In any business, people are your most important asset. This is especially true in the voice/data/video (V/D/V) market.
The electrical contracting firm's success in the V/D/V market is directly related to the quality of the managers, technicians, electricians, and support personnel employed. Without a great staff, the probability of the company's successful entry into the emerging V/D/V market will be greatly reduced. This article will address recruiting, developing, and retaining the quality managerial and technical staff that the firm needs to grow its V/D/V business.
People are your most important asset
Employee recruitment, development, and retention is key to the success of any business. The company must be committed to both recruiting the best possible employees for the new business venture as well as providing ongoing development opportunities for them. This means not only looking outside the firm for the needed employees, but also looking inside, particularly at the management level. Getting employees involved in the new venture will facilitate the transfer of the firm's core values and culture to any organizational structure that is selected. This also ensures that existing employees will see the new venture as an integral part of the electrical contracting firm, not as a separate entity. Company-wide employee acceptance of the V/D/V market initiative is critical to its success and the firm's ability to reap the benefits of being able to offer a full range of services to customers as an integrated firm.
Electrical contracting firms are often focused on technical skills and knowledge as they consider hiring for V/D/V market entry. There is no doubt that technical skills and knowledge are very important, but the employee's attitude and bearing are equally important. There is often a much more intimate relationship between the company and its customers in the V/D/V market than in the traditional power distribution market. The image presented by your management and installation personnel will determine future business opportunities, both with this customer and referrals that this customer may make to other potential customers. To be successful, the V/D/V market will need to assemble a "crackerjack" management team and attract first-rate technicians and electricians.
Assemble a "crackerjack" management team
The term "crackerjack" is defined in Merriam Webster's Collegiate Dictionary as "a person or thing of marked excellence." Diversification into a new market demands a "crackerjack" management team. The management team you assemble to oversee the startup and growth of this portion of the business is extremely important to its success. Whatever this team's size, it must be high-quality, deep, and mature. It needs to understand the firm, its business and culture, as well as the V/D/V market and its customers.
The quality of the management team not only impacts the success of the V/D/V market initiative. It also impacts the overall future of firm. Diversification into the V/D/V market requires an investment of the company's internal resources that include people, money, space, and equipment. Since the electrical contracting firm has finite resources, they will need to be shifted from the electrical contracting firm's core power distribution business to support its new V/D/V business.
In addition, diversification into the V/D/V market may require additional investment by existing partners or shareholders, outside investment by others, or loans and increased lines of credit from banks and other financial institutions. These internal and external investment decisions can significantly impact the electrical contracting firm's future profitability and success will depend heavily on the quality of management team.
The management team needs to have experience. The start up of a new venture is no time for on-the-job training. If the firm doesn't have the right people in house, it needs to go out and get them. The management team needs to have complimentary and compatible skills. The team should not only include technical people, but also members with an understanding of personnel, marketing, accounting, and finance, among other skills, for balance. The best person to lead your entry into the V/D/V market will have strong leadership and communication skills as well as both a business and technical background. Unfortunately, these individuals are in high demand and in short supply.
Attract and retain "first-rate" technicians and electricians
Attracting the best technicians and electricians into your V/D/V business will also be a challenge, especially starting out. Just like the management team, technicians and electricians are in demand not only within the electrical contracting industry, but also in other industries. Electrical contractors that are successful in the V/D/V market are typically also successful in attracting and retaining the best technical employees by offering a career and not just a job. These businesses recognize that technicians and electricians specializing in V/D/V systems are knowledge workers.
Unlike traditional power distribution work, where the managers understood the work and directed it, no one person can know and understand all aspects of installing a complex V/D/V system. Successfully designing, installing, and commissioning a complex V/D/V system is a team effort and each team member contributes his or her unique expertise. As a result, knowledgeable workers in the V/D/V market cannot be managed in the same way as crews in traditional power distribution work. Due to differences in the work, V/D/V technicians and electricians must be given greater latitude in how they perform their work.
Knowledgeable workers are what will make your firm successful. In order to attract and retain the best people, the electrical contractor must understand what motivates them. Offering a better salary and benefits, along with the promise of challenging work, may get them in the door, but it will not keep them there.
