Culture to me is the thing to focus on. I don't think there's anything more important in business than spending your time on culture. Welcome to the Home Service Expert, where each week, Tommy Chats with world-class entrepreneurs and experts in various fields, like marketing, sales, hiring, and leadership, to find out what's really behind their success in business. Now, your host, the Home Service Millionaire, Tommy Nello. Before we get started, I wanted to share two important things with you. First, I want you to implement what you learned today. To do that, you'll have to take a lot of notes, but I also want you to fully concentrate on the interview. So I asked the team to take notes for you. Just text notes, N-O-T-E-S, to 888-526-1299. That's 888-526-1299. And you'll receive a link to download the notes from today's episode. Also, if you haven't got your copy of my newest book, Elevate, please go check it out. I'll share with you how I attracted and developed a winning team that helped me build the $200 million company in 22 states. Just go to Elevate and win.com/podcast to get your copy. Now, let's go back into the interview. >> All right, guys. Welcome back to the Home Service Expert. Today, I got an awesome guest, close friend now, Rob Anderson, got recommended through Brigham Dickinson. And he said, this guy is the best home improvement man on the planet. He's based out of Utah, 35 plus years in the home service space and home improvement known for culture, first leadership, built a water treatment company from 11 employees to a million revenue into 230 employees on the first axis, 650 employees and several hundreds of millions in revenue on the second exit. It became the largest independent water treatment company in the United States. Rob Anderson expanded organically into full service plumbing, HVAC and electrical, secured Costco, Home Depot and Loas partnerships, 31 Costco locations across three states, 63 Home Depot's and multiple Loas, successfully pivoted growth model after telemarketing regulations entered a core channel. I know all about these stories and I've heard so many at the house. Rob, how are you doing today? >> I'm doing good, Tommy. Thanks for having me. >> I know you don't do these very often, so I'm glad you made it. No, I'm happy to be here though. It's fun to be with you. >> So tell me, listen, let the audience get to know you a little bit. What got you into water treatment? What got you into home improvement? And what are you excited about today? >> Well, I fell into water treatment by accident, actually. I fell into home services by accident and worked hard at it for 35 years and sold my business and retired and what's exciting to me is I'm getting dragged back in and having more fun than ever, honestly. >> You know, I think that there's a lot of people out there that have tried to get into Costco and they've tried the Home Depot, they've tried the Loas. And I know your story, but you guys made that Uber successful. That was a really big lead channel for you. What makes those channels successful? >> Well, first of all, you have to have a mindset of over the top customer service because the most important thing that a retailer wants, and I mean a retailer at every level from the buyer to the warehouse manager to the person at the front desk who has to deal with their customer, you have to be over the top in how you treat a customer and make them happy. In fact, your job actually has to become making your customer happy. It there is no other job when you're dealing with retail. >> So let's go over the, when you walk in a home, how you ask, I guess the happy talk. >> Well, yeah, I mean, look, our job and every person's job in our company is to make our customer happy. That's our job. My job was to make our employees happy. And, you know, so everything we did was about that and was directed toward measuring that. And we started every appointment with the same words. And that is Mr. Mello. You know, I'm Rob with Superior Water and Air. I'm here to do X, but before I get started, I just need you to know what my job is. My job today is to make sure you're happy when I leave. So I'm going to ask a favor before we start. Okay? I'm going to do my job in this way, this way, this way. I just need you to tell me when I'm done if you're happy or not. And if you're not, I'll make sure I make it right or I'll keep working until you are fair enough. >> Fair enough. And that just sets everything up. Now what are some of the things you've heard at the end of the call, possibly when the client was not completely satisfied or happy? >> Well, it didn't happen very often. But when, because you know, when you start with a commitment, it's just like the commitment you make in life, you don't want to let your customer down when you've committed to your customer that that's your job right out of the shoot, right? It's not somebody else telling them, you're going to do it. It's you. But when they aren't happy, you know, we gave the employees a lot of runway to do what they needed to do, whether as walk the dog, do the dishes, move the lawn, it didn't matter. Now, if it was outside of something that they could do, then they would pick up the phone and they would call me or they would call their manager. And we would get on our horse and get out there and make sure that customer was happy right then. >> So you had very little turnover. You know, we hired 62 brand new guys went through our training last month. And right now, we're at a 35% turnover in the first year. I talked to Kent Goodridge. I've talked to a lot of people hiring, you know, whether it's 30, 40, 50 guys a month. And I'll tell you, when you step into a garage and it's 20 below, or you step into a garage, it's 145 degrees because the heat's trapped and it's 122 out. >> Some people just say this is not for me. I mean, yeah. What do you look for in a person when you hire them to make sure they're not going to turn over? What are some of the attributes? How do you recruit so well? Because I think turnover is a good thing unless you're really good at recruiting. >> Well, you have to, I mean, recruiting becomes, you know, an art, right? It's more than a science, it's an art. And, you know, I think it's important that you get to know people. I think it's important that you pay attention to what people tell you because they will tell you who they are. If you ask the right questions, you know, and I think it's important that you define culture. I think one of the biggest mistakes that companies make today in every business is they say culture is important, right? But culture is a strange word. It's like the word satisfaction. If you asked a million people what the definition of culture was in their business, you would get a million different answers. Just like if I said, what is the definition of satisfaction? Now everybody has a different definition. My definition is satisfaction is an excuse to do less than my best, right? So we don't use the word satisfaction. We use the word happiness or wowing people. You know, it's, so culture is the same way. And you know, with culture, you want it to be simple. So we defined it very simply. If you ask anybody in our business, the culture of our business was we are a group of people that do our best for each other and for our customer. And everybody knew it. It was simple. It can be measured. And it's what makes all the difference because if you educate people on what your culture is to start, then you can start to identify if they're a good fit. And I would ask the question, one of the most fascinating questions I ask when I interview anyone, especially leadership, is how do I know, Tommy, if I'm getting your best? How am I going to know six months from now if I'm getting your best? Because that's our culture. I expect your best. How am I going to know? What is, in your mind, one of the best answers you've ever received for that question? Give me an example of the best answer, give me an example of not great. Well, when somebody says, look, I'm going to be the best salesperson you've ever had. Something like that, right? Somebody says, if you hire me, I'll bring 20 guys with me or I'll bring our customer base over to you. Or I run from people like that. If somebody says to me, look, you will know by your metrics and your KPIs, you'll know by whether I'm improving.
