Restore Your Power to Succeed through the C&R State of the Industry Report Results with Leighton Healey

In this episode, Rachel Stewart talks with Leighton T. Healey, CEO and President of KnowHow, about the C&R State of the Industry Report, powered by KnowHow. Rachel and Leighton share an overview of the survey and the intentions behind this data collection for and from the industry. 

Rachel and Leighton dive into what surprised them the most from the survey. Results like “77% of restoration firms are planning next year to be a revenue growth year” and the projected impact of our economic state and possible recession. They also highlight the topic of TPA (Third Party Administrator) work and how restorers are finding, or not finding, a balance in their businesses. 

Finally, Rachel and Leighton speak on the changes in software and technology adoption in the industry. They discuss and explain, in depth, the struggles with low adoption rates, insufficient training and the potential limits on functionality in software or technology within the industry. 

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Survey Results:

https://www.stateofrestoration.com/ 

https://candrmagazine.com/the-state-of-our-industry/

Connect with Leighton 

LinkedIn: https://www.linkedin.com/in/leightonhealey/ 

KnowHow Website: https://tryknowhow.com/ 

C&R Magazine Website: https://candrmagazine.com/

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Schedule a Demo with Xcelerate

Request a demo of Xcelerate Restoration Software and see why other contractors are choosing a more intuitive, user-friendly platform for their office and field documentation.

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Restore Your Power to Succeed is a podcast to help restoration professionals succeed both personally and in business. This podcast is dedicated to teaching what top-performers in the restoration industry have learned. From leadership, personal growth, and managing and growing teams, to addressing industry-specific pain points, this podcast is for everyone who has a desire to grow. 

#UnqualifiedSuccess #restoration #mitigation #reconstruction #contractor #restorations #restorationcompany #employeeengagement #innovation #growth #development #creativity #problemsolving #GROWTHWARE #RestoreYourPowerToSucceed

Transcript

Rachel Stewart: 0:04

From Xcelerate this is Restore Your Power to Succeed. A podcast to help restoration professionals succeed both personally and in business. I am Rachel Stewart, I spent 12 years in the industry growing a restoration company from $1.5 million to over $20 million in annual revenue before founding Xcelerate, an industry job management system to help contractors be successful by addressing the technology gaps that I faced every day. This podcast is dedicated to teaching everything I and other top performers in the industry have learned from leadership and personal growth to industry specific pain points, this podcast is for everyone. So let's get started as we restore your power to succeed. Welcome listeners to this episode of Restore Your Power to Succeed. I'm very excited about this episode, we've got some groundbreaking new data that's come out into the industry. And so we get to dig into that a little bit. With our guest today. Leighton Healey with KnowHow. How are you? And welcome to the podcast.

Leighton Healey: 1:20

Yeah, it's wonderful to be here. And I'm doing very well. And very excited to talk about all this data and all all the implications for your listeners. So you know, you have a wealth of experience in this industry. So I'm very curious as to see how the data comes from comes through your eyes, like from your perspective, because you have a lot of experience.

Rachel Stewart: 1:45

Yeah. So for my listeners who may not be aware, like if you've been busy, busy, busy out on job sites and haven't checked the internet or social media at all lately. Let's just give them some background about what this survey is, how it came about, who kind of collected the data who all the participants were. And then we'll dive into my initial reaction to seeing if we can do that. So

Leighton Healey: 2:12

Yeah, absolutely. So let me let me maybe set the table this way. Most industries, struggled to develop what we would call like a benchmarking, a seminal benchmark study that allows companies in the industry to be able to understand where where do they stand in comparison to their peers? What are some of the major trends in our industry? And ultimately, how do we kind of, in a sense, orient ourselves next year towards some of the fast water that many of our peers are focused on. There have been there have been, I think, well intentioned attempts in different areas of the industry to try to provide that to restoration to property restoration. But it, I don't think that it, it always lacked what I would describe as the robustness to really qualify as like authoritative data. And in so C&R Magazine, and KnowHow we both really felt that that was something that the industry lacked. And so we'd locked arms, we locked arms together. And we said, you know, I think that we can make this happen. And so when it looked like just to provide a really concise snapshot, it required us to develop a very thorough report, sorry, survey technique, and kind of list of questions, it was a pretty significant list of questions. And then we wanted to get a certain profile of individual to participate, you know, decision makers, within restoration firms across all US states at all Canadian provinces and territories, and then to be able to really give them an anonymous environment to respond. And I would say it probably took these individuals close to 45 minutes to complete this survey, it's a very thorough survey, and, and then to, for us to pull all that data together. And there's two layers of analysis, you have the first layer of analysis, which is just simply commonalities, trends, but then you have what is, is actually, I think, some of the real magic of this report, which is correlational research. And so when you look at a person, you say, you look at this cohort, you know, is spending their money in this area, or they have a preference for this product, or this franchise group is oriented around this? Well, then you look at other data around work tenure and worker tenure, and you look at, you know, other preferences, and you start to look for correlations, and you start to have these interesting kind of freak-anomic moments where you say, Isn't it interesting that companies that focus on offering this wage level are actually experiencing surprisingly high tenure levels? You know, it's an interesting to dive into the correlation data. And so that's some of the horsepower that that you know, we certainly were able to bring to it. And and then and then really, it came down to you know, how we have an internal writing committee and the round just really hot debate or on what do we think, is really should be emphasized? And in probably the fact that the reports over 50 pages long probably suggest that, you know, we agree that there was lots to be said. But that was basically the meat of it was, I think, you know, the I how I remember kind of the genesis of it was the Michelle Blevins, the editor over at C&R and myself spending some time talking about, we really think that this is something that the industry lacks. And Michelle brought an enormous amount of passion to that. And and so we decided to partner together and make that happen and make it an annual cadence. Yeah, so that's kind of the backstory.

