The Secret to Tackling New Technologies: Coffee break with Cathy and Caren
WE WENT INTO OUR VISIT AT ASF ELECTRIC INC., DALY CITY, CALIF., expecting to discuss successful—but mostly conventional—approaches to the electrical service and maintenance business. But we came away from our visit with a passel of novel ideas that most service-related electrical contractors could readily put to work.
Cathy Lagomarsino, president, and Caren Ferrari, treasurer and director of operations, daughters of company CEO Andy Ferrari, welcomed us into their conference room.
“Always Striving Forward” is your company motto. That’s a great philosophy. How does it translate into everyday activity?
“We depend on our service operation to act as a catalyst for our entry into emerging technologies like electric vehicles, battery storage and solar power,” Lagomarsino said. “Staying a step ahead has been a permanent part of the company’s modus operandi from its very beginning.”
We gather that there are many maxims that have guided ASF Electric over the past 50 years.
Ferrari seized on one immediately: “Our dad has always stressed the ultimate importance of customer retention.”
A quote from renowned professor Peter F. Drucker says the purpose of business is simply to find customers and keep them.
Ferrari agreed that if you adhere to that dictum, “You’ll always remain in business.”
Speaking of remaining in business, how would you characterize the effect of pandemic-related disruptions and the resulting fallout on your company?
“Some of the organizations that have provided our long-time, traditional sources of business have not recovered from the setbacks that they suffered,” Lagomarsino said. “Meantime, throughout this period, our service business has grown consistently.”
That’s good news with respect to the top line. What about the bottom line?
Lagomarsino reported that the company’s service-related profit margins were in line with industry norms and amounted to three times the company’s new construction profit margins. Key to that is the company’s disciplined approach to ensuring that billable hours correspond to paid ones. In that regard, the company has a policy requiring a two-hour minimum charge for a service call.
We are fond of pointing out that an electrical contractor performing new construction and service-related activities has one company but two businesses. Service is not just a scaled-down version of construction.
“We completely agree. By and large, these two businesses require different skill sets from electricians,” Ferrari said. “Service electricians are more likely to be on their own from start to finish of a job, 100% responsible for its outcome. They must have people skills because relations with the customer are almost entirely up to them. On the other hand, customers like having an electrician who knows their facilities and is committed to taking care of them.”
You have expressed some original ideas about ways we could improve the training and preparation of service electricians.
“Yes,” Ferrari said. “We have had some discussions about early identification of apprentices who would like to get onto a career path toward becoming service electricians. We would be more than willing to invest in training them.”
Are your thoughts on this subject a result of the experience the two of you had in the 1970s and 1980s coming into the business?
“When we started out, our father channeled us through the training and education that prepared us for the roles that we have in the company today,” Lagomarsino said. “In the 1970s, the customer’s attention was consumed mostly with the field installation itself. Today, the customer is far more interested in documentation, technology, management and other such matters.”
Today, he continues as CEO, the two of you are president and treasurer, respectively, and ASF Electric is a woman-owned business. Quite a lot has happened since 1971.
Lagomarsino and Ferrari together said that their father, now 92, who began his working years as an electrician, rose through the ranks to superintendent and made the leap to entrepreneur, has never lost his special talent of being able to relate to anyone on the spectrum between the construction site, the company office and most of all, the customer’s organization at any level. In their words, he is a Renaissance man.