In StoneTalk Episode 33, Patrick speaks with Kyle Williams of Earth Elements.
Listen to this episode to discover:
- How to grow very, very quickly (hint – go digital)
- How cross-training makes your employees more valuable
- The importance of company culture and how to nurture it
- How to balance a luxury image with a reasonable price
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If you have stories or insights that you’d like to share with other fabricators, please reach out to Patrick.
Transcript
Patrick: Welcome to StoneTalk, the podcast for countertop fabricators. Brought to you by Moraware, the makers of JobTracker scheduling software and CounterGo estimating software for countertop fabricators. I’m your host, Patrick Foley.
Today I’m speaking with Kyle Williams of Earth Elements Design Center in Bozeman, Montana. Let’s give him a call.
Kyle: This is Kyle.
Patrick: Hey Kyle, Patrick from Moraware. How are you?
Kyle: Good, Patrick. How are you?
Patrick: Good. Is this still an okay time to chat?
Kyle: Perfect.
Patrick: Awesome. Well, let’s dive in then. Could you tell me a little bit about Earth Elements? What sets you apart from other countertop fabricators?
Kyle: Well, Earth Elements as a fabrication company is relatively new. We’ve been fabricating for about 14 months.
Patrick: Oh, wow.
Kyle: Yeah.
Patrick: You guys are pretty big for 14 months old.
Kyle: Yeah, exactly.
Patrick: Wow.
Kyle: State of the art facility, you know. Brand new part equipment. Overhead cranes. We’ve got about 7000 to 8000 square feet of fabrication space and we’ve really just kind of entered the market in a big way. What we’re doing differently I guess from our competition is really catering to the market.
Patrick: Okay.
Kyle: Its a very high-end market, real fast-paced and a lot of our competition is just kind of maxed out in terms of their capacity, so their unable to cater to the market and that’s been probably our biggest niche is with the team that we’ve put together, and the equipment and the facility that we’re able to react quickly to contractors when they have a high demand, and we’re just gobbling up market share as a result.
Patrick: That’s pretty impressive. Now looking at your website it looks like you do more than just countertops, and it looks like you have quite a stunning showroom. Did that exist before doing countertops? Did Earth Elements exist in some fashion before starting your countertop business or did everything just start 14 months ago?
Kyle: That’s correct. Earth Elements began as a show room. You know and I’m kind of speaking for the owner here. I’ve only been with the company about a year and the company is probably four years old at this point.
Patrick: Jeez, only four years. Again, that’s very impressive.
Kyle: Yeah, very rapid growth over four years. So the main part of our business is the design center and at the design center it’s like 40,000 square feet. Again, its got a state of the art cabinet facility, probably 10,000 square feet of cabinet fabrication. They sell hardwood floors, hardware, plumbing fixtures, lighting fixtures, everything. It’s a a complete design center and it’s primarily high-end stuff, kind of mid-range. For example, in plumbing we certainly sell Kohler, but we sell everything under the sun above that. So that’s really the meat of our business. We’re going after full developments, full projects and the granite fabrication is just one part of what we do.
Patrick: Got it. You mentioned contractors, are most of your customers contractors or do you get a lot of walk-in homeowners as well?
Kyle: Most of our customers are developers and contractors, but we certainly cater to the walk-in traffic and the local, smaller builders that are doing in-fill projects or whatever. I mean, we don’t shy away from anything.
Patrick: Nice. You said you’ve been there about a year. What’s your role?
Kyle: I’ve been here a year. My role is the operations manager of the fabrication facility. They hired me. I come to the table with about 15 years experience in the granite industry and a lot of experience in automation. You know, running and programming saw jets, CNCs, all of that sort of stuff. I have a high aptitude for that. That was basically what attracted me to them and them to me.
Patrick: Nice, and so how many people do you have on the fabrication team itself? If you’re the operations manager, how many people do
you consider part of operations approximately?
Kyle: We’ve got 17 people in fabrication.
Patrick: Okay, so let me ask you some operational questions. Now you didn’t have to go through a transition the way some fabricators do. Some fabricators go through a transition from hand-cutting to digital which can be painful. You started digital right from the beginning it sounds like, right?
