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Case Study: The HouseCallCompany.com Abstract: The case describes an actual small business and the efforts to grow the business by the original owner. The case addresses a demonstration of the owner’s faith by his rehiring a worker who was previously terminated. The founder and owner of the business grapples with the perceived failure of the person who he has rehired; as well as with letting go of his directive leadership approach to allow others to lead; and a contrasting leadership style. The case presents challenges for students to consider not only the expression of their faith but also the different types of approaches to managing a small business.

INTRODUCTION

In 2014, Dean Thomasson, president and CEO of The House Call Company, had just finished a series of annual reviews with the key managers in his small but growing home performance business. Thomasson’s business model was a relatively new approach in the industry, a “home performance” model in which an HVAC (heating, ventilation, and air conditioning) contractor collectively considered all of the energy systems in a home in order to cross-sell energy services to the homeowner (Troast, 2014). This model was the next step in the growth of Thomasson’s original HVAC entrepreneurial start-up, and there was much to celebrate as reflected in the 50 percent increase in sales from the previous year (see Table 1). The prospects of future growth looked promising.

With the recent acquisition in March 2014 of a small cash-strapped HVAC business, Thomasson Enterprises (dba TheHouseCallCompany.com) had expanded its footprint in coastal Virginia and was now positioned for greater growth in the newly constituted home performance industry (ACI, 2012). Having demonstrated success with an increase of sales of $1 million over the previous year (see Table 1), and with the company striving to reach $4.5 million in sales in the coming year, Thomasson and his Operations Manager *Ray Ward were hoping that with the addition of a knowledgeable industry technician into the Service Manager position, they could grow the Repair and Service lines of their home performance business substantially in the future (see Exhibit 1).

Yet Thomasson had come away from the annual reviews with questions in his mind about the performance of his Service Manager, *Frank Whiting1. Whiting had good experience and strong industry knowledge and was originally hired by Thomasson into a Service Technician role, with the belief that he could groom Whiting for the Service Manager position. This Service Technician role was critical to the company’s future success as it was responsible for inculcating Thomasson’s core values in customer-facing employees and promoting value-added, revenue generating services. However, Thomasson was losing confidence in his Service Manager, a man that he recently rehired and to whom he had offered a second chance.

Several years earlier, Whiting was dismissed from the company due to his unwillingness to follow established standards and stubbornly insisting that he knew best how to run the business. Despite Whiting’s past performance, Thomasson believed that he had not managed the situation with Whiting well the first time around, and he had let his own emotions get the best of him. Since then, Thomasson had become more committed to his Christian faith after a series of poor decisions cost him his first business and his marriage (2015). As he sought to demonstrate in more tangible ways his renewed faith, Thomasson desired to model Matthew 20:28 by offering Whiting a second chance and by providing greater support and coaching this time around. Whiting for his part had stated that he did learn from his previous failure and he had asked for this second opportunity. In support of his decision to rehire, Thomasson had also learned that since his dismissal from the company the first time, Whiting had gained a better sense of managing the service area of a competing firm; however, rumors of stubbornness and insubordination had followed Whiting back to The House Call Company. Thomasson’s decision to offer Whiting a second chance aligned with his Christian belief in redemption, but it also made good business sense. Thomasson’s small company was poised for growth, and experienced industry leaders like Whiting were difficult to find. 1 * Subordinates names changed upon request.

Thomasson needed a competent Service Manager who could direct eight technicians and manage a portfolio of business that produced $1.7 million of sales in 2014 (see total revenue figures in Table 1), and held the potential for greater revenue in the future by providing the bulk of the projected 50% increase in sales in 2015. Thomasson wondered whether he could be successful this second time around in grooming a talented but maverick personality such as Whiting into a key role in his privately-held entrepreneurial business, allowing himself to step back and pursue other business ventures. Thomasson had two objectives the upcoming year. One was to set his current business on a firm footing, with established leadership and clearly defined performance standards by which they could achieve success. The second was to branch out and invest himself into a new business opportunity, and he was building momentum towards making the transition. This new business venture would keep him engaged with that entrepreneurial energy which fed his pursuit of operational excellence, a pursuit that would improve customer service and drive increased revenue. But first he needed to trust his new Operations Manager with managing this business. Although as the founder and owner of the business he could make a decision now regarding Whiting’s future, Thomasson also sought to withdraw himself from the day-to-day decision so as to redirect his energies toward this new venture. As he pondered what to do about the performance of his Service Manager, Thomasson sought the input of his new Operations Manager Ray Ward as to whether or not he needed to make a change.

