Hobbs Inc.

Source: Construction Digital

Date :08/05/2008 07:04:33

Scott Hobbs tells Exec that family values are what make a family business distinctive

Written by Fiona Nicolson and Produced by Alex N. Hortaridis

Family values are what make a family business distinctive and Hobbs, Inc. is no exception. The luxury homebuilder was established 54 years ago, founded on an ethos of high standards and teamwork, which continues to this day.

CEO Scott Hobbs belongs to the third generation of the family and works in the business along with his brother Ian. He took over at the helm nearly ten years ago, while in his early thirties, as had his father before him.

The company has grown substantially since the days when Hobbs’ grandfather Ted started the business. Back then it was a two man operation; the tools of their trade consisted of a hand roller and the service was pressing driveways along with small carpentry projects.

Today it’s a much bigger enterprise. Hobbs, Inc. has two offices, in Connecticut and the Hamptons. It employs 100 staff and, for its larger projects, it sub-contracts with high quality, specialty trades people for crews that can reach over a hundred at a time.

However, Hobbs and his brother continue to run the company according to their grandfather’s philosophy of “golden rule management” which can be summed up simply as treating people well.

Rare breeds

In the world of custom building it is not unusual to find second-generation craftsmen. Sometimes, you might be lucky enough to find third generation craftsmen. But third-generation companies are extremely rare. Indeed, building a business strong enough to survive a single generation is tough enough, but raising a child interested in and capable of taking over is almost impossible. The Hobbs’ family have done it twice!

By making it to the third generation, Hobbs, Inc. represents something of a standout in the industry.

However, Hobbs is not content, and aims for more. Leveraging the family company’s exceptional reputation and solid-gold client base, he has diversified into remodelling and estate management as well as expanded into new geographical markets. He stressed that the purpose of these expansions is to better serve his clients rather than just to be bigger.

He has also modified the company’s management structure and systems to handle the rapid increase in volume and leveraged its new economic power to offer big-company benefits, hiring full-time Human Resources and Safety Managers.

Most importantly, though, he is building on the legacy Hobbs, Inc. already has.

The apprenticeship

Hobbs sees it as an advantage that he did not join the company straightaway, as he explains: “One of the rules in many successful family businesses is that you have to work somewhere else before you join the business and both my brother and I are glad we did”.

Starting their careers in a different working environment gave them a breadth of experience which has stood them and the company in good stead. Scott served in the army first and his brother, Ian, worked in television for ABC. They both also gained MBAs from Columbia University.

When he joined the company, Hobbs started at the bottom of the ladder, pitching in as a laborer and carpenter, and then graduating to Project Manager before taking on the role of CEO. As a result, he got to know the business inside out.

The ‘Hobbs Way’

Customers and architects frequently tell the company that they like the ‘Hobbs Way’ of building homes. In order to fully understand their own brand attribute, the company set out on a quest of discovery. It learnt that the ‘Hobbs Way’ is a mentality and a proven methodology for high quality and timely building with relentless attention to detail - with full communication amongst all parties that leads to a successful construction process.

As a result, Hobbs, Inc. has a legacy of success. Its word is its bond and it will not break it, no matter what. “We recognize success and expect it – everyone has an ongoing commitment to fulfilling that expectation,” says Hobbs.

“We understand value too,” he adds. “Every person values the various aspects of a house and the building process differently. Some folks focus on noise control, others on hardware and still others on follow up service. We work hard to help our clients understand what is most important to them and advise them on how to best spend their construction dollars for maximum satisfaction.”

Whether you are looking to build a new home or renovate your existing one, a key benefit of the ‘Hobbs Way’ is its scalability and applicability to all projects. Although the tools and software constantly evolve, the managerial and supervisory processes remain the same.

“We installed Timberline software, which some thought might be more elaborate than we required,” recalls Hobbs. “But it is completely customized to our company’s processes and because everything is so well organized, it saves time – time that our project managers can make good use of, instead of spending hours filling out paperwork.”

The foundations of the business

One of the reasons why Hobbs, Inc.’s homes are in demand is due to the attention to detail at every stage of construction.

