Building a Competitive Edge by Investing in People
Josh Smith (00:03):
Hello, and welcome back to the sharpest tool, the place where we take the sting, how to marketing with everything that we're bringing to the table. Once again, I'm your host, Justin Smith. And I'm actually really amped up about who we have in the booth. I have Dan, the danimal Dowdy from Austin, Texas, actually just outside of Austin, but I'm going to let Dan introduce himself to the show. So Dan, welcome.
Dan Dowdy (00:25):
Thank you for having me, Josh. I really, really appreciate it. And been looking forward to this opportunity.
Josh Smith (00:30):
Absolutely. Well, why don't you give our listeners a little bit of insight into what it is you do the type of business you run and where are you located, where you operate.
Dan Dowdy (00:38):
All right. Awesome. So yeah, we are just located right outside of Austin, Texas, a little town called Taylor, Texas, and we're actually a family business. I'm second generation and we do a residential plumbing service.
Josh Smith (00:48):
How did you get in the trades? It's a second generation. So I'm assuming family owned and it was just something you, you took on. And I guess, how did that process take place and why did you make the decision to move forward with that? As a, as a career choice?
Dan Dowdy (01:02):
Really, it was, you know, growing up, my dad always said, Hey, Dan, you know, either, either you're going to college or you go into a trade because he always told me if you had a trade, you're always going to have a job. And so I always knew that. And so even I grew up in the business as a second generation plumber going through high school years. I've worked the summers with my buddies. And so I had a lot of experience there. But when I got out of school, I went to college for a while to experience that. And I realized that plumbing was definitely in my blood. It's what I enjoy doing. I liked working with my hands. And so, you know, I went back into it and I ran a service truck for about 10 years before I actually went into leadership in the company.
Dan Dowdy (01:37):
It's funny, it's like a lot of things in business. You have to kind of take that leap out of your truck and to doing a leadership position. And my dad just pretty much said, Hey, you're out of the truck. You're going straight into the state in the management. You know, I don't care what you say. He was ready to start getting out of it and, and watching me grow in the company. And so, uh, that really is, is my, my backstory. And then from there, we just started making a lot of, a lot of great changes to the company. We really figuring out who we were because for a lot of years, you know, we were the typical plumbing company where we kind of took every job that came in. You know, we were a smaller company, family company. And so we were doing, you know, residential service, commercial service, remodels, new construction, just a little bit of everything. But until we really started to find that focus is when we really started to grow and be successful.
Josh Smith (02:24):
You know, you hit on something. I want to dig into a little bit because I think a lot of tradesmen when they make that jump from being in the truck, to being in a leadership position, it's a bit of a difficult transition. What did you find most challenging about that?
Dan Dowdy (02:36):
Really most challenging is the mindset. You know, for me, it's, if you're trying to do both, it's almost never going to work. You have to give it all to one or the other. Typically, because even to this day, if I go out in the field just to go out and check jobs, you know, I have to focus that that's my focus for the day. Go do that. But if you're, if you're a service technician and you're trying to do half a day in the field, half the day in the office, you never going to do either one, well, that's a completely different mindset. So the first advice is really, once you make that step, you have to commit to it and know that there's going to be some times that you want to go back to it and revert back to it, but you really need to stay committed for the long haul.
Josh Smith (03:12):
What, what have you done that, uh, you have found success in, in making that transition the most impactful as possible for the business. Is there any kind of tools of the trade things you've learned you've picked up from other business owners that really stuck out to you?
Dan Dowdy (03:24):
Yeah, there actually is a lot, you know, I really don't know even know where to begin, but you know, when I first got into leadership of the company, I didn't really know what a, you know, what I was doing. All I knew is that I needed somebody to teach me because we ran a company that I think a lot of people can resonate with this. That was a time of material company. It was really a mom and pop type shop. We had a niche in the market and leak detection. So we did a lot of insurance work, but there was a time, I think it was around 2008 where I was like, the economy was kind of going bad. And I really realized that we needed to build our service company that could last through a bad economy. If our insurance, if the insurance company said no more leak detection, no more of that work, because that was probably a 70% of our work at that time.
