“The Big Picture”
Featuring Mike Murphy
Intro: Welcome to Profiles In Prosperity, the leading podcast for residential service contractors, sponsored by Service Roundtable and hosted by David Heimer.
David Heimer: Hi, this is David. Before we get into today’s episode, I want to say thank you to Daikin Comfort Technologies for sponsoring this episode. You know, Daikin, right? They manufacture Goodman, Amana, and Daikin HVAC Equipment. One of the many reasons I like them is that they support private labeling. If you’re in our industry and you haven’t considered offering a private label brand, you should. It’s a great opportunity to differentiate yourself in the market. If you’re interested in that, just contact us at Service Nation and we can help you create a powerful brand and a private label. And when we do that, we’ll recommend you use Goodman or Amana products for your private label. Give it some thought. And big thanks to Daikin Comfort Technologies for their support.
This is David Heimer. Welcome to Profiles In Prosperity. Mike Murphy recently retired as group publisher for BNP Media, which included responsibility for the ACHR News and Today’s Boiler. He has a long history in our industry, 13 years in the manufacturing sector, including training, sales, marketing, research, product development. He did all that with Lennox and Water Furnace. He was editor in chief of Contracting Business Magazine, editor-in-chief of the Air Conditioning Heating Refrigeration news, publisher of the ACHR news and he ended his career as group publisher for BNP Media. I first met Mike when we were early in our careers at Lennox. Mike was one of those guys you always liked to talk to, very personable, very intelligent, creative, and maintained an ethical perspective about work and life. Mike has an interesting perspective as a person who was intimately involved in the manufacturing part of our business, and from the trade press as well. He wasn’t just a reporter, he wasn’t just a publisher, he’s been a supporter of our industry, a cheerleader for contractors and a source of great information throughout the industry. So Mike Murphy, Welcome to Profiles In Prosperity.
Mike Murphy: David, thank you very much, and it’s a pleasure to be on with your audience here, and it’s always good to talk to you, so thank you.
David Heimer: Yeah, I should add that I relish the opportunity to sort of turn the tables on you and be the one to ask you the question. So this is a lot of fun for me. How does it feel for you?
Mike Murphy: You know what? Yeah, it doesn’t happen that way very often, but unfortunately, you set the bar really high there when you did the introduction. I feel like I better be really good today or else I’m going to let you down.
David Heimer: So you had an amazing career. How did you end up in our industry to begin with? I know you started off at Lennox. How did you get there?
Mike Murphy: Yeah, you know what? You’re right. I’ve been very blessed. It’s been a pretty good career I’ve had along the way. Funny thing is, I was working in the restaurant industry in Plano, Texas, which is a suburb of Dallas. Anyway, we had a regular bar customer, a guy named Craig. Craig used to come in all the time. And we started –
David Heimer: Craig Bernard.
Mike Murphy: That’s exactly who it was. He was a regular customer, we got to know each other, socially. And then one day he says, hey murph, you guys do a lot of training here in the restaurant business, don’t you? And I said, well, as a matter of fact, we have about 300% turnover. So yes, in fact, we do a lot of training. And at that time, I was one of the, I guess you’d call it the assistant manager, but also kind of specialized in training. So I was training new orientation, kitchen, front door management, you name it. And he said, well, why don’t you come into Lennox, because we’ve got a training position open in our education department. I’m like, wow, this is a lifelong dream, I’ve always wanted to work for a consumer marketing company. I go in, I interviewed for the job, and I didn’t get the offer. So I was like really bummed out. Well, about nine months later, Craig comes back and he says, Murphy, guess what? We’ve got another position open in Lenox. It’s in the same department, and we want you to be an editor/instructor. I’m like, so, okay. So I went in, I interviewed, I got the job and spent 10 years with Lennox. So it’s just one of those things where, frankly, it’s somebody you run into that’s a nice guy and brought me into Lennox Industries.
David Heimer: Yeah, Craig was a nice guy, very creative person too.
Mike Murphy: It’s almost like I had two careers because in a way, working in manufacturing for 13 years gives you a certain kind of a vision of what life is all about. So to me, everything was like split systems and thermostats and humidifiers for a long time, right? And then I go on to water furnace and I’m like, oh my gosh, there’s chillers, and geez, there’s boilers and there’s leaving and entering water temperatures. And I was like totally lost. But anyway, a guy calls me up one day, whom you happen to know as things work out, a guy named Matt Michelle. He said, murph, guess what? There’s a guy over at Contracting Business Magazine that’s looking for somebody to be their editor in chief and he wants to hire me, but he said, I’ve got something else going on, okay? And I’m like, well, okay, that sounds great. Long story short, I interviewed with the publisher at Contracting Business Magazine, he hired me in 1998, and I got into another area of our industry, which I was attached to for a very long time. But a little bit of manufacturing, marketing and a little bit of journalism. It was a pretty neat career.
