The second fateful event that year was the arrival of Gary Iskra. Esteemed for his sales and marketing prowess, Iskra had a long career in the home improvement industry. That career began in 1972 when he went to work as a sales representative for the Pittsburgh-area home improvement company Koolvent Aluminum Products, a manufacturer and installer of windows and doors, vinyl siding, and roofing systems. Fourteen years later, in 1986, Iskra bought the company (sales $19 million) and changed its name to American Home Improvement Products. In 1990, he negotiated with Sears to become an installing contractor for the retailer. In 1996, when Sears ended its 13-year relationship with AMRE, its major remodeling contractor, Iskra stepped into the breach with a deal that allowed his company — now called American HomePro — to take over many AMRE territories. In one swift step American HomePro vaulted to the top of the home improvement heap as Sears’ largest SFI licensee. In its 1997 Top 500 listing of remodeling and home improvement companies, Qualified Remodeler, a trade publication, listed American HomePro as the largest U.S. remodeling company (with sales of $125,264,124), followed by Pacesetter (sales of $122,844,680). In explaining his company’s success, Iskra is quoted as saying: “Our ability to replicate an operational culture in remote locations and to then maintain control over those operations has been a driver of our growth.” In 1999, he sold the company to Sears for “an undisclosed sum.”
Iskra was someone Phil Schrager had known for at least 20 years. His official reason for being in Omaha in 2002 was to help Pacesetter develop a new lead-generation strategy. But it was clear to some that his purpose was actually to prepare the company for sale.
Iskra seemed particularly qualified to do such things. He’d bought and sold companies and was a demonstrably skilled deal maker. And as owner and CEO of Koolvent and then American HomePro, he’d developed a number of innovative marketing tactics. For instance, in 1996 he’d created a promotion called “Take Your Best Shot,” which distributed $2 bills to homeowners who sent in a snapshot of that portion of their home they’d like to have remodeled. Iskra claimed that “Take Your Best Shot” accounted for a third of his company’s $114 million in volume that year.
In the two years between selling American HomePro and arriving at Pacesetter, Iskra had operated another company, Advanced Water Solutions, out of Greensburg, Pa. The company used telemarketing and door-to-door solicitations to promote the sale of water filtration systems, which it sold at prices ranging from $3,250 to $7,294, according to records from the Pennsylvania attorney general’s office. This business closed in September 2002. On November 14, 2003, Pennsylvania Attorney General Mike Fisher, responding to consumer complaints in several Pennsylvania counties, announced an Assurance of Voluntary Compliance agreement (essentially a settlement) whereby Advanced Water Solutions would pay to complainants a total of $16,000, in addition to $1,500 in civil penalties and the state’s investigative costs. Homeowners said the units had malfunctioned, that the product didn’t live up to what was promised, and that the company had reneged on its warranty agreement by going out of business. The settlement stated that Iskra “must permanently forfeit his right to operate a water filtration business in the Commonwealth.” All of that was something of a moot point, however, because by this time Iskra was president and CEO of Pacesetter.
Change Agent To the people who knew him, Iskra was many things. “A big picture person,” is how Bannon, who was hired by Iskra as CIO and had worked with him at American HomePro recalls him, “with details to be left to others.” Other employees interviewed for this article describe Pacesetter’s CEO as “smart,” “charismatic,” “self-involved,” “a manipulator,” “a change agent,” “a deal guy,” “a sales genius,” and “self-assured to the point of arrogance.”
“Gary had a certain charisma that allowed people to feel good,” Danielson remembers. “He brought enthusiasm and excitement when he first came.” Not everyone thinks so. Among the old guard at Pacesetter — those executives who’d come into corner offices and six-figure salaries through their loyalty to the Schragers — he had few allies, and many opponents. Personnel in the Omaha home office soon divided into “FOGs” — Friends of Gary — and others. “He felt like every one of us was a complete friggin’ idiot,” says one former executive, who spoke on condition of anonymity, “and he was the great god of the home improvement industry.”
In April 2004, Iskra, with partners Mark Aloe, Michael Madden, and Gary Kluck, bought the manufacturing and retail portion of Pacesetter for a sum that the Pittsburgh Business Times later reported as $80 million. (Others contend it was far less or that it was simply an agreement to assume debts.) The Schragers retained ownership of Federal Diversified Services, now renamed AmeriFirst Home Improvement Finance.
As Pacesetter’s new owner and its president and CEO, Iskra found himself facing big challenges. (Iskra did not return calls requesting an interview.) In a 2004 conversation for an article in REPLACEMENT CONTRACTOR, he noted that “over the past five years there [had] been some attempts made to revamp the marketing and sales, and the installation and service needs” of Pacesetter. But, he said, the company was operating with a business model that was 20 years old. He described Pacesetter as “a sleeping giant.”
Iskra’s prescription for waking the giant involved realigning lead generation to include a broad mix of sources — store leads, direct mail, TV, and the Internet — in addition to the call centers. Salespeople would be retrained to sell warm leads. In the field operation, installers — now “project managers” — would take responsibility for interacting with clients and ensuring customer satisfaction.
The sweeping changes Iskra envisioned would be difficult to implement in any organization. But the size and scope of Pacesetter made the job particularly formidable. Experience suggests that even the most successful home improvement company is a delicate balance of marketing, sales, administration, and installation and will grind to a halt if one of those components begins to falter.
On the plus side, when Iskra and his investors bought Pacesetter, it had certain advantages to leverage in its effort to right itself. The biggest of these was the several hundred thousand satisfied former customers in its database and the fact that, in an industry in which most home improvement companies sold vinyl windows, the company offered something different.
