clean

You know all too well how annoying it can be to misplace your favorite shirt, ball cap, or even your keys. You assume they're "lost forever," when, in fact, they're just buried under a pile of junk in your bedroom. This simple scenario can cause immense frustration, make you late for an important engagement, and ultimately increase your stress levels well above a reasonable level.

So what happens when your warehouse is unorganized and messy?

Instead of being late for an appointment, you might be late sending out an order-which costs you money.

Allocating an hour or two per week, or even per month, to cleaning the warehouse can lead to amazing improvements in your efficiency. You never knowwhatmissing or misplaced orders you might find. A clean warehouse also allows employees to

move around more quickly things done easier. It's just sense.

and get common

Bring some order to your orders

Stacking items in an orderly, logical fashion enables easy and timely retrieval of items for staff, which increases efficiency. Items can more easily be found and are less likely to be lost or misplaced-thereby reducing waste and optimizing available space.

Walk the floor

A great way to identify inefficiencies is to have senior employees walk the warehouse floor. It only takes a few minutes. Getting an outsider's perspective on day-to-day warehouse operations can go a long way to understanding where bottlenecks are occurring and why. Sometimes regular inspections become so routine that what may seem "normal" is actually grossly inefficient. Giving senior leadership-those with the authority to implement processing changesinsight into what may seem like mundane company operations can lead to extensive time and cost savings for the company.

wood lovers in your life Holiday gifts for the

fr soveouE oN your holiday gift list lcan't get enough of the beauty and durability of wood, you're in luck this holiday season. From pocket knifes to pens to covers for Apple devices, you can satisfy anyone's craving for something made of wood.

The original Swiss Army knife, manufactured in Switzerland since 1891, is now available with a beautiful hardwood handle. One model, named SwissChamp, includes 25 different tools, including a can opener, screwdrivers, wire stripper, chisel/scraper, wood and metal saws, and a toothpick. It's $ | 30, at www.swissarmy.com.

Several companies make wood cases for mobile devices. One of the best knownis Grove (grovemade.com), which is based in Portland. Or.. and manufactures all its products there.

The company's WoodPrint iPhone 5/5S cases are constructed of durable maple: $79 for a plan case and $119 for one decorated with custom artwork. If you'd rather have bamboo, a plain case will cost just $79. Or you can choose from dozens of pre-made cover designs for $99.

For iPad Minis and the new iPad Air, Grove offers Wood Smart cases handcrafted of maple, with a flexible bamboo cover that allows three different standing positions. The price is $79 for the Minis and $99 for the Air. Yet more wood cases are available from Miniot (www.miniot.com), based in the Netherlands. Stylish protection for the iPhone 5/5s is provided by a range of hardwood cases. The company's iWood case costs $106 and is available in several wood species and colors. Book ($194) completely surrounds the phone and is made from two contrasting wood species-maple and walnut, while Contour ($194) is constructed from wenge and maple. Miniot also offers covers for Apple's iPads and iPad Minis. The hinged cover snaps firmly to the tablet and can be rolled up into an angled stand. Choices include five wood species and six lining colors for $92, which includes custom engraving of a personal message, art or logo.

Baltz Fine Writing Instruments (www.baltzpens.com) creates one-ofa-kind pens inits workshop in Raleigh, N.C., using rare burled woods and decorative metals. The writing point is a rollerball/ballpoint hybrid for smooth writing without feathering or smearing. Prices range from $175 to $280.

SWISSCHAMP hardwood-handled knife from Victorinox

BURLED WOOD PENS from Baltz

By Carla Waldemar

All SKU'ed up to

grow market share

North Main Lumber has exploded today.

Three years later, in 1991, he bought out his uncles"strictly HEP, plus a kitchen and bath showroom-solely mechanical, no sticks or insulation." It wasn't until 1999 that he acquired a lumberyard, North Main, the first of many to come (current store count: 16) "To be honest, I wasn't interested in lumber; I simply wanted the location, in the southern tier of New York."

So, welcome to a whole new industry. Big learning curve? He chuckles. "I'm supposed to say yes. But in actu-

Rally tRound the Roundtable

foHN Knueccn DID Nor grow up in a lumberyard. And j that's probably a very good thing. He never acquired that "way we've always done it" mindset. Instead, he brought a business degree and a self-fueled inner drive that egged him on to expand, acquire, diversify-and succeed.

HEP Sales (which stands for heating, electrical and plumbing) was launched in upstate New York by his uncles in 1953, the year John was born. Upon graduating from college, the uncles offered him a job. Well, why not? "I didn't know anything about building materials, but it seemed like a good opportunity," he decided-until the first afternoon. "There I was, in 90" heat, working on a steel pole barn and thinking, 'I got a business degree for this?"'

But he stuck it out, laboring through the ranks until, five years later, he was made operations manager of the outfit-a promotion he downplays by demurring, "We were small-only eight locations, 45 employees, revenues of $6 to $7 million"-not so small in my book, but... whatever. Maybe puny only in comparison to the way HEP Sales/

As a member of NRLA, John Krueger swears by their roundtables. "They had a big impact on me. I learned how other people do things so I'll never have to re-invent the wheel. I learned the obvious. like. "Labor costs are l0Va: Is that a good number? I could find out their norms.

"I've been pretty heavily involved in roundtables with a lot of executives on the Eastern Seaboard (so they're no competition). These guys were leading the building boom of the U.S. They were just cranking, beating each year by Zo%o-till 2003. Then, heads were hanging; they were off 40, 507o.Bnt I'm coming in with. 'I'm off 7Vo and I'm bummed. It sucks.' But I'd never experienced their double-digit growth, which had made me wonder,'Oh my God, how do you do it?' Two totally different markets. We never saw even 2OVo growth,but then when I was off, it was only 1Vo.

"The roundtables taught me to keep my eye on the ball. They motivated me to sit down and think about numbers. But the best part was looking at other people's yards as they shared their successes. I'd think, 'This will work: It's how they solved a real-life problem.' I could latch onto a brieht idea."

NEWYORK'S HEP Sales/North Main Lumber are known for their range ofbuilding products.

ality,I acquired really, really good people who did what I couldn't. At that time, Wickes was on a slide, closing stores around us, so I picked up management people with 30 years experience. They knew what I didn't-things like product mix-so I relied on the expertise of the people who worked for me. I knew how to manage people, how to run a business."

So, forget the traditional yard. "I had six full-service lumberyards, but different from the usual yards. I melded them with HEP stores. HEPs carried 17,000 SKUs and a traditional lumberyard had 18900, so, combined, we had 38,000 SKUs: very diverse offerings."

And a customer base just as diverse. "At first, it was a 50/50 mix of pros and walk-ins. Now, it's 15125, drawing more builders because of our deeper inventory-things the trades want, like furnaces and AC." Plus service. "I spend a lotof time, effort and money on training. Our staff is very knowledgeable, and all full-time-no college kids. And I have 15 outside salesmen on the road, holding the builders' hands

boom trucks, forklifts. ."

Then along came Builders Bargain Outlets (now four locations). Diversify again, to capture the d-i-y market as yet-another slice of the pie (contractors are its good customers, too). For John, it solved the problem of "What do you do with your mistakes?" he says. "Before that, we had stores of 8,000 to 10,000 sq. ft., but 2000 of it, in the back, was filled with culls. It used to drive me crazy. Now, management has 60 days to get rid of them or they get sent to the outlets. It keeps the places from looking likejunkyards. And I've hired an employee as a buyer, whose sole job is looking for closeouts, discontinued, and some distressed product. We just bought six, seven carloads of discontinued windows that had sold for $150; we can offer them at $70 to $90. It's a great outlet for windows and doors."

