#125 - Enhancing Team Performance: The Role of Training and EOS

I'm John Wilson. Welcome to Owned and Operated. Twice a week we talk about home service businesses, and if you're a home service entrepreneur, then this is gonna be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting. Let's get into it. Hey, so just gimme your email. I said, just gimme your email.

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To— to— to Owned and Operated.

Dude, good to see you.

Hey.

What do you got cooking today?

Oh my goodness. Uh, 2 fronts. Um, one is, for whatever reason, every vehicle— I should rephrase that— every junky vehicle that we've had, like, decided to crap out on us. Every single one, like, simultaneously. We have changed one guy in a van 3 times, so I'm convinced that I just need to bite the bullet and get new vans. We've talked about this before.

Um, well, it's a lot. I mean, it's a lot. That's, that's why we ended up moving to leasing like 6 years ago.

Yeah, yeah, yeah, yeah. I mean, I think— I, I don't think that like leasing is the only answer, but I do think that The only wrong answer here is to run on a fleet of 200,000-mile-plus vehicles and try to pretend like everything's just going to be okay. Yeah. Yeah. So we had that, and then we had our whole company staff meeting today, which was really good, really helpful. It allowed me to clear up a lot of things and very excited coming out of that with some tailwinds, I think, going into summer.

What about you? Yeah, good. I mean, this week's hot. This week's really hot. So we're like I Like we talked about last week, we're about to take down a record in May, which is crazy. And then we have a bunch of awesome team members that have been onboarded and are now going live next week. And then we have a bunch of people beginning onboarding next week. So the elusive $2 million a month is probably June. That's taken us— we've been flirting with that line for a while, and I think we get to finally pass it in June.

That should help out with your capacity issue too, right? Because last time we— or a couple times ago we talked, you were kind of running into a capacity issue.

We still have those issues. Um, but will that— so no, it actually won't help it, but we have a plan to fix it. Okay.

Yeah, well, because, because I mean, there's really 2 sides of the business, right? There's a sales and service side, and then there's an install component. And so the people that onboarded, were they more along the lines of sales and service Or were they— were there a mix?

But it was both. Yeah, it was both. Um, but you know, some, some teams, like, capacity is just hard to, like— so plumbing is relatively steady, but like HVAC capacity is really difficult to nail. You know, we felt I probably did the best I've ever done this year because we were fully staffed with like 4.5 crews in May. Uh, so that means we get an extra 30 days of install. Um, but You know, we're still behind because we should be running, uh, 5 full crews. And the difference, the difference there is $50 grand a week of revenue. That's $2.5 million. So that was a $2.5 million mistake. Um, but correcting it— but plumbing's the same thing, you know. And each install plumber, we expect like $20,000 to $40,000 a week of installed revenue. And So basically everyone's $1 million is how we see it now, which is kind of an interesting way to look at it.

So I'm writing that down. Yeah, we were talking about that. I should probably just go back to listen to the episode versus lose my attention. But we were trying to— we were talking about how much is the capacity of a good install plumber should be per year. Sorry.

Well, the way— something that's kind of interesting, I had a deal show up last week. And deals, like I've talked about it a lot, of like, yeah, it's, you know, kind of an energy and distraction and whatever. But also, like, we've built a system where I can drive $1 million by hiring one person.

Yeah.

Why would a deal ever make sense if that's what I can do? It just doesn't make sense.

Yes, for you. And I think that's actually how most deals go though, is you lose that portion of value as you get bigger. Because your systems are now better than any of the other people's systems. But when you're smaller, like when you're that $3 million company, it makes sense to buy another $3 million company.

Oh no, totally. I'm, I'm not saying don't acquire.

No, I'm just explaining it out.