David Heimer: It’s funny how many careers Matt has influenced, he has done almost the same thing for me.
Mike Murphy: I know exactly what you’re talking about. Matt’s, and you for that matter, David, both of you guys have been very influential in this industry and you’ve done some neat things. So it’s nice to have a friendship with you guys.
David Heimer: Oh, likewise. So contracting business, you were there for quite a while, and then you moved on to the ACHR News.
Mike Murphy: Yes, I was in the contracting business about six years, and a great magazine, really enjoyed it. And I’ll just kind of give the side story there. My intent when I first got there, when I talked to a gentleman by the name of Jeff Forker, who was a very influential man in our industry, who unfortunately passed away, but Jeff is the one that hired me there. The plan was, okay, Murphy, we’re going to train you to become the publisher someday. I’m like, perfect, that’s exactly where I want to go. Well, six years later, Jeff moved into a different position. lots of things started happening, and I didn’t get promoted to publisher. So an offer was made to me by someone at the news, the air conditioning, heating refrigeration news, and I’m like, well, that looks pretty interesting. I’d like to become a publisher someday. And the guy that was in charge, Tag Henderson, he said, well, he said, Murphy, I don’t see why we couldn’t do that. I said, you mean you don’t have any brother-in-laws or any cousins or anybody you’re going to jump in there ahead of me? And he starts laughing. He says, no, I don’t think so. Seven years later, it did work out, and I became publisher when my boss retired and I took over for him.
David Heimer: And then eventually you became group publisher and expanded beyond the ACHR News.
Mike Murphy: Yeah, you know what? It just was odd the way things worked out, but some of the other HVAC publications, one was Engineered Systems, we just had some changes and some things happened. I was asked to take over that brand and asked to take over another brand, which again, the learning curve got steeper. I was asked to take over Mission Critical magazine, which is actually all about databases and what we call mission critical applications. So it applies to HVAC, but it applies to much more. And so my learning curve went crazy. But yeah, they asked me to take over a few extra brands. One of them dealt with boilers, another one dealt with the distribution industry, and I believe that’s called the Peter Principle if I remember correctly, David. We’re often promoted to the level of our incompetence. And I got there. I can assure you, I got there.
David Heimer: I seriously doubt that. So it’s a really interesting career. Manufacturing, then the trade press and publishing inside the trade press. So good for you, and it gives you a really interesting perspective of everything. So let me ask you about that. You have been an astute reporter and observer of our industry over a significant period of time. What’s changed?
Mike Murphy: You know, obviously, as you guys know too, and your listeners know, everything changes pretty rapidly these days in our industry, have been for a while. I guess I’ll give kind of a 34 year view of it, historically speaking. I think the environmental focus has shifted most noticeably. And again, that’s over like several decades that I was in the industry, and I’ll give you an example. In the mid-eighties when I was at Lennox, you were there as well, we collectively were still like poo-pooing the idea that there’s a hole in the ozone over Antarctica. And we were saying, you know what? You know, it’s just weather. And so that argument was being made. You can still make that argument today and say, hey, this is just weather, there’s not all that much going on.
But what I have observed, I think, David, is that the importance of the focus has shifted and it seems to be moving very rapidly. Whether you think about in terms of when the Montreal Protocol began back in the eighties, and then we’re into the, I don’t even know where the last meeting was held, but I think it was in Egypt or something like that, but the way things are going now, I think that the people who are in our industry now realize that whether they believe in certain concepts of science or not, that doesn’t matter. In your business, you’re going to be faced with those changes, and you have to adapt to them, whether you agree with the changes or not, you’ll be adapting to that. I really do think that when it comes to the type of business that contractors will be operating, they’ll have their customers asking them silly questions about, well, you know, what about your refrigerant? Does it cause damage to the environment? And obviously, I’m being facetious, people are asking those questions today.
