Pamela Cargill is Principal of Chaolysti, a consulting firm that helps residential solar contractors succeed and reach profitability. Her decade plus of experience in the solar industry spans the entirety of residential solar operations including design engineering, project management and installation, process design/automation, operations strategy, and software planning and integration. Cargill started her solar career as the second employee of a small solar installation company and played a key role scaling it into a $1M 8-person operation and, after two acquisitions, into a $60M regional installation leader.
Needless to say, Pamela Cargill has a wealth of solar industry knowledge. We were thrilled to have the opportunity to speak with her and bring some of those insights to you. In the first of two articles resulting from our interview, Cargill shares some management advice for running a successful solar business. In a subsequent article, we will share her perspective on how the solar industry is evolving.
[Please note that this interview has been edited for brevity and clarity.]
Why is it important for solar contractors to have a clear sense of their business goals?
Of all the businesses I meet with, the ones where the leadership has the clearest and best-articulated vision of "why"—why everyone including themselves is showing up every day—those are the companies that I find are really run in the most sane manner.
The why is very important. Defining a sense of why gives contractors the ability to step back from what they're doing and focus on the big picture.
Where things start to get fuzzy is when we talk about "why," because the why is not something that's easily expressed in language. It's usually deeply felt beliefs and personal convictions. But when we can articulate those convictions, that's how we achieve values-alignment across the company. It allows us to ensure we're bringing in employees that are aligned with those values, and that we're reaching out to our customers and aligning with their values.
When I see that alignment happen, because people understand “why,” that's really where I see the magic happen.
What are some best practices for solar contractors to adequately balance their long-term, big picture business goals with the daily demands of their work?
The most important one is to set up structures within your company that help you check in with that sense of why on a regular basis. A critical part of that is to have regular team meetings where you focus on the most important things (not just status updates) and use that time to make decisions together.
If the only thing you're meeting about is what is going on, then you're never going to have time to consider whether how you're doing that is the most effective approach.
And if you can't evaluate your processes, then you're never going to have a chance to reflect more deeply on whether you have the right motivations, the right "why" behind what you’re doing.
When choosing metrics to measure success, what should solar companies bear in mind?
I definitely see people tracking too many metrics, and a lot of them aren't actually important enough to drive business decisions. It's easy to go after things like how fast you're moving a project between one milestone and another. But unless you understand why that matters, there's really no reason to be tracking that level of detail. Having more data in front of you doesn't necessarily help you make better decisions, it can actually end up clouding your ability to act.
When advising companies, I usually start with first making sure the contractor understands their sense of why, and then their sense of how, and then their sense of what. From there you can have a goal that comes out of that—that goal is a big picture goal for the business. It needs to be measurable, it needs to be actionable, it needs to be timely.
From that big picture goal, you can then line up the key performance indicators to help you reach it. And a lot of that is going to come down to very big numbers—things like your customer acquisition costs, your operating expenses, and your cost of goods sold.
Those three things are the picture of health for your company. If you can keep track of what's happening in those three areas, and how they're affecting each other, then you can start drilling down into more detailed metrics.
I'm big on the rule of three; anybody at any given time, shouldn't be tracking more than three metrics. Otherwise, you can have all the data in the world and have zero insight.
One of the services you provide for solar contractors is to help them identify inefficiencies in operations and processes that cost them time and money. What are the most common mistakes you see solar companies make that lead to decreased revenues?
I would say it's having too singular a focus on optimizing their sales and marketing.
Understandably, customer acquisition cost is a very hot topic in the solar industry—it's definitely hurting a lot of contractors. But what I want to help contractors understand is that adopting solar is a process that your customer engages in; it starts before they even get to the funnel, and it's not over when their project is completed. Given that, they spend less time in the sales process than they spend, proportionally, in any other part of the process.
So why are we spending—let's just say, theoretically—90% of our resources optimizing their experience in sales, and just 10% of our resources optimizing the customer experience within the project delivery cycle and post-project completion?
Contracting is mostly about the experience a customer has as the project is happening.
As they are getting notifications, as the installation is happening, as the inspections are going on—that's the customer experience. All of those elements add up to whether or not a customer is, in the end, satisfied or dissatisfied. That is more likely to lead to them referring or not referring other customers than what happened during the sales process.