By Kelly Faloon
Gary Elekes got his start in the mechanical industry working in sales at HVAC manufacturer Lennox, then moving to the contractor side at Service Experts. What he found was an industry replete in hardworking men and women committed to serving their customers well, and he wanted to be a part of that independent, entrepreneurial spirit.
Elekes is president of EPC Equity, EPC Training, EPC Inc., and owner of Imarket Solutions. We talked with him recently about his thoughts on today’s HVACR industry.
1. When and why did you decide to go into your particular career field?
Jobs were scarce when I graduated from college in 1983, so any job was a good job. I interviewed with appliance manufacturer Magic Chef and they offered me a job in sales.
Eventually, I ended up at Lennox, then Service Experts, which brought me to middle Tennessee.
Service Experts was a much different environment. We were a national consolidating contractor, a publicly listed company on the stock exchange. We had 240-plus companies, and those businesses were all pretty good operators for the most part. It was a lot different than working at the manufacturer distribution level in sales, even though Lennox is direct to the contractor.
The Chinese say, "May we live in interesting times," and I think that's the mantra we have. We're always excited about it. I started a consulting and training business in 2000. That was my first independent business entity. When I worked at Lennox in the 1980s, I was part of its business consulting program, so I had a blueprint for my business.
Then I was really looking into acquiring businesses and entering the mechanical trades. You have to wait for the right deal. I acquired my first company in 2002, then started a private equity business. I have been involved in buying, fixing and operating companies ever since. The work continues to get more interesting as the industry is changing. It's always in flux. It's like the ocean; it's always moving around.
2. How did you develop the passion you have for the mechanical contracting industry?
I always knew I would be an entrepreneur. I got the bug, if you will, for mechanical contracting in the late 1990s. The trades are a wonderful business with the most amazing people. It’s a fantastic industry and I owe it for allowing me to prosper.
I’ve been training and consulting for more than 20 years. Becoming a part of the Electric & Gas Industries Association family allows me to scale a lot of the concepts and ideas we've developed over the years. The idea of the nonprofit angle and the affordability makes it fantastic for me, because that matches with my vision and purpose in my own business, which is to help other people achieve their potential. I can do that through the EGIA Contractor University.
3. What's the most important thing you can impart on the readers for what they can expect to hear during Contractor Leadership Live?
Attend, learn, take an idea home, execute that idea and then repeat it.
My focus will be on how contractors should look at developing an operating plan for their businesses. Being able to understand not just what the priorities of the business are, but how to choose those priorities. I think a lot of contractors would say, ‘I know the 10 things I need to do, but I'm not sure which one should be first or how they would be ordered.’
I'll walk contractors through the ideology of how to choose priorities and what I would call the acid tests of how they decide what is most important versus what becomes a little less important. To an entrepreneur, everything is important. It's very personal. However, you can't do everything at once; you have to order the priorities.
We would call that a gap analysis. Figure out what the problems are, put them in order of priority, and then follow a step-by-step process to develop and achieve each goal so it doesn't become an idea that doesn't get completed because of distractions. Maybe you want more leads, a better closure rate, more margin in your service business, or finding a new technician.
Begin with the end in mind. If I begin with the end in mind, whether I'm selling my business or whether I want to increase my revenue or profitability, I want contractors to focus on a longer-term idea and then build a plan and a team to help them achieve what ultimately they want the end to be.
Many contractors don't have a good idea of what their vision is or how they want it to look three, four, five or 10 years from now. It's just a way to look at your own leadership of the business. We want to improve the execution, but we want to have a process we can rely on so it's not just a one-time thing.
4. Tell us something interesting about yourself.
I am passionate about Ohio State football. Go Bucks!
5. What's the most exciting part of your job right now?
For me, it's being able to help people discover a skill they probably had and turn the idea or the skill into something that's actionable, something they can execute in their business. When somebody gets it, it's pretty thrilling.
If you're interested in servant-based leadership and helping people achieve something they haven't been able to yet, it’s fantastic. When you give them an idea or a tool and you teach them how to use the tool, it goes beyond just them making more money and creating profit, time and freedom in the business.
It extends into what I consider to be a good personal relationship. You build a bridge within the industry for life, really. I think that's the great part about our trade. It’s a small industry — practically everyone knows each other — and there are very strong bonds here.
I thoroughly enjoy working with all the education talent within EGIA. What an amazing collection of people!
Many people in the mechanical contracting trade have not had the opportunity for professional training, or if they have, they didn't start with professional training. So for EGIA, or any organization, to offer opportunities for them to learn about running a business, improving their wealth and providing for their families, that's exciting to me. That's how I'm wired. EGIA's mission is to raise the bar. Everyone in the industry gets better if we train.
6. What is the biggest issue we need to face in the HVACR contracting space?
Without a doubt, the biggest issue is finding qualified help, especially in plumbing and HVAC. A dearth in the labor force hinders the growth of the trade.
