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Sun Design

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Company Background

Started nearly two decades ago in Burke, Virginia, Sun Design – which focuses exclusively on the residential home renovation market – operates under the principles of truth, charity and fun. The company began playing the Great Game of Business in 2008 under the guidance of its owners – Craig Durosko and Bob Gallagher– and the company’s Game Master, Sandy Harris. “We stumbled a bit in the beginning implementing things like MiniGames,™” she says. “But we have continued to get better at playing the Game and it has made a huge difference in our results.”

Business Challenges

Few industries felt the sting of the recession more than the residential construction business did over the past few years - a pain that Sun Design shared in. “Coming off of two very successful years in 2006 and 2007, we began 2008 with high hopes and great expectations,” says Harris. “Then, as the market began to slide and our leads began to slow, we saw a significant decrease in revenues with an overall drop of 6.9% for 2008 from the previous year.” To compensate for this drop, the company suffered through its first ever layoff.

Great Game Solutions

Sun Design credits its open-book philosophy and the use of the GGOB scorecards to keep its employees – half of whom worked in the field as carpenters or project managers – engaged and conscious about what each of them could do to improve the company’s bottom line. “We learned a lot about how to keep things simple and how to get the information out to all our associates,” says Harris. One of the changes the company made was to scale back the scope of its projects, cutting its average job size from $180,000 to $110,000 to keep revenues coming in the door. The 20.6% drop in sales the company experienced in 2009 actually paled compared to its competitors who, at a minimum, saw their sales drop more than 50%. By focusing on its expenses and adjusting its forecasts, Sun Design weathered the storm that swallowed many of its competitors, taking only a $77,000 loss for the year.

As the market began to improve in 2010, Sun Design began holding monthly all-hands-on-board huddles to begin looking ahead at how the company could take advantage of the new opportunities that were emerging. “This allowed us to get every single person in the company in one room and discuss where we were and where we were headed,” says Harris. “That includes getting feedback from the guys in the field who are talking to our clients. We have a three-month sales cycle, so we now have a way to look ahead and fix any problems headed our way.”

Harris also helped implement several Mini-Games™ on a departmental level that focused on targets such as hitting sales goals, increasing the rate of internal feedback and improving customer satisfaction. “Making sure our customers are happy is a big part of our business since we rely heavily on referrals,” says Harris. “So we’re playing a Mini-Game™ based on Net Promoter Score to help ensure we are doing everything we can to listen to our customers.”

Meanwhile, Harris is also focused on continuing to educate the Sun Design team about how their business works. One innovative approach was bringing in a wheelbarrow filled with $8 million in fake money to a huddle to illustrate where the money goes. “It was a real education for people to see that after paying out for payroll, materials and supplies, there was nothing left,” says Harris. “That really brought home the issue for the staff about we can improve our own stake in the outcome.”

RESULTS

  • Profitable growth: Following two years of negative growth, profits surged some 400% in 2010.
  • Return on sales: Not only is Sun Design earning more, it’s doing more with what it pulls in, as its return on sales rate soared back to 3%, a rate it hadn't enjoyed since 2007.
  • Great prospects: This year promises to be a record-breaking one for the company as it recently recorded the second-highest sales month in its history and hit a new high mark for the number of design agreements it signed up.
  • Turnaround story: With the help of the GGOB, Sun Design turned an overall operating loss of $102,000 in 2009 to an operating income of $218,000 by the end of 2010.
  • Bonuses: Despite the industry’s struggles, Sun Design performed well enough to pay out a bonus equivalent to 2.8 days pay for every employee.
  • Award winning: Sun Design has garnered numerous awards for its work, including being named Guild Quality Guildmaster With Highest Distinction, earning the Contractor of the Year Grand Award, and being named Washingtonian Magazine’s Top Remodeler in the Washington, DC metro area.