Most people enter the V/D/V market because of the challenge and the opportunity to work with and learn about state-of-the-art equipment and systems. The key is to keep these employees challenged and continually provide them with opportunities to grow personally and professionally within the firm. This requires an investment in personnel development and recognition that people are a company's scarcest and most important resource in the V/D/V market. If you don't address the career needs and personal goals of your V/D/V technicians and electricians, someone else will.
Commit to ongoing training
To be successful in the V/D/V market, the firm must become a learning organization that includes everyone. Technical knowledge is not only a critical success factor for market entry, but also the primary source of competitive advantage for the electrical contracting firm in the V/D/V market. There needs to be a commitment to training at all levels in order to build new skills and keep existing skills and knowledge up to date.
The fast-paced V/D/V business relies on the knowledge, skills, and experience of people at all levels of the organization. Unlike the more stable power distribution market, new products and systems are being introduced daily, and customers are demanding the latest V/D/V technology. Training at all levels to stay current with the latest technology and trends is a must and should be viewed as an investment rather than an expense. Everyone must be knowledgeable from the new apprentice in the field to the company president.
It will be very difficult to convince a potential customer that your company can do the work if the person making the proposal does not have an understanding or the technology. The firm may have the best and most knowledgeable technicians and electricians available, but someone who lacks the knowledge to communicate at the customer's technical level can not sell these skills. In fact, success often depends on being one notch above and one step ahead of the customer.
Certainly not everyone can or should have the same depth of technical knowledge. For everyone in the company to have the necessary knowledge to effectively do his or her job everyone needs ongoing training, through formal internal and external education programs, on-the-job training, or both.
V/D/V training represents a significant financial commitment for the electrical contractor. Ongoing V/D/V training is expensive and includes not only the direct costs associated with sending people to seminars or purchasing self-study materials, but also the lost time and revenue when people attend training sessions.
Since knowledgeable workers carry their knowledge, skills, and abilities with them, the firm's investment is lost when an employee leaves for another employment opportunity. This is why your accountant requires that you expense training costs in the period they are incurred, rather than amortizing them over time like you would other assets such as trucks, tools and test equipment. However, there is greater danger to your business if you don't train employees and they stay.
Constant training and upgrading of employee skills is a must in the V/D/V market. For years we have looked at training as optional because of the slow pace of change in the power distribution market. Today, with technology advancing at a dizzying rate, training is a necessity for our V/D/V business to survive and prosper. Therefore, we have to view training as a necessary cost of doing business and recover it through project overhead allocation or directly as part of a project proposal.
Training that applies to multiple projects should be included in our general V/D/V overhead. On the other hand, project-specific training that will probably not benefit current or future projects should be included as a direct cost of the project.
Encourage individual certifications and registrations
Whenever possible, the company should encourage and support employees who want to pursue educational programs that result in employees receiving industry-recognized certifications or registrations. Training programs can range from a certificate for a short vendor-training course on a new product or installation technique to licensing. Individual certifications and registrations will make a good employee more valuable and marketable.
Customers know V/D/V systems are critical to their business, and knowledgeable ones choose design and installation firms based on qualifications and not price. More important than overall firm track record is individual knowledge and experience. Employee certifications and registrations demonstrate the firm's commitment to providing the customer with the best and most up-to-date staff. This can differentiate your business from competitors. Third-party certification or registration of your employees' skills and knowledge is a powerful marketing tool.
Use a business plan to attract key employees
Staffing is key to successful V/D/V market entry and an important part of your business plan. Your completed business plan will have many uses, such as recruiting key management and technical personnel.
Most people do not consider a business plan as an important employee recruiting tool, but it can be. Your business plan for V/D/V market entry should answer many potential new employees' questions about your company's diversification into the V/D/V market. Putting it in writing will demonstrate your commitment to the V/D/V market and give a good indication of its goals and how it plans to get there. Also, people considered for key positions in the V/D/V organization will see immediately where they fit in and their potential for growth within the organization.
This article is the result of ongoing research into the impact of information technology on the electrical contracting industry that is sponsored by the Electrical Contracting Foundation, Inc. The author would like to thank the Foundation for its continuing support.
Dr. GLAVINICH is Chair and Associate Professor of Architectural Engineering at the University of Kansas. He can be reached at (785) 864-3435 or firstname.lastname@example.org.