As part of my series about the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times,” I had the pleasure of interviewing author Dave DeRose.
Business author Dave DeRose moved to Craig Colorado, a small NW Colorado town to start a career in the plumbing and pipefitting industry. After teaching apprenticeship classes, as well as being a supervisor, he started his own Plumbing HVAC/ Refrigeration firm which grew from one man to a crew of as many as 15 and became the go to contractor in the area. After a few years Dave ran for city council and later was Mayor of this community for a total of 6 years before term limits were met. Also serving on the founding board of a Boy’s and Girl’s Club, which after a few short years expanded to Steamboat Springs a neighboring community, while he was President of the board with the prompting of citizens of that community. Additionally, investing in and serving on a community owned bank board in the same 2 communities. Selling the business, he now resides in Grand Junction, Colorado where he grew up and has written a book “The Principles of Business” based on his over 27 years of experience in business.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
After working for someone else for my entire career and serving as supervisor and even managing projects I was employed by a small plumbing company who decided they had a cash flow problem and the solution was to reduce my wages 35%. I met with a friend who was moving away and purchased his clients and started Masterworks Mechanical as a one-man plumbing HVAC/ Refrigeration contractor from my home.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I would say my biggest mistake was hiring my first employee the way I did. I was young and knew I needed to have another plumber and while my concept of replacing one of my skill sets with an employee to handle that was sound, my first was an individual that would rather hunt than anything else and took several weeks off shortly after being hired. In our town, hunting is a big thing and though he was not being paid, the reason for hiring a person was we were always very busy during the fall which is the normal hunting season. The funny side of this is he wanted to have a sewer cleaning machine which I never cared for and our first job call with this new machine he talked me into was performed by me during hunting season. My take away is always hire to increase your productivity as a company not to just give yourself someone else to baby sit and cover for.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I was lucky to have several that come to mind. Three years after working for another contractor I visited him in Denver and told him my plans and he encouraged me to make the leap and even told me when he was my age he had started this company and wished he could start this one with me as it was an exciting time. Another was the couple who spurred the starting of our Boy’s and Girl’s club and they were a constant source of encouragement and help with not only the club but my direction in business as well. Finally, one supplier who always was available to help and advise whenever I needed a sounding board.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
I have to say that my first thought was to provide for my family. As a single father, I wanted to make a dependable life for me and my son. In just a few months I realized that this area needed a dedicated business that not only provided a service but also was an inspiration to the entire community. From non profit work to performing services for those who desperately needed plumbing or heating and could not afford it for a greatly reduced price and many times for no charge at all. I began to view this business as a ministry to our community. A go to place for help even outside of our core business of contacting plumbing and heating services.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
There have been several times in the 27 years I owned this company that challenged my dedication to staying in business. One period that stands out is 2009. We were in a major downturn and while this area was not a booming area we had carved out a very nice market that was profitably employing a good size crew and meeting a lot of needs. Our gross revenues fell $750,000 from 2.2 Million in 2008 to 1.45 Million 2009. It was a challenge and we were open with our team and actually took a 30% reduction in our personal pay to help weather the storm. The rest of the crew were kept working at the same pay with the benefits we had at that time established, a 401K plan and a company health insurance plan and we managed to still make a profit by tightening our belts and getting lean in operations. While I had to work harder to keep work ahead of the crew and take on work I would not have bid 2 to 3 years before this it made the firm a better operation and made me a much better manager.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
There were several times that I considered just giving up but the one that stands out is the mistake made by an administrative employee that I originally thought would sink us. I came close to closing the doors but what kept me from doing that was my realization that I had a good hard working crew of technicians that performed a great service to our community and the belief that we made it a better place to live than without us. I decided to keep open and went through the problem which proved to be a non-event and separated the company from this mistake ridden employee.
What would you say is the most critical role of a leader during challenging times?
That question demands that we define leader. We see many who call themselves leaders in our world today and while they may hold the position either by default or even election most cannot lead through good times let alone a challenging time. Everyone on the face of this earth needs a leader at one time or another and many want to be led all of the time. All that being said a leader can manage emotions through all times. They can keep elation and celebration in perspective when times are good and can mitigate fear and misery when there are challenges to be dealt with.
While that is the operational trait of leadership they also must find a way to command the respect and provide the confidence to wait through the tough times. They also must believe for certain that these times will pass and convey that to all they have under them.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
I always found that I must be willing to do anything I was asking of my staff. If there was a ditch to be dug, I should be willing to do that. If there was a tough decision to make, they needed to see me make the decision and take action. When I spoke of reducing my personal salary in 2009 I did that to let them know that I was putting their needs before my own and not taking a big salary and draining the company of funds we needed to survive. This proved to be inspiring to my staff. That I believe is the reason many of them were offered other jobs over many years and refused to discuss it with the other employer as they respected me as their leader.
What is the best way to communicate difficult news to one’s team and customers?
I am not a big fan of communicating difficult news except in person and face to face. That is the only way true emotions and concern can be shown to the staff whether that be the entire crew or on a one on one basis. I always held a meeting with the entire staff if that was proper or a small group or individual if the news warranted that. Also keep short account of the news and attempt to stop a rumor mill that will begin as soon as you hire a second employee. It happens in all groups of people and those who think it does not are fooling themselves. The sooner an issue is dealt with the less infection there will be.
How can a leader make plans when the future is so unpredictable?
