PODCAST: TE Spall & Son – Consistency in Training Has Led to a Growth in Culture & Sales
Tom Spall Has Brought His Team Together by Consistently Bringing Them Together for Training. This Commitment Led to 14% Growth Last Year, and by Becoming More Unified, They’ve Been Better Able to Navigate the Unstable Times Brought Upon by COVID-19.
TE Spall & Son resides in the small town of Carbondale, Pennsylvania. It’s roughly 150 miles from both Philadelphia and New York City. Second generation owner Tom Spall has been diligently working on his company’s operational systems, which are impressive, but also its culture.
Tom discovered by training four days a week, he’s developed a more competent, confident, and unified team. This elevation in culture led to impressive 14% growth in 2019, as sales jumped to $3.7 million. As importantly, this strengthened TE Spall & Son team has been resilient in responding to the fear and uncertainty of COVID-19 concerns. While calls may be down a bit, the business is staying busy, serving its customers, and providing an essential service for the community.
Let’s learn the story of Tom Spall and TE Spall, as well as learn how Tom’s execution and guidance has strengthened the company, elevated its growth, and positioned it for even greater prosperity in the future. Read on for the full transcript, or listen on our recently launched Podcast, The Successful Contractor. It’s a podcast designed for residential contractors about residential contractors. We chronicle business journeys, share insights, and celebrate successes in this wonderful industry of ours.
Tom, how did you get into the trades?
Well, my dad was an electrician, so I grew up in the trades with him, pulling wires by the time I could walk. So in the late 70s my dad and uncle purchased some sheet metal equipment from a gentleman going out of business. My dad and his brothers were always very mechanically inclined. So that was my introduction to the trades. And then I went to vo-tech school for electronics technology. I thought I wanted to be an electrical engineer because my uncle was an electrical engineer, and he seemed to have a pretty good life, so I set out to be like him.
When it came to time for me to graduate high school, my dad says, “Hey, Tom, why don’t you go to school for heating and air conditioning? We could use this sheet metal equipment we purchased and we’ll start a business.” The rest is history.
When did you take over the company’s operation?
We started in 1985, and I formally took over around ’92 or ‘93.
How did the business progress over those 30-plus years?
There’s absolutely been some ups and downs over the years. Around 1999 we actually began utilizing a flat rate system. When we started utilizing a flat rate that was about the time I realized I had been a technician for all of my career prior to 1999. I woke up one morning, and I said to myself, “I seem to be putting an awful lot of time in here with not a lot to show for it.” And I realized I was a great technician, but I had no idea how to run a business. That was the turning point. That, being introduced to flat rate, changing our pricing structure, that was the beginning of our growth. At that time, we were five people in the company, so our growth began at that point up to where we are today.
You joined SGI in 2015. What led you to the group?
I’d been a member of other best practice groups over the years and most of them fizzled out. I’d be a member for several years, and then the group either got purchased or went defunct. I was looking for an avenue to grow our people, not so much on the technical side, but on the operation side. I wanted to become operationally excellent, which we’ll probably always be on that quest. So that’s what led me to SGI and why I made the decision to become a member of SGI.
You join SGI and then you go to Executive Perspective. What were the two or three core changes you recognized early on that needed to be made in your business?
The biggest thing I realized is we needed to redefine our culture. Our culture had been defined previously just based on what happened, good decisions, bad decisions, and irrelevant decisions that formed our culture. And at that point, I realized we really need to focus on what is it that we believe in. As a group, we came up with our core values and our mission statement, and we all agreed upon our common belief system.
Did that occur over a series of meetings?
Well, it was through company meetings. And I tend to be a little bit of an over-analyzer, so it took us about 15 months through monthly meetings, working through this with a friend of mine who facilitated. He’s a marketing and personal development person, so he worked with us in facilitating the meetings. And I really like the way it happened. We talked a lot about things that we were doing daily and told stories. We all started with our own individual story, and for our team members, we talked about what brought them to the company? And for me, what was it that made me bring these team members onboard? And we backed into the values that we were living, and we all had to arrive at these conclusions through the process on our own, and I think that’s why it took so long. We determined these are the values that we’ve been living, and it made them that much more real and everyone bought into the values that they were already living.
What other core changes were needed initially after joining?
Yeah, I’m going to say in our installation department, developing kits and developing things that we could systematize, so we didn’t have to think as much about it to execute. So, we started developing more kits. We put together a price book that was all in one and that’s the AirTime pricing model. And also, we implemented Straightforward Pricing immediately after Executive Perspective. That really simplified the service process side in terms of pricing. And that was embraced very well by all our team, and we’re still utilizing that to this day.
Did you implement the System Performance Report to further augment how you ran service?
We had a model in place that covered the majority of the points that SGI covers in the customer service model from a technician’s perspective. I’m sure we tweaked some things and added some things, but it wasn’t much of a change from what we were doing, which was another reason [we joined]—our belief system and the way we operated was in direct alignment with the SGI philosophy, which made it that much easier to integrate into the SGI world.
In talking to some of the SGI coaches, it sounds like you’re passionate about training. In fact, you have your own training facility?
