Wallwork Group has succeeded as an HVAC wholesale distributor for 90 years in the highly competitive Northeast-market because it leaves nothing to chance. With a well-thought out growth strategy, the business has a clear roadmap for its 10 (soon to be 11) branch locations in New Jersey and New York, yet it has always remained flexible enough to alter its course when the market shifts or there are new opportunities.
Wallwork Group ensures that it has more than enough inventory so its customers can always get what they need.
This structured yet flexible approach is embedded in the DNA of the business, says Matt Sheeleigh, the president of Wallwork Group, who represents the fourth generation to own the business. “Our company has thrived for 90 years because it changed its focus periodically,” Sheeleigh says
The business began as a plumbing and heating supplier in 1925 and added refrigeration in the 1940s. Through the years, plumbing and refrigeration was dropped and warm air heating and air conditioning was added. Today, the business is focused almost exclusively on heating and air conditioning equipment. “The goal of each generation has always been the same – to participate in the most lucrative part of the HVACR and plumbing business,” he says.
As Wallwork Group prepares to open its 11th location Sheeleigh says the company has always taken a measured approach to growth. “Having been in business for 90 years, one might think we’d have 100 locations and not just 10,” he says. But Wallwork Group has wanted to keep its unique culture so it would rather open a new branch than acquire an existing business. Also, because each generation had to buy out the previous generation at market price, the company’s working capital has been constrained from time to time. Fortunately, Sheeleigh notes, he was the last owner to buy out the previous owner (his father) more than 25 years ago, so capital has not been an issue.
It was Sheeleigh’s father who made the decision to add the warm air heating and air conditioning to Wallwork Group’s portfolio in the early 1970s. Sheeleigh says his father recognized that this part of the business was more technically challenging with fewer competitors and, thus, held more opportunities for success. It proved to be a wise decision.
Easy pick up as well as advice from the counter at every Wallwork Group branch.
Being willing to take on challenges on behalf of customers remains a hallmark of Wallwork Group. Its tagline, “Dedicated to the Success of Our HVAC Partners,” underscores the commitment that its employees make to helping customers achieve their goals. “By offering more training than our competitors, by employing an elite staff of people who provide real, tangible solutions and by offering pre- and post-sales support not only to our customers but to their customers, we endeavor to show we are different from other distributors,” Sheeleigh says.
Wallwork Group maintains a healthy mix of residential and commercial sales. Sheeleigh says the current split is 55 percent residential and 45 percent commercial with the goal to reflect a 50 percent split averaged over a five-year period. “We don’t believe a company can maintain such a balance over any one- or two-year period given that the residential and commercial markets are almost never in sync.”
Because its residential and commercial customers have unique needs, Wallwork Group maintains dedicated salespeople to serve each segment. One of the biggest differences between the two sales teams is that residential sales, which includes light commercial products, are more about relationship selling, while commercial sales are more focused around specific jobs and are more transactional in their approach, Sheeleigh notes.
The Wallwork Culture
These points are displayed – in poster form – at every Wallwork Group facility. Matt Sheeleigh says building a culture truly embraced by everybody within the organization occurs on different fronts.
Reinforcing the company’s culture every chance that management gets. “For example, our Annual Business Plan Template is sprinkled with lines that reinforce our culture. One of my favorites is, ‘A goal without a plan is nothing more than a hope,’” he says. “We regularly refer our employees to the points listed above when they are uncertain what action to take. By doing this, they understand these tenets are the bedrock of our organization.”
Hiring people who buy into Wallwork Group’s culture. “Like a lot of companies, we look to hire people who are above average in intelligence and energy. However, we go beyond these qualities and use Caliper Human Strategies Inc. of Princeton, New Jersey, to profile all employee candidates. Caliper measures various personality attributes. They help ensure that anyone we hire will embrace our culture.”
Most of the 10 Wallwork Group branches are located in the New York City metropolitan area with one branch in Albany, New York, and another in Lakewood, New Jersey, located in the southeastern part of the state. While the branches are customized with the products to serve their individual markets, they operate in a similar fashion. Sheeleigh says this approach, what he calls “fully systematized operations” – is a cornerstone of Wallwork Group’s growth strategy.
Being a fully systematized operation requires thoughtful planning, documentation and continuous improvement that everyone at every branch buys into. The ultimate goal is to provide a level of predictability that customers can expect to have during each transaction at their Wallwork Group branch.
“Being predictable is absolutely critical to being successful because customers crave consistency,” Sheeleigh says. “People buy from successful companies like Home Depot, Best Buy or Starbucks because they know what they’ll receive when they do. The product or experience delivered by these businesses is the same every time. Our goal is to achieve this same level of predictability.”
To achieve this level of predictability, Wallwork Group ensures that everything they do is documented and updated in a manual. “There are literally manuals on everything we do,” Sheeleigh says. Each manager is required to update their manuals and associated forms on an ongoing basis. A branch manager will not have his or her annual performance review completed until they’ve submitted their updated manuals. Having a set of manuals speeds up the education for new employees and enables them to more quickly contribute to the company. “It helps keep the company running smoothly.”
Wallwork Group places a strong emphasis on goals and then measuring results – from how quickly a phone is answered to how quickly an order is delivered once it is placed. “That’s how we make sure we are predictable,” Sheeleigh says.
