Last month, I attended NAHB’s midyear meeting in Miami and had the pleasure of sitting in on a presentation by Daniel Swift, president and CEO of Des Moines-based architecture group BSB Design.
Special Section: In the eye of Hurricane Sandy
How Alure Home Improvements managed its business during Hurricane Sandy while also helping employees and Long Island residents with recovery.
As Hurricane Sandy made landfall the evening of October 29, 2012, the storm surge rapidly overtook the south shore of Long Island. Reports described water rising 3-to-8-feet high, which completely flooded most of the coastal communities.
Jimmy Quinn, construction consultant at Alure Home Improvements and a resident of Amityville, N.Y., was a victim of the flooding. Located less than a mile from the shoreline, Quinn experienced a storm surge of more than 3 feet in his home (click here to view a series of videos where Quinn discusses how the flood impacted his home, and how Alure helped him and another employee during a time of crisis).
?The water rose in the street so fast that within 30 minutes of the storm making landfall there was water in the house,? Quinn says.
Quinn was able to rescue some personal items that were raised off the floor, but soon there were couches floating across the lower-level rooms.
?The water actually made a sound as it came into the house it came in so fast,? Quinn says.
Quinn and his family retreated to the upper level of the home to escape the rising waters. After losing power, they decided it would be safest to remain in the home for the night and ride out the storm. When morning arrived, Quinn noted the overwhelming smell of heating oil?which has an odor similar to diesel fuel?permeating throughout the home. Upon inspection, Quinn discovered his heating oil tank was dislodged and leaking profusely. Approximately 100 gallons of oil had escaped from the tank and mixed with the 3 feet of floodwater in the home.
?The seawater and oil mixture was on all of our possessions. We made some phone calls and decided it was time to leave the house,? Quinn says.
The floodwaters receded from Quinn?s home later that day, but 2 feet of water remained in the streets delaying their evacuation. Eventually, the floodwaters receded from the streets, and they walked to their vehicles parked two miles away on elevated, dry land. Quinn and his family made their way to safety at a relative?s home in East Islip, N.Y.
?Once we made it to East Islip, we just tried to forget about what just happened,? Quinn says.
Jimmy Quinn on Hurricane Sandy's impact
Scroll down to view pictures of Jimmy Quinn's home following Hurricane Sandy. Click here to watch an exclusive video of Quinn and Professional Remodeler Editorial Director/Publisher, Patrick O'Toole.
Less than 24 hours after the storm made landfall, Quinn called his manager at Alure, Ron Benkin, director of sales, to explain the extenuating circumstances that destroyed his home. Benkin assured Quinn he had the full support of everyone at Alure and the company would help him with his recovery efforts.
When Alure opened its doors for business the day after the storm, they wanted to ensure all employees were safe, and everyone had the materials and supplies they needed to remain safe. Two days following Hurricane Sandy, Alure held an ?all hands on deck? meeting to reassess how employees had been affected by the storm.
?Hurricane Sandy was by far the worst storm we?ve ever experienced,? says Sal Ferro, Alure?s president and CEO.
The storm affected most Alure employees to some degree but only Quinn and colleague Roman Gorelin, a kitchen and bath design specialist, suffered severe loss as a result of the storm.
?We had to figure out the next steps to be done in order to save the home. We wanted to stop further damage from mold and mildew,? Quinn says.
Fortunately for Quinn, Alure began the remediation process on his home almost immediately after the storm passed.
This was done not only to assist his recovery, but also to test the remediation process and perfect the work before it was started on similar jobs on homes also damaged by floodwaters.
?I was the test client. My home was the first that underwent the safe way of removing the water, oil, mold, and mildew,? Quinn says.
Concurrent to the relief efforts on Quinn?s home, Alure was now in the early stages of helping hundreds of Long Island residents secure their homes following Hurricane Sandy.
Preparing for and responding to the storm
Having experienced hurricanes, heavy storms, and other related disasters in the past, Alure believed it had a good idea of what to expect in terms of storm damage; furthermore, as a large-scale general contractor, Alure had the luxury of being able to turn the business focus quickly to manage the storm-related work and not get hurt financially.
?Until you actually experience a storm such as this, it?s tough to say ?I could put together a great pre-storm plan.? Having lived through the storm, there is so much we should have done differently,? Ferro says.
In the days leading up to the storm, one strategy Alure devised was how to handle communication among employees.
Frank Stehlik, director of operations for Alure, was responsible for the internal communication strategy prior to the storm.
?We pre-planned knowing the storm was coming. Days before, we had the strategy lined up at the office, how we were going to contact and communicate with each other through the storm, and then deal with the storm damage immediately afterward,? Stehlik says.