Yes, we’re actually kicking that up a notch right now. One of the silver linings we found is with some additional time and staff available, we’re expanding to a 2,000 square foot training center. We’re about halfway through that project.
But, yes, I’d say the one thing about our company from day one, I’ve always been an avid learner, and I guess I’ve developed that in our culture that we do a tremendous amount of training. We train four days a week technically. We train one day a week on the customer service side with our entire team. And we’ve been doing that now formally for a year and a half, and we’ve been doing it on a smaller scale for our entire existence.
This 2,000 square foot facility or space, will there be technical stations?
Yes, there’s going to be a large classroom area that will hold about 40 people. We’ve outgrown our current training room. I have a room that has all trainer boards in it; it’s for the fundamentals training. And then we have a full live fire lab. We have a modulating condensing board. We have a combi boiler domestic water maker. We have a geothermal system operational. And we have three HVAC systems operational to perform live testing, adjusting and balancing.
What does training look like weekly?
Generally, whatever season we’re leading into, I want to start about two months earlier and get our technical sessions going in alignment with it, so everybody is on top of their game. The other times we focus on the fundamentals, even seasoned technicians; I have them focus on the fundamentals, go through the trainer boards. They end up usually helping some of the other students and help me facilitate. One thing that we do as well is we train four days a week. I limit the class to five people so that I have a lot of one-on-one, and I can intimately start to understand a person’s skillset and determine what are their strengths and weaknesses. It allows me to have a good dialog with them in the smaller class sizes.
I’ve heard you have a throughout onboarding program. Could you talk about it?
We have an onboarding process. It was fairly short. It was something I had developed a PowerPoint presentation to communicate the important pieces to someone coming on and help them understand what it is we’re about as a company, what makes us work, what we expect, and what you can expect from the company. When the SGI model came out for onboarding, I mean that was awesome. We immediately took the information we had in ours, plugged it into the SGI model, and that’s the model that we use today. We’ll be starting onboarding with two technicians we recently hired on Monday, as a matter of fact.
How often are you recruiting?
We’re recruiting 90 percent of the time. I should be recruiting 100 percent of the time. So, we utilize Indeed. And primarily utilize word of mouth with our technicians. We don’t do anything in newspaper; nothing with television with recruiting.
What is your interview process like?
[Let’s say an application] came from Indeed, it was submitted, or they walked in and filled out an application. At that point, we’ll review the application and determine if they have some skillsets from their experience that would prompt us to take the next step. At that point, my colleague, Barb, who’s the office manager here, would reach out to them, have an initial phone discussion. At the end of that phone discussion, the goal would be to determine: Do I want to set up a face-to-face interview? [If so, Barb] does the initial interview and then she’ll report back to me. If we want to pursue it to the next step, then I will call them in, have an interview with them. If they’re technical in nature, it’ll be at my discretion; I’ll determine from that second interview if I want to ask them to take a technical proficiency exam. And then at that point, we’ll determine collectively, Barb and myself, do we want to make an offer to this individual?
Do you utilize apprentices much?
Yes, we have a relationship with the local high school vocational program as well as we have a relationship with the local technical college. So, we work with them closely. We’ll bring on people from those programs. They’ll do an internship with us and at which time we’ll determine if we’re going to offer them a full-time position. And that’s been very successful for us over the last about five years. I was very excited to be invited to be part of the team that developed the program at the college. It was great for me to see inside. Some of the things I would never consider that the school had to meet certain requirements. That’s been a very rewarding relationship.
How did you foster those relationships?
Well, it started with a gentleman that worked at the college; he knew that I was in the HVAC field, and he reached out to me early on and asked me if I’d be interested in helping them develop this program. And I saw that as an opportunity to help structure a good program that would yield a technician that had the fundamental skills necessary to build upon once entering the field. And after that, all I had to do was show up. I was amazed that people just don’t show up; there were many meetings it was me and one other person in meetings. But this industry’s been very good to me over the last 35 years, and I also saw that as a way of giving back.
How do you keep people accountable? Do you utilize scoreboards and do one-on-ones? Anything else?
We do those. We have a daily management essentials report that’ll come through that shows me how the techs are doing on a daily basis. I like to do one-on-one coaching; that would be my favorite approach. We also will address these things in our weekly customer service meeting on Wednesday mornings; we’ll address any types of issues. A lot of times that’ll be addressed generically to the whole group; I won’t single people out. If I feel someone needs that one-on-one, then I’ll take the one-on-one approach.
On our installation department, we’re watching our man hours on our jobs. We’re job costing our jobs, looking at our margins. On a daily basis, we’re managing, monitoring, and coaching where we have results. Let’s say the outcomes aren’t what we had hoped for, we coach them through those situations.
Last year, you had strong growth. What would attribute it to?
It was 100 percent the work that we did on our culture, and the training that we’ve invested in our people. And if I had to sum up our culture in one word, I guess it would be training. And for the morale of our team members, I could see a change. I’m facilitating these meetings 90 percent of the time. I’ll use some of my top technicians to help fill in, to keep the curriculum going when I’m not around. But we’ve shown them that we don’t just say the trainings are important; we put that into action by having these training classes every single week, and it’s consistent. I believe consistency has been a key to that. It’s impacted our culture and training, 100 percent.