proving every week or not, you'll be able to see it. Now, you know, I have a saying on the back of my business card, I've had it for 35 years, and it's my favorite saying, it's what we know, always trumps what we don't know. Now, that's the reason why you measure, right? That's the reason you have KPIs, so that you can know what somebody's best is up to that point. Now, that becomes the expectation. I don't allow for anything less than that, because that's our culture. We do our best, but the thing that's interesting about that is you do your best in different directions, right? Because you have to do your best not just for your customer, but for each other. And so you want to measure that. And, you know, my best, it's fascinating. You know, what happens when you're committed to doing your best. Reality is I don't do it. Very, you know, I just don't. There's days, there's any, every day I don't do my best at something. And so what's important is spending the time to identify that, and then recommit, make it right if I need to, and then figure out how to get people to do what we need them to do. And, you know, because you can pay people to do anything you want them to do. Tommy, right? You can pay them. You can pay someone to do anything. But you can't pay anybody to want to do something. And so I would spend my time thinking about our people, what can I do to help them want to do what we need them to do? And that is to give us their best. Now, sometimes their best isn't enough and they aren't a good fit, like you said. But, you know, there's three reasons people don't get something done. They're either a can't, a won't, or a don't know how. If they're a can't, you have to identify that right out of the shoot. If somebody can't handle 120 degrees in a garage, you've got to know that right now. Yeah, somebody to go run a 40-yard dash and they have one leg. They're a can't, right? So they just don't fit the need. If you have a won't, you got to find out why they won't, because they'll become a cancer really fast. But what's interesting about the won't is, usually they're standing on a principle. And if you can find what principle they're standing on and help them way through that, they become disciples. Okay. And then the dono house are easy. You have probably the best training program for dono house in the industry. I think that's your secret sauce, honestly. So dono house, you just got to spend your time training, training, training, and help them know how. Give them the tools. I was just, I was just on a call with 20 guys that are in the HSF. And I was showing them all the data that we have. When it comes to conversion rate, we have a great profile that we send to our clients. We have a picture of our family. We tell them why we love working for the company, why we love broad drawers, when our pastimes are our pets. Well, we're looking forward to in the future. And then the next thing is we offer coffee on the way. And we'll stop as Starbucks. Could I grab you something on the way? Mr. Anderson. And then we don't ring the doorbell. We knock the door. We play with the dog. Then we measure the time it takes to start the first estimate that we build rapport. If you start in the first estimate within seven minutes, you don't really get to know the client. You didn't really ask them real right questions. And everyone's asking me, how do you use the data to actually get results? And I said it's the feedback loop. And I said there's priorities. First thing I care about is conversion rate. I mean, you're not getting reviews without converting the client. So there's a couple of things that go into conversion rate. I just went over some of them. The next thing is did you offer a new door? If it's an old door and a lot of guys don't, it's a belief system. They won't because they're better at service. So I got to change their belief system to say it's the right thing for the client to give them the option to choose. And the next thing is are you selling our trademark parts, which are the top of the line? But a lot of people say, I got all this data. And we track. We've got all these KPIs, but they don't know where to start. How would you tell somebody to get a priority level? Or what do you do with all the data? What's your answer? Well, first of all, if we're in a house and a customer has a need or a want, and we leave that house and didn't take care of it, did we do our best? So I don't ever ask, did you sell something? I'm asking, did you do your best? Okay. And if we didn't take care of that customer, I mean, if that customer had a need and we didn't take care of it, then we didn't leave them happy. And that's your job. Your job is to make your customer happy. Your job isn't to sell. Your job isn't to think while you're in the house, how much you're going to make in commission. Your job is to do everything in your power to make that customer happy before you leave. And if they have a need, someone's going to make them happy. And if it's not us, then why are we in business? Why are we even here? So every KPI that we had was driven around a customer being happy. Now, believe it or not, that sells. Every sales number, every, you know, the conversion rate from, you know, we had a, we had a system called Ladsai leads appointments, demo sales installs. And from the beginning of the chain, from the lead to the end of an install, there was a drop off rate at every point. And you would measure, we would measure the drop off rate and try to narrow that drop off rate all the way through that chain. And man, it just, it just was like magic measuring that. And every employee has a little, you know, had a different problem in that chain. And so you have to focus on each and every individual employee. So that's how we use the data. We, we expected a lot of our people we did because that's our culture. Yeah, it's interesting. I talk a lot about the call center or the contact center. And I added a KPI to kind of, that became an outlier for us is the cancellation rate that we don't even show up to the house. It gets canceled. And that has to do with you've got a need. You're stuck in your garage. You need to get this fixed. You've got options. You need to get out. So, you know, now I take my booking rate minus my cancellation rate per CSR. And that's probably the hardest thing for a demand driven business is capacity planning because I'd imagine in water. And you could tell me if I'm wrong, would nobody says if I don't get, if I don't get really clean water in this house this week, we are screwed. Actually, it's a little different than you think in home services. You know, there's push through business and there's pull through business pull through business is HVAC. It's 100 degrees outside. Air conditioner goes down. Grudge doors. You've got to have help. Right. Plumbing your water heater is leaking. You need help right now. Water treatments more of a push through meaning people don't really realize yet that they need good water in their house. And they don't realize to the extent. So, you know, most people think, well, gosh, you know, I'll just go to Costco and buy a Britta and I'm great. So, it has to be push through because there's an education process that takes place in a house. So, tracking those conversion rates get really important because everybody needs to understand that we are a push through business in water treatment. Going back, you know, I'm just curious. Water is super important and I had no idea until I started looking at the stats and the health stats and just the skin's your largest organism and how bad the water can be. Are you happy you landed in water because I know we've talked about it's more difficult than the man driven business. Yes. Well, you know, I am happy that I landed. I've had some extremely fulfilling experiences. I would say. And I guess it would have been 2003. We were at telemarketing driven business. We had 35 or 36 telemarketers calling out at any given time. We had a pretty good conversion rate. We were doing a lot of things right. We were one of the larger independent water treatment companies in the country at the time. And then the telemarketing laws changed and we, you know, we were out of business. I mean, I went home one night. I told my wife tomorrow morning, I've got to go lock the business up and I'm done. But guess what happened the next morning the sun came out. And I got in my car and I got mad. I got pissed. I'm like, you know, we're going to figure this thing out. And it was fascinating. It was about that time. The EPA had come out with a report that 97% of the schools in Washington, D.C. had led traces in the drinking water.
