Family Business - Formal Structure, With Matt Schroll

Jack talks with Matt Schroll from ABC Plumbing, Heating, Cooling & Electric. Schroll, the third generation of his family's company, talks about how he gained perspective by starting at the bottom and working his way up.

Transcript

Speaker 1: 0:10

Hi, my name to Jack test or the prison CEO. Next Dart. Welcome to another edition of our leadership lounge. I've got the privilege of having one of our longtime members, even though he's a young man, match role from ABC plumbing, heating, cooling, and electric in Arlington Heights. I don't, Matt, I'm doing great. Thanks for having me. Thank you. Matt is in for advanced service system that starts this morning and he was kind enough to, to come in here and shoot one of these podcasts and uh, cause I think you got a lot dot from that. You tell me, um, a little bit. What do you do right now? So I head up our, um, plumbing division. Okay. Which oversee, sees all the plumbers, the sewer department. Um, we do more than that is as division heads. We also oversee part of the office. Uh, we oversee all of the marketing and the finance for each department. Kind of like a GM for the division. Okay. Well they used a cue word there, which was we, because there's a lot of weeds in your business. A lot of trolls. Yeah. Then that's what we're going to talk about in this podcast is how you're a third generation family member in the family business company was started by your grandfather don, is that right? Yeah, my uh, grandfather but technically he purchased it. Okay. So, but yeah, he was the first after like it was a one truck operation so he took it from a one truck operation, the first role and the plumbing drain. Exactly. This was done right. And then followed up was uh, his two sons, Gordon and Brian and the other family in their, um, their sister Cindy worked as our head of HR. Okay. So um, Brian and they're the ones who joined Nexstar back in 1993. Yeah. Brian and Gordon came there. Young people, but your age at the time I suppose about right, and I'll say this, that, that your company, ABC was one of the real first success stories of, of what was called then contractors 2000. Your, your father and your uncle came and they really were just great implementers. And I remember we had a new member open house there and we signed up like 40 people because you, they had built a business that hadn't been seen in this industry before. So I hadn't done an extraordinary job. As a matter of fact, that's one of the things that I took away was the foundation that they gave me, um, through the flat rate pricing and through all the systems they had learned from next. But also the level of professionalism that, that we had as a company. I had worked in the company before and when we were in the less stuff force before season 1000 or next time. Right. Oh really? And the less, less, less professional setting where, you know, there was no organization to the parts really it was, I call it a dirty, we had these beige trucks and we kept those based trucks for a little while ago. And, but they were, we used mostly like pickups and beat up vans like the very old school plumber, not, we are a commercial plumber. Didn't have as many of the new trucks. We still had trucks. But you kept them longer. You weren't profitable like we are now. Right. Well, I say this because of, of your company's longstanding, uh, uh, you know, membership and next Darren, and really the, the preeminent businesses that your uncle and father had[inaudible] grandfather had created. Right. So let's go forward to today now. Sure. Right. So, uh, Brian has a move his family to Florida and they run a division of Your Company in Florida, in Gordon State back. And uh, then he's got three sons of which you're one. Is that right? Yes. All right. So tell me about the other two brothers in the business. So my two younger brothers are twins. They run one division. Each one runs HPAC our biggest division and the other one runs our electric department or division. Okay. So, um, I want to talk about this dynamic, you know, of of third generation coming in, working with brothers and you've got your father and your mother in the business too. Is that right? Yeah. Yeah, it sounds complex. There's days, um, at times it can be difficult. Um, duck lie, you know, most days we get along really well. Yeah. Uh, we're family though. So we have all those old issues from when we were kids. And you know, you still have kind of that when you first come in. We've gotten over it by now that, tell me what happened when you first came in. Cause I want to know got kind of this healthy fear slash respect of your uncle and father. Okay. All right. Um, and the truth was at 19 when I came to work for him, I didn't have respect for the world. I didn't have respect for other managers and I knew if I was going to have respect for our manager, it was going to have to be my, I even said this because I remember at my previous job thinking, God, this guy's such a loser. He's like 60 and he's never advanced past the first level of management. And clearly that's not a healthy respect for humanity as a 19 year old or an 18 old. Yeah, it was 19 and a little arrogant know a little bit. So I came in and, but I knew that I could work for them cause I would respect them. Okay. And so that was one reason I chose to come work for ABC. Um, it was also that I was working my way through college and I'd always respected the level of success they had and I wanted a chance to have that success also. Okay. So is that healthy kind of fear and there were times where it was a for difficult cause I was maturing. I was getting away from that healthy arrogance or unhealthy arrogance I should say, and that situation, uh, to a more realistic view of the world. Um, how old were you at this time? I'm in my twenties, I would say. Yeah. Um, so I worked full time through college. Okay. I went to college full time and so by the time I got out it was about 23. Okay. Now I'm married. I got a kid and working. You're married with a kid at this time? Yeah. Did you, did