“We ensure that each property is inspected at least a dozen times during construction, to prevent any errors. Problems can be very expensive to correct later on, so it is far better to identify and fix them as soon as any become apparent,” he points out.

We spend a significant amount of time and dollars ensuring that every member of our team continually improves,” explains Hobbs. “The lessons learned by some, are shared with all. We try to aggregate the construction knowledge of all our employees into checklists that continually reflect the best construction practices in the industry.”

The focus on attention to detail is also evident in the company’s meticulous approach to project management. Hobbs believes that it is almost as important to manage the budget and schedule as it is to getting the construction details correct. “Ultimately, the house must be built right,“ says Hobbs, “but most clients are very unhappy if the budget or schedule are way off from their expectations.”

Building client ?relationships

Being attentive to clients’ needs is a priority for the company too. “Homes have become more complicated and clients need someone to advise them throughout the whole construction process,” says Hobbs. “Our role is to find out exactly what they need and to deliver it, keeping them fully informed throughout the process.”

Hobbs, Inc.’s client list includes a number of people from the higher echelons of the business world and there are a few famous names in there as well. But Hobbs emphasizes that not all are moguls or celebrities. “The main thing our clients have in common is that they all value a well made house.”

Hobbs also emphasizes that flexibility is a must for successful client relationships. “We treat clients as individuals. Some people like to focus on keeping to budget and deadline. Others like to have the opportunity to change details along the way and are relaxed about the impact on cost and timescales.”

The strategy is tried and tested: to this day, the company has never been involved in a legal dispute with a client.

Green issues

Building a new home is a challenge unlike any other. People want to be certain that the home you are creating provides the best environment possible for their family to live and grow in.

Hobbs, Inc. builds homes that offer safe and healthy spaces for their customers and their families to enjoy - and caring for the environment is an important part of how the company approaches this challenge. By encouraging its clients to take a holistic approach when considering the construction, maintenance or renovation of their home, the aim is to combine the comfort, safety and aesthetic aspects of the property while simultaneously minimizing its impact on the environment.

The company has built its expertise in green building technologies and is able to advise clients on a wide range of green issues, including air quality, solar power, geothermal heating and sustainability of materials, to name but a few.

One of Hobbs’ main priorities for the business is to further expand its capabilities in this area. “Our Green initiative is being led by a LEED certified Project Manager,” says Hobbs. “An important goal for us is to have four or five more of our team LEED certified in the next year to help broaden our efforts.”

Implementing this strategy is the responsibility of the Environmental Construction Division. This team includes project management and field supervisory professionals trained in the LEED for Homes program and accredited through the US Green Building Council.

Subcontractors and Suppliers

A critical element of Hobbs, Inc.’s success has been its partnership with top tier suppliers and subcontractors. “We strive to find the very best providers in the business, then to work with them to create the best value for our clients”, affirms Hobbs.

The company wants to be one of the top two customers for each of its partners to ensure that the partners have a true stake in making them happy. In exchange for excellent service and pricing, the partners can expect to be able to compete for a supply of high quality work for which they are fairly compensated.

Hobbs stresses that a key element of their relationship with their partners is that their subs and suppliers are paid in full at the end of each month whether Hobbs, Inc. has been paid or not. “We know how hard our guys work to create these homes,” says Hobbs, “and we want them to feel confident that they will receive the money due to them when it is due. I know that this may seem obvious to some, but, unfortunately, too many people in our business try to make money by not paying these guys what they are due in a timely manner.” This has led to great loyalty from the partners.

Recruitment and training

Hobbs, Inc.’s HR strategy focuses on recruiting exactly the right people for the company, from school leavers through to executives and giving them the training and development they need.

“We only recruit and retain the very best”, says Hobbs. “We like self starters that can hit the ground running. We spend a lot of time constantly interviewing and employing various testing processes to make sure that we get good people. Probably less than 25% of the people who go through the first interview even make it to the second. We really want to make sure that we have a great team.”

One of his main goals for the company is to ensure its values are imparted thoroughly, to this generation of employees and beyond. One of the most effective ways that Hobbs, Inc. integrates new employees is to assign them a mentor who must meet with them regularly to discuss important issues to the new employee. The mentors are paid for these efforts and must make sure that they document that they are fulfilling their duties. “This process has worked very well in ensuring that nobody falls through the cracks and gets lost or frustrated,” confirms Hobbs.