water that the kids were drinking. 97% the EPA had identified it because they had a problem. The kids in Washington to see it, the time we're testing lower than any children in the country. So we started to think, gosh, do we have that problem in Utah and we did? We started to test drinking water in the schools in Utah, especially the older schools that had led traces in the faucets or in the pipes. And we wanted to do something about it. And so we came up with a program called Safe Water for Utah Kids, where we donated water filtration and installed it free to the state to the schools, where we filtered every drinking fountain in 762 schools in the state of Utah. Wow. And that experience, changed our lives. That's, that's a lot. I mean, 762, you said? It cost us over a million dollars to do the original install to put filters in every single drinking fountain. We had to learn how to work with the school superintendents and all of the service guys in the districts. It was a lot of work. But it put us on the map because in 2003, I had to reinvent myself. We had to start advertising more conventionally and finding other ways. This is before we learned how to deal with online and Google and all that stuff, right? And so I went to the television. First of all, I started traveling around the country to find the guys that knew how to market. I'd pick up the phone. I'd talk to suppliers and say, who are your best, who are the best water companies in the United States? And I'd pick up the phone. I'd call them and say, you don't know me. But can I come see you? You know, I, and I would tell them what we had done. They'd share what they had done and I learned. And I learned from a guy named Tom Gersner, Anderson Water Systems in Rochester, New York. This is a performance CV, right? And he taught me how to buy advertising on a cost per lead basis. And no one had ever done that in our market. So I came back with his system, his program that he taught me. I found a station, it was the CBS station that was willing to go with us. And the president of the station at the time says, well, you know, why should I do this with you? And I said, well, because I wanted donate filters to the schools, he says, that's a cool thing. I ever heard what's stopping you from doing it. And I said, well, I need to meet the governor. He said, no problem. He had me in the governor's office in two days. Wow. I was sitting, I had a meeting with the governor and the lieutenant governor and three days later, I was in front of all the superintendents who get together once a year to meet. And yeah, they cleared the first 30 minutes of that meeting for me. And then they were lining up to be the first, you know, they all wanted to be the first to do it. He then gave me his lead anchor and created a PSA program and did a PSA spot. And, you know, the only other PSA that they ran was Baby Your Baby. So you had Safewater Fuhta Kids and Baby Your Baby. And you had the lead anchor. And then that just led, I mean, that sent us on a whole path to being who we are today. You know, it's really interesting about that as I always say success leaves clues and don't be afraid of rejection. And if you want to figure out how to be the best at Anjus List, look throughout the country at HVAC plumbing, electrical, roofing, water treatment. Find out who has 9,000 reviews on Anjus List and call them up and say, I want to fly out there, learn from you. I'll buy you lunch, I'll buy you dinner, I'll pay you for your time. I'm not gonna, I'm not getting into your industry. So I would advise you could do your same industry on the opposite side of the country and just get on a flight. But there's nothing that hasn't been already done. Don't reinvent the wheel. It just be curious and ask for help. I love that. And I love your story. I love how you did that, right? And the way you help other companies just is fascinating to me. You know, it's why so many people attract to you. - It's so hard when the guy tells me I'm at 5 million to go back to that, you know, 'cause I was 5 million in 2013. And it's not that I don't put myself in their shoes. It's just, it's so hard to go back over a decade and to think I don't have the resources nor the people nor the money to grow. The first thing I tell them is, are you measuring anything? Like do you have any stats? Do you believe your numbers? Do you understand your balance sheet income statement? Do you see your labor cost and your cost of goods? Do you see, do you know how to read that stuff? Because that illiteracy will stop you from knowing what to prioritize. - That's right. But now there's, I think the missing piece, and tell me what you think about this, 'cause this is kind of the epiphany I've made in the last few months, is by not having a great CFO and an FPNA team to do the analysis of what the data is and get the data. And actually like, I get my numbers on the first from last month and on the fifth is exact. Most people say close out by the 10th or the 15th. When I started learning what that data meant, and asking questions and learning about what departments are responsible for what, it changed my life. And I feel like most companies have a good bullkeeper. That's not really that good. It's like a part time bullkeeper. - A good person. - Yeah. - And the financial literacy with the KPIs is like the fundamental of business. - We bit the bullet and hired a CFO at about 10 million in revenue. You know, with what we were paying them, we probably, well, looking back, I couldn't afford them, but looking forward, I couldn't afford not to have them. - Right. - 'Cause if I wouldn't have had that data, we would have never gotten to 30. We would have never gotten to 150. You know, we just would have never been able to continue to grow. And so I agree 100%. I think the financial information, the KPIs into the nitty gritty, right? Are so important. People just, they don't grow because they can't. They don't have that extra money to spend to market, like you and I did. - Mm-hmm. - When the economy went bad in 2008 and '9 and '10, we doubled down and we spent a lot more, right? than anybody else. We captured market share. And honestly, I didn't really make a lot of money in those three years. I didn't really care. I just wanted the market share. - Right. - I knew what was happening in the economy and I knew I would come out on the other end. And because I had the infrastructure, I knew we'd make money as soon as the economy turned and we did. And then that's what made our company in Ticing, I believe to sell when I exited and retired. - That's a great topic. You hear these horror stories about private equity. Capital ventures, the VCs that you hear hedge funds. And the sediment out there all over social media and for the vast majority of home service owners, home improvement owners is they're evil, they're bad, they're not good, but they're coming no matter what. They make mistakes, there's different varieties of PE. There's great ones, there's not so great ones, there's unsophisticated ones, there's ones that really will back you up. What is your overall? What would you tell somebody that just thinks negatively, pure negative about private equity? - Well, I was watching a good friend of mine here in Phoenix, Paul Kelly, I had a front row seat really. He helped me a lot in my business over the years. And I watched what he was doing originally with the Flint group and then with the Ranch group. And he was the master of course, but I also watched the other groups that were rolling up on the East Coast through the South and up the West. Nobody had done it in the Inter-Mountain West and Colorado, Utah, Idaho, that area had been untouched. And I could see it was coming. So I decided to be the first, create the first platform. We rolled 11 companies into our platform in the first 12 months. It was fast and furious. And a lot of fun actually because I knew the companies that I wanted to partner with and we captured a ton of market share. What I would say is we probably weren't as prepared, I mean, I had never done it. Looking back, I think I would do things a little bit different for sure. But whether you sell or not, you have to have your company prepared to sell. - Right, built to sell. - You have to have it prepared to sell. If it's not, then you're just making excuses and justifying doing less than your best. Well, listen, Paul was in here recently and I will say he's doing this thing right now called raising goats and he's not building this for anything else, but he goes, there's, he goes, we can turn people into goats, the greatest of all time. And he goes, I know how to do it. And he goes, this isn't a forever class. I'm only gonna do a couple of them. And it's not,
