The Opening of this Show

In the Studio

HATTIE: Hi. I'm Hattie Bryant and welcome back. We are going to explore two homes being constructed along the Gold Coast of Connecticut. Though this episode could be called "This New House" or maybe "Lifestyles of the Rich and Famous," it is really "Lessons and secrets about the future of home-building." We have found a thoughtful small business owner who understands how to bring the future into the present while preserving the past. His homes are smart houses and his business is too.

Come now, and meet Eric Rose and his award-winning construction company,
E.M. Rose Builders.

1

HATTIE: (Voiceover) While masons handcraft each stone for this 7,000 plus square foot home and its 3,000 foot long retaining wall, this server rack is being readied to move data along thousands of feet of wire so that the owner from any computer in the world can lower blinds, heat the swimming pool and warm the water that runs through tubing to melt snow off the driveway or make walking on stone floors comfortable, even for bare feet.

Panels through the homes are programmed to manage light, multimedia, air flow and temperature, security and telecommunications. These are smart houses.

ERIC ROSE: (Voiceover) We're in an essentially gated community.

HATTIE: (Voiceover) Okay.

ERIC: (Voiceover) Architecturally it's a very diverse neighborhood.

HATTIE: (Voiceover) Eric Rose, founder of the award winning construction company, E.M. Rose builders, lets us step into his world.

ERIC: This stone is called Wissahickon Schist and it gets its name from the Wissahickon Creek in Southern Pennsylvania.

Our clients are a very, very, tiny, tiny niche club that inspires the kinds of projects that we do, that competes for the kind of projects. The subcontractors, the general contractors, the clients, the architects -- every one of those in their own sphere is a small group. Well why don't we take a look at the cherry in the storage area.

DREXEL FRYE (VP, Cabinet Shop): Well all the cherry--

ERIC: Our goal here is to find those three or four magical projects at a time and the heck with the rest of the world. And that's where we focus.

Oh my God, look at that. It's going to be gorgeous.

2

HATTIE: (Voiceover) Eric launched EM Rose in 1992 with the goal to be a general contracting firm specializing in high-end architect-designed homes. EM Rose has been called the best by its peers over and over again:

• Best Remodeled Home
• Remodelling Project of the Year
• Best residential remodeled home, over $2 million
• Best kitchen
• Best Kitchen over $150,000
• Best custom home 5,000 to 6,000 square feet
• Best remodeling project over $500,000.

ERIC: (talking to a contractor) I want to know where each one of the these pages applies.

HATTIE: (Voiceover) Eric and the EM Rose team of nearly 50 employees will handle three to four multimillion-dollar projects a time. Supported by a group of trusted subcontractors, artisans and tradesmen, one happy home owner after another forms a durable referral network that keeps good work in the pipeline. Each year this small company strengthens to positively impact the way we all live. And so how big is the house?

ERIC: It's about 7,700 square feet. We're walking through the breakfast room into the dining room.

HATTIE: Okay.

ERIC: And this -- this room has extraordinary views of the sound. And the flooring is chestnut oak which is a type of oak that isn't even harvestable anymore. It's really just a salvage product that we use.

I consider myself a project manager, not the CEO or the president. You know, for us it's all about the projects. And so I stop taking on work when I can't manage that project effectively.

And we're walking up what will become an absolutely gorgeous Georgian Staircase.

We won't work on a project where there isn't an architect but I take a lot of pride in the fact that we can even open an architect's eyes to ideas and ways to skin the cat that they might not have thought of which ultimately enables their goal. But it's -- it's how we put our stamp on the project. E. M. Rose.

We have an office facility where there are six people working. That's all purchasing, estimating, IT, and accounting. That's where my office is.

We also have a custom cabinet shop that basically does architectural woodwork, custom cabinets, whatever an architect or designer can design we fabricate in any species of wood that you can imagine.

DONALD BOTTICELLI: As they're stacked is as they came out of the tree.

ERIC: OK. And there are 10 people there, and then the balance are in the field in the trades, including rough and finish carpentry and plaster and paint. What's up with everybody's schedule?

BOB TERPIN: John and James, Andy and Evan are trimming in the great room.