Rachel Stewart: 5:37

That's great. And I think it's brilliant. It's really needed in the industry, the closest thing that I can recall, having something like this was, when we were part of DJI back in the day, they had a survey that, you know, in the 300 or so companies that were a part of that took, and I think business networks, Phil Rosebrook, kind of ran out originally. And then I think it was passed off to benchmark anyway. But since then, there really hasn't been something and a lot of that was around financial benchmarking, and not so much just industry trends. So this was really exciting, I think, is really well needed. Just for our listeners, there were about 150 companies that participated ranging and all sorts of different sizes, the average restoration company is doing $2 million. And we'll kind of get into some of the other types of metrics about mix and stuff like that. But hopefully, this is something that just keeps gaining steam over the years. And it's something that, you know, when 1000s of companies are participating, that that kind of data is really, really helpful. You know, it's like the difference between asking a group of five people and say, Oh, 20% of, you know, the people, the participating parties believe that XYZ product is the best, well, there were only five, so one person thinks that that is the case, that's not really great data, but 150 participants, that's amazing. And if we can get that up to something that, like is is, you know, representative of the 10s of 1000s of restoration companies across the country. That's exciting.

Leighton Healey: 7:26

I mean, one of the things that Michelle and I, Michelle, over at C&R, and I agreed strongly on is, you know, how do we create this as a report that companies can rely on to come out annually. So that and because it's always anonymous, they they want to create an incentive of saying, Look, we owe it to ourselves as an industry to try to get as many voices heard as possible, so that the data is as rich as possible. And so in the sense if this document was was a compass annually, that it says that the calibration is as tight as possible. And so yeah, we don't have any, you know, hidden motive. We truly want it to be an authoritative report. And, you know, Michelle, you know, you know, that information is great information for her, your organization to be able to continue to make sure that going into next year, their content serves the audience, it's aligned to the needs. I mean, it's very, is there a self serving element there? Well, I mean, I think it's very symbiotic. It's like, she wants to make sure that she's giving the industry guidance on what keeps them up at night. And for know how I mean, our commitment is to be the leading workforce solution for how you onboard and train up and scale up and give staff access to kind of like your playbook, like how everything fits together and your processes and workflows. And so because of that we're obviously very passionate around like, you know, how is the industry dealing with workforce? And so we take a lot of cues from that. So I think those are, are totally complimentary.

Rachel Stewart: 9:03

Absolutely. Absolutely. I hope restoration

Leighton Healey: 9:03

and what I hope Rachel, I'll just say one last companies kind of look at it and go, Yeah, that's self serving. thing I, you know, you know, if someone bumps into Michelle or It's self serving for me to participate and take this, because then it helps me make good business decisions based on real data and trends going on in the industry and provides the myself at a at an industry event, I would love for them to opportunity, just knowledge, just being aware of strategy opportunities. Okay, come up and say, can you ask this question, because I've always wanted to know, and, and will say, You know what we're thinking about that or Yes, I might say that that's a great question. In fact, let's get 1000 restoration companies to let you know what what they think about that and, and so we want to be able to, to crowd source some of those, those, those those areas where industry leaders and industry influencers, like like yourself have said, I've always wanted to know this. And it's so hard to get, you know, hundreds of industry executives at the microphone and just say, hey, what do you think about this? And for them to say, you know, what they think and to be able to pull that together and see commonalities. That's our desire.