Dan Dowdy (04:06):
So what I did is I just started plugging into best practice groups. We're part of a PHCC for a lot of years, and they have a, a group called quality service contractors. We got connected with them. And to me, I think there's nothing new under the sun. So if I can bring somebody in smarter than me in business to teach me how to run a business, then that's what I did. So I got plugged in and got some coaching and I've never looked back. We're looking at, I guess, 11 years later since I made that transition and people ask me, Dan, why do you still, you have a great company? Why are you still a part of these coaching groups? Even though sometimes I feel that I could be the coach in the group. I still gain a lot of knowledge out of it. Like I don't want to have that trap of the amateur thinking that I know at all, when I really don't know at all, you know, I still go, I still go out on a weekly basis and make mistakes. I've made enough mistakes and been coached well enough to really have a leg up in the competition.
Josh Smith (04:58):
Absolutely. When you were growing up and you saw the, you know, your plumbing companies around town, was there anything in particular that stuck out to you about certain plumbing companies versus other companies in the trades from a just kind of a competitive standpoint, I want to dive into a bit more of the competition aspect that's going on in the industry right now, especially being in Texas. You probably have a, a number of, uh, competitors in the area.
Dan Dowdy (05:22):
Every company I personally think is a direct reflection of the owner. And so, especially when you're transitioning from the first or second generation, I can look at a company and just tell by how rundown the businesses are, what their trucks look like, really who who's owning and leading that company. So I don't have to kind of answers your question or not, but, uh, that was my direct reflection is we have a great company and we're doing really good things. But then I look at the bigger companies that are running larger service companies. And I wonder, you know, how are they doing that? Because a lot of times the mindset for a smaller family company is I don't want to go flat rate because it's screwing people out of money and that's kind of the mindset. That's a trap, you get yourself. And she does. But then you look at these companies who are doing it, and then maybe franchising companies are just really large service companies. And a lot of them are doing it right now. Granted, there are some that aren't, but there's a lot that are doing it right. And so that really intrigued me to figure out, you know, what it is they're doing and how can I make that happen? Like I said before, there's nothing new under the sun. Everything is just kind of repurposed. And that's coming from a guy who loves innovation.
Josh Smith (06:27):
Let's dive into innovation a little bit. How do you stay on top of the innovation in the plumbing industry?
Dan Dowdy (06:33):
I can't say I do a lot of research necessarily, but I being a part of best practice groups. I do go out and visit a lot of locations, especially as I was growing my company and making changes, I would either go visit somebody or I call somebody and just get advice or get coaching advice. But really what leads my innovation, what leads my vision is really my quiet time I spend in the morning, you know, reading my Bible or praying. And I'd say, I give God all the credit for my ideas, because it took me a while to realize what that was and that gift that I had. But now it's a beautiful thing because I know exactly what it is. So would you say,
Josh Smith (07:06):
Say that that plays a large role in what drives you as an owner of a business that sets the tone for the culture that you create?
Dan Dowdy (07:14):
Oh, 100%. And the past 10 years I've seen a ton of success and a ton of growth, my company. And, uh, what happens is if you don't have the right values and the right focus in your life, money becomes what you're after and it shifts your culture. And what happens is you start hiring and your culture starts shifting towards it's all about the money. And the next thing, you know, you have technicians, screwing customers and things like that. So as you continue in these steps of innovation and these steps of making a very consistent quality service company, you're going to see great growth in your company, but you have to keep your values in line. Otherwise you will be blinded by the money and it will be all about your IGA when things like that. So I'm sitting here took me nine years to figure that out. So I don't think that I'm a genius here. It's been the last year that I really have been humbled to that servant leadership role to our realize that I can't do it without my team. And then also I can't do it without God and history his direction in my life. Absolutely.
