Growth through Humility | Timberlane Inc COO, Russell Andersen (Podcast 216 )

Get comfortable with not being the smartest guy in the room because at 22, all you did was run your mouth to try to impress people that you were the smartest and you never were. And certainly being elevated to this role and attending a live event at COO alliance, even the once a month over zoom. A lot of smart people that know a hell of a lot more than I do and I can learn from them. Yes.

Today is COO alliance member and the COO of Timberlane, Russ Anderson. Russ was originally the VP of Sales for Timberlane from May 2009 until September 2020 when he was promoted to the COO of the company. Prior to that, Russ was the principal to Nolan Anderson Homes, a real estate company, from 2004 to 2008. There, he led the charge in purchasing single family properties for rehab and resale, as well as multifamily properties to create his rental portfolio. Russ is motivated, experienced and results oriented. With an established success in leadership, operations, sales and coaching. Rush considers himself a natural servant leader, equally adept at leading from the front to teach, motivate and inspire. Rush enjoys spending time with his wife, Lisa, his wife of 32 years, and their dogs Miles. Gracie also enjoys traveling, boxing and reading. Russ, welcome to the Second Command podcast.

Cameron, thanks very much for having me.

I didn't know you were into boxing. That's kind of random. Pretty cool.

Well, into boxing you're getting beat up two different things. It's just a classier way of, you know, it's. It's a way of it getting rid of pent up frustration. So once a week I go up against younger guys and I get very humbled.

So is it the fitness side of things that you're into there?

Yeah. Right. So my wife's been a fitness trainer for over 20 years. She's pushing 60. Doesn't look anything like it. And for me, being short and fat isn't good for business. So I'm in it somewhat reluctantly, but I know as I get older that's certainly going to pay off.

Nice. I love it. Well, welcome to the podcast. Thank you for doing this. Tell us a little bit about Timberland, just so we kind of know the story and what the company is and what you guys focus on, and then we'll go back into some of your skills and how you're building it.

Sure, great question. So CEO and founder Rick Skidmore started back in 1995. This was really born out of an experience he had. He bought an old house in a local town. He was rehabbing it and he Wanted to redo the exterior window shutters and he couldn't find a good experience going to lumber yards, building supply places and the like. So he decided he was going to build his own. Luckily for him, his father worked as a machinist, so they knew their way around woodworking equipment. He built his own from that. He decided, you know what, I wonder if there's a way that this would have a mass appeal. So he did something that was revolutionary and somewhat disruptive back in the late 90s. And he went direct to consumer, so through at that time, magazine ads and certainly direct mailing. Created a following, started the business from there, grew it till the just before the recession, built Timberlane up to about 12 million. Survived the recession where a whole lot of products manufacturers didn't, then came out of the recession and built the business back up to what it is today. And we're currently striving to hit our target of 15 million.

What's the core of the. Is it just shutters?

Is that really like, is that a thing? Yeah, right. Yeah. So, and that's funny because that's what I said to Rick when I originally met him. Like, that's actually a business. And turns out it really is. So yes, the core business is just exterior shutters. We've ventured into handcrafted higher end custom garage doors as well. Of late we're using that as a bolt on growth strategy. But yeah, exterior shutters live and live well, especially in the northeast of the country where the architecture makes sense for the type of product we built.

Interesting. Yeah, you do have total geographic differences as well. Now do you only sell into the US markets as well? Are you global?

Yeah, great question. So now we do quite a bit up in Canada, we'll do some down in South America and certainly we own the Caribbean with the Bahamas style shutters.

Oh you do? Okay, so what areas of the Caribbean do you sell into?

So you know the Bahama, Bermuda, we're currently doing a large project on Antigua, so you know, pretty much the islands that make up the Caribbean.

And are you selling direct to the end user? Are you selling through retail? Are you selling to the installers, your contractors? Who are your customers?

Yeah, yeah, great question. So at the end of the day, it truly is. The end user now will interface with a homeowner if they're so inclined to want to gc the entire project and we'll walk them through that. But ultimately majority of our business is made up of the trades. So home builders, contractors, renovators, but knowing that ultimately they're serving their customer, who is ultimately the homeowner.