Rachel Stewart: 10:25

Yeah. What I thought was really interesting was just like the mix of where these companies were across the country, for whatever reason, Ohio really showed up big. And they were like the number one participant, I think California was second. So it was just, it was really interesting. So if you did not participate this year, please look for it next year. Take a look at the data now and participate in that way and utilize it in whatever way that you see fit. But next year, definitely make sure that you're participating, and have your voice heard there. Okay. I think your question to me when we first jumped on before I hit record, was like, so what did you think? And I said, we're gonna wait on that question. And we're gonna do it live. So I can, it can just be authentic and share it. I thought it was excellent. I thought, I loved the way that you guys broke out the report. So there's the data itself, but then it has like summary points, and then it has like recommendations. And then it goes into questions that you can discuss as a management team. So it really just gives a lot of resources. It's not just the data itself. It's like, okay, what, so what, right, like, what are the next steps that you can do with this? So I thought that that was really awesome. Again, I thought the participation that you got for the very first year out was excellent. And that's exciting. I, like you said, it's like 52 pages. So there's definitely but it's broken out very cleanly into sections like it's, you know, workforce or, like the way that work is split out and technology. So it's very, very clear for anybody who, who's like, oh, 52 pages? Yeah, I don't have time for that. It's very, very easily digestible. There's pretty pictures and graphs and everything. So that's awesome. What else can I say about it? Like, I think we'll dig into my reactions around certain topics, as we join in the conversation as we get into that, so I don't want to dive too deeply into some of that yet. Anyway, but I guess my overall sentiment is that well done. I'm glad you doing it. And I think you and Michelle are awesome. And have knocked it out of the park with this. So

Leighton Healey: 13:02

well. Thanks very much. It's very kind of you. And I, you say that through the through a great deal of experience in this industry. And so that that's, that's great validation. And it's very, kind to be to say that, let me ask you, Is there is there anything in the report that surprised you, like where a data point jumped out at you? And you said, I didn't think about it that way. Like, is there anything that surprised you in the data? I also wonder if there's anything that just just confirmed something, like a suspicion that you had any surprise and any confirmed suspicion?

Rachel Stewart: 13:42

Yeah, well, I think one of the things that was awesome, that that I saw was that like, almost 80% of your respondents or whatever are planning to grow next year. That means like, the industry at large is just growing, right? There's just a bigger need. And a bigger capacity. There's, there's plenty of work to go around. And there's a big pie. So I thought that was very interesting. You know, I guess nobody wants to put on paper though, that like, oh, I plan to downsize next year. But I think in general, most companies are continuing to grow and scale like if they are putting in the work to train their employees to, like, understand the science of the industry to have good practices and good relationships and stuff, but they grow. And that is a great thing about the industry, right, like and so that I thought was really interesting, and then we can get into later. Like, where, where that growth is happening. I know you were, it sounded like in that webinar that you did with Michelle yesterday that you were a little bit surprised that so many people were pulling back from TPA. That wasn't that surprising to me. He, just because of like what I hear all the time, and just like the administrative burden, and the cost burden, and the difficulty in programs being able to keep up with inflation, and the demands of employees, and all those kinds of things. So it doesn't really surprise me that way. I do think it's interesting, though, that you have that correlation between so many people wanting to get into more commercial work, but also understanding that their biggest pain point is collections and paid in a timely manner. And typically, commercial work just takes a little bit longer to do that.

Leighton Healey: 15:42

And I think that that's why we aim to be fair in our analysis, because, you know, for a person to say, I'm getting that a TPA on going after commercial. In that you're also saying, I'm taking on additional marketing burden, and I'm allowing my cash flow to reflect commercial payout timelines. You know, I'm saying like, you have to understand the implications of your statement. And, and, and we tried to emphasize that we said, I understand that, you know, and another thing we tried to emphasize with TPA is TPA, work third party administrator work is administratively burdensome, but it can create a rigor within your company that you may not want to lose. You know, it again, it's a big, there's an economist that Thomas Sowell that I'm sure, you know, many people have read a lot of his work. And, you know, and he, he, he's very adamant that there's not a lot of just good decisions and bad decisions. It's really just about understanding the trade offs of a decision. Right.

Rachel Stewart: 16:53

Right. Right. And, you know, I have a lot of different guests and various backgrounds on the podcast, and they all have different opinions about TPA work on TPA or commercial, residential, there's all sorts of different opinions. And I always take the standpoint that, like, just understand your business, understand your business model, understand, like where your strengths are, and your weaknesses. And like you said, there's going to be some trade offs and know your numbers, if you know your numbers, because I think a lot of people don't even know their numbers they know, they can't even tell you, am I really making money at this or not? I think it's really, where you want to invest your time and your energy and your money and where you're going to service your employees. Right. So I think that that aligns exactly with what you were kind of saying. No, I agree. What surprised you, as you were going through the data,

