Foreword for HVAC Spells Wealth Book

by Matt Michel

When I first heard about Ron Smith he was already an icon. In the mid-1980’s I was a young grunt working in the corporate offices of Lennox Industries. Ron Smith was already a legendary contractor. Ron was single-handedly reinventing the business of HVAC contracting. Today, we accept the basic contracting business model Ron created as a matter of course, but when Ron started it was radical.

Prior to Ron Smith most contractors saw service as an imposition. The replacement market was, at its best, in its infancy. The action was in new construction. Conventional wisdom said the way to build a big profitable contracting company was to compete in the field of residential or commercial new construction. Ron turned this notion, and with it the entire industry, on its head.

Counter to conventional wisdom, Ron built a big profitable company through retail–service, replacements and add-ons (complete systems in existing homes). A $15 Million fully diversified company, including the residential and commercial business, is nothing to sneeze at in today’s world. In today's dollars that translates to about $45 million dollars. In the early to mid 1980’s it was beyond comprehension. Yet Ron Smith did it. Not only did Ron build a huge and wildly successful company, he did it in what was then a small one-season market with a transient population that migrated south in the winter and returned north as the mercury rose. He did it in Ft. Myers, Florida. It is hard to sell furnaces in Ft. Myers.

Building Modern Air Conditioning was sufficient to make Ron a legend, but not an icon. Freely sharing his innovations, his ideas, his techniques, and his approach made him an icon. Ron became the industry evangelist for service, marketing, sales and profitability. He generously told anyone and everyone who would listen how he built his company and how they could replicate his success.

And listen people did. Contractors turned out when Ron spoke. Everything he wrote was widely read. He was the guru. You paid attention to the guru.

It wasn’t only contractors who followed Ron’s teaching, advice and counsel. Manufacturing executives, trade magazine editors and publishers, and association executives all paid close attention to Ron. I know. I was there.

While I wasn’t there for the start, at Modern Air Conditioning, when it served as Ron’s laboratory for HVAC innovation, I have spent long hours listening to the people who were present at the creation. It must have been a heady time. Modern’s sales force included Tom McCart and Charlie Greer. The sales manager was John Young. All three went on to become national figures in the HVAC industry.

Recruiting is one of the key success factors for great leaders. Over the years many of Ron’s hires have gone on to become industry all stars. Greer, McCart, and Young were not the only ones. Later he brought Al Roach and Ruth King into the industry. Ron has recruited an impressive roster of industry leaders.

Some of the innovations Ron introduced include the residential service agreement–which he literally invented. Most service agreements continue to be based on Ron’s original design. In fact, it’s remarkable how many of the HVAC sales techniques, marketing, business forms, procedures, processes and systems now ubiquitous in our industry can be traced back to Ron. Hiring salespeople from outside of the industry and dedicating them to selling replacements was another of Ron’s radical innovations. Although they did not know it at the time, Charlie Greer and Tom McCart were hired as experiments. The experiment succeeded. At Modern, Tom became the industry’s first salesperson to sell a million dollars of residential replacements in a single year.

Ron broke ground when he formed his service maintenance department by hiring young men and women, training them to perform top quality precision tune-ups, and allowing them to advance through a structured training program to the status of full-fledged service technicians. Ron also pioneered in the hiring and training of women as salespersons and service technicians.

Among Ron’s visionary moves was the establishment of Service America. Before consolidation, before contractor alliances, and before all other contractor groups, there was Service America. As the industry’s first residential franchise, it was also the industry’s first private contractor group.Service America was the tool Ron first used to disseminate his business philosophy and methods nationally. After Service America, he trained thousands how to sell and market through his year long Dominant Market Share program. And, of course, he continued to speak at industry events and write for industry publications.

After the consolidation movement swept through the industry and initial principals cashed out, someone had to figure out how to make the behemoths profitable. Service Experts turned to Ron. He served as Chief Operating Officer of Service Experts until its purchase by Lennox.

Ron has received about every award and honor the HVAC industry has got to give. He was inducted into Contracting Business Magazine’s Contracting Hall of Fame. He’s been presented with Service Roundtable’s Servant Leader Award.

With all the accomplishments, the honors and awards, not to mention all the praise from his peers, a lesser man might succumb to egotism. Not Ron. He is surprisingly down-to-earth, humble, and approachable. Ron Smith is a genuinely nice person.

Ron is retired today. Well, sort of! He continues to consult on a limited basis. He helped found Service Roundtable and serves on its Board of Directors. He is a contributing editor and on the Advisory Board of HVACR Business, a trade journal. He owns and manages a farm south of Nashville. He has a real estate license and a remodeling contractor’s license and is active in the real estate market. He is quite active in his church and with his wife participates in church mission trips around the world. He hikes all over the world. Actually, Ron is more active in retirement than most people are in the peak of their careers.

And, Ron found time to write this book. I was excited when he told me he was going to write it and urged him to do so. Contractors need it. Consultants and trainers need it. Trade schools need it. Manufacturer and distributor territory managers need it. The industry needs it.

A few years ago at HVAC Comfortech a group of us were sitting around the table brainstorming solutions to all of the industry’s problems under the charismatic direction of Don Kardux. The group included Dominic Guarino, David Holt, Charlie Greer, Tom McCart, Mike Weil, and others. Don asked each of us who we considered the industry’s best marketer.

It was unanimous. All of us named Ron. He’s still the guru.