Okay. Yeah. I can't see, like, Mr. And Mrs. Smith deciding to go online and buy your shutters and then figure out somebody to install them. Right you are. So you're a B2B. Or are you selling to them and then they're telling the contractor, hey, these are the ones we want.

Yeah. So all the above. So we'll have people that we market to that come to us, get interested in the brand, understand the value proposition, and they will either a, come directly to us to go through the entire process, and we'll help them with measurement, we'll manufacture, and then we'll even hook them up with an installer. So we provide the installation, or at least we subcontract that out to kind of get them to hit the easy button if they want to gc it on their own. Or we get them interested in the product and then they ultimately tell their contractor, I want Timberlane shutters. Then that contractor will call us and we'll deal with them direct.

All right, So I remember this was about eight months ago, which is extraordinary, that time is going by so quickly. But it was in September. I was in Italy, and I remember sending Rick, your CEO, an email saying, dude, there's freaking shutters everywhere here. Like, this place is shutter heaven. And he goes, yeah, but they all buy like cheap shutters or something. I'm like, no, but they all need to be replaced. Is it the kind of thing like the. There's that old story of the two guys that work for Nike and they both go over to Africa and the one guy calls back, he goes, put all of our marketing into Africa. Nobody's wearing shoes. And the other executive calls back, he goes, don't spend any money in Africa. Nobody wears shoes here. Is that kind of like some of these markets where they just won't spend the money and they just put slap something up or walk me through the differences.

Yeah. So I think shutters anymore, at least within the US have become more fashion than function. Right back when they original inception, shutters were the original storm windows. So if you think about early settlers came and at times when they built their houses out of fieldstone, they didn't even have glass for windows. So they would use timbers to build shutters, and they would build the panel style shutters on the first floor so that they could close them and have some sort of protection. And then the louvered style or the slatted type as some people call them, go on the second floor. So where you Sleep. So you can close those and still have the air circulation, but weather won't come in. So there was function back in early America. Certainly in Europe, there's still very much more function than fashion. And you're right. But I think if you really take a look at those Italian shutters, they're beat, but I'll bet you they're sound because the construction in the wood that they used way back then is just almost everlasting.

Well, that's, that's what. It's weird. Like normally I don't go in on a podcast to talk so deeply about the product and we'll switch gears into the operations of the business in a second. But that was something that kind of grabbed me. So I'm also resident of Barbados and I see a bunch down there for the storm. And you're right, it is all function. Like in North America, the shutters, you couldn't even close them over the whole windows. It's like these two little things, but they wouldn't cover any of the window itself. And in Italy, they absolutely are functional and they absolutely look like they've been there for 80 years and they absolutely look like they're well made. So why can't you go back into those markets and replace them all? Is that not coming?

So European market, the cost of getting product across the pond can be prohibitively expensive. And they have folks that do their localized manufacturing there. If you think for the U.S. right. We've been at this 25 years and it's a double edged sword. Our value proposition is we only build from the finest materials. And so when we started, that was western red cedar. Since then it's kind of migrated away and it's more of the mahogany styles. So they're very expensive, they're exotics, but they're also extremely long lasting and well performing. So. So we built shutters for folks 25 years ago who send us pictures. We have this amazing little cult following. Look how great my shutters look. And so you go, that was a customer, a transaction. Can't get anything more out of them because those shutters just look really good. So then you have to constantly find new and there's always, there's always an old residence that's getting turned into a museum. I'm thinking of Old Westbury out on Long Island. That was a really great old residence that they turned into a museum. They had 98 pair of original shutters that were just really, really in bad shape. They brought them to us. We did take offs, we made exact replications that's the kind of thing that we really excel at. So there's still that around. But then as you move further west, I think to your point, it's kind of disparate. There's pockets where eastern transplants have settled somewhere that the architecture is such that they can utilize my product. But my product doesn't make sense on an Adobe structure in New Mexico, right?