3

HATTIE: (Voiceover) It will take the work of 300 people to complete anyone EM Rose project. Michael Douglas heads up one project. He uses his laptop and digital camera to communicate to the office.

ERIC: You got digital photographs of the work?

MICHAEL DOUGLAS: I got photographs.

HATTIE: (Voiceover) Eric stops by to see the work with his own eyes.

MICHAEL: I recorded on the plan where the pipe is now.

ERIC: And you'll make sure you attach them to the daily report.

MICHAEL: Oh yeah.

ERIC: Okay that's great. Thank you, I appreciate it.

ERIC: In real architecture, in really good design there are no trends, you know. There's inspiration from the past and there's, you know, wonderful ideas, but there are no trends to have big rooms and high ceilings and things like that. It's the architects job ultimately to interpret what the client wants, but in a home like this there's just so much detail that every space makes you feel different and the detail makes you want to go there.

HATTIE: Why when people walk in this house will it be so different?

ERIC: We have work going on in 13 countries that is getting accumulated into this house. And that's typical of the projects that we do. There isn't anything we can't find, any problem we can't solve, any look we can't achieve, anything we can't imitate because there's no limit any more to where to go to get it.

It's sitting down, a few mouse clicks -- in a little while you could discover -- it's just incredible what you could discover. It's really wild. This isn't just building. This is about understanding the science and technology of building. It's about understanding the history of architecture. It's about understanding how to do something a certain way so that it turns out a certain way, so it lasts a certain period of time, and it works a certain way.

You have to -- you have to be committed to knowing what you're doing. It's really a special process.

4

HATTIE: How is it that you can make a house so special today, that maybe you couldn't 10 or 15 years ago?

ERIC: You know, I think certainly the introduction of technology is the newest, greatest thing that we as a builder bring to the process. But, there isn't any thing that distinguishes the great designers that we work for, from the great designers that lived 500 years ago. It's just talented design. So, this house is as beautiful in its own way as any house you could think of.

And we bring to it an understanding of technology, of systems, of performance that will make a great building last long and work well.

Every room in this house is a high-tech. The entire house is wired. Every wall, virtually every floor underneath. Each proposed piece of furniture. There are jacks that enable you to connect to the Internet at any time from anywhere. And we're headed towards the first of three mechanical rooms here.

HATTIE: (Voiceover) Eric took telecommunications executive, Chris McKay, to the basement of this smart house.

ERIC: This is really our -- our brains of the house. On the technology side and on the other side here we have some of the heating and air-conditioning pump stations. And all of the wiring in the house from the third floor down all centers right here. And we have a computer rack that's planned for here. And this is where we interface to both my office, the Internet, the security company, telephone, everything happens from here.

CHRIS MCKAY: This house is completely ready to take advantage of whatever technology is out there today, and is really well-positioned for almost any where we can dream it will go in the future.

So, first, there's an awful lot of bandwidth, and opportunity for the people inside the house to use it.

This wire has five different wires within it that can bring different things into the house. You've got two different telephone wires in here. They're CAT5 wires. What that means is that it's enhanced so that this copper wiring can carry data and be shielded from other interference. In addition, it's got two coaxial cables for delivering cable signals through the house, and this one has a fiber-optic cable as well. The technology that Eric has embraced, has positioned his business for growth and differentiation.

ERIC: (Voiceover) Yeah, we've been on a four year track to develop and implement technology and we're now beginning to think about the next generation of what we're going to do to expand on the backbone that we've built.

We've made no decision in the infrastructure of the house that would limit a hardware choice ultimately. But we have an IT director in our office and he has the ability remotely to do almost anything in terms of bug fixing, software updates and all kinds of checking and that sort thing. So we have that back up ability as well.

5

HATTIE: Okay, here's Scott and I told you that he was going to come see your house.

ERIC: Hey Scott. How are you?

SCOTT: Good to see you.

ERIC: Good to see you.

HATTIE: (Voiceover) Scott DeGarmo CEO and Editor in Chief of Broadband House.

SCOTT: Well, clearly this is an exquisitely built house with immense care that's gone into it. And even more, Eric has accepted the responsibility for the way it's going to function technologically in the future. Some builders, and indeed this is happening right now, they will walk away. They figure their job is done when the house is built. People don't always know what they need.