Oh, by the way, John also makes his own doors-another of those diversification-by-accident projects. "When our supplier went out of business, I went to the auction and ended up buying the business, which is a great benefit for our contractors. They used to have towait two, three weeks for an order. Now, we can do specialty doors in a

day. We also do our own trusses," he tosses in-"serving contractors in a way our competitors can't."

To facilitate this growing empire, John opened a distribution center in Waterloo-lumberyard, offices, an outlet store, the door and truss plants all in one location that services every yard once a week. (Between times, nearby yards help each other out.)

Then in 2000, John got another bright idea and added one more slice of the pie to his plate. How about a lighting store? He calls it Bright Ideas, and the well-heeled folks up there in the Finger Lakes love it. ("The Canandaugua is the second-most affluent lake in the country, after Tahoe," John reports.) He doesn't choose to go after the custom builder, who may require coddling, or aim at the remodeling market. "Our customers are very, very rural, so when we open a new store, we're looking for a demographic of 30,000 people in a l0- to l5-mile radius. Not urban," he emphasizes. "We had eight locations in the early '90s when I started growing the business, so in expanding I wanted to try something different, outside my comfort zone" of 20 to 30 miles between existing stores. "So I went an hour-and-a-half away as a kind of trial, to see if it could work, where nobody knew us. Wegman (the supermarket magnate) owned a chain of yards, but they weren't making enough money, so he closed the brand. I thought,'I'll get into those existing markets,' so I bought his sheds, the machinery, and hired his employees-a huge investment in equipment, staff and SKUs. We went from their five or six people per store to 20, but the opportunity was a no-brainer. They'd been making $10 to $12 million a yard, so I started pumping things up."

And that's the part of the operation John loves best. "I'm a marketing guy, to be honest with you. If there's anything I enjoy, it's that. I write all our radio spots, and we're using digital a lot more, too-Facebook, cool stuff on our website." And promos involving customers. North Main offers classes at each location-everything from window clinics to plumbing ("The ladies are very interested, and women are a growing market.") to floor heating in a pole bam. At sessions, as an extra lure, "we give away an overhead door or entrance door." Bottom line: Does it drive sales? "Absolutely! No doubt about it. It's been very beneficial for us." So have the zany Ugly Bathroom and Ugly Kitchen contests, where homeowners submit photos in order to win a makeover.

Of course, the recession dampened the flames a bit, necessitating "some layoffs, some firing-people I should have fired earlier, but labor is so hard to get here." But the outlook is becoming bright. "In 2009, what I did was managing my company, and I know how to do that. With a $36-million business, I could do a lot. I always know what I'll do in sales the next year, but I got awhole lot sharper."

So-more expansion? John responds with a firm no. "I have 200 employees, and that's a lot." But, never say never. Son Max, age 24.has worked here since a kid of 14. "He's now an assistant manager-my hope for the future." Another bright idea.

Carla Waldemar cwaldemar@ comcast.net

DEALER'S push to attract female customers included a Ladies Day, based in its stores' kitchen showrooms.

APA-THE ENGINEERED Wood Association hosted its annual meeting Nov. 2-5 at Hyatt Regency, Huntington Beach, Ca. [1] Dotti & Ted Schultz. [2] Mike Nielly, Tom Liberator. [3] Clancy Redmond, Dave Rupp. [4] Ed & Jan Elias. [5] Chris Degnan, Geoff Crandlemire. [6] Jim Enright, Doug Calvert. [7] Charlie Smith,

Scott Ashpole. [8] Mike Lobbett, Mike Dawson. [9] Katy Tomasulo, Jim Walsh, Heather Crunchie, Brenda Collins. [10] Fred Kurpiel, Rich Donnell, Jon Anderson. [11] Darcy & Denny Huston, TalleyDunn. [12] Jim Pattillo, Cathy Rudinsky, Monty Woods. [13] Ryan Stanton, MaryJo Nyblad. [14] Bart Bender,

Chris Wischmann, Robert Fouquet. [15] Angie Harrison, Pam Green. [16] Jennifer Cover, Kerlin Drake, Marilyn Thompson. [17] Tim Fisher,Tracy Trogden, Emmanouel Piliaris. [18] Cheryl Kuchar, KimSivertsen. [19] Kathy & Mike Wacker. [20] Dan & Margie Semsak. (More photos on next page)

APA wished farewell to retiring president Dennis Hardman durino its annual meetino (continued from previois page). l1l Kathy d Dennis Hardman. [2] Steve Killgore, Allyn Ford. [3] Pat Lynch, Mike McCollum.l4ltiz Churchill, Donna Meade. [5] Chuck Casey, Ken Caylor. [6] Ken Dunham, Gina Rodriquez.

By Wayne Rivers

Why your next hire will probably be a flop

[ravtlv BUSINESSES and their ownI-' ers are good at agreat many things. One thing, however, that family business leaders are not particularly distinguished at is recruiting, hiring, training, and retaining outstanding talent. What are some of the root causes of this deficiency and. more importantly, what mightfamily business leaders do about them?

First, what's the downside of a poor hire? What are the direct and indirect costs? It's hard to put a figure on an item like this because many of the costs are unseen, opportunity costs. Management firms claim that replacing a terminated employee costs an employer between two and seven times annual salary. They also say that hiring and training a new person

costs between 25Vo and 2007o of that person's annual compensation. Getting people-especially the wrong people-on your team is expensive!

What about the human toll? How many family business leaders have lain awake at night, dreading having to terminate an employee? Even a fairly new person who hasn't been on the payroll long has feelings and family, and it hurts to have to let people go. And there are other opportunity costs, such as wasted time, lower morale, wasted time on the parts of other family business executives, and unsatisfied customers, as well.

A good employee can do the work of two to three poor employees, so there are also inefficiency/low productivity costs associated with poor

hires. The long and short of it is this: poor employees cost family businesses a pretty penny, and the pretty penny is directly proportional to the importance of theposition to the organization.

Why are family business leaders poor at hiring, and why is your next hire likely to be a flop? There are the usual culprits: no well-developed hiring system, insufficient time devoted to hiring and training, theoverreliance on gut feel and intuition, and the over-reliance on traditional hiring methods such as newspaper classified ads, etc.But the main reason that family business owners hire poorly is that theyrely onthe most flawed evaluation tool known to mankind: the unstructured personal interview.

It's easy to understand: anyone who has half a brain can do reasonably well in a 30 to 90 minute job interview. They know, for the most part, what questions will be asked and what the appropriate answers must be. Furthermore, most of the interview time is devoted to talking, and we don't mean talking by the candidate. In most of the interviews that we've observed, when family business leaders are hiring new people, it's almost as if the executives are trying to sell the candidate on the company, instead of the other way around. The questions are usually open-ended ones such as, "What do you consider to be your greatest strengths and weaknesses?" or "How would you describe yourself?" Such questions simply don't compel applicants to reveal much about themselves in an honest or useful way. Is

an interviewee going to say, "I have a crack problem and I steal?"

It's much better to avoid first-date type questions and focus instead on specific past job experiences and jobrelated hypothetical scenarios. The idea is to focus on objective, relevant data and tune out any questions that invite the candidates to predict the future, reconstruct a rose-colored past, or ponder life's big questions. Interviews that are structured and all about the facts are sixtimes more effective than unstructured interviews at predicting a candidate's job performance. Some experts believe that job interviews aren't needed at all. Research shows that an aptitude test predicts performance just as well as a structured interview.

So there's part ofthe answer: focus on facts, specific work outputs, and past examples of work instead of piein-the-sky conversation and big picture verbal grandiosity. And here's another concrete idea you can use: Get other people on your team involved. Allow them to observe and comment freely on what they see as a candidate's strengths and weaknesses. If it's true that two heads are better than one-and it is-then getting feedback from the other valued people in your family business makes perfect sense.