No, not at all. So when we were building one, 800, got junk. And then even prior to that, when I was building College Pro Painters, both of them had very different, but similar in some ways, markets, a service market, contractor market. And we used to go out and try to figure out what our market potential was and. And what our saturation point was in a market. You know, I knew that at College Pro Painters, the most we could ever reasonably expect to do in a zip code would be 30% of that summer's available house painting. You know, if we were doing more than that, we were probably overspending on marketing. It was just too hard to get that we were only there for four months. You know, like it was too hard to get any more, but. Or we weren't charging enough. So we tried to stay around the kind of 18 to 22% of a market would be our optimal. How do you. How do you know what your market potential is? And then how do you decide where to shift your marketing spend or your sales focus? You know, are you. Are you getting sold out in Boston until a certain point, or is it enough new bit, you know, new builds that are happening? How do you understand what your market potential is in your marketing? Can you walk us through some of those. The thoughts, your playbooks?

Yeah, yeah, that's. That's really great question. It's really the core of our strategy, right. Because we don't have outbound lead gen. Our sales guys aren't cold callers. We don't take the white pages and call Mrs. Johnson and say, hi, you own a home. Does it have windows? Do you want shutters? That's really ineffective. So we create the demand and the interest, and we get people to come to our website. And then from a marketing spend perspective, for us, we really target the upper end of the market. The shutter market is vast. There's a whole lot of volume that occurs below our price point. If you would, our target audience. So we're very specific in who we target to draw interest from. Right. I'd say be the 1 percenters. Right. But we have to have an average house value of over a million bucks. We have to have average household income over a certain threshold. Right. We have to have square footage over a certain amount. And we use that in our target marketing approach to try to get the type of customers that understand that our quality and value proposition is such that, yep, you can go spend 50 bucks on a pair of shutters, but you can also go spend 1500 bucks, and we're going to tell you why. So that's really how we target to whom we're going to solicit.

Yep. How do you know how much of a market is available for you? How do you know how much you know when you're kind of getting sold out in a market and you should shift to a new city or a new region, or are you just selling to everywhere as hard as you can?

Right. So it's just pedal to the metal in all markets within those filtered target audiences that I just spoke to. But then what we try to do is we don't necessarily have a recurring revenue model.

Right.

Because as I mentioned, we sell shutters of good quality, so they really kind of last. There isn't much to do with them after that. So we take a look at the product and we try to figure out how to repurpose it. And then we'll do little ninja style marketing campaigns. So, for instance, you know, a few thin shutters hinged together to make a sogi screen, you know, a room divider for. So you make a couple of designs like that, then you go out and solicit market to interior designers. We found an interesting little niche a few years ago. Outside shower surrounds are really just four really large louvered shutter panels. So we took those, you know, marketed it to individuals that were making those type of shower surrounds and found a nice little niche audience. So what we do is niche, and then it kind of runs its course based on those geographic boundaries. But overall, there's always going to be some old structure that needs new, and there's going to be new construction that as part of the design is going to have some type of traditional accent like shutters.

And I would think that new construction is new construction. What, 60% of your business, 70% of your business, do you know roughly what your split might be?

Yeah. No. Isn't that interesting? It's quite the opposite. So one thing about new construction, everybody's familiar with the modern farmhouse design. Now in the old days, the old farmhouses, we loved them. They were stone, maybe some siding, you know, and slate roof. And they utilize shutters whether it was function or fashion, depending on, you know, at the time. Now, the modern farmhouse is really sleek, right. With the black trimmed aluminum windows and they're not putting anything on, on the outside. So we are fighting the fact that modern design isn't being friendly necessarily to the type of product that we manufacture.

Whoa. Crazy. So that's a really interesting. So we need to get the designs changing. We need to get the.

Yeah.

Do you guys push on PR at all? Do you push on that kind of marketing? Do you push for press coverage in, you know, regional, local. Not some. And even in the trades, like, do you push to get some of that exposure?

