In under 10 years, Comfort Supply, Nashville, Tenn., has grown from six employees at one location to over 50 employees at six locations around the state. This wholesaler of traditional and geothermal HVAC products for both residential and commercial markets has also seen its sales grow during that time frame from $4 million to $17.5 million. What's behind the company's success?





In under 10 years, Comfort Supply, Nashville, Tenn., has grown from six employees at one location to over 50 employees at six locations around the state. This wholesaler of traditional and geothermal HVAC products for both residential and commercial markets has also seen its sales grow during that time frame from $4 million to $17.5 million. What's behind the company's success? That would be its young dynamic president, Clay Blevins, who implemented an open- book style of management when he purchased the company, along with his father, in 2003, at the tender age of 24.

While most understand that open- book management involves sharing financial information with employees, it is really much more than that. As Blevins noted, it is a comprehensive method of running a company that requires everyone at every level of the business to be informed, involved, and engaged in making the company successful. And no one can argue with Comfort Supply's success.



Clay Blevins started the open book process gradually, but employees readily accepted the concept and now feel empowered to make decisions and take risks.

IT'S IN THE GENES

Blevins is no stranger to the distribution business, as his grandfather owned a global popcorn company and later started a subsidiary that distributed concession supplies. His son, Blevins's father, worked for that company for a while before buying a mobile home supplier, which he grew from $1 million in sales to $110 million today. After retiring from that business (another son currently runs it), he and Blevins decided to become business partners and purchase Comfort Supply.

Being fresh out of graduate school, it didn't take long for Blevins to feel in over his head when it came to managing his new company. However, he realized very quickly that the keys to success lay in harnessing the knowledge and experience of the people who had worked at Comfort Supply for a number of years. To that end, he implemented a new style of management based on Jack Stack's book, The Great Game of Business: Unlocking the Power and Profitability of Open-Book Management.

"I went to workshops and hired a consultant to help figure out how to implement those practices which is really the whole process of teaching employees to think and act like an owner," said Blevins. "I started showing employees what the business was doing in terms of sales and profits, along with how much we owed and how much we owned. I also implemented a quarterly bonus program that is based on the financial results of the business. The standards are set by the employees, so it's a totally open and transparent process. My goal was to bring employees in at a high level of engagement and truly delegate the responsibility of running the business to them."

Blevins started the open-book process gradually, but employees readily accepted the concept and now feel empowered to make decisions and take risks. "I want people to take their ideas and run with them and not worry about being criticized if they don't work out. I try to nurture a risk-taking culture in the business that lets people try things and not be reprimanded for failures."



At Comfort Supply everyone at every level of the business is informed, involved, and engaged in making the company successful.

Focusing on employee growth is fundamental to Blevins, who believes that keeping his staff engaged keeps the customer engaged as well. "I think that businesses lose out if they don't harness the creativity and teamwork of their employees," he said. "I would encourage others to adopt an open-book management style, although I don't think every business is ready to do that. It's a big step to share that much information, and some companies just don't want to do it."

The open-book management process at Comfort Supply has matured to a point where Blevins can leave most of the day-to-day operations to his trusted team of managers, while he works remotely four days a week. The decision to work remotely came naturally, as office space at the company's headquarters became scarce as the business grew. Blevins was working out in the field so much he decided to give up his office so that one of his managers could have more privacy.

"I've been running the company remotely since then, and I love it. I'm still very involved, and I track the data very closely because we're a data-driven business. I'm in the office for weekly open-book management meetings and forecasting meetings, and I stay involved with the branches and the salespeople, but I leave the daily responsibilities of the business up to the folks in our headquarters."



MOVING FORWARD

While Blevins truly enjoys the process of opening up new locations, he does not see that happening in the near future. What he is focused on now is setting up an employee share ownership plan (ESOP). "I'm taking the culture of ownership one step further and giving all my employees a piece of the business. I started by giving the ESOP 15 percent of my stock, which will be the portion owned by all the employees as a percentage of their payroll."

Existing employees are looking forward to this innovative way of increasing their financial security in retirement, while new employees are excited about the opportunity to have ownership in a private business that's growing quickly. "I've used the ESOP as a recruitment tool, and it's attracted quite a few young energetic people to our company, which I think is unusual for this industry. I think we have a much higher concentration of younger people than other distributors," said Blevins.

He has also been hard at work creating an e-commerce site that the company recently launched. Given contractors' erratic work hours, Blevins thought it was important to provide them with an opportunity to place orders when it is convenient for them, whether that means during business hours or on the weekend. Contractors can also look up stock and manage their accounts online.

Blevins also plans to continue working to grow the business, which has been a challenge given the dearth of new construction projects in his area. "The economy in Tennessee has continued to decline in the last six months, and I don't think there's going to be any significant increase in new construction until 2013. We are also still seeing a lot of repair work, and I'm hoping there will be some pent-up demand for replacement this year. Unfortunately, I think a lot of people replaced when the larger tax credit was there in 2010."

That makes it even more important to retain existing customers, which Comfort Supply does by helping contractors grow their businesses. "Our employees are really engaged in the business, and that is reflected in the relationships they have with our customers. We want to help our customers be more successful, and we do that by providing any kind of training they need, as well as marketing support and business development - anything we can do to keep us together as business partners."