1) The document discusses lessons learned from a quality management consultation conducted by CLEAResult and Advanced Energy for eight home performance contractors. 2) It describes how gathering data on recurring defects and inefficiencies, such as extra material runs, helped identify issues costing contractors thousands of dollars annually. 3) A key lesson was the need to establish standardized processes, identify champions to implement changes, and shift blame from employees to root causes like lack of training or communication breakdowns.

1. Lessons Learned in
Quality Management
Kitchen Ventilation
Air Sealing Small
Buildings
MARCH / APRIL 2015
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2. 4 Home Energy | March/April 2 015
i
n 2013, Energy Trust of Oregon decided to explore a fundamental
shift in its quality management of existing-homes contractors.
Based on the program’s specifications for measures installed, the
goal was to develop more cost-effective, contractor-centric quality
control strategies to reduce the need for on-site verifications by the
program, as well as corrective actions for the contractor. CLEAResult
(the company I work for) and Advanced Energy, a North Carolina
consulting firm, teamed up to conduct the eight-month consultation
for eight contractors—six of which are
home performance contractors. The
lessons learned from that effort can
help our home performance business
overcome challenges to implementing
quality tools and build greater efficien-
cies into our operation.
Essentially,myrolewastounder-
stand the contractor’s perspective as
we introduced the quality control
strategies. For one of my first field
visits, I documented the attic instal-
lation for a participating contractor.
The crew had just finished prescrip-
tive air sealing and was transition-
ing to baffle the can lights, at which time everything stopped.
They did not have the baffling material in the truck to complete
the preparation. A crew member called the project manager,
who then relayed the message to the warehouse. The crew waited
for almost an hour for the project manager to deliver the proper
material on-site so the crew could complete the attic preparation
for cellulose insulation (see Photos 1 and 2).
Now fast forward to an office meeting with both manage-
ment and field crew present where we were working through
the cost of poor quality for extra material runs. First, we intro-
duced a blame-free agreement so the crew felt that they could
provide honest feedback. Then I relayed what I had witnessed
on-site and asked the manager how often this happened. He said
that it happened forty percent of the time. I looked over to the
crew, who were shaking their heads. “Fifty percent?” I asked.
“Sixty? Seventy? How about eighty
percent?” The crew nodded their
heads. The manager was stunned.
This exchange illustrates a moment
where management’s perception of
the operation changed when the field
crew provided direct feedback. Very
few managers know what poor qual-
ity and inefficiency costs. The answer
we get is, a lot. We have learned that
it is hard to get conformance to re-
quirements and standards where
there is no data-based knowledge of
what noncompliance costs.
Challenge: to apply quality tools,
we need to shift from opinion to data.
Other contractors in the consultation did not necessarily have
one overriding quality issue to address. This then begged the
question: How do we prioritize quality issues and wasteful ac-
tivities that cause the contractor headaches and expense? To
compile the necessary data to identify trends, we asked each
L essons L earned
in Quality ManageMent
by Kevin Berg Photos by Kevin Berg
Very few managers
know what
poor quaLity and
inefficiency
costs.
Does doing it right make us money?

3. www.homeenergy.org 5
contractor to assign one person to document all defects (that
is, anything that needed to be reworked), and inefficiencies (for
example, extra material runs) for one month. Many of the con-
tractors balked, saying that they were too busy fighting fires on a
day-to-day basis. We responded by suggesting that this method
would help them to identify which of the fires were recurring
and would help to prevent them from repeating. Furthermore,
they would obtain their best data during the busiest times, be-
cause admin and crews were stretched, and breakdowns in the
workflow would be more apparent.
We had them document the defects in a simple event journal
that then fed into a tally sheet (see Table 1). As we see from this
example, two of the defects logged during the month of March
comprised 60% of all defects. What’s more, the two defects were
logged for all three crews, which pointed to a potential informa-
tion breakdown. Applying the Pareto principle, or 80/20 rule,
solving the underlying cause for just those two defects would
give the contractor maximum return for his or her investment
in time. The goal is not to eliminate all defects at once, but rather
to focus on the most expensive and frequently occurring defects.
Because owners and upper management make key decisions
based on dollars, it was important to calculate a dollar figure
for each defect or inefficiency, in order to gauge its impact on
the bottom line. Returning to our first example, we walked the
contractor through the step-by-step consequences of an extra
material run: the phone call, coordination, travel time, truck
mileage, and lost production. When we applied the owner’s dol-
lar figures to each of these consequences and multiplied them by
the number of times each extra material run occurred, we cal-
culated that the extra material runs cost the company approxi-
mately $60,000 per year. Given a 10% profit margin, it would
take $600,000 in extra sales to cover this cost.
Attic Hatch: Weather-stripping an attic hatch requires
few materials and takes only a few minutes. However, a
return trip to install it can cost the contractor hundreds
of dollars.
business best practices
Attic Preparation: The bath fan was exhausting directly
into the attic.To remedy this, the crew member replaced
the fan ducting so it could terminate to the outside.
Defect Crew Total
A B C
No weather strip on
attic access
IIII IIII I 10
Floor penetrations not
completely sealed
I III II 6
CO monitor not installed II I 3
No insulation on hot-
water pipes
I I 2
Incomplete caulking of
window trim I I 2
Floor insulation not
complete
I 1
Baffling around can
light has no clearance I 1
Total 10 10 5 25
Table 1. Tally Sheet: March
Challenge: to get to the root cause
of a quality issue, we will need to shift
blame from the employee to the process.