Right. So great question. In short, my CEO Rick Skidmore has done a series of guest spots on HGTV type shows. We have that footage and we'll slice and dice that and then we'll send out mass marketing announcements to that to draw people to it so they can kind of just more get awareness of the product and our company rather than a sales pitch. And then just recently, thanks to you and the great content at COO alliance, when I got back from the live event, which was fabulous, I just googled building products podcasts and I got a half dozen and I just did a form kind of, hey man, would you be interested in speaking to us? And it would be all things shutters. And I gave him a list of four or five things that we could speak to and three of them got back to me and said, absolutely, be interested. So I forwarded those on the Rick Rick's in the process of getting geared up to sit down and have those podcasts.

Boom.

Once we get those, we'll get the content and we'll use that to go out and just try to promote the brand and the product.

Yep. And I'll tell you, if you do that same kind of outreach or maybe you're not like, so when Brian and I built 1-800-got junk, we spent 5% of our week, which was two hours a week, 5% of our week, phoning the media. We did it every week for about four months and then we finally hired a full time PR person because we realized it was working. And what if we had somebody doing it 50 hours a week instead of Brian and I, you know, who were supposed to be CEO and coo. But imagine if you spent two hours a week, every week for the next six weeks or eight weeks phoning all the magazines, like all the decorating magazine journalists or writers or photographers. Like if you phoned all the photo and all the photographers names are in those trade journals and you phoned a bunch of the home and garden newspaper writers and like you phone newspaper and print and ezine and magazine and online bloggers and online, anything with visual. And if you just spent 5% of your week for six to eight weeks phoning all those outlets, because then you're right, you understand it. Most companies don't. Most companies think, oh, if I'm on that podcast, it'll change my business. No, no. Once you have that episode, can you share it five times on Facebook, five times on LinkedIn, slice and dice it, repackage it. Right. Put it up as captions and Instagram photos, etc. I think you guys could be onto something very big to get the press and then use that press for sure. Plus pushing that out to the contractors and the remodelers and the business audience that they have no idea how easy it is to get press. But if all of a sudden you're everywhere, they want to work with you. Right?

Yeah, I love that. I think activity breeds activity, right. So we actually did something like this and this is maybe just an interesting side Note. Back in 2020, right when the pandemic hit, we shut down for a week and we thought were a non essential product in the sense of the overall building. Right. You don't need shutters to close on a house or to sell a house. And we didn't know if anybody was going to buy a shutter again. So what we did was we pivoted. And based on current events at that time, the lack of ppe, we have all this amazing equipment that can cut and do pretty much everything. And we had a whole lot of people that were out of work and so we utilized the press and we had our people and culture specialist at Department of one, but she's just amazing, reach out to all the local press. And we actually got a lot of local airtime and a little bit of regional airtime because we took, I think it was 58 individuals from the unemployment line. We ran three shifts building face shields. We created it, you know, hashtag fight for the frontline. And then we switched into desk shields. Right. Again, we just bought all this plexiglass, we had all this cutting equipment, mobilized the sales team. Where do we focus on hospitals and hospital buying groups, medical device companies. And then had the marketing company put together a website and that's what kept us going through all the pandemic up until towards the end of last year. We were nimble enough to pivot, we're smart enough to leverage the press and we did well and it kept a whole lot of people working Yeah, I.

Think it could be really, really intriguing to see. I really think it could be intriguing to see what you guys could utilize with the press. So go back to the earlier days for me and talk to us about direct mail and what was working with direct mail. And do you still use direct mail in the business today or why you moved away from it if you did?

Yeah. So direct mail by far was number two to magazine ad placement. And if you're old enough to remember that there was a postcard on the back of a magazine, you grip that out, fill in the little checkbox for the advertiser that you're interested in. And then we would get those as leads inside leads, inside sales team would then follow up on those. And that was supported with direct mail. And that was the go to really until the advent of the Internet. And I would say the first thing that actually went was direct mail. So the budget for that went down significantly because Rick saw the power of the Internet and the reach that it could obtain. And then it's been Internet ever since with some magazine ad placements. Recently we've got a new director of marketing and this guy's really a multi tactic guy, comes from the agency world, so really, really smart guy. And he believes in it, in a tactical approach. So basically what we're doing now is I call it the old real the old which put a shutters on the house, right? We're going three blocks to the left, three to the right, three behind, three ahead. And we're just being very targeted. So the budget is low, the message is very specific and they have something that they can go look at right in their own backyard. And we're actually finding that is gaining us some good interaction.