Kyle: We started digital right from the beginning, and I didn’t come on right at the beginning. I came on about four to six months into operation, and the crew that was here had no experience with digital fabrication. They had primarily all come from one other company that kind of defected over and it was a hand-fab shop.
Patrick: And are those people still around or did the transition…?
Kyle: They’re still here.
Patrick: Okay. Cool.
Kyle: They’re still here. They’re still very key people in the company. One of them I basically share the operations manager role with. I’m more in charge of the shop, and he’s more in charge in the field, but we’re very much equals in that regard. The bottom line, to answer your question is that we have not gone through the transition traditionally the way that a lot of companies do, but our team is so diverse and has so much experience that we did go through the transition but it was a lot shorter. We were able to pull on our experience, whereas maybe some fabricators I’ve seen them take a year, or two years, to make it through the transition from hand-fab to digital. You know, we had a couple months that were just grueling. Ugly. You know, just mistakes every single day.
Patrick: Wow.
Kyle: But it was a two month time frame. Everybody was able to learn the lessons in that time period and move through it to where we are today where if you walk in here it looks like any other shop in the country. Looks like we’ve been doing this for 25 years.
Patrick: And do you do a lot of cross-training or are the individual skills more specialized? So do the polishes polish and the CNC operators operate CNCs or do you have the same people kind of cross roles more?
Kyle: We do do a kind of cross-training. I don’t like anybody to get comfortable in their position and that’s part of how we’ve grown so fast in such a short amount of time. I mean, that’s just the culture here. Everybody welcomes the challenge. Everybody’s been up for the challenge. I put a guy in one position. He thinks he’s going to be running the CNCs, next thing he knows he’s running the CNC, programming the CNC, learning [inaudible 00:07:29], learning all kinds of stuff. You know, able to run the fusion. Both my operators can run both machines, program both machines, and now we’re also bringing up junior operators underneath them looking towards running a night shift at some point in time. You know, so we’re constantly cross-training and challenging the employees.
Patrick: Very good, and obviously the goal is to run smoothly everyday and you said you went through a couple months where you rarely had a smooth day. Tell me about a day that doesn’t go smoothly now. What are the sorts of problems you might have or what challenges do you experience occasionally these days and how do you learn from that and adjust and try to prevent it from happening next time?
Kyle: It is a little bit of a false security coming so far so fast, because I still have guys that are learning every single day. But the mistakes that show up now are like maybe a rod was set a little too deep on a piece of marble and that could be [inaudible 00:08:37]. Maybe that’s happened once every three months where a new guy did something and he just didn’t know and he made a mistake, or a piece of backsplash breaks and we’ve got to recut another one. But these are the typical things you’d see in any shop. That’s what we’re dealing with now. We’re not… There was a time when the mistake was, “Oh my gosh, we offset the sink the wrong direction. Now the [inaudible 00:09:02] too big.” Okay, start over. We had another project three of four months ago where every single piece we encountered a problem. It was a quartz project, [inaudible 00:09:15] and one big piece had a scratch on it so a guy decides to try to top polish it. You know, ruins the whole piece. Recut that one. The next item we had a center piece we had cut and we decided to put it face down on the saw jet. We cut it. The guy goes over there to take it off and doesn’t look at it and just slides it all the way across the table. You know what I mean? Then it was like, “Oh my gosh, you’ve got to be kidding me. How is this happening?” You know? And that’s what I mean when I say we’ve come through that transition. It was just ugly, stupid mistakes there for a short period of time and I really attribute it more to…it’s not the skill sets, the skill sets have improved, but it’s more about the culture of the company and us coming together as a team that really got us out of that rut and really being successful today.
Patrick: Well, that’s pretty cool. So did you have to do anything to make individuals on the team care about the overall result or did you get lucky with that culture or was there something you or someone in the company did to cultivate the culture of people caring about the end result?
