HVACR Business November 2018 by HVACR Business

Industry Titan Retires ... Again By Terry Tanker 5

Identify People with Skills, Develop Them By Jamie Kitchen 18

Company Culture Starts at the Top By Taylor Hill & Carter Harkins 21

Be Proactive About #MeToo By Jeffrey S. Ettenger 23

All Hands on Deck! By Vicki LaPlant 24

NOVEMBER 2018 / VOL.13 / NO.11

D OI N G GOO D I S GOOD FOR BUSINESS Page 10

ALSO INSIDE Â» Featured Entrepreneur: Ken Goodrich, CEO Goettl Air Conditioning ...... 6 Ruth King: Essential Functions of Service Profitability .............. 8 20 Questions with Scott Larson President & COO of Gustave A. Larson ................. 26

CONTENTS

NOVEMBER 2018 / VOL.13 / NO.11

F E AT U R E S

Doing Good is Good for Business

D E PA R T M E N T S

When your company gives back to the community in a charitable way, it’s a win-win-win situation for your customers, your employees and your business. By Pete Grasso

Identify People with Skills and Develop Them

Company Culture Starts at the Top

Overcome the skills gap by educating, training and creating your own skilled workforce. By Jamie Kitchen If you want your company’s culture to improve, you’ll have to start with yourself. By Taylor Hill & Carter Harkins

Publisher’s Page

Featured Entrepreneur

C O LU M N S

Three Essential Functions, Part 2 — Service Profitability

Over the years, retiring Editorial Advisor Jim McDermott has been more than simply a mentor — he’s been a friend. By Terry Tanker Ken Goodrich, CEO Goettl Air Conditioning

20 Questions with Scott Larson President & COO of Gustave A. Larson

The more hours you can bill, the higher your service department’s profitability. By Ruth King

Be Proactive About #MeToo, or Face Consequences Employers are now on notice to make appropriate efforts to protect their employees from harassment and properly investigate claims. By Jeffrey S. Ettenger, Esq

M A R K E T WAT C H Stock Index: The HVACR Business Stock Index tumbled, shedding 136.55 points, or 8.73 percent and closing at 1426.74, the lowest close since April 2017. Visit hvacrbusiness.com/stock-index to read this month’s analysis.

All Hands on Deck! Processes and procedures can be the difference in whether your business survives, even under distress, or it sinks. By Vicki LaPlant

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PUBLISHER’S PAGE

BY TERRY TANKER THE HVACR MANAGEMENT MAGAZINE TERRY Tanker Publisher ttanker@hvacrbusiness.com PETE Grasso Editor pgrasso@hvacrbusiness.com MEGAN LaSalla Art Director mlasalla@hvacrbusiness.com BRUCE Sprague Circulation Manager bs200264@sbcglobal.net BARBARA Kerr Executive Assistant bkerr@hvacrbusiness.com

ADVERTISING STAFF EAST COAST/SOUTHEAST JIM Clifford Regional Sales Manager Tel 201-362-5561 Fax 201-334-9186 jclifford@hvacrbusiness.com MIDWEST ERIC Hagerman Regional Sales Manager Tel 216-409-3246 Fax 440-731-8750 ehagerman@hvacrbusiness.com WEST COAST TERRY Tanker Publisher Tel 440-731-8600 Fax 440-731-8750 ttanker@hvacrbusiness.com

HVACR Business, founded January 1981, is a monthly national trade magazine serving contractors, mechanical engineers, manufacturers, manufacturer representatives, wholesalers, distributors, trade associations, and others in the heating, ventilating, air conditioning and refrigeration (HVACR) industry primarily in the U.S. The editorial focus and mission of HVACR Business is to provide business owners and managers with the very best business management concepts available. Critical topics covered include leadership, management, strategy, finance, sales, marketing, training, education, staffing, operations, human resources, legal issues, customer service and more. We are dedicated to helping contractors master these key management skills and provide them with the resources necessary to build strong, profitable companies. Every effort is made to provide accurate information, however, the publisher assumes no responsibility for accuracy of submitted advertising and editorial information. Copyright©2018 by JFT Properties LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. Subscription Rates: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: U.S. and possessions: 1 year $48; 2 years $75; 3 years $96; Canadian and foreign, 1-year $108 U.S. funds only. Single copies $8. Subscriptions are prepaid, and check or money orders only. Subscriber Services: To order a subscription or change your address, write to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039 or call (440) 731-8600; or visit our Web site at www.hvacrbusiness.com. For questions regarding your subscription, please contact bkerr@hvacrbusiness.com. HVACR Business (ISSN 2153-2877) Published monthly by JFT Properties LLC., 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039. POSTMASTER: Send address changes to HVACR Business, 31674 Center Ridge Road, Suite 104, North Ridgeville, OH 44039. Periodicals postage paid at Cleveland, OH and additional mailing offices. (USPS 025-431)

Industry Titan, Valued Friend Retires … Again Jim McDermott, our editorial advisor, is retiring … again. After spending 37 years in a number of leadership positions with a large publishing company, Jim retired in 2002. Four years later, I asked him to help me launch HVACR Business, and it was difficult to tell who was more excited. Jim had been in the HVACR contracting and engineering space since the late 1960s and he’s seen it all. His knowledge spans multiple industries — contracting, engineering, distribution and manufacturing. With his help and guidance, I knew HVACR Business would be a success. We wrote a business plan, which became the foundation for HVACR Business. Once this blue print was complete, we went about recruiting other industry leaders to write for and advise us. Within weeks, Ron Smith, Ruth King (still writing for us today) and Jackie Rainwater were on the team.

www.hvacrbusiness.com www.HVACRBUSINESS.com www.hvacrbusiness.com

Jim and I built on our relationship as we continued to see one another at meetings and national events. And, in 2006 when he reached out to gauge my interest in joining HVACR Business, well, that just felt like old times and I had to accept!

Over the years, Jim has been more than simply a mentor — he’s been a friend.

Later, Theo Etzel, Mike Coyne, Guy Kawasaki, Paul Grunau and others joined our growing list of contributors. Based on their knowledge, we had every aspect of business and contracting covered. It’s not often you find a person with abundant knowledge to share, a passion for business and a willingness to help the next man in line. I guess you call that type of person a mentor. But over the years, Jim has been more than that — he’s been a friend. When we first started, we talked on the phone a lot, Jim in North Carolina and me in Cleveland. He’d launch into one topic after another, all editorial ideas we should be executing. I simply could not write things down fast enough. As a result, we invested in a VOIP phone system. Jim would call with an idea (or three or four) and I’d simply press one button and every detail was recorded — no pen in hand. I’ll miss those calls (though, I suspect I’ll still get occasional calls from time to time). I’ve asked a few who worked with Jim to share a thought or two below.

Ron Smith, consultant and author of “HVAC Spells Wealth” 31674 Center Ridge Road, Suite 104 North Ridgeville, OH 44039 Tel: (440) 731-8600 Fax: (440) 731-8750 Web site: www.hvacrbusiness.com (ISSN: 2153-2877)

I was a diligent reader of anything Jim published and shortly thereafter began writing and submitting articles to him. I had never written before, but apparently Jim thought the articles were worth publishing, so I continued to submit them for a long while. Many years later, and after I became well known in our industry, I realized that the articles Jim accepted and published contributed to establishing “The Ron Smith brand.”

