Business Challenge: Comfort Supply, based in Tennessee, is a wholesale distributor for the heating and air industry. Clay Blevins is CEO.
Open-Book Coaching’s Bill Fotsch worked with Blevins to teach his employees how their business makes money. Using an interactive process to get input from all employees as well as customers, they jointly established the performance metric that the company would focus on, a combination of profits and inventory utilization. Subsequently they developed a scoreboard so all employees could see how they were affecting performance. They also created an incentive plan to focus teams on improving their key numbers and driving bottom-line results.
The company holds weekly meetings, where managers and employees forecast results for the next 2 months, fostering a forward-looking organization. When actual results become available, each branch examines the variance to forecast and learns from this. This ongoing learning process has driven substantial revenue and profit improvement. Employee engagement as measured by annual surveys shows continued progress and high scores. This has helped improve customer service, resulting in growing revenues from happy customers. More recently, the company has established an Employee Stock Ownership Plan, reaping both the tax benefits of the ESOP and the next level of ownership thinking.
OBC also helped Clay with the valuation of his stock, which is driven by the trailing 36 months of earnings. The valuation process enables team members to see how they are driving the stock price as a function of each week’s forecast of profits. The typical mystery around how employees can influence the stock price doesn’t exist at Comfort Supply. The future looks very bright, with increasing sales, profits, stock price, customer loyalty, and employee engagement.
Results: Blevins reports:
“Once we started using the principles of open-book management, there was an immediate, positive change in attitude here. Everyone learned more about business, earned more money, and there has been very little turnover. We got our debt back under control, and had a great year financially.
Now employees are constantly bringing intelligent business ideas to the table. One of the best rewards is seeing someone who never had a shot at an education be able to show you how smart they really are. I have a warehouse worker with a GED who can tell me the current ratio of my business. I’m more proud of that than I am of anything else.”