by Steve Saunders
It was the fall of 1997. Our group, which handled residential installation and service for TDIndustries, in Dallas, TX, had just heard we were leaving the company. We were the casualties of a long-term strategic plan.
After several meetings to discuss possible futures, the 35 of us decided to continue TDIndustries' traditions and seek to create a new company like the one we were leaving.
At that time, the consolidation movement looked monolithic. What if our customers chose consolidator partners instead of us? We had no building, no owner, no computer system. We also had very little money, no accounting department, or even a bookkeeper or human resource support.
As a result, we were nervous, anxious, and, occasionally, frightened. At best, our future looked uncertain.
Despite these concerns, we also had 35 dedicated Partners, a strong business culture, and a history of success.
The “plusses” were enough for us to forge ahead with our new company, and after six years of (sometimes literal) blood, sweat, and tears, many good things have happened.
Revenues, customer satisfaction, employee retention, cash flow, and income are all up — some up sharply. We’ve received much positive industry recognition. We’re smarter, better trained, tougher, and more seasoned, with even higher expectations for what we can achieve in the future.
The successes we have experienced come from having great people with similar beliefs and all pulling in the same direction. The foundation of this success comes from the cultural heritage of our TDIndustries history.
The key components are what we refer to as the “3 Gifts of our Heritage.” They are:
- Employee ownership
- Servant leadership
- Performance excellence.
These aren’t new concepts. Employee ownership at TDIndustries dates back to the 1950s, in part as a way to conserve precious capital needed to fund investment in the company during the off-season.
Servant leadership was introduced to us in the early 1970s. At that time, we were struggling with business growth and the need to improve our ability to develop technicians and mechanics into supervisors, and supervisors into leaders.
Performance excellence was the tool we selected to dig us out of a deep financial and organizational hole caused by our reaction to the mid-1980s Texas real estate crash.
These three gifts bear the seeds for all that we are, all that we do, and everything we hope to become.
Employee Ownership
Employee ownership is an oft-misunderstood element. For example, I’m often asked if it means that we take a vote every time we make a decision. The answer to that question is no.
Through personal investments in their retirement accounts, our employees (or Tempo Partners as they’re called), own the ESOP Trust, and the Trust owns the overwhelming majority of Tempo stock.
Like owners of any corporation, this gives shareholders two fundamental rights: the right to vote for the Board of Directors of their choice, and the right to share in the success (or failure) of the company.
Employee ownership is the heart and soul of Tempo. It affects how we think, how we plan, and how we approach almost every business issue.
It’s also a key driver towards an attitude and ethic of success. For example, someone in the company is a hero each day by going the extra mile to solve a problem, save a dollar, or provide extraordinary service to an internal or external customer.
Most everyone thinks and acts like an owner. We take that extra call. We struggle to find a better or easier way to solve problems. We do this out of habit because it makes the company money and because our future is on the line.
Employee ownership is also the only way that we could have managed to endure the challenges of the last half-decade. Without the financial investment from our Partners, we couldn’t have financed the building, training, business systems, and software development that are central to our business success.
By itself, employee ownership won’t solve any problems. And, like any form of business ownership, it has its own unique set of issues that require attention and resolution. However, it’s a terrific way to attract and keep great people, share the results of their hard work, and build a self-sustaining company.
Servant Leadership
The concept of servant leadership has been popular in the business press in recent years. Although there are several versions, we follow a model outlined in Robert Greenleaf’s 37-page essay “The Servant as Leader,” originally published in 1970.
The premise is that the best leaders lead by serving others. There’s also a measure for success. The best test, Greenleaf writes, is, “Do those served grow as persons; do they while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants?”
So, what does this mean in the real world? The answer is both simple and complex.
Much of servant leadership centers on valuing people. Education is one big tool for human development. Another is empowerment. Most of our Partners feel as if they have the freedom to do the right thing. They make their own decisions on how to best satisfy customers or solve problems.
This autonomy isn’t restricted to just supervisors. Our goal is for it to be everywhere — in our field construction force, as a technician, the warehouse, engineering, and in our call center.
We believe that our Partners want to do the right thing, and generally, they do. There are plenty of opportunities for them to practice. Making decisions forces people to think and to understand competing priorities. Whether they’re right or wrong, they grow and become more able to serve others the next time.
Another element is serving the non-work needs of our Partners. There are many ways to help our folks live better lives. For example, we help people buy homes. We lend money during a crisis. We help navigate the legal system and fight off unscrupulous creditors.
This isn’t unique to us; good employers do many of these things. Our point is that we do this as part of our culture and our business strategy.
Performance Excellence
The third gift is the concept of process improvement and/or performance excellence. I can remember when we thought quality meant hanging duct level and straight.
Now, we realize that a key element of quality is obtaining a complete understanding of the customer’s requirements and meeting them.
Because much of our service, construction , and energy work is process-oriented, it has repeatable elements. For further guidance, we studied The Malcolm Baldridge Criteria for Performance Excellence. From it we learned that process goes way beyond anything we had previously imagined.
The Baldridge Criteria include several distinct categories, which are linked and intertwined in many ways. They are:
- Leadership
- Strategic planning
- Customer and market focus
- Information and analysis
- Human resource focus
- Process management
- Results.
Working on process improvement is a humbling experience, and an endless effort that only leads to an understanding of new areas in which to improve.
However, our study and efforts have made us a better company to work for and to work with. We see it as a distinct competitive advantage. As someone once told me, “You can’t reverse engineer process.”
If you accomplish nothing else with the Baldridge Criteria, I encourage you to focus on four elements that can help you build an effective team:
- Have a mission— a written description of what you are trying to achieve.
- Have a vision— a written statement of what you want your organization to look like in the future.
- Outline your company’s values. Tell everyone what actions and behaviors you expect of your company and from each individual within the company.
- Define the objectives of your key stakeholders. As a result, your partners will know how to solve problems without additional direction. As they make decisions, these people will grow. As they grow, so will the company. Good folks attract more good folks.
All this philosophical stuff has real world applications. Our Partners have a stake in the enterprise and personally benefit from business success.
We know that our purpose in business is to provide outstanding careers for the people who work here and collectively own the company. Therefore, our goal is to get bigger, better, and more efficient, which leads to greater profits.
With all the above information, our partners now have enough knowledge to solve most any problem. They don’t need much advice or direction and that frees them up to grow as persons.
It’s hard to understand these concepts. It’s even harder to implement. We fail regularly. However, it takes a great dream to do great things. Dream big. n
Steve Saunders is CEO and president of Tempo Mechanical in Irving, TX, Contracting Business’ 2003 Residential Contractor of the Year. He can reached at 972/579-2000 or at [email protected].