When Jeff Nusz seized the opportunity to buy Reitmeier, a commercial HVAC company in Tualitin, Oregon, in 2002, he had a definitive vision for the future: “Be the biggest, baddest business on the block…more people, more trucks, more of everything.” Within six years, he grew the company from 12 employees to about 80. And then the recession took hold.

“We almost lost everything. I’d call my partner on Fridays to ask how much was in the bank so we could meet payroll. I never wanted to be in that position again,” Nusz says. “I had to admit my vision was wrong.”

Though Nusz had worked as a journeyman service technician, general manager and service manager prior to owning Reitmeier, he credits the recession with giving him a Ph.D. in business.

“I had to do some soul searching about how I got so far off course and who we really are,” he says. In other words, some serious strategic planning was in order.

“I broke it all the way down with the help of my team and a business consultant. The conclusion we came to is: We want to be a really great company that happens to be really great at HVAC.”

Put in mission statement lingo, the essence of Reitmeier is balance—whether it’s work-life balance for the firm’s 36 employees, balancing how much a building consumes or achieving better air flow balance. From there, the leadership team developed some core values (e.g., owning mistakes and making them right, leading through innovation and building sustainable relationships) that appear on every company vehicle.

“They are a living, breathing testimony of what we believe,” Nusz says. “Everybody throughout the company knows that’s how we make decisions. If something doesn’t align with our core values, we know it’s not the way to go.”

With this foundation in place, Reitmeier instituted a more purposeful annual strategic planning process to guide it into the future. The four-member executive team comes up with a theme for the year and sets four to six initiatives that are broken down into action items with a champion tied to each.

For example, the company’s first attempt at creating a marketing blueprint included 10 action items. “We got overwhelmed and only completed about three-quarters of them,” Nusz says. “It was disappointing to the team to not meet that goal, so we learned to be more realistic going forward.”

Other initiatives have included converting field staff to tablets (reducing 80 percent of the company’s paper usage) and pursuing B corporation certification, which acknowledges firms that voluntarily meet rigorous standards for social and environmental performance, accountability and transparency. Only about 2,600 companies globally have earned the certification—including Patagonia, Ben & Jerry’s and Seventh Generation—and Reitmeier is the only U.S. mechanical contractor to do so.

“Typically one HVAC contractor is just like the next,” Nusz says. “I didn’t think that was good enough. I thought we had the opportunity to make an impact on the community, the environment and the welfare of those who choose to work here.”

Nusz created a B corp committee, which spent about a year and a half applying Fortune 500 ideas to the small HVAC business. For instance, on the sustainability front, Reitmeier partnered with a cogeneration plant to incinerate the filters the company removes for clients. The process produces steam that is then transferred to a turbine generator to produce power sold back to the grid. Does it cost a little more? Yes, but it’s the right thing to do, and Facebook and Apple have even reached out to Reitmeier for advice on replicating the process.

“For us, becoming a B corp was more of a validation that we’re doing the right thing in some areas and exposed other areas where we could do better,” Nusz says. “We’ll be a B corp in perpetuity. It’s not just a certification that goes on the shelf.”

Additionally, two years ago Reitmeier moved to a budget-based system in which each department sets financial goals based on the forecast for the year. Nusz shares financials openly with executive staff so they can see their effect on the bottom line, and they do a monthly post-mortem to examine which departments hit their marks and assess why others were missed.

“Now we can re-forecast as we go throughout the year based on what we know today that we didn’t know yesterday,” Nusz says.

Scheduling regular updates and having an open door policy are key to Reitmeier’s success in keeping the strategic plan top of mind 52 weeks a year. To keep everyone on task and away from the pull of email, Nusz hosts a Wednesday meeting with the leadership team and a business consultant to discuss initiatives in progress and how to get messaging out to personnel.

“We do things from the inside out. It’s more powerful if we have everybody sold internally first because they help us take it to market,” Nusz says. “We’re constantly communicating with the field. I tell them they don’t work for me; I work for them. It was a hard concept to get at first, but now they understand.”
Nusz even goes so far as to have book club-style discussions with a group of cross-generational, cross- department employees who are encouraged to speak their mind about what they get out of each reading assignment. “It gives us insight into how they perceive the world so we can shift our management style to get desired results and make them comfortable with changes,” he says.