Leighton Healey: 17:51

I was surprised by several things. I thought it was really surprising, because we spent so much time in our last study why workers quit understanding from the viewpoint of the worker, what are some of the reasons why they're quitting in mass? And so, you know, we surveyed anonymously, hundreds of technicians, and, you know, people at every level of the organization, and and that was on the heels of what, what many of us would refer to as the great re-, the great resignation of of Q4 2021. And, and so, what I was very surprised and surprised, in a sense of encouraged was, what is clearly an industry taking concerted, a concerted effort to respond to that, you know, there was there's a lot of interesting worker benefits that are being offered. A I mean, the number one area of investment plan for 2023 is worker training. And, you know, followed by operational, advanced operational software. And so, to me, what that suggests is, we recognize that we need to be we are a high skill industry with with a turnover problem. We recognize, you know, the old adage is, you know, well, why invest in the training of my staff, they're going to quit, and then the person, the common, you know, that old adage responses, what if you don't invest in training, and they stay? And so I think a lot of companies are really acting on that. So I was, I was surprised from a sense of the speed at which the industry seems to be reacting to that that giant turnover trend, that experience that they would have experienced about 14 months ago. And I was surprised to what I think about the doomsday hope for

Rachel Stewart: 19:47

you. Can I comment on that before? Yeah, next surprise. Yeah, I mean, I went to I don't know how many trade shows last year, you probably went to just as many right? Yeah. But there was no i Don't think one trade show that I went to where that was not a hot topic. And they didn't have several speakers or split several classes around webinars around it throughout the year. So to your point, I mean, I don't know how many times you were asked to speak about that, why workers quit and everything, but I think it was a number of times. So I do think that there was a lot of education around it. And there was a lot of changes that happened in the industry. And so I was excited to, to see those numbers as well. And that shift, which also lends itself to the more education that we can get around certain topics or certain things, there will be a positive correlation and shift to that. So Okay, the next thing that you're excited to hear every Well,

Leighton Healey: 20:51

I It's interesting, because the data is kind of a closed box until you, you know, you crack it open. And so, you know, we had a submission window. And then at the end of that submission window, you you extract all this data, and there's massive spreadsheets of jumbled data that you have to go to work and scrub for a while to make sense and see patterns in it. But one of the patterns that emerged very quickly was, there's been a lot of like doomsday horns, you know, the recession is going to kill us all. And, you know, interest rates are this and, and I thought it would have a more significant impact on the level of optimism going into next year. And so to see that 77% of restoration firms are planning next year to be a revenue growth year to see that 80% of firms are planning to add headcount next year, like net new headcount is both of those to me, made it very clear that restores are aware of the the economic climate, but they're optimistic about next year, and, and they plan to invest in their companies. And they plan, I would say that 2023 is positioned to be, you know, kind of get off the ropes here, and get back in and get swinging again. So that I found was encouraging and surprising.

Rachel Stewart: 22:14

Yeah, I don't know if you were around, the industry last time there was a recession. But I mean, I think tons of companies grew during the 2008 recession period. And, you know, this is, this is one of the things that's so appealing about this industry, like we put up with a lot of headaches, like 24/7, on call schedules, really demanding stressful situations, like you said, difficult payment terms, all of these kinds of things that you put up with this industry. And one of the benefits and perks of it is that it's recession proof, and that you really are able to ride through, you don't have the ups and downs that a lot of other industries have in that regard. So I think the most important thing for restores is going to be you know, making sure that their debt is like that they have plenty of capital and cashflow. And they're not really relying on debt with interest rates and those things kind of going up. But as long as they've been smart, over the last couple of years, and I've been careful about that, then yeah, I think that they will be in really good position to ride out, you know, whatever's coming.

Leighton Healey: 23:27

The I think that's well said. I mean, no, no question. When we looked at, there was a topic around that we looked into around what keeps you up at night? And ultimately, what, what is the source of lost sleep for you as a leader in this industry, and on the heels of next year, cash flow is front of mind, you know, I think it's a perennial topic, but that ability to just weather the storms of an average payment term window between 45 and 60 days. And, and, you know, when I made it, I made a comment that when it when a restore says that their average payment term is a payment window is say 52 days or something like that, well, they've had, let's call it maybe four weeks or six weeks of cash outlay prior to to submitting that for payment. And so it's not necessarily you know, from first dollar spent on that job to all the way to getting paid. You know, we're talking about as many as much as five months and and that is, that's a cashflow killer so I more just support what you're saying is that that, that that cash flow going into next year to what you said, as well know your numbers, understand how it all fits together. No question, I suppose. I was. I was a little surprised that you know, the planned hires the top planned hires for next year. You know, they were no surprise they were feel largely field based or kind of red New generating roles. But for a lot of companies that really need to understand their numbers, I guess I thought I would see more individuals bringing in, yeah, maybe maybe like a junior financial analyst, or someone kind of in an accounting role to really help them with that reporting. Maybe they have those roles in place already. But that's something I was thinking about.

Rachel Stewart: 25:23

Yeah. Yeah. I mean, one of the things when you said, Hey, I would love to hear what you would like to know, one of the things that wasn't really on here much was like the impact of inflation and pricing. And I would love to kind of see, because I think that that's another concern going into the recession is, Ken, like, all of the pricing software and programs or your processes with those software programs, like creating your own price lists, and so forth? Are you able to keep up with that inflation in a way that allows you to still be profitable? You know, so the growth is not only just in revenue growth, it's can you maintain profitability with that growth?