A variation on this theme is to put candidates to what we call the "spouse test." When considering an important hire, we often bring in the spouse of the owner and have him or her interview the candidate. They will helpbringthat terribly underrated characteristic - objectivityto the hiring process. By the same token, if you're getting near the decision portion of the process, it's a good idea to have the candidate's spouse come in for an interview. The spouse tests are informal, butthey've proven over time to be outstanding tests for fit and chemistry.

It costs too much time, money, and emotional turmoil to let your next hire be a flop.Apply these 2lst-century hiring techniques and save yourself a lot of trouble, while simultaneously improving the quality of the people around you.

- Wayne Rivers is president of the Family Business Institute, Raleigh, N.C. Reach him at wayne.rivers@familybusinessinstitute.com or (877) 326-2493

Reprinted with permission of the Family Business Institute. No portion of this article may be reproduced without its permission.

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Gontagious confidence

HrNGS THAT Ir,rere others feel good sell. So, what makes us feel good?

Gonfidence ls #1

Have you ever seen a homely man with a beautiful woman, or vice-versa? Money is not the answer. That's just a cop-out for people with no money and no confidence. There are lots of lonely, rich and good-looking people.

Confidence is the answer. The Bold First Step is one of the characteristics of master sellers. The feeling of confidence radiates.It transfers to others. Why do you like hanging out with your confident friends?

Confident sellers make their customers feel confident, which is one of the best feelings in the world.

Gonfidence, B.S., and Truth

Animals, of which we are purportedly the most intelligent (as reported by us), can feel the difference between B.S. and the truth, which is where true confidence comes from. Weak sellers let themselves off the hook by saying, "I could be a great salesperson, but I don't want to be like John, he's such a B.S.'er." Who's B.S.'ing whom?

Any businessperson who has survived the last 60 months absolutely can smell B.S. a mileaway. More importantly for us as salespeople, they can smell a lack of confidence from five miles away And just as our customers want to be around confident people, they don't want to be around a lack of confidence-which also radiates.

Many hard-working but struggling, plateaued and underperforming sellers think they can get away with only telling the truth. We must tell and sell the truth in a compelling and confident way.

I know a lumber broker, alias Bob Wreckman, who has one of the best sales voices I have ever heard. I call him Zeus, because that's what he sounds like. How can you not buy from this guy? But Bob is not a B.S.'er. He is as serious as your first date's father. He is a professional. He is in the market, on the market, and making markets daily. He is good for his customers, suppliers and the traders around him. Radiation, it creates profit.

Are others as intelligent as Bob? Yes. Do they know their markets and their customer's needs as well? Some do. Do they care about their customers as much? Some care more and some care too much. Do they make more calls? Some do. Is Bob more likable? Bob is very likeable, but there are those who are more likeable-but most of them

confuse agreeability with likeability, to their own detriment.

So what'sthe difference? Confidence. Sure, Bob sounds great, but he has the confidence and nerve to act on his convictions and sell those convictions (which are usually correct) to his customers and suppliers. A great broker is a money-making asset to any company's buying strategy, and Bob is that.

Honesty, hard work, personal beliefs, hobbies/passions, and a myriad of other values are important to people. Sharing these values with ourpotential customers will strengthen our business together, but by itself, is not enough. Sharing values with confidence wins the day in the sales contest.

Why Not Gonfident?

Salespeople are uncomfortable and afraid of being too pushy or being perceived as a liar or a B.S. artist. These are prejudices that are taught at the dinner table across America every day. Many of us are raised by people who are prejudiced against salespeople. It is deep in our psyche. Confidence comes from learning, practice and preparation.

. Our product and market. Learn as much about what we are selling as we can. Seems obvious, but isn't. Many sellers leave product and market knowledge to someone around them. This is a mistake-and does not breed confidence.

Our customers. Make learning about human interaction a lifetime pursuit.

. Ourselves. As salespeople we must ask and answer the difficult question: How do I affect others? A treacherous journey, but more treacherous for us is not working on this important question.

Hard Work ls Confident (and Sexy)

Sixty calls a day breeds a positive, confident momentum that 30 calls a day never will. Hard work breeds confidence. Make the calls.

James Olsen Reality Sales Training (503\ 544-3572

Hardware Express, a 17,ooosq. ft. Ace Hardware in Coos Bay, Or., was opened Dec. 1 by Gary and Beverly Kalsbeek, along with their children and their spouses, Marty & Lisa Kalsbeek and Keri & Terry Grafe.

The Kalsbeeks hope to later add a garden center.

Lomas TrueValue, Atbuquerque, N.M., owner Jim Capin inked a 10-year lease to add a 13,700-sq. ft. store at Albuquerque's Promenade Shopping Center.

Foster True Value Hardware, Mariposa, Ca., continues fine-tuning plans to build an expanded store, one year after receiving county planning commission approval.

Hangtown Hardware, ptacerville, Ca., is closing this month unless retiring owner Art Hardie can find a buyer for the 64-year-old store.

Overland Ace Hardware, Boise, ld., is liquidating and will close by the end of December after 32 years, with the retirement of owner Darvl Watson.

Orchard Supply Hardware, Goleta, Ca., was evacuated Nov. 13 after a fire broke out in a roof-too airconditioning unit.

Sun Mountain, Berthoud, Co., has opened a showroom and design center in San Francisco, Ca., to showcase its custom wood doors, mouldings and wide plank flooring.

Ace Hardware awarded "Coolest Hardware Store" of the year honors to six retailer members, including Carmel Ace Hardware, Carmel, Ca. (famous for its two unique boutique entrances and having real redwood trees inside the store). and Parkrose Ace Hardrdare, Portland, Or. (known for its extensive selection of fasteners, grills and unique rentals).

Anniversaries:

Montana Dealer Adds Second Store

Rock Creek Lumber, Red Lodge, Mt., has opened a second location in Billings, Mt., in the former home of Zig's Building Materials.

Owner R.D. Kirkness purchased the one-acre Zig's property as well as an adjacent acre.

He expects at least 757o of the business to be to pro's and, since BNSF tracks run alongside the site, Kirkness is working with Montana Rail Link to add a short rail spur into his yard.

Roseburg Upgrades Missoula

Roseburg Forest Products will be making capital expenditures at its Missoula, Mt., particleboard facility to upgrade the forming line of the existing press.

The upgrade is designed to enhance product quality and improve the line's overall efficiency.

According to Grady Mulbery, vice president of operations, "The improvements we will be making at our Missoula facility will allow us to better meet the evolving needs of our customers, and solidify the long-term viability of the facility."

BMC Buys No. Ca.'s WBS

BMC, Boise, Id., has acquired Northern California millwork wholesaler Western Building Specialties, Sacramento, Ca., to expand itsmillwork offerings in Northern California. WBS provides residential pre-hung doors, trim, moulding, shelving and closet organizers.Itscommercial

department offers hollow metal doors and frames, as well as commercial hardware. Its Western Bath and Shower division provides tub and shower enclosures, mirrors, bath accessories, bathroom partitions, storefronts and specialty glass.

"WBS has built over a 60-year period a reputation for providing quality products and reliable services," said BMC c.eo. Peter Alexander. "We are very excited about serving customers through the combined strength of WBS and BMC at our facilities located in Sacramento, Fresno and Modesto."

BMC operates 29 lumberyards, 15 truss plants, and 24 millwork operations across the West, plus Texas and North Carolina.

New Name for Hawaiian Aces

Maui Varieties Ltd.'s stores throughout Hawaii recently held "brand opening" events to promote their stores' name change to HouseMart Ace Hardware.

Newly renamed are Ace Hardware stores in Hilo, Keaau, Captain Cook, Ocean View, Pahoa and Naalehu; Ace Hardware & Crafts in Waimea and Kailua-Kona, and Ben Franklin Crafts in Hilo.

Staff, management and ownership remain the same.