you work outside of ABC to come right back to the business? I stayed working full time through college for ABC and I decided to continue on with ABC at that point. Got It. You know, and, and my dad actually encouraged me to look elsewhere to, to kind of see, hey, you know what, make sure this is right for you. And I said, you know what, I don't want no, I like ABC. Okay. So at the time we a, I wasn't in management yet. I had a college degree. Um, what were you doing? I was doing dispatch and I was working 7:00 AM to 7:00 PM everyday, um, wife at home, new baby. So there was a little bit of tension there too from the amount I was working in a mansion. And so, you know, there's going to be blow ups over the, over the years there were, there were definite blow ups and I can't name any specific ones. You said you were, you did you dispatch when you're in college? I did. So I started with the warehouse than I did customer service than dispatch or prior to college I had worked in the field. Um, and then I started working with the field people more. Your job as a dispatcher. Um, was that a conscious decision because it was the right role for you to learn the business or why, why were you a dispatcher? Um, I think it was a need for the company. Much of my role changed as needs arose. Okay. Um, you know, we needed a warehouse person and though we needed a customer service person and that we needed to dispatcher and dispatch is always to kind of battlefield promotion. Oh. As a matter of fact, almost all my promotions originally came out of battlefield, so to speak. Like someone left. Yeah. Yeah. So, uh, I started overseeing the office because our office manager type people had left. Yeah. And you know, I was just a supervisor when I was overseeing the office staff. Then I became the service manager because our service manager left and I volunteered to take over concerns. And then a right. It kind of evolved into, okay, you're going to be the service manager. Okay. So then I'm overseeing both departments. We're a small company. We're smaller than, no, let's put it that way. Um, four and a half,$5 million and not a lot of vertical room there at the time. So, you know, cause you're a four and a half,$5 million. Right. And my uncle and my dad were still active. That's a story. I'm going to come back to that because I think that's the key to this thing. Right? Okay. Until your success. But uh, so you, you, you graduated college, you became, you worked in dispatch, you're working long hours, and then when did your other two brothers come into the business? So in oh one they came in, but they were still in college and they both left to go back to college. It was just a part time thing. Yeah. Um, finally we needed a dispatcher and my dad said to them, I need somebody to work dispatch. And my brother said, while worked dispatch for about a year, I'd be okay with that. He, it was just freshly out of uni. Okay. And so, you know, but my brother's a little more hot headed than me at times. And after a year was up, he kind of said, well, I'm not working dispatch anymore. You need to find something else. So in the, that then turned into him becoming part of our marketing team and did create which Moses, this is Eric here. So, and I understand, you know, you'd get a college degree, you don't really want to be a dispatcher. Right. You know, um, and they were open to that. Uh, but it did create some tension between my uncle and my father. Um, my uncle that had kind of checked out, you know, they both had for a little while. They both were kind of gauged a little bit. Yeah. And I think that's it. You know, I read your book. Um, thank you. And I could identify, cause I've even found myself starting to checkout at points and I, I've found that I needed a new why I still have my family and they're still important. But I've gotten to a level where my income's enough now that I need more. And so I had to find that for myself. Oh, very cool. So, and I think they had to also, and, and, and so I think it's a natural evolution. I think I remember talking to Gordon at that time. Yeah. But anyway, yeah, that's, that's great to hear. Yeah. So, you know, their why became, grow the business for our kids in a lot of ways and grow the business for the employees. Right. Um, you know, I can't speak to his wife today, exactly. Other than he is very much about the employees as family. Right. Um, let's talk about that. So it came in the business and he was dispatching and then he moved over to marketing, then he had another brother. And what did he do? Uh, well he was an installer for a little while. Okay. And then what's his first name? Peter. Peter? Yeah. He was an installer for awhile and then he left to run a Jimmy John's. I'm very good and kind of do his own thing. Um, and then we, this is no, like 2009 is when my uncle left to go to Florida. He decided he wanted to live in Florida and grow a company for his kids. At that point. And there was a little bit of tension between my dad and my uncle at that point because two of his kids are in the business where the only managers, it doesn't seem like there's going to be a lot of room. We're not growing. We're kind of stagnant at this point. A lot of mouths to feed. Yeah. And now more overhead dollars too. Yeah, yeah, exactly. Okay. And so there's a concern and naturally when there's this fear for your safety now financially your livelihood right now you have to make decisions and it's going to create more butting of heads. Okay. So they decided to buy the company in Florida, you know, and so there's, I would say it's healthier now than it was at time. Yeah. Um, and you know, that company's growing about 20% a year and he's creating a environment for his kids too, right. To run. Um, and an oh nine, we kind of had a recession going on, so we had to make a decision and we made a decision as a management team to not participate in that. And, um, that was when we really solidified it. My Dad and I, and, and my brother Eric as, um, a team and, and came to this, this is for the company now, and this is no longer about just, um,