I first met Jim McDermott sometime in the late 1960s or early in the 1970s when he invited me to attend a meeting he was hosting for several HVACR contractors at a resort in Florida. As a group, we had interesting conversations, shared processes and ideas that worked in our own companies with the other attendees, formed relationships and had a dinner together.

In my opinion, the single greatest contribution he made to our industry was when he, recognizing the adversarial relationship between manufacturers, distributors and contractors, took the initiative to do something about it. He started arranging a number of major dialogue meetings of great contractors with major manufacturers. I find it hard to believe and accept that Jim is finally retiring from the industry that he obviously cares about so deeply. I wish both Jim and his wife Sandy the very best, however, and hope that they enjoy the well-deserved rest.

Ruth King, profitability master and president of HVAC Channel TV Jim McDermott has done a lot for the industry and contractors over the years. I am so sorry to see him retire. His main focus was contractors — he simply wanted to help them do well and he knew he could provide the blue print to do it. All they had to do was read and follow along. He also worked through trade shows and alliances to help contractors. His work with HVACR Business allowed him to continue to influence the industry from a positive, profitable perspective. Jim, I wish you well.

Matt Michel, president of Service Nation, Inc. Jim McDermott is a towering figure in the HVAC industry. From his editorial platform, he oversaw one of the greatest periods of service innovation the industry has seen, helping to bring Ron Smith and his best of class practices he was pioneering at Modern Air in Ft. Myers, Fla. to the entire country. We take all of this for granted today because it seems so ordinary. At the time, it was anything but ordinary. It was revolutionary. Ron was the pioneer and Jim provided the spotlight. Cheers, Jim! HVACR BUSINESS NOVEMBER 2018

Featured

ENTREPRENEUR

Keep Shining BY PETE GRASSO

K KEN GOODRICH Title: CEO Company: Goettl Air Conditioning Website: goettl.com Year Founded: 1939 Headquarters: Las Vegas Work Performed: Residential Repair, Replacement and Installation No. of Employees: 200 Vendor-Partners: Amana, Dynamic Air Cleaner, Aprilaire Affiliations: Air Conditioning Contractors of America (ACCA) Partnerships: Arizona’s Children Association, Sojourner Center, Susan G. Komen for the Cure, Hope & A Future, Inc.

en Goodrich got his start in this industry the same way as many HVACR contractors: holding a flashlight for his father as he worked on air conditioners.

“By the time I was old enough to drive, I was proficient as an air conditioning technician and ran service calls,” Goodrich recalls. “Through many years of being the official flashlight holder, I became a skilled technician, learned invaluable business lessons and, ultimately, how to be the best at what I do and make customers happy.” Early on, however, a career in HVACR was not what Goodrich wanted to do with his life … or so he thought. “I grew up in Las Vegas and it can be miserably hot on those roofs. I decided that wasn’t the way I wanted to make a living, so I went to college and got a degree in finance,” he says. “When I interviewed for finance jobs, I’d get offers that were half of what I was making in HVACR.” Goodrich simply couldn’t wrap his head around making half the pay, so like any good entrepreneur, he decided to start his own business and go with what he knew. “About the time I decided to return to this industry, my dad fell ill and passed away,” he says. “I purchased the business from my mother; it was called Racee Air Conditioning. I went to work on building an enterprise rather than a family business.” Over the next 10 years, Goodrich struggled with learning how to run a business and understanding how to implement business systems and processes, as well as creating management teams and leading people. Eventually, he built a fairly successful company, which attracted an HVACR industry consolidator in 1997. He sold the company and worked for the consolidator for a couple of years. “Being a part of a larger company exposed me to operating processes, acquisition strategies and new perspectives on how bigger business is done,” Goodrich says. “I was intrigued to see if I could take that knowledge and apply it to another company.” In 2001, armed with his new-found perspective, Goodrich started putting some businesses together in Las Vegas and Phoenix, and grew sizeable in those markets. They had five locations and ended up selling them to the same buyer as last time, in early 2008.

HVACR BUSINESS MONTH 2018

“I became the division vice-president, then the president of the Western Division for several years, when the opportunity presented itself to purchase Goettl Air Conditioning,” Goodrich says. “It was something I could not pass up, as Goettl has been a part of my career since I started.” Goettl was the brand of the first air conditioner Goodrich shined the flashlight on for his dad. Goettls were designed to operate in the high ambient temperatures of the Sonoran and Mohave Deserts. So, when he was growing up and learning the business, his dad installed Goettls. Goettl Air Conditioning was started in 1939 by Gust and Adam Goettl, two brothers who moved to Phoenix from Austria. Their vision to establish a company that could make the intense desert heat a livable environment helped paved the way for a population boom in the emerging Southwest. In 2013, Goodrich took control of Goettl and immediately installed new management and systems to manage the company. Soon, Goettl Air Conditioning went from hemorrhaging millions of dollars a year to being a profitable, industry pioneer yet again. Then, Goodrich started expanding Goettl Air Conditioning throughout the Southwest while resurrecting the brand and ideals that shaped the company. “We currently have locations in Phoenix, Tucson, Las Vegas and Corona, Calif.,” Goodrich says. “We’re aiming to significantly increase our footprint throughout California. Our next move is toward Sacramento, and then going further into Los Angeles.” Goodrich has also recently expanded Goettl’s training outreach with a new 53,000-square-foot Las Vegas facility housing the region’s largest state-of-theart training center: Goettl University. “This facility and Goettl University will fulfill a life-long dream of mine where HVAC technicians throughout the U.S. will be trained the Goettl way,” Goodrich says. “Leadership skills and management skills will be part of our curriculum, in addition to training our technicians and installers.” u

Pete Grasso is the editor of HVACR Business magazine. Email him at pgrasso@hvacrbusiness.com.

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FINANCE

BY RUTH KING

Three Essential Functions, Part 2 — Service Profitability

ast month I wrote about maintenance profitability, the most important segment of your business. It feeds service and replacement, the subjects of this column and next month’s column. How do you ensure that your service rates are correct? Here’s the formula: Highest paid technician’s hourly wage + Overhead cost per hour for the service department + Net profit per hour you desire. This is your hourly rate for maintenance plan customers assuming that the service technician can bill out 100 percent of his

assuming you could bill 100 percent of a service technician’s time.

You don’t want technicians to stretch warranty calls or maintenance calls because they think they don’t have enough to do in a day. time. Since this is impossible unless you don’t have meetings, training, vacations and holidays, estimate the total percentage of billable time. This is your hourly rate for maintenance customers. Then divide by the 1, minus the discount you give to maintenance customers to arrive at your hourly rate for

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Let’s assume you can bill 75 percent of the service technician’s time. The hourly rate for maintenance customers is:

non-maintenance customers.

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Here’s an example: 1. Highest paid technician’s hourly wage = $30/hr. 2. Overhead cost/hour for the service department = $35/hr. 3. Net profit/hour you desire = $75/hr. Your service rate would be $140/hr,

Assume you have a 15 percent discount for maintenance clients: The regular hourly rate is: $186.67/.85 = $219.61 This is why residential HVACR contractors should be on flat rate pricing.

