Performance Under Pressure

Thomas C. Dolan

October 2006

The Boise, Idaho–based Interior Systems, Inc. has long been the dominant force in its market of Southwest Idaho, with a share consistently ranging from 40 to 60 percent. Though it has gone out of state in the past, the last couple of years have seen a significant growth in all of the surrounding states: Washing¬ton, Oregon, Nevada, Utah, Montana and Wyoming. In fact, earlier this year it did a job in Springfield, Mo., the farthest location to date.

"This is very much driven by our satisfied customers, who request we follow them to different parts of the country,” says Brian Whipple, the company’s president.

How does the company generate this customer loyalty?

"We believe it’s because of our reputation of performance under pressure, the quality of our work and safety,” Whipple replies, "as well as solving problems in innovative ways.”

One good illustration is the company’s work on the new passenger terminal at the Boise Airport, for which Interior Systems recently won the project of the year award from the North¬west Wall and Ceiling Bureau. Since the terminal was still in use as the new construction replaced the old, the project took place over several years. The general contractor was Layton Construction out of Utah. Interior Systems’ contract was for about $6 million.

The company works in a wide range of fields, and the airport project encompassed many of them, including spray fireproofing, light gage metal framing, drywall, acoustical ceilings, specialty ceilings, exterior insulation and finish systems, and exterior aluminum composite panels.

"There was a large amount of specialty wall and ceiling products, including huge amounts of radius curves, skylights and soffits, including about every kind of challenge you can imagine,” Whipple says. "It turned out spectacularly well. When you think of all the people who come through the airport and see our work, well, that’s one reason we’re very proud of it.”

When asked why he thought Interior Systems won the award, Whipple replies, "because of the complexity of the project, the demanding schedule and the high level of quality that was both expected and achieved.”

Over(time) and Above
A project the company did last year was for a large retail and office mixed-use complex, which included a nine screen movie theater. The general contractor was Devcon Construction, and Interior Systems’ contract was for $3 million.

"This one had a very difficult schedule,” Whipple says. "At one point the general contractor phoned and said construction was falling behind and asked where we were headed. That weekend we had the entire office staff on the project doing whatever they could to move it along, even if it meant sweeping floors. It showed the field personnel that the office staff walked the walk and would do whatever it takes to get the job done.”

On this particular project the field staff worked six 10-hour days a week or more. At certain periods there were double shifts, morning and night. "When it was completed the general contractor told us we were the best trade he had ever seen, and all involved were very impressed,” Whipple says.

Currently Interior Systems is involved in a $9 million hospital project for McCarthy Building Company. This is the St. Alphonsus Regional Medical Center. One of the major features is an 11-story tower built between two existing buildings, which is providing several challenges in terms of site access and safety.

"Our reputation is based on our ability to do the most schedule intensive, difficult and demanding large projects,” Whipple says. "We’re not known as a low cost company but the one that has the horsepower to do what’s needed. This seems to be more and more of the trend in our industry, particularly in busy times. The customer’s concern is not low cost, but getting the job done no matter what it takes. We have this reputation and continue to earn it each day.”

Employees Take Stock in the Company
Interior Systems was started in 1982 by two partners, Harvey Neef and Burt Bradley. It was originally a flooring business, but at the suggestion of its Armstrong rep they decided to go into ceilings too, acoustical ceilings, with drywall and steel framing following. For about 10 years the company was a niche player, known for its high quality work. In the early l990s, the company began an aggressive growth pattern, doubling its sales year after year. This happened in concert with the terrific growth in Treasure Valley in Southwest Idaho. At one point the company had up to nearly 400 employees.

But in the late 1990s, the marketplace settled down, as did Interior Systems. The company also reflected the general national economy from 2000 to 2003, when, thanks to 9-11 and other factors, the growth was rather slow. Yet during these downs, as well as the ups, Interior Systems maintained the same 40 to 60 percent market share.

The two founding partners gradually turned over the running of the business to managers. Currently the company has about 200 employees and expects to gross between $25 million and $30 million this year.

In 2001 the company initiated a partial employee stock owner¬ship program; it is in the process of becoming 30 percent owned by the employees. This will be completely accomplished in two years, at which point the owners will make the decision as to whether or not to continue the process. But, as of now, the program is showing positive results.

"As of this time last year, $500,000 were in company stock,” Whipple says. "As the company improves, the employees get more stock, and the value of their stocks and appreciate. It’s working out great. Unlike employees in other companies, ours have a chance to own a part of their business. It’s a great selling point for recruiting and way to reward employees for their efforts.”

This is but one example of how the company elicits maximum performance from its employees. Other benefits include paid vacations, 401k retirement plans with the company providing matching funds, as well as full health, dental and vision in¬surance.

An especially innovative high incentive program is called the quarterly labor cost savings fund. Whipple explains that each project has budget. If the crew completes the project for a cost that is lower than what was budgeted, the extra money goes into a special fund. That money is pulled together from the various projects and put into a special fund. A cross-section of office and field personnel decide every quarter how best to use this money to best benefit the field (not the office) workers. Over the past 18 months the committee has paid out quarterly cash bonuses, put money into a special fund for employee assistance in special cases such as a house burning down or health issues, as well as parties for employees, plus a variety of sweaters, jackets and other gifts. "The amounts generated have been in excess of $100,000 per quarter,” Whipple says. "The employees know the money goes right back to them so it gives them an added incentive to give their all in every project.”

Ready for Changes
"Another big issue we tackled is one that affects many contractors, and that’s how to find quality workers,” Whipple says. "There are just so many quality journeymen in the market¬place, so, instead of waiting for them to come in through the door, we decided, about 10 years ago, to start actively training people ourselves. Over the past decade we’ve developed dozens if not hundreds of quality workers through our program, some of whom have gone on to become superintendents.”

This year the program has been expanded from a single instructor to three. There are now three different categories. One is for first and second year workers. The second is for third and fourth year workers. And the third is for Hispanic employees, taught in Spanish. The company newsletter is also printed in Spanish and is available on the Internet in Spanish.

"We decided we had to acknowledge reality,” Whipple says. ‘We know we need good people who are willing to work hard and know the trade, but rather than wait and hope that the right people will come in and speak our language, which was not happening, we adapted to the changing times.” About a third of the workers are Hispanic, and that’s the fastest growing proportion of the work force.

"We’ve also changed our methods of recruiting,” says Whipple. "For years and years we relied on newspaper advertising, with limited success. So we tried to be innovative in this area as well. We’ve started advertising on the Internet and on the local Spanish-speaking radio. The results have been excellent.”

Feel the Love
To show the kind of company Interior Systems aspires to be, Whipple tells the story of one of the many longtime employees who have been with the company for 10 to 20 years. This was a superintendent, in his late 50s, who developed some serious health problems. He was highly respected and loved by his co-workers and customers. Although he wanted to continue working, he simply could not. He was forced into retirement, but he was not in a good enough financial position to retire.

"We went around to each of the job sites and asked individuals if they were willing to contribute to a fund to help this supervisor make the transition. We certainly hoped we could get a good enough fund to help him retire. But we were stunned by the response. Virtually every employee across the board contributed. Even new hires who didn’t know the guy wanted to participate. And employees who really couldn’t afford it asked us to take it out of their next three to four paychecks.

"When all was said and done, we collected more than $15,000, which the company matched for more than $30,000. At the retirement party, when we presented him with the check, it was a very emotional moment. The man and his wife were absolutely overcome, surrounded by so much love and appreciation.

"As we made the presentation, we told him he represented the best of what our company strived to achieve.”