"When we started in Baltimore," Warner adds, "I had a mechanic there who never came to our office. He Fed-Exed his work tickets and purchase-order receipts to us twice a week, and it worked fine. If those guys could work independently, why couldn't everybody?"
That October Warner decided to introduce that system on a broad scale. His Harvard experience had taught him to think creatively about solutions. He knew that when he gave employees autonomy he'd relinquish a great deal of control, but he thought the risk was worth it. Thus was born the ATD program.
Warner wasn't sure how to launch it. He knew he wanted experienced Warner plumbers and HVAC technicians, masters, and journeymen who had worked effectively and independently for at least five years. He assembled a dozen mechanics -- willing volunteers and others who were encouraged to volunteer -- and turned them over to Harrison for training. "At first nobody understood what I was talking about," Warner says.
For that pilot group, Harrison crafted a six-session curriculum focused on practical skills -- how to manage time, stock the van, and handle customer complaints. He permeated the curriculum with advice to the mechanics on marketing in their assigned zip codes. "We weren't trying to make them master salespeople but to make them understand that they played a big role in the sales process," Harrison says. "We wanted them to use some ingenuity to build their own businesses."
"Most HVAC technicians and plumbers have a secret desire to start businesses," Warner says. "Usually, they quit and try to take customers with them. I wanted to give my workers a terrific opportunity to make more money here than they could make out on their own -- without a big financial risk."
In Warner's vision, the ATDs would penetrate the residential market by developing the daylights out of their territories. Within their zip codes, they could generate referrals, keep customers for years, and develop personal relationships. They'd schedule their own work and do their own estimates. They'd handle their own equipment, craft their own advertising campaigns, do their own sales work, and collect their own receivables.
The company would provide training, trucks, tools, phones, pagers, dispatchers, and an all-night answering service. It would perform such chores as payroll and taxes. Tom Warner, in his Superplumber costume, would shoulder an advertising budget of $1.2 million a year. And eventually, he'd feature ATDs in TV commercials of their own.
Hearing all that, Harrison was astounded. "Most people at Tom's level don't want to give any autonomy to their employees -- not in the trades, anyway," he says. "His approach was unique."
Harrison himself had no small part in the drive to get the 18 branch managers on board. They were no-nonsense guys, hardened by long exposure to sewer clean-outs, blown boilers, and the odious hunks of slime they'd snaked out of drains. "Our challenge with the branch managers," Harrison says, "was to make it clear that they were going to be coaches more than bosses, leaders more than managers. Their chief mission would be to develop their people -- to give advice and guidance. We were taking them out of the plumbing business and putting them into the people business."
As the magnitude of the change dawned on the managers, some felt threatened. The mechanics, soon-to-be ATDs, it seemed, were taking on most of their duties. Were they being booted out? Warner assuaged their fears. He was, in fact, making all the branch managers vice-presidents. And in addition to their usual salaries of $1,000 to $1,400 a week, they'd each be eligible for a bonus of 20% of the pretax profits generated by their respective branches. In a good branch, that could be $60,000 a year or more.
The key, increasing billable hours, was achievable because Warner had switched from time-based charges to a flat-rate system, also called job quoting. Drawing on years of experience, the company calculated the average time required to complete the most common jobs and set its charges accordingly. Flat rates now allowed for "bonus time," and mechanics who worked faster than average would benefit from their own efficiency.
In 1992 Paul Mattes, an HVAC technician in the Gaithersburg, Md., branch, made $52,000 -- on the high side of average. Last year, his first as an ATD, he made $67,000. This year his goal is $90,000. It's bonus time that makes a jump of that size feasible.
"We're allotted two and a half hours to change a condenser-fan motor, for instance," he explains. "In 23 years I've changed thousands of motors. If I do one in an hour, I still get paid for the allotted time. Then I move straight to my next job. At the end of the day I might have done six jobs in eight hours. But since we now get paid by the job, not by the time it takes to do it, I might get paid for 16 hours. Instead of making $160 that day, I'd make $320. We also get 30 minutes of paid travel time between jobs. In these tight zip codes, though, the next job might be just down the street. In fact, I schedule my appointments based on location. I used to drive 75 miles a day. Now it's about 30.
"That's how you make more in less time," he adds. "About 30% of my income is from bonus time. Under the old system, there was no incentive to work quicker. You got your $20 an hour or so whether you changed the motor in one hour or four. We're more productive, and the company is more profitable."
Even with all his bonus time, Mattes reports that he has "more time to deal with each problem. I have time to repair. Before, when I ran all over the county, I was more concerned with time and getting to the next job. Now I'm not rushing, and the more time I can take, the more things I can find. Not that I'm looking for them, but I want to do an honest job." Before he became an ATD, his average "ticket" -- representing roughly an hour's work -- was $177. Now it's $390.