Josh Smith (08:11):
Would you describe the culture at S and D plumbing?
Dan Dowdy (08:14):
You like to have a lot of fun. We like to work really hard, but what happened is over the last nine years, it became, we made a lot of transitions. We went flat rate. We went commissioned with our techs. And even as a leader in the company, I can think I was taught a lot. That culture is a lot of what you do for your team, what you buy for your team, what your building looks like, all these great things, just, you know, we love the millennial generation. You know, we hire them a lot. So I got in that trap of thinking more is better. And so what happened was I ended up with a culture of a lot of entitlement. And even though I had an amazing team, it was kind of like holding up their hands, like what's next. And there was a lot of entitlement with not a lot of accountability.
Dan Dowdy (08:53):
And so you definitely have to have that balance in your culture. And so really over the last year, we've made a shift in our culture to where we've added in a lot more accountability and a lot more appreciation towards what we do. And with that came really holding accountable to our core values, just really running the best quality service company we can with our core values in mind. But it's easy to say that because what happens is you bring accountability into a service company and the blue collar industry, everybody listen, and this through the business owner starts thinking of one or two or three or four or five technicians. They're like, ah, you know, maybe though we're going to have to get rid of Bob or whatever, because he's a little bit shady. He might be doing side work or something, and he may be still in my fittings or treat or cheating a customer, but, and then you start thinking, well, he, you know, well, he's up like a $500,000 tech or a million dollar tech.
Dan Dowdy (09:42):
I can't get rid of him. So you have that battle in your head. So one of my sayings and I always tell myself, this is, is your ego bigger than your culture? And I only say that because we all like to sit here and talk about how many trucks we have and how much revenue we have, but how toxic is that culture nowadays, we have, you know, you see it all over. Here's $10,000 for signing onto a company that you have technicians running around with handouts who just worked that handout and then move to the next company. And I don't want that in my culture.
Josh Smith (10:10):
Yeah, definitely. You mentioned the millennial generation. I know that there's a bit of a, a challenge right now in the home services industry as a whole, just in terms of getting younger techs, younger, younger people coming out of college or coming out of high school, leaving and the desire to go into the trades. You know, we have the tech boom, we got a lot of technology companies. A lot of people seem to be going that route. And we're seeing a bit of a crisis in terms of hiring into the trades. Have you found that challenge to be present for you as well? And if so, how have you kind of gotten around that? I can't really say
Dan Dowdy (10:44):
The challenge because we saw it as opportunity and we really kind of attacked it. We go directly to the high schools and we put ourselves out there as you know, we're wanting to hire some kids and bring them up to the local trade program we have and get them licensed. So really with the millennial generation, I think it's about, I think it's more about looking for somebody who fits your values. Who's a hardworking kid who's raised right, and ready to go. And then really investing in them personally because the millennial generation doesn't care so much, always about the money. They care more about the experience and the time you invest in them and the whole family atmosphere of doing that. And it's all perspective. Any level of company can have a whole different perspective because I was just visiting a company yesterday and, and he was talking about how he felt that his technicians, they just moved from running the company out of their house to running it out of an actual business and, you know, brick and mortar business. And he could just see the overwhelming relief from the employees he had working. Cause I just felt that now we're established the company's not going to go anywhere since we actually have a building and a location. So as, and it was a millennial tag, that's only reason I'm saying that is, as you could see in his face, that he felt more comfort knowing that that his long-term plans are more secure
Josh Smith (11:59):
In terms of, you seem to have a lot of innovation, obviously is, seems to be at the forefront in terms of how you develop your culture. You're thinking a bit differently than, and because of necessity, because then a lot of other businesses are, um, what motivates you to continue to think outside the box? I know your faith plays such a great, uh, important factor in how you just run your life day to day and how you run your business. Um, what'd you say it boils down to that. Are there other things that you find and grab motivation from?