Not a network where you sign up and it's forever and he consults you. You come in for three days and you learn this. Massive amount of information. I told him, Paul, I want to see what you guys do. I want to bring a few guys to it and I think I don't make any money from this. I will just tell you if anybody gets an opportunity to invest in this program he's putting out there and to work on her Paul, it's not going to happen forever. It's going to be probably the next year that he's done. It's his way of giving back. So if you're interested in raising goats, look up raising goats and go to Paul Kelly, I'm a big fan of Paul's. I think he's very intentional like you said and he's a hell of an operator. I mean, I think he went through five turns for four or five. Paul's done something that probably will never be done again. So yeah, gold is a good term for Paul, but also he's a great teacher. I think it would be well worth anyone's time to go sit through that class for sure. You said you did what 12 or 13 acquisitions was it? We did 11 in the first 12 months and then we slowed down to integrate. We got a little bit out over our skis that way, but it was a lot of fun. I mean, we partnered with a group that were really good at acquisitions. At the time, my mindset was the same as 2008, 9 and 10, right? I wanted to capture market share. But yeah, no, it was fun. It just was a lot of work. I would do it again. I would do some things differently, but I would certainly do it again. It changed my life. It put me in a position to do some things that I've always wanted to do and I'm really grateful for that. So the timing was special. We started. We went right at the beginning of 2020, right? When COVID was just starting. Yep. And you've mentioned to me that you've really learned how to get the deals done. There's a lot of people like a drum up a lot of opportunities, but never get to the finish line or not acquisition. What do you think the key ingredients are to get to the finish line? Well, well, there's a lot of key ingredients. The companies that I wanted to partner with, first of all, were all good cultures. They were all good men with good teams. So I think having people be a good fit for your organization and making sure that when you go out, that you're a good fit for whatever organization you sell to or join. Because like I say, culture to me is the thing to focus on. And I think if you get your culture right and people have a chance to come look under the hood and your numbers are in line and you have that kind of culture, you're going to command several more multiples and have the pick of where you decide to go. One of the things that I've realized people have tried to work on their business sometimes 30 years. You got to show up, have dinner, learn about them, ask the right questions, take notes. And find out what's important to them because sometimes it's not always money plays a key role in them. But what's going to happen? What's the future? Are you dreaming big? What's going to happen with my people? What does this mean for me? There's a lot of questions. What do you find where some of the most important questions you would get? I think if you can show that there are no skeletons buried. If you can show somebody that's looking at your business, because when you're doing the due process and you're making the reps and warranties on your business, you better dot the eyes and cross the tees and you better show them everything. Because if you don't, it's going to cost you in the back end. Well, if you have nothing to hide and everything's out in the open because that's your culture, I would say that's the first thing you take care of. Make sure that you don't have customers that are unhappy. You don't have an environment where you have employees that are wanting to sue you, things like that. So we would work on our culture non-stop. In 2000, we started teaching Freud's theory of self-deception to our employees. It's the problem of having a problem that you cause, but you don't realize that you have the problem. You cause it. Therefore, you don't want to be part of the solution. It's not my problem. It's everyone else's. Right? And so we would literally spend a day, every year with our people teaching and discussing what their motives are. What are their true motives and how do you find out what they are? Because it eliminated collusion, it eliminated siloing, it eliminated selfishness and focused, it allowed people to focus on results. When you're result-oriented and not me-oriented, magical things can happen. I could tell you a thousand stories where people did things that I could have never dreamed they would have done. I couldn't have asked them to do it. They just did it. When you have that kind of stuff happening, when you have a group of people that are united in the same cause, you're unstoppable. Hard to do as you grow. You know, one thing you're known for was taking the time to really get to know the people, the families, their lives, what motivated them. And it's a little bit easier to do when it's a team of 20 versus 230. How do you do that? And I know you got to teach other leaders to do it, but right now we're at 1300 a.1 and I miss those days. I still this morning, two birthdays, a set of video. I know every birthday, every anniversary, it's fixed to me by my EA and make a video. And soon I'll be sending a handwritten card and their kids. But that's still, I wanted to do more than that. And I find myself, and I'm really good with managing time. But I find, you say you work on culture all the time with 1300 people plus, wife plus kids. It starts to get tough. I'll never forget the first time I met you, Tommy. The thing I fell in love with was when, you know, I asked you about that and you started telling me all of the different things you do to let your people know you care. You know, it's fascinating. I never, I always had a cooler full of drinks in the back of my truck and a box full of food and snacks. And every day, if I was in a certain part of town, I would call this batch and say, who's installing in draper today? Are they still there? Who is it? Send me the address and I would just stop the address. I'd open the back of my truck. I'd walk up to the door and ask for my guys to come out and they'd see me and they'd be shocked. Like, what are you doing here? And I'd say, hey, come on out here for a minute. And I'd load them up with drinks and food and put my arm around them and ask them how their family was doing and you know, it's fascinating. I never asked if they weren't parked right on the street and had their cones out, right? Or if they weren't in uniform because it was 110 degrees in the attic and they were in a grubby t-shirt, they shouldn't have been in. I never said anything. I just told them I loved them. Yep. And I was grateful for them. And by the way, the next day when everybody's loading their trucks up, what do you think they're talking about? Oh, yeah. Yeah, those little things matter. I think you've got to have an intentional plan to do things and it's harder to do as you grow. And that's why leadership seems to be so important. I was on a podcast with the R.O.O. The CEO of Service Titan and one of the co-founders and he said, he thinks that companies stop growing as the bandwidth of the leadership. And the bandwidth of the leadership will never grow unless you teach leadership. And I think private equity struggles with it. There's not enough natural born leaders and I don't know if that's really a thing, but it happens in school and it happens is when you become the captain of the team. And I always look for athletes because a lot of times you practice 10 days a week to play one game. 10 days. And they worked really hard to become great at one thing. So we're going to teach them to do the same mental fortitude to be good at this. But I'm just interested in leadership is there's a lot into leadership. It's leading from up front. It's asking questions. It's really building a culture. But how did you grow leaders? I looked for emotional intelligence first. I think emotional intelligence would tell me a lot about somebody. If I had somebody that wasn't hot head and they didn't fire off at the hip and they knew how to treat people.
