Pool & Spa News: How the west was won: even as Shasta aggressively makes its mark in the pool wo

It's a Wednesday morning and Ed "Skip" Ast takes his seat at the head of a large table. Looking a bit like a cattle rancher with his broad shoulders and rugged charm, Skip seems out of place in this indoor, corporate environment.

But then the 66-year-old president/CEO of Shasta Industries bows his head of white hair and starts to speak, guiding his well-groomed, 10-member management team in a quick prayer.

The reverent moment reveals the duality of Skip's $93 million, Phoenix-based company. Not only is Shasta Industries a highly competitive, sleek corporation of 600 employees, but it's also a family-run business with an intimate sense of purpose. Its subsidiary, Shasta Pools & Spas, built 2,450 pools in 2003 and expects to surpass those numbers in 2004, forecasting more than 3,400 pool sales. Indeed, Shasta is saddling up for a smooth ride into its 37th year as the No. 1 pool builder in Arizona.

"They're in relentless pursuit of perfection," says Mark Ragel, president/CEO of Patio Pools and Spas of Tucson (Ariz.). "Nothing stops them." His company was once owned by Shasta, but it was sold in the early 1970s to Ragel's father.

"The family has a strong Christian background, and faith can do amazing things," Ragel adds. "They have phenomenal drive ... to continue to grow year after year and dominate their market. They're doing many things correctly."

One of those "things" is a focus on business relationships--both inside and outside the company, internally, Shasta develops its employees through a deeply ingrained training program that Fortune 500 companies would envy. Externally, it has a reputation for securing lucrative partnerships with home builders.

Home, sweet home

Shasta's relationship with developers has been a key part of the company's success for more than a decade. Partnering with nine of the top 12 builders in Arizona, Skip is credited by countless industry professionals for pioneering the "ideal" home builder agreement.

Shasta's formula typically involves constructing four or five model pools for sample homes in a large development, free of charge. In return, it asks to be the "pool builder of choice" for any family that wants to add an installation to its custom-designed house. By offering perks, benefits and the capacity to do high-volume work, Shasta often reins in exclusive rights to the development, At an average price of $28,500 per project, this translates into big dollars.

The opportunities seem endless. In early 2004, new housing permits in Maricopa County, which includes Phoenix, Mesa, Scottsdale and Tempe, were up an impressive 24 percent over the prior year. Overall in 2003, there were 46,591 housing permits issued in the Phoenix metro area alone, according to the National Association of Home Builders.

"That [home builder] program was something that came to my mind, and it was radical, but it worked," Skip says. "We separated ourselves from the competition at that time, and then there were only a select few who were big enough to come and compete with us."

Despite his success, Skip remains humble. "I don't want to paint [Shasta] as some kind of brilliant, utopian company where we snap our fingers and--boom!--everything just slides through," he says. "It isn't that way at all. We have struggles.

"Sometimes I'll sit back and think to myself, 'Do we know what we're doing?' After all, we still have human beings working for us who are subject to error."

That attitude has helped Skip earn the respect of his fellow Master Pools Guild members, as well as the recognition of people outside the pool industry. "It's a quality company with quality people," says John Gorman, managing member of Gorman Litigation Support Services, P.C., in Phoenix. Gorman nominated Shasta Pools & Spas for the 2001 Arizona Business Leadership Award, which the company eventually won.

Message bearers

There's a distinct and clear message echoing through the halls of Shasta's corporate headquarters: We have a vision; come be a part of it. The clues are everywhere. On cubicle walls, posters announce, "Never Assume Anything," and fliers posted on managers' glass doors proclaim, "Be Proactive" and "Think Win-Win."

These short messages help the company stand tall, says Rick Mortensen, Shasta's director of organizational development. "We were a typical construction company; it was command and control. There was no discussion," says Mortensen, who has been with the firm since 1982.

But that was then, and this is now. Mortensen has developed materials in conjunction with FranklinCovey Co., a Salt Lake City-based productivity firm specializing in employee training and motivation. Every Shasta employee, from a retail store clerk to the highest-ranking executive, is required to take an introductory course on the "Seven Habits of Highly Effective People." The class is based on the book of the same name by FranklinCovey founder Stephen R. Covey.

"People say the course is changing their lives, and not just at work," Mortensen says. "If a company is willing to invest in its employees, they will have great loyalty to the company."

Take Dwayne May, for example. He began working at a Shasta retail store in 1990 because it was "a good summer job." Since then, he has been promoted numerous times. Now, as a retail operations training manager, May says the development program helps differentiate Shasta from its competitors.

"If a customer has a problem or question that needs to be answered, they don't trust anybody but us," May says. "It's the knowledge and experience of all our personnel, as well as the quality of service that separates us. We train our employees on an ongoing basis, and we take a lot of pride in that."

