As Penco celebrates 40 years in business, we thought we would take a look back to the beginning. Many of you know about Penco’s recent history – enjoying steady growth by putting our customers’ satisfaction first. But, some of you may not know much about the early days. Below, Penco Founder, Nick Renneker, reflects on the company’s beginnings and how the foundation was laid for the company that thrives today.
Nick Renneker started Penco in 1970 with the help of his brother Paul and Uncle Eugene and nearly no money. They did it all, from making sales calls, to estimating job cost, to supervising production. Nick's father, Paul A. Renneker, raised his children with the motto “Quality is the only thing that lasts.” This set a very good example for them to follow, and they applied it to their business. They understood that quality is what makes customers repeat-clients. They also knew that even though cost efficiency played a large role in customer satisfaction, they determined that time was the factor their competitors mostly failed to address. They used their father’s motto and applied knowledge to create the Penco 3-part Philosophy. They focused entirely on being consistent in deliverables and ensuring customer satisfaction. For the last 4 decades, this has been the major component of the Penco recipe for success - client satisfaction.
Nick recognized early on that the multifamily industry was on the rise. Most of the existing properties of the late 1960’s and early 1970's consisted of 24 to 48 units. Developments of much larger multifamily properties built with poor construction standards began to increase. Developers at the time were building them fast and cheap. The idea of the original developer was to create multifamily housing for short-term ownership, except the structures themselves were permanent. “There was a high turnover of property ownership in the multifamily industry. Poor waterproofing and construction shortcuts resulted in a high volume of calls for renovations,” states Nick Renneker. “Aftermarket renovation and reconstruction on a large scale was a very new concept.” With this knowledge, Nick decided to take a calculated risk and focused on reaching out to the owners of commercial and multifamily properties exclusively. Unlike residential construction, where there is a 1:1 customer to project ratio, multifamily offered a high volume of business per customer.
Nick realized that building one relationship within the multifamily industry could result in an "Account" with multiple projects per year. “It was a challenge to be an 'Account Rep' equipped and proficient enough to see the decision maker in this industry. It was considered a harder sale,” recalls Nick. “In my personal experience, I have had more than one successful call to 'The decision maker' in the multifamily industry result in 20 years of business.” Thus, making that difficult sales call and building solid, long-term relationships with commercial property clients became a tenet of the Penco way. He says, "Our success is a result of the many years we have worked to consistently satisfy our clients who have in turn, provided Penco's repeat business".
By the mid 1970’s, Nick's brother and uncle had left for other businesses. Penco had begun to establish a good reputation in the industry. Penco's business started to grow beyond what Nick, as The Account Representative, could handle alone. It was time to hire another Account Representative. That move increased the business operations and challenges by 100%. A second Account Representative was added and Penco's operations grew another 50%. Before long, a third account representative was added and revenue grew another 33%. With the addition of offices in other markets beginning in 1980, Penco saw the need for a systematic approach to producing projects around the country and chose to base its system on Quality, Time & Cost. Having designed and implemented the Penco Production System, the company grew and grew. Before long, Penco was contracting multi-million dollar projects in numerous states throughout the country. These were huge milestones for Penco.
“It’s been easier getting to the top of the mountain than it's been staying there, and now we're on to new mountains,” says Nick. “Incidentally, some of our most successful projects are the ones we did not take. We avoided pitfalls that could have put the company out of business.” Our competitors attempted to take our market share by underbidding projects. Many of those competitors are no longer in business because they did not accurately estimate job cost. “We know costs: we have the cost history on thousands of our completed projects, and that knowledge has saved us,” recalls Nick. “Knowing costs is such a simple concept but has enormous impact. Some projects we initially declined to take ended up coming back to us to complete with quality and satisfaction in mind.”
As with any business, challenges arise and at times, mistakes happen. The difference in companies is how often and then what businesses do about their mistakes. For Penco, “We make it right and we do it quickly and honorably,” states Nick. “When we hear of complaints, negative comments, or experience shortfalls, we focus on immediate resolution. We pay for our mistakes, we never ask our clients to pay for them.” In 1990, Penco completed a 10-year self-analysis regarding our mistakes. This analysis revealed that during the 1980’s, we suffered complacency in estimating cost, customer service had slipped and contract revenues had begun to fall. We determined that Quality, Time, and Cost elements (aka "QTC" at Penco) are the primary factors needed for analysis. Ever since then, we use QTC for practically everything and especially for design of our Systems, Programs, and Policies. Time is the bridge between quality and cost - a fact our competitors mostly fail to address. The result of this analysis was the design and implementation of the Penco Production System ("PPS") where Quality remains primary, Time is of the essence but second to Quality, and efficient Cost is a constant. Our PPS system is a "step-by-step" method to produce our projects. We intend to stay ahead of our competition by continuing to strive for excellence and to meet and exceed our client’s expectations.
Nick says, “Like climbing a ladder, with each step upward, you can see more and then may learn more. With those lessons, you can climb another step and be even more successful. With that knowledge, you can be a better steward of business, a better manager of your staff and their talents. Competitors who refuse to take that next step are left behind.”
Well said Mr. Renneker, well said.