Commercial Contractor of the Year:
THAYER CORPORATION, AUBURN, ME
Dan Thayer, co-founder and president of Thayer Corporation, is an avid marathon runner. He has completed eight marathons over the past two years, including the Athens Classic Marathon in Athens, Greece, which is still run on the same route that Phiddipides used when he ran from the village of Marathon to Athens to announce the victory over the Persians in the Battle of Marathon.
“What I love about marathon racing is that nobody can bluff his or her way through a marathon,” Thayer says. “Even gifted athletes who attempt to run a marathon are doomed to fail if they haven’t made the training commitment and have the determination to run the whole race.”
Those qualities that make Thayer a successful marathon runner are the same ones that make Thayer Corp. successful: The company never stops training and never loses its determination to run the whole race for its customers.
Joys and Woes of a Family Business
Thayer Corp. was founded by Dan and his father, Dick, in 1981. At the time, Dan had earned his engineering degree from the University of Maine and was working for Carrier International as a technical specialist attached to a commercial marketing group. Meanwhile, Dick, who has been “retired” for about 10 years (he still visits the company regularly, accompanied by his trusty dog, Dotty), was looking for a new challenge after the HVACR contractor he had worked for (and partially owned) for 30-plus years broke apart.
Dick convinced Dan to return to Maine, and Thayer Corp. was born on the kitchen table of the family’s home in Minot. As the hassles of clearing the company’s business off the table for meals became evident, the Thayers moved into more glamorous quarters: the family’s backyard chicken coop. Dan remembers a rooster who made it a habit to crow repeatedly into the open “office” door during important phone calls.
“My dad and I built this company together, and we made a lot of mistakes along the way,” says the quiet, low-key Dan. “I’m sure I’m not telling your readers anything new when I say that running a family business can be tough. Decisions, disagreements, conflicts, triumphs — none of those are 9 to 5.”
Thayer notes that there’s no-
where to go to get training on interacting within a family business
environment. He says he was fortunate to have some terrific and timely guidance from various members of his ACCA-sponsored Management Information Exchange (MIX) group. “I credit them with saving Thayer Corporation from disaster many times over,” he says.
Yet, Thayer adds, family ownership can ironically be both a company’s greatest strength and greatest weakness in the same day.
For example, Dick always instilled into every employee his driving vision of customer focus and quality workmanship. There was never any doubt that Dick would order completed work to be removed and redone if the workmanship wasn’t impeccable.
Dick also believed in investing in people. “Find the best people in the marketplace and provide them with a career, not just a job,” was his mantra. Thayer still abides by these principles today.
From its humble beginnings, Thayer Corp. began to make a name for itself as the quality commercial company in Maine. That was an accomplishment in itself, as the entire state of Maine has fewer people than many urban areas across the country. The low-density population made it necessary for Thayer Corp. to have a service area that would boggle many contractors’ minds. It stretches from the Atlantic Ocean on the east to the New Hampshire border on the west, and from just outside of Boston on the south into wherever commercial companies choose to locate in the wild lands of northern Maine.
“We really have to work harder than many commercial contractors just to get our business,” Thayer says. “The work is there, but it’s rarely right down the street.” That’s why the company’s $6 million in 2001 revenues is impressive. It may not be a huge amount compared to some commercial HVAC companies, but it represents an unusual domination of an area’s market share.
“We don’t really have any large population centers or concentrations of commercial buildings in our area,” Thayer says. “There’s business to be had here, but we have to work hard to get it. We also have to be very diversified in what we offer. The good part is that since nothing comes easy, we tend to appreciate it more.”
The market domination is made all the more remarkable by the fact that Thayer Corp. doesn’t win its jobs by selling price. As a long-time believer in the Design/Build/Maintain method, Thayer and his team win their jobs one at a time, by educating building owners and managers about Design/Build/
Maintain and its benefits.
The best Design/Build/Maintain prospects and customers, according to Thayer, are the one ones who have been burned by the plan-and-spec method, which can seduce the unwary with its apparently lower pricing.
“If a customer will trust us enough to fully explain the project and its objectives, we can deliver top quality solutions at very competitive prices,” Thayer says. “I always feel a tremendous sense of responsibility when a customer trusts us. I try to instill this same feeling in all of our associates. This trust must never be betrayed, regardless of the circumstances.”
Thriving in a Tough Environment
A geographically challenging location coupled with an unshakable commitment to the Design/Build/Maintain process may seem like a recipe for disaster in the commercial market. Thayer Corp., however, has not only survived but also thrived. High quality work leading to a steady stream of referrals is one reason. Another is Thayer’s involvement in industry organizations: Dan is an active member of the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), one of only a few contractors to be involved with the engineering society. Thayer Corp. is also a member of the Air Conditioning Contractors of America (ACCA), and a LINC Services contractor.
“LINC gives us great tools and helps us keep our focus on service,” Thayer says. “LINC helps us create an organization that can inherently handle customer satisfaction issues.”
