Meet the Wholesaler: Lauren Roberts
Name: Lauren Roberts
Title: President and CEO
Company: cfm Distributors
Number of Locations: Six branch locations
Number of Employees: 75
Year Founded: 1969
Major Product Lines: York, Guardian, Daikin, Hitachi, Reznor, Bohn, and Bard.
cfm Distributors is celebrating its 50th anniversary this year. Tell us a little bit about the company’s vaunted history.
Roberts: cfm Distributors was started in 1969 in Kansas City, Missouri, by my grandfather, Amos Roberts, and Bruce Huffman. In 1981, my dad (Tom Roberts) joined the company after working for York’s engineered systems group. He convinced Amos and Bruce to bring on the York line, which makes us one of the longest-standing independent York distributors in the country.
In the early 1980s, the economy was in a bad spot. Company leaders were either going to have to lay off 10 percent of the company’s employees, or everyone would be required to take a pay cut. Employees voted for the pay cut to keep their friends employed. That was the beginning of the employee-ownership culture at cfm. Amos retired in 1993, and my dad became a part owner and vice president. Bruce Huffman became president. In 2001, Bruce eventually decided he wanted to retire, and the company bought out his shares, making cfm partially employee-owned. Tom became the majority owner. In December 2012, Tom sought an exit strategy. To further expand on the existing employee-ownership and to help provide a more secure financial future for the employee-owners, cfm became a 100 percent ESOP (employee stock ownership plan).
How has becoming an ESOP impacted the culture at cfm?
Roberts: Overall, I’d say it’s improved the culture. By the time we became 100 percent employee owned, there wasn’t a “big boss” in place with a controlling interest. In fact, we have employees who have been here for more than 30 years who own more stock than I do. The employees at cfm work harder because they have more skin in the game. They have a truly vested interest in the long-term success of their company.
Does cfm have anything special planned in recognition of its 50th anniversary?
Roberts: We do. Earlier this year, we launched a series of documentary-style short films covering the history of cfm Distributors, the employee-owner experience, and the customer experience that we shared on social media, on our website, and in our stores. On July 27th, we’re hosting our 50th anniversary celebration at a local hotel. We’ll have a big casino-themed party with that will include music, dinner, and cocktails with some of our key vendors, customers, and all of our employee owners. Additionally, our dealer incentive trip will be a little more luxurious, as we’re taking them to St. Lucia for an all-inclusive trip. We’ll also be running several special promotions.
In 2019, how many branches do you operate, and how many employees do you have?
Roberts: We have six branches and 75 employees.
What are your primary markets and sectors?
Roberts: We sell residential heating and air conditioning equipment as well as parts and supplies. We also do commercial refrigeration, commercial rooftops up to 40 tons, chillers, air handlers, ductless, and VRF. Geographically, we serve the western half of Iowa, the western half of Missouri, all of Nebraska, and all of Kansas.
What percentage of the business is equipment and what percent is supplies?
Roberts: cfm does about 21 percent parts and supplies, 4 percent commercial refrigeration equipment, and 75 percent residential and commercial air conditioning equipment.
This industry’s been a staple of your life from the womb. What is your first memory of distribution?
Roberts: During snow days, when I was a kid, I’d always ask my dad if I could go to work with him at cfm. I’d spend time helping the receptionist with simple things like mail or answering the phones, and I’d help the marketing department with various odds and ends. Interestingly, I joined the company in 2004 as an accounting assistant and shortly thereafter moved to the marketing department. I grew most in my career through the marketing department, which is where I worked as a child. My older and younger sisters would come in with me when we were kids to “help out,” but I was the one who was remembered for actually working and not causing trouble while there.
Did you always know you were going to work in the HVAC industry?
Roberts: No. I went to the University of Missouri at Kansas City on nights and weekends and worked full time during the day. I was always interested in the travel industry and business in general. When I was a young teenager, before the company ever explored the employee-owned model, my dad asked, “Would you ever be interested in working at cfm?” I said, “I don’t know, probably not. I’m a young teenage girl, and the HVAC industry doesn’t sound all that exciting to me.” I quickly realized that tourism and the travel industry wasn’t as interesting as I thought it may be, so I changed my major to business administration, which granted me more options. When I was 20, cfm’s controller at the time told my dad, “Hey, I’d like to retire in a couple of years. I know Lauren is getting a business degree, maybe we should ask her to join the company and potentially take over as controller when I retire.” So, my dad asked me, “Do you want to work here?” I nervously said, “I don’t want to bring the company down if I make an accounting error.” He said, “You can’t really do that. Come give it a try.” I’m really glad I did.
