The Great Recession wasn’t easy for those connected to construction, but it opened the eyes of Brad Taback, president and CEO of Climatech Inc., as to the direction of the company for the next 20 years.
As a HVAC provider, Climatech was forced to change its business model in order to keep its doors open.
Taback, who is the second generation to lead the company, says Pittsburgh’s private construction market dried up, forcing the company into the public sector.
“After spending four years in that arena, we realized that it was not the direction we wanted to have,” he says. “It was a big eye-opener as to the future of our business.”
At the time, several managers were touting a bigger-is-better approach, which Taback says meant taking on large public projects that would move Climatech from a good-sized company to a much larger one.
“That’s not who we were and the challenge was really just ‘getting back to the basics,’” he says. “We made an effort, starting probably in late 2011 and heading into 2012. I had to decide to really get this company on track to the point where we were going to get back to what we did well.
“I worked with management to get everybody on-board to refocus the efforts and just understand that bigger is not always better.”
Refocus your strengths
Refocusing your business model shouldn’t be taken lightly, but tight margins and the nature of the projects should drive the decision.
Taback says in public work, the profit margins are extremely thin and bidding makes everything very competitive. Climatech’s strengths are service and being part of a team; in the public arena, it’s more every man for himself.
So, with a recovering economy, the company was able to shift back into private work.
“We made a concerted effort to get out of that industry, and interestingly enough, our volume probably dropped by 30 percent, but our profit went up,” Taback says. “So we were, at the end of the day, making more money on less business, which I think is probably the goal of every business out there.”
Management helped employees understand that the new direction was in everybody’s best interest.
Every situation is different, but Taback says to go with your gut and focus on what you’re good at.
Climatech, started in 1972 by his father Mitchell Taback, traditionally had been involved in 60 percent construction and 40 percent service.
“From a historical standpoint, our company was a pioneer in the marketing and development of the HVAC service industry in Pittsburgh,” Taback says. “Back in the ’70s, a lot of our competition looked at service as the necessary evil.”
When Taback made tough decisions during the recession, that mix moved to 80/20. As part of its refocusing efforts, the company set a goal of getting back to 40 percent or even 50 percent service.
“Our goal is to stay with this customer forever, which back in the ’70s was not the prevailing mentality,” he says. “So we were always a service company. That’s something that we always did well and we still do well today.
“From my standpoint, I try to keep my eye on that and make sure that we continue to head down that path.”
New technology for old-fashioned customer service
In order to keep its service business strong and retain customers, Climatech has added new technology.
The company implemented an enterprise software system that integrates service dispatching, accounting and construction software into one package that all departments can access.
It also added an HVAC asset management module so facilities managers and building owners can access records online.
Finally, Taback says the company has started to roll out technology that allows service techs to work on smartphones to access equipment history, generate invoices, etc.
With technology changes, it’s critical to implement it in phases.
“So we’ll introduce it to five at a time, work through the training and make sure that they’re all comfortable before we roll out the next five,” he says of the current project.
“The process is going to probably take 12 months from start to finish, but we find it’s more productive for us because the more problems these guys have in the field, the more time we all have to spend solving the problems, and that detracts from what we all do on a daily basis.”
You also have to stay organized, Taback says.
“Whenever you go to a new software system, there’s a tremendous amount of time and planning and things that go into it and a lot of that gets underestimated, I think,” he says.
Despite the growing pains, Taback says the right technology not only helps Climatech but the end user as well. This puts service where it should be for the company — at the forefront.