I think we forget that times have always been unpredictable. Think about the last 100 years in the history of our nation. We have survived 2 world wars, a great depression and stock market crash, several smaller military actions, an attack on our home soil twice Pearl Harbor and 9/11, a presidential assassination, and industrial revolution, multiple racial issues, and many earthquakes, hurricanes, tornadoes, wild fires, and other natural disasters, and now 2 pandemics. As a matter of fact there have been very few runs of more than 4 to 5 years we did not see one or many of these things effect our lives.
Think about the fact that John F Kennedy, the President who was assassinated, was also the one who made the promise to go to the moon because it was hard. Just a few short years after his death we were making one small step for man and one giant leap for mankind. By the way we also experienced many of the negative things mentioned during those few years as well but we still landed on the moon.
We did that because there was a plan in place and it stayed in place with no regard for the extenuating circumstances. The leader that does not make plans will fail from their own accord and while there are plans in place they must remain vigilant to make the decisions and changes needed to keep the course and see the best outcomes possible. Failure to plan is nothing but a lazy excuse for not producing and will always be met with failure of the leader.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
Every company must have a mission and know what that mission is. Whether it is to perform plumbing and heating, finance major projects, or be a non profit who attempt to better the lives of children. Stay true to what you are there to do and define that and the steps it takes to perform at an exceptional level. This will aid in your seeing less downturns in turbulent times and also keep you from making foolish mistakes in very good times. Be true to who you are.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
The first mistake is to stop advertising. I rarely used advertising as we were so busy I did not want to pay to have people mad at me when I had to say no due to work load. That being said in 2009 I started advertising more than ever and it helped to create some profitable work that we had never chased before.
Second is to not take care of those who take care of you. Many businesses spend multiple dollars attracting new customers and few or no dollars maintaining existing customers. Learn to classify your customers and say yes and thank you to the good ones that are happy to have you there and no thank you to the ones that cost more to serve that you could ever profit from serving them.
Third lack of planning in both a broad sense and even every task that the business performs. As a manager you are not there just to sit around and talk to everyone or plan your next vacation. You are there to manage the business and take that seriously. In the words of a Bachmann Turner Overdrive song “ Take care of business every day and every way”. I have seen this in every type of business I have ever been associated with.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
I always wanted to be prepared for new business before I began to hunt for new business. I have witnessed many companies who advertised and marketed to gain new business that they could not fulfill with excellence. I think that is a major problem in our nation as we all want to grow but we rarely want to plan to grow.
Increasing profits or maintaining is not only about growth but also about management of operations. Without management the cost of the business may exceed any possible gross revenues and usually those businesses are left with the task of finding tomorrow’s business to pay for yesterday’s problems. You can continue to forge ahead with planning and management to keep your margins profitable and managed in good times and difficult times as well.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
- Prepare your self and consider all the situations you may encounter. Spend time making yourself a better person, manager, boss, and visionary. I have spent many hours in thought as well as prayer and also reading and listening to books and other instructional methods. Work hard to be the best that you can be.
- Plan for each part of the future of your company. From the newest and lowest employee to what will you do when the oldest finally retires. Look at contingency plans for all situations and you will never be surprised totally. You may be annoyed but you have an opportunity to make your company better with the right decisions. One of my favorite series of books is Good to Great and all of those that follow.
- Understand what the facts are of every situation you encounter. Take time to look at all sides of any issue and make the right decision. When I decided I needed to offer health insurance long before the Affordable Care Act I wanted it to be the very best I could afford. I did not settle until I found an affordable and comprehensive solution. While rolling this out in a company meeting the agent was surprised to hear one of the single guys say “Maybe the single guys should pay a little more to help offset the guys with families”. That was the first time in his insurance career he had ever heard that type of team dedication. They appreciated that I was looking for something valuable for them not just checking a box.
- Be honest and open with all of your staff about what the times are bringing. They will appreciate that and make sure they know your heart.
- Be true to your mission and what you as a company are. Keep your company’s personality at the center of what you do and make this an anchor of your operations, decisions, and daily performance.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Luck favors the prepared mind” and “Know the Truth and it will set you free”. While that is 2 quotes, they are hinge pins for each other. It may sound odd that the first is a quote from a Stephen Seagal movie Dark Territory, but I have found that this in hand with knowing the truth will be a great guide to what you can accomplish. A personal example is in my service to the Boy’s and Girl’s Club as a founding board member. In 2006 we had a board retreat and while at this retreat we asked ourselves as a board if we would consider branching our to other communities if the opportunity presented itself and the stars if you will were aligned. In 2009 a donor and future board member in Steamboat Springs called and told us that they had sold an expensive property and she was ready to have a club in Steamboat and had a six-figure sum to fund it. She also called in late winter and wanted the club open by summer. Realize it took 2 years of work to get the existing club started but because our board had prepared their mind and the truth of the matter was we had the money and the drive in Steamboat Springs we embarked and in June of 2009 we became the fifth largest club at that time in the state of Colorado. The other four were all in large metropolitan areas such as Denver and Colorado Springs to mention 2 of them. Luck absolutely favored our prepared minds and while there was a lot of work to do not only in administration but in mindset, we were able to keep that going now for 11 years in Steamboat and 16 in Craig. This lesson also applies to business and the mind of any leader.
How can our readers further follow your work?
My book “The Principles of Business: Understanding What Makes a Business Successful and Valuable to Society” can be purchased on Amazon, Barnes & Noble, and iUniverse.com. I am embarking on some teaching situations that have been delayed by the pandemic so that is not available at this time.