The strategy worked, as the team members were effectively able to communicate with each other throughout the storm using text messages and email. Stehlik also developed a strategy to ensure the company was prepared to respond to the influx of calls that came in immediately after the storm.
?The amount of work and the severity the work was unexpected. We had to plan out a strategy, and even though the strategy might have gotten interrupted during that time, we had to stay focused on our customers and their expectations,? Stehlik says.
Critical to Alure?s storm response was the redeployment of employees within the company, which was done to make sure there was balance across the business segments, especially those responding to storm work.
Alure assigned individuals with specific skill sets to make up teams. Each team had a specific task and managed duties such as securing tarps on roofs or boarding-up windows.
?We spent close to 10 hours per day just tarping roofs, and these weren?t even for jobs we sold; these were just people coming to us that just needed our help,? Stehlik says.
Securing supplies and materials was also critical to Alure?s storm response plan. Leading up to the storm, the company ordered dozens of tarps and stored them in its warehouse.
?The day after the storm, we ordered close to 800 sheets of plywood for exterior sheathing and boarding-up windows,? Stehlik says.
Assessing immediate needs
Due to the massive amount of water and wind damage on Long Island, many of Alure?s clients were in immediate need of repair work on their homes. As was the case with Quinn, the company determined if their staff, installers, and vendors were also affected.
?We had to take inventory of our own manpower first as well as our installers to make sure they were capable of getting on the road,? says Doug Cornwell, vice president of operations for Alure.
As Alure fanned out into areas damaged by the storm, the first-response workers were inundated with requests for help. When they made a call to see a customer in need of storm repair, neighbors came by seeking help as soon as they saw an Alure-branded truck. The first-responders were instructed to assess which emergency work they could take on and which work should be deferred to an Alure salesperson. This was done to maintain a proper balance of workload and to avoid the temptation to accept every job possible.
?We toed that line a few times, maybe we even stepped over, but we quickly stepped back. There were so many people looking for so much help,? Cornwell says. The toughest part was the homeowner with insurance claims?those people who wanted us to do the work immediately because they knew they were getting money from the insurance companies. ?They were in trouble and needed help. We did what we could, but we couldn?t take on too much of this type of work,? Cornwell says.
Meanwhile, Ferro and his senior management team continued to assess the storm damage in the area. They recognized the opportunity for more work, but that was not the focus. The goal was to help residents secure their property and begin recovery efforts.
?Our thoughts kept going back to simply handling the emergency. Many people said, ?You?re going to get a lot of work,? but that was not our focus. It?s really a matter of survival at first,? Ferro says.
In total, the company took on hundreds of jobs. Many of the jobs were agreed to without a formal contract, or ?handshake deals? that promised the work be done in a short amount of time and at a fair price.
?The jobs were not about operating a business; it was about helping Long Island become stabilized,? Ferro says.
Once the emergency phase had passed, the business turned it?s attention to addressing non-emergency response such as the storm surge that impacted the south shore of the island as well as wind damage in the middle of the island.
Rebuilding Long Island
As the phones rang off the hook for days and weeks after the storm, Ferro was perfecting his business model in order to handle the work that needed to be done in the long term.
Backyard power plant
Dramatic weather events such as tornadoes and hurricanes have heightened awareness about emergency preparedness and the importance of having reliable backup power. During Hurricane Sandy, more than 8 million homes lost power along the East Coast and as far west as Michigan.
One way to support your clients with storm mitigation is to suggest they invest in an automatic standby generator installed outside the home. The generators range in power from 8 kW to 150 kW and can power the entire home during an outage. It is permanently connected to the home like a central air-conditioning unit so the homeowner does not need to be home to turn on the generator. It runs on propane or natural gas and can power essential items like air conditioning, lights, refrigerators and freezers, security systems, electronic devices, and more. When severe weather strikes, it may take a utility days or weeks to restore power. This can be a challenge for families with small children, elderly persons or those with medical needs, professionals who run their businesses out of their homes, or homes with finished basements that rely on electric sump pumps for water mitigation.
?The challenge was not about going to someone?s home, giving them an estimate, and them saying, ?Yes, I?d like for you to do the work.? There is the normal production phase that involves the pre-construction walk through and doing the job,? Ferro says.
Some of the checks and balances in place for a typical Alure project were adjusted in order to complete projects in a timely manner; however, Ferro did not sacrifice the quality of construction projects to increase the bottom line.
?I didn?t want to make a living on the back of other people?s disasters. It?s more than going out and fixing people?s homes; it?s also about protecting them from the scams,? Ferro says.