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HVACR BUSINESS NOVEMBER 2018

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Residential HVACR contractors should be on flat rate pricing. Whereas commercial customers have an advantage in that most customers will pay travel time. Commercial customers have an advantage in that most customers will pay travel time. Other than vacations, holidays, meetings, and trainings, the remainder of a technician’s time is billable. In addition, commercial customers can easily charge for everything they use: torches, vacuum pumps, reclaimers, etc. And, you can charge for shop materials — usually five percent of the materials used or a number calculated by taking your total shop materials cost last year divided by the number of service tickets you had last year. Choose the larger number for the invoice. Here are five ways to help your service technicians be more productive, i.e. bill more hours. The more hours you can bill, the higher your service department’s profitability. 1. Track and post billed hours. What gets tracked gets improved. Put a poster on the wall with the number of total hours worked for the week and how many of those hours were billable. In six months you will know the percentages for busy months and slower months. Once you know the trend, have a contest to increase billable hours over a six-month period. 2. The only time service technicians are in the office is for meetings. They go to their first call from their homes. They go home from their last call. In most states you can pay them from the time they arrive at the customer’s home/office until they leave the last customer’s home/office. GPS helps you monitor this. Route the technicians through the shop to pick up parts as they are travelling to their calls. 3. Give a technician one call at a time. When technicians see all of their calls they stretch the time or rush the time to complete them in a day. In addition, they may change their schedule to suit their needs rather than what dispatch has promised the customer. www.hvacrbusiness.com

TIME TESTED. CONTRACTOR APPROVED.

4. Never answer the question, “How many calls do I have today?” The answer is, “Enough.” If the technician asks again, answer with “Enough.” Eventually they will stop asking. You don’t want them to stretch warranty calls or maintenance calls because they think they don’t have enough to do in a day. 5. Debrief the technicians after the calls. At a minimum ask the following questions: a. Is the call complete? If not, why not — what parts need to be ordered, etc. b. What recommendations did you make that the customer declined (or needs a quote)? The answer to this question gives you work in the slower times of the year. This is your tickler file. It can be electronic or copies of service tickets in a desk drawer folder. Whenever the technicians have a slower day, call the customers and ask whether the recommended work can be performed. This keeps them profitably busy. c. Did you collect (or get a store stamp/ manager’s signature, etc.)? d. Did you get a picture of the model and serial number for the unit you were working on? This picture should be sent to the office and uploaded into the customer file. e. Is the customer 100 percent satisfied? Debriefing ensures that you don’t miss any additional potential for service revenues.

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Next month I will cover replacement profitability. u Ruth King is president of HVAC Channel TV and holds a Class II (unrestricted) contractors license in Georgia. She has more than 25 years of experience to help grow HVACR companies. Contact her by email at ruthking@hvacchannel.tv.

HVACR BUSINESS NOVEMBER 2018

D O I N G G O O D IS

GOOD FOR BUSINESS

Friedrich’s volunteer employees help deliver donated A/C units for hurricane relief efforts last year.

When your company gives back to the community in a charitable way, it’s a win-win-win situation for your customers, your employees and your business BY PETE GRASSO

n December 1997, Mark Geschke’s granddaughter Megan Diane was born premature, weighing only 1 lb., 10 oz. Geschke and his family spent five long months in the Neonatal Intensive Care Unit (NICU) at Rainbow Babies and Children’s Hospital in Cleveland. During that time, Geschke visited the hospital on a daily basis and saw first-hand what the NICU nurses dealt with on a daily basis. It really touched him. “We got to see first-hand what the NICU nurses do daily; all that goes into the care of these special children. Not only medically, but mentally and physically. It was not only a very emotional time for our family, but a great learning experience on how they cared for Megan and the other babies in the NICU,” Geschke says. “They are truly angles from heaven sent to care for the sickest of children and we can never thank them enough.”

Giving back to the community is a great way to boost employee morale, connect with customers on a personal level and, most important, improve the comfort and lives of others. Unfortunately, Megan Diane didn’t make it. Out of that very personal tragedy, however, rose Geschke’s passion for helping those children and nurses. As owner of Bauer & Son One Hour Heating & Air Conditioning, Geschke decided not only to give back personally, but also to make it a part of his company’s corporate social responsibility program. “We shut the company down one day and took everybody down to Akron Children’s Hospital to show them what we were going to get involved with,” Geschke says. “At that point, I was still in a position

HVACR BUSINESS NOVEMBER 2018

where I didn’t have a whole lot of day-today duties, so I could really take whatever days I wanted.” Mondays were normally his day off, so Geschke figured he’d go down there personally and volunteer every week. And he’s been there ever since. In addition to Bauer & Son’s local involvement with Akron Children’s Hospital, Geschke spearheaded Direct Energy’s corporate participation with the Children’s Miracle Network (CMN). “Helping hospitals with advances in technology and equipment are just one

of the ways donations from Direct Energy help power the lives of patients at CMN Hospitals,” Geschke says. To date, Direct Energy has donated over $1.7 million through each of their brands campaigns and programs. Donations are used to fund patient services, new equipment and charitable care. Corporate Social Responsibility programs like Direct Energy’s are not unique to this industry. Every day, stories appear in the news about charitable programs put on by HVACR contractors and manufacturers. Giving back to the community is a great way to boost employee morale, connect with customers on a personal level and, most important, improve the comfort and lives of others. continued on page 12

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SERVICE EXPERTS In January 2018, Service Experts became a proud supporter of the MakeA-Wish Foundation. As an organization, Service Experts has donated $150,000 to help create life-changing wishes for children with critical illnesses. “As of September 30, we have raised an additional $133,527 through various local marketing activities such as our company-wide Bowl-A-Thon, employee payroll deductions, t-shirt sales, dunk booths, internal raffles, spare change jars and yard sales,” says Scott Boose, president and CEO of Service Experts. “As a company, it’s important for us to be able to participate in the communities where we live, work and play.” Not only is it important to give back, but Boose also believes it gives their company an incredible opportunity to truly make a difference in people’s lives through this partnership. Above and beyond Service Experts’ initial donation, the company incentivizes its local centers to work with their partners and customers in the community to help grant even more wishes. “Our employees throughout the United States and Canada have taken the initiative to coordinate various local activities

Contractors have a valuable skill that can make a real difference to society. By donating their time and talent, they can impact the quality of life for those in need. to generate awareness and provide additional support for Make-A-Wish,” Boose says. “Our employees have come together to coordinate local fundraising initiatives and host three wish reveal events.” The amount of teamwork and extra effort has been amazing. Boose says it’s exhilarating to see so many of their employees come together to support the partnership with Make-A-Wish to help grant wishes to brave children who are living with serious illnesses. “We’ve seen our involvement with Make-A-Wish reach to our customers, as many of them have decided to join us on our journey to help grant more wishes by actively participating in our campaigns,” he says. “There are so many important organizations that can expand their mission through the support of corporate partnerships.” Through its involvement with Make-AWish, Service Experts hopes its customers continue to realize the commitment to the communities it serves. Backed by an incredible team of big-hearted general

managers and their teams, Service Experts has also performed incredible acts of kindness in their communities throughout the US and Canada. Local center community efforts included staging food, blood, toy, and clothing drives to donating entire home comfort systems. “We have been fortunate enough to work with great teams through various local Make-A-Wish chapters and have also been honored to get to know a few wish families in markets where we have hosted wish reveal events,” Boose says.