As an example, Thayer cites LINC’s customer assurance review and evaluation (CARE) program, where twice each year the company’s largest service agreement customers meet with Thayer Corp.’s general managers to evaluate the service they’re receiving.
There has also been much help from the “life saving” ACCA MIX group.
Thayer Corp was invited to join one of the industry’s oldest mix groups nearly 15 years ago. MADA (Mid Atlantic Dealers Association) was born out of crisis when Trane discontinued its residential dealer program more than 30 years ago. Without the aid of the Trane “mothership,” the dealer/owners started meeting to discuss survival techniques. Most of the original MIX group members still participate, and have created a rigorous company review process. This process has been honed and refined during the past three decades, and is a keystone of MADA’s twice-a-year member company audits.
Doing the Right Things
Thayer Corp. is divided into two distinct profit centers: Design/Build installation, and service. Service is the “base of the pyramid,” according to Thayer.
“Installation work, particularly Design/Build, is high risk, high reward,” he says. “The service business is one of eternal vigilance.”
There are about 25 associates in each of the company’s profit centers. Thayer cites the dedication and separation of the two centers as a main reason for his company’s success.
“There are only three people who report directly to me: the general manager of Design/Build installation, the general manager of service, and our business manager. By having a GM in each of the profit centers, and letting them run those centers as their own businesses, it gives them clear priorities and allows them to make their businesses successful, which, in turn, makes the company successful.”
Thayer’s role? “The biggest part of my job is just to always ask if we’re doing the right things,” he says. “I’ve never fussed too much about making mistakes the first time; any new venture into the business maze is going to have some dead ends. The important thing is for the company to continue to make the right decisions in the big picture. Not just engineering and installing our jobs correctly, but making the right moves as a company. It seems simple, but unless you’re constantly asking if you’re doing the right things, it can be easy to get complacent.”
One of the most recent moves the company decided to undertake was to offer service in the high-end residential market, where homes have comfort systems that are virtually commercial in their complexity.
Bob Pennabere, general manager of service, has been at Thayer Corp. for 11 years. He’s responsible for the 15 field service technicians and three office staffers who handle the company’s roughly 250 service contracts, which generate about $1 million in recurring revenue per year. His division also handles repairs and upgrades for existing customers.
He says what makes Thayer Corp. different is that the company has “big picture” thinkers who provide customers with single-source solutions.
“There’s nothing we like better than to hear a prospective customer say, ‘No one has been able to help us,’” Pennabere says. “We’re confident that we can solve any problem because we start from ground zero and pull all the pieces together to find a solution.”
The company takes advantage of the fact that it has six engineers on staff to identify and remedy a building’s problems.
“We try to make it easy for our customers by taking ownership of their problems and solving them,” Pennabere says. “They make one call, and we take it from there. Beyond that, there’s really no secret to service. It’s all about responding and being vigilant to their needs.”
Sticklers for Process
The Thayer Building Systems Analysis is one of several programs Thayer Corp. uses to ensure that the company’s performance matches the high expectations that its associates and customers hold it to. “We’re sticklers for process,” Thayer notes (as one might imagine in a company with so many engineers).
Other key tools include the Weekly Project Meeting form and the CARE program. The Weekly Project Meeting form gives everyone an update on the various projects underway at the company, and includes items such as project status, scheduling, safety, and logistics.
The CARE program lays the framework for the interviews that take place twice each year with the company’s major service agreement customers. It includes open-ended questions about what services Thayer Corp. provides that customers consider the most valuable, how Thayer Corp. meets their needs, and any suggestions for improvement. It also asks for specific ratings of response time, professional appearance, dispatcher follow-up, and other items that can make or break a customer’s service experience.
And, of course, every job is followed-up with a post-job review.
While Thayer Corp. is justifiably proud of its service business, the company’s name and reputation have also been built on its Design/Build installation work.
Ken Champagne, manager of installations, believes that the key to success is treating every installation as if it were going into Thayer Corp.’s own building.
“We expect impeccable workmanship regardless of whether the work will be visible or concealed. We work very hard at delivering installations that have exceptional value. We hire great people, provide a safe worksite, and encourage everyone to focus on the end product,” Champagne says.
“Over the past 10 years, we’ve positioned our installation department to provide turnkey installations,” he adds. “Performing all the requisite tasks such as engineering, sheet metal, piping, controls, and electrical in-house makes us very competitive. It also allows us to mobilize and execute very challenging projects, since nearly all of the communication is in-house. Having all of our field work performed by Thayer personnel also provides the kind of workmanship and safety our customers expect.”
Business Manager Dave Reed keeps everyone at Thayer very focused on costs. “We use an integrated accounting, dispatch, sales, and contract administration software package that keeps performance indices in front of everyone on a weekly basis,” Reed says. “I feel that it’s imperative for our administrative team to provide accurate and timely financial information to the Thayer team. We constantly look for ways to push costs down to improve the value equation to our customers.”