Dan Dowdy (12:30):
Yeah, so I mean, what really drives me is competitiveness, but on top of that, it's I read a lot of books. When I say read a lot of books, I listened to a lot of audio books.
Josh Smith (12:40):
Dan Dowdy (12:40):
That was a great thing. I'm a technician at heart. It seems to resonate better when I'm, when I'm listening, I'm driving or, or working out or doing something like that. But sometimes I wonder why bigger, why better? But to me it's more of the fun of the innovation, the fun of doing new things. The fun of shaking up the industry a little bit, because I hear a lot of complaining about how it's too expensive to train my team and I can't ever find any good help and all these different things. But what, you know, what I've found my secret weapon is his effort stepping out in faith and saying, Hmm, maybe today I'm going to get out of my comfort zone and come shoot a podcast or go turn my iPhone on and get in front of the camera and shoot a live Facebook video.
Dan Dowdy (13:20):
I've been doing it for years. Oh yeah. I get nervous. Every time I get nervous and that, you know, that nervousness is what drives me. That's what it is, what excites me. And that's what, what keeps me taking. But going back to the training thing is like these guys, these guys, and gals ni training, your CSRs need to be trained as much as, just as much as your technicians. Cause they're just as important as your top selling technician. So if you ever say it's too expensive to train my team, I'm just going to want to slap you because it really is. I hear that a lot from business owners, you know, they say, oh, that, um, that progress software, oh, it's too expensive. Oh, that marketing company, oh, that's too expensive. And I laugh inside because I think, is that an expense or is that an investment in your company? Because if you're doing it right, you're investing in your company, you're seeing 10 or 11 times return of what you're putting into it. And so they have to get out of their own heads and realize what an expense of what an investment is. And I'm going to keep putting in all the effort and keep and keep growing and keep doing what I'm doing because I'm willing to get out of my comfort zone on a daily basis and do, and just do crazy things. So that's my secret.
Josh Smith (14:22):
I have a bit of a curve ball. I want to throw your way because I think it's, it's really interesting when we talk about a lot of this theory mindset and a lot of people might be listening to that and they think, yeah, that's great work for Dan. Like I just don't see it. I just don't get it. Or I don't know, practically how to move in that direction that we kind of get inside ourselves and mindsets. It doesn't seem like something. It seems simple and arbitrary to say, I'll just change your mindset. Was there a time in your professional development that you can tie it back to? That was an instrumental event that made the switch in your head for whatever reason, all of a sudden your mindset change.
Dan Dowdy (15:02):
Oh, really what's really flipped. A switch for me has been probably about three years ago. I had a, uh, at a good friend of mine. Who's, who's now passed away, but he came into my life really through bow hunting is how it happens. That's one of my hobbies he can in my life. And I remember getting in his truck one day, he was one of the greatest salesman I ever knew. He got in his truck one day and he turned it on and an audio book started playing. It may have been, it may have been longer, remember about four or five years ago. But anyways, it definitely, first thing I thought was this guy's crazy. Nobody listens to audio books. Right. And then, and then what he taught me is how to perfect your craft outside of what you're doing on a day-to-day basis is outside of actually hands-on in your business.
Dan Dowdy (15:44):
And so you have to have that discipline. And that was a mind switch of if I'm going to be successful, I need to just start doing that. And that really changed my mindset a lot. And then beyond that in the past year or two, it's really been my journey back to health, really disciplining myself, really learning that every year I need to edit my life. And so I look, and my goals is let's edit your life. If it's not making you better, if this person's not making you better, what I'm eating or doing is not making me better. I'm going to start working and having that discipline to cut that out of my life. And it's easy for me to sit here and say that I love food and everything as much as everybody else, but it's a secret weapon, you know, successful people and thus in themselves.