I have seen that to be something that I think is going to be very critical, and continue to be critical going forward in their business. The only other thing that I think, and this is kind of a tongue in cheek statement, David, artificial intelligence, I think, is a big factor. I don’t think of that in the terms of just technology. We all know that technology, again, is changing. It’s like every day, there’s something new going on. I think of it in terms of artificial intelligence. And as I’ve tried to do a little bit of research on that occasionally, it’s like, there’s still a lot of arguments, well, what does that really mean? Does that mean you’re trying to teach a machine to think and parse out information the way a human mind does that? Or is it something else?
I think artificial intelligence, for our industry, it really has to do with aiding the labor shortage. And look at it this way. I mean, there are welders that worked in manufacturing, whether it be in our industry or others, that thought we will never be out of a job because what we do is a highly skilled function, welding is not easy. It’s kind of complicated. And it takes some human skill. Walk into any manufacturing operation, almost any manufacturing operation, and you will see robotic welding. Now, I’m not sure that there’s really AI or artificial intelligence really built into those robots, and I know that there’s a man or a woman standing a few feet away just to make sure that they can turn off a button if they have to. But quite frankly, it’s like computerization, technology, and artificial intelligence are becoming a part of every industry. And I don’t doubt that they’ll become even more pertinent within the HVAC industry, even at the contractor level.
David Heimer: That’s an interesting analogy with the welding robots and the labor shortage that we have. If you think about it, the opportunities to use AI to help out with labor shortage, to take a tech that is less seasoned and augmented with some artificial intelligence, that makes a whole lot of sense. It’s a great observation.
Mike Murphy: Well, trock one up for the kid here.
David Heimer: So we talked about what has changed. Some things, it seems like, never changed. What hasn’t changed? What’s the same?
Mike Murphy: That’s really a good question. And as your audience knows, you probably gave me these questions ahead of time so I could think about them, and I did, and this one was a tough one. But I look at it this way, and I think this has been the same way for a long time in our industry and the contractor perspective, is that the barriers to entry, I don’t think they’ve really changed very much. And what I mean by that is generally, obviously, licensing and certification requirements. Of course, this isn’t very hard for people to open up a new contracting business. I’ll give you an example. An ambitious technician who happens to be really good, okay? Let’s just say that maybe he gets called to do a side job every now and then. Sometimes, we call that moonlighting, right? Going to happen. You know, my brother-in-law comes over and does something for me.
All of a sudden they think, gee whiz, you know what? I really think I could run a business like this. I could do a really good job and be successful. And that’s how so many contracting businesses really did start, they started out of the back of a truck. And that’s great. That’s the way businesses start. I don’t see a lot of change in today. And David, you or Matt, might correct me if I’m wrong, you guys stay closer to the contractor market than I do, especially in the last six months since I’ve been retired, but I get the sense that it’s still about as easy as it was 20 years ago for someone to start up a business. And the neat thing is, and it happens, it’s like, you know, a big company complains about the little company because they don’t have the same kind of overhead I’ve got, and they’re low balling stuff and they’re messing up the market. Well, you know, lo and behold, a few years later, that little guy becomes a little bit bigger, hires some other people to work with him, has to support his own enterprise of coworkers and starts raising their prices and kind of getting to where everybody likes him in the market, says, hey, that’s a pretty astute businessman. You know, our business man.
David Heimer: It’s the wheel of contracting.
Mike Murphy: I think it is. And so I guess what’s the same is that the whole cycle I think is not much different than I saw it when I first joined this industry. What do you guys think?
David Heimer: You’re absolutely right. The barriers to entry are pretty low still. The fact that there have been a lot of consolidation in the industry makes the industry competitive in some different ways, but it tends to make it competitive at the mid to high level. At the low level, it’s still the same. There’s a man in a van or chuck in a truck that is out there in kind of a low price, low value, low quality competition. And you’re right, eventually they either continue down that path or they decide they’re going to get serious and get some real profitability, at which point they have to start raising prices, maybe join a group like Service Nation or something like that and start learning how to run the business. But you’re right, I mean, the basic barriers to entry are still really low, and it’ll continue to be that way. And, you know, I don’t think that’s a bad thing necessarily. It’s good for the economy, actually. It’s an upward mobility opportunity for people. So I think it’s great.
Mike Murphy: Yeah. Yeah. I agree with you. I’ve heard the HVAC industry described as one of the last bastions of free enterprise, and sometimes I agree with that. It’s like, it is nice that people can start off relatively small with, let’s say, a relatively small investment and develop a business and like I said, put other people to work for them eventually. It’s really the way it ought to be. And I like it.
