Jon Bostock may lead Leaf Home to do its own manufacturing someday. But for right now, the CEO of the Hudson, Ohio-based outfit is happy to keep refining a business model that has brought Leaf to the threshold of $2 billion in annual sales of products and services to feed the continuing boom in Americans’ investments in home improvement.
Leaf Home provides gutter-protection systems, walk-in tubs, stair lifts, water-treatment systems and, with its most recent addition, epoxy-based garage floors. It has grown rapidly since Gridiron Capital purchased a majority stake in 2016, by acquiring companies in existing and adjacent categories of home products and services, investing heavily in product-development technology, tightly controlling output by its contract manufacturers, and helping its network of independent contractors and installers to market and sell effectively and to satisfy consumers at the completion of the job. Leaf Home was only a $20-million company before Gridiron’s involvement.
“We’re a large platform and a large company, with close to 8,000 people in our ecosystem today,” said Bostock, the former CEO of Big Ass Fans, who took the reins of Leaf Home in March after six months as interim CEO. “Our model is to be powered by people, and our north star is making home ownership easy.”
Covid prompted millions of Americans to take closer looks at their homes and plot home-improvement projects. “And the median age of U.S. homes is 37 years and getting older every day,” Bostock noted.
Leaf Home is continuing to build toward an IPO or potential sale after filing to go public in late 2021 and then reversing that notion in the spring of 2022. Bostock, who previously was an executive with General Electric and then led Big Ass Fans to a $500-million private-equity deal, has beefed up the company’s bullpen of executives with IPO experience.
More important at the moment, Bostock told Chief Executive, is that he continues to bolster Leaf Home around three main leadership principles:
• Highlight growth. Bostock has updated Leaf Home’s management culture to emphasize elements that can continue to create growth, and one aspect of this is to help employees measure their accomplishments on a continuing basis.
“We created a process and a system to recognize what we call ‘wins,’ and the tagline is, ‘Win Every Day,’” Bostock said. “So, from every level in the organization, we not only understand [key performance indicators] but also have a mechanism in place to recognize those wins in real time.”
To wit: Each week, Leaf Home managers review the various parts of the organization and recognize a person from each department for advancing a specific KPI. “That seems simple, but in many big-company cultures, you lose touch with the KPIs that drive” performance.
• Improve systems and processes. “When you grow so fast, you use systems that you’re used to using, but that doesn’t mean they help you scale to become a much larger company,” Bostock said. “It’s so easy to forget to build sustainable processes and systems, including using technology to do that.”
So Leaf Home has begun implementing Salesforce for customer relationship management and NetSuite for enterprise resource planning. “This is helping us across the board, including facilitating the 20,000 [job] interviews we’ve had to do in the last several months,” Bostock said.
• Focus on profitability. To that end, Leaf Home keeps leveraging its mastery of various aspects of home improvement to move into new categories with immediate results for the bottom line.
For example, Bostock said, early this year Leaf Home moved into a new business: applying durable floors to garage floors. “That category is generally at a high price point for the average consumer, so we came out competitively priced but with the most durable solution you can find in the garage,” he said. “We’re already in several markets, and the numbers are phenomenal. It’s an example of growing fast. It’s an accretive but highly profitable category.”
Leaf Home uses this approach to back its owner-operator contractors who sell products and services into categories that tend to be highly fragmented into single entities or regional operators. The company offers its patented LeafFilter gutter-protection system at about 700 Lowe’s stores, but its owner-operators also generate many leads by manning demonstration booths at local festivals and art fairs.
Right now, Leaf Home sources all of its products from contract manufacturers, and the actual “assembly” of its solutions — such as gutters, bath-tub inserts, windows and chair lifts for stairs — occurs by installers in customers’ homes. But the nature and conduct of those supplier relationships are crucial.
“In everything we do, we make sure we have a strategic advantage,” Bostock explained. “So we don’t go to a supplier and just ask for a readily available product. For example, in the water-filtration category, we don’t make reverse-osmosis systems, but we work with suppliers to specify our standards to make it unique to our business.”
Because of the importance of providing products and services that Leaf Home can call “best in class,” Bostock said the company is “evaluating where it makes sense to manufacture anything of our own. It’s complex.
“If you start from scratch, you have a shot, but not if you inherit a manufacturing operation that’s old and not up to the standards of today,” he said. “It’s got to be best in class. If you’re going to choose to manufacture our own product, we have to fundamentally believe we can do it better than anyone else. And we have to make the investment ahead of the curve and make it a competitive advantage. But I don’t see the path to that in the short term.”