and they were charismatic and they were drivers. I mean, nothing, what was it? Emerson, Ralph Aldo Emerson said nothing good ever happened without enthusiasm, right? So I'm looking for enthusiasm. And but at the same time, my job, to scale, my job became to build leaders for sure. And so we would spend a lot of time on that. They actually took ownership of the culture because the culture was defined. And the definition was we're a group of people that do our best for each other in our customer. Well, we constantly wanted to know what your best is as a leader too. And one of the things we would do or one of the secrets we had was leaders would report down. We literally designed meetings around leadership different. So you know, most meetings you go to, who's meeting is it? It's the leaders meeting, right? And you sit in, it's boring and they report all the numbers. We decided, look, let's rewire this. A meeting should start with the result in mind. So the leaders job is to define the result of the meeting and then make sure everybody comes prepared and then watch the magic happen. Not dictate and talk down until and let people hide in your arrogance. So that's where I, again, I can't express enough all the solutions, everything to leadership, to poor sales, to poor productivity, to customer complaints. We would just look to culture to solve everything. I tried to solve every problem through culture. Yeah, I mean, a lot of people talk about millennials, Gen X, Gen Z. There are different people that need different things. And it's not just the money. I thought the money was so important. You look at Maslow's hierarchy of needs, but the money's only, it's only matters to when it's not enough. And then after that, it becomes other things. How do I identify some of those other things? Because not everybody's cut out of the same cloth. Well, first of all, that's the right question, right? Because it has to start with, we all count the same. I mean, I'm a person, they're a person, and we have to see each other as people. And it's fascinating when we would teach this idea that all of us have thoughts that we should do something at any given time for each other. And we betray those thoughts and don't do it. And in the second we do that, we start to justify not doing it. And then that leads us down a rabbit hole of living in a world of justification. Well, if we can expose that, then it opens up the freedom to say, I'm sorry, I'm going to read, you know, "Rhea, I need to make this right." And, man, you know, helping people do that, it's so funny how we don't see each other at work. I can come in and I can blame you for not helping me. I can blame you for all the mistakes you made to make my life rough. And I'm never even thinking about her considering that I didn't do my best to help you, right? And so that's one of the reasons we had such low turnover because as leaders, we realized we had a deep obligation to really know our people and really be responsible. You know, we couldn't just take a shortcut and say, "Oh, we're going to do the easy thing and that's to let them go and hire someone else," right? And then let's just hide behind the fact that we didn't do our best. Yep. The reality is if we had a problem, we started with us. How are we the problem? And how can I help things go right moving forward? And how can I re-engineer this thing so we have a better chance for success? And those are really the questions. And if you get your mindset in an outward position where you're thinking about a result for people rather than an inward position where I'm thinking only about people in terms of what they can do for me, if I get the mindset, right? Then that question you just answered becomes the question every day and we find an answer to it in every situation for every individual person. It just happens. It isn't overwhelming. It's just the opposite. It actually solves more problems that take your time up in a day and empower people and to develop into thing, into flipping professional people that you never saw. You know, I'm sure you've had people that surprised you, that you're like, oh my gosh, I didn't even want to hire that person and then they turn out to be one of your biggest rock stars. Oh yeah. I had a guy that threw bags on an airplane for United and he wanted to come sell for us and he'd never sold anything. And I'm like, there's no way he says, look, just hire me to do anything. hire me to replace filters. I'll just, I'll prove to you what I can do. I just don't want to throw bags on a plane and I want to be in your business because he had been a customer of ours and knew how we treated him and he turned out to be like one of the best sales people I've ever had and I would have never hired him. Yeah, no, it's definitely interesting looking at people. I do find that the blue collar industry is very tough for private equity 'cause they come in and they talk almost like doctors and usually they got a Rolex or wearing loafers, they dress a certain way. And sometimes they miss the fact that maybe that wasn't around when the kid grew up. Maybe they had a bad relation. Maybe they didn't learn about money in school. Maybe they didn't even graduate 10th grade. And I think that's so hard because I haven't seen that mentality of sitting on a high horse walking into a business work. Never. There's a saying in private equity, don't go native. Don't go native. Don't go native. If you ever hear that from a private equity run, when somebody says don't go native, what they're saying is don't get close to the people, don't know them, don't care about them, right? And that's really what private equity, that's where they get their bad rap because they, you know, they're not in the business of people. They're not in the business of serving. They're in the business of making money at all costs and they have lots of different ways of doing it. So if you hear someone say don't go native, run. Private equity is not easy to work for. I will say there's a lot of expectations. And I think people miss this fact that they report to teachers, unions and the police officers and the firefighters and people are investing their life savings in this, hoping that you, they made the right call by purchasing your business. Those meetings they sit on are harder than the ones we have to sit on. And I always try to put myself the EQ side to me says, the Ken Guterich called me up and he said, I want you to learn everything these guys. I want you to have them over to your house, spend the night, ask them a million questions, learn what they know because you'll be unstoppable. If you learn what they go through and how they mathematically engineer these deals, the one thing I very nervous about that I see things go wrong is when they take too much debt where you're just making debt payments and that kind of stipends growth. - It does. And then the second you slow down, they pull the cash out and they start cutting costs and then that's the kiss of death. The other thing you do, you fly their flag. And that's probably the biggest mistake I think you can make when you sell your business is you, it's not your business anymore. - Right. - Okay, you think it is, you want it to be, your identity's tied into it. But if you don't learn right out of the shoot to fly their flag, you're making a big mistake. - Yes. - Right. And it's not gonna be long before you're not there. - I think that's so right. And I talked to my buddy