More than a decade ago, it was hard to find talent, but now we're finding it a struggle to find any level of talent, because as people age and retire, or they find a different avenue to do their work, we lose experienced people with no one to replace them. The funnel at the top is not bringing in more than the funnel at the bottom. We have an inverted funnel right now.
What can we do to attract young people to the HVACR industry? We can do many things as a trade or an industry; getting organized is the difficult thing.
Most educational systems in the United States today are pointing children who are coming through high school into an academic-based, university-based curriculum. The vocational system that I grew up with in the 1970s doesn’t exist today in many school districts. So young people don’t view the trades as a viable career option.
I believe the mechanical trades need to educate the educators, so to speak. We need to make the youth of America who are coming through high school realize there are a lot of jobs in the trades. Literally, we need plumbers today. We need HVAC technicians today. Some companies could easily add two or three crews today if they had access to skilled labor.
Or, we have people who are interested in the work but don’t know how to get trained. I'm not sure the HVAC industry is doing a great job of marketing itself, of creating recruiting opportunities: ‘Hey, if you're interested in a trades career, come to HVAC University 101 and we’ll turn you into somebody who can earn and be effective at raising your own standards.’
There's a lot of fragmentation in our trade right now, with different groups doing different things to drum up that next generation of HVAC techs. Somehow we need to find a way to unify the different strategies.
It starts at ground zero. My children are grown now, but they were all pointed toward academics. Vo-tech was looked down upon: ‘Well, you don't want to do that.’ So here we are with a major shortage of talent. I think it's critical right now.
We have a whole lot of mechanical systems in our buildings. We have a whole lot of engineering. We have a whole lot of infrastructure that requires not just future development, but the repair and replacement of it. You still need those people. You still need those skill sets.
HVAC jobs are fantastic paying jobs. Some of our people are making well over $100,000 a year, and so we tell young people, ‘You can make over $100,000 a year as a plumbing technician.’ They're very surprised by that, which means the information doesn't translate over to the educational system. We have to fix that.
7. What technology is coming up in the near future that you believe will alter the mechanical contracting course forever?
Software applications that will tie lead generation to providers by the likes of Amazon and Google, as well as large-scale retailers. Google is most assuredly looking into the home services industries. It’s already introduced a beta test in one market in San Francisco; now it’s in 16 markets, where Google is controlling the lead generation systems, selling leads to the contractors.
As software companies, they have the ability to impact the mechanical contractor. They've made no secret it’s a potential interest for them. They're in business to grow their revenue and profit stream, so if they feel they have a technology that can disrupt this particular set of trades, that's competition. More power to them.
I think as mechanicals, and as business owners, we do a better job at the customer experience. We do a better job at the brand experience. We tie our customers down with service agreements that have value, and we provide a solution that's based on the personal relationship. You can’t do the same with technology.
I've had great experiences with my Uber app, and I've had incredibly lousy experiences with my Uber driver, but it's the driver experience that's lousy, not the app. The app works perfectly each time.
I think as contractors we can defend our opportunity or what I'll call the vertical if we do a great job at solving customer relationship problems and learning how to do it. I think that's the problem in our industry; too few contractors have embraced service agreements, and the relationship and brand experience. I think that's where EGIA provides a great opportunity for contractors.
You have to be better than you were yesterday, and tomorrow you have to be better than you were today, at all those things, or technology as it exists will cause problems. Sensor technology and the ability to diagnose and monitor equipment prior to failure for repairs, that's already out there. Manufacturers have been working on it for a long time.
It will put some pressure on the mechanical trades as well. It probably is also disruptive. Maybe not in a bad way. Maybe from the consumer's point of view, it turns out to be better, but as contractors we're going to have to be better at things such as software, learning new techniques and the brand experience.
I believe we're not where we need to be as an industry in that regard. When you get disrupted, when a business gets disrupted, you have to change. It’s certainly happening in other industries. And Amazon and Google are going to be on the front lines in our industry.
About Contractor Leadership Live
You can hear Gary’s presentation, “Leadership: Improving Execution to Drive Profits,” at Contractor Leadership Live, Sept. 12-14 at the Huntington Convention Center in Cleveland. Visit www.contractorleadershiplive.com for details and to register for the event.
Contractor Leadership LIVE is a new, multi-day event that brings together the resources you need to transform your business. You will see the latest technologies and learn about proven strategies from a powerful line-up of today's HVAC industry experts. There's no better opportunity to level up your business while building a solid foundation for the future.
Slated for September 12-14 at the Huntington Convention Center in Cleveland, this national event will feature conference sessions by top educators to inspire you to transform your business while delivering insight on the latest industry trends that are impacting contracting business owners and service professionals. The expo hall will give you an opportunity to learn more about the latest products that help drive business and boost profitability while connecting you with the manufacturers that are responsible for developing those tools and solutions that are critical to your success in this ever-changing business environment.