FRIEDRICH AIR CONDITIONING Friedrich Air Conditioning believes in the value of excellence and that extends to everything it does. “We create innovative high-quality products, but we believe our legacy as a 135-year old company extends beyond product, to impact lives,” says Holly Beck, director of marketing for Friedrich. “Corporate Social Responsibility is a part of our culture and as stated in our mission statement, we are ‘committed to

An orphanage in Mexico received a Friedrich donated ductless system.

ove l the L e x’s Fee Lenno provides fre m to progra llations ta s in HVACR need. in those

HVACR BUSINESS NOVEMBER 2018

This year, 155 Lennox dealers across 24 states and provinces participated in Feel the Love Day.

improving people’s lives with our products and social actions.’” Corporate philanthropy is important to Friedrich. The company actively looks for opportunities to support a variety of worthy causes and contribute to the advancement of education in HVACR and engineering studies. Product support has ranged from hurricane relief efforts, to schools, orphanages, historic buildings, local and national homeless assistance organizations, a Children’s STEM Museum and the San Antonio Zoo. Central to Friedrich’s corporate values is a focus on doing the right thing. That guides the company and the decisions it makes. “It’s not just about donating product; it’s about contributing to the overall benefit of the community, locally and nationwide,” Beck says. “We encourage Friedrich employees to get involved as well and many have contributed their own time, effort and talents to doing everything from delivering donations to helping with installing them.” While Friedrich doesn’t have a formal corporate giving program, worthy causes and requests often come to them or are recommended, and with limited resources, continued on page 14

Friedrich’s units we re donated to an org anization that provides housi ng for homeless.

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Photo credit: DAN RIEDLHUBER/St. Albert Gazette

continued from page 12

they try to accommodate if they’re able and if it is a fit with what they do. “Our employees make suggestions and pitch in to help,” Beck says. A great example of that is when Hurricane Irene struck last year, devastating a coastal town not too far away from Friedrich’s headquarters. The company received a request from the emergency crews who were trying to provide relief for that community. Given the lack of transportation services to that area at the time, a group of our employees volunteered to drive and deliver all the donated Friedrich product to help ensure it got to where it was needed most. “It creates tremendous pride among our employees to give back in this way and see the real difference our products can make to someone’s life,” Beck says. “Oftentimes, we’re working to give back to people and organizations who are not only facing extremely difficult situations, but whose suffering is greater due to the lack of A/C resources.” Another example is an orphanage in Mexico where Friedrich donated product last year. The facility is in an area where the temperatures can often reach 100F and the kids and staff desperately needed relief from the blazing temperatures. “There are many stories like this, and our employees get an incredible amount of satisfaction knowing their work and efforts have directly helped improve the quality of someone else’s life,” Beck says. “Friedrich employees have always taken a lot of pride in their work, but absolutely, these efforts multiply that by tenfold. When you can see how what you do greatly impacts and improves someone’s quality of life, you can’t help but feel empowered and proud of the difference you’re making.”

The best way to make sure you are your potential customer’s choice is to be a familiar part of their world. People do business with people they like — and people like them. up through efforts like these. “Contractors have a valuable skill that can make a real difference to society,” Beck says. “By donating their time and talent, they can impact the quality of life for those in need.” Beck believes the primary motivation for giving back is not for marketing purposes, although they do work with recipient organizations to announce when they’ve installed donated product and when possible, create case studies about them. “We view that as a win-win for both Friedrich and the recipient as an avenue to help get the word out about worthy causes and potentially inspire others to get involved,” she says.

ARS/RESCUE ROOTER ARS/Rescue Rooter has a long history of community involvement and outreach. ARS Cares aims to donate an HVACR system or water heater to a community member in need. “We wanted to start a program that provided home comfort to people who need but cannot afford it in our communities,” says Dave Slott, co-CEO of ARS/ Rescue Rooter.

It’s also important for employees to see that the company doesn’t just talk about its corporate values, but also works hard to live up to them through actions that make a difference not only to customers, but to its community.

ARS’s service centers coordinate closely with corporate to ensure the most impactful strategy for their location. The service centers of ARS/Rescue Rooter eagerly adopted this program, and many branches elect to do multiple installations a year.

Everyone at Friedrich embraces that philosophy and sees that it is driven not only from the top down but also bottom

“Employees look forward to participating in these installations,” Slott says. “Many donate their time for the work

HVACR BUSINESS NOVEMBER 2018

done, and the day is full with laughs, tears and other memories that make this program so special. ARS/Rescue Rooter is a very big family, and our communities are our homes.” Community outreach and volunteerism through programs like ARS Cares, participating in Tim Tebow Foundation’s “Night to Shine” and sponsoring many non-profit organizations nationwide is critical to the morale of the organization. “Community outreach is a great teambuilding resource, and employees love sharing photos and stories from these activities,” Slott says. “ARS will always be an organization that realizes our communities are of the upmost importance.” Slott believes both consumers and prospective talent are attracted to companies that are socially responsible. ARS knows that doing the right thing is essential to its success.

ONLINE-ACCESS, INC. Over the past year, Online-Access, Inc. developed and tested its Helping out Locally program to give its more than 400 contractor clients the ability to shift marketing dollars into local giving — and do it profitably. “My brother and I were raised with the belief that giving back is a privilege — not a burden,” says David Squires, president of Online-Access. “We spent a year testing and refining it so that our client’s can easily run competitions between organizations in their community, to engage their community in a way where everyone wins and they dramatically increase their brand awareness.”

When they started testing the program in their HVAC company, Vincent’s Heating and Plumbing, they made sure their employees knew about the goals and had input into the local groups they work with, which gave them employee buy-in. “Our team at Online-Access loves the fact that with just our existing clients alone, Helping out Locally has the potential to put more than two million dollars a year into deserving local organizations all around the country” Squires says. “Our clients have really loved the fact that we have the program for them to use and that it is totally turnkey.” Vincent’s Heating and Plumbing has also benefited tremendously from the program. In one charity competition they sponsored, there were more than 12,000 votes from a total of about 4,000 people. “All of the voters were local and they went to our HVACR company website to vote,” Squires says. “The odds are good that those four thousand people that were on our website an average of three times in three months, that if their equipment breaks down in the near future that they will recognize our name when they are looking for a contractor.” Considering that Vincent’s market area is only 30,000 homes, having 13 percent of the entire market area engaging with the company for less than a $2,000 donation is a decent return on a good deed. “This plus the fact that we now have email and SMS information from everyone that voted and we know what they are passionate about, gives us the ability to do affinity marketing with offers that when acted upon help their charity as well,” Squires says. “What contractors need to realize is that the number one reason customers will choose them is familiarity.” When you start to engage with the community, you become memorable because you’re involved in what they are passionate about. “This is much better than trying to get them passionate about a metal box on the side of their house that they don’t even know exists until it breaks,” Squires says. “By making the program a fun competition between charities, not only our company promotes it but their donors promote it to all their friends making it go viral locally.” It’s important today for contractors to www.hvacrbusiness.com

learn how to engage their clients to create familiarity. The days of cheap leads through Internet search are quickly coming to an end as Google monetizes their local business search. “The best way to make sure you are your potential customer’s choice is to be a familiar part of their world,” Squires believes. “In the 40 years I’ve been in this Industry, the fundamental truth of marketing remains, ‘People do business with people they like — and people like them.’”