Safety

As a professionally run family business, safety is not an option, it is a fundamental requirement for Hobbs, Inc. It takes every precaution to ensure the safety of everyone and every house that it works on.

Its demand for site safety is reflected in a lower insurance expense, resulting in savings that benefit clients. Additionally, Hobbs, Inc.’s safety record has earned recognition from the state of Connecticut, the insurance industry, and the largest construction trade associations.

The company has even presented its ideas before the US Congress.

“We believe safety requires continual emphasis and attention to detail,” says Hobbs. “The pride we take in the structural and aesthetic quality of your home is rivaled only by our insistence that it be constructed safely.”

Hobbs, Inc’s commitment to safety extends from the CEO down to all of its employees and the employers of its subcontractors. This includes the employment of a full time safety officer who visits all of the sites and trains both Hobbs, Inc. and subcontractor employees on how to accomplish their work in a more safe way.

“Our track record and approach to safety means we qualify for lower cost insurance,” Hobbs adds. “We also check our contractors’ and suppliers’ insurance to ensure it is appropriate for the job.”

Hobbs, Inc. has won more than a dozen safety awards and is committed to keeping accidents at the lowest possible levels: “Our accident rate, calculated on the basis of the workers’ compensation modifier, is only 0.67 percent and for a three year stretch recently we had no serious incidents,” confirms Hobbs.

He is not complacent about the company’s achievements in this area, however, as he adds: “This is the construction business and realistically accidents are going to happen from time to time. Zero accidents is the only acceptable goal to strive for when it comes to safety though and this is what we are always going to aim for.”

Diversification

Hobbs, Inc. has experienced the impact of many changes in the last 50 or so years, including crises such as 9/11, market downturns and labor shortages, yet it has continued to thrive.

This is partly due to the company’s traditional values and because it has adapted to the evolving needs and demands of its target markets.

“Our mission has always been to serve our clients for life,” Hobbs explains. “And when we looked at the substantial number of legacy clients on our database a few years ago, we realized there was a lot more we could do.”

While the company was already assisting clients with maintenance and renovation requirements, it was decided these services should be formalized within the company structure and two new divisions were born.

One was named the Personal Estate Management division and, the other, Additions and Renovations. The Personal Estate Management division focuses on maintenance and repair jobs, which Hobbs describes as “the kind of things that keep a home looking its best and maintaining its financial value.” This covers a wide range of needs, externally and internally, from making sure gutters stay clean, through to replacing kitchen flooring.

The Additions and Renovations team handles more complex projects: “Our clients’ needs change over the years, as their lives change and this has an impact on what they want from their home”, he confirms. “This could mean they need an extra bedroom, or might like to add a home theatre, or upgrade their bathroom. By expanding our range of services, we don’t just help clients create their dream home; we make sure it stays that way.”

The future

While Hobbs, Inc. has expanded and diversified over the years there are no plans for further growth at the moment: “Since the economy is in a state of flux and our business is very much driven by the financial markets, our plan is to wait and see before executing any further expansion or recruitment,” says Hobbs. “We are always looking at new opportunities, but will only act on them when we are reasonably sure that we will succeed while not hurting our core business or clients.”

However, he does not foresee any significant changes: “We’ve got a good backlog of business and a nice flow of work coming through,” Hobbs confirms. “We’re estimating that turnover this year will remain at a healthy $100 million.”

In summing up the Hobbs, Inc. approach to the next twelve months, the CEO envisages more of the same: “Our business plan for the year ahead is quite simple and the same as it always has been - to keep doing a superior job for our clients’ construction dollars and to secure more good quality projects.”

For a half century, homeowners who simply want the best have come to count on Hobbs, Inc. Architects who choose the company know that it will faithfully execute their vision – no matter how ambitious. Indeed, Hobbs, Inc. will not just meet expectations, it will exceed them.

“It’s been a huge advantage for our company to have been around for 54 years,” concludes Hobbs, who has transformed an already first-rate outfit into one of the most formidable custom building companies in the country. “We think we’re so different from our competition.”

Nobody’s about to let a little thing like family ruin that.