Yeah, it was a good— I agree with you. And, but it was like a good example of— because I had a deal show up in my lap last week and it was like $2.5, $3 million of revenue. And I was like, should I, shouldn't I? And I was like, that's going to be— it's going to take me some time, it's going to take money, it's going to take all this stuff. And for me, $3 million of revenue might just be 2 hires or 3 hires. Like, that could— I could do that in the next 7 days. And all that it would take me is 3 vans and additional marketing. But like, right now, like, we have We have excess capacity, like lead flow. So like we can do that. Um, so the, the, yeah, it, it really reframes, it really reframes how you think about it.

I think that's the key is it's like, it's a reframing. So it needs to be, it needs to have different value. So like you could see it like if you're trying to move into another market, like Southeast, if it brought value there or a different vertical, I could see it being worth it. We got a deal the other day too. You want to hear this one?

Yeah.

So the guy does like $400,000 in gross revenue as an HVAC company, and he wants $200,000 for the company.

Oh, that's tough, man.

And I said, good luck.

Yeah.

No, no, no, no, no, no. I'm sorry, your phone number and your Small client list or not. Yeah, $200,000. Just—

yeah, it's not there. Yeah, yeah. I think, um, we've gotten a lot of flack over the years for like, we'll pay less than a 1x on small companies and people are like, what the heck, it's still worth something. And like, just going back to my example of like, $1 million is one hire, uh, like it's, it's really not worth anything. That's like training. Because like, it had— it has to be less— it has to be as, as much of an easy decision as hiring someone. So like, what's the, what's the cost of a van? What's the cost of the leads? And what's the cost of a hire? And like, if your company costs more than that, then like, it makes no sense for me to do that. And it has to be at a significant discount, because if I'm focusing on buying your company, I'm not focusing on my actual business.

Yep. I mean, for us, I mean, the way I look at it is for us to generate another $400,000 in revenue would cost me less than $200,000 in marketing because that's all we're getting out of it. End of story. I can go spend $200,000 on marketing and I don't have that same headache. I just need to hire, like you said, hire one person. And that's not even a well-trained person to make— if one person's only doing $400,000 in service flips, Yeah, it's just not— it's not there.

Yeah, no, I totally agree. I totally agree. Um, well, today we wanted to dive into your whole company meeting, and I think a way— a question that we've gotten a— I don't even know if it's a question, it's an observation. So like, and not of you, but like, we've talked to a lot of owners, and I remember, I remember when my dad said this, and this was a decade ago now. You know, we were starting to grow, and he said— the phrase was something like, oh, so I guess we're a meetings company now. And I was like, okay, that's an interesting way to say that. Um, but I think it comes up a lot of like, people are like, oh, what, what would we even talk about? Because I've talked to people, they're like, I've never had a company meeting. Like, what What is there to talk about? Like, I'm just gonna go plumber, you know? Yeah, HVAC stuff. Hey, this episode is sponsored by Service Scalers. So Service Scalers is actually a brand that I've used personally with our companies for a little bit over a year now. They've helped us manage our digital advertising. Frankly, they did a lot better than our last agency. Leads went through the roof and cost per click went way down. Check out Service Scalers if you're a plumbing, HVAC, or electrical home service company. That's what they knock out of the park, and they did a great job for me.

I mean, I think what the hardest part is, and this is just purely my company and what we were doing. So a year ago today, we had 4 people. We have 18 people sitting at that table today. And so The big thing for us is there's actual company growth in terms of like, hey, you guys are 6 months with the company, 3 months with the company. We've never had core values. I asked the group bluntly, anybody that doesn't sit with me in the office, what is our goal? Do you know what the company goal is? And nobody knew. And that's a failure on my part.

Really?

It's a failure on my part that nobody knows what the company goal is. Nobody knows why they're on performance pay. Nobody knows The background, the theory behind the company and how we're going to grow and how does that benefit them. And so, a lot of it today was, I think it's extremely important meetings. We do a weekly meeting for trainings to hold accountability. But I think once every quarter, it's important to do a meeting where, one, you're showing appreciation. We shout out any promotions that we've done, which we did today. We gave somebody a promotion who's— a killer tech who went from a level 2 to a level 3. And then we go through and talk about the company in terms of, hey, how are we meeting or not meeting our pillars of who we are, how we'll get there, and who we are, what's our goals, and how we'll get there? That's the part I stole from you. We stole it right off your model.

