Roofing Road Trip with Thea Dudley- PODCAST TRANSCRIPT

Editor's note: The following is the transcript of an interview with Thea Dudley. You can read the interview below or listen to the podcast here.

Heidi Ellsworth: Hello. This is Heidi Ellsworth, Roofers Coffee Shop partner. I am here today with another Roofing Road Trip With Heidi podcast. I have to tell you I have been on the road with this guest so many times at National Women in Roofing events, different conventions, but today we wanted to get together and really talk about something that is so important to contractors, and that is how to get your money, credit. I want to introduce Thea Dudley with Pocket Protectors, a dear friend of mine. Welcome to the show, Thea.

Thea Dudley: Thank you.

Heidi Ellsworth: I'm so excited to have you here today because so many people just get scared when you talk about collections or credit or really how to make that a strong part of your business. You always make it sound just like... You make it easy. I'm excited for you to share some of your thoughts with our audience out there today.

Thea Dudley: Well, thank you. Thank you for inviting me on a road trip with you. It's very fun to be here. Money is not scary to me, but then that's what I've dealt with for the last 30 years, so want to take some of that and heartburn out of it and make it okay to talk about. It's not a dirty word.

Heidi Ellsworth: That is perfect. You know what? For all of those folks, and I know there's a lot out there who know you very well, we... I've watched you. I've known you work credit for so many huge corporations, working with contractors all over the country. Share what you're doing now. You're doing something pretty dang cool.

Thea Dudley: Well, I stepped outside of the corporate world. I had a lot of years with Cameron Ashley Guardian Building Products and then moved on to SRS and had some experiences before that, but I always got really connected to the customer and helping them work through some of those cash flow issues because if they know how to collect and protect their money, they could, in turn, pay me. When I stepped outside of that corporate role, I wanted to take a little bit different path, started doing work with contractors and distributors in the industry to improve that back office cash flow situation so that contractors didn't feel like they were basically holding up the money bag for everybody.

Heidi Ellsworth:That is great. It's your own business you have started, so it's near and dear to my heart. It's a woman-owned business. We all support each other that way. Who are you working with, Thea? Give us some examples because I know it's not just roofing. You're really across the board doing some interesting stuff.

Thea Dudley: Well, I work with a lot of distributors, a lot of lumber dealers, roofing contractors, insulation contractors, drywallers, and a lot of work with the National Association of Credit Managers because just... The building material and construction industry is pretty slow to adapt and change, in a lot of aspects, and credit is no exception. Trying to get people to leverage technology and stop thinking adversarially between sales and credit is really what I'm working towards, that if you can get those two departments working together and you can get that communication, that cash flow really follows suit, and then that opens up a whole nother world for your company. It's something very dear to my heart. My dad was a contractor. Working with a distributor, I've always been very empathetic to our customers because I knew the struggles, and they were real. You have to go through contracts and retention and all of the things that go with that. Sometimes you don't have somebody in your company that understands that and can help guide you through it, and so I'm like your little surrogate credit manager.

Heidi Ellsworth: That is perfect. You know how much I love sales, so I understand the problem. You go out there and you work so hard to sell something. If you're not having that strong conversation with the back office, with accounting and finance and everything, then it just doesn't work. I love the fact that you're really bringing that collaboration to the forefront too.

Thea Dudley: It's been really fun, and it's amazing how many... No matter what company and at what level, whether it's a general contractor, subcontractor, dealer, distributor, whatever, wherever you sit on the bus, the problems are all the same. They're just a different viewpoint. It has been really gratifying to work through and to take somebody whose credit was maybe running very behind and they hadn't updated anything in a really long time as far as processes, how they're thinking, tools they're using, and to get them to the next level and to see that cash flow really bust loose is really just so gratifying and really fun.

