NECA TransmissionsNotes from the front lines of the electrical contracting industry
  • Where The Glass Is Greener — And More Than Half Full

    Posted on Aug 04, 2008 by John M Grau

    A friend of mine writes regular commentary on our industry through his own blog and in the freelance work he does for industry-related groups. He’s a doom and gloom kind of guy. For him, the world has always been on the verge of the Apocalypse, and I know he is reveling in all the bad news he can garner from our current economic and political situation. He’s featured a lot in National Association of Electrical Distributor publications. So if your local distributor is especially depressed, it’s probably because he has been reading my friend’s stuff.

    A variation on this theme is another friend of mine who views the peak of his career as the day he went to work in the industry. In his mind, everything has been downhill ever since. He longs for the good old days of thirty years ago and can’t adjust to the changing realities of today’s world. For him, the only solution is to get everything back to the way it was. No wonder he’s always disappointed.

    I just came back from a meeting in Los Angeles that paints a stark contrast to these two views of our industry. NECA, in conjunction with our Los Angeles County Chapter, hosted an Energy Solutions Summit. The thirty-plus participants at this meeting are all involved in some way in the alternative energy (e.g., wind, solar, etc.), green building and energy efficiency markets. We brought them together to pick their brains on what NECA and our members should do to capitalize on the opportunities presented by these markets.

    To say that we all came away from this meeting with renewed energy is more than just a pun. The growth of these markets and the work opportunities they present for electrical contractors is virtually unlimited. We are also convinced that the opportunities are available to all-size contractors in all parts of the country; This isn’t just a big-contractor-in-the-Sunbelt phenomena. The only downside is that if we don’t take positive steps to grab this work, it may slip through our fingers like some other opportunities have in the past.

    The good news is that we’re still in the early part of the game. To that end, NECA is taking all the good ideas from this summit and developing a master plan for capturing the energy efficiency market. To accomplish this plan, we’ll need to draw on our resources in education, training, research, government affairs, codes and standards, marketing and labor relations.

    We don’t need to start from scratch. We have some good models in programs already operating in places like Los Angeles. The important thing is that we don’t just sit back and do nothing at all.

    So for those who want to lament the passing of the old days, they’re welcome to it. The rest of us will be working on creating the industry of the future.

  • Summertime and the Livin' is .... Hectic

    Posted on Jul 22, 2008 by John M Grau

    Last week, the ELECTRI Council of NECA’s Foundation met in Chicago to fund a new round of research projects. The Council members selected six projects from some new, young university professors on subjects such as Building Information Modeling (BIM) in the electrical industry. The Council also approved a new multi-year project involving solar marketing and training led by veteran researcher David Riley of Penn State.

    Next week, Midwest Chapter Execs gather in Chicago to share experiences and learn better ways to manage their respective chapters. Later in the week, NECA is hosting an energy-efficiency summit in Los Angeles. An invited group of 30 member contractors and chapter executives will discuss solar/wind/green construction and provide guidance and ideas on how NECA members can best capitalize on work in these markets.

    During the first week of August, the National Training Institute (NTI) will convene in Knoxville, Tennessee. Nearly two thousand local training directors and those associated with NECA-IBEW training attend this week-long program. In conjunction with that event, NECA and the IBEW leadership will meet as the National Labor-Management Cooperation Committee (NLMCC). We will talk about how to most effectively move our industry forward through joint cooperative efforts.

    Of course, there are many more meetings taking place, and these are all events that I am directly involved in over the next couple weeks. This means I’ll be shuttling around on airplanes, as usual.

    Anyone traveling by air this summer knows that it hasn’t been fun. So far, I have avoided paying for checking my bag — I prefer carry-on. I haven’t avoided delayed flights and poor service. I can forgo the meals and peanuts, but I would like to get from point A to point B somewhat close to schedule — like the same day.

    On the plus side, I'm rewarded with lots of frequent flyer miles which I can then use to take more flights.

    Wait a minute. Something's wrong here.

  • 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.

  • A Tie to Future Success

    Posted on Jun 23, 2008 by John M Grau

    In case you missed the news, the Men’s Dress Furnishing Association (MFDA) is shutting down after 60 years. MDFA is the trade group for American necktie manufacturers.

    The group decided to close its doors when its membership dropped from 120 to under 25. Their leaders blame competition from manufacturers outside the U.S. and, more importantly, the fact that fewer men are wearing neckties. They claim they saw the writing on the wall a couple years ago when, at their annual luncheon in New York, a good number of members showed up at the event tie-less. Oh my!!