I mean, I think it's good. I think Yeah, company meet, that's like the, I think, a perfect application. What we have found over the years is like some of our managers have taken it on, on themselves to do more. So like we've had a once or twice a week huddle for 6 years, and we've been able to— it's obviously looked a lot of different ways depending on the season of the business. Um, could be updates, could be training, could be NextStar, could be CertainPath, could be whatever it is that we're going to be diving into. Um, but what we found is that no amount of training is enough. And that's, you know, if you've been listening for the last month, you know, we've gone through this sort of like re-kick on training where like we had one team that was training 5 days a week and they were outperforming like Their performance doubled, like average ticket doubled, close rate doubled in over the course of like 60 days.

I believe it.

Because they were just diving into daily training. So now, like, as we were sort of going through this thing, um, we, we put a bigger emphasis on training. Now there's still a bunch of different places that we fall short. Like, we still haven't gotten there on call center yet. Well, we're about to. As of next week, we go into, I think, a daily training for call center, which I'm excited about. And we're only at once a week right now for leaders, and that's about 30 minutes a week, which I don't think is enough either. So we're really trying to like— we worked on the tech side, which is obviously the biggest side of the company, and then we're working through the other sections in order to get there. And then our Wednesday is whole company, but it's really just— it's a lot of the same information, and then we like split off. To cover that in, in more granular detail.

Do you do a whole company weekly or monthly?

What is—

what is that?

We do a whole service team, and then like dispatch and HR, and they'll show up. But like every team meets at least once a week.

Yeah, okay.

If not 3 to 5 times a week depending on the team. But the highest performing ones consistently meet. Like, yeah, I mean, it's almost like tickets. Like the more options you give, the higher your average ticket.

The more trainings you have, the higher And that's actually the exact verbiage that I gave when— so I got that pushback like, Jack, we can't have a meeting because we are going to miss out on X, Y, or Z calls. And I said, the X, Y, or Z calls that we're going to miss out on, what, 3 calls, 5 calls? Realistically, if they're doing what they're supposed to be doing from this training, they will make that up in the first 2 calls that they actually run versus letting them continuously run doing subpar work. Yeah, not that my guys are doing subpar work, but just saying, um, in general, like, well, they'll go into it better trained.

Yeah, yeah, 100%.

So I know we've talked about this a few times, but you're running EOS for all meetings? Is that how your team's trained up? Do you have an in-house— what is they called, like the in-house trainer or the in-house watcher or something like that?

I'm not sure. Yeah, no, we don't have that either. Um, soon. Right now the managers are responsible for their, like, their own verticals. Uh, but we will soon invest in a trainer. Um, hold on.

Sorry.

We'll soon invest in a trainer. Um, so we do run— we do run EOS. So EOS is like, it's a way you meet, it's a way you scorecard, it's a way you solve problems. It's not really a way that— or That I know of. It's not a way to meet as a whole company unless you're doing a whole company L10. Um, so those are just different things for us. So L10s aren't really trainings. L10s are like, that's a weekly meeting, and the idea is that you solve problems inside that weekly meeting. So like, hey, here's this issue that came up, let's solve it. So, um, so that's different, but those, those do happen weekly by team as well.

Okay, so they're doing L10s or, or EOS meetings.

So none of our teams are in L10s. It's like We have 12 L10s a week. Senior leadership has one, plumbing, marketing, accounting, HR, warehouse. Each individual team has one. But inside those teams, like plumbing, HVAC, electric, their L10 is only going to be with the managers and the dispatcher of each team.

Here's a great question. When you get to the size you are, Um, what's your involvement in— like, so you have your whole company meeting, you have your weekly trainings with the staff, you have your L10s. Are you— you're— are you part of every single one of those? Or where— how are you, one, managing those meetings, and two, are you a part of those meetings?