Leighton Healey: 26:08

Mm hmm. That is, that's a really good point. And I can see us discussing what it would look like in next year's report, because we the generally, the rhythm that will put in place as the data collection, commences the end of August kind of in really focus on is the real focus is about a six week window of data collection September, and kind of early October. And then there's a window of data analysis, and then there's a window of then committee writing. And, and so it's a it's a, it's a it's a process that would start in probably early September. So most restores, will have, I would say, experienced the whatever the fallout of this this pending, call it a recession is going to have for us to be able to, to ask them, you know, what has been your experience with this recession? What has been in how would you? How would you respond to? How have you experienced that the pricing impact? So I don't see any reason why we couldn't take a thorough look at that next year.

Rachel Stewart: 27:15

Yeah, that's awesome. Well, I would I would be very interested. I'm sure restorers would be interested to

Unknown: 27:22

know. As the owner of a restoration company, how often do you have technicians that return from a job site without the need of documentation? Do circumstances arise on the job that change the scope? And your technician doesn't know how to proceed? Are you struggling with standardization and consistency? What if you could ensure an accurate and consistent workflow every single time? Let me introduce you to Xcelerate's dynamic, smart and conditional workflows. These will systemize your field experience to ensure that what you want as an owner is super easy for your technicians to deliver. We knew that any solution would need to feel simple on your end. These conditional workflows can be there for your team when you can't and will instruct your team what to do next, when something unexpected arises. As your teams are moving through the job flow, they answer a series of questions, expertly training and guiding them through even the most complex situations. Let's hear from restorers. Just like you, they have taken the power of job management into their own hands utilizing excelerate.

Daniel Berry - Restoration 1 of OKC: 28:37

We've used many different software's and many different programs. And I would say to any owner or anybody looking to improve their processes, Xcelerate is an excellent software to use because of the fact that, you know the industry is always changing. And Xcelerate is one of the few companies that is adapting to those changes, and really following the the different changes that happen. I would say to anybody looking into Xcelerate, it's something that is definitely going to improve their business, it's going to improve your day to day operational technician, from the technician all the way to your office manager, do your estimate or anybody else in the administration side, Xcelerate is going to improve your business processes on a day to day basis. And it's something that I would highly recommend

Unknown: 29:16

put an end to your pain and partner with Xcelerate restoration software today. Okay,

Rachel Stewart: 29:27

what else? What else did you find interesting or where do you want to go next? I think you had mentioned something about TPAs. And your surprise there. Do we want to

Leighton Healey: 29:41

I do think we could have some discussion there. It'd be interesting to maybe tied into discussion around speed to payment. You know, one of the things that was was was a huge pain point for restores is simply getting paid on time and it And so, you know, when I think about the kind of the the marriage between evaluating whether we do TPA work and getting paid on time? You know, it varies, you know, in some, in some instances, TPA work, as, as I would understand it provides a measure of predictability in that, you know, you're working with the firm that has an established payout process. Whereas predictably slow, yeah, somebody's been predictably slow is, is predictable. Right? And, you know, if I was gonna

Rachel Stewart: 30:38

say that for all TPA, for some of them, and yeah, it's, it's challenging.

Leighton Healey: 30:45

So let me ask you this question. This is something I was thinking about. After, after we published the report. A lot of times, franchise networks and member networks, they are able to come in and negotiate large national accounts and, and larger engagements with TPAs. And so if there is a transition away from TPA work, I think it's fair to say, I think it's a reasonable assumption that, that that franchise systems will stand to gain from a lot of companies say independence that migrate away from TPA. And, and so I wonder what, you know, what impact that will have, in terms of just the dynamic with, you know, the franchise? Kind of versus independent model?

Rachel Stewart: 31:31

Yeah, I mean, what would be really interesting was, if you could have cross sections of your data to where you see how your franchises are, feeling towards TPA versus commercial?

Leighton Healey: 31:45

I know, I think that that is, that's an opportunity for us. And that might be something that we might still do, we might still dig in and do a little bit of correlational research around that. i It's interesting, actually, that question that you the comment you just made, came up in yesterday's webinar. And so I think that that's, that's two times, you know, experienced industry leaders have said, but what is the the what is the desired TPA mix, split between independent and franchises? And so, I will take that feedback to heart and see if that is something maybe we could do some kind of supplemental. I mean, hey, for a 51 page report, what's another two pages of appendices? Right, you know,

Rachel Stewart: 32:30

oh, it's all the analysis behind it, too. And I think, you know, and that really depends upon who you're asking to, like, franchise is a big term. And there's lots of personas inside of a franchise.