    Just another example that it doesn’t matter how long you’ve been in business or how successful you have been; it’s how you adapt to change that’s important. I wondered if there were any insights for NECA and its member contractors in this story.

    While neckties may be on their way to obsolescence, I don’t think the same is true for electrical contracting. Electricity running through wires should be with us for a long time to come. Of course, it’s possible that some huge technological breakthrough will create a new universal source of power or some new way to deliver that energy to buildings. But, even if that were the case, it would take many years to retrofit our current building infrastructure to the new energy source. And who’s to say that electrical contractors wouldn’t be doing that work?

    Competition is the most likely force impacting our future. While we tend to focus on the competition within our own trade, we might consider some other sources of competitive pressure. Could another type of contractor come to dominate what is traditionally thought of as the electrical contractor’s realm? The mechanical/technical contractor, for instance? At one time, general contractors considered hiring all the labor on a site. Today, they don’t want to hire direct labor at all.

    A change in construction technology may be more of a threat to traditional electrical contracting. While manufactured homes and buildings have been talked about for decades, they have not become the norm in construction, but prefabrication of assemblies off the jobsite is a hot trend. A natural extension would be to prefab or manufacture even more of the building offsite and then assemble it onsite. Whole modular sections of a building could be manufactured in a foreign country and shipped to the building site. The only task left for an electrical contractor may be to connect the electrical systems in the modular units together. It could be the ultimate version of the “plug and play” concept.

    While we might dream up a number of scenarios where the electrical contractor may fade from existence, we have to consider that as a whole they are a pretty resilient bunch. After all, the industry has evolved in many ways over the last one hundred years, and resourceful electrical contractors have learned to adapt and grow.

    What about NECA as the association of electrical contractors? Well, we are a reflection of our members, and if they adapt, so will we. The association has lots of resources and bright people to draw on. My bet is that we will be here for decades to come. Different. Hopefully better. But here, nonetheless.

  • Next Generation of Project Managers

    Posted on Jun 12, 2008 by John M Grau

    The Academy of Electric Contracting held its annual meeting at a resort near Austin, Texas, last week. The working group session at the meeting featured a presentation by Dr. Cindy Menches of the University of Texas.

    The subject was “Hiring the Next Generation of Project Managers.” The most interesting part of the session was when Professor Menches brought in a group of five graduate students from the university’s Construction Management program to sit on a panel. These students were out interviewing for jobs and they gave us some insight into what’s important to them in a job search.

    The first question to the panel put everything in perspective. When asked what they knew about electrical contracting, their answers indicated that they knew basically nothing about our industry. The University of Texas doesn’t have an Electrical Construction program. The lesson to us is, if we want to attract young talent from universities, we need to promote an Electrical Construction curriculum as part of the Construction Management degree program.

    Some years ago, NECA, working through ELECTRI International, developed an Electrical Construction management curriculum. It’s being taught in a number of universities around the country. The best way to get the program initiated into your local university is to form a NECA Student Chapter. We have 15 right now and we hope to double that number in the next few years.

    Some other interesting insights from the student panel at the Academy meeting focused on what’s important to these students when interviewing and accepting job offers.

    Money, of course, is important. But my sense is that NECA electrical contractors can be competitive in this regard.

    More problematic may be dealing with the issue of company reputation. One of the students was very frank in admitting that a big factor for him was being able to brag about the company he works for when he gets together with family and friends on a weekend. By this, he meant that if he works for a big-name company like Bechtel or Exxon, his friends will think of him as being important as well. It’s harder to explain what Tri-State Electrical Service Company is.

    This isn’t meant to degrade our industry in any way. We just have to do a better job of making prospective management talent aware of our industry’s unique advantages. For one, a project manager of an electrical contracting company can become a significant player in a project — and in the company. He may also have a good chance of running or owning the company some day. He or she may only have a bit part in a big-name company.

    We can also promote the fast growing and more technical nature of electrical construction. Many young people are attracted to companies that provide cutting-edge environmental solutions. Professor Menches said that in her opinion electrical contractors are the most professional of the construction trades. We need to capitalize on that.

    All in all, the Academy working group session was very enlightening. I’m encouraged that our industry has a good chance to attract some of the best talent out of our nation’s Construction Management programs. But we have some work to do if we want to beat the competition.

  • 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.

  • More Inside Baseball

    Posted on May 19, 2008 by John M Grau

    Both the baseball and political seasons are in full swing. From time to time, I have reported on insights I’ve gathered from meetings with some of the political movers and shakers in Washington, D.C. It’s time for an update.

    I recently joined seven other association CEOs for a breakfast meeting with the Director and Asst. Director of the White House Office of Public Liaison. These are the people who promote the President’s position on legislative matters before Congress. 