And the terrific thing about Eric is that he has foreseen the evolution of technology, and the needs of customers and is able to supply them with the things that they will need down the road.

CHRIS: I think we all want speed because we don't know where it's going to lead us. And getting to the future for us as a society is what has always driven us to success, and what has always been the engine for the growth of our business community in our small businesses. We don't know exactly what lies ahead, but we all want to be there. We want to be able to take what ever speed may be available so that we can disintermediate space and time.

SCOTT: When you look at the technology in the past, people didn't say that they needed cell phones back in 1985. They didn't know that they would. In fact they said they didn't need them. And much the same is true now. And we're evolving into what will, in this decade, become an ultra connected society. And this house is really on the forefront of that evolution.

CHRIS: And even though we don't know where its necessarily going, we know that that technology will enable the applications of the future in the same way that we could get to the moon even though we did know how.

DONALD: This job here is special because it's unique. It's -- it's a smart house, and there's a lot of work involved in that and communications is big in this house. It's just a --a special house.

HATTIE: So when it comes to getting the job done, you have to turn it over to the young guys, right?

HATTIE: Roger, why is this house unique?

ROGER NIELSON: Well, it's a smart house for one. There's not a whole bunch of them out there. It's all computer-controlled.

ERIC: It's different in the sense that you're removing all the mechanical switches that you would run around a house and flick, and its all now incorporated into touch panels, and push button panels that do lighting enhancements and stuff like that rather than just flicking switches.

Wire. You need to get your house wired. No matter what your desire for a technology is, if you don't wire your house, you are leaving out a huge piece of value.

HATTIE: You don't have to have tons of money to do that.

ERIC: No. The wiring is the least expensive, and the most important. It's very easy to do, and you need the wire.

7

ERIC: This is the library and --

HATTIE: (Voiceover) At another project down the road, Eric brags on a favorite supplier.

ERIC: Every window in this house and typical of Zeluck projects, it's custom designed right down to the molding profiles. And you can open these very easily with one hand. HATTIE: Either way. ERIC: And these windows weigh about 100 pounds each.

ERIC: This is the mechanical room which I referred to as the sort of central brain of the house, mechanical brain of the house. And this is where we have all of our hydro air system, pumps and valves arranged. This room, like all boiler rooms and mechanical rooms in our project is where I think the ultimate level of workmanship is displayed. You can just see the workmanship and thought that goes into arranging everything so that it's easily maintained, it's easily managed in an emergency. And ultimately we don't do that because we want the client to take care of it, we want the client to see that they don't need to worry about it. If they came down here in an emergency they'd know what to do. But ultimately we want to take care of it. It's really about thinking it through and caring about even what no one else cares about except us.

HATTIE: How did you get your first client that led you to this -- to this place?

ERIC: I had come back for a project I was building in Taiwan. And when I got home I called an architect who, he and his brother -- twin brothers, Chris and Tim Morris who had been great friends over the years and I had done projects for over the years, called them and said, 'I'm back.' And I just hit it at the right time.

They had a project they had just finished designing. They were just about to go out to bid and they were more than happy to include me on the list of bidders and that was my first shot, and we nailed it.

8

The client was as fabulously committed to the art of building and architecture as you could ask for. And, you know we all were of the same mind. And that client led me to my second client. And ultimately to the same architect who has designed this house, Sean O'Kane.

And I'm incredibly proud of the projects that we get to do for him. A great number of the award winning projects that we've done have been for Sean O'Kane and they came out of the very first client. That was a lesson for the future.

Fast growth frightens me, but as you're in it, and you're so focused on everything, things happen and you do find yourself having to control the pace. You know, I control it by controlling the number of projects that we do and making sure we stay focused on those projects. The dues that I paid started very young, and those were painful lessons.

My first time in business did not end well. The end of my company -- gave me the opportunity to take a corporate opportunity -- ended poorly on a single project. And when I look back now, it was my youth that cost me. It was my belief that I knew enough. It was my belief that just being passionate about building was all I needed to be. And it amazes me now that I got that far before the bottom fell out, if you will.