I don't feel like I have this perfect. Um, like, I wish I was a part of more than I am. I usually attend 3 to 4 L10s a week, uh, and it tends to be in the teams that have the biggest issues. So I'll sit in. Now, I should be sitting in teams that are winning as a sign of encouragement, um, but my time tends to be drawn to the teams that are having bigger issues.

Yeah, fair enough. I mean, I think that's generally how It just works until you can figure something else out. Because that's— I almost posted this on Twitter, but I didn't know how to write it out properly the other day. But it was like, business ownership is a cycle of dealing with call center. And then when call center gets all fixed up, then it's like, oh shit, now the dispatchers are— or now service techs are falling behind. Go over to service techs on the HVAC side, get them back up to where they need to be. Then it's plumbing goes down. And then it's back all the way to call center again. the time it's all said and done. It's like you paint to one end of the Golden Gate Bridge and then you start painting back.

Yeah, I mean, you really, you really do. I, I don't know that that ever goes away. I think what you add in is smart people that are capable of helping you solve those problems. Mm-hmm. So then it's more eyeballs on each one, but like those problems, it's still always roughly the same. What's been nice is inside that chain of accountability that we've talked about and we gave in the workshop, Like eventually you have a manager over each one instead of like right now you're over most of it.

Yeah.

And, um, then it's holding that manager accountable to what that team should be doing. And it does get a little bit easier as long as you have the right manager in place. If you don't have the right manager in place, obviously it becomes even a bigger hassle. Yeah.

And so, I mean, that's actually a lot of where the, the conversation was in today. It's, hey, we're building— it's also you guys have built the systems, right? You've built the systems. So that the managers know what they're doing too.

Yeah.

For the majority of it, not for all of it, but like for a lot of it, there's something in place that, that's a framework that they can work off of. And so a lot of today's talk was like, hey, we are still building this framework and we understand there's growing pains, but this is what it needs to look like and this is the direction we're going, um, and this is why we're going there. And I think that's important at the end of the day is for them to know This is sometimes a hassle for us out in the field, but there's a reason we do debriefing. There's a reason we do call-by-call. There's a reason that you guys can't see your next call. There is a series of things that need to be put in place so that in the long term, whether you're here or not, whether I'm here or not, whether the manager's here or not, or changes, that the system still works.

Yeah.

So it's interesting. I mean, It's a very interesting spot to be in. I mean, a lot of people who are running these businesses like you and me are young 30s, mid-30s, late 30s, but you started when you were 24. You were running these things. And so, it's definitely something. I don't know how to put words on it. It's a big responsibility to be the leader of you know, 18 people, 100 people. Yeah, at the end of the day.

No, it is. Yeah, it's huge. And I think, um, but being able to show growth, why the improvements happen, you know, having a track record now matters and it counts. And, um, you know, we're having— this could be like a different episode really, but like The more we do stuff, and like back to this, you know, one hire is a million dollars now, uh, that's real. So that's like a— so now, you know, that's like— that took years to get there. That took like a decade of my life for one hire to be a million dollars. You know, my— the second company I bought was doing $700,000 with 8 people, or like 11 people, it was something like that. And And now it's like one hire. So yeah, you build all these systems and over years, you just find ways to continually improve it and you 1% improve it and 1% improvement. And the best example I have of this is HVAC, where our headcount in HVAC has changed by 2 or 3 and revenue has quadrupled. We might even actually do more than that this year.

That's wild. I don't want to hear it.

That's just continuing to unlock these little pieces here and there. So it's crazy how it all stacks up.

For anyone who doesn't know, I think on a couple episodes ago, um, John's told me like his texts are doing an average order value of something crazy. And I said, this is going to keep me up at night. Don't tell me these things. And John, did you get a text at 2 in the morning?

You texted me. I woke up to pee and you did text me that you were up thinking about it.

2 AM. I just can't sleep when I hear stuff like that because I know it ha— like, it's, it's real. Like, yeah, everything you're saying right now is— it's obviously real. Like, you're a real person, this is a real company. And with our order, like, if we have an average ticket of $400, like, that guy is killing it.