Leighton Healey: 32:45

No question. Let me let me ask you, one of the things that was a challenge when it came to the world of software is, is software adoption. And as you know, I'm not going to pick on every any any particular product in the industry, just in general. You know, this is a often referred to as a blue collar industry. And, and it's, it's not an, I don't think it's an unfair stereotype to say that individuals that are in blue collar industries, probably adopt software differently than individuals who are in say, traditional white collar Industries, a person who's in works at a software company, or working works in a consulting firm, or a bank probably has a different oriented technology than someone who, you know, really just prefers to be out, you know, in a field service vehicle, you know, working with their hands. And so adoption of technology within labor service for the poles is a challenge. Hands down like that. So we're not we're not surprising anybody with that. But there were three areas that that, in particular, that restores indicated that were driving some of the obstacles around technology adoption. And I wonder how you how do you think about that? Because we think about that, obviously a lot it and KnowHow. So one is just low adoption across the whole team, it's, you know, how do I get my entire team to embrace this technology product, insufficient training on how to properly use it, and limited functionality for what I want it to do. And that last point I think that there's probably two camps in that limited functionality, which is there's a lot of horsepower under that hood that some people just don't discover in the product. And then on the other side, there's Yeah, you know what, that's fair. That's there's you know, it doesn't it minces grinds and, and pulses, but you're right, it doesn't chop doesn't chop. Right. So what do you think about that?

Rachel Stewart: 34:55

Yeah, this is a constant challenge, right? I mean, even just it's don't even necessarily desire because you did mention desire, okay, you have blue collar workers that are out in the field, that don't really care about this. And I find it's even more than that. It's, it's when when did they have time because it's 24/7, that you might set up a training and then a new loss comes in and half your technicians have to leave and go, you know, so it's, it's also a matter of just like, there's no predictability and schedule. So, I mean, this is something that we're always talking about internally at Xcelerate is like, Okay, how do best people best absorb this information? Is it you know, webinars? Is it in person training? Is it digital, that like on demand content that they can they can consume? Is a hands on type of activities? Like, what is the is it in built inside the platform that, you know, has popups and different notifications everything? You know? And we're always kind of debating that internally about how do we get this so that it's easy, and consumable. And I think the biggest, the number one thing that we can do as technology and software providers is to make it intuitive, where they do not have to have a training manual, in order to understand basic functionality. Now, I will say to your point is like, there's, there's this balance, right? Because restoration is a super complex industry has a lot of moving parts, a lot of interested parties, there's a lot of pieces to it, and communication and things that have workflows, and all of these kinds of things. So if you're gonna have the robustness that can service that, then there's going to be built in complexity to that. And there has to be at some level some commitment on behalf of the ownership or leadership or management, to really set aside the time and be able to dig in if if they're going to get the value out that the software can provide. And I think that that's, that's something that I think is shifting in the industry, because I think you used to be able to get away with having a little bit more loose operational efficiencies, and with the way that the industry is consolidating, the way that pricing is working with all of the dynamics inside the industry really have to become a very efficient machine and really be able to understand your processes and procedures. And what we're finding is that some people, like there's a lot of people that don't even understand what their own processes and procedures are. So it's even starting with just creating those SOPs, I'm sure you find it because, you know, as as people are able to build out their SOPs and KnowHow, as they're able to build out there workflows, and they're, you know, the automations, in Xcelerate, you have to be able to start with something which is basic standard SOP and know what you're doing. And if everybody's doing something slightly different. And you don't have an SOP around receivables, and everybody who's involved in that process, the estimators all do it slightly different, you're gonna run into a little, you're gonna run into some issues. And so it's, it's dialing that in, and there's a lot of ownership that, like, they have to take responsibility to say, Okay, this is a commitment that I'm making in this next year 2023. And then we have to do our part, I believe, as technology providers to make that feel as simple as possible when they finally do decide to invest and how do you constantly be asking your user base? Okay, how can we make this better? How can we make do this more intuitively for you? What are the things where are the friction points? I gave a speech, or like a breakout class at one of the trade shows is where we talked about, like the friction points and all the friction points that a technician encounters in the in the simple process of going out to a loss, assessing what the damage is getting all of the paperwork signed, setting up equipment, and like scheduling for like there are a million friction points in that process. How do you eliminate as many as possible?