Speaker 2: 12:32

yeah,

Speaker 1: 12:32

the individual God, you know, and I don't think my dad was that way. I think my dad was always about the company, but I know it as growing individuals. We hadn't had that epiphany yet to be about the company. Got It. So, so let's, let's take us to that point. Um, Brian and Gordon had decided to, they bought a business in Florida. Brian[inaudible], he's got like six kids to, he has an extensive family. He moved to Florida down, just got Dennis or someplace down there, right? Yeah. And then, so you guys are here and the business had been flat for awhile and you've got some growing families and growing financial needs in this royal family. Yeah. You and your brother Eric at this time. Yeah. And, uh, and, and so you decided that, that you had to grow the business? We did. Okay. Yeah. He's got eight kids, eight kids. I forgot about that. Okay, well done. I agree. He's a Brenda, Brian's a former chairman and next door and good man. So he is all the best of him for sure. Um, so yeah, we, we found a, some new marketing sources. Okay. Made some decisions to, to get involved with those two even though there was obviously some risk there, especially in a recession. We said we need to try these things. And this was at a time where the yellow pages had been dying for awhile and that had been our main marketing source and we were trying new things. You know, we had tried paperclick and all that and some of that was working in some wasn't. Yeah. And we found a, another marketing source, so it worked for us. Okay. What was that? Just curious. Oh, it's called best picks. It's a,

