2020 AHR EXPO, Orlando, Fla. — During the recently concluded 2020 AHR Expo in Orlando, Fla., we spoke with Jeff Williams, vice president and president, Global Products, Building Technologies & Solutions for Johnson Controls (NYSE: JCI) — for a balcony seat overview of Johnson Controls initiatives in the commercial building controls sector of the HVACR industry.
Williams has built a solid, 36-year career with Johnson Controls, 31 of those in the automotive division. He now leads all of Johnson Controls Industries’ product management, engineering, development, manufacturing and third-party sales activity.
For the previous five years, Williams served as vice president, Johnson Controls Building Solutions, Europe, Middle East, Africa and Latin America, where he guided the business to sustained growth and improved margins across the region.
Growth Through Solutions
Though our time was limited, and Williams' next interviewers were waiting in the wings, we managed to cover key areas of interest to the overall commercial HVACR industry. The bulk of our discussion centered on people and products: how the people of Johnson Controls are working with customers and contractors, to provide the many new products those customers need to achieve their building efficiency and sustainability goals.
“In areas related to product development and product management, we believe we understand this market, and we also understand how we should position a product offering from a particular product line, in a particular domain and region,” Williams said.
Global Convergence Around Three Trends
Williams’ comments followed a morning panel discussion — “Changing Customer Demands" — which featured other Johnson Controls executives: George Oliver, chairman and chief executive officer; Mike Ellis, executive vice president and president, chief customer and digital officer; Rod Rushing, president, Building Solutions, North America; Joe Oliveri, vice president/general manager, Global Ducted Systems; and Jenny Stentz, area vice president, Building Solutions, North America. During that discussion, the panelists explored ongoing and myriad construction industry changes related to digitization, decarbonization, and electrification.
“As George Oliver mentioned during the panel discussion, our collaboration with customers is helping to define their priorities, their use case scenarios, and understanding the problems customers want to solve, and in what priority. I think we get it 80 percent right. The remaining 20 percent can be customized to a customer requirement,” Williams asserted.
Customized Solution for Bee’ah
As an example of Johnson Controls recent success in offering customized solutions, Williams described its activity with Bee’ah, a major, Middle Eastern waste management company, during the construction of a new, sustainable headquarters in the United Arab Emirates. Microsoft was a partner in the project.
Williams explained: “Bee’ah leaders had a vision to be smart, digital, connected and first to market. They had a number of use cases for which we had not yet developed solutions, but we had the domain expertise and capability to support them as they sought to enhance the total experience in a building. We partnered with Microsoft, and applied our domain expertise around HVAC, building, fire, and security, all digitally connected. We possessed 80 percent of the capabilities, and Microsoft has helped us with the cloud applications, AI and algorithms that converge upon an incredible offering for the customer. Bee’ah is an example of a customer that had additional issues or opportunities they wanted to solve, that would not be part of a standard portfolio offering.”
The Bee’ah story served to support Williams’ message, that Johnson Controls knows the steps it must take to differentiate itself and gain market share.“Customers will inform us of what they may want, and we provide solutions we have developed from an R&D and market-backed perspective," he explained.
For both the independent North American building controls contractor as well as its own field workforce, Williams said Johnson Controls is ready to offer information and training that leads to a full understating of product capabilities. That realm of knowledge includes specifications, the Johnson Controls value proposition — which contractors can in turn translate into value for their building clients — the applications required for specific building environments, and the connectivity, training and collaboration that is critical for the contractor’s ultimate success.
Among other news circulating around the three-day annual Expo, was Johnson Controls new collaboration with Lincoln Educational Services Corporation (NASDAQ: LINC), a leading provider of specialized technical training. The agreement will provide expanded career opportunities for Lincoln Tech graduates, and help to build the Johnson Controls workforce. Graduates of Lincoln Tech’s Heating, Ventilation and Air Conditioning (HVAC) and Electrical and Electronic Systems Technology (EEST) training programs throughout the country will have the opportunity to pursue careers with Johnson Controls, which will assist Lincoln in recruiting new students for these programs. Johnson Controls will provide training equipment and sponsor classrooms at 10 Lincoln Tech campuses across the country: Columbia, MD; Denver, CO; East Windsor, New Britain, and Shelton, CT; Indianapolis, IN; Mahwah and Union, NJ; Marietta, GA; and Melrose Park, IL.
Even the giants of the HVACR industry must plan ahead for the continually shrinking HVACR workforce, and as Johnson Controls seeks to build up its manpower, the products are meeting in between, and have become more interconnected and smarter.
