All Industries, Operations, Management, Productivity

Trackable efficiency on commercial jobs speeds Lovett Services to increased profitability

Pat McManamon
October 7th, 2022
8 Min Read
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Straight-line racing is part of Gary Cosmer’s DNA. He drives a Factory Five Shelby Daytona Coupe with a Supercharged Coyote engine, which he built. He’s working on restoring a 1967 Corvette. And when he wades into drag racing, he uses a Tesla Model S Plaid.

“I take that to the local strip on Friday nights and just clown guys with it,” Cosmer said. “It’s good fun.”

Cosmer no doubt would like to take a straight line to profitability (see what we did there?) in his full-time work as Partner, President and CEO of Lovett Services, which does large-scale commercial work and projects in the Portland, Ore., area.

But he knows that the steps to a successful company are just as important and detailed as building a winning race car. It takes time, effort, diligence, precision, and a clear plan. Especially with a company as varied as Lovett.

“We've got plumbing, which is kind of broken down with project plumbing and service plumbing,” he said. “We've got drain. We've got excavation. We've got directional drilling. We've got vac truck services, and we've got mitigation.”

All are individual business units within a common profit-and-loss statement and balance sheet. 

When Cosmer scans that balance sheet in the fall of 2022, he can smile. Lovett's profitability and revenue are up since the company came on board with ServiceTitan, the cloud-based software for the trades, in February 2021.

“We went from doing $16 million to this year doing just under $20 million,” he said. “On profitability, we were averaging about 8% net contribution, and this year we’ll be around 13% net contribution.”

Specifically in plumbing, revenue has dropped a small amount, but profitability is up 30% “dollar wise,” he said.

“That’s just related to being more efficient,” Cosmer said.

Lovett1

Lovett Services does it all — “We've got plumbing, we've got drain. We've got excavation. We've got directional drilling. We've got vac truck services, and we've got mitigation,” says CEO Gary Cosmer.

Lessons learned in manufacturing

Efficiencies are a driving force to this man and this business.

Cosmer learned the importance of efficiency before joining Lovett. His unusual background includes an undergraduate degree from Southern Illinois University in Advance Technology Studies. He also has an Associate of Applied Science degree in Aviation Technology. His last job before Lovett was with a private equity firm focused on aerospace and defense manufacturing.

The oversimplified way to explain that work is it emphasized bringing manufacturing back to the United States after a time when so much was outsourced, saving money but affecting quality. In the early 2000s, the firm studied efficiencies in successful companies, including in Japan. Labor costs domestically were four-to-five times what they could be overseas, and Cosmer understood extra labor costs required efficiencies in the United States.

“Long story short, we started using those methodologies to bring manufacturing back, and we were quite successful,” Cosmer said.

His friendship with Lovett owner Dale Lovett led him to join his current company in 2018. He was part of the team that decided to bring on ServiceTitan. He does not attribute every extra dollar or percentage point to the software, but he concedes ServiceTitan has contributed to the growth. His effort is to bring efficiencies to the trades, as he did in manufacturing.

“I thought if I could take the lessons I learned from manufacturing and apply them to the service industries that we should be able to go to market at a lower cost, demand a higher margin, and have better efficiency and customer service through that process,” he said.

In September 2022, four years into his tenure, Cosmer said the approach “seems to be working quite well.” 

“Part of that was obviously having systems that could support the demand,” he said. “So having things like scoreboards so that you know if you were getting better or worse, having good phone systems and integration, that was all critical to that process. Obviously ServiceTitan has natural components that help facilitate that.”

Lovett2 Image

Lovett has ServiceTitan address the competence by tracking factors like highest performance, billable hours compared to revenue, and revenue per hour. “All of those components are native to ServiceTitan, and come in really handy,” he said.

Lovett’s key commercial KPIs

Cosmer relied on a scoreboard he created using data from ServiceTitan, QuickBooks and one other product. Cosmer starts his day checking the scorecard for a snapshot of performance on top KPIs and individual projects. One of many examples: The report shows the company’s cash position, which tells Cosmer and management if it’s time to start saving and stop spending.

He sends the scoreboard to every member of the team every day at 6 a.m.

“Each laborer that's on a job site knows how we're doing as a company,” he said. “And that's important, because to a lot of these folks, it's about stability. They want to know that the company they're working for is financially stable, and this gives them that peace of mind.”

Other elements that appear daily in the scorecard include:

Service. A key tenet of Lovett as a business. “If we're not on time, our customers aren't very happy with us,” Cosmer said, “but operationally and tactically, if my guys aren't on time for the first call of the day, they're not going to be on time for the second call of the day probably. If they have four calls that day, they may not get to the fourth, which means I have to front load that for tomorrow, which is going to screw my schedule up for the entire rest of the week. I look at how we're doing on being on time for the first call of the day, and that's really what this metric tells me. That's what my superintendents are looking at also. If they have issues, they can figure out how to resolve those and get back on track.”

Technical utilization. Cosmer said this KPI comes directly from ServiceTitan. The goal is for techs to be recording revenue-generating time 91% of their work day. Cosmer then focuses this data point on how superintendents are using their time, because time in the field is more valuable than time spent doing paperwork in the office. “I track how many times they’re out in the field,” Cosmer said. He also has superintendents fill out a form that shows they are wearing safety gear every time they visit, a form he gets from ServiceTitan.

Takt time. To narrow the information, he uses a principle he brought from manufacturing, called takt time, which measures the rate at which a business needs to complete a job to meet demand (Takt has German origins and means beat or pulse in music) or, put another way, output against demand.)

Job efficiency. Taking takt time a step further, Cosmer measures job flow compared to time budgeted. If a job is 99% completed using 77% of the expected hours, it’s a job that is ahead on takt time. But if a job is using 133% of the expected hours, it's a job that should be assessed. Any percentage over expected matters a lot in large commercial work. “One of the superintendents is going to need to get involved and figure out how we got off the rails,” Cosmer said. “Is there a change order that needs to be done? Do we need to do something different to get this job back on track? This is all stuff that's flowing in from ServiceTitan.”

(ServiceTitan) was the best solution, and it continues to be the best solution.”

Gary Cosmer

Gary Cosmer

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Customers notice efficiency too

Cosmer has found that Lovett’s internal efficiencies score well with customers. Google reviews are at 4.9, which he said are the highest in the area they serve.

“We take that very seriously,” he said.

Cosmer relies on Stephen Covey’s book The Speed of Trust. That book says trust is built on two pillars: character and competence, and 13 behaviors support those pillars.

Lovett has created its own “Smart Trust Report Card,” which involves every employee rating themselves against the 13 behaviors—along with a peer and supervisory review. If employees exceed expectations, they are rewarded.

“It lets us walk our talk with our customers,” Cosmer said.

That addresses character. Lovett has ServiceTitan address the competence by tracking factors like highest performance, billable hours compared to revenue, and revenue per hour.

“All of those components are native to ServiceTitan, and come in really handy,” he said.

Cosmer said ServiceTitan provides the best connection to the customer experience he’s seen. That includes being able to see pictures from the job, listen to phone calls, and see it all on a timeline associated with every customer.

He admits the software still has to address challenges for commercial projects, that in some ways it is still growing. But the future he sees with ServiceTitan is bright.

“All indications are that they listen,” he said. “They're interacting with Jessie (Sticka, Lovett’s IT Director) all the time, and they're like a sponge. If we find something that works, they're listening (and) they're trying to incorporate that in the next version. When we struggle in areas, they do what they can to help us find a work-around, and then a solution. They've been a good partner from that perspective.

“(ServiceTitan) was the best solution, and it continues to be the best solution.”

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