Speaker 2: 14:04

uh, uh, like, uh,

Speaker 1: 14:09

pay per lead source in Chicago. Yeah. And they have, um, a couple other locations, I'm not sure where it worked for you guys. Yeah. And that, so that was kind of a catalyst. I wouldn't say it was the only thing. And then we started getting into more marketing and another things like that, uh, radio, TV, that kind of stuff that took a couple of years old. We had to grow. One of the big changes of what is, we started making a five year plan. We started to look at rebranding ourselves. Okay. We really got down to the training, we split the divisions. I then took over plumbing and Eric took over heating and air. And now at this point we're not doing electric. Yeah. Uh, and I think it was when you did, did you do electric cars? You had three brothers, is that what happened? No, as a matter of luck, Pete came back because we were doing electric. Okay. Are we needed somebody to run it. Um, what happened was, so we had started to grow and we had made these changes, got into best picks. We had started to really be a lot more about growth and a lot more about gaining it for the company than ourselves. Um, and creating the overhead that, or the ability to have overhead that could support us. Right. As a higher level manager. Uh Huh. Um, so then we got another marketing sources and we decided, I think it was 2011 to add an electric. Okay. Um, and it was kind of like the redheaded stepchild of plumbing because I was overseeing plumbing and that was my passion and you were doing. And so we hired an electrician and uh, you know, it's run very similarly to plumbing, but I know nothing about electric. So we had to find somebody who is licensed and right. And so it just kind of was like, I'm not really getting a lot of attention, but at the same time we wanted it to work. And so we tried a few things and we try this or that. We'd try different pricing, different things to look for, and we train them in the service system, you know, so they were involved in the training, so it just wasn't getting the same level of attention and it wasn't getting the marketing attention. So we needed somebody who was really passionate about it. So, but I did a year in, I think it was 2012, Pete came in to run the electric. Got It. And, and it's only a division one or two guy division at that point. Right. And he's taken it since then to be, I think he's got a lemon electricians now. Nice. So, um, we've put the marketing dollars behind it, we've put the effort behind it. Obviously we made it important. Um, and this, it's a big part of our business now. So let's stop and talk about this. Shoot a three now. You've got all three. You guys in their three of brothers, we've got birth order issues. You got all this going on, right? Right. You Do, you get all that right? But you, you're running plumbing, uh, Eric's running air conditioning and peach running electrical. Yes. Right at this time. And uh, I remember back speaking with Gordon back when you guys were kind of flat, you know, oh, eight oh nine, whenever that picture, it was right when you guys had, and uh, I think, you know, around$6 million, is that right? Somewhere around there, yeah, right in that neighborhood. And you've been there for a while. I remember, I think it was about five, maybe five and a half at that time, like I remember talking to Gordon then in him thinking about how to involve you, you his, his sons in the business and how to create compensation and things like that. Fast forward to today. Sure. Your Business is last year. This year we'll finish it about what? We'll finish about 21 and a half. Oh Wow. That's, I didn't know you're that big. Congratulations from five to 21 and so you each have a division. You should have a part of this business. It's almost like you have your own, I want to say division or business in the company, but you do, you all get your own areas. Responsibility. We're sort of do have our own. It's almost like having your own company within a company. How do you get along? How do you, how do you not get jealous? How do you not say you're not working as hard as I am or, or if you see that, how do you have these healthy conversations so that you guys continue to work together because you've done something that, that the people say that the third generation's the one that that puts the business under. Right? Yeah. That's, that's, that's the part that many times the olds, I don't know if it's true or not, it was heard it, right? Yeah, sure. So here you guys, the third generations come in. The second generation is still there. The first generation still around to don and you guys have collectively as a family and as a management team, grown it from five to 21. Sure. How do you not get in each other's way? How do you, how do you work? How I have a healthy work relationship. So we understand. We each have our own responsibilities. Okay. Um, you know, so example, I'm responsible for everything. Plumbing. I will tell you there are things I do that annoy my brothers. Okay? There's ways I see the business that are different than all of them. Same thing goes for me. Um, but at the same time we understand it's my responsibility. So if it's going to happen, I have to take care of it. Okay. And same thing with electric. If it's going to happen, Pete has to care of it. Now I can make them aware of things. And that's key. We have to communicate. We do say, Hey, listen to this issue is going on. Communicate in a formal way. Let's talk about that. Cause think that's key. So, so depending what it is, we, uh, it could just be an email. What are your management rhythms? When we talk about what are your communication rooms in the business? Sure. We have a weekly manager, executive manager meetings, um, that we all sit down at. We bring up issues, we talk about the state of the business, that kind of stuff. Um, when we're doing trainings, the four of us, three brothers and my dad get together and we plan the trainings for the managers. Okay. Gordon overseas, the managers, and we have a, um, we do a level 10 every other week. We decided not to do it every week. It's going to do an executive, the four, you know, we do a full management level 10 every other way over the week. We do a weekly meeting for the four of us. Got It. Got It. Okay. And then we do a monthly call it business review, which is a longer meeting that includes the level 10, um, with our managers also. Okay. Uh, and then each of us has managers under us that we meet with individually. Weekly. Okay. So we'll call it a one to one. Okay. Um, and then obviously we communicate throughout the week with the people who were writing to us also. So you, you don't leave communication to chance. You, you're very structured in how you guys get together, how you think about the business. So it's not like just hallway conversations. There's a formal structure even though you're a family. Yeah. Oh, for sure. I think that's actually one of the things that's been very important for us is having that formalized communication makes it easier for us to bring issues up. Okay. Okay. Got It. So that's your communication with them. So you were talking about, um, you know, you think about the business different than your does. Even though you have your Eris responsibility, each, each brother has a trade and you're ultimately, everybody knows you're responsible for that trade, right? So they can't come in and tell you what to do big and bring things to your attention. But then you've got broader business issues, right. Broader things, you know. And uh, how do you work through those, those, those differences, how do you reconcile those? So that kind of stuff would