    They told us that the White House is primarily focused on two legislative issues: trade and the economy. The trade issue is the Colombia Free Trade Agreement being held up by the House leadership. The economy issue revolves around various stimulus measures being debated by Congress. 

    Apparently the White House is still promoting a broad range of issues, but quite frankly, it was evident to me that there’s not much going on there. With a lame-duck President who’s lost almost all political leverage, I believe the White House staff are simply biding their time until they’re out of office. Not that it’s an unusual situation – just the reality of politics and government.

    More interesting was a closed door session with Senator John Ensign of Nevada. Sen. Ensign also heads up the National Republican Senatorial Committee, the group that raises money and promotes Republican candidates for U.S. Senate races. Both parties have such committees on both the House and Senate side. NECA contributes to all these committees for both parties including the overall national committees, and that gives us entrée to sessions like this.

    Ensign was very frank about the Republican Senate prospects for this fall’s election. He admitted that he expects to lose seats. His goal is to hold on to 45 seats, and in his wildest dreams, he can paint a scenario for 47 Republican seats. He gave a candid race-by-race analysis. He noted that fundraising has been a problem for the Republican Party. He said that last year he spent most of his time apologizing for the performance of his party. This year the prospects have improved.

    Ensign did offer a glimpse of the issue Republicans will use to motivate donors – union card check legislation. It was defeated last year, but with increased Democratic strength in both the House and Senate next year, along with the prospects of a Democratic President, he expects card check legislation to be front and center on the legislative agenda. His argument is that Republicans need to maintain enough seats in the Senate to be able to filibuster the bill if necessary.

    So that’s the Republican Senate battle plan for this fall’s election. My inside baseball group is extending an invitation to the Obama campaign staff to provide someone to meet with us. More insights to come.

     

  • Meet Rich Parenti

    Posted on May 08, 2008 by John M Grau

     

    “Get a haircut!” 

    I can still hear former IBEW President Jack Barry as he teased Rich Parenti about his a bit too long hairstyle back when he was director of the Midwest Region. Rich has since trimmed his locks, and Jack is no longer with us, but good-natured banter remains a hallmark of Rich’s business relationships.

    A veteran NECA staffer, Rich has worked effectively with IBEW Vice Presidents and Presidents as well as leaders throughout the electrical construction industry. As Executive Director for the Eastern Region, he is responsible for a territory stretching from Maine to Maryland to Ohio and Eastern Kentucky. The region includes some of our country’s biggest metropolitan areas such as Boston, New York, Philadelphia and Washington, D.C. 

    A native of New Jersey, Rich headed to West Virginia for college. He earned his bachelors degree from West Virginia Wesleyan College, and he holds a master’s degree in industrial relations from West Virginia University. In 1975, he joined the NECA Midwestern Region as a staff associate and was quickly hired as an assistant manager by the Minneapolis Chapter. He became manager of that chapter in 1981.

    Rich effectively saw the Minneapolis Chapter through a number of rough labor conflicts, including two lengthy strikes while he was assistant chapter manager. He bargained all his labor agreements under strike potential. He said that experience has made his belief in the CIR even stronger.

    In 1986, I hired Rich to succeed Gene Kasal as Director of the Midwestern Region After successfully serving in the Midwest Region for many years, a desire to be closer to aging parents spurred him to pursue the job as Eastern Region Executive Director. In 2002, he took over that post from Mike Barry upon his retirement, and he moved the regional office to Rhode Island.

    Rich is assisted in his duties by his wife, Linda, who is the Eastern Region office manager. Rich and Linda have three children. Their daughter Jennifer is a registered nurse at the Baylor Medical Center in Houston. She is engaged to be married in September. Son Jonathan is a graduate of the construction management program at Colorado State University and is employed as a project manager in California. Justin, their youngest, was recently accepted into the IBEW-NECA NEAT program as an electrical line apprentice.

    Rich Parenti is devoted to NECA and its members, and he’s proven his commitment time and time again. His hard work continues to better our industry in the Eastern Region and throughout the country.

     

     

  • Hold Up a Mirror to See the Special Interests

    Posted on Apr 30, 2008 by John M Grau

    Right now I’m attending the NECA Legislative Conference in Washington, D.C. This is a busy week for me, with meetings of the Government Affairs Committee, the Workforce Development Committee and the National Joint Apprenticeship and Training Committee. Just to round things out, the Marketing Committee gathered last week.

