IoT and We

So many people are into IoT…it’s the shiniest object on Earth right now and nearly ‘every’ company is active in it. Which gave me pause…who is really ‘in’ IoT? I did a couple of Google searches and here are the top 10 IoT innovators, according to a couple of aggregator sites:

Familiar with most of those? Me neither. So, I checked again to find more legacy named companies that seem to be at the forefront and got:
Siemens, AT&T, Schneider, Intel, Apple, Amazon, Google, HP, IBM, Microsoft, Oracle, Verizon and Philips

Those, I’ve heard of. And then I started to think about where does the electrical industry play in this future behemoth of a market? It’s noticeable to me Philips is on the legacy list AND have divorced themselves from lighting. Of the legacy companies, the only ones that appear on that list are: Schneider, Siemens and GE. Those 3 companies are all electrical manufacturers; and the only commonality they have is power distribution and/or factory automation. All three, of course have to be positioning themselves in the IoT market. But where are the rest of the large companies? ABB, Acuity, Honeywell, Rockwell, Eaton, Southwire, Johnson Controls…and more.

I found the book BOLD* very interesting. The digitization process goes through a 6 step process of 6 D’s: Digitization, Deception, Disruption, Demonetization, Dematerialization, Democratization. When LED arrived about 12 years ago (commercialization of LED as a light source), I witnessed most of these steps: the legacy companies, at large, denied its existence (too hot, too expensive, etc.), and then the market disrupted, first at the lamp level and then legacy fixture products. The rest of the steps also occurred, with democratization remaining as the last step. I’m not sure how a lighting emitter source will ever be democratized (other than as an inclusion of a flashlight in your cell phone), but there’s a lot of runway still out there.

My main point is this…is the IoT ‘market’ suitable for the electrical industry as a whole? When IoT is boiled into its primary elements, it’s a sensory system with a data analytical system attached. While many electrical products have been equipped with sensors, the electrical industry is not historically tech savvy enough to position themselves as a data analytical system.

GE is an example of an electrical company who has jumped into this area with both feet. It has internally created its own operating system, Predix, to provide an industrial customer with a complete sensory and analytical system; independent of the overall ERP system of that company. Their success is still too early to assess.

I can imagine a Honeywell solution competing with Predix; as well as a Siemens system. But those companies have been software intensive for decades. Is this a viable market for more traditional electrical manufacturers to enter; as their historical success has been the manufacture of electrical hardware?  The only way to get there, quickly, would be through acquisition. Acuity is a company who obviously believes they should be in the IoT market; and they’ve made several acquisitions of companies with software solutions. Will that succeed, though?

Lighting is a product designed for commercial applications, to do one very important thing; render the ability to see a task. Most companies listed on any of the lists above, feel they ‘get lighting’. Commodity lighting solutions will always be around us…troffers on 8’ centers has been the core of commodity office lighting for decades…and sadly, it’s not going away. But does your ability to put troffers on centers position you in the IoT market? Lighting offers a unique presence; it has geographic hegemony, power supply and structural capacity to handle as many sensors as a building owner may require. Coupled with communication gear, it can sense anything you want, upload that information into a central processing system and feed a sophisticated analytical system to generate more information than anyone needs. But, does that give lighting an edge in playing in the IoT market?

I think not.

I’ve always been guided by the principle of parsimony…keep it simple, master your craft. Lighting is complicated enough; with dozens of channels and myriad product solutions…you can be very happy and successful focusing on being a great lighting provider. Stepping into software solutions and assessing security risks, asset management, temperature variances, occupancy variables, toxicity, terrorism or more…isn’t lighting.

Egret is uniquely specialized in the identification, assessment and recruitment of quality talent unique to the electrical industry. Most of the people we encounter are well-qualified industry people…who have developed some capability of talking about IoT. Any client company can succeed with the acquisition of that talent…without investing time, people, training, and huge capital investments into a scientific discipline that happens to just physically coexist with lighting.

I know many of the mega corporations feel compelled to enter IoT, with huge CapEx and OpEx budgets. But look at the players above and ask yourself…is my software solution more robust than Google, or Verizon, or SAP, or Microsoft? An alternative strategy may be to become devout agnostics and approach every company above and offer to partner with them as the geographic hegemony that can deploy their solutions? And together provide quality lighting and a sensory/data analytic solution that meets the expectations of the client.

The IOU community has been embracing software vendors for decades as they try to modernize their grid. With the advent of distributed generation…they’ve expanded their vendor partners. None of the IOU’s I’m aware of have ventured into creating their own solutions for IoT. In short, they stick to what they really good at; power generation and distribution.

Parsimony…be the best you can be in electrical equipment and partner with the software innovators to provide a broader solution to your customer.

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*: Diamandis, P., & Kotler, S. (2015). Bold: How to Go Big, Create Wealth and Impact the World.

 

professional recruiter electrical industry ted konnerth

Ted Konnerth, Egret Consulting Group’s founder and CEO, recruits on a retained basis, helping leaders in the electrical and lighting industry identify their next C and V-level hire. Ted also manages Egret’s Consulting Services division, assisting clients with Organizational strategy, Channel strategy and Succession planning. To learn how Ted can help your company view his biography, check him out on LinkedIn or email him at tk@egretconsulting.com.