A SERIAL ENTREPRENEUR WITH A NASCENT FAITH Dean Thomasson learned how to use power tools at 12 years old, and became interested in home repairs when a carpenter showed him how to do certain repairs around his home (Graham, 2014). Later at 16 years old he started doing home framing on the weekends. He started his own construction firm in 1986. As a young man Thomasson landed a job working for a small contractor in the heating, ventilation and air conditioning business (HVAC). The owner of the business admired the hard working Thomasson and encouraged him to go back to school to gain additional training in this industry (, 2015). Thomasson applied himself at Tidewater Community College and after two years received his Associates degree. He then went to work full time in the HVAC industry. At the time there seemed to be low barriers to entry in this industry, and it was fairly easy for an industrious person with some knowledge to get started building a business (2015). In the days before Angie’s List and customer satisfaction websites, as long as a person had a certain amount of equipment and some self-confidence, he or she could convince a homeowner that they had the experience and knowledge to repair almost anything (2015). Thomasson had the personal confidence and industry knowledge, and he became even more successful as he worked his way up in the industry. He then chose to venture out on his own with a franchise business, Mr. Comfort, in 1995 (Thomasson, 2015b). Thomasson’s personal drive and attention to detail helped him to grow his small franchise business, but in his personal life things were not working as well. His attitude early in his work life and his personal life exhibited a “my way or the highway” demeanor which created some tense relationships. At one point his marriage began to suffer due to the excessive amount of time he spent away from the home in building the new business. Attempting to salvage both the business and his marriage, Thomasson recommitted himself to following the principles of his childhood Christian faith, as well as accepting a partner to help him run the business. Ultimately he could not reverse the damage that had occurred in his marriage, and his marriage became more unstable shortly after his partner joined the business. Frustrated and discouraged in his inability to manage both relationships, Thomasson let his business partner buy him out and he left the business. Thomasson used his same drive and determination in seeking to reconcile with his wife. He sought out counseling, and made several appeals in order to repair the damage with his wife. But his marriage came undone and ended shortly afterwards (2015). Having learned some hard but enduring lessons through these difficult experiences, Thomasson reflected deeply on these losses and committed to allowing his faith to have a greater influence in his personal and his business life. Thomasson began to consider what a faith-oriented approach to running a business would look like, and this began to change his approach to work. Still nurturing the entrepreneurial spirit, Thomasson would later start his current business under his own name, Thomasson Enterprises, out of his home in 2002 (Thomasson, 2014).

MANAGING GROWTH THROUGH PERFORMANCE EXCELLENCE Thomasson worked out of his home for the first five years of his new business, and then leased a 2000 square foot facility in Portsmouth, VA in an industrial area as the business began to grow. In 2008, still operating out of his home, Thomasson worked with a consulting firm to develop performance metrics to support goal achievement, and he began to see more tangible results. As the company grew, Thomasson struggled to grow out of his dual role as chief salesman and master technician to operate more in the role of President and CEO of the growing business. Thomasson struggled with what Hamm (2002) described as working on things as compared to working on his business, and being too narrowly focused on how things were done (Hamm, 2002).

In 2012, in order to position his business for success in the new home performance industry (ACI, 2012), Thomasson chose to operate his business as the “House Call Company,” and he acquired the unique URL www.housecallcompany.com to establish an internet presence as web-based searches for home services became more prevalent (Lentz, 2012). The transition of traditional HVAC contractors into whole house service providers was a natural transition for Thomasson, whose process-driven approach and confident demeanor enabled him to build strong rapport with customers who trusted his professional expertise. Thomasson has painstakingly taught each of the customer service representatives to answer their phone or online chat by asking customers, “How can I make you smile today?” When making home service calls, his technicians are trained to ask homeowners for three things: what is that thing the customers “gotta have” (to fix the problem immediately); what is it that they “ought to have” to avoid this problem going forward; and what would be “nice to have” (ideal)? Thomasson has trained his technicians that this series of questions empowers homeowners to make the best choice in addressing home performance problems, and this process encourages homeowners to choose solutions with which they can live (2015). Thomasson had believed in operational excellence even before he had recommitted himself to his Christian faith. But once he had done so, he worked with great passion – like he did with all of his activities – at finding more ways to include his faith in the management of his business. He often referenced the Parable of the Talents (Matthew 25), and saw in this scripture passage the remarkable trust of the Master in giving great responsibility to his servants, and his high expectations for a return on the investment upon his arrival. Thomasson had high expectations for his own performance, and he expected the same high level of commitment and attention to quality processes and performance metrics from his staff.

