Live from the AHR Expo, Ken Goodrich returns to To The Point! CEO of Goettl, Ken recently wrapped up his 4-part series on the 7 Centers of Management Attention. During the fourth and final part of the series, Ken detailed a 1,000 plan he and his team put together. Now, Ken has some big news to share!
In 2018, Goettl partnered with a major private equity firm to continue the company’s strategic growth. Ken pulled his team together and set a major goal. They were going to 10x the value of the company in 1,000 days. With that, they would continue to build a great company, and maintain the Goettl legacy. It was an effort to fortify momentum going forward, as well as have meaningful wealth gains for Ken’s key people.
They looked at everything they thought they needed from day one, and went out and got it. Things like what people, systems, capital, and facilities Goettl would need to accomplish their goal. Once they decided what was needed and how to put the pieces in place, they went to work. It wasn’t without challenges and friction, but Ken and his team executed, and achieved their goal even a few days earlier than that 1,000 day mark.
The Results Are In: Setting Goals Works
Ken has learned over the years that if you clearly out your goals in mind and internalize how you’re going to accomplish them, it puts you on a course to do just that. It’s happened time and time again for him. In this case, it meant multiplying the value of his company 10 times over, and they executed their plan in 996 days.
Now, Goettl has partnered with a new group out in New York. Over time, Ken has learned that there are different private equity groups that make more sense depending on the size of your company and your strategy. Ken is confident that they have a sponsor right now they can continue to grow with for a long, long time. They found a partner with the resources, intellectual capital, and connections to perpetuate the Goettl legacy, which is to “Goettl-ize the nation”.
As for the next step in the journey, Ken isn’t going to be satisfied with something simple. It has to be bigger and better, otherwise what’s the point? The next number will certainly start with a “B”. Ken is only about 70% of the way finished defining his next plan, but it will likely be in the multi-billion dollar range.
Ken isn’t here to brag. His wife often asks him why he does these podcasts; why he shares all of his knowledge with everyone. It’s important to note that Ken isn’t out here to tell everyone what to do, but rather how to avoid the pitfalls he had to endure to get to the point he’s at right now. He knows the struggle of starting out alone in a service truck and the journey one has to take to have a successful business because he lived it. He had to work incredibly hard and has watched the industry he loves struggle so much that he feels it his duty to help others navigate the course.
If Ken was starting it all over again, there are some key things he would have done differently. First, he would have taken the time to get a job at a bigger company so he could see some of the routines of a bigger company. Then, he would have sought out some leadership and management training. You don’t have to be a great manager or even a great leader to have a successful business, but you need to at least be able to recognize a good one.
Ken stresses to others that the work of the trade is not the business. It’s the organization and leadership of processes and people, and using your 7 Centers of Management Attention to create an overall business system. Regardless of the stage of business you’re in, it’s never too late to get on the right track.
Whether you’re just starting out or trying to correct your course, there are some key things to understand about running a sustainable, scalable, and successful business.
You simply have to learn how to manage people first. That was a real struggle for Ken, and he wasn’t able to hang onto a lot of people in the beginning of his career because he didn’t know how to. It’s incredibly important to have this knowledge immediately; ideally before you ever start in business.
It’s also worth noting that not everybody can be a good manager or a good leader, and it’s certainly rarer to be both. Ken freely admits he is a terrible manager, but that’s why he hires someone who is a good manager to do it! Still, you have to have that education in order to identify a good manager, even if it isn’t your natural skillset. What our industry often does is we take our best salesperson, or our best tech, and promote them to management. Being a great technician does not make a great manager! It’s a different set of skills. Why do we do this?
Ken is smart enough to recognize what he knows, and what he doesn’t. For everything you’re lacking, there is someone or some organization out there that has the answers! Both Goettl and RYNO Strategic Solutions have found great success with MAP for leadership and management training.
In The E-Myth HVAC Contractor, the book Ken co-authored with Michael E. Gerber, Ken writes that trying to create your pricing based on what your market is suggesting is not the best way to go about things. You need to understand the mathematics of your business, full stop.
Your first step should probably be to get into a best practice group and/or a mastermind group to get some proven systems to implement, but even then, you have to understand the math behind it all. Ken remembers getting involved early on with Air Time 500 (now Success Group International). They gave him systems, and he started to implement them with success. What Ken did, however, was go a step further.
Ken dug into the math behind these systems. He worked to understand why each number was what it was. Then he started to play with the numbers, looking at the cause and effect. He would generate scenarios with his P&L and pricing to truly understand and give himself the ability to tweak the numbers of his business as he saw fit. Surely one model won’t work for every business in every market, right?
There are lots and lots of very large companies in the services industry that run off of systems that best practice groups taught them. These systems are great, and they work, but the management team doesn’t really understand the ‘why” and the math behind it all. If something changes and you need to be able to pivot, or you want to optimize your business, you can’t be held hostage to a system you don’t understand.
Set goals for yourself and your business, and create an actionable plan with checkpoints towards your biggest goals. It’s really that simple. Every morning, Ken gets up and looks at his current goals, modifies them as needed, and sets up his plan for the day. At Goettl, the team creates annual, monthly, weekly, and daily plans with goals. That might mean in January they plan on 9,471 service calls of a certain type, and it will result in a specific net result. That means converting a certain amount of leads, navigating the logistics and providing the resources to complete the calls, and everything else that goes into achieving that goal.
That extends into knowing what day they will break even, what they will add to the bottom line every day after, and what they will close at once the month is up. It’s a goal, but it’s an active process. Their team talks about it every single day. If a tech needed six calls today and got four, the conversation is what we’ll do tomorrow to get two more.
It’s no secret that Ken has enjoyed quite a bit of success, and that’s a result of many years of both hard work and having to face quite a few challenges he hopes to help others avoid. One regret he has, however, is that he lost out on time with his family. Ken urges others to remember that your business is not your life, and it should not define who you are. Your business is simply a tool to help you achieve what you want out of life.
Ken has seen business owners completely divorce their families in the hunt for their fortune. It isn’t worth it. You don’t want to wake up at age 65 with 200 million dollars and no friends or family to share it with. There is a work/life balance to establish. Sometimes, that might mean missing out on a great business opportunity so that you don’t miss a soccer game or graduation. Build this into your system, and don’t let your business plan take over every aspect of your life. Understand that your business plans can and should change to accommodate the other areas of your life.
Most business owners spin their wheels for 10-15 years before they get things figured out. Ken wants you to cut that down to just a few. He struggled for a long time before he found The E-Myth and did what he was supposed to do.
If you’re just starting out and you have your van, your logo, and your shirt, and you’re all excited to jump into business, consider what Ken is talking about here. The business is not about fixing air conditioners, or selling air conditioners, or marketing air conditioners. It’s about combining the 7 Centers of Management Attention. It’s about the people, the processes, and establishing the overall system that creates the revenue and profits generated from the sale, service, and maintenance of HVAC equipment.
Fools rush in. The first thing you need to do is not buy a van, or get a logo. It’s to obtain the education needed to understand how to run a company, manage people, and the mathematics of your business. Become a zealot for leading your company to create processes and an overall business system to produce the results you want.
We thank Ken for sharing his journey and wisdom with us! If you haven’t listened to our 4-part series on the 7 Centers of Management Attention, go back and check it out!