5 minute read
DEVELOPING NEW MARKET OPPORTUNITIES
By Jordan Whitehouse
About four years ago, Cleveland-based contractor T.H. Martin had its eye on an HVAC project at the new Highland Springs assisted living centre and hospital in Beachwood, Ohio. The job would be worth over a million dollars, and it would help T.H. Martin enter a new market it was itching to get a piece of. The only potential problem, says company President Tom Martin, Jr., was that they wouldn’t be able to secure it if they couldn’t negotiate a competitive labor rate with Local 33.
Thankfully, everything worked out, as Martin and Local 33 Business Manager Mike Coleman had developed a strong working relationship over the years. “We would never have reached the number we needed if we didn’t have that relationship,” says Martin. And the result was not only a profitable final project and the employment of six to eight sheet metal workers over six months, but both T.H. Martin and Local 33 had a clear example of the benefits of working together to target a new market.
Successfully entering a new market isn’t just about relationship-building, of course. Economists and strategists generally agree that factors such as timing, scale relative to the competition, and the ability to leverage complimentary assets also play big parts. Even with all of these factors lined up, it’s believed that for every successful market entry, about four fail. In the signatory sheet metal industry, the best way to reduce risk is to have a strong relationship.
Photo courtesy of The Waldinger Corporation.
“Anytime you venture into a new area or tackle a new market, you need to have your entire team onboard to make it successful, and our labor partners are a critical part of that team,” says Western Allied Mechanical CEO and SMACNA President Angie Simon.
So, how do you get the two sides onboard and working together? It all comes down to trust, says Mike Coleman, SMART International assistant to the general president and labor co-chair of the SMART-SMACNA Best Practices Market Expansion Task Force. “That’s important so that labor can get the true perspective of employers and employers can get the true perspective from us. That only comes from sharing a high level of trust.”
Building that trust takes time, however, says Martin. Sometimes you have to start slow, which may mean that you don’t initially address the topic of new markets. “Just find some general 30,000-foot initiatives you can work on together—networking events, political events, those types of things. If you’re talking and meeting bi-monthly or whatever, eventually you’re going to start drilling into, ‘Hey, where can we maybe work together to secure some markets?’ Or, ‘What can we do better from a safety standpoint to sell value to our customers?’”
It’s hard work, says Coleman, but the most important thing to remember during the trust-building process is to be honest, because that’s how you show you can be trusted. “And look, it’s not always going to be what the other side wants to hear, but as long as it’s the truth, you can build those relationships.”
Once that trust has been established and a contractor wants to go after a new market, contractors should be open to asking labor about what they think, says Guy Gast, president of The Waldinger Corporation’s Iowa division. “If you are willing to invite input on your new market plans from your banker, insurance professionals, accountant, or colleagues, then you should be willing to test your ideas on labor leadership,” he says. “Of course, that only happens when you have trust.”
For Angie Simon, it’s also crucial to share the business plan for a new opportunity with labor partners. It could outline the number of workers needed, the qualifications they’d need, and the growth plan over the next six months to a year so that labor can also plan. Carol Duncan agrees that it’s crucial to share numbers with labor partners in these situations. She is the CEO of General Sheet Metal in Portland, Oregon, and the management co-chair of the SMART-SMACNA Best Practices Market Expansion Task Force. “I’ll share vivid notes and numbers, and say, ‘Here’s my bid, here’s my competition’s, and this is why we didn’t get this job. How can we be more strategic in our approach next time?’ We’re both limited in what we can do, but it is so important to find those common threads or those out-of-the-box ideas that you can use to try to get there and make it workable.”
Those limits, though, and getting both parties to understand them, can be the biggest challenge when trying to work together to develop a new market, say both Duncan and Coleman. On the labor side, Coleman found that it could sometimes be tough to get the contractor to realize that just because he agreed with the contractor didn’t mean the membership would also agree. On the contractor side, Duncan says the hardest challenge to overcome is getting labor to understand how difficult it is to get into a new market or how difficult it is in some markets to get work because of the non-union competition.
Plainly, they both agree that one of the keys to getting on the same page is building trust in the other. “And that’s an ongoing process,” says Duncan. “It’s all about continually reaching out and trying to be responsive to their needs. And when they call and ask for help, we help. We do what we can so that when I say we need help, the response is, ‘We’ll do what we can because you’ve always been there for us.’”
The result of that reciprocity is, ultimately, what’s best for the industry as a whole, says Coleman. Whether it is a new market opportunity or any other issue labor and management were discussing, he says, in his experience, it never helps to be close-minded. “You have to be open-minded, and you really need to look at what’s best for the industry,” he says. “Because if we’re taking care of the industry, I think the industry will take care of us.” ▪
Jordan Whitehouse is a freelance business journalist from Kingston, Ontario, who writes for magazines, newspapers, and online publications throughout Canada and the United States.