Although Thomasson had had a knowledge of Christ since his childhood, he had more recently worked harder to cultivate and express his faith in more tangible ways. He joined a weekly Bible study with other business owners and has participated in the study for a number of years. He has committed himself to become more active in his church and has stepped into several leadership roles there (2015). He was supporting several ministries generously, and he has been able to articulate a strong understanding of his faith in witnessing to others (2015). Thomasson has participated in an association of Christian business professionals and has promoted his services through their website and literature (CBC, 2015). Thomasson has chosen to become more involved in industry associations, local civic organizations and his community’s economic development authority (Graham, 2014) with the hope that he can grow stronger in expressing his Christian beliefs in the marketplace. Because of his increasing interest in expressing his Christian beliefs, Thomasson has sought to demonstrate in a tangible way his care for his employees by investing heavily in employee training, seeking to improve their skills in the delivery of superior customer service. He is well read on the subject of motivation, having consumed management books such as Daniel Pink’s book, Drive, and books on the science of persuasion. Thomasson has encouraged his employees to set development goals that are both professional and personal. He has created a compensation plan for his employees that not only encourages them to achieve their performance goals, but also allows employees to earn substantially more than just their normal paycheck. Thomasson has espoused the belief that he wants everyone who works for him to be “wildly successful” (2015). Thomasson wants the expression of his faith to be evident in the way he treats his customers and his employees.

FAITH MEETS WORK

Thomasson made the decision to offer Whiting a second opportunity in the business as he sought to model in his business the redemptive act of Christ, “who gave Himself for us to redeem us from every lawless deed, and to purify for Himself a people for His own possession, zealous for good deeds” (Titus 2:13, NASB). Thomasson was deeply committed to this approach, but there were moments of doubt. Recently, Thomasson had noticed several occasions where Whiting did not follow through on some of his recommendations on ways to maximize service call potential with his employees. As Thomasson began to prepare for a follow up meeting with his Service Manager, he reflected on what appeared to be the missed revenue opportunities that Whiting was not promoting among his Service Technicians. These missed opportunities included questions his technicians were not asking because they did not like to talk to customers. By not making these connections, the technicians missed the opportunity to offer customers the option to sign up for a “Peace of Mind” Priority Membership, which was an annual contract of regular service appointments to maintain the systems in the dwelling. As much as he wanted to give Whiting the benefit of the doubt, Thomasson could not excuse the fact that his recommendations were not being followed.

Thomasson sought to model his faith in his approach to his employees as he also sought greater revenue growth and greater levels of responsibility from his managers. Thomasson did not see these as mutually exclusive concepts. He firmly believed that the scriptures were clear in how believers’ efforts would be evaluated by Christ (Matthew 25:31-46 the Sheep and the Goats; also James Chapter 2:26 – faith without works is dead). Thomasson firmly believed that operational excellence and faithful service to God were the best means to reflect the Gospel in his work. His adherence to strong processes and good habits to capture every revenue opportunity were important in growing his business; therefore, he determined that Whiting’s shortcomings had to be addressed.

DIFFERING PHILOSOPHIES OF MANAGEMENT

In this second meeting with Frank Whiting, Thomasson would include Ray Ward, the new Operations Manager for the HouseCallCompany.com. Ward was an experienced engineer, but he had only been in this role of Operations Manager with the HouseCallCompany.com for a little over one year. Ward had been managing a smaller company in the industry that became mired in debt and was ready to be closed down with the assets sold off to pay creditors (Carr, 2014). As another effort to express his Christian faith in a tangible way, Thomasson agreed to purchase the company’s debt on behalf of the company’s owners, who were people he knew and shared his Christian faith. As a part of this acquisition, Ray Ward moved over to work for Thomasson and was installed as the Operations Manager of the larger corporation (2015). Ward had an engineering background, but not a lot of industry experience. Yet his skill set in engineering and systems analysis allowed him to grasp the key performance drivers in the industry and made him a valuable key leader (2015). Ward also expressed that he shared Thomasson’s Christian faith, which encouraged Thomasson as he planned to develop Ward into a future senior leadership role in the business. Thomasson saw that the acquisition of the smaller business would reap a large return for him, in that it provided not only additional accounts in the Hampton Roads area by which he could expand his business footprint, but it also provided him with a competent leader. The promotion of Ward into a critical role in Thomasson’s business would be the means by which he could achieve his objective: stepping back from the day-to-day operations in order to pursue more business opportunities. Yet there were also challenges which emerged that Thomasson did not anticipate as he planned his exit strategy. The leadership personalities of Thomasson and Ward could not be more different. Thomasson was more process-driven, pushing for more advanced technology so that the business could capture more data in shorter cycles; this data could be used to assess revenue opportunities that were available and take corrective action. Thomasson knew exactly what each employee and manager needed to do to grow the business, because he had done it himself, and had carefully trained other technicians to follow his lead. Thomasson expected that each employee in their various roles would follow their prescribed processes, respond appropriate to the customers, ask the right questions, and make the best decisions leading to quality service