Taking on the HouseMart name earlier were the chain's four Ace Hardwares in Las Vegas, Nv., and seven in the Pacific Northwest (Milwaukie, Or., Des Moines, Lakewood, Longview, and Olympia, Wa., and two in Renton, Wa.).

LBM Retailers Set for Modest Turnaround r SUPPLIER Briefs

After a period of sharp declines resulting fromthe failing housing market and declining economy, the retail lumber and building material industry is set for a modest turnaround, thanks to a series of positive changes that will affect revenue over the nextfive years, according to a new IBISWorld report.

Over the past five years, revenue for LBM dealers has grown at a minimal average annual rate of | .8Vo.

According to IBISWorld industry analyst Kerry Coughlin, "The volatile cost of lumber, which accounts for about 65.4Vo of industry sales, has also burdened industry firms over the period."

The trend has made it difficult for retailers to anticipate future spending and control costs. Furthermore, the industry has experienced intensifying competition, especially from home improvement stores, which offer the added convenience of one-stop shopping and. at times. lower prices.

Such factors have pressured profit margins. IBISWorld estimates that profit declined to industry lows in 2010, only to recover in 2013 with margins reaching 2.6Vo. Falling margins have caused some operators to either exit the industry or consolidate over the five-year period. As a result, the number of enterprises has declined at an average annual rate of l.1vo to 43,692 in 2013.

"After facing stagnant conditions following the recession, the housing and nonresidential construction mar-

kets finally began making significant strides in 2O12. and strong gains in both sectors are expected for 2013," said Coughlin. IBISWorld projects industry revenue will jump 10.l%o to $96.3 billion in 2O13, driven by an increase in residential construction investment and higher spending on home improvements.

Further, as population growth and pent-up demand drive up housing starts, and improved economic conditions boost demand for repairs and renovation projects, sales of industry products will continue to rise. Over the next five years, industry revenue is forecast to increase, albeit not as high as prerecession levels.

The retail LBM industry exhibits very low concentration of ownership. It is highly fragmented, with no single dealer having more than 5.0Vo of market share. The majority of dealers are privately owned, and they successfully supply the local demand in their communities. In recent years, many of these small operators have merged with other players or exited the industry, increasing concentration.

Stores covered in the report consist of dealers that retail building materials, such as lumber, hardwood, stones and brick. Companies may also suPply doors, windows, roofing, cabinets, floor coverings, electrical and plumbing goods. Not included are home improvement centers, paint and wallpaper specialty stores, and hardware stores.

States Industries, Eugene, Or., laid off 35 employees-about 10% of its 331-person workforce-Nov. 11, blaming an inability to secure antidumping tariffs on Chinese plywood imports.

Mary's River Lumb€r, Corvallis, Or., p'urchased Port Gardner Timber's sawmillin Bow, Wa.

Sierra Pacific Industries' sawmill in Lincoln, Ca., sustained an estimated $75,000 of damage in an Oct.27 fire that started above a dry kiln.

Mid Valley Lumber Specialties, Aldergrove, B.C., next month will move to larger offices in downtown Langley, B.C.

Blomberg Windows, Sacramento, Ca., is selling off its remaining assets and real estate and closing after 57 years.

Lonotime TimberTech distributor OrePic Building Products, Wilsonville, Or., is now also distributing sister product AZEK lines throughout the West from its 10 DCs.

Azek distributor Boise Cascade Building Materials Distribution is now also supplying TimberTech products throughout California and Carson City, Nv. lts Lathrop, Ca., branch will serve No. Ca. and Carson City, while Riverside, Ca., will cover So. Ca.

California Redwood Go., Eureka, Ca., signed Russin Lum. ber, Montgomery, N.Y., to distribute its redwood products in the Northeast.

Wahoo Decks, Gainesville, Ga., offers a new AridDek color-artisan clay.

Thermory USAs Thermory decking was selected by lhls Old House magazine as one of the top 100 new home oroducts for 2013.

Simpson Strong-Tie, Pleqsanton, Ca., was named zOtg Do it Best Vendor of the Year in the building materials product category.

Horizon Distribution, Yakima, Wa., was named Farm Mart Distributor of the Year by Pro Group.

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Jerry Long, executive v.p. and general mgr., Parr Lumber, Chino, Ca., is retiring Dec. 12 after 23 years with Parr and43years in the industry. Mike Parrella will succeed him, with Bert McKee becoming sales mgr. and Joe McCarron, assistant sales mgr.

Frank Elfering has been appointed v.p.-purchasing for Boise Cascade Building Materials Distriburion, Boise,Id. Rich Viola is now v.p.sales & marketing for Building Materials Distribution.

Eddie Smalling, ex-Oregon Canadian Forest Products, has returned to radio frequency kiln drying sales, as product mgr. for Tru-Dry RFKD timbers at Capital Lumber, Woodbum, Or.

DonBell has retired after 27 years with Bear Forest Products, Riverside, Ca. Tom Doidge, exGP/Bluelinx, succeeds him as warehouse mgr.

Jesse Manzo has joined the lumber trading team at Buckeye Pacific, Portland, Or.

Ken Laughlin has been named president of West Coast Wood Preserving LLC, Bakersfield, Ca. He remains based in Phoenix, Az.

James Brebner, ex-Allweather Wood, is new to sales at Western Wood Preserving, Sumner, Wa.

Scott Wirges has rejoined Parr Lumber, as store mgr. in Eugene, Or.

Fred Taylor has been named v.p.- manufacturing at ProBuild Holdings, Denver, Co.

Kevin Caldwell is now handling specialty plywood and lumber cut stock sales at Plywood Solutions Inc., Albanv. Or.

Gerd Kronenberg is a new lumber trader at Shelter Products, Portland, Or.

BenjaminMettler, ex-Hutrig Building Products, has joined Orepac Building Products, Wilsonville, Or., as a ThermaTru product mgr.

Shreedhar Patel has been named director of finance at El & El Wood Products, Chino, Ca. In Elk Grove, Ca., Brian Wheeler is now operations mgr. and Wayne Callicott, door shop mgr.

Bill Brown is retiring Jan. 1 after seven years as president of Green Diamond Resource Co., Seattle, Wa. He will be succeeded by Douglas Reed, currently senior v.p. of California operations.

Mike Howell has been promoted to director of operations for Parr Lumber, Hillsboro, Or.

Doug Embree is a new trader at Mill Direct Lumber Sales, Lake Oswego, Or.

Rob Roundy, ex-Truth Hardware, has been named western reeional sales mgr. for Deceuninck -North America, Monroe, Oh.

Miguel Zepeda, ex-Max USA Corp., has joined Fasco America as Portland, Or.-based Northwest territory mgr.

Jim Mackall, ex-Bluelinx, is now Sacramento, Ca.-based v.p. of sales at Steeler Drywall Conitruction Supply, Seattle, Wa.

Sara Grootwassink Lewis, Lewis Corporate Advisors, was elected to the board of directors of Plum Creek Timber Co., Seattle, Wa.

Owen Elkins is now territory sales mgr. for the Pacific Northwest at Boral TruExterior Trim. Roswell. Ga.

Dave Harris has been promoted to mgr. of Builders Supply Co., Chester, Ca.

Wally Placido has joined Canyon County Habitat forHumanity as ReStore mgr. in Nampa, Id.

Sandra Collins, ex-Curtis Lumber, is now San Francisco. Ca.. area account mgr. for Hilti.

Dave Cox, ex-Allied Building Products, is a new branch mgr. trainee at Pacific Coast Building Products, Rancho Cordova, Ca.

Brett Bricker, ex-Home Depot, is new to millwork sales at Lowe's, Concord, Ca.

Marty Crouse, ex-CertainTeed, has joined Johns Manville, selling insulation in No. Ca., Nv., and Hi. He is based in Granite Bav. Ca.

