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Gary Energizes Happy Heating - Level 3 - "I Win"

Dec 19, 2019

{This blog post is part of an ongoing series of posts that tell a story.  If you haven't read the previous posts, you will be lost.  Here is the first post in this series.}

“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” ~  Steve Jobs

After hearing the data presented to him by Russ on Margaret’s customer survey, Gary slumped down in his chair.  Just when he thought he had figured out his business, he realized that he could do better by better understanding his industry. 

Gary said, “We have invested so much in beating Easy Heating & Cooling, and it seemed to be working for us. What are we supposed to do now?”

“Gary, is it okay if I assign you some homework for our next meeting?”


“Gary, I’d like for you to prepare for me a revised business plan that creates a sustainable business model with all of the costs in place to hire enough people so that everyone is not working ridiculous hours.  I’d also like you to sit down with Margaret and Sally to discuss the customer survey results and create marketing and sales processes that give greater value to what your customers value.  What do you say?”

Gary sighed, “I suppose I can do that.  I think I may even bring Margaret with me to a few clients to have deeper discussions than what we are seeing in these surveys.”

Russ smiled, “That would be great.  I’d also like to see a plan to get some of your previous sales people and technicians back.”

“What?  I can’t afford those folks.  Now that we’re going through another one of your changes, it seems like it’s going to be stressful again.  I doubt they’d come back if they didn’t like how stressful it was before.”

“A big part of Level 3 energy is understanding where you went wrong and taking responsibility for your mistakes.”

“My mistakes?  You’re the one who told us to ‘go competitive’.”

Russ smiled, “Right you are.  However, that was one step on a path to fully recovering your business.  Remember, one step at a time.  You successfully went from Level 1 to Level 2.  Now, I’m asking you to continue on to Level 3.”

Like the previous year, Gary took Russ’s advice to heart.  Gary revised his business plan to account for increased wages of bringing his more experienced staff back.  He had to let go of some of the rookies, but he did what needed to be done to accommodate the current market environment.  His customers wanted expertise, and he knew that his previous staff were experts.  Naturally, as Gary ran the numbers, he knew he had to increase his prices.

Gary met with Margaret and Sally to strategize how they would market and sell their higher priced expertise.  As promised, Gary had fierce discussions with many of his customers to craft the marketing message that Happy Heating would use moving forward. 

In addition, Gary had Oliver ask his technicians to have clients complete a brief customer satisfaction survey every time they completed service for a project.  

Happy Heating ended this year with slightly less profit than expected as they spent a lot of time re-tooling their business to make the changes it would take to move from Level 2 to Level 3.

Employees at Happy Heating started to feel a little more at ease.  While they were still expected to show up on time and do their work, there was less stress because their new business plan allowed for reasonable profit margins and staffing levels to do their work well.

A year had passed since Gary implemented the shift from Level 2 to Level 3.  This time, Gary didn’t call Russ.  Instead, Russ called Gary.

Russ started, “Hi Gary, I wanted to check in and see how things are going with Happy Heating?”

Gary remarked, “They’re going fine, Russ.”

“Great to hear.  Can you give me a sense of how you’ll do this year?”

“Based on my most recent financial projections we should make about $100,000.”

“Wow.  That sounds great.  How is the mood around your office?”

“I suppose it’s okay.  You know the routine.  Some folks are happy while others have to complain.”

“Your right, it’s hard to please all of the people all of the time.  I’m curious to know what happened after the changes you made last year?”

“We managed to get back two of our sales people, but we couldn’t entice Alex to come back to work for Happy Heating.  He had already found a new home at ACME Comfort Systems.”

“How did your customers react to the higher prices?”

“It seems like we got mixed reactions.  Some customers seemed to buy from us based on our new marketing and sales messaging that we put together.  But some bought from Easy Heating & Cooling who was still offering lower prices.”

“It sounds like things worked out, if your going to show a profit of $100,000 this coming year.”

“I suppose.  It would be nice to get back to the growth we once had, but I suppose that’s asking too much.”

“Growth is a challenge for many small businesses.  I’m primarily curious to hear how Oliver, Sally and the rest of your employees feel after the changes you made this past year.”

“I think they are content.  Because we haven’t been doing that great, I didn’t offer raises this year.  I think they’re a little angry about that.  Especially, after their hard work a few years back.”

“That’s understandable.  What do you plan to invest your $100,000 profit in this coming year?”

Gary paused as he really hadn’t thought about re-investing.  He always considered his profit to be a cushion for bad times… Not an investment source for the future.

