John W. Norris Jr., chairman of Lennox International Inc., passes the baton of leadership on July 21, 2006. After 46 years with the company, Norris plans to spend more time with his wife, more time fishing, and more time with his favorite philanthropy, The Nature Conservancy.

On July 21 there will be the passing of a Lennox baton - John Norris Jr. will trade his role as chairman of Lennox International Inc. for a little more travel time with his wife Terry, a little more fishing, some bird-watching, and more time with his favorite philanthropy, the Nature Conservancy.

In Marshalltown, there weren't many big employers around, and as with most small towns, everyone knew everything about everybody. In Marshalltown, most of the people went to the same schools and later worked together as they grew to be young men and women.

Though Norris gracefully followed in his grandfather's and father's footsteps, he said that being part of a small town environment caused a lot of his childhood experiences to be like most kids in a small Midwestern town.

THE EARLY YEARS

"All the kids in the neighborhood came to our house to watch movies on Sunday nights," said Norris. "My father was quite well-known for showing movies in our attic space and cooking up these gigantic barrels of popcorn. We would have as many as 80 kids some Sunday evenings watching movies and eating popcorn at our house."

When he was young, Norris didn't expect to become the president or CEO of the company, but he expected to be working at Lennox Industries. "I never felt as though I was forced to work in the family business. Being around my father just ingrained a sense of belonging to Lennox.

"As a young boy I was always around the place. On weekends, before government regulations became more restrictive," joked Norris, "we would have forklift races around the aisles in the factory. Later, I started working on the maintenance crew during the summers. For a while I was in the tin shop, then worked the factory presses for a while, and eventually worked in almost every department. Some of those summer jobs were pretty tough for a skinny kid," laughed Norris.

“Dave Lennox” and Chairman John W. Norris Jr., of Lennox International Inc., ring the opening bell at the New York Stock Exchange on July 29, 1998, the day Lennox first traded as a public company.

LOOKING BACK

"Of course, I also learned a great deal from my father. He was an amazing designer and creator. He just had a knack for finding out what people wanted and then making it happen. He spearheaded many important industry innovations, including the first two-speed compressor and the first commercial multi-zone rooftop units."

In reflecting on his 40-plus years with Lennox, Norris believes the single-most industry changing event was the advent of high-efficiency heating products. Norris had a big hand in the marketing and development of one of the company's major innovations.

"The move to high-efficiency heating equipment changed the game for everyone. For years, furnaces sold for meager amounts, almost something like $1 per 1,000 Btu. But when Lennox came out with the first high-efficiency condensing furnace in 1982, it opened up a brand-new world. We put a pretty hefty price tag on it. Suddenly, we and our dealers could make a really good profit on a heating product for the first time in a long time. I actually had to walk around the company to ensure the accountants we weren't doing something immoral or illegal. I told them, ‘You know, profit isn't a four-letter word.' "

According to Norris, the high-efficiency heating market opened doors for a lot of new industry products both on the heating and cooling side. "This came on the heels of the energy crisis of the 1970s," said Norris.

"We spent seven years in research and development for the first high-efficiency furnace and probably three of those years were in field testing. We had never field-tested a product for that length of time since I had been with the company. Everything about it was different. We were even concerned about what would happen to condensate going into septic systems. It turns out the acidic content of the condensate simply neutralized the waste in a septic tank. But at the time no one had any experience with condensing furnaces. Not only that, but we were using outdoor air for combustion. No one had done that yet either."

THE LEGACY

When he first joined the company in 1960, Lennox was a largely domestic $50.8 million company. As he walks out the front door on July 21, he will leave a $3.4 billion international corporation as part of his legacy.

Norris became president of the company in 1978 and was appointed president and CEO in 1980. In the 1980's, the company purchased refrigeration companies Heatcraft, Bohn, and Larkin.

That was soon followed by the acquisition of a traditional two-step heating and cooling manufacturer, Magic Chef Air Conditioning, which was renamed Armstrong. For years Lennox had been defined by its unique manufacturer direct-to-dealer distribution channel.

"The contractor has always been an important link for Lennox. My father realized years ago the relationship between customers and contractors was something that could never be replaced. We decided to sell directly to the contractor and establish our own unique relationships," said Norris.

"But you can only hope to capture so much of the market with that business model, and frankly we were missing some tremendous opportunities. To continue our growth we made the decision to expand our scope and expand into two-step distribution."

The purchase of Armstrong in the mid-1980s was followed years later with the acquisition of several hearth and fireplace manufacturers and Ducane, another two-step manufacturer of unitary equipment.

In perhaps one of the boldest moves ever seen in the industry, Lennox began purchasing numerous contracting businesses in the late 1990s.

Norris said, "Frankly, it started out as a defensive move for us at a time when roll-up consolidators were beginning to change the landscape of our industry. Some of our dealers came to us concerned about the long-term consequences and asked if we would be interested in purchasing them. Since then we have grown into one of the largest contractors in the nation with our Service Experts business segment. It's a challenging business to run properly, but we have learned a great deal and are continuing to make progress."

Under the guidance of John Norris Jr., the varied distribution channel strategies of Lennox International has positioned it as one of the top HVAC manufacturers in the world.

Norris commented on the beginnings of the popular advertising icon, Dave Lennox and the Attaboy Dave campaign.

"One of our early ad campaigns used an actor (Bill Tracy) to portray Dave Lennox in a turn-of-the-century scenario. Along the bottom we had added a small tagline that read ‘Attaboy Dave.' The whole thing sort of snowballed from there and the dealers absolutely loved it. It certainly helped that the first ‘Dave Lennox,' Bill Tracy, was a very charismatic fellow. We found people wanted to identify and connect with a real person - Dave Lennox," said Norris. "He personifies many of the core values that makes Lennox what it is today.

"Part of the reason that the icon has been so successful is that there actually was a Dave Lennox, and the two people who have portrayed him have both been fantastic individuals. "Bill Tracy (the first "Dave Lennox") charmed everyone he met, and Bob Tibbets [the current actor portraying "Dave Lennox"] has carried on that tradition."

THE FUTURE

He added, "It is so important that executives in the upper-most reaches of every company become involved in the leadership of our industry. The best way to accomplish goals for the common good is by working together and applying the very best minds we have to offer. That is why the presidents and CEOs should make the time to participate with NATE, ARI, and GAMA, and all associations that work toward the betterment of the industry."

When the door closes on the distinguished Lennox career of John W. Norris Jr., he will direct some of his organizational talents toward his love of the outdoors. Norris is a past chairman of The Nature Conservancy of Texas board of trustees, and now says he intends to focus more time on assisting with the national organizational framework of the Nature Conservancy. It appears that when one door closes, another one opens.

Sidebar: A Red Letter Day

Publication date: 07/17/2006