Managing Editor, Heather Langone sat down with the Chief Executive Officer & Founder, of Redwood Services, Richard Lewis. The two discussed partnership, the good people of HVAC, and carving out a niche.

1. Do you have a hobby?

I play basketball. I played college basketball for four years and I'm not yet 40, so I can still get up and down the court. I play once a week at our local community center. So that's awesome.

2. Beer, wine, or spirits?

Beer. But being from Tennessee – whiskey too. 

3. Halloween just passed. What scares you?

Snakes.

4. What will your memories be of 2023?

2023 was a very pivotal year for me and the Redwood team.  We’ve had several years with tailwinds at our backs, this year we had to learn how to fight through adversity because of mild weather and higher interest rates. It’s been a good learning experience and we’ve adapted.

5. What is your definition of connection? 

As we say in our videos, “connection is everything” It’s even our tagline. At Redwood, we understand that our value is combining what you're good at and what a partner is good at bringing together those things. We have an expression around here – outstanding alone, better together. 

6. What makes an entrepreneur stand out among the competition?

What makes an entrepreneur stand out is that they're ready to turn a chapter. Specifically, one of growth and that they care about their people, it’s part of what makes them tick. 

7. As the founder of your company, why did you decide to start in HVAC investment specifically?

I've spent pretty much my entire career in home services. I spent two years on Wall Street right out of school and hated it. When I moved back to Memphis in 2008, I joined a group called Service Master, which at the time was one of the largest consumer services companies in the country. So this is what I know and love.

8. What is the Redwood growth model?

We invest in a majority stake in the businesses that we partner with. But, unlike a lot of other groups and lots of other industries, we don't buy 100% of a business and take full ownership. We don’t want the owner to become an employee because you just suck the entrepreneurial spirit out of the business. I don't want to buy your business. I want to invest in a partnership, and you're going to keep a big chunk of the business. I'm going to have a big chunk of the business, and then we're going to do it together. 

9. You talk about laser-focused coaching. What is it? 

We have people who can come in and help coach you on specific problems you may be having. It could be accounting inventory or close rates on your services, we hone in on that. Technicians like the ability to close jobs properly. We have people who can go in and help coach the technicians on how to add value and how to present options. 

10. Why is the right partner more important than location?

Having the right partner and the right business always trumps whatever value a specific market provides. We never pick a market and then say we want a business there. We're looking for good people, good stories, and good businesses. We search for the right opportunity rather than the location.

11. What common denominator do successful owners have?

They set goals for themselves. They have a goal for the year. They know what they’re trying to accomplish and are applying metrics to it. They are holding themselves and their team accountable.

12. What is a culture of accountability?

We believe that our business owners should set their own goals and budgets. They all have different growth rates for top and bottom-line results.  A culture of accountability is once we say we're going to do something, we're going to make bets around that. You have to be accountable. You have to be accountable to yourself and your team.

13. What makes a good partner for Redwood?

We look for people who care about their people first. Money is important. But typically, we look for good business in a good market run by good people within a good culture. We don't care where that takes us. 

14. Do partners lose autonomy?

They do not lose autonomy which is why people have gravitated to us. And the niche that we have carved is autonomy. They run the day-to-day operations, and it's still their brand and their management team. Certain things we do standardize like 401k and healthcare. 

15. What drives the decision to partner with Redwood? 

There are many driving forces but the common one is they feel like they could go farther faster with Redwood than they could on their own. 

16. What is your leadership summit? 

Once a year we bring all our partners and their management teams together for three days of networking, breakouts, collaboration, and best practice sharing. And they can bring their spouses and families. 

17. What values drive the company? 

We haven't written out a value statement. Partly because I'm afraid that once I put something on a poster or a wall, it becomes just a poster on the wall. I'm a big believer that your vision, mission, and strategy are determined by the decisions you make. For us, it's about putting people over profits. 

18. What does a perfectly aligned partner look like? 

I don't know if I would put the word perfect in front of anything. But we work hard to make sure we're aligned with all our partners. One of the best ways is to make sure that the financial incentives are aligned. 

19. What are your top three goals this year?

To partner with more passionate, strong, like-minded entrepreneurs. But that's secondary to our main priority, which is to support our existing partners. And I’d like to strengthen our support team. We have some of the best and brightest minds in the industry. I’d like to develop and grow the systems and processes for the team so we can continue to run the business well into the future.

20. Where do you see Redwood Services in five years?

We're in this for the long haul. So, if we continue to have fun, make a difference, and add value to our partners, this thing can go the distance. Five years from now, I plan to have more partners, be bigger, and continue to create opportunities for the team.