Mike Clark, senior v.p. and chief merchandising officer, True Value Co., has retired after 40 years in the industry. He came to the co-op from Orchard Supply Hardware in 2008.

Keith Foxx, ex-Bluelinx, is now business development mgr. with BlueTarp Financial, Atlanta, Ga.

Barrie Shineton, president and c.e.o., Norbord, will retire at the end of January, to be succeeded Peter Wijnbergen, currently senior v.p. and chief operating officer.

Terry Upgaard has been named mgr. of plywood sales forCenturion Lumber Mfg., Chemainus, B.C.

Angela Braly, ex-Wellpoint, has been elected to the board of directors of Lowe's, Mooresville, N.C.

Doug and Phil Hoals are new fencing installers at Mungus-Fungus Forest Products, Climax, Nv., according to co-owners Hugh Mungus and Freddy Fungus.

Ochoco Handling Sales for Revived Arizona Sawmill

Ochoco Lumber Co., Prineville, Or., has been named exclusive sales agent for all lumber to be produced at the former Fort Apache Timber Co. sawmill in Whiteriver, Az.

Renamed White Mountain APache Forest Industries, the facility is currently undergoing a $l0-million refurbishment and is expected to restart in Febuary (see Nov ., p. 38).

The facility will primarily produce pine industrials and commons. At full production, capacity is 42 million bd. ft. of 414,514 and 6/4 products of various lengths and widths, sourced from the reservation's 770000 acres of timberland. The mill will also produce fir timbers, squares and poles and-once the mothballed reman plant restartscut stock and moulding Products.

An Andrews and Steve Fetrow will handle sales at Ochoco.

Insulation Demand Surging

U.S. demand for insulation is Projected to rise 7 .6Vo annually to $10.3 billion in 2Ol7 , according to a new Freedonia Group forecast.

Growth will be driven bY an increase in construction spending from

a low2Ol2 base. Gains will also be boosted by changes in building codes and construction practices that call for structures to use energy more efficiently. Such measures as the 2012 International Energy Conservation Code (IECC) and themost recent Leadership in Energy & Environmental Design codes-LEEDv4-will spur the addition of more insulation to reduce energy consumPtion.

The residential market is forecast to post double-digit insulation demand advances through 2017, sPurred bY a strong rebound in housing starts. Not only will more houses be erected, but builders will install more insulation per structure in order to comply with the2Ol2IECC.

Residential insulation demand will also be supported by homeowners attemptingto lower utility bills by adding insulation to attics and walls and sealing gaps to prevent air leaks.

Demand for insulation in the nonresidential market will see solid growth through 2017, sPurred bY strong advances in construction. Further gains will come from rising interest in green building practices, such as those put forth bY the LEED rating system, that call for the use of

more insulation with higher R-values.

Fiberglass accounted for 477o of insulation demand by value in 2012. Fiberglass will remain the market leader in 2011 , with demand reaching $5.0 billion.Its low cost, insulative properties, fire resistance, and ease of installation make it popular among both professionals and d-i-Yers.

Demand for foamed plastic insulation, which accounted for the second largest share of the market in 2012, is forecast togrow to $4.6 billion in 20 17. These materials are used more extensively in nonresidential, due to their high R-value.

However, the residential market will offer solid growth prospects going forward, as code changes that call for houses to be better sealed to prevent air leaks will boost the use of these products, in spite of their higher costs than fiberglass insulation.

Foamed plastics are well suited for sealing hard-to-reach areas, such as crawl spaces and between walls.

Weyco Merges SubsidiarY

Weyerhaeuser Co., Federal WaY, Wa., has agreed to merge its homebuilding and development division, Weyerhaeuser Real Estate Co., with a

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subsidiary of TRI Pointe Homes.

As part of the deal, which is expected to close in the spring, Weyco will receive about $700 million and 80.57o of the shares, with TRI Pointe shareholders owning the balance.

Barry Sternlicht will remain chairman of the TRI board, which will expand from seven directors to nine. Weyerhaeuser will select four direc-

tors, TRI five. Doug Bauer will continue as c.e.o. of TRI Pointe, with Tom Mitchell as president and chief operating officer, and Mike Grubbs as chief financial officer.

Dealer Networking Meet to Kick Off Builders Show

The National Lumber & Buildins Material Dealers Association will hold

its first-ever networking event during the 2014 International Builders Show in Las Vegas, Nv.

Set for7 a.m. Feb. 5 at the LVH Hotel (next doorto the convention center), the Dealer Networking Breakfast will include the latest housing forecast from NAHB chief economist David Crowe.

Cost is $25.

DO lTBESTCorp. recently invited a select group ofmanagers and leaders from member-owned storesacross the U.S. to its Fort Wayne, In.,

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headquarters for its inaugural Leadership Development Institute, a weeklong, intensive training development program.

Street Change Upsets Ganahl

Ganahl Lumber, Corona, Ca., is upset over a proposed plan to reroute a street that runs in front of the location, to make way for a new 464-unit apartment comPlex.

"Two of the key parts of location are access and visibility, and that's what we're losing," c.e.o. Peter

Ganahl told The Press-Enterprise.

As part of the project, the street would be straightened so it runs through the new apartment comPlex, then turns south and bisects another street just past Ganahl Lumber.

Ganahl wasalsouPset that he received only a month's notice of the proposed plan. "I would have thought

we would have gotten a little more respect and would be asked our opinion on a street change," he said. "I guess not."

Sears Hardware Shrinks Units

Sears Appliance & Hardware has opened in Dallas, Tx., one of the first following the company's new smaller, neighborhood footprint. Similar stores have been opened in Big Rapids, Mi., and Cedar City, Ut.

"When we heard that Sears was interested in rolling out a smaller, neighborhood model, we knew this smaller format would fill a void in the Northwest Dallas area," said Dave Maggio, who co-owns the location with Michael Donohoe. "Our new store embraces the feel and customer service of a neighborhood hardware store, without compromising on the reach of our merchandise assortment."

He said the smaller models are 16,000 to 18000 sq. ft.-vs. 22POO' 25,000 sq. ft. for the larger storesyet still offer the same size and qualityof inventory. Additionally, anY item unavailable in store can be ordered and delivered straight to the door of the consumer.

Jesus Aldrete

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Edward Butz

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Henry Herrera

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Robert Williams

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LMCDEALERS from around the country made their way to Philadelphia Nov. 13-15 for the buying group's annual forest products & building materials expo.

COURT ACTION: Los Angeles Hardwood

Lumberman's Club members-and guests came out swinging for the fall tennis round-robin tournament Nov. 10 at Anaheim Tennis Centel Anaheim, Ca. (Left

David & Katie Church, Randy Porter, Te6sa Hattock, Stephen Ondich, L6on Richman, fit Ronm, Dan Bohannon, Bill Fitzgerald, MikeWalters, Ellie Mendiaz, Ron &KiniNicolas, Dan Nezos.

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Once the library is created, each catalog can be searched by keyword, including product name, number, or description. In addition, all downloads can be viewed on the gowithout wi-fi or cellular connection.

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William Gordon Scott, 94, retired founder of Scott Lumber, Portland, Or., died Oct.24 in Portland.

After graduating from Rutgers University in 1941, he served with the Marines in Guadalcanal during World War II.

ln 1941 , he started his lumber career at A.C. Dutton Lumber Co., Poughkeepsie, N.Y. Ten Years later, he moved his family to Portland to open a West Coast office for the company.

He retired from Dutton in 1980 and

started his own company a year later, retiring in 2001.

Herbert Fred Koller, 85, retired partial owner of Oregon Cedar, Seaside. Or.. died Oct.2 in Seaside. He retired in 1990.

Robert Wade "Bob" MosbY, 87, retired West Coast lumber executive, died Oct. 28 in Sweet Home, Or. During WorldWar II, he served with the Army Air CorPs in the Pacific Theater.

