Capital Lighting & Supply realized a lucrative ROI from an outsourced program.
by Sharon Daniels
Popular counter-culture comedian George Carlin once noted that “electricity is really just organized lightning,” which fittingly describes how electrical products distributor Capital Lighting & Supply became a more formidable competitor in its price- and service-sensitive business.
Company executives credit its gross margin increases and unified, service-focused culture to leadership development and sales skills training delivered to its executives, sales and service personnel by AchieveGlobal, an international performance improvement company.
“We knew if we could get our people better educated about our products and how to present them as solutions to our customers’ needs, then we would be stronger in the marketplace and a more successful organization,” noted John Hardy, president of Capital Lighting & Supply, part of the Sonepar group, the world’s largest privately held electrical distributor.
A Common Culture
Acquired by Sonepar in 2000 as part of an industry-wide consolidation, Capital Lighting & Supply provides electrical products, lighting, and services to contractors, builders, and end-users in the Mid-Atlantic States. It services its customers from 21 locations throughout Maryland and Virginia and from its 220,000-square-foot headquarters and central distribution center in Upper Marlboro, MD. Its mission is to be the electrical distributor of choice. By 2003, Capital Lighting had acquired five competitors, each firm bringing with it into the fold a unique culture that Hardy and Tim McGowan, vice president, Corporate Development, knew had to be unified and then united.
“We wanted to reinforce and establish a common culture,” McGowan said. “And once we did that, establish goals that would align the organization and build a bench of people quickly and profitably to meet the challenges of this rapidly changing business.”
To build Capital Lighting’s unified culture, AchieveGlobal introduced the company’s branch managers to a two-day seminar designed to help them better understand and sharpen basic communications skills. Reinforcing that seminar were follow-up programs delivered one-on-one, in small groups and online. Those programs further developed such leadership skills as delegating, developing others, evaluating performance and handling difficult people.
AchieveGlobal programs included:
- Interpersonal managing skills and followup programs;
- Principles and qualities of leadership;
- Clarifying performance expectations;
- Delegating for shared success;
- The hallmarks of supervisory success; and
- Developing others
Branch managers and their sales people also sharpened their selling skills through Achieve Global’s Professional selling skills and professional sales coaching programs. Front-line delivery personnel were developed as well, participating in customer service programs. As a result, these front-line people are better able to deliver a higher level of leadership, sales results and customer service, successfully differentiating Capital Lighting & Supply in this commodity-oriented industry.
“Our managers are great technicians, but they lacked depth in frontline management,” McGowan said. “They had not been formally trained on sales processes and selling to support the growth of the organization.”
As with many distributor-type businesses, Capital Lighting’s primary contact with customers—electrical contractors on a job site—is through its parts delivery personnel. “These guys are more than drivers; they’re really our customer service agents. A vital link in achieving our mission, their daily contact with our market can make or break the impression the customer has about our company,” said McGowan.
In addition to sharpening employee’s business skills, the outsourced training whetted appetites for self-learning as means to career enrichment, all part of Capital Lighting’s goal of unifying its culture and creating an organization enthusiastic about its business.
“We’ve woven the cultures of the various companies we’ve acquired into a unified awareness that we are no longer a bunch of small businesses but a big company,” McGowan said.
The results of Capital Lighting’s culture and sales performance efforts are paying off nicely, McGowan noted. “We’re enjoying a 1.5-percent increase in in-stock product gross margin, directly attributable to the AchieveGlobal programs. We are a $225 million company with in-stock sales representing 65 percent of our business. That’s a $2 million to $2.25 million gross margin increase. This is huge. And we spent something like $150,000 total for first-year training, so that’s pretty good ROI.”
From a holistic perspective, the training has paid off handsomely as well. “Our people are learning that they’re truly the engine that drives the business, and this kind of education investment proves to them we care and that we’re willing to invest in them,” Hardy noted.