I'll tell you. At college Pro Painters we called that the bingo. Marketing bingo. I taught everyone at 1-800-got-JUNK. The same thing that when you do a job, you put a sign up and then you put flyers out or door hangers out on five houses on each side of the one you're doing and the seven or eight houses across the street because everybody sees you and you just need to market to those people, not the whole damn neighborhood. But it's amazing how our team gets lazy or they find excuses. So then it's like, okay, if my 42 year old installers are too lazy to put out flyers, I only have two paths. I mean they're going to put a promo code on there so that they get a spiff. If we get a client, they might get 50 bucks. So now it's like, okay, I'll put up my flyers, I might make money. Or I'm going to hire a 16 year old kid and they're going to drive around the city once a week and put out flyers around all the jobs that we just did. Because a 16 year old love to have that kind of a job.

Like we call that the scrappy approach. Right. And it works.

But there's flyers going out and what do you guys do? You actually direct mail them?

Yeah, so they're direct mail and only it was. You always have to talk pre and post pandemic. So pre pandemic we did that. Rick's kid was a kid graduated high school. He and his friends were looking for something to do. We loaded them up with flyers and we sent them out in the four. We got four pretty historic towns around here just outside of Philadelphia, just ripe for what it is we do. And they were just stuff indoors and got great traction with it.

Would you ever go back to doing any direct mail at all?

I believe for right now, the golden triangle or the bingo approach is suiting us. We're focusing efforts more so on the new vertical with garage doors and trying to gain a foothold and some traction in that vertical. And so we're really trying to use all of our digital marketing resources towards getting that launched and starting to understand the numbers there to figure out how to scale that.

Let's slide a little bit into kind of the operations in the factory floor a little bit. How many. First off, how many people have you got at Timberlane?

So depending on seasonality. Right. We get busier in the warmer months and then it kind of cools off after Thanksgiving. We'll run between 45 and 65 for our headcount.

Okay. And on the factory floor, I mean, that's got to be a tough gig, right? These are people that have to come to the office. These are people that, you know, they're typically the blue collar. You know, they're not minimum wage though. Are you paying them well or do you have to pay them better than you used to or where. Where are they on the pay side of things?

Yeah, so we always paid well. That's one thing about my CEO. He wanted to make sure that there were a lot of reasons to come here and factory jobs become less desirable maybe, you know, for the up and comers. And so we've always paid well. We reset as needed across the board. So, yeah, I think we're pretty exceptional on the pay scale.

Are you finding that, you know, this whole. The great resignation Which I think is amazing, by the way. I think it's. It's about darn time that, you know, employees quit the crappy company jobs that they were doing and they went to go work for a great company. Are you seeing any impact of that whole great resignation, or are you seeing people deciding to come and work with you instead of with others? Where are you guys there?

Yeah. So the labor market's tight. I think everybody knows that. It's certainly tight in manufacturing and production. So the great resignation has not infested our ranks. And for people who maybe aren't exposed to a mature manufacturing business. Right. We're a big wood shop. That's what we are. And they may think hot, sweaty, dirty, dusty and the like. And working on the plant floor. Yeah. You know, has some aspects of that. You know, in the summer months, it can get a little hot. But I'd have to just, hands down, give it to our people and culture specialists who make sure everybody's engaged, that we have routine events that not only bring in the people that have gone or have worked remote since the pandemic, but also everybody on the factory floor and has really created a culture of inclusion and then just an overall culture of we want you here, and we recognize that you want to be here. And then I think the big thing is we top grade on a regular basis and having done it for so long, see players, you know, if they figure out a way in through our hiring process, don't last long. And we've got Bs. Right. You got to have Bs, and then you have the aspirational A's and the actual A's, and then we do a great job of creating a growth path for them. Because even though we're not scaling at the moment at lightning speed, you still have to give people a reason to come in, want to learn, and then advance themselves. So we've been really lucky. But I don't think it's luck. I think it's the way Rick's designed the business.