    In my opening remarks at the conference this morning, I warned the NECA members and staff present to be on the look out for special interest groups. All the presidential candidates and many legislators say that special interests are taking over our government and unduly influencing our elected officials. These special interests are like a 17-year-old boy with only one thing on his mind – in this case, it’s to convince legislators to support their issue or cause.

    Then I asked the conference participants to look around at the other people in the room. They now had come face-to-face with the dreaded special interests. We are one of those special interest groups.

    Anyone who gets together with a group to petition their government leaders is a special interest. But it seems that depending on your political bias, groups like the trial lawyers, unions, and the Sierra Club are not special interest groups. Apparently. it’s okay for them to invite legislators to their meetings and help finance political campaigns. If you listen to the mainstream media, the real special interests are business groups. They have unflattering labels like “Big Oil” or “Big Pharma.” 

    In truth, it’s a patriotic act for a special interest of any kind to legitimately try to convince their legislators of the merit of their point of view. Like voting, it’s our duty.

    Our political leaders should not work in isolation. They need to be confronted with issues and understand the problems facing their constituents. But it is difficult for any one voice to be heard. For one thing, it’s not feasible for every citizen of this country to have a personal meeting with every legislator voting on a matter of interest to that citizen. It’s also not very efficient.

    That’s where trade associations, professional societies and other groups come into play. It makes perfect sense for people or companies with common interests to band together to jointly present their point of view to our political leaders. And the bigger, the more organized and well-financed the group, the better. Such things clearly demonstrate the importance that the group places on their issues.

    So we shouldn’t be knocking special interest groups. We should be lauding them. Totalitarian governments control their populations by suppressing organized groups. In contrast, democracies promote a free society by guaranteeing the right of people to organize into groups and to openly petition their government.

    So this week, the patriots of our industry are in Washington, D.C., working to influence the federal government. Watch out Congress – Big Electrical is in town. We are a special interest group, and we’re proud to be here!

  • Being the Best: A Lesson from the Marine Raiders

    Posted on Apr 22, 2008 by John M Grau
    Seated at the table are Col John Sweeney (ret.) and Lt Gen James Amos
    Seated at the table are Col John Sweeney (ret.) and Lt Gen James Amos

    Last weekend, I attended the final reunion banquet of the 1st Marine Raider Battalion held at the Marine Corps base in Quantico, Va. Also known as Edson’s Raiders, this elite unit was created by an order from President Franklin Roosevelt as a counterpart to the British Commandos—a unique concept at the time. Raiders were trained to conduct amphibious light infantry warfare and operated behind enemy lines.

    About a dozen Raiders, all well into their 80’s, attended the reunion. I was there with my father-in-law, an original Raider and a recipient of the Navy Cross for his heroics at the Battle of Bloody Ridge on Guadalcanal in 1942. He went on to a career in the Marine Corps, serving in Korea and Viet Nam as well

    As the remaining Raiders made their way around the base at Quantico last week, they were treated like rock stars by young Marines. Many asked for autographs and requested stories about past battles. The featured speaker at the final banquet was Lt Gen James Amos, recently nominated to become assistant commandant of the Marine Corps.

    Amos talked about how the Corps is still focused on innovation (like the Raiders of World War II) while maintaining the traditions and discipline of the past. He noted that unlike other branches of the armed services, the Marines are not lowering their recruitment standards. He said that the Marine Corps promise to a new recruit is a trip to Parris Island for 12 weeks of boot camp where his head is shaved and he is stripped of his clothes and personal identity. Upon completion of his training, he will be sent to some remote part of the world where people will hate him and try to kill him.

    Yet with this pledge in mind, the Marine Corps has been able to increase its numbers to over 180,000 men and women, and it will increase that further to more than 200,000 in the next 18 months.

    As I listened to him, I thought about our need to recruit young men and women into the electrical trade. In the face of competition, we often look at compromising our standards. Wouldn’t we attract more applicants if we lowered our basic requirements or shortened our training? Why do we need tests and certifications? If the non-union can train someone in two weeks, why can’t we?

    Matching the lowest common denominator is easy. Being the best is hard.

    We still need to be innovative. New methods of instruction like day-schooling and boot camps are worthy of consideration. Online courses support and supplement classroom learning. New worker classifications like CW/CE and unindentured increase our workforce and lower our composite labor rates. We have to embrace all these changes.

    At the same time, we can demand and expect the best of those who work in our industry. It’s a matter of pride and tradition. It means something special to be an IBEW journeyman or a NECA contractor. If we set the standard, then those who want to be the best will be waiting in line to join us.

    After hearing Amos’s stirring remarks, I think each one of the eighty-plus year-old Marine Raiders would eagerly re-up to serve their country once again, if they could. I know that’s how I felt.

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.

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