and improved revenues. Thomasson had managed to grow his business by learning to develop performance metrics that supported goal achievement. Meanwhile, advances in technology had made performance metric data more readily available to the managers. Since managing by means of strong processes and performance metrics was the means by which Thomasson had grown his business, he sought to provide managers with greater access to calendar and account reminders, to help technicians address all the revenue opportunities on each call, and to manage cost controls by limiting tools usage through detailed equipment lists. Ward’s approach was more laid back and outcomes-focused. Ward was insightful in understanding the challenges faced by the technicians and managers. Ward took a longer term view of the objectives set by the managers that seemed to easily frustrate Thomasson. He believed that the managers had the knowledge and experience necessary to accomplish their goals, so they would figure out the best way to do it. As long as they were acting ethically and upholding the name and reputation of the firm, Ward would give the managers much more latitude in choosing how to achieve their goals. Ward urged managers to develop their technicians by using collaboration first, and then to make a joint decision with the employee, thereby giving the employees greater ownership of the responsibility.

Leadership Styles Dean Thomasson Ray Ward Process-focused Outcomes-focused Details important Results important Do as I suggest Do what needs to be done Tell employees how to do it Collaborate with employees on how to do it Good work habits Learn how best to get it done Short-term excellence Long-term results

The approaches advocated by Thomasson and Ward are not new or unique to the business environment. They actually represent two sides of the performance management debate that continue to ferment tension among managers seeking to improve their approach to managing people. These contrasting approaches are spelled out in some of the most well-known leadership books, providing two separate paths to help entrepreneurs scale their businesses. For example, in Michael Gerber’s book, The E-Myth Revisited, Gerber described the way to small business success as creating a business model and following it precisely. Gerber believed that a business development process would produce quality results every time and would transform a small business into an effective organization (Gerber, 2001). Ordinary people given precise training and the confidence to repeat excellent processes would be able to perform extraordinarily following this model. Gerber considered the franchise prototype model developed by Ray Kroc for the McDonalds franchise as the best approach to take (Gerber, 2001). This approach reflected more of how Thomasson believed his employees needed to be managed. Conversely, Marcus Buckingham and Curt Coffman in the book, First Break All the Rules, described the best managers as people who focused on outcomes (Buckingham and Coffman, 1999). Managers needed to select the right people for the job, define the outcomes for their employees, and then create a climate in which employees could achieve their objectives. Buckingham and Coffman suggested that management was not about direct control but about remote control (Buckingham and Coffman, 1999). Employees could take different approaches, and managers might themselves differ on the approaches. But as long as employees acted safely and accurately with the customers’ satisfaction in mind, managers could trust their employees to use their talents and skills to achieve the defined outcomes (Buckingham and Coffman, 1999). Following in this line of thinking, in the past month Ward had requested that all of the HouseCallCompany.com managers go offsite without Thomasson to plan for the New Year and to develop their own revenue and performance objectives.

MAKING THE PERSONNEL DECISION Thomasson believed that he had acted according to his faith in offering Whiting a second opportunity to be successful at his company. Thomasson had addressed Whiting’s previous performance,

admitted his own shortcomings in the relationship, and had offered greater support in this second chance. In his management book, Love Works, Joel Manby (2012) suggested to his managers that they look for an act of contrition or repentance by the terminal employee as a sign that the employee was willing to recommit themselves to the second chance opportunity. Whiting was a knowledgeable and experienced employee, and he had recognized that he did not make the most of his opportunity with Thomasson’s firm the first time around. He and Thomasson had met informally to discuss the possibility of working together again. Yet now in his second turn at the company, it did not appear to Thomasson that Whiting was taking full responsibility for the missed revenue opportunities of his technicians, and he was again resistant to follow those processes which Thomasson believed would help grow his portfolio. Ward and Thomasson met to discuss Whiting’s situation. It was a professional but lively discussion. Both men respected each other's roles, and both men had different approaches in mind that motivated their actions. Despite his deep commitment to second chances, Thomasson was leaning towards letting Whiting go for the second time. Ward meanwhile wanted to give Whiting some more rope. Ward was relatively new to the Operation Manager role, and learning to manage Whiting was going to be his responsibility. His approach was very much based on outcomes, and he did not believe that Whiting had been given enough time to demonstrate that he had changed and could do more. Meanwhile Thomasson knew that he needed to withdraw his daily involvement, and he needed to turn over the responsibility of managing the firm to Ward.