Lance about this and a lot of people think they're gonna come sell to another business or sell to private equity. Or sell to whoever it is. And hey, I just got all this money. Now I get to take the kids to school every day. I get to take Fridays off. The fact is, I knew the day I did that that I was gonna have to work harder. It doesn't mean I can't manipulate my schedule enough to still have time for family to do the things I want. But it's definitely, I didn't think now I get to take a break. And as the next opportunity arises, I'm like, I will say that I see Tommy 3.0. Right now I'm Tommy 2.0. Tommy 3.0 is way more of a culture. I'm still doing, I'm still the CMO of the business today. I'm still, and I will still do to forever all the orientations. I'll still be making the calls. I'll still be talking to people out there. I will call people up, not out. But I'm gonna start hanging out with the endorsements. I've learned this one recently. You know, you've done radio and stuff. So I just had these guys over the biggest endorsers on the radio in Phoenix. And these guys are calling me every day to go into the waste management open. Like we're setting this up. And they'll talk about,
us all day on the radio. And I'm not doing this maliciously. I really like these guys, John J and Rich. They're cool guys. And I mean, they are like awesome to hang out with. And it was just crazy how much we have in common. And so, but you can't do that if you're working in the business all day. You can't do that. I find it fascinating. Tommy, you know, again, you can pay somebody to do anything you want them to do. You can't pay him to want to do it. You are hanging out with people that want you to be successful. When you have people that want to do things for you, they're going to go above and beyond just like you do. You know, if you want your employees to be happy, you're going to do things that other managers don't. You're going to become the preferred employer because of that. And so you've got to really think hard about what it is you want to do, right? Because it that's culture, man, doing our best. One of the most interesting parts of your story is how you ended up working for Costco. It's a huge partnership. Can you walk us through that and how that kind of that then then relationships started? Well, so in 2008, 2007, 2008, the economy started to turn a little bit. I could actually see what was happening. I was listening to some people that were actually forecasting the downfall of the mortgage industry and the housing crisis, right? And so I was a little bit nervous about our business. I was, you know, I'm always looking for new lead sources. And so we decided to start an HVAC company and hadn't been doing it for too long when I heard a little rumor that Costco was thinking about getting into HVAC. And so this, I went home that day. I heard the rumor. I told my wife, honey, I bought a ticket one way to Seattle tomorrow. I don't know when I'll be back, but I'm going to go see if I can get in front of Costco. Now, you know, I worked in retail. I, when I was 24, I was running one of the largest grocery stores in, in Southern California. I had 350 employees and a 50 plus million dollar budget, right? At 24. I knew, I knew how these people think. I knew if I could get in front of them, that I could help them and they could help me. So I just, I went up, I met a guy named Craig Williamson with M.M. Comfort Systems. He was the first kiosk there in Isacua. I didn't want to come out at first and see me, but I just sat in his lobby until he gave up basically. He says, okay, I got 10 minutes. Well, two and a half hours later, we're in the coffee shop down the corner. We're great friends. And he's just an amazing guy to this day. I love him. And he picks up the phone and calls Kathy Hargerson, who is the buyer at Costco and says, Kathy, can I, can I send this guy over to see you? I've got someone you need to meet. She says, well, can he come now? I've got 15 minutes. So I get there. I run over there 15 minute meeting three hours later. We're walking across the street and she's showing me her kiosk. And, she had an assistant by her name Chris Hendrix, who's overall the travel for Costco. Now he, he's got a big job for Costco. But, um, so I just get to know these guys. I get back on the plane. I'm thinking, okay, well, maybe they'll think of me. You know, I mean, I took my shot. I got off the plane and my phone had been blown up by the input by my rapid Linux, who was like, what the heck are you doing? What's going on? Well, they had called him and said, look, we want these guys to, um, to be our test pilot for HVAC. Wow. And, you know, what had happened while I was on the airplane is she started calling these warehouse managers. And what nobody knew is I knew all the warehouse managers. I had relationships with every one of them because we had an office drinking water company and we did their water heaters and we did their water treatment in all the warehouses. Yep. And so I had gone in there and made friends with these guys not knowing that I would ever do business with them. That's just who we are. Again, making customers happy, right? And every one of those managers said, do it. So Kathy says, that's who we want. So we went from being a nobody to the market leader in HVAC overnight. Now it was hard, hardest thing I've ever done in my life. But, um, one of the most fulfilling things and it really put us on the map and made us who we are, you know, um, we ended up in 32 cascos and 63 home depots by the time we were done and and a bunch of lows and and it wasn't long before they asked us to do water treatment and and water heaters and home standby generators and on and on and they're plumbing service and and we had a whole we built our whole business out on that and it we scaled it out. We made sure our pricing was right so that we could make money and our employees could and it was awesome. Rest is history. Home Depot lows casco. I've heard you know what's really really cool. I don't think I've shared this story yet. I don't know who we serviced but it was some high up at home depot. Now they've got a deal with clope which is a manufacturer and all the home depots are good they're filled up and we offered coffee. We offered them everything. We made them happy. Played with their dog and Luke, our CEO got a call two weeks ago of one of the higher up to home depots and said we don't we want to build a special program with you guys. We're not looking for the cheapest. You guys have the best experience. You guys the profile on the way. You guys did everything right. We want to build a program around you guys. So we didn't even look for this. We didn't ask for it. Also a home warranty company reached out and they said that the largest home warranty company in the nation and they're they're working a program out with us because they've heard the good things about us and that's just it's divine I think it's like you could do the right thing you train the right way you build steps and you expect what you expect in the culture and great things find you. I'm excited because I'm like this is the first time in the history of the 20 years I've been doing this. The people are actually doing outreach to us and that's like a different thing that I've never experienced before. But as far as home depot lows and Costco are they all created equal if you had to pick one I've heard Costco's the way to go. Actually they