Tim Murphy didn’t ask for a new job, but the economy gave him one.
“Three to five years ago, I was on the corporate side — traveling around, looking at acquisitions and potential new office sites. I was working on my business,” says the CEO of Presidential Pools & Spas, a Pool & Spa News Top Builder in Gilbert, Ariz. “Now I am working in my business and focused on making money, watching the bottom line as far as gross profit for jobs.”
Murphy is not alone. As the pool industry continues to contract, more and more company owners are forced to redefine the role they play in their own business. Today, even in large firms, there’s no such thing as a business owner who can devote the whole day to inspecting financials, developing marketing strategies and shopping for new real estate.
“In this economy, you can’t be an armchair owner and survive,” says Larry Duffy, CEO of Cameo Pools, a Pool & Spa News Top Builder in Mesa, Ariz.
Here, company leaders explain how they’ve shifted their duties in response to market conditions, as well as how they view their jobs in the future.
Back in time
Many industry veterans are experiencing a sense of déjà vu as their job descriptions revert back to the early days of growing their businesses.
The bigger the firm, the more this holds true.
“Right now, [I am doing] exactly what I did to build the company 15 years ago,” says Murphy, who heads one of the largest pool firms in the nation.
While many CEOs continue to delegate tasks such as bookkeeping and overseeing service, they tend to take over sales and construction management for obvious reasons.
“I became the sales manager again to make sure that we could look at every deal that was coming in very closely to make sure we could get it,” says Mike Church, president of Cody Pools Inc., a Pool & Spa News Top Builder in Austin, Texas.
This kind of diligence has become necessary when dealing with today’s customers, who are, shall we say, more discriminating than ever. Many expect to get a drastic discount because the economy is so bad. (To see how the economy has affected employment as well, go to Residential Specialty Trade Contractor Employment.)
The new arrangement also allows business owners to negotiate special deals with vendors and subcontractors in an effort to lower costs and land the job.
Murphy says he closely monitors changes in materials and labor costs, so he can apply that knowledge instantly to jobs that are on the table. “Costs have come down substantially,” he explains, “and we’ve had to follow those prices down. A lot of new products have become available, so I’m constantly watching the trends.”
As company presidents step down into the trenches, the effect is felt in a number of ways throughout their firms.
First, there’s the issue of employees. In some cases, CEOs let go of higher-level management positions, thereby eliminating pricier paychecks while allowing the field-level people to stay out and do the work.
But others, like Murphy, take a different approach. Just as he has reverted back to a more hands-on position, so have some of his managers. He essentially had them step down and go back out in the field, doing what they did before, and take a commensurate salary cut.
Demoting a highly paid manager may not be considered a standard move from a human resources perspective, as there’s always the concern about morale dropping and a subsequent lack of dedication.
But Murphy sees it differently. “We kept our best people, whether they’re paid highly or not,” he says. “When the economy comes back, we can rebuild faster, and we have the loyalty there. We feel that we owe the people who’ve been here and really put forth the effort to grow the company, and therefore those are the people that we have kept.”
Another challenging issue for company owners putting on a new hat is the question of how to work in the business, while still maintaining the big-picture view necessary to work on the business.
“After running around 10 hours, you go home and think, ‘OK, I have to look at those numbers again. But I don’t want to,’” Duffy says. “It’s a lot tougher working on your business when you’re working in it so much. But you have to make that time.”
It’s a matter of discipline, time management skills and adaptation. Duffy used to plan and track operations from his office, but now he takes that office with him, often reviewing bids and financials from a computer in his truck that’s wi-fi-capable.
When the economy turns around, some company presidents will quickly return to their pre-recession duties.
But others actually plan to continue running the show from a closer vantage point.
Duffy, for one, found that being back in the field has helped him pinpoint inefficiencies that he couldn’t quite grasp before.
“When I was in the office, things would come up during construction and I was saying, ‘Why is that coming up? That doesn’t make any sense’…But once you get out in the field you realize, ‘Oh, this is why it’s coming up — because this guy’s doing this when he shouldn’t be.’”
Duffy doesn’t plan to remain the company’s construction manager indefinitely. But even after the economy recovers, he intends to take a job every now and then to ensure the machine’s running smoothly.
“I don’t think you have a viable company unless you’re replaceable,” Duffy says. “Until your company can run without you, you don’t really have a company.”
In the end, this downturn has taught builders many lessons — lessons they’ll use in the future.
“When we pop out of here, we’re going to be smarter for this recession,” says Ron Robertson, president of Robertson Pools & Spas in Coppell, Texas, a Pool & Spa News Top Builder.
“We’re going to be better businesspeople, and we’re not going to make the mistakes that we made before. We’ll be smarter for it. I know I will anyway.”