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REVIEW SUMMARY
Business. Clockwork Home Services, Sarasota
Industry. Home repair, franchising
Key. Company is going through a series of changes, including a new president and parent company.
Scott Boose's first winter in England, in 2007, was a treacherous one.
The Ohio native, recruited to England to run the 10,000-employee heating services division of British Gas, had no problem personally with the snow-clogged alleys and unusually low temperatures.
But it turns out British Gas, a unit of London-based Centrica plc, the largest energy firm in England, had a multitude of issues related to the season's first storm. Confusion reined, pipes froze and a bulk of the company's 4 million customers went several days with little or no heat.
Even for famously stoic Brits, the meltdown was a bit of a debacle.
The experience, however, taught Boose, then 35, a timely lesson about being prepared. Or even over-prepared.
“We went into the winter with what we thought was a plan,” says Boose. “But it hadn't been that severe of a winter in a while and we didn't have contingencies and as a result we let customers down. We had more customers than we'd like who didn't have heat.”
The lesson still resonates with Boose. In fact, Boose says he plans to make over-preparation a vital component of his new job: Late last year Boose was named president of Sarasota-based Clockwork Home Services, the franchise parent firm for three home service brands: Benjamin Franklin plumbers; One Hour Heating & Air Conditioning and Mister Sparky electric services.
The franchises serve more than one million households in 47 states. And with $194.5 million in 2009 revenues, Clockwork has been one of the Sarasota-Bradenton area's largest and fastest-growing private firms the past decade.
But Clockwork is also in the midst of a major transition.
Toronto-based Direct Energy, the North American subsidiary of publicly traded Centrica, bought Clockwork in July for $183 million. The cash deal allows Direct Energy to offer both energy supply and services to about 55% of the households it serves in United States and Canada.
The recession, no surprise, cut into Clockwork's growth trajectory and made the company potentially more viable for acquisition. Revenues in 2009, for instance, were down 9.5% from $214.80 million in 2008.
The last quarter of 2010, however, showed glimpses of a recovery. Boose says top-line revenues grew 6% for Clockwork's owned operations in the final quarter last year, while company-wide sales were broadly in line with 2009 and didn't drop anymore.
“This is a significant achievement in a difficult economic climate,” says Boose. [It] puts us in a very strong position to grow further in 2011.”
You're hired
Another challenge, meanwhile, looms for Boose in that he replaces Clockwork CEO Jim Abrams, an industry pioneer who co-founded the company in 1998. Abrams was named the Review's Entrepreneur of the Year for the Sarasota-Manatee region in 2008.
“I knew a little bit about Clockwork, having competed against them” in jobs prior to Direct Energy, says Boose. “I was incredibly impressed with what Jim and his team built.”
Indeed, Abrams used more than two decades of lessons learned in the industry when he founded Clockwork. A key component to the success was to be absolute on one rule from the first day: Well-dressed, polished and professional technicians were the only employees allowed to arrive at a customer's home. It was a counterintuitive move, considering the industry norm at the time.
An additional element to the success was Abrams' ability to build brand awareness, an essential factor in fragmented industry like home repair services. A high point of the company's branding effort came last May when Abrams and another Clockwork executive appeared on an episode of Donald Trump's “Celebrity Apprentice” on NBC.
Boose, who worked in finance and management roles for several air conditioning and heating firms in the Midwest before he joined Direct Energy in 2004, is used to big challenges. The managing director job at British Gas, for one, was a unique challenge. The company was so big, it fixed a boiler every four seconds, recalls Boose.
“It was a tremendously interesting challenge,” says Boose. “It was a huge development opportunity for me.”
And not only because of the winter storm issues he encountered early on. Boose also learned about how to scale a business using defined, simple and repeatable principles. He developed experience in how to introduce new products to a large audience. And he learned that educating customers couldn't be an afterthought in the home services sector.
“If all we had done was fix the customer's appliance,” says Boose, “but we hadn't fixed the customer, then we'd be back.”
Safety promotion
Boose, who worked side-by-side with Abrams for the last few months of 2010, already instituted two of his own tweaks to the company's model, in an effort to expand the success.
One addition is the implementation of a Net Promoter Score for all three service brands. The program is a trademarked customer loyalty tool developed by business author Fred Reichheld in 2003. The gist of the metric is that a company's customers can be the best gauge for future success — or failure.
The score stems from asking one question to a customer at the end of a job: How likely will you recommend this company to a friend or colleague, on scale of 0 to 10?
Scores of 9 and 10, so-called promoters, can be a pipeline to future customers, while detractors, with scores from 0 to 6, can sully the brand and prevent growth through negative word-of-mouth feedback. Customers who score 7 to 8 are considered passive under the Reichheld model, and while somewhat satisfied, they could be open to defect to the competition.
The final Net Promoter Score is the percentage of detractors subtracted from the percentage of promoters. Boose utilized the technique with British Gas, and found it to be a good way of seeing where the company could improve.
A second key point for Boose is to refocus on safety. He hired a few employees late last year to work directly on safety issues and he spent into the six-figures to buy new safety-centric gear and equipment, from goggles to shoes. Says Boose: “We need to make sure our technicians have what they need to be safe.”
Boose plans to make other changes to the model and structure of Clockwork over time, with a focus on finding ways to be more efficient, especially with the power of Direct Energy and Centrica behind it. Recession challenges still linger, although Boose says “even in difficult times people's air conditioning and heating still break down.”
And Boose will bring one more executive lesson to his new role at Clockwork: Concentration.
“We need to prioritize what we want to go after,” says Boose. “I learned early on that if you don't focus on a few tasks you end up accomplishing none.”
Jim Abrams, 64, has worked pretty much every day of his life, at least ever since he turned 17 and was a bartender for a catering firm that hosted parties in affluent Detroit suburbs.
Bartending turned into teaching high school, which turned into running the franchise side of a Weight Watchers branch in southeastern Michigan. By the early 1980s Abrams settled on a career in the home services and heating and air conditioning repair industry.
So it's no surprise Abrams won't rest for long now that he's sold his stake in Sarasota-based Clockwork Home Services. Abrams, who co-founded the $194.5 million franchise home services firm in 1998, will work as a consultant for the new owners through the end of March.
Abrams' new venture is AngelShot, an investment fund he will run with his wife, Kathleen Abrams, who has worked in marketing and hospitality. Abrams doesn't want to merely invest money in startups and wait for his return to come in, but instead become a source of financial and tangible assistance to any company that sells a service or a product that can be repeatable on a large scale.
Abrams plans to eventually build a team of IT, marketing and back-office employees for AngelShot who can become the backbone of the company's clients. The fund signed up one client so far, a Sarasota restaurant run by a husband-wife team with a strength on the food side, Abrams says, but a weakness on the business side. The deal with that company includes what Abrams calls a significant investment and a $200,000 line of credit.
The Review's Entrepreneur of the Year for the Sarasota-Manatee region in 2008, Abrams says he's excited about the new business venture, and excited about working with his wife. But he's also discovered the dynamic of being the boss of a home services conglomerate is a tough thing to replace.
“When you are needed on so many different fronts and then all of a sudden you aren't needed, I think that would be a challenge for anyone,” says Abrams. “It's hard when things just stop.”
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