After the pause, Gary responded, “I really hadn’t thought about it.”

“The reason I ask is that you haven’t given your people raises and yet, you have money to pay them more.  What if you reward your staff and give them some of the profit they’ve helped you earn this past year?”

“C’mon, Russ.  I already gave them back the pay-cuts that we implemented in our ‘competitive’ phase.”

“How generous of you.”

Gary was getting annoyed, “Russ, you know how it works.  We’re going to have a bad year eventually, and I need money to hold me over in those bad times.  If I give out raises now, I’ll regret it when I have to lay off people in the bad times that are bound to come.”

“That could happen, Gary.  You need to pay your people what they’re worth.  It sounds like you will skip raises this year, and your employees may feel they are worth more.  If they leave, you’re back to the same problem you had when you lost some valuable people a while ago, right?”

“I suppose.”

“Gary, do you remember the energy levels that we’ve been using with you in the past two years.”


“I think that you have successfully moved your company from Level 2 to Level 3.  How would you like to learn about Level 4?”

“I don’t know, Russ.  Things are actually pretty good at Happy Heating.  We aren’t killing it, but we are doing okay.  If these profit numbers continue with maybe a little bit of revenue growth, I think we’ll be fine.  I’m not really interested in fixing something that isn’t broken.  You know what I mean?”

“That certainly makes sense, Gary.  However, I think that Happy Heating can be so much more than another HVAC service company.  What do you say?”

“I guess I’m up for a meeting, but honestly, I don’t think you’ll find any problems with Happy Heating like you have in the past.”

Russ set up another meeting with Gary to discuss energy levels.  As before, Russ sketched his list of energy levels on Gary’s whiteboard and added a fourth level:

Level 1 – Victim – I Lose

Level 2 – Compete – I Win, You Lose

Level 3 – Responsible – I Win

Level 4 – Compassion – You Win

Russ pointed to Level 3, and said, “This is where you are currently.  Level 3 is called Responsibility, and the core thought for this level is “I Win”.  Again, you’re not necessarily concerned about beating a competitor at this level, but you are interested in moving your company forward and doing what it takes to serve customers to the extent you need to.”

Gary commented, “What else can we do?”

Gary could certainly read for himself, but Russ went ahead and introduced the next level, “Level 4 is the next level.  The title of Level 4 energy is Compassion.”

Gary interrupted, “Compassion?  Since when did ‘compassion’ get you anywhere in business?”

Russ smiled as he continued, “The core thought in compassion energy is ‘You Win’.”

“What?  Are you saying that we should help ACME Comfort Systems and Easy Heating & Cooling WIN?”

Russ chuckled, “That’s a good one.  Actually, the YOU in this particular case is your customers and your employees.”

“We must already be at Level 4, Russ.  We asked our customers what they wanted, and we’re now doing what they asked.  This was the change we made last year. Remember?”

“You’re right in a way, Gary. You did exhibit a small piece of Level 4 energy by asking your customers what they wanted.  However, your motive for doing so was to better assess your market place and adjust to that market place rather than solely competing with Easy Heating & Cooling. Level 4, Compassion Energy is primarily concerned about helping others.”

Gary interrupted, “Wait a second, Russ.  We do help others.  What do you think it would be like having no heating or cooling in a house or an office building?”

“True enough, Gary.  I’m talking about taking your compassion beyond the level of doing business.  In other words, if those people didn’t pay you, you would not provide heating and cooling for them, right?”

“Oh my God!  You’re not saying we should start giving away our services, are you?”

Russ chuckled again, “Of course not.  The compassion that I’m talking about is truly putting yourself in the shoes of your customers and your employees.  Many companies give lip service to customer service and the fact that their employees are their greatest asset, but few put their money where their mouth is.”

“I know where this is going… You’re still sore about me not giving my employees raises this year.”

Russ was serious now, “It’s really not about the money, Gary.  It’s about investing in people as opposed to protecting yourself against some unknown risk in the future.”

Gary paused as he let Russ’s words settle in.  Could it be that Russ was right?  Was he simply afraid of what could happen in the future. 

Gary responded, “I guess I understand your point, but what if I give raises to my people and they don’t respond with increased productivity?”

“That sort of thinking is still at Level 3.  Up until now, Gary, this has really been your company with a lot of employees that work to increase your wealth.”

Gary mocked, “Russ, isn’t that the purpose of a company?  We provide a service and I give people jobs, so they can support their families.”