Dan Dowdy (16:29):
And, and with that, you also have to balance investing in yourself as a million dollar race horse. But also once you're out of that and you're into your team, you also got to balance checking that ego and making sure it's not all about you because great leadership comes from servant leadership and humbling yourself. It took me a lot of years to realize that because like I said, the success trap you get into and really change a person. Once I realized that I had to discipline myself and put that time in for myself, but then transitioned to putting that time into my team and serving my team that I started to see, uh, the growth and the culture that I wanted. Because really when I look at successful companies, the biggest difference is the team who's in your doors, how they treat your customers, how you training them to treat your customers is a consistent service.
Dan Dowdy (17:21):
It consistently the same way we answer the phone the same way we show empathy. And I'll sit here and say, if you want to run a quality service company, it's very simple. You have to train your team obviously, but you have to train your team to listen and show empathy and care for your customers, and then communicate with the customers. I mean, it's that simple in the home service industry, because how many times do you call a plumber, HPAC or electrical company out? And you really have no idea what time they're showing up. And nobody really, you know, you tell them you flooded your house and you're like, ah, I'm cool. What time you want us out type deal? You know? So it's that simple. And it sounds easy to say, but you have to train your team.
Josh Smith (18:01):
You know, I, uh, I heard it said one, uh, one time that people are your most valuable asset and your biggest competitive advantage because companies can reverse engineer processes. They can reverse engineer techniques, they can reverse engineer technology. But the one thing that they can't replicate is people because every individual's different created differently and develop differently and they have different strengths, they bring to the table. So I think what you're hitting on just that just resonated with me. It's just by developing your people that can be and should be your competitive advantage in the industry and the way to make a mark.
Dan Dowdy (18:43):
Josh Smith (18:44):
That's it. Well, Dan, this, this has been awesome. I think we got some really good meat out of this. I want to tie it to, to a nice little bow here and no pun intended with your hobbies. Um, but I want to give, like, if you were to sum, summarize, just one takeaway I've I have an idea of what you might say, but if you were to summarize one takeaway for our business owners listening right now, what would that take away be?
Dan Dowdy (19:10):
I have too many.
Josh Smith (19:12):
You were to summarize it to one that they take this and you go implement this in your business tomorrow. You'll see a change. What would that be?
Dan Dowdy (19:20):
Yeah, really. It depends on what company we're talking about. I was visiting a company here locally, yesterday, who is at the grassroots of transitioning that second generation and making all these changes they want to make. And they had all these idea, great ideas. But for me, it was, you know, making sure they slowed down and channel those and did slow and steady growth. But the biggest takeaway is, is just that competitive edge and your team. It is your team. You know, you got to stop saying, it's too expensive to train. You got to stop saying, I can't hire people. You have to build a company with great core values with a great service system. And really just start investing the time in your team, knowing that it's not going to be instant gratification for you. It's going to be a long-term investment. You're going to see people stick around longer.
Dan Dowdy (20:07):
You're going to see happier customers, more reviews. And then in return, you're going to see team who is listening and caring for your customers and creating a service experience. That's truly life changing. Why I love doing what I'm doing. It's serving people. That's one thing I have realized over this last year is service company. You say that a thousand times, and you never think about serving and servant's heart and how, how that looks. I've given you a lot of takeaways, I think, but anyway, the servant's heart keeping that in line, keeping your values in line, you know, letting God lead your life and not letting that money drive you and blind you because you'll quickly lose your soul to the, to the success traps that you can get in. Absolutely
Josh Smith (20:45):
Well that that's a lot of takeaways, but I think there's a lot of punch and power in that. So, uh, Dan, thank you. This has been awesome. I really appreciate you taking the time to come out and be on the podcast. Thank you very much. Absolutely. And for everybody listening definitely hit the subscribe button wherever you are, listening to your podcasts. So you can get more of the awesome content email@example.com forward slash the sharpest tool and get more updates on new episodes that are going to be released. And from all of us here at the sharpest tool, we'll catch you next time. Thanks.