In April 2007, Phoenix Building Solutions issued a press release announcing their acquisition of Benchmark Homes. In the press release Tom Hennings was announced as the President and COO of the newly acquired corporation and outlined the company’s goals. Mr. Hennings was quoted as saying “We plan to create awareness with increased marketing and promotion and with a larger focused and dedicated sales team. With continued emphasis on customer service and quality, and increased marketing and promotion, Phoenix Building Solutions will be the leading company in the industry in this market." (Read the full press release)
A little less than two years after the acquisition of Phoenix (aka Benchmark), the experiment exploded with catastrophic implications. During his tenure as President, Tom Hennings, did not deliver any of the goals or even attempt to maintain current corporate strategies. The sales team at Phoenix Building Solutions was disassembled and in December of 2008 the company only had one (1) sales person. The marketing strategy was non-existent as the company never pursued any attempts to create brand awareness, and adjust to the changing economic environment. Instead of attempting to pursue sales and marketing, Tom Hennings elected to direct funds at upgrading software, computer systems, and remodeling the corporate headquarters including his personal office.
When the company finally realized they were reaching the brink of financial disaster in August 2008, Tom Hennings decided to stop the hemorrhaging by accelerating the production schedule to increase the capital. His theory, the quicker the product is produced the faster Phoenix will receive payment. Tom instructed the employees to produce a house in seven days regardless of size and complexity. This accelerated schedule lead to production, engineering, sales and purchasing errors and defects due inadequate preparation and construction time. Tom Hennings, himself who acted and sold products to customers was not immune to errors. In august 2008, Tom sold a flawed custom ranch home to customer in Kentucky with excessive drywall cracking and the wrong color siding. The drywall cracking was form inadequate cure time for the drywall before painting and had ivory (white) colored siding installed, instead of Ivy (Green) color.
As the accelerated schedule continued, homes were being produced and shipped every 7-10 days. The backlog of orders depleted quickly and there was no sign by the Lone Ranger of Sales, Tom Hennings, to attempt to bring orders or more capital into the corporation through outside sales. By November, the backlog was extinct and judgment day was facing Tom. In a move of desperation Tom Hennings and Phoenix accepted an order for a custom built cabin and a 6-plex apartment building with no intentions of producing a quality product or possibly producing a product at all. This was simply a scheme to inject capital into the company to maintain life support. On December 19, 2008 the company ran out of money but Tom and his two amigos (Ed Fanning and Nick Jevic) decided to continue the company through the holidays. This was merely a tactic to complete a home for a company known as Apex Strategic Holdings. The owner of Apex Strategic Holdings is Edward J. Fanning, Chairman of Phoenix Building Solutions. The employees worked through the holiday to complete this Home, only to find out on January 5, 2009 their services were no longer needed and they would not receive pay for previous two weeks worked. The experiment was officially over.
No comments:
Post a Comment