Dean Thomasson faced two challenges in that meeting. The first was whether he had made the right decision in rehiring Frank Whiting, and whether he should terminate him…again. The second challenge was really whether Thomasson himself was serious about pulling back from the day-to-day decision-making of his growing home performance company in order to let Ray Ward make the decisions. While Thomasson was focused on fixing or replacing his Service Manager Frank Whiting, he was also responsible for grooming and freeing his new Operations Manager Ray Ward to lead his business. Thomasson had strong opinions about the business, and was challenged to step back from hands-on activities to more of an oversight role. He needed to learn to hold Ward more accountable for managing the business – including the business results – and how Ward chose to reach them. At this point, Thomasson realized that Frank Whiting represented more than an important personnel decision; this situation and how Thomasson approached it would set the direction of his business for years to come.

Table 1: Thomasson Enterprises (dba The HouseCallCompany.com) Annual Revenue

Year Total Revenue

2002 $14,908.68

2003 $339,547.23

2004 $286,855.54

2005 $480,227.42

2006 $787,931.69

2007 $962,640.33

2008 $863,478.32

2009 $963,953.86

2010 $1,595,855.16

2011 $1,008,320.82

2012 $2,236,081.07

2013 $1,996,851.03

2014 $3,003,242.28

References: ACI (2012). The home performance industry: Road map to a sustainable future. Washington DC: Home Performance

Coalition. Bamberger, P. A., & Donahue, L. H. (1999). Employee discharge and reinstatement: Moral hazards and the

mixed consequences of last chance agreements. Industrial & Labor Relations Review, 53, 3. Banks, R. J., & Stevens, R. P. (1997). Firing. The complete book of everyday christianity: An a-to-z guide to following

Christ in every aspect of life. Downers Grove, Ill: InterVarsity Press. Buckingham, M., and Coffman, C. (1999). First break all the rules: What the world's greatest managers do differently.

New York, NY.: Simon and Schuster. Carr, E. (2014, March 26). The House Call Company and Energy Efficient Solutions announce merger.

Portsmouth, VA: PR Log. Retrieved January 17, 2015, from http://www.prlog.org/12287985-the- house-call-company-and-energy-efficient-solutions-announce-merger.html.

Chewning, R. C., Eby, J. W., & Roels, S. J. (1990). Business Through the Eyes of Faith. San Francisco: Harper & Row.

Elwell, W. A. (2001). Baker's Evangelical Dictionary of Biblical Theology (Rev. ed.). Carlisle, Cumbria, U.K: Baker Academic.

Gerber, M.E. (2001). The E-myth revisited. New York, NY.: HarperCollins. Graham, R. (2014, October 22). Hampton Roads Business Live Profile: Dean A. Thomasson. Retrieved

January 17, 2015, from http://hamptonroadsbusinesslive.tv/house-call-company/. Hamm, J. (2002). Why Entrepreneurs Don't Scale. Harvard Business Review, 80(12), 110-115 Harper, D. (1990). Spotlight abuse-save profits. Industrial Distribution, 79, 47- 51. Hayes, R. (2008). Strategies to detect and prevent workplace dishonesty. Alexandria, VA: ASIS Foundation. Lentz, S.D. (2012). Trademarking of the HouseCallCompany.com. Retrieved January 17, 2015 from

http://www.trademarkia.com/housecallcompanycom-85624803.html.

1985 1990 1995 2000 2005 2010 2015

Rehired Whiting

Business coaching performance metrics

Purchased first franchise Mr. Comfort

Started current business under his own name

Relocated to current location – smaller space

Dean Thomasson: Growth of Faith and Business Timeline

Started own construction firm

Completed AA Degree

Married first wife

Started in HVAC industry

Brought in partner to better manage growth & time

Recommit to faith

First marriage ended

Hired Whiting

Started dba House Call Co.

Over $1M Sales

Fired Whiting/ Bought other business

Project sales of $4.5M

Asked for help integrating faith into business

http://hamptonroadsbusinesslive.tv/house-call-company

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