HVACRDB

Peer Group Power

We often talk of the benefits of HARDI membership in the context of its impact on industry and legislative/governmental issues, educational resources, market data and analysis, and the variety of networking opportunities, just to name a few. It's the networking aspect I'd like to address in this column. Wait!! Before you close the magazine thinking this has to be as boring as counting copper fittings, please give it a chance.

First of all, I hate the term “networking.” I only used it to suck you in. Rather, I prefer the term “relationship-building.” Wow! Now I got you hooked! I'll bet you can't wait to see where this is going.

If I may, let me start with a true story. I have an acquaintance who owns a medium-sized business (not a distributor, but similar in many aspects). We'll call him Pete. He and a partner started the business about 20 years ago, and Pete was involved in operations while his partner handled administration and sales. When his partner decided to retire five years ago, Pete bought him out and began running the business single-handedly. As you can imagine, this opened a whole new realm of situations and problems for which Pete had no experience, but he learned quickly.

In earlier years, Pete and his partner had no interest in getting involved in a local or national industry association, believing there was probably nothing that could help them, and besides, it would take time away from their business.

Fast-forward four years to last February. The business had been doing well. There were a few bumps in the road as with any business, but all in all, not bad. Pete still had not taken any time off and knew no one outside of the company with the exception of a few suppliers, but he knew his company and his market well.

This past year has been tough on Pete and his company. Although it had been developing for several years, it became obvious to Pete that many of his competitors had moved away from the “traditional” business and invested in new equipment and technology. In addition, consolidation had changed a number of the players in his market, but he couldn't tell you who they were and didn't particularly care.

Today, Pete's situation is dismal. Operational problems turned into a major equipment replacement, bringing on unexpected debt; major declining sales brought serious cash flow problems; and to top it all off, he has developed health issues demanding surgery with a fairly lengthy recuperation period. For the most part, Pete's situation is not uncommon, but what is probably the most disturbing for him are his feelings of loneliness and frustration. He simply does not know what to do or where to turn.

What have helped many in similar situations, or perhaps prevented them from happening, are industry peer groups. HARDI has a number of such member peer groups which involve executives from three or four companies around the country that originally joined together typically to meet and talk about general business issues and to visit each other's facilities. In many cases, before long they evolved into sharing financials and business strategies, and even critiquing each other's businesses. Probably the most important outcome of the groups is the true relationships that are established and the ability to call one another to get advice, to just complain or simply to ask for help. Would that have happened were they not a part of a trade association? Possibly but not likely.

There are a number of for-profit business peer groups around the country that bring together local executives from diverse businesses. They do a terrific job, but they are expensive and do not involve others in the same line of business. On the other hand, association peer groups bring together individuals with similar businesses and problems, and in many cases, the same suppliers but from other areas of the country. The only cost involved is transportation to visit each other's businesses.

Unfortunately, at this point, a peer group is not the answer to Pete's problems. However, I have seen firsthand that it would have provided the solutions and help he desperately needs and, furthermore, would have helped him to avoid them in the first place. It is truly the relationships that are made at regional meetings, annual conferences, educational sessions and the like that bring successful people together and which, in many cases, evolve into effective peer groups. I venture to say every one of the peer groups associated with HARDI would give a testimonial to the value of the relationships they have made and the positive effect they have had on their businesses. If you want more information about forming a peer group or their value, please give me a call.

Don Frendberg,
Executive vice president / COO

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