At the Habegger Corp., headquartered in Cincinnati, employees are quick to praise the lack of bureaucracy and the freedom their company leaders grant them to make decisions. And company leaders emphasize that this decentralized approach empowers employees in every location to respond quickly to local market dynamics and to take great care of their customers.
Although some might think this sounds a little risky or chaotic, the opposite is true in Habegger's case. There is nothing random or haphazard in the distributor's strategy; instead, the company's leadership is very methodical in how it plans for and charts its future course.
The best example of this is how the company has successfully passed the torch of leadership down through the generations. This year marks Habegger's 60th anniversary, and it is now being transitioned to the third generation.
LEADERS IN TRANSITIONFred Habegger Sr. founded the company in 1952; his son Fred Jr. took over in 1970. Fred Jr. and his siblings Tom, Jim, and Sue Frey have all served as corporate leaders within Habegger and continue to serve on the company's board today. Now their children are developing into the rising future leaders of the company, and Fred Jr.'s son Brian became president of Habegger on January 1, 2012.
According to Brian, "Ten years ago my father wanted more free time. He didn't want to have to be involved in the day-to-day operations of the company, but I was still early in my career."
Instead of immediately passing the company along to his son, Fred Jr. hired John Dorr in 2002 to come in as president and CEO and help the company through the leadership transition. Although Dorr came from a 27-year career in a different industry, his skills and abilities proved to be a perfect match for the new role.
"Fred Habegger had the foresight to realize that a bridge was needed because the third generation was still too inexperienced when he wanted to step back," Dorr said.
"We were fortunate to find John Dorr," Brian said. "He brought some very good outside leadership experience into our company, and he's been truly a valuable mentor to me."
At the beginning of the year, Brian took over responsibility for working with all the region and branch managers as president, while Dorr still holds the title of CEO and continues to work closely with Brian and the corporate leaders and board on the strategic direction of the company.
In addition to Brian, there are seven other members of the third-generation family working at the company. His brother Michael works at the Cincinnati branch, and cousins Steve Frey, Susan Brickweg, Doug Habegger, Greg Habegger, Lori Messmer, and Rob Habegger all hold different positions within the company.
"We're all family-oriented and we've all agreed to the path where the company will head," Brian said. "Everyone's hard-working, and no one takes anything for granted."
Dorr noted that it can be tough for third-generation family leadership to succeed. "We're now really working with the sons and daughters," he said. "Each one of them has a distinctly different and specific role. I give them a lot of respect, but I do hold them responsible for each of those roles along with other non-family managers. I have told them, 'You inherit the name on the building and the shares, but you don't inherit the employees. You have to earn them by your skills and leadership abilities.'"
That is exactly what is taking place as a result of the company's careful planning for the transition. And the company's focus on developing younger leaders extends beyond the family and corporate level. It also carefully monitors all employees and continues to hire more young workers to develop them for future years before the older ones retire. The company currently employs roughly 350 people.
"We're now leaning on the younger side of the manager age balance, and that's part of our strategy," Dorr said.
This is confirmed by Brian Newport, Habegger's residential sales manager for Carrier in Ohio and Indiana. "If you looked at our management team a couple of years ago, in our meetings the average age was 58 to 62. Now it's 48 to 50, and it's been planned that way," he said.
GROWTH AND SERVICEHabegger Corp.'s strategy focuses not just on the individual employee growth, but also on overall company growth and market share. Currently, the company has 29 locations serving markets in seven states, including Ohio, Indiana, Kentucky, Illinois, Iowa, Pennsylvania, and West Virginia. Habegger distributes Carrier, Bryant, and Comfortmaker products in its various regional territories, along with a host of other complementary products by manufacturers including Mitsubishi Electric, Honeywell, Generac, Weil-McLain, and others. The company's sales will exceed $200 million this year.
When considering ways to expand, Dorr said the company looks for growth opportunities by geography and by providing additional services to its customers. The most recent expansions were into Cedar Rapids, Iowa, and Paducah, Ky., in 2011.
Additionally, Habegger has also grown by providing more services to its customers, including metal fabrication and geothermal drilling. However, Dorr noted, "Everything we do relates to our core competencies in heating and air."
To better serve commercial contractors, last year the company purchased a competitive fabricating facility and then moved it into a new expanded facility in Cincinnati. "We have a full line up of metal fabrication products and capabilities," Dorr said.
To aid contractors who wanted to get into geothermal work, Habegger purchased a drilling rig in Cincinnati. Prior to this, Newport noted, his customers' biggest complaint was that it took too long to get a drill. Now Habegger has alleviated that concern and been successfully drilling for more than two years.
Another area of growth involves e-commerce. According to Newport, "We launched heavily into this three years ago and are enabling dealers to purchase products online 24/7. We think that if we make it easier for those who want the flexibility to order online, they'll buy more from us."
Habegger's emphasis on helping its customers is also evident in the training it provides. In February, the company rented out Cincinnati's Great Wolf Lodge and hosted over 400 dealers for a two-and-a-half day conference. According to Newport, the event was much more than a typical product trade show to promote the distributor's lines.
"We brought in professional business speakers to help our customers understand how to make their businesses more profitable," he said. "We are trying to get them to think of themselves as retailers instead of just contractors. For example, a lot of our dealers don't have Saturday hours. They'll work on Saturdays when they get busy, but otherwise they don't have Saturday hours. It was a big mental shift to get them to start thinking of 'retail-izing' their business."
Providing valuable training is just one more aspect of how Habegger aims to serve customers. The company will continue to celebrate its anniversary throughout the year with smaller events and promote the message that it has been "serving customers first for 60 years."
AN EMPOWERING CULTURENone of this service would be possible without a company structure that enables employees to take care of its customers.
"We don't have a lot of bureaucracy, and we can make sound decisions fast," Dorr said. "One of the really nice features of the Habegger family is that they allow us to do that. It's a different culture, and that freedom and ability to make a difference in our regional markets helps us grow more aggressively."
Newport describes the distributor as "small enough yet big enough" to enable employees to operate effectively on behalf of their customers. "Even though we're a large company, we remain pretty decentralized," he said. "We're divided into geographic regions and each regional manger handles a state or a state and a half. It's not a dictatorship, and we get a lot of rope."
According to Brian Habegger, this goes back to the core of the business his grandfather established where the distributor was a friend to the customer.
"My vision won't change from what my father and grandfather have established," he said. "They've built a customer-oriented culture that really truly empowers our managers and our employees, which gives them the control over their success."
He continued, "We will definitely continue to be a growth company. We've made investments in people, processes and facilities, and we'll continue to make investments in the future, with the end result being that we truly add value to our customers. And this value will enable them to become more successful in their businesses as well."