LENNOX Lennox, as a corporation, has five focus areas of giving: youth, environment, health, arts and education. On the residential side of the business, Lennox has concentrated on the environment side and how to serve the community and make their environment comfortable. “Most people would maybe take environment as more of a sustainability nature, but we’ve taken more of a softer approach,” says Stephanie Bond, director of marketing and communication at Lennox.

“We have 125 plus years of experience as a business leader … we like to say we have the privilege and the power, and we have the position to really positively impact our communities while also benefiting the bottom line.” Formerly called Lennox Heat Up, the new Feel the Love program provides free HVACR installations to those in need. “We asked, ‘what can we do to bring comfort, align it to our business goals and bring it to homeowners that otherwise would potentially not be comfortable in their home?’” Bond says. “And that was really the beginning of Heat Up, which has now become Feel the Love.” There are three key ingredients to the Feel the Love program. First, all HVACR equipment is donated by Lennox. The second ingredient is where the contractor validates a homeowner in need, and they go in, and they install that HVACR equipment for free where their employees are donating their time, and they’re donating all the parts, supplies and the labor to get that done.

“But it really all starts with the community, so the third ingredient is where the community goes in, and they nominate someone in need,” Bond says. “They’re nominating someone that has given back to their community or their country, and most likely never gives to themselves. So this is someone that is needing but isn’t needy.” This year, 155 Lennox dealers across 24 states and provinces participated in Feel the Love Day, doing roughly 165 installations for families in need. It’s no secret that recruiting and retaining employees in this industry is difficult. Bond believes another benefit of Feel the Love is the sense of purpose it gives employees of its dealers. “There are so many statistics out there right now around employees really looking for organizations, businesses, companies that have a higher purpose and get behind a cause,” Bond says. “Ninety-three percent of employees want to be a part of something bigger, want to work for a company that is part of something bigger, so this

program is outstanding in terms of how you can recruit and retain employees.” Corporate Social Responsibility programs can also have a tremendous impact on recruiting new customers. There are also statistics that say a homeowner or a customer is more likely to choose a business or a product when they give back and they have higher purpose. “People are really searching for a well rounded, well respected business, and so this can be the difference of why a consumer chooses a Lennox dealer over a competitor,” Bond says. “You also see the benefit of even more profit and revenue, because people are more willing to buy a more expensive product, as well.” u

Pete Grasso is the editor of HVACR Business magazine. Email him with your Give Back story at pgrasso@hvacrbusiness.com.

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HVACR BUSINESS NOVEMBER 2018

IDENTIFY PEOPLE WITH SKILLS AND DEVELOP THEM

Overcome the skills gap by educating, training and creating your own skilled workforce BY JAMIE KITCHEN

o understand what skills are important today for new hires to bring to the table, it is first important to know what your needs are for the technicians who work for you. This set of expectations should consider how the employee will grow with you — from their hiring to several years down the road — and should vary according to a new hire’s background. Expecting a new technician straight out of college to do what an experienced technician can do is unrealistic. It is also important to know, in advance, what you, as the employer, are willing to invest in their development, as this will influence the type of new hire that would best fit your needs. No matter how you define the specific qualifications your business requires of its technicians, there is one skill that envelops all contractors and is absolutely indispensable to business today: communication.

It is crucial to evaluate a new technician’s communication skills and incorporate communication training as part of both new-hire and ongoing training. Being able to have a good dialogue with your customers is critical and, judging by the amount of training programs available to develop communication and other soft skills, the industry recognizes the need. It is crucial to evaluate a new technician’s communication skills and incorporate communication training — even if they are already a good communicator — as part of both new-hire and ongoing training. As an employer, the technical skills you should be looking for depend on the resources you are willing to invest in upfront wages and benefits — and, in training.

HVACR BUSINESS NOVEMBER 2018

HIGHLY DEVELOPED SKILLS RARE If you choose to seek qualified people rather than invest heavily in training, keep in mind highly skilled people tend to have more options for employment. In some cases, this creates competition among contractors looking for the same type of people, and, thus, you may have to pay more to reap the benefits. The same can be true when considering college graduates — the most desired will be those instructors recommend without hesitation because the student has shown all the desirable aptitudes from day one of classes.

If you choose to hire more skilled talent up front, remember: 1. They are easy to recognize, and you should feel confident you are getting what you pay for, as they come with an eager, wholehearted recommendation and/or stellar performance reviews. 2. They are rare. Unfortunately, out of a class of 30 students, there may only be three to five of these ultra-high-performing students. It is no surprise they are usually all hired a month or more before they even graduate. 3. For experienced technicians who have built a solid reputation, the same rules apply. However, the payoff is you can expect that they will be independent and add value from day one.

IDENTIFY POTENTIAL TALENT Harder to recognize are the students who do well but do not stand out as much among their peers because they may not have a strong extroverted personality. www.hvacrbusiness.com

They, too, can be star employees if given a chance and, more importantly, support along the way through mentoring, ridealongs and soft-skill classes. They also make up a much larger part of the available talent pool, which is a strong plus for employers. I highly recommend you work with your local technical school(s), get to know the instructors and help them out in a way that is workable on your end. Instructors can be your best friends when it comes to helping you find and recognize good talent, and being around the students yourself allows you to observe them and see them at work first hand. Do they show up late and unprepared for class or have an attitude you wouldn’t want associated with your business? If they do, does having a good score on an exam override these kinds of behaviors and personal skills? Any graduate or prospective hire who can show up on time, demonstrate some technical competence and have a good work ethic should be a focus of your hiring efforts. The challenge is you will not be able to just give them a van, tools, GPS and send them off to fix stuff. This can be a particular challenge for smaller contractors who may not have the senior technicians available to mentor and do ride-alongs with new hires as they learn the trade and develop the necessary skills. Keep in mind, however, this is an investment, so it makes sense to use past interactions of potential hires with instructors and managers to help identify those with the skills required. Once you have identified and hopefully hired someone with the attributes you desire, developing them is a continuation of your investment, like adding to any employer-provided benefit or retirement fund. In fact, it is pretty much the same as using the proceeds of the sale of your business to help you retire. Since investing wisely is the name of the game here, you need to determine what your investment should look like six months, one year or even five years down the road. What you are looking for will change as time goes on, with the goal being the amount of investment diminishes with time while the value and return increases. If you choose to seek and develop potential talent, remember: www.hvacrbusiness.com

Instructors can be your best friends when it comes to helping you find and recognize good talent, and being around the students yourself allows you to observe them and see them at work first hand. 1. These workers will likely have a good work ethic, show up on time and do what they are capable of because they have already demonstrated this work pattern. 2. They will have a desire to grow and learn new capabilities, as they will want the benefits that come with these new skills. 3. You will need to invest in their development and it will likely take at least a year for them to become fully productive members of the team. The more expected of them, the longer the development time and investment period becomes. 4. This type of hiring investment often lends itself to larger businesses that can invest the time of an experienced technician to help train and make do with a little less output from the experienced technician in terms of work completed during that period.