“The money is certainly something that all people need.  But the fact is that most people are looking for much more than a paycheck from their employer.  They want to feel like they are a part of the company… that their ideas are contributing to the growth of the company.  They want to grow and learn and expand their skills.”

“That makes a lot of sense, Russ.  But I’m not sure how we can accomplish that within our current market.  We’ve managed to do okay in HVAC services.  In fact, we are one of the preferred providers in our community.  We have continued to take customer satisfaction surveys, and our customers seem to like us.”

“There is no question that you’re fine where you are now.  And, if you give your employees a small raise, you’ll probably continue to do okay.  What if you can do more than just be okay with the people who rely on your company?  What if your employees become nurtured and truly happy working for Happy Heating?  What if your customers become so loyal that there is no other provider that can come close to providing the care you provide them?”

Gary took a big sigh, “You’ve given me a lot to think about, Russ.  Can you give me a few weeks to get back to you on whether or not I want to try still another change with Happy Heating?”

“Of course.  You know my number.”

Over the next few weeks, Gary thought long and hard about what Russ had said.  On one hand, he was content with where Happy Heating was, but he also remembered his time as an employee at ACME Comfort Systems.  He remembered how he felt like there was no room to grow and he would always be a technician if he remained working for them.  He knew that some of his talented employees felt the same way.  He knew Sally had developed amazing sales and marketing skills and could get a job anywhere she wanted. For now, she chose to continue working for Gary.  He also knew that Oliver and a few other technicians could do their own business… it was just a matter of time.

So, what?  He loses a few people that he can replace over time. 

Gary knew that he wasn’t content either.  He had grown the company to its current level, but he knew that it could be so much more.  He also knew that it was time for his team to start contributing to that growth and that he would need to change the way he leads to get Happy Heating to its next level.


Identifying Responsible Energy

Responsible energy is quite admirable for any company in today’s modern space.  It means that the company has found a way to be successful without engaging in highly stressful competitive activities.  You can identify Level 3 energy with a sense of progress.  Most people at Level 3 like achieving and reaching goals.  They tend to make progress despite whatever else is happening around them.  To be sure, you would be fortunate to hire and retain Level 3 employees in your company.  They will take responsibility to heart and do their best.

While this responsibility and self-control is a coveted trait, it can also be limiting.  Level 3 employees and business owners are content to stay where they are.  They don’t want to rock the boat or try new things.  This limitation can be quite damaging when the company must change to adapt to a changing marketplace.  You will easily be able to identify strong Level 3 energy in your employees when you want to innovate, and your employees want to stay put.

SHIFTING Responsible to Compassion

Most people at Level 3 are stuck inside their own thinking.  They are quite responsible and dependable by themselves, but they fall apart when it is time to collaborate with others.    

To shift a person from Level 3 – Responsibility to Level 4 – Compassion, you need to highlight the advantages of teamwork.  In most cases, a business owner will want their employees to make this shift either because they’ll be required to manage people, or they’ll need to engage with customers.  In either case, their people skills will become quite important in their new role.  If you promote someone to a leadership level or outside sales without giving them leadership training, that person will most likely never shift to Level 4.  Instead they will be convinced that they never want to manage another person again. 

There are two forms of leadership training that will help a Level 3 person shift to Level 4: 1) Empowerment; and 2) Personality Traits.  Empowerment is simply the awareness that people don’t like to be told what to do, they want to engage their minds and come up with solutions on their own.  Personality traits can most easily be taught by using DiSC or Myers-Briggs personality profiles.  Both of these leadership training efforts will result in shifting a Level 3 thinker to a Level 4.

If you want to shift a sales person to Level 4, they need to stop selling features, functions and benefits, and start developing relationships with their clients.

STAYING Responsible

Most successful mom & pop companies reach Level 3 and never make it any further.  Level 3 companies will tend to find ways to survive and be a comfortable place to work for the owner and most employees.  If you want a stable income with little change, Level 3 is a great place to be.

You can prevent slipping back to Level 2 or Level 1, by reinforcing personal responsibility and accountability in your employee management practices.

Why Level Up?

If you are trying to build a company that will continue to grow and provide opportunities for your employees, you will need to find a way to shift to Level 4.  At Level 4, the business owner is letting go of making things happen and truly empowering his or her people to grow the company.  As a business coach, this transition is one of the most difficult to make because most are quite content to live at Level 3.

Core Energy Coaching™ and all core energy concepts described in this post are registered trademark belonging to Bruce Schneider and the Institute for Professional Excellence in Coaching (iPEC)

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