I love that you actually identified the A's, B's, and C's, and that you need some B's. It's strange to me when people say things like, we only have A players. I mean, it's impossible. I've never seen a company yet that is only A players. So I've always said, A players are racehorses, B players are the workhorses, and C players have to go to the glue factory. And you kind of need to have about 80% or 85% of your team are that good, solid, workhorse, just plowing through stuff and you know, good culture people, they're there. But the A players for me are the. God forbid they ever quit. Right. Like I've got a bunch on my team where I'm like, and I've said it publicly, I'm like, I would just, I'd shut it down if Meredith left. I would just shut her down. It ain't worth it anymore. I'm out. Peace out. And that's. She's my executive assistant. Right. I've got a really, really good, solid team. I'm really, really happy with them. How do you get rid of the C players?

So for me, my direct reports are there.

Sorry. And how do you identify that you have them as well?

Yeah. Okay. So we have a really tight 90 day onboarding process. Right. It's well documented and you've got to follow all the different steps. And I'm thinking more production than I am the administrator or the sales team. And then routine scheduled check ins with your direct supervisor who then reports to the VP of manufacturing. And we're really sound in our training. And I say training on the shop floor because you're learning how to use different machines and tools and whatnot, more so than the coaching aspect. And then we have check ins and we have tests. Right. You have to make sure that you can pass the test in order to get certified on the machine in order to utilize it and work your way through the process. And people self select pretty easily. You know, if they, if they can game the hiring process, say all the right things and act in a certain way, can recite our core values and say that they live by them, you know, that type of thing, then okay. But for us, I think we really find out within the first 30 days the true nature of the person comes out. And then once it does, it's, it's. We have a really great step one, step two, sorry. You basically just checked yourself out the door. So I've never had an issue with holding on to Cs on the plant floor. Sales guys, kind of the same thing. You know, I'm, I've been at this a long time and you can sniff out the people that want it and want to work hard for it and don't allow excuses to get in their way versus someone who tells you that they've been to three different places. And I'm all about moving around for variety. But when you come to me with a resume that your last sales stop, you raised the territory volume by 113%. But you were there for five months. Did the territory not have any sales and you sold three. I mean, walk me through that. So I think we're pretty strict on the front end and we really look for people that are hungry and then we'll coach them and train them up into the sales process. I hope that answered your question.

It does, very much so. So I also love the fact that you actually are screening the resume so carefully too. Like, I don't understand why some leaders just have never actually been properly trained on interviewing. It's one of the 12 modules in my invest in your leaders course. Because I just think that every manager is doing interviews and most people don't know how to do them. And what you mentioned, one of the basics is just actually screening the resume and noticing on the resume their little hops. I would never hire anybody who goes from job to job to job three times in the last two years because I know they're going to be leaving me. I need those. You know, even if it's, even if they are the younger gen Y, I still want somebody who is a little bit more loyal, a little bit more stick with it. Right, so what do you look for in the interviews? Let's, let's go into the two, two sides of the business. Let's call it the front stage and the backstage. So the, you know, on the sales and marketing and ops side, what do you look for generally? And then what do you look for on that shop floor side? The backstage people.