Heidi Ellsworth: That is so cool. That is cool. Okay. I don't know if everyone who's listening to this knows, but of course, we have our R Club. Our CSR Club is really there for contractors with discounts on classifieds, and the gift shop, and great content, but one of the best parts, I think, of R Club is you, you. People, our friends, who are willing to come in and do free consulting for the contractors to help them, that 15 minutes of just, "Where do I even start?" Then it allows them to get to know you. I'm curious, along that lines, Thea, is what... Your first conversation with a roofing contractor, what is usually that number-one discussion point that you start out with talking to roofing contractors?

Thea Dudley: The thing that comes up most in our conversations is processes. Everybody comes to the table when I ask them and say, "Okay, tell me what your processes are," and they have to admit they don't really have any. There's nothing written down. It's tribal knowledge. It's evolved over time. Somebody just picked up the slack on this job of collecting money or making sure the invoicing is out correctly. That's where we start backing in is trying to nail down those procedures. That seems to be universal where there's no policy and procedure. It's tribal knowledge. There actually is a procedure. You just haven't acknowledged it and written it down. It's the unwritten law of the land, but it gets massaged a million ways that, sometimes, aren't good for the company, but it works to maybe get jobs done.

Heidi Ellsworth: Yeah. A lot of times, it's just about get it done today, and we'll worry about the rest of it tomorrow, but then your cash flow is halted, and that doesn't work. What do you see, along with the processes as a roofing contractor, the owner is trying to put this in place with the right people in the right seat of the bus, what are some of the pitfalls or what are some of the things that you would really coach them on thinking about as they're putting these processes together and also getting the right people to work on it?

Thea Dudley: Well, I think you hit the nail on the head right there. It's getting the right people. Then the owner is sometimes one of the worst people to put in charge of credit because we have what we call FOBs, friend of the boss. Everybody likes to get to that owner and say, "Gosh, if you would just work with me, here's what I'm thinking. I need another 60 days," or whatever. Owners cave a little bit faster than anybody else if you put somebody in there. A lot of it's pride, and you want to help your friend, and you want to be there to support because you maybe feel obligated to. Walking into that friend of the boss situation, the no processes, and then contracts really jam up a lot of people where they're so afraid of turning away business or questioning, "Hey, this is what's in this contract. Let's talk about this retention or let's talk about your terms of payment, and let's make sure that's clearly outlined before I set one toe on your project." Those are the things that really start to jam people up because they feel like, "If I turn this job away, then it's going to go to my competitor, and I'm not going to get it." It's like, well, I understand you might not get it, but it might be something you want to step away from. You've done no research to check out this guy bringing this contract to you and saying, "Hey, I'd like you to work on this." Did you check them out? Did you run a credit report on him? Did you read the contract, I mean really read it and make sure you understood what the pay scale is, what the warranties were, indemnification, scope of work, all of those things? Then what do you have to do for invoicing? Is there specials that you have to do? Is it AIA billing? Is it that it's just a normal bill cycle? What's going on there behind the scenes? Don't be afraid to make your payment expectations very clear up front. I always of put it to the contractor in context. If you're a sub rolling up and you're ready to do the roof, there's is an expectation by the GC you're going to be there, by the GC or the owner that you're going to be there on a certain day to do this project. If you're not, they're on the phone just blowing you up, but they don't have that same treatment with payment. How about we flip the table? What if I said, "Hey, my crew will be out there sometime between now and Christmas. I'm not really sure when it's going to make it there. We're just going to roll with it." The contractor wouldn't like that. That's the same thing he's doing with your money, so you have to start putting it in context.

Heidi Ellsworth: I love that. I love that. That is so perfect. As you're going in and meeting with, starting to work with different roofing contractors, it sounds... I mean all of those things you just said, that's a lot. What's the order? How do you work through that to help them get there to be able to say that, like, "It'll show up sometime between now and then, about the same time my money does"?

