The sign in the social services facility said it all for JamesAbrams.
“Plan or be planned for,” Abrams recalls of the sign he saw backin 1968.
At that time, Abrams was a 21-year-old teacher in Detroit, accompanying a student who was having problems at home.
“Right behind that building was another very large building inDetroit, which was commonly referred to as the ‘projects,’ wherethey effectively housed people that had not planned very well fortheir life,” he says.
“So, it was very impacting on me as a young man. I don’t think I’llever forget it walking in there and seeing that sign and saying,‘Oh my goodness, if one doesn’t plan one’s life, other people havea plan for you that you may not like.’”
The sign made such an impact in Abrams’ life that he still usesthe lesson today as a key factor in leading Clockwork HomeServices Inc., where he serves as chairman, president and CEO ofthe provider of electrical, plumbing, HVAC and other services tohomeowners.
“It’s our plan really that sets us apart to begin with from everybody else,” he says. “The plan is allowing us to have this type ofgrowth and generating profits each step along the way.”
The growth Abrams refers to starts with the company he co-founded in 1998 and had sales of approximately $2 million in 1999.After a steady climb, revenue jumped to $59.8 million in 2005,$111.9 million in 2006 and, in 2007, the company posted revenue of$182.3 million.
However, simply developing a plan didn’t lead his business tosuccess it’s how Abrams measures within the plan and how hereacts when something isn’t working within it that keep his company running smoothly.
Lead with a plan
Before developing his strategic plan, Abrams had a study doneasking consumers what it was they valued most about home services.
The answer was time. “They wanted somebody that could come right now,” he says.“And, if they couldn’t get there right now, then get there when yousaid that you would.”
Beyond that, customers also indicated a concern about safetyand security, so he adopted an operating philosophy of conductingemployee drug tests and doing criminal background checks. Thisgave him the operational backbone to keep customers once hehad them by allaying all their concerns.
Customer feedback helped shape his strategy and gave him aclear insight into what they wanted. Abrams says the most important step in planning is to clearly understand your strategy andstick with it.
To help everyone on his team understand the strategy and operatewith it, he created a book called “The Strategy,” which he updatesevery year and passes it out to his management personnel. Sticking towhat’s inside that book is vital to making sure the company heads inthe right direction because deviating from your plan can cause problems.
You need to stick with your organizational chart and fill each position specifically, instead of trying to get too much out of one goodemployee, avoiding what Abrams calls “ease of management.”
“By that, I mean, I might have somebody who is very talented that perhaps I could exploit their talents and carry them over intoa broader range of responsibility,” he says. “But, ultimately, myexperience has been that will hurt the organization.”
For example, it’s tempting to have someone who thrives in onearea assigned another area of responsibility.
“I don’t think that serves a company well in the long run,” hesays. “In the short run, it could work. In the long run, you end upwith ‘Joe’s job,’ rather than the defined operational position within the company.”
Measure within the plan
About two years ago, a field employee in the company’s air conditioning business discovered data that helped the company addmillions in sales.
One of the key reasons a consumer replaces a system is its age.The company was not tracking the number of service calls that theyran on 15-year-old plus systems, and, in Las Vegas, a 15-year-old system is pretty much shot and should be replaced.
“We were just looking at when our technicians went out to calls,how many people did they present a price to, and then how effective were they at converting that customer into a sale,” Abramssays. “Once we started tracking operations, our sales from ourservice department just accelerated dramatically.”
By tracking that number and holding people accountable to it, theygrew sales $2 million for a 12-month period in Las Vegas.
“That is probably the most dramatic example of a number thatbecame real important to us,” he says.
It’s also an example of why Abrams says metrics are essential torunning his company and keeping it on track with its plan.
His focus on data starts by having one of his subordinates test hismanagement personnel to make sure they understand the company’s strategy and are on board with it.
“That allows them then to talk to their subordinates about whatthe plan of this company is,” he says.
Along with the test results from managers, he also uses keyreporting mechanisms in each division on a daily basis to showwhether the plan is working or not.
With 100-plus salespeople across the country and approximately1,000 employees throughout the company, Abrams needs to seedata to know where the company is succeeding and where it’s failing so he can be proactive in taking action instead of reactive.
“I know what a closure rate should be,” he says. “If all I did was lookat a financial statement, let’s say from our L.A. center at the end ofthe month, I could see either a great performance or a failed performance at the end of the month and respond to it at that time.
“On a daily basis, I can take a look at what our salespeople aredoing. I can take a look at the number of appointments we are running each day. I can see our closure rate, our average sale, and wecan actually respond to that daily if we start to get off track so we’renot surprised at the end of the month.”