Yeah. So I would say I'm blessed in the sense that I've got a VP of manufacturing that handles for the most part, the majority of that. As a seasoned guy, we're wired very much the same. We have the same disc profiles, we have the same Enneagram profile. So he and I are very much alike. And in the 20 months that he's built been here, we've really built a relationship of trust that if he says it is, then it is. And I feel really great about that. So to be able to leverage that and not have to be into the day to day hiring aspect of that is ideal. So I can speak more so to the front end because I came up through sales, I've been a sales guy my whole life and came to Timberlane through sales and grew a sales team that we still have the majority of the people here to this day. And I know sometimes people hear that and go, ooh, old wood, tired iron. You know, you get people that are used to something, that workhorse mentality. But in an inside sales environment, you know, where lead gen is through marketing and we're very consultative so you got to strap in and have some longer conversations to really get somebody across the finish line. Having somebody that understands that and is willing to do that and take seeks enjoyment out of that and then is compensated well for that really makes it easy. We do have some new hires here recently and again, I have to say, whether it's blessed or maybe I have a good eye for talent. As I migrated into this second in command role, I assumed a lot of the duties. When I still had the VP title and it became formalized late last year, I had one guy that had been with us for eight year that, you know the old adage that your best sales guy doesn't necessarily make a good sales manager. Well, I lucked out and he did because I just watched how he took his territory and ran it like a mini business. I mean, this guy did not let anything come at him. He was well prepared for every day. He wasn't reactive. And so through coaching and some training was able to get him up to a level where now he's responsible for the new employees coming in from the sales end. And I just like to have a quick cursory conversation just to get a feel for somebody because again, there's a lot of measurement and interview techniques that you can deploy. And Victor, my sales ops manager, really great at it. But I'm a guy that likes to look you in the eye, ask you some light hearted but serious questions and then I also believe in a really firm handshake. Right. And so if you ask somebody where are you in five years? If somebody tells me that they want to be here at Timberline, it's like you got to have bigger aspirations that, you know, talk to me, work with me and something as simple as Cameron, tell me something about you that I'm not going to find on this resume. And if they turn around and start reciting things on their resume, well, it appears you don't listen. And that's just how I view it. And so it's those quick little hits that I get a vibe. Ultimately Victor will have the majority of the weight in the decision. And again, I'm blessed to have a guy that can do that. But I'm on the soft skills. I think everything else can be coached and trained.

You know what's really nice as well, Rick, what you're talking about is that you're getting the emotional commitment from people, but you're also really raising the bar at the interview stage. And the A players love that. The B players are a little nervous, but they want that. The C players run away and hide and they won't join you anyway. So you're kind of screening out the wheat from the chaff real quickly. Right. Which people are scared to do. I think most interviewers spend far too much time selling. So at our recent COO alliance event, we had Roland Fraser speak from War Room and he was talking about some of the economics of marketing, some of the numbers side of things related to pricing and related to increasing our gross margins in times of inflation. Can you walk us through some of the changes that you've had to make at Timberlane during this last two year period? When we've seen wood prices go through the roof, up 35 to 40%, I think from Canada coming down and from global, we've seen shipping costs go up, we've seen labor costs, we've seen material costs, we've seen, you know, inflation is going crazy. What have you guys done on the pricing side of things on and on the gross margin side of things?

Yeah, that's a great question and I love roland's presentation. Right. 5% decrease in your price and you've got to raise sales 33% if you're at a 20% margin. And when I heard that, I literally had to come back and do the math. I'm like, I'll be damned. He's absolutely right. And so, you know, cutting prices is not the way to go. It's certainly the way to volume, but you know, there's no guarantee you're going to make that 33% up in buying. So for us, yeah, it's been really difficult. We used to employ a strategy of maintain pricing because being at the upper end of the of the shutter market with regards to price, every time we would raise a price, we basically just bring the floor closer to the ceiling because everybody that could afford us and understood the value proposition would buy regardless. Right. Nobody was not buying from Timberlane because we weren't expensive enough. So we were able to get all those folks. But each time we had any type of incremental price increase, we'd take a volume hit because some of those aspirational buyers were kicked out of the market. And so we decided to get away from that type of process and then simply move in lockstep with what's our margin target and with each incurring price increase, how does that affect overall cost? And then bake in our margin and adjust price accordingly. And then what we'll do is we'll advertise out that you got a finite period of time to close at your old price. Right. Because we still have inventory that was purchased at the lesser price. And so we feel okay about that. Then we have a hard cutoff and everybody that doesn't move, we reprice and go out and try to reengage. And so our goal right now is really serving margin. And I think what we're seeing certainly in the building product space, because to your point, everything is just through the roof and going up by the week, is people understand it. And we're finding that we're getting much better engagement with people. And we have to explain a 2, 3 or 4% increase in the overall dollars of their order compared to. Well, Joe the contractor. Remember, I've held my pricing for the last year when everybody else has gone up, but now I have to hit you with 15%. Joe the contractor wasn't having any of that, so absolutely just passed it along as it's coming to us and we're having much better engagement with it.