Leighton Healey: 39:30

And I think that everything that you're saying is, is what we're hoping this report sparks for discussion around the boardrooms of software vendors in this industry. You know, and it's not just it's not just software vendors, but also I mean, one of the things we looked into was, say disinfectants and you know, one of the things that drive a lot of decision making and ease of use for the product was a very Big thing you know, it, you know, intuitiveness and user friendliness, you know, to us kind of a software term is not just for software companies, it's for us for equipment rental companies, like how easy is it, what's a piece of equipment is dropped off for a person to just intuitively know how to use this piece of equipment safely. And, you know, and, you know, it goes on and on and on and on. And, and I think that there's, there's four things that I think about Rachel and I think about that topic, the first thing I think about is, they are things way bigger than this industry that play a significant influence here. One is, I refer to it as consumer software preferences. You know, companies like it's very, it's very often I'll, I'll make this statement, and I stand behind it is that, you know, Google, Amazon, Facebook, Instagram, you know, Pinterest, even marketplace products, like flair, you know, are social tools like TikTok, you know, they, they, they pay 10s of 1000s of engineers, over a quarter million dollars a year to engineer how knowledge and technology should serve people. And, and it influences them to have expectations around software products that are very powerful. One of the things that we're restores, we'll be investing next year is in training. And I really hope and we tried to emphasize this the report, I really hope that companies don't receive that and say, that means I need to do more of how I understand training to be, right, right now, what it's saying is, you need to invest in how, particularly young people today, access knowledge outside of work, when they when they want to learn something when they want to pick up a new skill, when they're when they want to change the oil on their, you know, on their car. You know, people don't refer to the manual, people don't sit down to a one and a half hour course, you know, people engage with technology in a way that's more on demand or bite size for kind of what you need when you need it. So that's the first thing that I would say is that you have to pay attention to how, like, what is the direction that consumer technology preferences are the,

Rachel Stewart: 42:24

if I could just put an exclamation point there, right? Like, the budgets that Google and Facebook and Amazon have. But that is the expectation is that kind of simplicity, and that seamless feel, and all of all of that. So it's it's that that battle, but I definitely know that you know, that little bit of investment upfront, when you were talking about how, instead of going back to training, the way they've always known it, you know, if you take that investment, and get your software working for you and set up some of these processes, either KnowHow or Xcelerate or whatever, get those automations working for you. You're gonna say it saves so much time on the back end. And so in terms of administrative burden, and in training your your folks because they're going to, like the software is going to help you reiterate those good behaviors, right and guide them through that process. So that's what we're always, we always try to set those expectations, it's like, if you invest a little bit of time upfront, like we can do it however you want, you will just want bite sized pieces, you just want to start with this kind of functionality, and then kind of grow from there fine. But if you're willing to invest the time upfront, and really dig in and put in all of your SOPs, and get your workflows and your automations and have all of your connectors going, like, you'll really it will be a night and day difference in your business. But

Leighton Healey: 43:49

totally, you know, I think that's very well said the, the other you know, the other factors at play that I see is so memory, you know, the whole area of mnemonics is this whole, like this whole study of like how we improve our memory and whatnot. And most reports will show that, that the attention span of the average individual nowadays, it has obviously never been lower. I read a study that actually TikTok alone was responsible for like, reducing the average attention span by like two seconds, like just that technology alone. It's kind of funny, and it's terrible. But, you know, I often will say this thing of the last time you committed a phone number to memory, you know, and so, you know, people just have this unconscious, in a sense disregard for memorizing things. And, you know, kind of the, whether you think he's a victor or villain, you know, Elon Musk, or how often, you know, make the comment that we're already kind of cyborgs. You know, we're already an essentially an organic creature that is supplemented with technology. You know, just think about How many aspects of your life would be disrupted if your phone just went away? I

Rachel Stewart: 45:03

thought about that this morning because I got the blue screen of death on my laptop. And I, like my life is my laptop. So I'm just like, wait, what? Your phones, your

Leighton Healey: 45:19

I got my little my like, my Apple like breathing. screentime report this last week and it was right. Oh, it's always horrifying. So I began thinking that it's funny, you say I began thinking, okay, what are some aspects of my work? I can shift from screen work to like non screen work. And I thought when I said like, very little nothing, right?

Rachel Stewart: 45:41

Like, it's not like you're gonna get out your pen and paper when you're doing this analysis of that.

Leighton Healey: 45:45

Totally, exactly. So So I bought a raven. And now I write very small notes. And I send this just joke. But now, there's anyways, there's a few other things, a couple of other things at play. So what first we said, consumer preferences, that's a big thing. You know, I think the whole area of memory, it's really wreaking havoc on on people who are who have really exhausted training as opposed to bite size training. But another element is that is definitely a play. And I this was often my, my closing comment with our study why workers quit, is you know why workers quit presented a ton of things that companies need to consider doing differently to appeal to the, to the, to the modern workforce. And my encouragement was, business owners and managers date, they need more time, they need more time, because it's just, they need time to be able to work on the business, because there are so many strategic elements, there's so many tools that they're leaving so much horsepower on the shelf, like like, like, whether it's Xcelerate, or KnowHow, there's so much functionality, but to really unlock it, you need time. And, and so that's why I'm such a big believer in what you said earlier, which is, is investing that work in creating standardization, and being able to bring a level of process consistency within your company, one of the immediate byproducts of that is time, time that is given back to you, because you're not what I like to refer to it as you you've shifted from being a a human dependent company to a process driven company. And, I mean, I'm kind of a, you know, I mentioned mnemonics earlier, like the study of memory, and one of the tricks that work from memory is kind of crude images. And so one of the images that I often propose is, you know, companies need to shift from companies where every single time you add a new staff member, it's like attaching an umbilical cord to their supervisor, because they rely on them for everything, to enabling that individual to be autonomous and self reliant. And then you do and you do that through, frankly, you say, Well, what, how do you do that? You do that by giving your managers and supervisors 20% of their week of airspace, to just optimize? And so I think that's very important. And, and, you know, and then the final thing is that a lot, there's a lot of demand in the technology world to say, Why can't everything play together. And, and again, I, you could throw a rock and hit a report that says, software is consistently going to move towards best in class services. And you're not going to see a lot of massive consolidation, you're going to see tools like like Company Cam, you know, Company Cam's, value proposition is very clear, use photos to communicate on from jobs, you know, it's, and you know, what, and they're not trying to be Oracle or SAP and do everything, you know, what I'm saying? And, and so I think that's a strong thing is that a lot of folks are saying, you know, why can't everything come together and just kind of have this, this moment of, of total interactivity? And I'm sure that Sure, if you had $1, for every time someone said, Do you have an API? Or does it integrate? And, and you know, not always necessarily knowing what they're asking in that in that statement? The reality is... integration

