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Business Observer Friday, Jun. 29, 2018 2 months ago

The right conditions for succession

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Tim Dupre’s ascension to CEO of Conditioned Air frees Theo Etzel to pursue growth. For a company that averages 40 promotions from within per year, it's also validation of a core belief.
by: Andrew Warfield Lee-Collier Editor

On an end table next to a sofa in Theo Etzel’s upstairs corner office at the Naples headquarters of Conditioned Air is a nameplate-style desk sign that reads, “I’M RESPONSIBLE. I’M ACCOUNTABLE. IT’S ME.”

The same sign is in newly minted President and CEO Tim Dupre’s office. And everyone else’s office, too.

“It’s a reminder that we hold everyone here to the highest standards,” Etzel says, “and we’re no different from anyone else.”

The culture permeates the organization from top to bottom, he says, one he spent the past 23 years cultivating as CEO, moving from Atlanta in 1995 after his father-in-law, as part of an investment group, purchased the company. It’s a culture that holds every employee accountable for the company’s image and reputation, while encouraging and accommodating advancement for those who seek it.

It’s the kind of company in which a high school graduate can rise from novice technician to president and CEO in 21 years.

And in fact, one did.

On June 13, the 38-year-old Dupre was officially installed in the top role by Etzel, the conclusion of a three-year transition process that in reality was nearly a decade in the making. The leadership succession is a strategic move, Etzel says, that will allow him to shift his focus to geographic growth of Conditioned Air while Dupre oversees operations, training and initiatives that will allow the company to keep pace with the expansion Etzel will pursue.

“I've had a lot of great mentors through all the levels of the company, and that's the beauty of what we have here because the culture is so deep,” says Dupre, a Cape Coral native. “At every level there is someone to lean on, ask questions and get the guidance and the support you need to find that motivation to push forward.”

Dupre’s rise to the top in two decades serves as testament to the environment Etzel worked to create, one that rewards the work and dedication required for advancement.

“My thing is building people,” says Etzel. “I believe you build people, surround yourself with smarter people than you, set the direction and give them the tools to do what they do best. You show the vision and set the expectations and the guardrails you can operate within, get really good people around you and everybody rises.”

Shifting fundamentals

Nobody has risen farther and faster under Etzel’s leadership than Dupre. Having worked in his teens for his grandfather’s general contracting company to pay for home schooling — it was a home school operated by another family — he started with Conditioned Air in 1997 as an apprentice installer in the production housing division.

He steadily rose through the ranks — even surpassing his father, who still works for the company.

“I remember when I was offered my first promotion to field supervisor, my father and I were in the same department,” says Dupre. “I asked him, ‘How do you feel about this because essentially you would be reporting to me. Do you think that would be awkward? Do you think I should take the job?’ My father said, ‘You’d be stupid if you didn't take the job. I don't have any problem reporting to you, just remember after 5 o’clock you're still my son.’”

In 2011, Dupre was promoted to general manager of the Sarasota Division, and in 2015 he was named president and COO, at the same time Etzel led a recapitalization effort in order to grow the company. 

Dupre was a key component of that plan.

“When we went through our recapitalization, the goal was for Tim to become CEO and, after three years, we are right on target,” says Etzel. “Over this three-year period, we've gone through many issues together. It’s been a process and the delegating of responsibilities has occurred over that time. We're not handing him a title and saying, ‘OK, here is the list of stuff that goes with it.’ He's had that experience and I’ve stepped out of the picture step-by-step. We touch base. No question is off limits. It's been a two-way street and he's earned that title.”

Among Dupre’s responsibilities: balancing the effort to grow Conditioned Air’s service contract division while developing the staff to provide that service. 

“You don't want to outsell what you can adequately perform,” says Etzel.

“We review that every month to accurately assess our staffing needs,” says Dupre. “As we sell those contracts every month to service a home is twice a year, we gauge how many technicians we need.”

“My thing is building people. I believe you build people, surround yourself with smarter people than you, set the direction and give them the tools to do what they do best.” Theo Etzel, chairman, Conditioned Air

The company now holds about 16,000 service contracts constituting 40% of its customer base, Etzel says, as it continues toward becoming what he calls a consumer-facing business. That was a fundamental shift he initiated prior to the recession, after detecting early signs of the housing downturn. 

While many contractors went out of business as new construction dried up, he says the strategy to refocus on individual residential and commercial customers allowed Conditioned Air to weather the downturn with few layoffs. 

“From 2008 and into 2009, the new construction side was down about $4 million in revenue, but overall we were only down by less than $1 million because we shifted and went after existing market share,” says Etzel. “I don’t have a crystal ball, but you have to go with your gut, and that was where I thought we needed to be. 

“That’s what got us through until 2012,” Etzel adds. “Because we had been able to grow our market share and we were still here, the minute the market started to go up a little we went up a lot because we were better positioned to take advantage of it.”

More than executing a succession plan, Tim Dupre, left, and Theo Etzel are working together on growth initiatives for Conditioned Air.

Last year, Conditioned Air made about 40,000 service calls. To keep up with that demand, Dupre hires an average of four technicians each month and oversees a rotating training and education program that puts new hires in a truck making service calls on their own in four weeks. 

“I had mentioned to Theo a few years ago that if we want to ramp up that part of the business, you have to have the people first because it’s a customer service-focused business,” says Dupre. “You have to be able to perform at the same expectations whether it’s someone who has been here for two months or for 20 years.”

Dupre says he enjoys the hiring process, during which he meets with new hires to relay the company’s philosophical approach to service, reputation and opportunity for advancement, for which he serves as the definitive example. 

“What this move does for us is it finishes putting the responsibilities of day-to-day operations and the core of what we do on the shoulders of Tim and the team,” says Etzel. “Now my focus will be on acquisition possibilities and geographic expansion opportunities. We have clients who would like us to go to Tampa. We're probably a couple of years away from that. How we end up there I don't know at this point, but we will be exploring that, which will allow us to look at filling in on the west coast market.”

Room to grow

Even with a trend toward job training in the education system, there remains a manpower shortage in the construction and maintenance trades. It’s no different for HVAC contractors sector, a challenge for growing companies such as Conditioned Air.

Bill Sharpless, HVAC instructor and master trainer at Florida Academy in Fort Myers, says Conditioned Air has a competitive advantage with its upward mobility business model. Seventeen of his current students and graduates work for the company.

“I do refer a lot of our students to Conditioned Air,” says Sharpless. “I like how they promote from within and how they prepare people for advancement. Even though it’s a big company, it feels more like a family.”

Dupre says all employees are incentivized by opportunities for advancement, providing they are willing to put in the effort.

“One of the things we do here is map out opportunity for our people,” says Dupre. “Over the past three years, we averaged 40 promotions from within per year. This year we’ve hired 56 people, so we continue to grow . We try to put people in that growth pattern if they want to be there.”

Sharpless says Dupre’s example and the company’s growth plans are attractive to his students.

“In order for a company to grow, they have to be able to attract more employees,” says Sharpless. “Conditioned Air seems like a big company, but the way it is set up is each area is its own entity and when you become part of that group you have people to rely on. With many companies you get thrown to the wolves because they don’t have the people who have grown into leadership roles and are able to help you.”

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