A critical component of Wallwork Group’s growth plan is the Branch Business Plan, completed annually and reviewed quarterly with the management team, that serves as each branch’s roadmap for the coming year. Written in October, the branch team details its top sales growth initiatives for both the residential and commercial divisions, including the metrics by which they will be measured. These plans also incude sales and planning for both new and existing customers, a report on local competitors, a calendar of local marketing and training, and a ‘wish list’ of their operational needs.
Sheeleigh says the Branch Business Plans have been part of the business for 15 years and have become part of its fabric. The plans are a way for each branch to set goals and provide the teams with the details about how to reach them. They also serve as a touchpoint for the branch and management. “We want to make sure we’re paying attention to them and things are working the way we planned. If necessary, we will make adjustments,” Sheeleigh says. “It’s a commitment of time, but it’s well worth it.”
Having this detailed line of sight into each branch gives Sheeleigh and the management team a very good idea of how the business will grow in the coming year. It helps the business plan for inventory and make any adjustment to its marketing and sales planning.
All of the branch employees participate in developing their business plans and they must sign off on the plan. “Everyone has to agree,” Sheeleigh says. A critical part of developing this plan is the dialogue between the branch management and the staff. It creates conversation about the future of the business that may otherwise not take place.
|Wallwork Group at a Glance|
|Management Team||Matt Sheeleigh, President; Kirk Malcolm, Sales Director; Rick Millis, Director of Operations; Steve Rittersbach, Director of Product Management|
|Headquarters:||West Caldwell, New Jersey|
New Jersey: West Caldwell, Lakewood, Mahwah, Piscataway
New York: Albany, Brooklyn, Elmwood, Hicksville, Long Island City, Ronkonkoma
|Number of Employees:||65 (many traditional job functions are outsourced)|
|Major Product Lines:||Trane, ADP, Ameristar, Burnham, ComfortAire, Daikin, First Company, MultiAqua, National Comfort, Navien, New Yorker, Reznor, Skymark, Unico|
When it comes to inventory, Sheeleigh says he always errs on the side of having more inventory rather than less. “People expect us to have product when they come here,” he says. Having lots of inventory is part of Wallwork Group’s culture. “Some companies are going to be particularly efficient with inventory, but maybe not as efficient in other areas. We’re efficient on process.”
Having inventory in stock is a competitive advantage for Wallwork Group. The business makes large preseason purchases and then drop ships them into the branches ahead of the busy summer and fall seasons. “Our customers must believe we can help them with their immediate need for product every time,” Sheeleigh says. “We absolutely can’t afford to send customers to our competitors. We know the number one reason contractors buy from a particular distributor is availability.”
As Wallwork Group works to continually improve its processes and have the required inventory in stock, its team also stays current with market trends. Ductless products are a good example of how the business has kept its focus on the future. Wallwork Group was Sanyo/ Panasonic’s first distributor of ductless products in the 1970s and Daiken’s first U.S. distributor of ductless products in the early 2000s. While sales of these products were initially slow, they have now taken off, Sheeleigh says.
The newest change in HVAC is the desire among homeowners for connected home solutions. While it may be considered a luxury item for older homeowners, a growing number of consumers consider this to be a necessary part of their home. In fact, most homeowners have some sort of wireless network in their home today.
“This is an opportunity that no company in our industry should miss,” Sheeleigh says of wireless home-connected solutions. For contractors, the opportunity to sell wireless homeconnected products is a tremendous talking point and the learning curve is relatively flat. “It makes dealers look even more professional.”
He says Nexia Home Intelligence from Trane is a home automation platform that offers homeowners the ability to control the temperature and security of their homes from anywhere – from opening a garage door to operating a ceiling fan. For the firsttime homeowners who grew up on tablets and cell phones, this is a must. “The convenience factor always wins,” Sheeleigh says.
The training room at Wallwork Group allows customers and employees alike to get hands-on experience with the systems.
Over the years, Sheeleigh has seen the competition evolve. Independent distributors continue to be purchased by large national organizations and Sheeleigh says they continue to become more efficient in their operations. With Wallwork Group operating in such competitive markets, it makes the work they do on inventory and process even more important.
“We believe our approach to business keeps us out in front of our competitors,” Sheeleigh says. “We feel we are more than a traditional supplier. We are a measurably valuable business partner. We are a company that judges our own success by our partners’ success. Accordingly, our company’s real product is not HVAC equipment, but rather the security we give our customers and vendors through our partnership with them.”
Wallwork Group’s partnership extends to having honest conversations with their customers, when necessary. It may be a customer calling customer service repeatedly about a technical issue or they may be experiencing credit issues. Because Wallwork Group documents everything, they have records about every issue. “Customers with repeated issues are told they need to attend training,” Sheeleigh says. “We offer our customers product, application, technical, business and sales training. All are necessary if we are to be true business partners with them.”
These honest conversations also take place with Wallwork Group’s vendor partners. Like customers, vendors have opportunities to take their business elsewhere, so Sheeleigh and his team make sure they are continually cultivating their relationships with them. He notes these conversations are framed in a “politically correct” manner. “We have learned to do this despite our usually too-frank NY/NJ approach!
Michael Maynard is a freelance writer who writes frequently on topics related to HVAC, architecture and construction. He can be reached at [email protected].