Kyle: Yeah, I don’t think you ever get lucky in that respect. We were very deliberate about it. When we come together, this is the first time I’ve grown this quickly with a company, but when we came together it was a lot of personalities, a lot of ego, a lot of experience, and all of those are good things. It was just a matter of learning how to work together. And I definitely remember a point in time when Josh, my other co-manager, we just sat down and we said, “You know, we’ve got to change the culture.” Now we’ve done such a great job cross-training and getting guys going in the right direction as far as their skill sets, but now it’s all about the culture. And this was probably, you know, four or five months ago and since that time we’ve been very deliberate about it. Doing things like developing an on-boarding program where the employees are engaged and basically engaging with new employees, not only on the shop floor but taking time to do company lunches and doing stuff that I think engage new employees or even certain employees making a point to engage that employee outside of work. Just so that we build a team atmosphere. People notice that they’re trusted, that their opinions count, all of that sort of stuff that really cultivates a good team.
Patrick: That gives me an idea. It seems like there would be challenges cross-training across field and fab, so having fabricators go out in the field to actually learn how to be an installer or templater or might not be cost effective and vice versa, but do you have any, for lack of a better word, exchange program where you can make sure that your field crew sees what the fabrication team goes through and vice versa? That the fabrication team sometimes goes out with the field crew and sees the result of perfect work versus imperfect work, for example.
Kyle: Right. You know, that’s a tough one because you have to pay attention to what your employees want. I don’t ever try to push somebody into a position that they’re not interested in doing, but at the same time I do want them to get feedback and see firsthand what’s going on so that, you know, just like you’re saying, there’s certain things that we can all do that make the baton that we hand off a little more comfortable.
Patrick: Right.
Kyle: So and part of the cross-training for us, we certainly have had the luxury over the last year of being relatively slow and building up to where we are right now and that’s afforded us the opportunity to take guys that might have just been standing around and saying, “Okay, let’s go over here so that you can see what’s going on with this.” And really it was an incredible opportunity that we had there, because I don’t think we’d be where we are right now if we had just tried to quantum leap to this volume of business that we’re at right now. But the ownership understood that. They gave us time, but really I knew from the time I came on how much time I had before I needed to be at a certain square feet per day, for example, based on what they thought the market was and what they wanted to achieve. So, back to the question about did we get lucky? In a way we kind of did. We got lucky that we have such great people, but we’ve worked hard at it and again, we’ve been very deliberate about it.
Patrick: Is square feet the way you think about capacity? So to prevent overloading or underloading your team, do you think in terms of trying to hit a certain square feet number a day or do you think about money or do you think about both?
Kyle: We think about both.
Patrick: Okay.
Kyle: We certainly think about both. I would say the primary driver is revenue and profitability always, but I try to talk about production with my guys in terms of square foot because they can understand that and you know, they can see a piece on their table and look at the square footage and, you know, know what they did in a day. And we’re working towards a program where we will have incentives for people on a square footage basis.
Patrick: Individual incentives or team incentives?
Kyle: Individual and team incentives.
Patrick: Oh, interesting. Very cool. You know, looking at your website here, it’s a simple thing but something I always like, I see that the pictures of your team show a lot of people wearing a company t-shirt or a jacket. I just always think that looks nice especially when customers can see employees. Is that something, do people wear company clothing on a daily or almost-daily basis and is that something that customers in some fashion, even if it’s just passing, do your customers see the people in your fabrication shop?
Kyle: I would say, I mean, the answer is yes, 100%. Nearly 100% of everyone’s wearing branded clothing all of the time. All of our vehicles have full-vehicle wraps, from the sales vehicles to the install vehicles to the slab delivery vehicles to the cabinet delivery vehicles. Every trailer that we have is fully wrapped and branded, so not only do people, our customers, notice our employees but they notice our brand in a big, big, big way.
Patrick: It’s a simple thing, but it seems to me it’s a point that some people miss, the opportunity. There’s always an opportunity to brand your company. As you said, vehicles are another great one, but t-shirts are so cheap and just putting people in company clothing, it just looks better and it costs next to nothing when you really think about it.
Kyle: Absolutely, yes. We certainly spare no expense, and again, that’s a key factor in our growth as I’m sure you [inaudible 00:16:44].
Patrick: Right, and you also have a great website. You clearly didn’t spare expense on your approach to marketing and branding. So earthelements.com, a site worth looking at as a, what seems to me, as a customer is a pretty impressive website for a design center and fabricator.
Kyle: Right.
Patrick: Nice job.
