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Episode 8

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Management • Operations • Productivity • 54 minutes

Chad Peterman: Why a Thriving Culture Trumps the Labor Shortage

June 9, 2020

Episode Overview

When it comes to company culture, Chad Peterman knows friction can cause a family business to go south quickly.

“On the one hand, that story can go terribly, terribly wrong,” says Peterman, president of Indianapolis-based Peterman Heating, Cooling & Plumbing. “There can be a lot of strife and arguing. In our family, we’ve been fortunate not to have that be the case.”

The Peterman bottom line points to a harmonious existence. The 130-employee family business did $21 million in sales last year—a 30-percent increase year-over-year. The company also has two other locations in Central Indiana and was honored as the 2019 Residential Contractor of the Year by Plumbing & Mechanical.

Patriarch Pete Peterman started the company out of his garage in 1986. At the time, Pete’s wife, Beth, was pregnant with Chad. Starting a new business wasn’t the most popular idea in the Peterman household. All’s well that ends well, though.

Growing up, both of Pete Peterman’s sons played sports year-round. Pete attended every game he could—something a child may not necessarily appreciate, Chad says, but later in life is something you come to respect as a loving commitment.

Chad and his brother both played football in college. Chad attended Wabash College and Tyler played at the University of Indianapolis.   

Both boys came back into the family business. Pete is semi-retired but still keeps a hand in the operation. While Chad serves a president, Tyler primarily oversees new construction.

How do they keep the peace at work?

“I think that’s partly due to the fact that we all three have different skillsets and all like to do different things,” Chad Peterman says. “So, we stay out of each other’s way. We’ve made it a point to stay in our own lanes.”

Even when a big-picture decision is needed, it’s approached with teamwork. “When there’s any crossover with a decision that needs to be made, we do a really good job of taking a step back and trusting each other,” Peterman says.

The eldest son says that mindset started with their dad. 

“That’s the biggest piece of the puzzle we’ve been blessed with—our dad,” Peterman says. “He has his opinion about things, but he’s never really questioned if we wanted to do something or felt we should go a particular direction. It’s never, ‘You can't do that,’ or, ‘That’s never going to work.’ It’s been open and honest support and, ‘Let’s give it a shot.’”

Peterman says the empowerment his father gives to his two sons instills and informs the way they manage the company and strive to empower employees.

The family business plan

When Chad Peterman graduated from college in 2009, he didn’t plan on getting into the family business. He wasn’t mechanically inclined like Pete and Tyler. Chad took a job as a traveling salesman. He tired of being on the road, however, and with some trepidation, came home to study a career in the trades.

Upon joining the company, Peterman worked to get himself up to speed. Repairing a furnace was not his forte. He helped rewrite the website, did some sales and eased into decision-making.

“I held various roles throughout the company, really touched all aspects of it,” Peterman says. “Along the way, we added plumbing, we bought locations, we started up new locations from scratch. We added drains and excavation about three years ago. We’re really growing.”

The decision in 2013 to add plumbing to the company’s list of services was the beginning of a boom—albeit one that came with a learning curve.

Nexstar was the biggest help when it came to really understanding plumbing and how we were going to make it work for us,” Peterman says. “It was a labor of love. We built it, tore it all the way down, built it again, tore it down again. Now, I think this rendition is going to take us to some pretty cool places.”

Valuing employees

Peterman’s personal growth in the trades has led him to an essential truth: It’s a people business.

“When I first came back, I was under the impression that the business was selling furnaces and fixing water heaters and repairing sump pumps and all of those things,” he says. “What I came to learn is this is a people business and it's really about just growing people.”

Peterman echoes the sentiment of successful entrepreneur Richard Branson when it comes to the viewpoint of employees.

“Being a service business, our No. 1 customers are our team,” Peterman says. “If we take care of our employees, and grow them, they’ll take care of every customer who calls us for a heating or plumbing problem.”

It makes sense: A family business succeeds when its extended family is also free of friction and strife.

Chad Peterman’s Home Services Trade Tips

Chad Peterman, president of Peterman Heating, Cooling & Plumbing, offered tips for success in the trades on a recent episode of “Toolbox for the Trades” podcast, hosted by ServiceTitan. Among his top tips: 

1. Create call center/dispatch efficiency.

A big lesson for Peterman was understanding how to book calls properly, then how to dispatch with capacity.

“We used to call all our customers and we’d book up every technician with as many maintenance calls as we could,” Peterman says. “Then it would get hot—and we’d still have all these maintenance calls and we wouldn't have the room to take on new customers.”

The company has seen amazing growth since 2015, when Peterman joined Nexstar and picked up training tips in this area.

“We split apart the call center and dispatch,” he says. “Now, people in the call center are booking calls and putting them on the board. Dispatchers are trying to get people around town most efficiently and create revenue.”

By shifting away from just filling up the logs of tech to keep them busy, strategic assignments increase revenue—especially when it gets hot and demand increases.