He started his lumbercareer in 1946, with Santiam Lumber, Lebanon, Or. He retired as an executive with Louisiana-Pacific in 1992.

Guido Addiego, 69, owner of All Bay Mill & Lumber, American Canyon, Ca., died Oct. 28 in Vacaville.

He helped found the comPanY in 1984 and became sole owner in 2001, when his partners retired.

Jesus Maria Pefla,76, retired lumberyard foreman for Big Creek Lumber, Davenport, Ca., died Nov. 3 in Santa Cruz,Ca.

A U.S. Air Force veteran, he sPent 35 years in the industry.

William Harold "Bill" Claussen, 93, founder of several Cottage Grove, Or.-based forest products businesses, died Nov. 2from comPlications of pneumonia.

He started in the timber industry in Olympia, Wa., in 1948, relocating to Cottage Grove in 1950. His businesses included W.W. Lumber Co., R&W Trucking, R&R Cedar Products, and Claussen Timber Products. He retired in 1989.

Philip Davis, 94, longtime lumber salesman in Oregon, died Oct. 16 in College Place, Wa.

After serving in the U.S. ArmY Air Corps during World War II, he broke into in the retail lumber business, working for Tum-A-Lum Lumber Co., Pendleton, Hermiston and The Dalles, Or., followed by Hillsboro Lumber Co., Hillsboro, Or. He retired in 1983.

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J.W. Charles Jacobi,91, founder of Jacobi Building Materials, Canoga Park, Ca., died Nov. 12 aftet a twoyear battle with Alzheimer's disease.

After serving as an Air Force Pilot over Germany and Italy during World War II, he graduated from USC. He opened his own business selling used brick out of his garage until formally establishing Jacobi Building Materials and settling at its current location in 1959.

Lee Bun Colby Jr.,90, co-founder of Engineered Wood Products, Oroville,Ca., and Las Plumas Lumber. Oroville, died Nov. 1.

After serving in the Marines during

World War II ancl bcing awardcd two purple hearts. he cnterecl thc home building industry. Hc heacled severiil construction companies whi le helpin-e to funcl the lurrrber busirresses.

Emmett Francis Birrer. 90. former sales rranagcr for Gallatin Lumber Clo.. Bozeman. Mt.. died Nov. 6.

He served in thc U.S. Navy during World War II. He workecl lirr Gallatin in the early 1960s and owncd Thompson Floor Covcring, Bozeman. from 1972 until selling thc rctail sidc of the busincss in l9tl0 and concentratlng on contr]lcrcial accounts until rctiring in l9lJ9.

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LOSANGELESHardwood Lumberman's Club was out in force at its Nov. 14 dinner meetinq at the Rib Trader in_Orange, Ca. (Front row. l-r) Waller Ralston. AlanArbiso. (2nd row) Matt Barrasi, Paul Pendergast, Dan Bohannon, Jim Gaither Bill Fitzgerald. (3rd row) Deonn Deford, Randy porter, Dennis Johnston, Lany Mether, walt Maas, John Banks, charley James. (4th row) Dale Brihannon, chadey Bohnhoff, Tom Escherich, Steve ondich, Marty Fox, Nathan osborne, Rob wilson Randy Wilson.

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By Annie Tsai

Rallying referrals

reviews about your business all over the social media landscape and bragging on you to their friends simply because they love what you offer and/or how well you treat themin other words, because you've earned their loyalty.

Hamessing that loyalty is a no-brainer. And here's the thing: These active referrers oftendon't expect or even want incentives for referring others. Sure, you can offer incentives, but don't think you have to break the bank in order to get referrals from current customers. In fact, before you spend the time designing a referral program based on monetary rewards, test out how willing your customers are to simply help spread the word.

If you're ready to harness the power of active referrers, here are seven tips for designing offers that continue to nurture your most valuable customers:

Be an equal-opportunity rewarder. Reward the referrer and the referee. This should be an easy modification if you already have a new customer acquisition deal in place.

Dlcrunp rHts: After a long day's work, you sink onto the -F couch and turn on the television. As you flip through the channels, you see a commercial for a new local restaurant. Later, as you scroll through your Facebook newsfeed, you see that a friend has checked in at that same restaurant, posted a picture of his meal, and captioned it, "Delicious! Can't wait to come back." Which is more likely to make you reserve a table: the commercial or your friend's endorsement?

If you're like most Americans, you're much more likely to be influenced by your friends' recommendations (even if they're'Just" online friends) than by ads. In fact, a recent Nielsen report reveals that 927o of consumers trust recommendations from friends and family above all other types of advertisements. And, they're four times more likely to make a purchase when referred by a friend.

Here's the takeaway for businesspeople: Referrals are a huge, sparkly, tied-up-with-a-bow gift-and if you aren't already working to harness and maximize their power, it's past time you started.

Businesses are so busy focusing their energy on acquiring new customers that they often neglect one of their most valuable resources: active referrers. Though this may be a small percentage of your overall customer segment, setting up a basic program to support them and encourage their activity is well worth your time and resources.

In fact, if your company is delivering value to your customers, you probably already have active referrers-even if you aren't aware of them. These people are posting positive

Even if you don't have a formal offer that rewards the existing customer for bringing in new business, find a way to say thank you. Put a note on that person's account to give them a little something the next time they come in. The gift could be as small as a coupon for purchase, a small freebie, or a gift card for future service.

Don't stop playing after you score the first goal. Provide an incentive to get the referred customer back a second time as a part of the referral program.

It's the same as when you're designing deal site promotions or any other new customer acquisition program. Building in a strategy that incentivizes that new customer to return a second time provides you with additional leeway and a captive audience. New customer acquisition through your referral channel is no exception to this rule.

Be magnanimous with merchandise. Reward customers with retail products instead of services offered to increase perceived value. Offering retail items is a great way to increase perceived value due to the built-in mark up from cost.

Use gift cards to your advantage. Encourage gift card purchases into your customer base as a key driver of referral business. Thisisa great way to broaden the scope of your actively referring customer base. For those customers who are evangelists for your business in the offline or online world, gift cards are an easy way for them to introduce your business to friends and family.

If you don't have a solid handle on precisely which customers are referring business to you, putting an aggressive gift card promotion out there is a great first step. For track-

ing purposes, you can append the gift cards with some internal coding; if you're printing them out, simply use a different color or numeric identifier for easy coding. This way, you can track gift cards as they are redeemed and will know over time which promotions generate the highest new customer referral rate. You'll also know exactly who is gifting your gift cards, so make sure to say thank you with an extra something the next time that person retums to your business.

Go old school-distribute business cards! Don't discount the power of handing out some business cards to your favorite customers. Asking for the referral is often the most difficult part of building a referral program; however, you need to educate your customers on how they can help support your business-especially in the beginning.

Even if you don't establish a formal referral program, you can use business cards as an easy conversation starter here. Simply hand the customer three business cards at the point of sale and say, "I'd really appreciate it if you could let a few friends know about the great service you received today."

Harness the power of .6In their own words.t' Use existing customer recommendations and testimonials.

If you have a recent customer review that emphasizes how amazing a product or service is, turn that recommendation into a referral engine by pitching your offer as ..customer approved" and share their story. You can go several directions here; a customer video testimonial, a before and after photo, or a snapshot of their post-visit review are all effective ways to draw new business from your current fians.

Ask customers to bring a .6plus one.tt Create referrers

using "you and a friend" deals. This is a great approach for businesses for two reasons. First, it turns an existing customer into a returning customer. Secondly, it encourages that existing customer to bring someone completely new to the business.

We've all heard the adage "The best customers are referrals"-and it's true. The great thing about this type of customer is that you already know that your existing customer is reliable and operating in potentially socially savvy space. And since they're a return visitor, you know they already enjoy being a patron of your business. By posting these kinds of deals, you increase your chances of getting more customers like the ones you already have.