Finally, it’s important to implement a set of ground rules for training ride-alongs. Make sure the new hire gets to see both how something is done and then provided a safe environment to try it themselves with supervision. Give the senior technician several points to monitor so you can discuss later. This will allow you to then evaluate trends in development and overall performance. Also, it’s important to let the senior technician know you value the experience over the time it takes to complete a job, so they are assured they can spend the time needed to let the new technician learn. Once the new hire develops a set of skills they can do on their own, you can send them out a few days a week to work alone. On the other days, have them travel with a senior technician to jobs that

provide an opportunity to learn new skills and continue to build on what they have learned. Ultimately, for a successful contracting business, finding technically strong employees with good communication and people skills is the goal — and a well considered and supported mentorship program is an excellent way to develop these. Remember, a technician who has gone through a mentorship program can grow into a top-rated technician who remembers their experiences and makes a fantastic choice to mentor other future new hires, thus repeatedly paying back your investment. u Jamie Kitchen is an account manager for Danfoss. He previously was the training manager for Danfoss in North America. Jamie has worked in several positions around the world to develop an expertise on the various considerations each region requires to achieve its air treatment needs — whether through refrigeration, air conditioning, heating or humidification. Visit danfoss.us for additional information.

The first three to six months after a person is hired is generally the time when you will monitor, evaluate and decide whether or not a person will work out in their role and as part of your business. Unfortunately, this is often used as an excuse to minimize investment in training and developing the person because of the fear of losing the investment if the person does not work out. While this may make sense if you just hired a person who claims to be experienced but you have little actual knowledge or testimonial of their past, it is counterintuitive if you have already invested in finding the person with the skills you already desire. The whole purpose of working with schools to vet the better students from the rest is to quickly overcome the typical six-month probation period. Obviously, some caution is warranted, but do not risk losing good talent by not developing it early on if you have done your homework in hiring them. One of my biggest recommendations is to ensure the new hire has access to a more senior technician. HVACR BUSINESS NOVEMBER 2018

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COMPANY CULTURE STARTS AT THE TOP If you want your company’s culture to improve, you’ll have to start with yourself BY TAYLOR HILL & CARTER HARKINS

ulture has become such a buzzword that the word itself is almost meaningless — but the power and influence that culture has within your company is indisputable. Culture determines what’s expected and what’s unacceptable in terms of how you and your employees interact with each other, conduct business, and treat customers.

If you don’t take pride in your company, the value you bring and the services you provide, how can you expect your employees and customers to? transparency, respect, and empathy? • Do I put customers and employees first or sales and profits first?

It’s also what attracts or repels potential employees and what largely decides the loyalty of your existing employees. Whether you want to admit it or not, company culture starts at the top. If you’re looking to improve your company’s culture, you’ll have to start with yourself.

• How do I handle conflict and difficult customers?

Ask yourself:

• What do I allow in my business and how do I conduct myself when no one’s watching?

• Do I think of and treat my employees as liabilities or assets? • Do I care about and invest in my employees? • Do I rely on my employees’ fear of me to keep them in line? • Do I promote and practice honesty, www.hvacrbusiness.com

• What sort of expectations have I set for my company? • Do I have one set of standards for myself and another for my employees?

The answers to these questions will largely define the type of culture you have in your company. Is your culture a culture of value, inclusivity, respect, honesty, onus, integrity and teamwork or is it an us (owners/managers) versus

them (employees/customers) culture that’s fueled by fear, cutthroat competition, or apathy? The first is attractive to employees, potential employees, and customers while the latter will make you, your team, and your customers miserable.

WHAT YOU BRING The skills gap is a popular topic of discussion and most people blame the hiring problem that plagues blue collar industries on a lack of interest in technical schools and training. While there is some truth to that, it’s not the whole story. Today’s workforce wants leaders who intentionally cultivate inclusive, transparent, people-first cultures and provide opportunities to make a difference. No one’s looking for a job that makes them feel unimportant, inadequate, or like a cog in a machine — but that’s the kind of

attitude and culture that many blue-collar leaders present to the next generation of workers. So why are we so surprised that it’s harder than ever to find and keep good workers? The reality is this: the way you perceive your company, your employees, the work you all do, and the people you serve impacts and influences the perception your employees, potential employees, and your customers have. If you don’t take pride in your company, the value you bring and the services you provide, how can you expect your employees and customers to? How can you expect your employees to go the extra mile, to put their hearts into the job, and to care about the satisfaction of your customers and the success of the company? How can you expect your customers to pay you what you’re worth, to treat you and the work you do with respect, and to choose you over a competitor who will do the work for less? You can’t! continued on page 22

HVACR BUSINESS NOVEMBER 2018

The process isn’t easy and you may even lose some employees who aren’t a good fit for the culture you’re creating, but in the long run, it’s so worth it.

continued from page 21

Culture is top down and requires you, as the business owner or manager, to sow the seeds and pull the weeds. It may seem like a lot of work, but if you give a big push at the beginning and take the time to write down and communicate your company culture, it will serve as a constant guide that allows you to step back and focus on other things. Like a well-planned garden, a well thought out and intentional company culture will produce higher yields in terms of quality employees, quality customers, and quality service, and will require less effort on your part in the long run. It will lay the expectations for what you do and how you do it, so you don’t have to micromanage or be there to assist with every decision or challenge. If it’s not written down and communicated, on the other hand, it can easily be shaped and shifted by each team member’s personal culture and core values, which may not align with those you want for your company.

To really encourage buy-in and make your culture stick, you’ll want to get everyone involved in the process of determining what your company’s culture should be. The point is: whether you take the time to determine and establish a written company culture or you don’t, you have one — and your culture is your standard.

INTENTIONALLY CREATE A CULTURE Culture can and should be intentional. To really encourage buy-in and make your culture stick, you’ll want to get everyone involved in the process of determining what your company’s culture should be. Take some time to ask your employees

what values and standards they have and hold. Find out what’s important to them in a company culture and make sure everyone is in agreement as to what type of culture you’re all working to cultivate and protect. Once you’ve established what that is, make sure everyone agrees to hold themselves and their decisions and behaviors up to the standard the culture creates. And perhaps most importantly: don’t just demand consistency, cooperation, and integrity from your team — demand it from yourself as well.

Disregard the R-22 Myth!

Leadership is the No. 1 contributor to company culture and culture is what drives company performance. So, be a better leader, create a better culture, lead a better business, and enjoy a better community. It all starts with culture — it all starts with you. u

Taylor Hill and Carter Harkins are the cohosts of the Blue Collar Proud (BCP) Show, a podcast that’s all about having and living the blue collar dream, and co-authors of the book Blue Collar Proud: 10 Principles for Building a Kickass Business You Love. Taylor & Carter also co-founded Spark Marketer, a Nashville-based digital marketing company that works primarily with service businesses. Visit bcpshow.com/contact for additional information.

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LEGAL

BY JEFFREY S. ETTENGER, ESQ.

Be Proactive About #MeToo, or Face Consequences

he last several years has seen a major rise in high profile sexual harassment claims in all areas of society, including entertainment, politics, sports, business and news. While sexual harassment allegations and lawsuits are not new, the massive publicity they are now generating has caused an increase in sexual harassment complaints generally.