Rachel Stewart: 49:17

is the key to that, right? Because it's more of the problem of saying, like, Why can't Why can't I just have one software that does everything? Because the user experience is important to you. And as we just discussed, the the scope of work is just so massive, that you can't be best in class and all of it like, well, if you were you wouldn't like the price tag that came along with it like because you would have to be a Google or Facebook or whatever, and put these massive amounts of dollars behind it, but but if you can have that integrations with those best in class pieces, right, like, okay KnowHow covers onboarding and training? Great? How do we integrate with that, you know, like, other platforms like your 3d capture or whatever they do this, you know, moisture reading, do this, like equipment tracking, they do this and then just figuring out how I would love if the whole industry was shifting to more of this open API and these integrated pieces so that you can have best in class software that solves a smaller problem than trying to have this big massive behemoth that tries to solve everything and then does solves nothing well.

Leighton Healey: 50:39

yeah, no, I think that's really well said, and my only advice is to only, you know, hurl one more thing on top of that conversation is just just ask a worker, just like, hey, do you mind just like showing me how many apps are on your phone? You know, just swipe through them? Dozens, you know what I'm saying. And so we live in a world where we have no problem having fragmentation and segmentation in our application. I mean, that, you know, when when Apple introduced the App Store, you know, they introduced a concept to the technology experience of what I would refer to as the equivalent of like, a tool belt of applications, you know, in the same way that a worker worker would would, would never suggest that, you know, I'm going to abandon my tool belt, and I'm just gonna have this one, you know, Star Trek tool that just does everything. You know, like, you know, I mean, I would just challenege, like, like, who even carries a Swiss Army Knife nowadays? Say? Absolutely. Like, we have embraced purpose built tools. We have embraced a purpose based application experience within Android and iPhone. And, and so should, should, should best in class technology, find ways to work together. Absolutely. But when you're when you're when you're margin restrained. I think that in the same way that restoration companies are trying to prioritize technology companies are trying to prioritize. And, and so it's, yeah, it's a, it's, you know, it's an interesting balance, or as I said earlier, it's a world of trade offs. Right?

Rachel Stewart: 52:22

Absolutely. Okay. Well, I think we're gonna take your your words to heart and say that people have short attention spans, and we're not gonna take this any further. But to my listeners, if you want to find out the details, we didn't go into very many specifics of of, like, give you actual data points, or what the breakout is. But Leighton, and Michelle did that yesterday in a webinar, get it, get a hold of a copy of that webinar, watch that. Also download the report, figure it out, and then also put in your calendar, come the end of summer, next year, participate in a survey, um, anything, like any last words that you want to share with us before we I really appreciate you coming on. I appreciate your time. I think this was very interesting. Thank you for giving me the opportunity.

Leighton Healey: 53:17

Oh, you're very welcome. And I appreciate the opportunity. It's, you know, the feeling, certainly mutual stateofrestoration.com. And, and so if that is something that you'd like to grab a copy of that report, you can grab that report, you can either go over to C&R Magazine, or and go to stateofrestoration.com. You can also find it at tryknowhow.com. And it's a free report. It's a great, you know, I thought you you summarized it really well, in that we wrote it in such a way that each chapter ends with, with discussion questions for teams, and proposed action items. And so if I was to just encourage everyone to take one action, it would be download the report, set aside some time get get around some pizzas with your management team, or whoever you would describe as your linchpin staff, and just talk through those questions. It's a very valuable activity to do on the heels of a new year.

Rachel Stewart: 54:11

Right. We'll put it we'll also put some of those links in the show notes. So thank you, listeners for joining us for this episode of restore your power to succeed. We'll see you next time.

Leighton Healey: 54:22

Okay, thanks, Rachel. Have a great day.

Rachel Stewart: 54:24

Thank you.