California Company Is Workers’ Champion

March 5, 2003
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YORBA LINDA, Calif. — It may have been dark and dreary outside, but the atmosphere inside the offices of Service Champions Heating and Air Conditioning this particular winter’s day was so warm and inviting that it was immediately apparent why the company won The News’ fourth-annual “Best Contractor to Work For” contest in the West/Pacific region.

This company operates as a family under the direction of owner Leland Smith, who is not comfortable being known as the company’s proprietor, president, or CEO. Even his business card doesn’t allude to the fact that he’s the head of an almost $5 million a year company — it simply lists his position as “coach.”

Why coach? Because Smith feels that the company should operate as a team. “You’re nothing without good people, and your people don’t function well without a good coach,” he said. “My job is to work with the people and help them however I can.”

Leland Smith would prefer to be called the "coach" of Service Champions Heating and Air Conditioning, because he believes the company should work as a team.

It’s In The Blood

Smith comes from a long line of heating, air conditioning, and plumbing professionals, so it’s obvious to see why he’d want to follow suit. He graduated from the University of Kentucky and started out as an accountant, making $10,800 a year. One day he called his Uncle Otis in California and asked how much he could make as a plumber. “At least $50,000 a year,” was the answer.

That’s all it took to get Smith across the country and settled in California, where he and his brother started Allied Plumbing, Heating and Air Conditioning Service in 1979. The brothers worked hard at their craft, and the business flourished. In 1995 the company caught the attention of Service Experts, which wanted to buy Allied, but Smith turned down the offer. In 1997 when American Residential Services (ARS) came courting, Smith decided to sell.

He worked at ARS for about two and a half years as the regional vice president for the Western region, before he decided to take some time off. After nine months (and the expiration of the noncompete clause), Smith decided to throw his hat in the ring again. In March 2000, he started Service Champions Heating and Air Conditioning, which focuses solely on the residential service and replacement business.

During his nine-month hiatus, Smith spent a lot of time thinking about the kind of company he wanted to build. He went back to the principles he learned at the meetings of Contractor Success Group (CSG), now International Service Leadership Inc. (ISL).

“I credit all our success to CSG,” he said. “I listened to everything they told me, then came back and implemented it. They told me to not copy my competitors, because I should be more successful than they are. I wanted to deliver more service and more products for more money.”

Smith also spent a lot of time handpicking his new employees. He decided he needed to focus on recruiting exceptional people if he wanted to make his company work. One of those people was Jim Cooper, who is the operations manager. “After I hired Jim, the technicians lined up to work here, because of him,” said Smith.

Laughing, Cooper added that it’s easy to manage people who are star players. “Our people like success, and they work hard to achieve success.” He cited examples of employees who have purchased larger homes or fancier cars because their compensation has risen so dramatically. “No other company has allowed them to provide better for their families than we have.”

Well-trained employees are a big factor in why they’re successful, noted Cooper. “Our departments meet daily and weekly. Basically, training happens every day. The more training we can give, the more the employees can grow. We continually cross-train and remind departments of how well other departments are doing. That keeps a spirit of cooperation going and everyone appreciates one another more.”

Call Center Manager Duane Fisher discusses business with Leland Smith's assistant, Pamela Kiel.

Focusing On Customers, Family

Empowering employees is another key in the Service Champions success story. Smith believes that every employee should be empowered to make a decision for the benefit of the customer. “Most employees are very cautious about making decisions, but they’ll almost always make the right one. I never come down on someone who’s taken the initiative to make a decision,” said Smith.

Lead Manager Lisa Shaffer agrees with that philosophy. Shaffer has worked for Smith for almost 10 years, through the company’s various iterations. “I can make decisions at the spur of the moment, because Leland says to make decisions, whether they’re right or wrong. Leland is always supportive, regardless. When he gives us that confidence, we become more confident.”

Smith said that putting customers first is the main goal of all employees. “Satisfaction doesn’t stop when we get the customers’ money. We want to build a relationship.” All employees from customer service representatives to technicians are trained in ways to educate customers about products and services. After each service visit, customer service representatives call customers to ensure they received good service.

Shaffer noted that immediate recognition is one of the reasons why employees enjoy working at Service Champions. “We have what are called ‘five star performance sheets’ that we fill out every time a customer calls with a compliment for a service technician. Those are read at meetings and are good at building self-esteem. The technicians want to get those calls, and we get a lot of them.”

People also enjoy working at Service Champions because Smith treats them like family. “The employees know that we care for not only them but also their family,” Smith said. “We realize that there is only one reason why any of us are here working — it’s our family.” To that end, he continually stresses that employees should spend time with their children and attend their various events. Smith himself regularly takes time off to attend his children’s basketball games and dance recitals.

“Leland’s always pushing us out the door,” said Shaffer. “I have a hard time leaving sometimes, but Leland encourages me to go and spend time with my kids.” Cooper, who has an asthmatic child, agreed, noting that he’s been able to work from home when his child is sick.

Warehouse Manager Mark Steinberg (left) goes over inventory with Comfort Advisor Daniel Pop.

What Tech Shortage?

When asked what he does about the industry-wide problem of too few quality technicians, Smith seems a little baffled. “We don’t have a tech shortage,” he stated. “We often have people come to us looking for work.” Positive word-of-mouth from current employees is one of the reasons that prospective employees come calling.

Another reason is that Smith keeps his technicians busy throughout the year due to continual marketing and service agreements. A direct marketing piece touting the benefits of regular maintenance is sent out each week to potential new customers. Smith’s theory is that customers seeking maintenance have already placed value on their heating and air conditioning systems, while repair customers are often just looking for the best price.

Everyone in the company sells service agreements. Customer service representatives mention the benefits of a service agreement on the phone, technicians discuss their benefits on the service call, and the agreements are discussed again when the routine follow-up call is made. Cooper noted that the service agreements aren’t moneymakers in and of themselves, but they can lead to further sales down the road.

The expectations are high for those being hired by Service Champions, but once they are part of the family, they seldom leave. Good pay and financial incentives for personal performance are just two of the motivators the company uses to retain employees. “We do just about anything to keep our technicians,” said Cooper. “It’s really expensive to find and train new ones, so we’d rather work on the ones we have.”

This personal commitment to employees and customers is evident just about everywhere you go in the company. “Our people have pride in the company,” said Smith. “They also have personal pride, because they’re continually improving. Our goal is simple. Take care of the customer first, the employees second, and never worry about the company. If the first two are happy, the company will always be taken care of.”

Definitely words to live by.

Sidebar: Just The Facts

Name: Service Champions Heating and Air Conditioning

Owner: Leland Smith

Location: Yorba Linda, Calif.

Years in business: 3

Bulk of market: 100% residential service and replacement

Total revenue for 2002: $4.5 million

Total employees: 30

Total service technicians and installers: 22

Average hours employees spend in training: 140 to 160 hours per year

Benefits offered beyond medical/dental insurance: 401(k), paid holidays, paid vacations, and flexible work schedules are offered. Technicians take their trucks home, starting and finishing their days from home. If technicians are scheduled to work a Saturday, they’re able to take a day off during the week. Clean shop and office with a training room and conference room. Other benefits include cell phones and Nextel “Direct Connect,” tool accounts, personal performance bonuses, contests with rewards and prizes. The company provides uniforms, professional training, company parties, and watching Angels baseball games in a suite.

The News selected this contractor because: In short, Leland Smith. The “coach” of Service Champions leads the charge, but allows his employees to make key decisions. We also agree with his business philosophy, which stresses taking care of the customer first and the employees second. “If the first two are happy, the company will always be taken care of,” Smith said.

Publication date: 03/10/2003

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