Employees need a better understanding of what is considered workplace harassment, what is and is not appropriate behavior, and how managers can spot and avoid sexual harassment.

Employers are now on notice that if they do not make appropriate efforts to protect their employees from harassment or fail to properly investigate claims when they are made, they risk significant liability and overall damage to their reputation and business.

Dedicated Human Resources.

UNDERSTAND THE LAW Under Federal law, and generally all State law, employees are protected from acts of sexual harassment. These laws also set forth the potential fines, penalties and damages that can be assessed against an employer and individuals who violate these regulations. Notably, even if a State has lax or employer-friendly statutes, the employer is still subject to Federal laws, which have significant penalties and damages for violating sexual harassment laws. These damages could include payment of lost earnings, emotional damages, punitive damages and attorneyâ&#x20AC;&#x2122;s fees. Those who conduct business in employee-friendly States such as California and New York, face greater risks. Employers likely will be subject to additional scrutiny for violating sexual harassment laws, and may have additional stringent requirements imposed on them to protect employees. The most important thing for employers to do is to have a meaningful conversation with their attorney to understand the law, their obligations and what penalties they face for non-compliance. www.hvacrbusiness.com

While never perfect, appropriate training should reduce sexual harassment issues and claims.

PROTECT YOURSELF Understanding the law is one element of protecting an employer from potential liability, but preparing an action plan to handle workplace harassment is a very critical step in avoiding problems and exposure. If the employer follows these steps, they have a greater likelihood of avoiding claims, lawsuits and workplace distractions.

Employee Manual. Most States do not require employers to have an employee manual. Nevertheless, having a bona fide written antidiscrimination and anti-sexual harassment policy is good practice and may act as a defense to sexual harassment claims. Certain States, such as New York, have recently mandated employers to have a specific sexual harassment policy, outlining complaint and investigation procedures. Even if itâ&#x20AC;&#x2122;s not required, employers should have a sexual harassment prevention policy

because without one, employees will not know how to appropriately make a sexual harassment claim, and employers cannot demonstrate they have a procedure for investigating a claim. Both lead to major problems for the employer.

Sexual Harassment Prevention Training. Similarly, few States mandate sexual harassment prevention training for employees or supervisors. Likely because of the #MeToo Movement, that is changing. California, and now New York, have mandated interactive sexual harassment training for employees and supervisors. Other States will likely soon join them. The fines and penalties for noncompliance will also be significant. Whether mandated or not, sexual harassment prevention training has become a necessary and important requirement for employers. While employers are loath to take time away from their employeesâ&#x20AC;&#x2122; regular work obligations and are averse to spending money for training, allocating 1 to 3 hours per year for workplace training should provide a substantial benefit to employers.

A major component of avoiding sexual harassment claims and properly investigating them is for the employer to have someone employed by the company as its dedicated human resources coordinator. Employees need to know that if a problem occurs, that a specific person within the company is there to investigate the claim, in a timely and appropriate manner. Said human resources coordinator, with the assistance of outside counsel, needs to be trained in how to properly investigate and resolve complaints. In many instances, if the employee believes that the company has investigated the claim, respected the parties and taken appropriate action to reprimand or train the alleged harasser, he/she will not file a lawsuit or claim with a government agency. The world is changing. The sooner companies adapt to these changes and take appropriate steps to protect their interests, the better off they will be. u

Jeffrey S. Ettenger, Esq. is a partner at Schwartz Ettenger PLLC where he concentrates his practice in the area of labor and employment law, assisting employers with their day-to-day employment needs, as well as all areas of employment litigation. Jeff is a regular speaker and writer on employment law topics for business owners. Contact him via email at jse@selawny.com or visit schwartzettenger.com for additional information.

HVACR BUSINESS NOVEMBER 2018

OPERATIONS

BY VICKI LAPLANT

All Hands on Deck!

ecently, my husband and I were visiting Vermont. And as everyone knows, when one is on the road, one must eat to keep body and mind fueled. We heard about an amazing restaurant with an outstanding and unique menu. Who could resist, right? But, what happened there was beyond amazing, beyond extraordinary and had nothing to do with the food. A young woman, Erin, waited our table. She was a consummate service professional. Everything Erin did was with impeccable taste and style. The explanations, the recommendations, the choices, the service and care were fluid and perfectly timed and virtually invisible. These were elements of the standards of the perfect customer experience that she had learned or that the restaurant motivated her to follow. And still, that was not the best part of this special evening. Erin was an engaging professional because her approach was energetic, yet calming and delivered with respect (The same personality traits that are needed in all employees who interact with the customer). And still, that was not the best part of this three-and-a-half hour evening.

THE STORY BEGINS When I asked about summer vacation activities, we discovered she did not spend the summer shopping at the local Mall, hanging out with friends or going to the gym. Erin attended UCONN, the University of Connecticut, where she met a brother and sister who were from Alaska. The three became fast friends. The parents of Erin’s new friends owned a fishing boat and delivered salmon to canneries for other fishermen, meaning the family lived on the boat for three months during the summer fishing season in the Bering Sea — quite a distance from Vermont. At the end of her first year of college, her new friends asked if she would

over the transom. The bilge pumps could not keep up. The captain gave the abandon ship order. Water temperature in the Bearing Strait is approximately 40 degrees Fahrenheit. Hypothermia can result in death in only a few minutes in water at that temperature.

Processes and procedures can be the difference in whether your business survives even under distress or whether it sinks. like to crew with their family on the F/V AMBITION, the family fishing vessel. Erin said, “Yes!” at this fantastic opportunity. The work would be hard and the hours would be long. She would have to learn her crew role. There would be much training for safety, maintenance and organization protocols, maritime rules for docking procedures day or night, and efficiency processes for on and off loading 185,000 pounds of salmon from ship-to-ship or at a cannery. And many more processes and procedures for a 70-foot fishing vessel to be profitable at the end of the season. The first summer was a huge success. A captain and a crew of four, a total of two men and three women, managed the challenges of the Bering Sea that summer — the weather, the temperatures, the mental and physical strains. All knew and followed the processes and procedures required of each crewmember to make the season safe and profitable Five people on a 70-foot vessel create close working quarters. Everyone had assignments to be completed and standards to be met, 24/7. That summer

HVACR BUSINESS NOVEMBER 2018

the people on the boat functioned like a well-oiled machine (surely, you’re now seeing the theme of this column). It was the summer of a lifetime for Erin. But the story doesn’t end here. The summer was so good; Erin asked if she could return the following summer. The family, of course, said, “Yes.” Erin knew and followed the processes and procedures required in the often-dangerous world of fishing boats and stormy seas.

THE STORY CONTINUES Summer number two started much where summer number one left off. Everyone doing their jobs, following processes and procedures, accomplishing their assigned tasks. But as often happens in the real world, an obstacle can derail the best of planning. Part way through the fishing season, the F/V AMBITION was headed to the cannery with 180,000 pounds of salmon on board. A squall came up, the seas became rough, and the load of salmon shifted and the boat began to list to the starboard side. The stern of the vessel was much too low. Waves were now coming

Now more than ever before, with the worst happening, processes and procedures that had been practiced and drilled into everyone in that crew kicked into overdrive. The distress call went out to the Coast Guard, a “Mayday” to any ship nearby. Erin and her friend immediately put on protective insulating suits and jumped into the water. Even the way the crew abandoned the boat was dictated by documented, learned procedures. In only a matter of minutes, all 70 feet of the F/V AMBITION, sank.