Kyle: It’s interesting, the feedback that I hear from our customers most of the time is that they’re surprised by how inexpensive that we are and when I filter that, what I think they’re saying is that because of our branding and because of the image that we’ve created that it’s not necessarily that we’re less expensive than our competitors, it’s just that we’re less expensive than the image that we’ve created, which is really cool.
Patrick: That is kind of cool. So I think it would be a mistake if you were less expensive than your competitors, but it is an interesting needle to thread to try to establish a really luxury image and then not be so expensive to pleasantly surprise people when they see the estimate and say, “Oh, I can afford that after all.” That could be a very interesting niche to hit.
Kyle: Exactly, I know that’s a key part of marketing to this area is that that luxury tends to feel exclusive to certain customers and our image has been much more inclusive. Again, I think that’s a big part of why we’ve been so successful.
Patrick: Yeah, and that is a difference. I was trying to put my hand on the branding aspect of luxury and it is exclusivity. Some customers want exclusivity and they want it to be expensive. People, celebrities, there’s an element that if I can afford it, they don’t want it, right? So there is a market for exclusivity, but there is a probably larger market for people who want high quality, want nice things, but don’t consider themselves part of the upper echelon either. There’s a place for both and again, it’s a bit of a difficult needle to thread I think sometimes.
Kyle: Yeah, there is a place for both. Fortunately for us, it hasn’t been either/or. We’ve been able to capitalize on both. I don’t know if that’s luck or if it’s the way that we’ve branded ourselves or just time that the consumers have had to come experience us and then the feedback getting out to the market. You know, I’m sure it’s a number of things but we’re definitely doing it right.
Patrick: Good. I suspect there are significant geographical differences there, so in Bozeman, I presume it would be very different from Los Angeles, for example. I just assume there are enormous differences based on how dense your population is and the overall wealth of the area I think would have a significant impact on the choices there.
Kyle: We might have to save that topic for another podcast, Patrick, but I’ve worked in both markets.
Patrick: Have you really? Lucky guess then there. So, yeah, we’ll save that for another podcast or perhaps over a beer sometime.
Kyle: Yeah, there we go.
Patrick: So let’s talk magic wand. If you could just change one thing to make your job or your team’s job easier, what would it be? Is there something that you think about in your daily work that “Ah, I wish this could be easier but I don’t know how to make it easier. This is just hard.” Is there anything like that that you notice or is at this point everything is just running so smoothly you don’t really need a magic wand?
Kyle: Oh, we’re never that comfortable to where we just are going to be happy with how things are running, but we’re at the same time, you know again, now we’re to this point where we’re dealing with the same problems that I think every fab shop deals with. Number one, there’s just not enough talented people out there to go around in the industry and certainly not in this market. There’s such a labor demand in this market that now we’re to that point where we’re kind of scratching our heads, you know. How do we scale beyond this point? How do we get to the next level? And I think that’s good and natural for the team that we have that we have such depth of experience that we’ve been able to get to this point really quickly and now we get to use our heads and now we’re out of our comfort zone and challenged a little bit to get to the next level. But again, I think that that’s very common. Companies in this industry struggle with all of the time.
Patrick: I can confirm that, yeah.
Kyle: Yeah. And then the other thing I would say is just on a systems level, again because we’re such a young company, you know, communication through systems is still a challenge. We use Moraware and we use it very well but we’re probably still only using, you know, maybe 50% to 60% of its potential and we have other systems that that’s a similar case. And I think that it’s just a matter of us, you know, really deciding…we’re still in that area where we’re deciding whose role is this to do this and whose job is it to make this and whose job is it to look over this detail and things like that. I don’t think there’s a magic wand is not going to solve that. That’s the kind of stuff that you solve from developing a relationship and working together over a period of time and then slowly those things become company operating procedures and things. And maybe the magic wand is a good analogy because that’s the kind of stuff that you wish you could get through so fast but you have to remind yourself that it’s a journey, you know.