"Bring a friend" deals also benefit businesses because they give them a very clear indication of how effective their existing customer base can be at driving new patronage on the business's behalf. Every once in a while-perhaps once a quarter-it's always a good idea to offer a..bring a friend" deal and test word-of-mouth willinqness and con(Please turn to page 35)

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By Dave Kahle

turns into loss of focus When multi-tasking

f necexrlv had a conversation lwith a sales manager. The gist of it is this: he has so manY competing responsibilities, it is difficultto spend time with his sales team.

Sound familiar? It should. I have heard that idea expressed countless times by executives, sales managers, and salespeoPle. In one way or another, sales professionals find themselves increasingly occupied bY trivial tasks at the expense of the important ones.

It is an epidemic that is raging unabated in our economy. It renders people unproductive and organizations oPerating at a fraction of theirpotential. It often comes from what I call "other stuff." Over the Years, I have seen this phenomenon become so pervasive that Years ago I labeled it and gave it its own acronym: OSE, for "Other Stuff Expansion."

The rule is this: When you give a proactive salesperson "other stuff' to do, the other stuff will always expand, taking more in time and energY than you anticipated and rendering the

proactive sales efforts to an unacceptable smaller part of the Person's labors.

Here's how this looks in Practice. A branch manaqer needs someone to

fill in a couple of hours a daY for a customer service Person who has taken a maternitY leave. "The salesman can do it," the branch manager thinks in a flash of inspiration. "He's got time."

Presto. The problem is solved.

But, alas, the couple of hours a day turn into a half day, and sometimes more, as the salesperson gets caught up in reacting to inbound calls. Those proactive sales calls that should have been made in that time are never made. The silent costs of that decision and the inevitable "Other Stuff Expansion" begin to be felt months down the road.

Or, you have a sales manager check out that Promising new product line, or write that new procedure because he/she "understands that," and, of course, you're too busY.

Or, you have inside salesPeople who also answer the Phone and respond to inbound calls, and you are constantly frustrated that they don't make enough outbound calls.

The examples can go on and on. A

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quick perusal of your sales efforts will unearth dozens more,I'm sure.

There's a simple explanation for this. Making proactive sales calls is a high risk effort that requires initiative, motivation and self-discipline. In other words, it's hard to do. That's one of the reasons why most people aren't salespeople. On the other hand, taking care of "other stuff is usually low-risk, easier and somewhat fulfilling. And, it keeps you busy.

That's why "when you give a proactive salesperson 'other stuff' to do, the other stuff will always expand, taking more in time and energy than you anticipated and rendering the proactive sales efforts to an unacceptable smaller part of the person's labors." It's the law of OSE.

In a bigger picture, OSE for sales personnel is just the specific application of a deeper rule. That rule is this: When you give someone something to do, you are, by that act, preventing him/her from doing something else. Or, to be more personal, when we accept the responsibility for doing something, we, by that action, eliminatethe possibility of our doing something else.

What sounds blatantly obvious is open reflection, so often violated that it has become one of the major productivity killers and one of the most common mistakes made today by managers and self-managers of all kinds.

Here are two solutions:

(a) Ii you have given -or are tempted to give-anyone who has proactive sales responsibilities other things to do, don't! There is always a greater cost than meets the eye. If you are a salesperson who has other stuff to do, try to hand it back to your manager or pass it on to someone else.

Be very careful about giving responsibilities, or accepting responsibilities, that detract from your core focus. In today's hectic, multi-tasking world, it is more powerful to say "no" than it is to say "yes."

(b) Okay, you can't do that. For whatever reason, your sales personnel must also do other stuff Plan B. Keep the division between the two sets of competing responsibilities as clean and sharp as you can. The other stuff should be well defined, have clear guidelines for completion, and be limited to a specific period of time.

For example, don't say this: "John, we want you to do this other stuff."

Instead say, "John, I'd like you to

spend a half-day every other week doing this other stuff."

Bykeeping the divisions clear between the competing responsibilities, you limit the damage done by other stuff expansion.

In the long run, it's those organizations and individuals who focus on

the core tasks and don't diffuse their efforts who succeed.

- Dave Kahle is a sales trainer. oresenter. and the author of a free wiekly ezine and l0 books, including his latest How to Sell Anything to Anyone Anytime. He can be reached at dave@ davekahle.com.

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Western Wood Preservers Institute welcomed Dwayne Carter, Brooks Manufacturing, Bellingham, Wa., as its new president during its annual meeting in San Diego, Ca.

Joining him on the board are new v.p. John Davis, Pacific Wood Preserving, Phoenix, Az.; secretary Patrick Tymkiw, Bell Lumber & Pole, New Brighton, Mn., and treasurer Jerry Farley, JH Baxter & Co., San Mateo, Ca.

Western Wood Products Association has reserved March 2-4 forits annual meeting at Embassy Suites Downtown, Portland, Or.

APA-The Engineered Wood Association drew nearly 400 to Huntington Beach, Ca., for its annual meeting (see p. l4-15 for photos).

Safety Awards were presented to Robert Fouquet, Ainsworth; Greg Anthony, Boise Cascade; Mike Dawson, Norbord; Tom Temple, Potlatch; Terry Secrest, RoyOMartin, and Steve Doffin, LP.

The APA board of trustees also

elected two APA staff members to serve as officers of the association. Sonya Bachlmayr, financial & administrative services director, was elected treasurer, and Marilyn Thompson, market communications director, is now corporate secretary.

During the golf tournament, Scott Poole, RoyOMartin, won 910000 for sinking a hole-in-one.

Rallying Referrals

(Continued from page 29)

plcrune rHrs: After a long day's |' work,you sink onto the couch and turn on the television. As you flip through the channels, you see a commercial for a new local restaurant. Later, as you scroll through your Facebook newsfeed, you see that a friend has checked in atthat same restaurant, posted a picture of his meal, and captioned it, "Delicious! Can't wait to come back." Which is more likely to make you reserve a table: the commercial or your friend's endorsement?

If you're like most Americans, you're much more likely to be influenced by your friends' recommendations (even if they're "just" online friends) than by ads. In fact, a recent Nielsen report reveals that 92Vo of consumers trust recommendations from friends and family above all other types of advertisements. And, they're four times more likely to make a purchase when referred by a friend.

Here's the takeaway for businesspeople: Referrals are a huge, sparkly, tied-up-with-a-bow gift-and if you aren't already working to harness and maximize their power, it's past time you started.

Businesses are so busy focusing their energy on acquiring new customers that they often neglect one of their most valuable resources: active referrers. Though this may be a small percentage of your overall customer segment, setting up a basic program to support them and encourage their activity is well worth your time and resources.

In fact, if your company is delivering value to your customers, you probably already have active referrers-even if you aren't aware of

CLASSIFIED M

Rates: $1.20 per word (25 word minimum). Phone number counts as 1 word, address as 6. Centeredcopy or headline, $9 per line. Border' $9. Private box, $15. Column inch rate: $55 if art furnished "cameraready" (advertiser sets the type), $65 if we set type. Send ad to Fax949-852-0231 or dkoenig@building-products.com. For more info, call (949) 852-1990. Make checks payable to Cutler

WEST COAST INDUSTRIAL LUMBER iS currently seeking experienced lumber broker/ salespeople for domestic sales. The candidate will become part of a team with responsibility for purchasing and sales. Would like qualifications to include: Existing network of business relationships and following among customers and/or sawmills. Please send resume in confidence to lana@wcilumber.com. Please reference "MERCHANT AD" in the subject line' Or mail to West Coast Industrial Lumber Inc.' 1795 Willamette Falls Dr. #200, WestLinn, Or. 97068.