Today I'm surrounded now by so many bright, disciplined, and experienced people, and they're doing so many things I don't know how do so that I can do what I know how to do, that now it's working. And it took maturity, not just in years, but in experience to realize really the scope of a team it takes to make for a successful business.

(Voiceover) Get security up and running, get ...

I reached a point where it took a while for me to realize that I was my own worst obstacle because it hadn't occurred to me to let go of things. And so we began to build a staff around enabling me to manage my projects at a very high level of detail. And ultimately we chose to adopt technology to take that to even the next level.

9

So these are all set. We do one for each level, OK. Both the lighting control and all the mechanical systems.

Hierarchically a project manager has to be the funnel through which everything flows. The only thing I can tell you, from experience, otherwise you just have a breakdown of communication and construction ultimately is nothing but good or bad communication. Projects fail because people didn't communicate. Projects succeed because they did and they worked well together.

HATTIE: (Voiceover) Creating digital workflow at EM Rose, Eric has made complex communication tasks more manageable. Digitizing all data starting with the architect's plans, means more detail is available to more team members.

10

ERIC: The growth didn't happen because we were such and such. The growth happened because we wanted to become such and such. We really focused our growth and staffing and the mix of skills within that staffing on a goal, and so it was really about bringing on the right people at the right time because we needed to do that to get where we wanted to be.

(Voiceover) Did you -- did you pull your permit.

You can't spend your time reacting to the opportunities that you're given. You have to know what opportunities you want and be prepared for them. You can't -- in my business you can't go get a job and then figure out how to do it. This is too important to too many people and if you are lucky enough to even be on a list to get a shot at a project, you better be able to perform. If you get picked, it isn't time to go hiring people. It's time to figure out which of your team are going to be the ones to execute it.

HATTIE: OK, so that meant you had to invest dollars perhaps to get that person before you had the dollars in your bank account.

ERIC: I don't buy into the idea that everything has an ROI that you can calculate and be sure of. What is entrepreneurial if it isn't risk. You know, what is risk if it isn't getting the right person who is a talented person, experienced, has exactly what you know you would need if you were doing the things you wanted to do, but they came too soon.

Risk is getting them when you can get them, and being ready when the time comes. It isn't waiting till you have a job and then running around looking for anybody to do it. That's not managing risk. In fact, that's creating risk.

And you don't know which you could do if you don't have people that you have tested, that you have brought on, that you have watched, and observed and trained and taught and learned from. It's a collaborative effort, but you need to have them on board well in advance of when you're going to rely on them.

HATTIE: Even though you've got 40 something, almost 50 people on your team. It can be lonely.

ERIC: It's lonely because you're constantly trying to learn what you don't know.

The last 10 years have been remarkable in residential construction. It has been the second coming of the gilded age. It's just been extraordinary in terms of the quality, of design, materials and workmanship that has resurged in residential construction. And we haven't seen anything like it in decades.

We're trying to build that perfect thing that lasts a long time for the client; but for the architect, you're trying to make whatever it is they think up and make it happen. When it seems like they're asking for something that can't be done, what they're asking for is for something that somebody else hasn't done yet. And that -- that's where you can really make a difference and that's what we love.

I think when you're young you don't know necessarily what it is that's driving you. You know, I knew I wanted to be a builder. I remember even talking to my father about my decision to do that. And I would describe it in terms of, 'I want to go out there and I want to cut wood and nail nails.' And then you wake up one day, and in my case I woke up and said, 'Well that was fun. Now what?' And I went back to where I started which is what I really love. And it was just a closer contact with a complicated project.

HATTIE: Right. So that's OK to do.

ERIC: If you don't do that you're making a mistake. If you don't follow your heart, if you just stay in that big job because it's a big job with lots of people (and you get to fly around the world), well that's fine, if that's enough for you. But, if really being successful is about living what you do and about getting better at what you do, then being around a lot of people who work for you and flying a lot of places isn't the point.

And so for me, I needed to come back and do this.

HATTIE: How smart is your business? How smart is your home? One thing we all have learned from Eric, we can all get smarter and our homes can too! We'll see you next time.