Patrick: I agree and from a systems perspective, there are plenty of things we don’t do as well. You know, customers ask us to integrate more systems together. So you mention you use Slabsmith. There’s a third-party company, a couple of them actually, DataBridge Integrations and Fabricator’s Choice have both built tools to integrate Slabsmith with Moraware. There are multiple opportunities like that and again, looking at your website which is so nice, if I were a customer, I would expect to be able to interact with you online in deep ways. Well, we don’t provide anything in that regard for homeowners right now. We do some things for your repeat customers, you know, your contractors and developers, but we don’t have a customer portal yet or anything where you can text your customers or email them directly from JobTracker. People are starting to ask for that, but we don’t even know what that means yet so our magic wand is dry there as well. We know that people want some things, it’s just it’s not clear to us exactly what that is or how to get from point A to point B yet. But definitely, there are many system opportunities to make things better.
Kyle: Right, right.
Patrick: Well in lieu of a magic wand, if you look ahead two or three years from now, what do you think will be different about the company? Do you think you’ll have twice as many employees in fabrication or do you think you’ll have outgrown your huge shop yet? Approximately where do you think you’re going to be in a couple years?
Kyle: Well, there’s absolutely no limit to, at least from our perspective right now, there’s really no limit to how much we could grow. I would say maybe to be a little more realistic, we could certainly grow two to three times our capacity right now and still not have the majority of the market so if that’s what we think about everyday when we come to work and when I talk about how to get to the next level. First of all is identifying that level. Where are we trying to get? And right now we’re talking and looking at how we double our capacity? And so we look at the things that are bottlenecks. Obviously, you know, where do we have to start and train and is it adding equipment, is it adding square footage to the shop?
Patrick: Adding shifts?
Kyle: Is it moving the Night shift? I mean, everything is on the table and part of what ends up happening is kind of going to be determined by the team that we’re able to put together and the skill sets that they bring so we try to be flexible in terms of what it means to get to where we’re trying to go, but there’s no doubt in our minds that in two to three years that we should be doing two to three times the amount of countertops on a daily basis that we’re doing right now and we’ll certainly have to add square footage to the facility and add machinery and add personnel and develop tighter systems and the whole thing. I mean, it’s going to be a constant evolution and the second that we feel comfortable, we’re going to fail sort of thing.
Patrick: That’s very interesting. So put a little note in your head, nothing like 100% growth. So when you cross that 100%, when you’ve doubled where you are today, drop me a note and I’ll have to get you back on and see what has changed in such a short time that you’re planning to double your business. As you said, it’s going to be an interesting journey and it’ll be interesting to see how you deal with growing so fast.
Kyle: Definitely, that sounds good.
Patrick: So, any last thoughts you want to share with other fabricators?
Kyle: I would just say, from a personal note, I’ve been in this industry a long time and I know how difficult it is to be a great fabricator. There’s a lot of good fabricators out there. To be a great fabricator it really takes a lot more and I think that everybody out there that considers themselves a great fabricator knows that and I would just say, keep doing what you’re doing because I really love where the industry is headed. I think that the people that make it through the next 10 years and come out on top and really become manufacturers rather than fabricators, you know, really embrace the digital revolution. It’s going to be a great journey. People are going to make money. You know, I’ve been doing this for almost 20 years and there are a lot of guys out there been doing it longer than me, but I’ve been doing it long enough to remember where I started and how much work it was to get to where I am now and there’s just so many people out there that share that experience, you know. And kudos to everyone for creating this industry and making it as great as it is.
Patrick: That’ll work, I agree, it’s an awesome industry and it’s only going to continue to improve and progress so anyone who wants to be a part of that, keep pushing it forward. Great thoughts. Thank you so much, Kyle. I really appreciate you taking the time to talk to us and I wish you continued success and I look forward to talking to you again soon.
Kyle: You’r very welcome, and I appreciate it. Take care.
Patrick: You, too. Take care. Bye.
Thanks for listening to StoneTalk, the podcast for countertop fabricators. If you liked this episode, be sure to visit stonetalk.org or subscribe to StoneTalk in iTunes for more. Visit the StoneTalk show Facebook page to join in the conversation, and follow @stonetalkshow on Twitter. StoneTalk is brought to you by Moraware, makers of JobTracker scheduling software and CounterGo estimating software for countertop fabricators. I’m your host, Patrick Foley, and I look forward to spending time with you again on the next episode of StoneTalk.