Thea Dudley: It's a process, and you sit down. There's a lot of conversation by phone going, "Okay, tell me about what your processes look like. Tell me about your business. Let's talk about how you go to market. How do you sell? Then let's start with how you pre-qualify somebody." You back into it in chunks. You make it not seem quite so like you're trying to eat that elephant all at one time. You make it not so scary where, "Let's take this in chunks." My view has been honed over 30 years of doing credit in the industry, so my perspective's a little different. You just have to teach that to other people, that it's okay to act like you need the money. That's another pushback I hear from a lot of the guys is, "Thea, I don't want to look like I need the money." It's like I worked for some big corporations, and let me tell you, we needed and wanted our money because that was our deal. That was the arrangement we made. Nobody here is... Yes, I want to provide a quality service for you, but let's not lose sight of the fact that we're a for-profit corporation regardless of size. There is a certain chain of events that have to take place for everything to go correctly, so getting them into that mindset and being able to walk them through some scenarios that they can grasp, that makes it very easy to go, "Okay. I get where you're coming from on the money thing." It's like you can do a lot when you've got money in the bank.

Heidi Ellsworth: Yeah. I mean I always find it really interesting too when people push back that way like, "Well, do you really need it now?" Well, that's what the contract says, and that's how this works. Maybe it's just because we all try to pay our bills on time and be that person, you really want that same respect from your customers.

Thea Dudley: I think it's setting the expectation. A lot of times, we don't teach. It goes back to any aspect of your life. You teach people how to treat you, so you teach companies how to treat you. If I know that I can stretch your payment out for six, eight weeks, and then you make a phone call and I can stretch it out and another three to four, well, my pocket's always better than your pocket. Unfortunately, the squeaky wheel does get the attention. You have to train your customers, "Here's my expectation. I don't really care how you treat anybody else. That's between you and them, but this is what our relationship is going to look like."

Heidi Ellsworth: That is great. That is great.

Thea Dudley: [crosstalk 00:00:12:45]-

Heidi Ellsworth: Oh, go ahead.

Thea Dudley: You have expectation. They have expectations of you as a company. They expect you to have good crews that come out. They expect your job site to be a certain way. They expect all of these different things that they've laid out in their contracts from you. They expect you to live up to that or they will send you a bill for it or you'll hear about it, so what's wrong with setting the expectation table back on the other side of it and being very clear about it?

Heidi Ellsworth: I think that's so true. Maybe can you talk, just share some of your philosophies on that same concept with your employees? I mean I'm sure there's a lot of training you have to do with sales team and the finance team and them working together. Talk a little bit more about that. I find that really interesting.

Thea Dudley: That's sometimes one of the biggest challenges once you get past, "Okay, here's how we're going to approach this. Now let's talk about the people side of it," because policies are easy to put in place. It's harder to get people to carry them out. Not everyone's going to have the same like-mindedness as you. Salesmen come from all over, and they come with their salesman baggage. Same thing with credit people. I'm not letting them off the hook. You've got to have two people that are really working for the same goal, so you have to talk through it, and then you've got to have accountability and support from the top or it's never going to work. There might be people on your team that aren't good fits for that philosophy and how you're going to move forward after you've invested in them, worked with them, trained them, tried to walk them down that. It might not be that they can look at it the same way and get them to the place they need to be, and you might have to help them go find their smile somewhere else.

Heidi Ellsworth: Yeah. Yeah, we know that. Do you see some of this starting to fit into company culture too? Because company culture, right now, is the hot topic in roofing on recruitment, retainment, and just good business practices. Where do you see all this fitting into that?

Thea Dudley: Oh, like you said, it's such a big topic, and everybody... It's not the same workplace as when our parents went to work where the philosophy was you got there before the boss, you stayed til after the boss left. If you had kids, nobody knew it. It was just very, "We're all about work," where today you've got, "Hey, my work life and my personal life overlap and blend, and there's really no clear-cut division." You want companies that can acknowledge that and give you that flexibility and also give you a voice, and you want to feel heard and you want to feel supported. You also want that, "Hey, if I did something wrong, I would prefer that you take me aside privately. Let's talk about it. Let's fix it publicly as a team, and get that courtesy that... Let's give you a learning environment with a safety net." Looking at how the culture has changed over the years, that really is a big thing. It's not that whole command and control and, "I'm going to dictate to you." You can't yell at people anymore like you used to be able to. They push back. They frown on that. The culture is really, "Hey, I can work anywhere in this economy, so I'm going to choose to work with companies that are all about my growth as well."