2. Build leaders.

During the exponential growth since 2016, the company has been looking inward to see what it’s doing right. Peterman says the focus has been on leadership.

“Tapping into personal growth and leadership is the key to everything,” he says. “Over the past couple of years, we have doubled down on building leaders on our team.”

Peterman has incentivized leadership by making sure employees know that as they develop those skills they will be rewarded for helping the overall team do better.

“As we’ve built the leaders on our team, I tell them all the time that the company grows when they grow. It's a very simple formula. You invest in your own personal development and then invest in those around you, you can't help but grow.”

Peterman has a bimonthly leadership class. The company produces a podcast that techs can listen to in their trucks. And field supervisors have been invited to join senior management meetings.

“For me, the learning that I do is important,” Peterman says. “However, the most important thing is sharing that. People constantly come in and find chapters of books printed out on their desk, or an article that I read.”

3. Learn to listen.

Peterman says there’s an important differentiation between managers who simply dispense advice and those who listen carefully before offering advice.

“The ability to listen is crucial,” he says. “There's a big difference between always wanting to be right as a manager, and the practice of opening yourself up to learn and asking those great questions. Those great questions can uncover why someone may be struggling or why someone doesn't understand what we’re trying to do.”

Listening is a key quality that a good leader needs to develop, he says.

“It factors in with leading others on a team” Peterman says. “Our younger guys who are coming up through the trade need help and guidance. “You have to listen, or you can get a bad name. We really have to take a step back and understand how we can grow our people, not beat them down until we get the results we’re looking for.”

More tips, tricks and bits of trade wisdom 

Chad Peterman, president of Peterman Heating, Cooling & Plumbing, offered tips for success in the trades on a recent episode of “Toolbox for the Trades” podcast, hosted by ServiceTitan. Among his top tips: 

“Explore and solve” with customers: The customer experience comes in two parts:

  1. Explore. The first part of a Peterman conversation with customers entails finding out what problems they have and what they want to fix. “We make note of those items,” he says. “If we’re there for one thing, there may be other things the customer wants to get taken care of, maybe today, maybe in the future.”

  2. Solve. After we’re done exploring, then it’s time to put together solutions,” he says. A tech is trained to explain what a customer’s options are. “We suggest taking care of it all that day. Or, let them think about when they want us to take care of it in the future. We let them decide how they want us to proceed.”

Find great employees: “It all starts with finding great people,” Peterman says. “We made a commitment to never stop recruiting. We’re always interviewing people. We always have our proverbial pole in the water when it comes to finding great talent. In fact, later this year we’re bringing in our first class of students who we will teach the trade.”

Start your own school: Peterman saw that other companies in the Nexstar network were doing this. “We’ll have five to six students work with a full-time trainer,” he says. “They’ll spend time in the classroom and time out in the field with senior technicians. The hope is after four to six months, we can turn them loose in an introductory role out in the field.” That will be followed by another six to eight months of training to become service technicians.

There’s no labor shortage: “I don't believe there’s a labor shortage,” Peterman says. “If there’s a labor shortage, it’s a company problem. There are plenty of great people out there. There are plenty of people in the trades to staff your company that live in your city. It’s just that you haven't created a place that they want to come and work.”

Be a place where people want to work: “You have to care about your people and treat them like you would want to be treated,” Peterman says. “That sounds very simple, but that’s how we found success. Peterman says he and his brother take an employee out to breakfast two to three times a week—“to learn a little bit about them and know about them.” The brothers do every annual review. They greet a new employee on their first day. They have an open-door policy, do quarterly surveys and analyze the surveys to see how they can do better.

Train on soft skills: The goal is to create not just a service call, but a customer experience, Peterman says. Soft-skills training goes to office staff and techs. “On top of that, for the last four years, we’ve sent out an eight-page monthly newsletter,” he says. “We celebrate employee birthdays, employees having children. My dad writes an article, my wife writes a blog. We have recipes in there. We want customers to know who we are, and that we are a family-run company.”

Never stop working on company culture: “You are never finished working on good company culture,” Peterman says. “Your culture is a living, breathing thing that always has to be improved. To me, the minute you stop working on the culture piece is the minute you’re going to stop growing—and it’s going to be pretty rapid.”

Recommended reading:

Here are some books and authors that have inspired Peterman: 

  • The Ideal Team Player. “I’m a big Patrick Lencioni fan, and this is a great book for recruiting.”

  • Dichotomy of Leadership. “Jocko Willink’s book is packed with tons of great lessons for leadership.”

  • John Maxwell. “We’re looking at a lot of his books while we are developing our school that will train new technicians.” 

  • You Can’t Stop The Growth. “I wrote this book on how we operate. It talks exclusively about our belief in culture, growing people and empowering them.”

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Toolbox for the Trades is a podcast where top service professionals share the tips, tricks, and tactics they use to succeed in their industry. This podcast is brought to you by ServiceTitan—the leading home and commercial field service software.

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