all have their strengths and I'm not saying that to be political. I'm saying that because I love the people that are in their program. See you know those buyers can be brutal until you become their friend and then they want you to be successful. So they work with you and they tell you look you need to do this and then you have the advantage on everybody. You know my dad my dad taught me basically two things that I remember from my dad when I was little my dad said look if you want to make $20 an hour son you've got to be worth $100 an hour while you're making five. Yep. Okay and the set and so I always looked at that with Costco and people. How do we how are we worth that you know and and so we would just I mean we we would do things like you know we we still we would hand right thank you cards for every store manager. We hand wrote thank you cards for every customer. When when we left a house the installer would have a thank you card he'd write a little personal note he'd turn it in the dispatcher would write a personal note with her name that she touched them it would go to the salesperson it would then go to the manager and we had four or five people that wrote a thank you card and so you know the other thing he taught me is look the definition of opportunism is to work your ass off so that when opportunity comes your way you can first recognize it and second take an advantage of it and I've just learned that when you work your butt off like you have Tommy those opportunities come your way yeah you know and it's you can call it divine if you want I think it's just opportunism yeah I mean it's there's a lot of different philosophies but if you do the right thing it's amazing I always said when you help enough people well what what is it you could have anything you want live if you help enough people get what they want then you'll never want for anything yeah and then you'll never want for anything he said I've been thinking a lot about different things lately and what I really appreciate that you do is how many golf courses well no I'm gonna say that to the end I'm gonna say that to the end that's almost at the end I want to talk about one more thing I think this is fascinating anyway dollars yeah so let's talk about anyway I love this if you want to just just a quick lesson on any way dollars look our I think the biggest thing that we do in home services is we help customers recognize and come to conclusions that are going to make their life better that's
what we do. We just make their life better. And using any way dollars, it just gets it done quicker and more efficiently. Meaning, look, you're going to spend the money anyway. You might as well do it this. You know, you're going to spend the money eventually anyway. You might as well do this. And I mean, look, right now, I'm helping my son open a golf improvement business. It's a simulator business with a gym and a recovery center. And, you know, the anyway dollars there are, look, every golfer is going to get injured. And you're going to spend the money anyway on physical therapy and, you know, recovery and all of that stuff. So why not join our program and we'll run you through the Titles Performance Institute. We'll get you an exercise program that helps you prevent injury. And then you can also have all the sports box AI technology in our, in our simulators and help you with your golf swing and have a better experience. And then, you know, so you're using any way dollars there. I mean, there are any way dollars everywhere if you think about it. And the more you can use any way dollars, the better a customer is going to feel when they buy what you're selling. Yeah, it's genius. I love that concept. So how many of the world premier golf courses what are those called again? Well, you have the top 100 in the US and top 100 in the world. And, and how many of you golf that what's one are you going after you going after the US first of the world? Well, I'm in the middle of both US is really my first goal. And I'm, and I'm probably at around 70. And I golf 74 different golf courses last year. And I don't think I'm going to hit that pace again because I'm, I'm committed to, to working more this year. Some, some Turkey got me back in, pulled me, sucked me back into business and, and, and so I'll be working a little bit this year. You know, Bob Pearson heard a lot of great things about him. You know, he went through a lot during the military or whatnot. But I heard you got to try out, you bring your wife or your fiance and you go there for a weekend. And then they kind of size you up and decide if you should join or not. But I know you know some people there. I know several people there. I think there's only 123 members if I was told correctly. I don't, I'm not sure. I don't think it's very many. Yeah, that's not a lot. You can get out there. It's almost all open. Yeah, it's, it's a great experience. But again, that he is, he is defined culture and experience and service like I've never had, I mean, I've never been, I mean, I've been to a lot of places. And I've never been anywhere better that has it down like he does. That is crazy. That place is amazing. There was this member that he had and the, the member was very, very wealthy. And he's being rude to the server and he was talking loud and cussing. And Bob heard it and says, go tell that member to be quiet. And he goes, I paid a million dollars to be at this course. I'm going to do whatever I want. Bob walked over there as I get out of my club. I'm wearing you all your money back today. And the guys never log back. Is it's not put up with? Is you treat people with respect no matter who they are? You know, I played a golf course in California. And, and it was fascinating. The member told me and it was Bel Air Country Club. And the member, you know, he had just built, he was in charge of the committee that built their brand new clubhouse. And he gave us a tour of the clubhouse and the way he treated everyone on that staff was unbelievable. He knew who they were. He knew their name. He knew their families. He introduced us. He walked us through the kitchen. We got to meet everybody in that place. And he was just so proud of it. And when we sat down for lunch, I said to him, I said, Skip, I said, what the heck? And he said, you know what? He smiled and he says, you know, we send all the a holes to the country club down the street. I won't name the name. But he says, look, at Bel Air, we treat every employee better than any member. Now, think about the culture. You know what really gets me excited about that is I can't wait to go and just study other industries, especially hospitality. The best restaurants and how they train their people and how they recruit their people. What's the number one hotel for hospitality? Not the W, the Ritz, risk Carlton is I heard that they look for people that actually genuinely say what they mean. Like it was a rob. How's your day going today? You know, I'm really curious what I could do to help you. And it's just like they're not just, hey, how are you doing? It's like, I'm going to make your day better. What's one thing I could do today to make your stay here or better? Yeah. Well, you do that with your service guys. When you stand up in front of them and say, look, I want you to do this. I'm going to teach you how to do it. But I want you to do it for good. You know, I mean, you hammer that home and it's the same thing, right? It's the same