Do you know what you’re looking for?

If you are looking for the perfect candidate, that person does not exist; but you may need help finding industry professionals. As recruiters, we talk to industry people every day, we know what candidates are looking for, from salary to culture to growth potential.

To determine if you have unrealistic expectations, start asking yourself these questions:

● Why is this position so difficult to fill?

● Why did the previous employee leave?

● Is your salary range in line with your specific industry for that location?

● Is the education requirement necessary for competency in this role?

● Is it necessary for the candidate to be in the office, or could they work from a home office? If they must be in the office is your relocation package sufficient to move someone?

● Is it necessary they have the exact previous experience?

Hiring for a single position shouldn’t be a full-time job. Find a fresh set of eyes, call a professional recruiter in your industry. An industry specific recruiter will tell you what the employee market is like, what the current salaries are in each region, what requirements may not be realistic for the role you’re looking to fill, etc.

We at Egret Consulting work in the electrical industry and we understand everything from Lighting, Wire & Cable, Tools, Power Distribution and Electrical Wholesale distribution and even the independent manufacturer sales rep channel. Give us a call, we can help you find qualified candidates.

 

Pati Kelly is a contingent and retained recruiter exclusive to the electrical industry with a specialty in Wire and Cable. To learn more about how she can help your company identify and attract talent, check out her biography, view her LinkedIn profile or send her an email at pk@egretconsulting.com.

Emerging Lighting Professionals: What Companies are Looking for and Their Concerns

Part 1

I was invited to speak at the IES Annual Conference in Boston presenting for the “Marketable Skills for Emerging Professionals in the Lighting Industry” seminar. Over the next 3 blogs, I’ll review the topics I discussed in that presentation.

I surveyed presidents and VP’s of lighting manufacturers and principals of lighting designers. Here are the top 5 positions for emerging professionals companies are looking for:

1. Lighting Designers – junior to mid-level, project managers, production work, etc.

2. Engineers – electrical, mechanical, software and electronic

3 & 4. Sales (inside and outside were tied) – calling on specifiers or distributors

5. Marketing

The top concerns companies have for hiring someone with 0 – 5 years of experience:

1. Work ethic. Companies are worried that people with 0 – 5 years of experience aren’t interested in putting in the work and doing the little, mundane details required to build a strong foundation for their career and be successful in their career. As Michael Jordan said:

You can practice shooting for 8 hours a day, but if your technique is

wrong then all you become is very good at shooting the wrong way.

Master the fundamentals and the level of everything you do will rise.

If you get away from the fundamentals the bottom will fall out.

Those little tasks have value even if you don’t see that today.

2. ROI (Return on Investment) and longevity with their company. You may see the company is paying you a salary of, say, $50,000, but they are investing much more in you. Statistics state: for a $50,000 salary, a company invests $75,000 – $135,000 for you. They are covering your benefits such as medical, dental and retirement account, but more importantly, they are investing their time to train you and taking time away from their own jobs to do so.

3. Character. Companies want to make sure you are who you say you are and you will invest in yourself; to learn on the job and on your own time.

Please stayed tuned for the next blogs on Marketable Skills and Qualities for Emerging Professionals and the 3rd blog on Advice for Emerging Professionals.

Brooke Ziolo is a contingent and retained executive recruiter working exclusively within the Lighting Industry. To learn more about how she can help your Lighting company, LED company or Lighting Design Firm attract talent, check out her biographyLinkedIn profile or email her at bz@egretconsulting.com.

Market Growth

In 2010, I prepared a presentation for a consulting client that had a diversity of products; from electronics to alternative energy to lighting equipment. I summarized raw numbers of companies that were in their space to give them an idea of how diverse the industry is in the United States. In 2018, I revised the numbers, with additional categories and I summarized that data in the chart below:  

  • Lighting manufacturing has grown nearly 80% in 8 years, i.e. the number of manufacturers of commercial lighting have increased nearly 80%.  The number of residential lighting manufacturers has declined 40% in 8 yrs. Lamp manufacturers have grown more moderately of around 8% over 8 years. 
  • As an interesting aside, the number of electrical distributors has dropped from 2014 to current by 3%. 

Which brings me to market growth… 

Every facet of the electrical industry is experiencing market expansion; not necessarily revenue growth, but growth in the diversity of ‘customers’. In 2010 I summarized a list of vertical markets. That slide had 11 markets listed; with C/I divided in subsections of project versus stock. 

My current list of vertical markets is now 23. Vertical market is defined as a market that is unique or large enough to require a dedicated sales strategy or sales organization to compete in that market. Let me list the original and new market entries: 

Many of you may come up with additional markets (Sign market and GSA are 2 likely additions). 