David Heimer: So you’ve been in the industry a while and it appears you still have enthusiasm for it like I do. If you were talking to a young person who is entering our industry and you wanted to give them the benefit of your experience, what would you tell them?
Mike Murphy: David, I think I would give them a very general bit of advice, and I would simply say that they set goals for themselves. And there’s some people I know in this industry that are much better at teaching that whole concept than I ever thought to be, but I will say this. It’s like, I remember setting the first tangible goal in my life when I was about 12 years old when I said, you know what? Someday I want to move to Colorado. And anyway, about 10 years later, I actually moved to Colorado. And I’m not saying it’s just because I set a goal when I was 12 years old, but I think it is important that people set goals for themselves. And I know that, generally, they’re doing that anyway. Every day somebody thinks, okay, what do I need to do today? And they do set goals for themselves.
But in the sense of the long term, long range goals, I suggest that everyone, if you’re brand new in the industry, even if you’re only 18 years old and you’re just getting started, is like, set three year and five year and maybe even 10 year goals for yourself. And it so much doesn’t matter that the five year goal seems like this crazy stretch of imagination once you happen to it write down on paper. But I think that your three and your five year goals are very important. And maybe it’s like, you know what? I want to get my NATE certification in like 1, 2, 3, 4, 5 different areas. Or maybe it is, you know what? I want to become a service manager or I want to become an owner myself within this business. So I think setting those goals are going to be very important for the success of our industry and that we have a lot of aggressive, ambitious young people that start thinking in terms of like, how do I make this industry my career and make it a very successful career for myself?
David Heimer: Good advice. And, you know, I think it’s good advice for almost any stage of life. In fact, Mike, if you were, let’s say retiring, you might want to set some three and five year goals as well.
Mike Murphy: You know what? Now that you pinned me down on that, I have a more short term goal and I’m almost there, but it was to lose the 15 pounds I gained during Covid. I was sitting on my butt too much during that whole time. And I’m just about there. I’ve been bicycling more, I’ve been, actually, just a few weeks ago, I got back from the Grand Canyon and went hiking with my daughter out there, and I’ve been a lot of hiking and bicycling and actually going to the gym. So I’m closing in on the 15 pound weight reduction.
David Heimer: Fantastic. Congratulations. Presumably, there will be some three and five year goals as well.
Mike Murphy: Presumably. Actually, there is, it’s a little bit more short term, our one year goal is my lovely wife and I will be moving to the Sunshine State approximately next June. And something we started talking about about four years ago actually. And we finally sort of pulled that all together as retirement has just kind of set in for us. So I guess in a sense we’ve been setting goals together for the last, actually, my wife and I, for the last 10 years, been setting goals and that one is coming to fruition next year.
David Heimer: Congratulations. That’s awesome. Getting out of the Indiana winter, right?
Mike Murphy: I know. And I know you know this area, especially up around in Bloomington. And yeah, we have decided there’s no more snow in our future.
David Heimer: Yeah. I made that decision myself years ago. I like it. So you’ve seen a lot of businesses. How do you measure success in business?
Mike Murphy: That’s a good question too. And again, I’m going to give, if I can, maybe a more general personalized answer to that. But obviously, people gauge success in a myriad of ways. It’s like, what is our EBITDA at the end of the year? What’s our monthly sales? You know, there’s so many ways to measure success. I’d like to suggest that one way is to help other people excel in what they do. And to me, that is a gauge of success in business, is like, do you have people that you’re working with that could take over for you if you get promoted and move on? And I can say, personally, that this happened to me. I was able to move up a couple of times in the organizations that I’ve been in because there was someone that I worked with who had progressed to the point where they could do my job. And I think helping other people to learn how to, whether it’s your job or they have a career goal of doing something else, helping to provide an environment where they can attain that and be successful in their own right will very often help us to be successful too.
David Heimer: Well said. And at the end of the day, at the end of your career, you can look back and say that you’ve helped other people in their careers and in their life. There’s really nothing better than that, is there?
Mike Murphy: I’d have to agree with you there on that one, sir.
David Heimer: Yeah. Well, an appropriate place for us to wrap up because you have helped a lot of people in our industry, those that you have helped personally, but also you’ve helped us all in the industry through your efforts in the trade press. You’ve always been such a big supporter of ours. Wanted to say thanks for that and please keep in touch and best luck to you and your lovely wife in retirement. I know you’re going to have a great time.
Mike Murphy: David, thanks a lot and best wishes to you and Matt and the whole gang over there as the new chapter evolves here in the near future.
David Heimer: Thanks a lot.
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