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BUS | Dealing with Change

 November, 27th 2017     Comments     Views

By Bill Rau and Joe Mastroianni

How to deal with change?  That’s a question that has been asked, promoted and defined in the HVAC industry for the last 30 years. Yes, for over 30 years manufacturers have embraced change to convince distributors and contractors to accept their current business objectives. In other words, get on board with our vision of the future or get out of the way.  To be fair, “change” was then, and continues to be, a valuable and important focus for all in our industry, and, in a broader sense, for all business activities. Change has definitely affected all of us, but understanding how you approach and use it can be a key to your future success.

How prepared are you to deal with change? Do you want to follow it, ignore it, or lead it?

Our industry is becoming increasingly commoditized.  Products are moving toward an essential sameness.  Engineering has achieved tremendous reliability, making product quality among manufacturers a much less significant distinguishing factor from a generation ago.  Most all equipment is good, it all works, and acceptable quality is the most basic cost of being in business.

A slow realignment in how the industry works is now under way due to this movement toward commoditization and consolidation. Some manufacturers have led a significant industry change by implementing programs and practices that essentially minimize and then destroy customer loyalty. They internalized a false view that anyone could do a particular job (who was minimally qualified). That point of view ignored two things; First of all, the value of relationships built over time, and secondly, the value of an organizational memory; that is a group of dedicated employees who grew up with the business, understood it to its core, and made it work.

Our industry does not suffer from too much loyalty, just the opposite. Consolidation, commoditization and the need for increased market share and profitability have all taken their toll on loyalty. Over the past several years, it has become apparent that contractors’ reliance on, and loyalty to distribution is eroding. At the same time manufacturers have shown decreasing loyalty to distribution. Distribution is caught in the middle. Distributors are unable to support contractors as in the past, since they no longer have the same support up channel.  That is joined with an ethic that encourages all employees, everywhere, to job hop for short term gain.