“We have an incredible service base, with 15,000 to 20,000 service technicians on the front lines,” Williams shared. “The issue is, that increased controls sophistication, greater digital capability, and increased connected offerings and technology, all require some retraining and incremental training. So that whole refreshing and retraining is critically important for sustainability.”
“But related to the value proposition and applications for various situations, you must be selling the correct product, as opposed to selling for the sake of a sale. Therefore, there is training and retraining across the entire spectrum: sales, business development and service.”
How to Optimize Dwindling Labor Resources
A large population of specifying engineers, MEP engineering firms, and contractors of all shapes and sizes continue to seek solutions to repopulate a declining workforce. We asked about specific efforts that Williams’ team is developing from a product standpoint that’s helping those employers optimize labor resources so they can "do more with less."
“We’re establishing apprentice programs, and finding those early career and trade associates in the trade schools, and we fund or sponsor all or part of what’s needed to bolster a particular trade and the training that comes with it.
“We’ve done that with ourselves; we haven’t looked at extending any partnerships, because quite honestly, there is a great capacity for our own needs based on the growth curve and attrition rates.
“A great takeaway is, “how can you take what you’re doing, and extend it to other partnerships? We have the recipe, programs and protocols, now we need to make the decisions on which broader set of constituents to offer it to," Williams explained.
Since differing generations learn and interact with technology in different ways, we asked Williams if any of the newest Johnson Controls product designs have been informed in any way by changing technician demographics. He said this is indeed happening.
“For example, when we talk about ‘digital twins,’ it refers to mapping digitally the assets in a building. And when it’s smart and connected, you know that you can be seated at a remote monitor and see that on the first floor of the Orlando Convention Center, there is a fault in a fire detection unit. The digital twin may see a light blinking in a zone. The technician knows it’s nearby, but the digital twin knows exactly where the faulty unit is found. Digitization is making troubleshooting more intuitive and precise.
"Additionally, you have virtual reality goggles, and buildings mapped digitally. When you are working on a YORK chiller or a residential/light commercial unit, the technician can see the schematic and wiring pattern in the VR goggles.
"The technology is evolving very quickly. The next question is, how do we equip the workforce with those capabilities to be able to install and service with more sophistication?"
Lessons from Differing Cultures
Williams’ career has included eight years managing the Johnson Controls overseas businesses. He told us the lessons to be learned from working in a foreign country include the need to be culturally adept and aware.
“Markets, people and operating systems are different. As a global company, we certainly pride ourselves on standardization and best practices, which I have led for Johnson Controls since 2015. When your operating system includes procurement, manufacturing, engineering, and commercial businesses, how can a global company best leverage its scale? You leverage scale through standardization; finding things that work; and deployment.
Williams agreed that markets, specifications, customers and contractors differ from each other in many key ways, “So, there is some tailoring in your approach to solutions that you must recognize. If I’m designing a product for the Middle East, that’s 50 hertz versus a different power supply elsewhere. It’s not one for all. There are differing applications, requirements, specifications, and regulations, for example, In terms of a product’s SEER (Seasonal Energy Efficiency Ratio) rating, or a refrigerant’s global warming potential (GWP).
“We use the ‘market back’ process [when designing coordinated marketing programs]. We understand where the largest opportunity is. We prioritize our investments based on market potential, and there are obviously tells that help us determine whether it’s a growth opportunity or if there is a gap in the portfolio; and then we make those tradeoffs and decisions as to how to serve our customers. We might find that we’re not everything to all customers.”
Williams described the growth in Johnson Controls’ HVAC, residential/light commercial, security and fire suppression sectors as one of growth, with some ‘white space,’ sprinkled throughout, depending on the market.
“It becomes incumbent on my group, to inform us from a global product management perspective, of what represents an opportunity, what is a gap, or where can we be first to market if we had a differentiated solution.”
Leaping Those Tall Buildings
Williams said Johnson Controls’ sustainability superpower is significant around the globe.
“Europe has been a leader in sustainability for decades. In Asia, industrialization is improving and the economies are building like crazy, but in environmental stewardship, there are some gaps to fill. The Americas is adapting, at a more rapid pace that it has in the last 10 years, for obvious reasons of global warming and the need to be a better steward of our environment. Our company, the company promise, and the Johnson Controls brand, are centered around environmental stewardship and the efficiency that comes with that: using fewer precious resources. That’s why a 20- to 30- to 40 percent efficiency improvement in electric consumption, or zero landfill waste are principles and staples we put behind our products and offerings that make a pretty bold statement that we’re ‘all in.’”