NECA TransmissionsNotes from the front lines of the electrical contracting industry
  • Family Business, Family Association

    Posted on Jul 08, 2008 by John M Grau

    On a recent NECA trip, I headed downstairs to the hotel bar at the end of the meeting to see who might be there. I ran into a NECA-member contractor and sat down to have a drink with him. 

    Our conversation drifted onto the subject of his business and some challenges he was facing. His workers’ comp modification rate had gone up, and he was having difficulty convincing his electricians of the need to control workers comp costs. He took over the business from his father about ten years ago and was now questioning that decision.  Was it worth the risk? His two sons (one just out of college and the other with two years to go) had decided they didn’t want to work in the business. They heard about all the problems over the kitchen table at night and decided there are better ways to make a living.

    With some variations, I’ve had this conversation before. It’s a pretty typical scenario for many NECA contractors. By and large, they are small, family-owned businesses with all the problems and opportunities inherit to that type of business.

    I realized in this conversation that disappointment with family loomed large. There is the sons’ lack of interest in the business, of course, but there’s also the lack of cooperation from the workforce. Small businesses consider their long-term employees like part of the family. It’s hard for them to understand why family members won’t pull together for the good of everyone in the business.

    During our conversation, another NECA contractor came by and joined in. He was nearing retirement from his family’s third-generation business. He had gone through a bunch of the same experiences and offered both sympathy and advice to my original bar mate. 

    I mentioned to them both that this was one of the real advantages of belonging to an association, like NECA. Where else can you find someone who truly understands the challenges you face on a daily basis? Where else will you find competitors willing to share their knowledge and experience with you?

    NECA members become part of an extended family. Sometimes there’s the weird cousin or the good-for-nothing son-in-law, but overall it’s a caring and supportive family.   Successful NECA members have learned how to use these relationships to their advantage. In fact, many have told me it is the secret to their success.

  • Not Going to be a Statistical Victim

    Posted on Jun 02, 2008 by John M Grau

    The other day I was glancing at a magazine published by a non-union electrical contractors group. In an opening editorial by the group’s president, I came across a line claiming the group represented contractors performing “86% of private sector construction work in the U.S.” That caused me to sit bolt upright in my chair, ready to fight.

    Non-union groups are good at throwing around exaggerated statistics that go unchallenged most of the time. Our recent market analysis shows that union electrical contractors perform around one-third of all electrical work in the country. Our own data aside, it’s pretty ballsy for an association of only about 1,800 members nationwide to claim that they represent all non-union electrical contractors. I also noted the clever phrasing referencing “private sector” versus “all” electrical construction work.

    Then I sat back, took at deep breath, and started thinking about what I was doing. I was reminded of a CIR presentation I witnessed where the management representative stated in his oral argument that union electrical contractors in his area had a 12 percent market share. In rebuttal, the union business agent called the chapter manager a liar, because he had a study showing that they had a 15 percent market share. 

    Maybe the spread between 14 percent and 33 percent is a little bigger than the difference between 12 and 15 percent, but is the distinction any different?  What kind of bragging rights does a 33 percent market share actually earn us? 

    The bigger danger in trying to justify a low market share is that we accept viewing ourselves in a permanent minority position. If 33 percent is okay, then falling to 25 percent isn’t all that bad. 

    In my mind, if we don’t really think we can control a majority of the market, then we never will.

    I remember when I first became CEO of NECA the publisher of our magazine, ELECTRICAL CONTRACTOR, told me that in terms of display advertising revenue, we had a 20 percent market share. He explained that our major competitors at the time, EC&M and CEE, were owned by McGraw-Hill and could draw on their vast resources to outdo us every time. He said that give or take a percentage point or two, 20 percent of the advertising market was the best we could ever expect. 

    When that publisher retired, I replaced him with a young fellow with lots of new ideas who didn’t accept limitations on what he could achieve. Within a couple years, he had our market share up to 50 percent. Today we have the top magazine in the field with market share in the 70-80 percent range.

    The lesson here is that we shouldn’t waste our time quibbling about statistics or trying to justify a poor position. If we don’t perform a majority of the work in a market area, then we’ve lost. Period. Our goals should be ambitious and our effort should match it. Let’s chose to be the victor, not a victim.

About NECA Transmissions

NECA Transmissions is a collaborative effort from CEO John Grau and NECA staff to provide insight and feedback on key issues from the front lines of the electrical contracting industry.


1201 Pennsylvania Ave. NW Washington, D.C. 20004 United States |Phone: (202) 991-6300 |Fax: (301) 215-4500

|Contact NECA Webmaster

© Copyright NECA 1995-2011. All rights reserved