be brought up in our executive meetings and sometimes we'll take that and say, you know what, we need to have a separate meeting about this cause this is, this is going to be more than an hour. Okay. So we need to take it and they can be contentious. I mean, we have all, we all have opinions, we're all stubborn and we're all strongly opinionated. Um, sometimes we'll stand behind those opinions more than we should. Okay. Um, so you're in the meeting, you're, you're, maybe you're getting a little bit hot under the collar. And at first we used to get into, you know, like going back years, we would just kind of yell at each other. We figured out over the years that's not effective. Okay. It's better to just take a deep breath, kind of be quiet for a minute, let yourself kind of maturity. Yeah. It, well it takes years to get there are months anyways, you know? And it just slowly changing over time, you know? And, and we, we had to realize that being calm and being a team was more important than our view. Okay. And so it's not always about our view. Okay. And if it is, so if it has to do with somebody else's department, clearly we're going to state our opinion and leave it up to them. If it's overall company, we all have to get on the same page. Okay. Um, so we all have the same vision that the employees are family and that it's really about a win, win, win. Right. And so that's important to us. And we go back to that intent when God, ah, we're looking at a overall issue, what's our intent for it? Okay. As a company and we work it out. So the intent is right for the four of you that, that it's about the business, it's about the overall company. It's not about you or winning or your opinion. Right. Y'all go back to what's the intent of, of, of each of us and there's an aligned intent in the business, which will then allow for differences of opinions from time to time. Yeah. And I think, I think it's actually been helpful that were family because we all kind of grew up the same way. We all have the same values, um, towards the world and towards the business. And so it's easy to get on the same page. That's, that's fantastic. Wow. Okay. I, I, that's a, that's great to hear. That's great to hear. Okay. So how does it work? I've talked about your three brothers. Um, now you're, you're working for your father that you directly report to Gordon, right? Yeah. Tell me about that. Is that there's times where it's contentious? Yeah. Well he's my dad and, and so of the three brothers, I'm the one who's most likely to um, butt heads with him. Cause you're the oldest? Uh, I don't know if it's because I'm the oldest or we kind of have similar personalities and as such. Um, and same hairline we do for that for sure on that one. Um, there's also just some key differences. He likes to be more involved with having all of the information and really getting to the nitty gritty on stuff. Very detailed oriented. Whereas I'm more, all right, I have enough information I've thought this through, I'm going to just make a decision. Okay. I'm not going to ask a bunch of people's opinions. And so sometimes because of that difference in style, we butt heads. So you feel like he doesn't go as fast as you sometimes. Oh, for shape decisions. I like to make decisions quickly. He likes to take his time and that's okay. I mean it's actually, it's benefited us over the years now. At first it was a hindrance, right? But we had to work that out and give you the butting of heads of somebody that may be, causes you to be a little more cautious when you need to be. And of course Gordon and I was saying maybe I can make a decision a little bit quicker than it would have otherwise. Have each other's input. Absolutely. Okay. I think that's hugely important. Yeah. Yeah. We compliment each other with our strengths and weaknesses. Oh, that's very cool. That's so cool. Okay. Talk about that. What do you see the strengths and weaknesses between union of the brothers and how do you, how have you recognized in and kind of appreciated those? Sure. So, um, for example, you talked about how we're good implementers has company. Yeah, my brothers are great implementers. They're great at processes, they're great at, um, really getting down to the, sounds like they are like more like Gordon, they are more like Gordon and I and I'm great at the field. Good. The communications, the engagement, the making a quick decision, but really being about let's talk to the employees. Let's train them, let's do this, let's, you know, and so a lot of times I'm more gung ho about the employee then and about making sure the employee feels good than they are. And Yeah. So that, but that's also changed them. They've become more about the employee. They've okay come more, they've become more about engagement. And um, I've become more about processes because I've realized the importance of them and I've been able to implement them and I'm not always the best implementer. So sometimes I ask them for help with that kind of stuff with, well how are you doing this? Yeah. You know, you, you, you run an install department. I'm doing sewer install also. Tell me about that. Okay. You know, so cause I'm not always the best at implement. Right, right. And I rely on others to help me with that. This is great. You tell Ya. Um, we kind of wrap things up a little bit here, but uh, just a great story, Matt, that you guys had come together to grow up and just an amazing business that what I've heard is that you put the company first, you've put your own personal identity or things like that, kind of to the side a little bit. You've come together, each of you got through own area of responsibility. So you've got a measure of control over your life. You'll, you'll, you all come together with the best interest of the business. Right. And, and in work through differences to make big decisions. It sounds like you all appreciate the differences that each of you bring knowing that there's going to be those differences also bring conflict, but the differences are worth it. Is that right? Oh, absolutely. Yeah. Just awesome. And that you guys can make it work together. Yeah. It took a while, but we made it work. So, uh, just, just kind of wrapping up here, what other things would you like to share relative to kind of working in a family business? People are listening to this, that, that maybe are considering a family or have a family and other family members in your business. Just, just broad, uh, what some final advice you'd have for those folks. So I'd say one you can get through. Okay. As long as you're both open and you understand that it's not about butting heads. Okay. Um, and that succession is a big issue and session and make it important. We didn't talk about that, but always it's a big issue for all the generations and it needs to be important for all the generations. I'll figure it out early, not late. So it out the succession plan of the business earlier. Yeah, exactly. Okay, well maybe we'll do that another time. How's that? But happy to talk to you about. All right, well Matt, thanks so much for being here today. I'd just like, again, congratulations on what your family's accomplished. Thank you. You know, you've done a great job. There had been a model business and next door for a lot of years and it looks like the businesses in great hands with the third generation coming in here, so. Well, thank you. Thank you and enjoy it. Advanced Service System while you're here too. I plan on it. Fantastic. Well thank you to you and thank you again from the listening to another episode here of Leadership Lounge is a check tester.

Speaker 3: 28:33

We'll catch you next time. Thanks so much.