That's really smart. I love that approach to it as well. And I'm glad you pointed out what one of Roland's tips was. That 5% deduction means you have to raise my 33%. Like what? Just people just. Oh my gosh, we just completely missed that stuff. Right. All right, so I want to go into last couple questions. You mentioned the culture person that you have and somebody really focusing on culture within the organization. What, what specifically are you doing? If you gave us some tactical things to make it a better workplace for the, you know, the shop floor people, the people that are there grinding it out the back, I call them the backstage.

Yeah, yeah, Great question. Because it is, it is like two, two halves. Those folks roll in at six and leave at three. And then admin and, or sales and finance and the like roll in at 8:30 and leave at 5. So we. And again, I think this is a really, a testament to the CEO. We have a happy hour once a month and that kind of faded with COVID but it's coming back. And so, you know, we have a beer keg and guys from shop floor can come in and people that are on the five o' clock run can certainly stop, come in and have a beer. As a matter of fact, it's encouraged. So she makes sure that that's well attended and that people are interacting real big on what we call core value cards. Right. So we have five core values. We have integrity, energy, team growth, and transparency. And each one of those has a little tagline. And she's constantly reminding and encouraging everybody that if you see an act of integrity, you see somebody displaying good energy. All these cards that have the different core values on them are hanging on a board underneath everybody's picture in the in the employee hub. And you're encouraged to grab that, put your name on it, the date real quick, what did you see? And then, you know, quick signature. Then what we do with those is every quarter when we have our quarterly recap meeting that Rick gives, we meet in the hub. Brandy is her name, grabs all the core value cards and the person that receives the most gets a free spin of the gift wheel. And we have Amazon gift cards and yeti coolers and there's even like some PTO time for people which they really value. And so it encourages people A, to act according to our core values and then B, to report it when they see something like that. And I don't know if I'd say you'd be surprised. People want to win to spin that wheel. So there is great participation in that. And that was her brain trust to figure out how to make that interactive and then continue to support it. And it's really been important, I think for us in this labor market to retain our talent.

I really love it. I love that you're gamifying it a little bit. I love that the focus is on those employees. I love that you're doing it frequently. I also really love that you are really clearly communicating and talking about and celebrating the core values from the shop floor up versus management. Always talking about it when you kind of percolate it from the bottom. Really powerful. All right, I want to go Back to the 22 year old Russ Anderson. You're just embarking on your business career. You're going to give yourself some advice as that 22 year old. What advice would you give yourself that maybe you know to be true today, but you didn't know back then.

Wow, 22, you're invincible, right? I think it would be get comfortable with not being the smartest guy in the room because at 22 all you did was run your mouth to try to impress people that you are the smartest and you never were. And certainly being elevated to this role and you know, give you your just due, attending a live event, SEO alliance, even, even the once a month over zoom. A lot of smart people that know a hell of a lot more than I do and I can learn from them. And if I'd have just employed that tactic at 22 who knows where I'd be now? But you got to be open. You gotta be a sponge, and I think you gotta be vulnerable to understand what you don't know and then go seek knowledge to know it better.

I love that. I love that you're seeing that as well. Rick, you are certainly, I should say, you're certainly not the smartest person in the room. We have a great room at the COO alliance, but you have raised the bar by joining the group. So how's that? I'm not the smartest one in the room either. It's a pleasure to have you as a member. Pleasure to get to know you as a friend and looking forward to seeing you at our call coming up. Thanks for sharing with us on the Second Command podcast today as well.

Really appreciate it. Have yourself a great day.

You too, buddy.

Anybody could take care of their people better if they just thought about it. Always say, why don't you just take time to think? To think. Most people don't take time to think. To think. If you sat down and said, today, I'm going to think about my staff, pull up your calendar. You look at things over the next month. You could create an crazy experience by 20 minutes of thinking to think about your people.