Abrams says most business leaders know what data they need,but some are afraid to set a goal in fear of not meeting it.
“To begin with, much of it is logical,” he says. “Most businessowners or executives understand what are the key performancefactors in their business; many of them don’t want to look at it.
“After I stopped teaching school, I went to Weight Watchers, andthe most common reason a person doesn’t begin losing weight isbecause they don’t want to put up something that they might failagainst. Weight Watchers’ biggest objection was always getting a
consumer to come in the door because the first thing we did wasput up a goal weight. I think once you put up a goal weight andunderstand what you are going after, you have a much more likelihood of success.”
Throughout the years, Abrams discovered the main reason people don’t like to see goals set is because they don’t want to be heldaccountable.
“They don’t want to hold themselves personally accountable andsee themselves as perhaps failing against a specific goal,” he says.“So you have to overcome that ego drive that says, ‘OK, I’ll putsomething up here and begin measuring myself, and this is what Ibelieve I can get done.’ Now, you may find that what you perceivedcould be accomplished isn’t accomplishable, and you’ll have toadjust those goals downward. But, you’ll never know that unlessyou begin to track them.”
You also need to remember people will judge you if the goalsaren’t being met.
“I think there is a little bit of a fear there that if you start to trackthese things, other people see them,” he says. “So, other people aregoing to start to measure your competence as a leader and as a business manager.
“There are not many places to hide if every key performance factor is being tracked in the company each day, and you’re the guythat dictated that these are the things that are going to be met.Ultimately, it ends up your responsibility to make sure that theyare met.”
Change the plan if necessary
Because Abrams has such a focus on data, it allows him theopportunity to take action when the numbers aren’t adding up toexpectations.
One such case involved a patented product that Abrams thoughtconsumers would love. The product can monitor heating and airconditioning systems, which would allow the company to alert aconsumer before a problem occurred.
“We’ll be able to call them and tell them before they even have aproblem with their furnace and air conditioning, and they’ll neverexperience another day of discomfort,” he says.
“So, looking at it, we thought, ‘Wow, consumers are really goingto want this.’ And in an attempt to market it to the consumer, wefound there was no interest whatsoever.
“We were spending a lot of money on attempting to educate consumers on why this was so important for them. They were just tellingus, ‘I get it, but I don’t want it.’ That was something we could have keptknocking our heads against the wall on and saying, ‘Come on, youhave to understand this because we get it. We like it in our ownhomes.’ But the consumer just didn’t want it.”
The company had already spent $2 million marketing it, andAbrams contemplated spending another $1 million because hebelieved in the product so much. But ultimately, he had to stepback and realize the marketplace indicates a product’s success.
“Then I started doing the math on that, indicating that I would have$3 million invested in that initiative, and how long would it take meto get back my money?” he says. “I just said, ‘I’m a businesspersonand my real scoreboard is how much money I make.’ It’s not reallyabout, ‘Look at how brilliant I am with this idea.’ It’s how muchmoney I make, and that’s what stopped me.”
If you have exhausted all your avenues to market a certain product or service, and employees are telling you no one wants it, youneed to listen or risk wasting more time and money.
“It was easy for me to sit in my office and say, ‘But, here’s what itdoes’ and go out to the field and espouse the virtues of that particular product,” he says. “But, my field people were saying, ‘Mr.Abrams, I understand, but I gotta tell you, they are kicking me outof the house. They don’t want it.’ And, of course, I didn’t want to hear that. So, I was thinking, ‘You’re just not doing it right. Try itthis way; try it that way.’”
The decision was made more difficult because Abrams actuallyhad success selling the product when he would accompany technicians into homes.
“But I was vested to the bone in the product, and I’m not going toget that from a technician who has chosen a career to fix things forconsumers rather than sell the next new, great product to consumers,” he says.
Salespeople also attempted to sell the product, but Abrams hiredthe salespeople to sell new furnaces or air conditioners, not themonitor.
“So, we just didn’t really have the resources within our company inthat example to be able to do that, and it’s just recognizing that this isnot who we are,” Abrams says.
The first step in dealing with a failure is recognizing it and coming to terms with the fact that you won’t be successful 100 percentof the time.
That’s something Abrams learned from a mentor early in hiscareer.
The mentor told Abrams: “Management is very much like bettingon horses. If you went to the horse races every day of your life andbet on every single race and you ended up winning 51 percent oftime, you’d probably end up OK in life as a gambler. Business is alot like that. You have to make a lot of decisions, and you’re goingto make a lot of wrong ones, and you have to be able to acceptthat.”
HOW TO REACH: Clockwork Home Services Inc., (941) 366-9692 or www.clockworkhomeservices.com