Heidi Ellsworth: Yeah. I think that training is so important too because when you start putting either the younger or the next generation coming into credit, putting them out there talking to customers, when you have salespeople who you're trying to have them set the right expectations, I just really think that it's an opportunity for huge growth if the training is there and if they're using, honestly, someone like you who can help them with some of those pitfalls before they stumble into it.

Thea Dudley: I think that's true. It's hard. The credit environment is tough. I go to a lot of the NACM, the National Association of Credit Manager meetings, and I speak at a lot of them. You walk into a room and you see a certain demographic, and it's all very skewed to maybe the boomer generation. I've asked a couple of the millennials or younger that I know, it's like, "Hey, why wouldn't you want to get into credit?" They're like, "Oh, my God. No way. First of all, your job looks awful," which it's not. It's like the best job in the company because you really control if we make any money or not, so it's the best job ever. I can see where they would say that. There's a lot of negativity, a lot of times, around the role of credit. We always come across like we're a little jaded and grumpy and that everybody's a crook. That's not true, but you spend 80% of your time dealing with the less-than-desirable people and maybe not as much time dealing with people that you could affect change with, which is what I loved about what I'm doing now. I get to spend time with companies that really want to improve it and with the customers that I used to maybe not have the best relationship with because you're calling them going, "Hey, what's going on?" Well, now you have the opportunity to go, "Hey, let's fix this because, with a couple easy tweaks, you could be rocking and rolling in cash, and this would not be a problem for you." It's really nice to get to go in and help coach some of those people on their team and go, "Here's how you would approach this. Let's take a look at how you want to present this, and let's lay out what the return on your investment's going to be. Let's let's walk through these steps."

Heidi Ellsworth: The great thing is, with what you did on the corporate level, that was always your focus was it wasn't just collecting money. It was helping contractors collect money and grow their business and become more sustainable. You have real life examples from so many different directions to really help those contractors out.

Thea Dudley: Well, thank you. That's been really fun for me, and that's always where my heart really was. It was never... Yes, I spent a lot of time in court, but that's just the nature of the job. You get to take customers that you can see. It's like, "Look, really easy. You're a really good roofer or drywaller or insulator or whatever you're doing, but the back office systems really aren't your strong point, so let's talk about how we build that out and how we put some things in place to help you and get you there, get your back office to grow as much as your front, the front side of sales and marketing of your business did." That's really the fun part, and then getting to take people on their team, just like I did on other teams, and to help them grow and stretch and reach for what they want to do and how they can build out the role to be something that they actually really enjoy coming in every day and doing.

Heidi Ellsworth: That is great. That is great. Moving just a little bit away from credit in that you're seeing so many different industries, insulation, building products, roofing, everything, what are you seeing in some of the... I mean as you're an RCS influencer. We ask you questions every month, and you write amazing blogs and send us great videos, but what are you seeing is really the hot topic or the trends that contractors should be aware of that's happening out there across the building products market?

Thea Dudley: I think part of it is the false sense of security. That's one of the things that I keep reminding. It's like, yes, business has been really good for a lot of years and, hopefully, you remember the dark years enough to want to not repeat that. Although all economic indicators aren't saying they're going to be as bad as it was, eventually, what goes up must come back down, so it'll hit a snag again. If you're not positioned to take care of that, you're going to feel the effects and be a casualty. I keep seeing distributors let their customers go out a little farther. They give them a few more days. Contractors don't tighten up. They're asking for money or they're reviewing the contracts, and so they're getting very comfortable with, "Hey, this'll go on forever." If you're not preparing for that and you're not setting the expectations now, it will jam you up when that hits, and it'll be too late for you to fix it then. You've got to start laying that groundwork now and setting that expectation.

Heidi Ellsworth: I think now is the perfect time even though everybody is so busy. I mean that's so great for all of us in the industry, but now is the perfect time to really talk to someone like you, talk to... We have Cotney Construction Law in the Roofers Coffee Shop. We have a number of really great people who are out there ready to help to create that sustainable model that will weather the bad times that we know will come eventually.

