“Unstable Disequilibrium” in the HVAC Industry: Thinking about 2014

“Eternal truths will be neither true nor eternal unless they have fresh meaning for every new social situation.” — Franklin D. Roosevelt

The economist Nouriel Roubini coined the phrase “unstable disequilibrium.”  I wish I was smart like that.  More than half way through the year and the sense that the HVAC industry is wobbling in its own “unstable disequilibrium” is palpable.  In conversations with friends, salesmen, business owners, managers and distributors the overarching sense of uncertainty about an uncertain future is very real.  This morning a friend said to me: “I’ve run this business for 30 years and all I know is that we’re going to have to change a lot next year and the year after.”  Old rules are gone.  Owners and managers who hold today in a vice grip because of uncertainty or fear  lose more and more opportunities than they create.  Our car is flying down the highway, outstripping the headlights’ ability to project light in to the darkness.  

There’s no reason to believe that this will change–only that the nature of change is accelerated and necessitates a new type of strategy thinking (and thinker!) for small businesses everywhere.  Recognizing that a small business owner’s magnetic north is gone, she must begin to feel at home along these dark and twisting highways.  

Smart owners are asking tough questions: How can I plan for a business landscape that defies traditional planning?  How can I market a business when marketing mechanisms are quickly outmoded?  How can I hire great people when great people already have great jobs?  How can I build a strategic advantage when tried and true ways of strategic planning are transient at best?

The best business owners I know are asking these questions right now.  Not in November.  Now.  I’m fortunate to participate in many of these strategy discussions.  I’m encouraging my friends to consider a new set of strategy attitudes (“stratitudes?” I like it, I’m claiming it) for the service industry in 2014:

1.  Outsource talent and hire for skill.  The old adage was “hire for attitude and train for skill.”  Obviously an employee’s great attitude is part of an exemplary company culture.  I am, however, strongly suggesting that outsourced and remote talent acquisition combines the best of both worlds.  Project management, administrative functions, copy writing, social media maintenance, SEO, consulting services–all of these are easily accessible in a growing number of credible locations.  The outsourcing service oDesk is the best example of this type of talent strategy.  Think of a business function (I need a blogger!) and oDesk has 100 truly qualified bloggers–usually available for far less money than a social media agency charges.  Need your website updated?  oDesk has immense talent at your disposal.  Looking for SEO advice?  Outsource it.  If you love the results then build a relationship with the remote talent.  If you don’t, move on.  Suddenly you’re free from unfortunate termination conversations and contracts.  You can high-grade your talent based on your needs for a fraction of the cost.  Remote workers are the future.  They’re a quickly growing, highly educated, skilled class who elects to work remotely for a variety of reasons–and still delivers top level talent.  A service like oDesk requires that remote talent post their work, their portfolios, their rates, and their results.  Something Craigslist doesn’t supply.  For my money oDesk nails it–which probably explains the influx of capital in to the company and their publicized success.  Dare I say it: outsourcing talent will also begin to apply to field staff: helpers, technicians, and installers (if anyone wants to help get a start up going let me know).

2.  Direct-to-consumer internet sales.  Skynet is here my friends.  The sacred cow occurring at a kitchen table is at risk of being vaporized.  If a business has a well-optimized website (use free resources for this if possible) then it’s time to monetize the site.  Sell accessories, sell maintenance plans, sell systems…sell something!  This is happening right now.  A website is not merely your “digital storefront.”  It has to be functioning storefront (some guy named Bezos started selling books out of his garage in 1995–I think it worked out for him).

3.  Micro-narrative storytelling.  Why are blockbuster movies being promoted on Vine?  Why is Instagram jumping in to the video sharing game?  Why does YouTube suddenly feel a little old-timey?  Why is there a whole new crop of ad agencies popping up who focus on micro-video advertising?  Because it’s not a novelty.  It’s about capturing your customer’s attention for about as much time as it takes to make an influential, positive impression: 6 seconds.  Plan to begin integrating micro narratives in to tablet presentations, on websites, on social sites, on mobile sites.  Little stories have big impacts.

4.  SoLoMo marketing: Social, Local, Mobile.  Static advertising continues to decline while distributors do a disservice to their customers by continually promoting sluggish two-dimensional relic agencies (simultaneously creating their own version of The Emperor’s New Clothes).  It takes 30 to 40 organic visits to a static website before converting to ONE lead.  That’s a hell of an expense.  A well planned social media strategy that combines an engaging local strategy and that is designed FIRST around mobile users will be the dominant visibility plan in the very near future.   

5.  The New 1000: Long Tail influence marketing.  Defining a True Fan, categorizing them, connecting with them, providing custom incentives for the customers who can truly move the needle is a cost effective, referral based strategy for low-cost lead generation.  Of course, that means a business has to stay connected to its customers along the Long Tail.

6.  Meaningful brands/The end of Benefit sales.  “I don’t sell a product I sell my company.”  I’ve heard this so many times that I’ve lost count.  The question is: does the customer care what you sell or who you are?  A business and a product have to matter to the end user in terms that are largely unfamiliar to the service industry.  After all, we’re still splitting hairs warranty claims and AFUE ratings.  Who “gets” this better than most?  Nike, Audi, Volkswagon, Dox Equis, Old Spice.  The best news is that a business can duplicate the strategy without needing a million dollar budget.  Capture their heart and the the wallet follows.

7.  Culture.  Nilofer Merchant calls culture “the dark matter that holds up the stars in the sky.”  You know when a business has a unique culture–it’s the organization’s secret sauce.  But what is it?  Some mystical goulash of people, attitude, vision, leadership, sharing, collaboration, identity, purpose, cause, values, mission, reason-for-existing?  It’s something like that.  Which is the reason that most of the service industry either doesn’t spend time developing culture (it’s too hard) or they suffocate it with boilerplate (“Our mission is to be the industry leader in innovation”…bile rises..gack).  I’ll defer to Peter Drucker on this: “Culture trumps strategy every time.”  Amazing culture invites talent because it’s magnetic.  Amazing cultures are filled with amazing energy and ideas from all sorts of contributors.  Amazing culture gushes over to the customer.  It’s impossible to duplicate and it has to be part of any strategy discussion.

“Unstable equilibrium.”  The new normal.  The post-normal.  The abnormal normal.  The Franken-normal.  Whatever you call it it’s here.  And for our the service industry, the HVAC industry, it’s going to be a golden opportunity for some and the beginning of the end for others.  Direct-to-consumer sales, brand reinvention, culture reinventions, disruptive innovations (I’m waiting for a Nest filter), open-source sharing, remote talent–these are just part of a future that demands a fresh strategy and a new love affair with the unfamiliar.

2 responses

    • Thanks my friend and yes, I can absolutely present the info in a seminar format. Would be a pleasure. Please feel free to share the post with other ACCA members! I’ll give you a call this week. Matt

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