thing. You know, we had an opportunity last week where the guys got on a whiteboard anonymously. I stayed in the room. I wasn't really paid attention. I just, I wanted to keep it anonymous and they wrote down some of the things we need to work on as leaders. And I got up at the end of the meeting and I said, guys, I don't care if you sell doors. I don't really care what happens. I just want to do the right thing for the client. I used to be a technician. We weren't going to sign doors when I started, but I don't feel like it's the right thing for the client to not get the option. And I don't expect you guys to have the highest sales and I know it's a competitive environment. But all I'm asking you to do is do the right thing because fixing an old door for $3,000 is going to have a problem in three years. I don't think is the right thing. It's not what I would be doing for my mom. That's right. And I want you to just ask, well, would you be doing for your mom? Mine is the pricing because the pricing you don't make. I understand that. But if you just do what's right and give people the options, they'll decide what's right for them. And you'd be surprised on how many clients when you just ask them the question to give them the options, they'll pick what's good for them and their family. That's right. I love this conversation. I just got a couple of close-out questions. If someone wants to reach out to you, what's the best way to do that? Well, probably email h2o
[email protected]. H2O rob1. And is there any books that it could be fiction, could be any book you want, but this really changed your life maybe a couple. Leadership and self-deception by the Arbanger Institute. Consortium scholars based on material that Terry Warner, he was a philosopher who reproved Freud's theory of self-deception in the 60s. And he's basically changed the world of philosophy, I believe. But I would say that changed my life. That was so dramatic that I can still remember the night that I read it. It was like somebody opened the curtains and I could see out the window for the first time. And I remember sitting there like till two in the morning because I couldn't stop reading that. And I went to bed that night and I just looked at my wife different. Just she's asleep. I just sat there and looked at her and I just whispered, "I'm so sorry." Now, she immediately said, "I've been bedding said, 'Alright, what'd you do now?' But I said, 'Never mind honey, go to sleep.' But you know, two weeks later we were out to dinner and she's like, 'Okay, what's going on?' And I said, 'What do you mean?' And she says, 'You're the guy I married, all of a sudden again, what is going on?' So I would tell you leadership and self-deception changed my life. Yeah, he gives me goose bumps. That's a great story. You know, I'll just say one more thing is like, how powerful are stories? It's the only way to share life in my opinion. It's the only way to know who people are and to let people know who you are. I love stories, man. I love it. I hired a guy, this is about a year and a half ago that just went to our training program and he's world renowned for telling stories and he tied our team out of tell stories. For me, I always learn how to tell jokes. So the details of jokes are what make the joke. So stories are so important to add details and almost talk as if you want to describe something as if the other person were there. And at my let, have you ever heard of at my let? I haven't. At my let is very wealthy man, he's a coach. I start to work with him and he goes, Tommy, he goes, one of the things I want you to do that I need a lot of work on is learn how to frame. So one of the things I'll do is say, guys, I really want you to pay attention to this. You're here because of this next five minutes. And then at the end of it is when he goes, remember when I told you to focus for that five minutes. Now this is why that's important. So bringing things in comedians do it. Yep. And I love learning these things because it's impossible. It's not impossible to study speaking or how you communicate. But if somebody else that's a pro, they can identify things. So like he worked on our Tony Robbins. And Tony Robbins is the
the best ever of framing. Like he said, - No question. - He has you change your identity, and that's the most important thing is you've got to change your identity to accept the change that's gonna happen in your life in a positive way. - Well, you know, the thing I love since you asked me about that, the thing I loved about leadership and self-deception the most was, you know, in life, there's basically three philosophies, you know, that I don't have any choice in life. I just, the world dictates to me my situation and what happens to me. And then there's a second philosophy that says, "Well, I do have a choice. "I can choose how to respond to what people do to me "and what life throws at me, right?" And then, but what leadership and self-deception does is it teaches this idea that there's a third philosophy. I have a choice. I have a choice to see whether the people that are affecting me are people or objects. So I literally can choose my environment, not just respond to it. And once you realize that and the power of that, you know, it's just crazy. Then you asked about the other book, the only other, you know, I do like HBR stuff. I like reading the HBR stuff. I think that they put out some brilliant material. - I love it. Finally, close this out. Whatever you want to close this out with one final thought. You know, what I've learned in my retirement is, don't ever retire. (laughing) That's the final thought is, you know, to look forward and to think about what's in front of you and to get up this morning and think two things. Word, I mean, the only reason I should look back is to say, where did I not do my best so that I can recommit to do my best today? And what does my best look like today? And then, you know, you always talk about visualizing and writing it down and committing to your people. And I just can't believe in that more. I just think looking forward and saying, what is my best today? And so I don't know, I mean, I'm almost 60 years old. I think I'm more excited about helping people build their business. And I just, I'm more excited about things today than I have been maybe in my whole life. And I thought I would just be playing golf, but I did realize you can't play too much golf. It is possible. That's interesting. Well, hey, I really appreciate you doing this. I know you don't do a lot of this. I learned a lot, I got a lot of notes. And we'll do it again soon. Appreciate you. Hey there, thanks for tuning into the podcast today. Before I let you go, I want to let everybody know that Elevate is out and ready to buy. I can share with you how I attracted a winning team of over 700 employees in over 20 states. The insights in this book are powerful and can be applied to any business or organization. It's a real game changer for anyone looking to build and develop a high performing team, like over here at A1 Grasdorah Service. So if you want to learn the secrets, so to help me transform my team from stealing the toilet paper to a group of 700 plus employees growing in the same direction, head over to Elevate and win.com, for a slash podcast and grab a copy of the book. Thanks again for listening, and we'll catch up with you next time on the podcast.
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