But that, that took us—

I know, but like, the fact that it's a real thing is just—

Oh no, it's, it's real. And I'm like, well, drives me nuts too. So you like You start working— I did a tweet on this the other day, and it's like, you miss the nuance. So I get the question, and I have for years, of, why are you so willing to share stuff on the internet? And I'm like, I don't think you understand the depth of nuance that goes into this. Me saying, hey, my average ticket in this department is $2,500 or $2,900 or whatever it is, All that that does is tell you— it tells someone that it's possible. But the series of decisions over the past 9 years of my life led to that. And why do we train the way we do? Why do we price the way we do? Why do we call-by-call? In order to get to that average ticket, it is like—

There's a lot of work.

It is so much. So, and, and I really think like even if I gave the exact playbook that we used to go from a $400 average ticket to a $2,900 average ticket over the course of like 7 years in plumbing, like most people still would not be able to do it. Even if I gave like the exact like 30 steps, because—

I agree.

Like, you're gonna talk— even with the 30 steps, you're still missing all of the nuance. You're missing like the people, you're missing the decisions, you're missing like— like when I start to describe a problem, I'm usually on step 6 or 7 because it's all I've been thinking about for like 3 months straight. Like when I'm in the shower, I'm thinking about this problem.

When it's 2 AM.

Yeah, like, and then like suddenly parts of it click and you're like, oh, okay. Solved it. And like, they missed the, you know, 6 months of inner dialogue.

I mean, a great example of that is we were switching over to a sales service model, a service— well, a service tech installer model, I should call it, for plumbing. And like, that alone, it— yeah, it's easy in theory. Like, you just change it, you just stop doing what you were doing and do something else. But like, the nuance that goes in behind it and the amount of systems that need to get put in place—

oh my God.

And like, the change is a call center.

Yeah.

Infrastructure, vans, the whole nine. Everything just— it changed the entire business. And that's why we lost half our staff because of it. And so, it is what it is because I know it's the right move. But honestly, it's funny because it's the nuance in that is what makes it— and the execution is what makes it not—

Yeah. I mean, you still have to execute it. You could give the 30 steps and someone still has to do it. Like someone still has to like figure out how to more than 5 times their average ticket.

They got to do it well too.

They have to do it well. Yeah.

Yeah. Because if you do it and you just don't do it right, the change management is garbage. You don't like, you miss the part where, hey, like, yeah, we're getting rid of these, this half a million dollar industry. You, you talked about getting rid of your whole electrical new construction. I'm shutting down a $3 million, $4 million, $5 million division.

Yeah.

For, for my one service tech that does electrical. Like I need to make sure this is done right? What if they don't perform?

Yeah.

So I'm with you on that one. But that's why we hold meetings. That's why we hold trainings. That's why we explain these, why we make these decisions in company-wide meetings as well, is because it's like, I feel that that's necessary for people to understand the direction and why things are going that way and care at them. Why does this benefit you? Also, a huge thing today that we talked about, Benefits. Everyone finally gets benefits.

Nice. Yeah, that's a huge one.

Yeah, it's a win for us. We've finally been able to get to a point where we can offer them, and everybody's really excited. And I mean, it's my first step. I feel like it's our first step as a company to be like competitive in the recruitment market.

Yeah. No, man, that sounds awesome. Today we dove into EOS meetings nuance. I feel like we covered the good stuff, man. If you like what you heard, make sure you check out Owned and Operated. We just got a brand new website. We're very excited about it. Make sure you sign up for the newsletter. And, uh, our next workshop, the June one, got rescheduled to September, so make sure you check the website for those new dates. Uh, should be a lot of fun. I'm really looking forward to it. And I think that's it.

Yeah, really excited. Thanks for listening, guys. We appreciate you.

Thanks for tuning in to Owned and Operated, the podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out. You can find me on Twitter at @WilsonCompanies. I'll see you next time.