Taking Care of People
It has been said many times that the contracting business is a people business. The people at Thayer Corp. are well rewarded for their roles in making the company one of the nation’s finest commercial contractors.
In addition to good wages, the company knows the basic needs that must be fulfilled. Thayer Corp. provides uniforms, a tool allowance, a 401(k) plan, a pension plan, a profit-sharing plan, and a strong health insurance offering to its employees.
Thayer also has a good feel for the intangibles that help his company attract and retain good people.
“First of all, never underestimate the power of your company’s image,” he says. “Build a company that people can be proud to say they work for. We strive for professionalism in everything we do. That’s good for our customers, good for our image, and good for our associates.”
Thayer also offers three words to remember as far as ensuring employee satisfaction: train, train, train.
“People desperately want to be trained,” he says. “Find out where they want to go in their careers and then help them get there. Don’t try to hold people back or fight their tendency to see the trades as a stepping stone. Even if they take your training and leave your company, you still have the best employees you can have while they’re there.”
Thayer’s belief in training is put into practice through the Thayer University, which consists of a total of 24 training programs conducted throughout the year
“While this sounds like a relatively easy task, training had a way of taking a backseat at times, until we appointed a part-time training manager from within the company,” Thayer notes. “Chris Nelson, the training manager, facilitates the 24 training programs, in addition to scheduling all outside factory training, coordinating all licensing renewal and upgrades, and continuously monitoring our training needs. “
A unique benefit that Thayer Corp. offers its employees is the company-sponsored wellness program.
Thayer is particularly proud of this program. “The successful contractors of the future will be able to recruit the best people in the marketplace, develop the necessary technical skill sets internally, and provide a healthy environment for individual growth and personal health,” Thayer says. “When our model is fully implemented, we’ll have a process for consistently producing goods results for customers, decade after decade.” (See sidebar, pg. 38).
No Stopping or Standing on Easy Street
Like any progressive company, Thayer Corp. isn’t standing still. The company will soon leave its current location in the heart of beautiful downtown Auburn, and move a mile down the street to a new 58,000 sq.ft. building. However, “new” is a relative term: the building might be a new home for Thayer Corp., but it’s anything but newly constructed. Built in the 1950s, the new headquarters has served as a shoe factory and a fiberglass truck cap manufacturing plant. It then sat empty for six years. It needed — and is in the process of receiving — a total renovation to make it suitable for Thayer Corp.’s needs.
Even amidst the chaos that can ensue while undertaking such a project, Thayer’s devotion to his employees is evident.
“I’m trying to handle all the details about the renovation and the plans for our move, so that people can just focus on their jobs,” Thayer says. “We want the move to be a seamless, business-as-usual transition for our customers, and that isn’t going to happen if our associates are bogged down in it.”
Among the amenities that the new building will offer are locker rooms, an employee lounge, and expanded wellness and training centers. “Our wellness center will rival many health clubs when it’s finished,” Thayer says. “It will not only facilitate the maintenance of health, it will also have a treatment room for non-trauma injury triage and treatments.
“We really want our employees to feel that Thayer Corp. is more than just a place to go to work,” Thayer explains. “We want them to feel that this place and the environment here is a positive part of their lives.”
In addition, Thayer recently started a separate division called Vital Air Technologies, whose role is to manufacture specialty HVACR equipment. Within a year, the division will be shipping a full line of equipment from 3 to 100 tons in capacity.
“This diversification is an important piece of the puzzle in the next several decades,” according to Thayer. “As the availability of skilled labor continues to decline for all technical trades, there will be a bigger role for high-quality packaged solutions. One of the neatest things about having a manufacturing capability is the ability to export solutions beyond traditional geographical boundaries.”
The Long Run
Like the thought of facing a 26.2 mile race, this can all seem a bit overwhelming at times. But, as Dan’s marathon training has taught him, the key is to stay intensely focused on the moment without forgetting the big picture.
Ultimately, Thayer appreciates the importance of being in something for the long run. He wants Thayer Corp. to win its customers for life, and he knows how to do it.
“Customers are hard to win, so we never want to send them away, or give them any reason to go anywhere else,” he says. “I wish I could say that there was a sexy, magical way to keep them, but there’s not. You just have to take care of them. The best advice I can give anyone is to handle everything promptly and professionally, and leave no problems unresolved.”
Having six engineers on staff and being on the cutting edge of all the latest technology available to ensure the comfort, safety, and happiness of building owners and managers provides a solid base from which to work. Having a smart, talented, dedicated staff of associates, treating them right, and training them regularly builds on that base. Treating customers professionally in every way, solving their problems, meeting their needs, and ensuring their satisfaction provides the reason for being.
Yet Thayer, the ever-practical marathoner, knows that success most often comes from taking all these elements, mapping out a clear and proper course, then picking one foot up and putting the other one down, over and over again. Phiddipides, on his way from Marathon to Athens, would be proud of Thayer Corp., Contracting Business magazine’s 2003 Commercial Contractor of the Year.