RELIABLE WHOLESALE LUMBER, Huntington Beach, Ca., is seeking an experienced moulder operator. This is a union position with full benefits. Schedule is M-F 6:303:00, some weekends. Contact Randall Richards, randall.richards@rwli.net or (714) 849-2211.

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Deadline: 18th of previous month.

To reply to ads with private box numbers, send conespondence to box number shown, c/o The Merchant. Names ofadvertisers using a box number cannot be released.

852.1990

Fox 949-852-0231

DATE Book

.l,lsflngs. are often submitted months in advance. Always verify dates and locations wrfh sponsor before naking plans to att6nd.

Southern California Hoo-Hoo - Dec. 11, meetinq, Anaheim Hills Golf Course, Anaheim, Ca.; (760) 324-0842: hooibol 17.org.

Oregon Wood Innovation Center- Dec. 16.17, annual wood products manufacturing quality control workshop, Oregon State University, Corvallis, Or.; oregonstate.edu/conferences.

Portland Build,^Remodel &. Land_scape Show - Jan. 3.5, Oregon Convention Center,Portland, Or.; i800) 374-6463; www.nomeshowcenter.com.

Seattle Remodeling Expo - Jan. 3.5, Washinqton State Convention Center, Seattle, Wa.; (800) 374-6463; homeshowcenler.com.

Colorado Springs Home Building & Remodeling Show - Jan. 10. 12, Norris-Penrose Event Center, Colorado Springs, Co., (g00) 374-6463; www.homeshowcenter.com.

San Diego- Home Show - Jan. 10.12, Convention Center, San Diego, Ca.; (888) 433-3976; www.acshomeshow.com.

National Retail Federation-- Jan. 12-15, convention & expo, New York, N.Y.; (800) 6734692; www.nrf.com.

Black Bart Hoo.Hoo Club - Jan. 15, industry niqht, Broiler Steakhouse, Ukiah, Ca.; (707) 621-0485;btackbahhobhool8l.org.

Tru.ck Log_gers Association - Jan. 15.17, convention & show, Westin Bayshore, Vancouver, B.C.; (604) 6844291; www.fla.ca.

Humboldt Hoo.Hoo Club - Jan. 16, crab feed, Elks Lodge, Eureka, Ca,; (707) 601-9128.

Western Pallet Association - Jan. 17.21, annualmeeting, Rancho Las Palmas Resort, Rancho Mirage, Ca.; (360) 335-020g; www.westernpallet.org.

Do,iJ. B.qs.! Corp. - Jan. 20.22, winter conference, Walt Disney World Swan Resort, Orlando, Fl.; (260)748-5300; doitbestcorp. '

Portland Renovation & Landscaping Show - Jan. 24.26, porfland Veterans Memorial Coliseum, Portland, Or., (800) 374-646J: www. homeshowcenter.com.

Surfaces - Jan. 27-30, Mandalay Bay Convention Center, Las Vegas, Nv.; (972) 536-6358; www.suriaces.com.

National Association of Wholesaler.Distributors - Jan. 2g.30. executive summit, Fairmont, Washington, D.C.; (202) 872-0995; www.naw.org.

California. Forestry As-so-ciation - Jan. 29-30, annual meeting, Maniott, Napa, Ca.; (91 6) 444-6592; www.foresthealth.org.

International Builders Show - Feb. 4.6, sponsored bv National Association of Home Builders Las Vegas Convention Center, Las Vegas, Nv.; (800) 368-52a2; www.buiidersshow.com.

National Kitchen &Bath Association - Feb. 4.6. annual show. Las Vegas Convention Center, Las Vegas, Nv.; (S00) g$-6;522: www.nkba.org.

Willamefte Valley Hoo.Hoo Club - Feb. 7, crab feed, Shadow Hills Country Club, Junction City,Or.; (541)688-6675.

Northern Utah Home Show - Feb. 7.9, Davis Convention Center. Layton, Ut.; (888) 433-3976; www.acshomeshow.com

Los Angeles Home Show - Feb. 7.9, Los Anqeles Convention Center, Los Angeles, Ca.; (888) 433-3976; www.acsnomesnow.com.

San Mateo Home Show - Feb. 7-9, San Mateo Event Center. San Mateo, Ca.; (888) 433-3976; www.acshomeshow.com

Western Building Material Association -Feb. 12-14, annual convention, Tulalip Resort, Marysville, Wa.; (888) 531-9262; www.wbma.org.

Southern California Hoo.Hoo Club - Feb, 1g, meetinq, San Dimas Golf Course, San Dimas, Ca.; (760) 324-0842; hooh-oo1 17.org.

Tri-Creek Lumber & Hardware, Lowell, In', has sponsored a winter coat drive every,December for the past six years. {9,9f last year, mor€'than 2,300 new and gently wom winter coats-plus a large number of new hats, gloves and scarves-have been donated. The ,',itg-ms are distributed to local churches and a nearby i.ihelter that works to alleviate family violence.

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Coats of all sizes are welcomed, but:g{es,for'schoolage children are especially needed. "Dorrations for these sizes can tn:vg,ry low, but requests for them are vely high," says emgioyee Nancy Panozzo, who organiztX the annual drives',.She says that one customer of thg:.:itore comes in every year to ask what's neededand ihen goes out and buysthe requested items. According toPanozzo,it's one way for thaf cuq&Serand manf others who participate in tfre Ari*e::iO give back tothe community and honor help they once received themselves.

Tri-Creet requests that donated items are clean and in good repaii; because many recipients have n9 way t9 do that themselves. If good quality items that need repair are donated, store imploy""s pit"h in to help. '

Panozzo says that the idea for the first coat drive came from an employee. Advertising takes the form of free public seryice announcemetts in local newspapers and on local radio programs. She also hangs information flyers in the showroom, although, after six years, it's mostly word of mouth.

' Since donated items are collected in the back of the kitchen and bath design center, customer$ who never venture outside the hardware area get a tour of this side of the store. Some have expressed surprise that TriCreek has such a large, well-stocked showroom.

"We think it's wonderful that people take the time andl,money to shop for new coats, hats and scarves," sayslPanozzo. "It's a great way to celebrate the spirit of the season." ':.t'

[www.normandist.com]'...'."'......'..".'.29

North American Wholesale Lumber Assn. [nawla.org] '..catendar 22

NyloBoald [www.nyloboard.com].....'..,..... .calendar 8

Parr Lumber [www.parrlumberchino.coml '."..'.'24

Pennsylvania Lumbermens Mutual Insurance [plmins'com]'.'.'15

Peterman Lumber Inc. [www.petermanlumber.com] .......".".'..'.1 9

Plycem USA [www,plycemtrim.com]'... ....catendar 16

PrimeSource Building Products [www,primesourcebp.com] ..'.29

Probyn Group [www. probynltd.com]....'.",...'...."...".........".".".'..7

Redwood Empire [www.redwoodemp'com] ."'.'.......'.'."..catendar 24

Reel Lumber Service [www.reellumber'com] ....."....'.'...'..'.."."..37

Rosboro fwww.rosboro.coml........."

Roseburg Forest Products [www.roseburg.com] .'..'.'.".'.........'.17

RoyOMartin [www.royomartin.com] "'.."'......."'.".........'.'...Gover ll

Southern Forest Products Association [www.sfpa'org].'caunaar 1 8

Stimson Lumber Co. [www.stimsonlumber'com] "..'."'...'..'."......5

Swanson Group Sales [www.swansongroupinc'com] .'."Cover lV

Taiga Building Products [www.taigabuilding.com] .".....".'.'.'....20

Universal Forest Products [www.ufpedge.com]....',.',.'..........'......3

Westbury Aluminum Railing [westburyrailing.com].'......catenaar

Yakama Forest Products [www.yakama'forest.com],.,....'...'.'.....'3

Your Market Demands... Swanson

Responds.

Intro

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