THE HAPPY ENDING Fortunately, another vessel and the Coast Guard were close by and everyone was rescued. But it was processes and procedures and constant training in those processes and procedures and no hesitation in following those processes that really saved the crew of the F/V AMBITION. Even when the worst happened, everyone survived. The take-away from this real-life story are apparent. Processes and procedures can be the difference in whether your business survives even under distress or whether it sinks. u Vicki LaPlant is the owner of Vital Learning Experiences and has been a leading consultant to the HVACR and plumbing industry for more than 20 years. She has trained countless contractor owners on how to run efficient, profitable businesses. For additional information, visit vleishvac.com.

www.hvacrbusiness.com

BUILDING A HIGHER STANDARD. ONE DEALER AT A TIME. “Your Residential Specialist”

NICK BECKER CARL NEWCOMB

SERVICE SUPERVISOR

OWNER BILL BECKER OWNER

MARV BECKER OWNER

American Standard is committed to doing what’s right—and that’s why we choose to work with dealers who make the same commitment to their employees, customers, and communities. Now, we’re honoring the dealers who best embody these values with our Building a Higher Standard distinguished dealer award. Congratulations to Cary of La Crosse, Wisconsin, one of four inaugural winners. See how you can become a dealer at amsd.us

SEE THE STORY OF CARY HEATING AND AIR CONDITIONING AT

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20QUESTIONS

>> with SCOTT LARSON

We sat down with Scott Larson, president and COO of Gustave A. Larson Company, a wholesale HVACR equipment, parts and supplies distributor with more than 50 locations in the Midwest, Plains and Mountain states. Larson, who is the third generation to lead his family business, discussed future industry trends, contractor education and what it means to be successful. 1. What’s your management philosophy? Lead by example. Don’t expect your people to do something you wouldn’t do yourself, but at the same time, don’t do it for them. Integrity is truly a core philosophy that extends from doing the right thing to also if you see something, say something. 2. What do you view as the most important aspect of your job? Leadership. No matter how good the individuals are on a team, it needs a good leader. A good leader can make the team great. 3. How do you communicate effectively to such a large organization? We have one operating, management and execution system that everyone in the organization has bought into. We hold weekly team meetings throughout the organization that cascades goals and quarterly priorities. We also hold an all company meeting every 90 days. 4. What trends do you see moving forward? Asian variable refrigerant flow (VRF) and ductless manufacturers will continue to integrate their products with traditional split systems to a point where they will become a much larger part of U.S. residential housing. Also, Internet selling will continue to grow, especially as public companies such as Watsco and Ferguson use their e-tailing platforms to grow beyond the normal two-step distribution channel. 5. What challenges will contractors face in the next few years? They’ll have to figure out how to deal with the next recession, as well as how to transition their business to the next generation of ownership, even if not to direct family. 6. How are you positioned to help contractors with these challenges? We truly partner with our customers and become their closest advisor. That’s why we call our salespeople consultants, as we want them to help their contractors be better business people and help anticipate any issue their business may be facing. 7. What do you see successful contractors doing that others are not? Those that truly partner with their supplier to add value to their business and their customers are successful. Somebody in our organization put it best, what is the “sustainable strategic advantage” they have to be successful? We will help.

HVACR BUSINESS NOVEMBER 2018

8. What management practices will Gustave A. Larson help contractors improve? We help them put better business systems in place and sell more product at higher margins. 9. What types of training do you offer contractors? Technical and business training, as well as valueadded services/solutions that are like training, only better. 10. Would you explain your philosophy on training? We like to offer formal training two ways, both in-person as well as online through our Larson Learning Center. Our philosophy is simple: we don’t succeed unless our customers succeed, so we provide training and other solutions to help them be more successful. 11. Could you tell us about Gustave A. Larson’s training programs? Most of what you’ll see on our website is formal contractor product training, but in addition, we also offer our Larson Business Solutions that help our customers in a multitude of areas of their business all with the intent of helping them sell more, operate more efficiently and, therefore, make more money. 12. How do you promote the training in the industry? We have links to everything available at galarson.com on our home page as well as in our Training & Events and Services section. We also do specific email and text marketing campaigns, as well as installing flat screens in all our branches. 13. Are you working on any specific tools to help contractors? Larson Business Solutions helps the contractor with such things as efficient online ordering, selling more

parts and accessories (higher margins), lead generation and how to optimize SEO, ad and media campaigns, flat rate pricing, technical support including access to our team of service advisors, recruiting employees, extended warranties and more. We also offer crane service in selected markets to help the contractor save the hassle and time of coordinating equipment delivery and the lift. 14. Where do you see the most significant growth in your business? Definitely in three areas: ductless and VRF, new dealers and residential and commercial new construction. 15. What are the challenges facing wholesaler/ distributors today? The challenge continues to be remaining a valueadded part of the two-step distribution channel and not getting squeezed out. I truly believe we provide that value for our suppliers and contractors, otherwise independent distributors like us wouldn’t survive. 16. What does the future hold for HVACR distributors in general? Distribution is always stuck in the middle with demands from customers and suppliers. We have to look at our partners like we look at ourselves internally: whom do we align with from a values perspective? If we can do this, we’ll have long-term success. 17. How did you get your start in HVACR? In the warehouse working for dad back in the day. No job was too small from dusting shelves to sweeping floors, receiving, stocking, pulling parts, shipping, warranty, etc. 18. What’s your proudest achievement so far? Building a team of leaders that has taken the business to another level. 19. How do you measure success? Simple. Did we accomplish what we said we were going to do? 20. Who has been your biggest role model? My father Karl by far. He was second generation, taking over from my grandpa Gus Larson. Dad was a visionary who took over the business, actually shrunk it to make it more successful and then started growing again from there. He’s still an inspiration to me and all in our company today.

www.hvacrbusiness.com

My ambition

is to be the one they’ll recommend to friends. You want to be the one they’ll call on to make their home the comfortable place it should be. Our payment solutions, tools and technologies make it easy to oﬀer your customers more purchasing power. They’ll also help you increase store traﬀic, raise average transaction size and build repeat business. Just right for your future. Find out how we can help you realize your ambitions. Visit toolbox.mysynchrony.com/hv or call us at 866-950-5677.

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What are you working forward to?

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The information presented in this advertisement is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for general information purposes only. An offer is made only through delivery of a Franchise Disclosure Document that has been registered with and approved by the appropriate agency in your state, if your state requires such registration (unless an exemption applies). If you are a resident of, or wish to acquire a franchise to be located in a state requiring registration, we will not offer you a franchise unless and until we have complied with applicable pre-sale registration and disclosure requirements in your state. One Hour Air Conditioning Franchising, L.L.C., 12 Greenway Plaza, Suite 250, Houston, TX 77046. Call 1-866-370-8302. ©2018 Clockwork IP, LLC. All rights reserved.

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