Since joining cfm, you’ve worn a lot of different hats. Tell me about your journey up the ladder.
Roberts: I joined the accounting department and grew bored with it very quickly because there wasn’t enough customer interaction for me. So, I moved into the marketing department. I didn’t receive any training and had to kind of figure it out on my own. I was a marketing assistant at first, then became a marketing manager, was promoted to director of marketing, then vice president of marketing in 2012, and a year later landed as vice president of marketing and customer experience. In 2017, my dad was HARDI president. He saw that coming and began seeking a point person while he was out of the office. In 2017, I served as executive vice president, and on Jan. 2, 2018, I became president and CEO.
You’ve been in the CEO/president role for a little over a year now. What changes have you implemented thus far?
Roberts: Things are going well. We’ve improved our internal communication and implemented some better processes. We now share our strategic plan more openly with our employee owners and update them in person. We used to just share the sales and profit goal for everyone and people did the projects they felt were necessary. Now, we have a management team that decides on the strategic plan well in advance. We agree on one-, three-, and five-year plans and share those in person with each of our employees.
Did your peers or others in the industry treat you differently because of your last name and standing in the family?
Roberts: For the first 10 years, it took a lot of hard work to win people over at cfm and prove I was there to actually work hard and earn my keep. My dad, as he should, made me work three times as hard as others. I worked my tail off to overcome every obstacle, which helped me earn the respect of those around me within the company and our close vendors and customers. There are still a few who probably doubt me simply because I’m a third-generation leader, but those individuals haven’t seen what’s gone on inside the company.
You’re very active in Heating, Air-conditioning & Refrigeration Distributors International (HARDI). When did you first get involved with HARDI?
Roberts: I first got involved in HARDI in 2013, when I was invited to join the marketing committee. Eventually, I became chair of that committee and served in that role for three years. I simultaneously got involved in the task force that built the Emerging Leaders program for HARDI. I was in the first graduating class of that group, which was instrumental in my life. The education I received was beneficial because it was specific to our industry. Those who were on the task force with me are my best friends in the world. We share ideas and best practices with each other all the time. We also got really close with some of the industry veterans who were our mentors throughout that program. I now serve on the HARDI human resources (HR) council to stay up to date on HR trends and share best practices related to HR. HARDI has clearly been the foundation for my career growth and development, and I know I wouldn’t be in the position I’m in today without HARDI’s amazing educational programs and conferences.
Are you involved with any other organizations?
Roberts: Yes. I’m also on my third year serving on the board of directors of Women in HVACR, which has been another fantastic organization to be a part of. I recommend that all women in the HVACR industry consider joining for the wonderful educational, mentoring, and networking opportunities that are provided by Women in HVACR.
How has the industry changed the most in your 15 years?
Roberts: The influx of new technology has really impacted distribution, and, as a whole, we’ve fallen behind. The use of more digital technologies, between e-commerce and mobile technology, has allowed us to better communicate with customers. Also, the consolidation of distribution is getting crazy. Many bigger companies are purchasing smaller distributors. I can think of six acquisitions in the last six months. Some large distributors are buying companies only for leverage or money and forget about the people who work within these companies. One of the reasons we became 100 percent employee owned is to avoid being bought out by a big company. Having one person make that decision on behalf of everyone was not the way my dad felt it should go.
What’s cfm’s biggest challenge today?
Roberts: The rising cost of health insurance is among our biggest challenges. It restricts our ability to grow as quickly as we’d like to. The more people we bring on, the higher the costs, which also limits our ability to offer as much salary as we’d like to. Our employees are also struggling with the cost of insurance as they opt into expensive family plans. Another challenge is keeping up with technology. We try our best to stay up to speed, but technology is outdated the minute it’s launched. Additionally, it’s very difficult to stay in step with some of the powerhouse wholesale distributors that have bigger IT and technology budgets.
Where is the company at regarding e-commerce?
Roberts: We launched a new site in October 2018, which was a three-year project. We are constantly adding new features to make the shopping experience easier for our customers. We have a strategy in place to use our new platform to grow our e-commerce sales significantly over the next few years.
What goals does cfm have in 2019?
Roberts: We have a lofty sales goal to hit for our 50th anniversary. We’re also investing a significant amount of time and money on new technology projects and enhancing our education programs and overall employee-owner experience.
What’s one piece of advice you’d like to offer the industry?
Roberts: Get involved in industry groups and trade associations. Don’t just attend the events but get involved in the committees or small groups that work on certain initiatives for those organizations. You get out what you put in. If you’re a casual attendee of events, you’ll never gain as much as if you were to dig in and get involved. Doing this will help you forge more meaningful relationships and gain a lot more knowledge about the industry.