As unlicensed and uninsured storm chasers descended upon Long Island following the storm, price gouging on gasoline, materials, and labor was rampant. For example, jobs performed by storm chasers that consisted of removing two trees from a roof might have cost $1,500 for one homeowner but $3,500 for a neighbor.
?We wanted to make sure we were a solution the residents could trust. We are well known and involved in the community,? Ferro says.
Ferro also went on a media blitz to ensure Long Island residents were made aware of the dangers of hiring a storm chaser (view a series of interviews with Sal Ferro, in which he discusses Alure's business strategy before and after the storm). During interviews with radio stations and newspapers, Ferro passed along this message: ?Make sure you hire licensed and insured contractors. Use local contractors, hire the companies that have been here for years and will be here for years long after the storm has passed.?
Additionally, Alure started working with the Nassau and Suffolk governments to conduct emergency assessments and get residents emergency heat and lighting so they could return to their homes.
Assisting with insurance claims
As response and reconstruction work continued, Alure started helping its clients navigate the claim process with the insurance companies.
?We worked with insurance companies to get a commitment from them to get money to our clients so we can start the work,? Ferro says.
Alure created an in-house team that specifically dealt with storm-related insurance claims as well as the insurance adjusters.
?A few of the team members had worked with insurance companies before, so they were familiar with Xactamate and the systems and processes the insurance companies use,? Cornwell says.
The team would get all the pertinent information from the homeowners, properly build estimates for a claim, and serve as a mediator between the homeowner and insurance company.
?We were able to produce jobs once homeowners got their checks from insurance companies. We monitored the payments from insurance companies to homeowners much like we would monitor payments to us for a job,? Stehlik says.
Alure also had to be careful to avoid a pitfall common in storm-related work, which is starting the work before a claim is paid in full.
?We couldn?t be out there doing work without being compensated; we still had a business that we have to keep capitalized,? Ferro says.
Moving on and lessons learned
If Ferro could go back in time, he would reconsider the sales method the company incorporated in order to better manage the workload.
?I had responders and sales reps in different parts of Long Island generating a lot of work. Looking back, I might not have allowed them to be so proactive. We learned we couldn?t grow overnight to four times your size,? Ferro says.
As for the reconstruction work, the company would consider staging the work as opposed to having one crew handle a job from start to finish. One crew would do demolition, removal, and remediation work on a project and then move on to the next project. Another crew would then handle the next stage of construction and, when completed, would move to the next home.
?Our crews have been on the same project eight-to-nine months, and they are ready to start new projects. The stage-type situation would keep the crews fresh on the jobsite and the new project manager would be walking into essentially a new jobsite,? Cornwell says.
The benefit of this stage system allows the contractor to breakdown the reconstruction process into smaller, more manageable steps. The short-term goals keep the crews on time and at budget.
?Our crews are not used to being on one project for so long. The longest they stay on one project is six-to-seven weeks for kitchen and bath work,? Cornwell says.
From a personnel perspective, the company learned how to handle the emotions of employees following the storm. Alure employees faced a tremendous amount of stress months after the hurricane. Not only were the employees overworked, but they also had the stress of the homeowners they were dealing with on a daily basis.
?The storm was very tough on our employees because homeowners were very stressed out. They lost a lot of their possessions and they want the project to get done so they can get back in their home,? Ferro says.
Alure monitored the stress level of their employees very closely. They hired experts to talk with employees during regular therapy meetings to address the heightened level of stress throughout the company ranks.
?Our employees were very appreciative that we brought in experts to sit and talk to them, listen, and simply help them compartmentalize what was going on. We did not want them emotionally disturbed about what was going on everyday,? Ferro says.
Reconstruction a year later
Most of the Long Island residents with flood insurance have completed repairs and are moving on with their lives; however, there are still a tremendous number of residents without flood insurance who are struggling to find the resources to rebuild their home.
?The work is not be coming in like it did right after the storm where there were 80-to-100 calls a day, but it will continue to dwindle in. We now have more time to work with them and their insurance companies. It?s almost become like a normal job, you are not operating on a timeline and there is less pressure than initially after the storm,? Ferro says.
As for Jimmy Quinn, he moved back into his home six months after Hurricane Sandy. Alure performed the reconstruction of Quinn?s home from start to finish and even helped moderate the insurance claim. Alure also made cash donations to Quinn and other employees to help during their recovery from the hurricane. Ferro even purchased a new washer and dryer for Quinn?s home. Like many of the Long Island residents who received help from Alure in the days, weeks, and months after the storm, Quinn says, ?I don?t know what I would have done after the storm if it wasn?t for Alure.? PR