Has being together that frequently helped the comradery among your team, too?
Oh, I absolutely do. And I guess that’s what I was alluding to. Being involved in the class, and having that more intimate interaction with five people, there’s a lot of one-on-one discussion and a lot of learning that takes place, not just about their skillset but about the person. And the interactions that I watch happen between the other individuals—where somebody will step up to try to help somebody that’s struggling—they’re great. When people feel like they’re being supported, there’s a much higher level of commitment and engagement.
That’s wonderful. Just to change winds here a little bit of the conversation, the last couple months have been really interesting across the country with the COVID-19 situation. A lot of the country has been shut down. How did it change how you’ve been doing business? Are you communicating with your team virtually more? Are you guys still getting together? How has it impacted your business?
It’s definitely had a major impact. And the Thursday evening I got home from work and found out that we were being shut down the next day, it was quite a surprise. I’m not one that watches much news; I kind of live in a vacuum I call my life. [Laughter] So it was scary at first. So immediately, the next day, I met with our leadership team and we discussed how are we going to get through this. Immediately we thought, communication is going to be the key, not just with our team members but with our customers and community. We immediately launched communications. And I saw some of the communications taking place with other SGI members throughout the Facebook forums; I definitely picked up pointers from those and implemented some of those strategies. Our main message was: We are here, we are open, and we’re ready to safely serve you. And we’re still repeating it actually.
We also started a Facebook page, a team page, for our team members. We encouraged everybody to post some pictures and tell some stories about some of these silver linings we’re finding that we didn’t realize. It seemed like all doom and gloom at first, but there are good things that are going to come out of this. So, we’ve been communicating through Facebook, email, outbound calls to customers, as well as we’ve done some radio advertisements with the same message. There was no call to action to ask somebody to buy something. It was strictly to say: We are here, and we’re ready to safely serve you.
How has your call count been impacted by COVID-19?
I would say overall our call count is down about 15 percent. It would’ve been down a lot more had we not been doing the outbound calling, letting the people know that we’re prepared, following protocols, and letting people know we were ready to safely serve them, making them feel more comfortable in allowing us to come into their home.
Have you changed how you provide service and do installs?
We’re definitely wearing all of our PPE. They’re wearing masks into the homes, wearing rubber gloves, wearing floor savers. On the incoming request, we’re explaining all of this to the customer. Letting them know that we want to maintain a social distance. Asking them if there’s alternative ways to get to their basement via Bilco door or through a garage. Setting the stage to have that distancing in place when we get there to make it easier for the technician. As well as for collecting payments we’re encouraging them to use credit card so that we can take those payments over the phone. All those things we’ve been employing on a daily basis on every call.
Speaking of payments, with the economic uncertainty, do you feel like you’re financing more jobs?
I wouldn’t say we’re financing more. For the last three to five years, we’ve changed to leading with financing. Even on a large repair, we’re letting customers know that financing is available. I do believe that this is going to be an issue this coming cooling season where people are going to be much slower to pull the trigger to have an installation done if financing was not there.
We’ve partnered with Daikin and with Green Sky, so we have a great program that’s in effect until the end of May where the stimulus money that’ll come back to the customer. And we’re getting ready to launch our new radio commercial this week. And so we’re off and running with that right now. So time will tell how successful that’s going to be.
Have you seen fewer bid shoppers because people don’t want multiple companies coming into their home?
No, I can’t say that I’ve noticed anything related to that.
Is there anything else you’ve done to help alleviate the outside pressure COVID has placed on the business?
I’d say again, communication was absolutely the key. That’s immediately the one thing that comes to my mind that I think has helped to get us through this tough time and come out stronger than when we went into these times.
As states begin opening, what do you think the next six months might bring?
Well, I tend to be an optimist, so I’m counting on the economy’s going to bounce back. I think there’s going to be a little bit of a hole at first; we’re going to have to be very proactive at reaching out to our customers and continuing these communications to not allow that hole to turn into a ditch which turns into a grave, right? [Laughter]
Have you begun strategizing and making plans to prepare for the next six months or so once Pennsylvania opens?
We’re absolutely talking about this. And we’re ramping up our marketing. We’re going double our marketing going into this next six months. We’ve already taken a big step with the partnership with PlacementSEO. We’re migrating over to them so we’re making a large investment there to get that return and get our lead count up, as well as we’re doing radio, we’re doing some direct mail, continuing our outbound calling. But I believe that’s going to be the key to help to fill the gap that’s going to be there.
In general, do you have any other advice for fellow members or contractors on how to navigate these uncertain and strange times?
I’d just say it again, I’m an optimistic person. I don’t watch the news, very little of it. I don’t listen to what they say. I read, I study, and with my leadership team, we’ll make decisions and we’ll execute on those decisions. Sometimes it’s ready, fire, aim. [Laughter]
But I believe you’ve got to be doing something and the universe will give you feedback. You can correct your course along the way, but take action and do something. Don’t just keep thinking about it and then never executing.
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