It’s an important point—that strategic planning and goal setting are inextricably tied to change. The hard work has to be done every year in order to get into the rhythm of setting, and following through on, smart goals.

“Be honest with yourself, look beyond the numbers and find your right-fit customers. It will absolutely pay off for retention, worker satisfaction and the bottom line,” Nusz says. “We are definitely seeing the dividends of our rebranding and strategic planning initiatives. I’m doing half the revenue and making twice as much on the bottom line.”

‘BUILDING SOMETHING BETTER THROUGH CONTROLLED GROWTH

Themes are an important part of annual planning for Verdex Construction, a West Palm Beach, Florida, general contractor that’s young in years but deep in experience. In 2017, President Rex Kirby brought a YETI mug on stage while rolling out goals to his 45 employees. His point: What’s so special about YETI? It’s not the biggest company, but it’s perceived as the best and people are willing to pay more for its products. As a result, that year’s theme was to be “the YETI of construction.”

Kirby founded Verdex in 2014 after spending 30 years with two other firms—the latter of which grew from $60 million in regional revenue to half a billion under his leadership.

“When I started Verdex, I wanted to stay at the mid-level size to make sure we could keep our finger on the pulse of the projects,” Kirby says. “I like having the ability to make quick decisions and react based on the market and the client’s needs.”

At the start, leadership put the cash in to get a higher level of bonding so the firm wouldn’t have to carve out a reputation doing small jobs. Kirby also brought on experienced personnel who strictly fit the culture.

The company surveys its employees annually for feedback on what’s being done right or wrong, and the results are then categorized by a strategic planning team comprised of 10 to 15 people from the C suite and entry level to estimators and finance professionals. The list is whittled down to about five big items to focus on as two-year goals.

“It’s a very fluid document. Some are stretch goals and some are ‘let’s get it done’ goals,” says Lisa King, Verdex’s vice president of business development. “We review it on a regular basis to make sure we’re addressing the issues that need to be addressed.”

Quarterly company-wide meetings are held to share progress on the strategic plan and goals. Updates also are provided during Monday staff meetings and Friday operational meetings so tactics stay front and center.

Early on, it was evident that standard operating procedures needed to be a strategic planning item. A group spent the better part of a year establishing standard operating procedures for everything from how trailers are set up and what jobsite signage should look like to where files should be stored in Procore.

“We have space designated in our trailers for permits, current drawings, etc. You’d be shocked how disorganized it can be if you don’t have a procedure in place,” Kirby says.

Adds King: “It makes for a nice transition from project to project as new teams come together. And it’s nice and smooth for owners.”

Other strategic planning goals have centered on bringing value to employees (e.g., offering opportunities to connect in a fun atmosphere) and increasing training related to technology and soft skills (e.g., dealing with challenging situations or conducting professional meetings).

“As picky as we are about bringing people on board, we also need to make sure we can retain them,” Kirby says. “Every employee out there is getting calls from competitors.”

In a similar vein, Verdex has emphasized subcontractor relationships from the get-go. In this market, subcontractors can be choosy and still get plenty of work, so Verdex sets itself apart by cutting checks as quickly as possible. In short, prompt payment pays off and creates a following.

Another component of the initial strategic plan that continues to drive the business is being able to meet high-end clients’ needs. As such, Kirby and King keep an eye on the mix of projects being performed—ideally four to five “slices of pie” in the hospitality, multifamily, mixed-use, industrial and public sectors—along with job sizes varying from $500,000 to $75 million.

This year, Verdex will hit $140 million in revenue with a healthy backlog for 2019. Kirby marked the occasion by bringing on a COO to work in tandem with the CFO who was hired when the firm reached $100 million. Controlled growth remains a priority for the executive team.

“We’ve been asked to go out of state, but we didn’t feel like it would be a success for us at this point,” Kirby says. “When we’re making a decision about whether we want to go down a particular road, we can look back at our strategic plan and our original mission of ‘Building Something Better’ to make sure the decision benefits both our company and our projects.”

For additional insight on strategic planning and building organizational trust, see this interview with Stephen M. R. Covey, New York Times best-selling author and founder of FranklinCovey’s Speed of Trust Practice.