The point is simple… the electrical industry has expanded by the emergence of new markets enabled by new technologies. Power distribution equipment manufacturers are all promoting smart equipment and are getting further removed from their traditional customer of IOU’s, Muni’s and co-ops. The growth of DER (Distributed Energy Resources) has created a direct to end user sales model that didn’t exist in the past. The sales approach to that sale also requires different selling skills. Amazon is building mega warehouses and most of those are incorporating their own DER power supply system. The same holds for Google’s construction projects, and many large global corporations are looking at DER as part of their move to alternative energies, lessening reliance on traditional power providers, reducing their energy expense and offering some security barriers to being largely ‘off-grid’. 

So, who’s selling this stuff?  As the number of manufacturing companies has grown and the number of distributors has shrunk… it’s apparent that the channel strategy to new customers is bypassing the traditional structure. Why is this changing? A few thoughts: 

1. Channel cost. In a recent article by David Gordon, the annual rebate pool from manufacturers to distributors is over $1B. In an electrical market that is probably around $125B in size, that’s less than 1%; but to each individual manufacturer that chooses to play that game, it’s about a 5% ticket to play. Is there real value in that investment? One could suggest that the 5% ticket is a modest investment if it enables the manufacturer to retain that C/I relationship, while investing their growth capital in different channel skills to enter the emerging markets listed above. But a 5% bottom line hit will become more meaningful as we enter our next recession.

2. Pace of technology. The expansion of technology has been faster than the industry has ever experienced; which means the absorption rate for those manufacturers is strained. Most manufacturers have challenges in keeping their own employees current, let alone trying to educate their legacy channel partners to get them to see the new markets.

3. New markets have differing players and rules. IoT is without a doubt the shiniest object on the Earth right now. It’s forecasted to become a multi-trillion-dollar market. There are no rules of who’s going to play in this game… so it’s open season. The dialog of what sensors, what operating protocols, what regulations and who will influence the buying decision is wide open. And IoT is embedded in every market listed above… but the caveat is… who’s going to get to the right buyer to influence the sale, deployment and analytics that justify the expense? And which legacy partners are stepping up to participate?

4. New markets versus cost of sales. The fully loaded cost of sales for a lighting manufacturer, utilizing an independent rep force is around 4.5-5% (note: this is commissions only and specifically the larger manufacturers; smaller companies would have larger cost of sales). The same cost of sales for a direct sales force is closer to 9%. You are not going to enter the UV market, HCL market, vertical farming market, HVAC or DataComm markets with legacy indirect sales organizations. So, you can simply choose to not enter those markets, or you can choose to invest in those markets. A 9% cost of sales; without 5% distributor rebate plans, brings that strategy into focus. A cost of sales to enter a pure e-commerce play can be even lower with a few dedicated marketing people who can brand your products and eliminate ‘sales’ all together.

Change begins from within.  Manufacturers who continue to lag the shift in market dynamics, will slowly fade from sight; new disruptive business will move in. As for distributors… it’s ‘local’ relationships that retain their business. Over time, distributors will lose their seat at the table for technology solutions if they feel that isn’t their ‘value’ to their customers. And it will be difficult to attract new customers in channel markets that are foreign to them; opening the door to upstart companies that will lead with technology, and eventually drag in legacy products to expand their value to emerging markets. 

The electrical market is bigger than we imagined and growing rapidly.  

Disruptors seize on growth markets. 

Change begins from within. 

 

professional recruiter electrical industry ted konnerth

Ted Konnerth, Egret Consulting Group’s founder and CEO, recruits on a retained basis, helping leaders in the electrical and lighting industry identify their next C and V-level hire. Ted also manages Egret’s Consulting Services division, assisting clients with Organizational strategy, Channel strategy and Succession planning. To learn how Ted can help your company view his biography, check him out on LinkedIn or email him at tk@egretconsulting.com.

It’s Not Always About the Money

There are many reasons people change jobs but it’s rarely about money, yet it’s the first defense when a manager is handed a resignation. When a candidate gives notice, one of two things occur: a counteroffer or an escort out of the office. I believe employee retention falls squarely on the shoulders of management and the majority of candidates quit their job for reasons their manager could control. If employees don’t trust their leader to lead them, they lose respect for them and leave. Conversely, an employee who feels their manager recognizes their work, pays them fairly and invests in them and their career growth will stay…until the manager leaves.  

The reasons why people leave their jobs has changed over the years. Between 2008-11, most workers preferred job security over cool benefits or an amazing office or company culture. Prior to 2008, it was almost always about the money. Post 2011, employee concerns shifted to things like benefits and culture. Since 2014, the main reasons people left were for better opportunities, career advancement, more supportive culture and autonomy.  

Based on a study published by Jan Tegze, a long-time recruiter…gathered the reasons why people have left their jobs in the last 10 years.  

Things are shifting, there aren’t enough people to fill jobs now, tweaking your management style (or your management team) could mean all of the difference!

Rather than play phone tag, Here’s my calendar link to make finding time easy. Just choose the day and time!

 

 

Prudence Thompson is a contingent and retained recruiter entirely dedicated to the Electrical Distribution industry. To learn more about how she can help your company attract talent, check out her biographyLinkedIn profile or email her at pt@egretconsulting.com.