Once a quality defect is clearly identified—for example, no
weather strip on the attic hatch—it’s time to look for a solution
(see Photo 3). However, we found that, rather than looking for
solutions, management had a propensity to blame the field crew.
This stemmed from the fact that many of the contractors had no
standardized training program and would train new hires in-
formally by having them shadow an experienced installer. This,
in effect, made the field crew responsible for any installation
defects. Inevitably, this approach disenfranchises the employees
and seeks to only fix the symptom, rather than looking for, and
correcting, the root cause of the problem.
Attic Preparation: Air sealing a chase above
a staircase.
1
2
3
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4. 6 Home Energy | March/April 2 015
Challenge: Change is difficult—
you’re going against established
inertia in your operation.
Once we decide to standardize, we need to set clear
expectations for implementation, holding employees
accountable. To implement a specific process change,
we learned that the contractors needed to identify a
champion to help push through the inertia of the old
process and establish the new one. For instance, one
of the contractors decided to change his end-of-day
check-in process for the work trucks. Under the new
process, they would check into the warehouse before
they parked their trucks—something they had not
done during the old process. The contractor had a
champion—the operations manager, who decided
that he would closely monitor the follow-through.
Once the change was communicated to the
crews, the operations manager would sit in his
truck every evening and watch as the trucks re-
turned for the day. Out of habit, many of the crews went to
park their trucks right away, so they could head home. Before
they could park, however, the operations manager would guide
them over to the warehouse, where they needed to check in
inventory, clean the truck, and submit paperwork. At first, the
crews were not thrilled with the change, but slowly they began
to see the benefits the following morning, when they showed
up for work ready to get on the job. By the end of the fourth
week, they were lining up without prompting and checking in
their trucks.
To connect the idea of improving the process to the actions
of the contractors, we pointed to their recurring safety meet-
ings. The contractors had established these meetings as part of
the process used to standardize work practices and reduce ac-
cidents. This focus on prevention enabled us to introduce new
quality control systems and reinforce commitment to improve-
ment. We identified a champion for each of the eight contractors
to implement these new solutions and to help document them in
a quality improvement plan.
Each of the eight contractors completed a quality plan. In it
they described their standardized processes and affirmed their
commitment to continual improvement. They documented the
methods they employed to implement quality improvement,
such as event journaling, the Five Whys analysis, and calcu-
lating the cost of poor quality. This gave some of the contrac-
tors more confidence in their ability to deliver quality to the
customer, and they began to express this increased confidence
in their sales presentations. Two of the contractors initiated a
rewards system for their employees if they collectively reached
a reduced-defect threshold. Neil Kelly Home Performance won
We introduced a common method of finding the root cause;
we call it the Five Whys analysis (see Figure 1). It’s simple, and
we don’t have to ask exactly five why questions. The goal is to
work methodically through the why questions until you reach a
satisfying answer. In the example shown in Figure 1, the analy-
sis worked upstream to place the root cause of the problem on
the lack of a standardized assessment form. We learned that
this information exchange between sales personnel and install-
ers was a common cause of problems for all eight contractors.
Instead of laying blame on the crew or sales team, we focused in
this case on the assessment form.
Before implementing a solution companywide, it is best
to test that solution. The method that we use is called Plan-
Do-Check-Act (see Figure 2). In this case, first, plan to draft
a standardized assessment form to include all essential items,
including the attic hatch weather strip. A checklist can be an
excellent standardization tool. For example, Energy Trust pro-
vides checklists for key measures, such as attic insulation, to
help the contractor keep track of the work scope, and the de-
tails of installation. Second, do implement the solution with
only one salesperson, to test it out. Third, check to see if the
crews installing projects for that salesperson notice a marked
reduction in the targeted defect. If not, note what problems are
still being missed by the time they reach the crew, add those
problems to the assessment form, and continue to monitor.
Fourth, once you have successfully developed a standardized
assessment form, act on the solution by distributing the form
to all sales staff.
Figure 1. Finding the root cause of a problem can be done by asking the
question “Why?” five times.
The Five Whys
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5. www.homeenergy.org 7
take action based on what you
learned in the previous
steps. if the change
did not work, go
through the cycle
again with a
different plan
recognize an opportunity
and plan a change
review and
analyze the results
and identify what you’ve learned
implement
the change and carry
out on a small scale
the prestigious Housing Innovation award (presented by Home
Performance with Energy Star) in part because of the improve-
ment work this contractor accomplished during the eight-
month consultation.
As home performance contractors, we are experts at identi-
fying the weak points in the house as a system. Now let’s use this
same analysis and see our business as a similar system. Think
of CFM reduction as a metaphor for areas where we are wasting
money, or voids in the insulation as an inefficiency that needs
improvement. If you are ready to deal with the weak points in
your business, use the lessons learned from this consultation to
help you develop a plan for remediation. Identify your cham-
pion, and then quantify the pain in dollars or number of occur-
rences so you can prioritize your time. With consistent improve-
ment you will develop a high-performing business with greater
cost savings and an enriching environment for employee input
and contribution.
enriching
Kevin Berg is an associate program manager at CLEAResult,
an energy efficiency consulting firm headquartered in Austin,
Texas. He oversees quality management for Energy Trust’s
Existing Homes program.
ADVANCEDENERgy
business best practices
>> learn more
To learn more about CLEAResult, visit www.clearesult.com.
For more information about quality management, go to http://asq.org/
learn-about-quality/total-quality-management/overview/overview.html.
Plan-Do-Check-Act
Figure 2. A method for testing possible solutions to a companywide problem.
ACT PLAN
CHECK DO
ACT PLAN
CHECK DO