It also explains why staff members seem to stay for decades and across generations. "It's a huge commitment," Mortensen explains. "No other pool company we know of does this."

Industry innovators

Skip's dedication to improvement also is evident in his use of technology. Though Shasta's retail stores are small, the company is constantly looking at new systems. "They're almost obsessed with process improvement and leveraging technology to satisfy their customers and make things work smoother and better," Ragel of Patio Pools and Spas says.

For example, there are the point-of-sale systems and state-of-the-art water testing stations at every store. Recently, the retail centers also went "live" with the company's sales department to have instant, up-to-date access to warranty, parts and service data. Later this year, Shasta will implement a detailed scanning system to track inventory.

Skip says he entered retailing to retain and develop aftermarket clientele. That determination also inspired him and one of his longtime company executives, Andy Blake, to launch Shasta's A&A Manufacturing Division. It develops in-floor cleaning systems and Xcel Dek decking materials--products that have helped Shasta penetrate every major segment of the pool industry.

Even in the firm's bread-and-butter business of new pool sales, technology plays a continuous role. A few years ago, the company partnered with AutoCAD to produce "ShastaCAD," a pool industry-specific design software that it markets nationwide. Training on the program is intense and reaches upward of 40 hours every six months, but the benefits are immense.

"My builder will send me an e-mail with the customer's needs, and I can turn around and put together a pool to the exact foot within minutes," says one sales manager. "The customer walks out with a clear definition of what their pool will cost, and that separates you from the competition."

Indeed, only a small percentage of builders nationwide use some kind of CAD-related design software. But the technology is important to Skip. "He always says, 'I'm willing to invest in you if you're willing to give me value in return,' "Mortensen says. "With him, there are no boundaries on creativity and innovation."

Eventually, Skip plans to ride into the sunset of his retirement years, His sons, Steve and Jeff Ast, are quietly expected to continue their father's legacy, in many respects, the two brothers sport their father's same passion and vision, not to mention broad shoulders.

"Some people are in business for the love of money; some people love their business," says Steve, who serves as Shasta's vice president of sales and marketing. "I love the business of selling pools. I'm still infatuated with pool design."

The making of a leader

Everyone has a past, but only a select few individuals have great stories to tell. Ed "Skip" Ast is one of those tale bearers.

In the 1960s, he was a student bound for university life on a football scholarship. But the center/linebacker never finished school. Instead, Skip returned home to Phoenix to help his father, a custom home builder, try to save his failing business.

"Dad was the kind of guy who thought he had to lean everybody's way in order for them to like him and refer him," Skip says. "He finally went bankrupt in 1960. That's how I learned the business, and how to delegate and trust people and communicate."

Around that time, Skip married his high school sweetheart, Sharon. They had four children: Diana, Skip Jr., Steve and Jeff. However, Skip soon re-entered the construction business and became involved in what he calls its vices, namely drinking and gambling with fellow workers. That was when he was converted by an evangelist who helped him "put God No. 1" in his life, along with his family and the company.

The turnaround coincided with his takeover of Shasta from his brother, Bob, in 1966. Within two years, the company was the No. I pool builder in Phoenix, This year, the company broke its own record: In the first six months of the year, Shasta sold more than 2,000 new pools and rolled back consumer advertising as a result.

Last year, the company grew so large, it consolidated its 11 separate offices into a vast, 16-acre location, 4 of which are under one roof. Shasta's headquarters now houses corporate offices and boardrooms, a customer call center, training classrooms, manufacturing facilities, a test pool and 22 service trucks. Only the company's design centers and retail stores operate from independent sites.

It seems the power of faith has worked to Skip's advantage. And the rest is, well history.--S.M.

Sounding the accountability alarm

For many years, the one complaint you heard about Shasta was that its customer service wasn't as good as the quality of its pools. But that perception has been changing steadily.

In 1998, surveys indicated that approximately 50 percent of Shasta's customers would refer the company, Those numbers have since shot up to 75 percent and are increasing every year. To keep the percentages rising, the company launched an accountability alarm system in April.

Similar to an airport switchboard that shows flight numbers, destinations and on-time/delayed status, the system is on display for all to see. Projected onto the wall, the large rectangular image scrolls through all the contracted new pools and prevents projects from slipping through the cracks.

This Integrated Customer Management Software, aka the ICMS alarm, lists the name of each project and the sales representative handling the account. If a project falls more than 10 days behind schedule, the text turns red and signals managers to a potential problem.

What's more, in the words of Andy Blake. a manufacturing operations officer who has been with the company since 1974, "No one wants to see their name up there in red."--S.M.