Thea Dudley: Unfortunately, nobody wants to think about it because everybody, right now, is really high on where everything is, and it's been really comfortable, but that and across the board in the construction side of it, people are so uncomfortable approaching the mechanic's lien aspect of things where those are... It's not a slam on anybody's ability to pay or not pay. It's just a mechanism to help level the playing field for everyone. I'm letting you know I'm out here and, if something goes wrong, which we don't expect that it will, but if it does, then I've given you notice that I know my rights, and I'm going to assert them under the lien law. It also lets people know that you're out there, so everybody up the food chain gets to know, hey, I'm on this project, and I'm going to be looking for money. They're going to make sure that you get paid because they don't want to get liened. A lot of people, a lot of a companies shy away from using mechanic's liens because they don't know how to explain them. They're not comfortable with them. They're a little misunderstood. After that last rough recession, if you're not utilizing mechanic's liens, wow, you're a trusting soul, my friend, because they're there for a reason. If you can explain them and explain how they're good for everybody to your customer and why it's good for them, it's really an easy sale. It's really an easy pitch.

Heidi Ellsworth: That sounds like a really good article for us, Thea, on that. I think that would be something great to help educate our audience, so I'm writing that down right now, mechanical liens, so we can get that out there.

Thea Dudley: I will send you something fun just because you always buy the best wine, so I'll always support you.

Heidi Ellsworth: Oh, I love it. Oh, I love that. You and I were just talking about this. You're traveling a lot. You're speaking. Any speaking engagements or any conventions coming up that you'd like to share out there that where people might be able to see you?

Thea Dudley: I do. Oh, I will be at the North Carolina Home Builders Association in April. I'll also be out in Phoenix in April at the National Association of Credit Management, Credit Management Association co-branded a conference doing about three seminars for them. My mind just went blank. I know there's a few others that are coming up. It's been so much fun, and it's been so gratifying. I'm loving getting to spend time more on that one-on-one with customers. I'm happy to help anybody that I can. It's been a lot of fun.

Heidi Ellsworth: That is-

Thea Dudley: You can still read all my columns at LBM Journal. You can go online there. My credit advice column runs online and in the magazine.

Heidi Ellsworth: You have a new website. What's your website?

Thea Dudley: I do have a new website.

Heidi Ellsworth: Yeah.

Thea Dudley: It's pocketprotectorslls.com, or you can just email me at thea@creditoverlord.com.

Heidi Ellsworth: I love it. More than anything, I just want everybody to know that you have a full directory on Roofers Coffee Shop where they can find all the articles that you've sent us, that you've written for us, the influencers, upcoming events. We try to keep all of that on the Coffee Shop so that everybody can easily find you along with this podcast.

Thea Dudley: Oh, thank you. Thank you, guys. The roofing community is so great because they're so embracing. As much grief as I get for being in this industry as far as, "Didn't your mom want you to be something safe and nice like an attorney?" I'm like, "No, no, nope. I'm going to hang with the contractors."

Heidi Ellsworth: Yeah, but now we've got all these National Women in Roofing too, so we got... and along with all the great guys in this industry. I don't know. I think we're pretty lucky. It's a great one, a great place to work.

Thea Dudley: I do too. It is a really fun industry, and I just thank everyone for all their support. It's been a wonderful first year.

Heidi Ellsworth: That's good. Well, thank you. Thank you for being an RCS influencer. Thank you for all of the wonderful advice and help that you give, continually give back to the industry. I think it's so important. Thank you for being here today. This has been great, Thea. I appreciate you so much.

Thea Dudley: Oh, thank you for everything. I appreciate the support. I love getting to spend time with you.

Heidi Ellsworth: That is good. I thank everybody out there for listening today. Roofing Road Trips With Heidi will be back again next week. Keep listening because a lot of our RCS influencers, key thought leaders in the industry, they're all coming here, and we're having these great discussions. We want to continue to share the wisdom that they bring with all of you in the industry. Thank you, and have a great day.