Liu, a member of the HARDI board since 2021, came to Standard Supply in June of 2017 from the computer industry, in which he’d had executive positions at several companies, including HP Inc., Hewlett Packard Enterprises, and Electronic Data Systems. He has a bachelor’s degree in architecture and master’s degrees in both civil engineering and business administration.

GETTING DOWN TO BUSINESS: Loran Liu, the new chairman of the Heating, Air-conditioning & Refrigeration Distributors International board of directors, in his office at Standard Supply & Distributing Co., where he is COO. (Courtesy of Standard Supply & Distributing Co.)

Distribution Trends sat down with Liu, after the recent HARDI conference in Phoenix, to talk shop, including about what’s ahead for HARDI and why he moved from tech to HVAC distribution. Here, edited for length and clarity, is the conversation.

DT: You’ve been in key roles at a few different industries, and you’ve been involved with HARDI for a while. What do you plan to bring from your professional experience to the role as chairman?

Liu: I consider myself relatively new, having only been in the industry for a little bit over six years now. I came from the high-tech industry, where I spent about 20 years working in the corporate world. Had done a startup company before that for a few years. And before that, I was in management consulting at a business school.

What I bring to the table is a little bit of a different perspective, coming from outside the industry. … I think I bring a lot of functional expertise that a lot of people in the industry have maybe not been exposed to.

What I mean by that is: How do you view technology enabling your business to become more efficient, more productive? How do you run effective HR? Marketing? Accounting? Finance? Those are areas where I’ve had exposure, and those functions help our companies operate better in our industry.

DT: Can I ask what drew you into the HVAC industry? How did you get started?

Liu: That great question. I’d experienced a lot in the corporate world, but I wasn’t really satisfied from a culture perspective.

Really, getting out of the corporate world, being part of the inner circle of the management team where I could effect change, versus just being, you know, quarter by quarter, focused on meeting financial objectives. And I wanted to find an industry and companies where my values aligned with their values.

It surpassed my expectations as to how much the industry (and the) values that we reflect are the values that I want to live by. And so it really has met my expectations as far as the culture fit.

I’m in what I’d call the “back nine” of my career. And I really wanted to finish my career in an industry where I could effect change within a company, where I could impact people’s lives. And I felt like I could do that more in a midsize market company that had values, and the industry has values that reflect mine.

DT: Could you sum up those values in a sentence or two?

Liu: Hard-working individuals.

I think of our industry as a reflection of the values that our country stands for, and that it was built on. And to be more specific, the values that our company stands for. We say to people that our values are God, family, and career, in that order.

DT: Are there any changes in direction or new initiatives that you have planned for the organization that you wouldn’t mind sharing?

Liu: Over the last two years, under the leadership of Rhonda Wight, we’ve done a much better job of staying focused. And maybe even recalibrating our focus, to make sure that we’re serving our membership. Making sure that we get feedback from our membership, and ensuring that the communication between HARDI as an organization and with its board and with this membership is very clear and working.

I think the other thing that we have done is to ensure that HARDI as an organization is a healthy place, that it’s a place where we can grow talent and recruit new talent so that we can serve our membership better.

What you’re going to see in 2024 are some new key initiatives that are going to invest in some tools that can be utilized by our membership so that they can be more informed. Easy-to-use tools such as the A2L (refrigerants) tool that’s going to help them navigate the changes in the A2L space. There’s some extra funding for litigation for some of the EPA regulations, that if we have to file a lawsuit we have some money there to enter into litigation. There’re some website enhancements; we’re going to make it more user-friendly for the membership to be able to access resources and information.

DT: We’ve had a lot of upheaval, as you know, in the industry and the economy. What, what would you say is the importance of HARDI and other HVAC organizations right now, given all the change and turmoil that we’ve that we’ve had?

Liu: (HARDI is) the organization that’s going to help us navigate all the complexity in our marketplace, whether that’s new government regulations, the changing landscape and the market dynamics, forecasting what’s going to happen in the future, or providing the market intelligence for us to make better decisions.

I think every company needs to better understand what I would call (business guru Michael) Porter’s Five Forces: the competitive landscape, our supplier influence, our customers’ purchasing power, the threat of substitutes, the threat of new entrants. All of those forces are going to be at play in some fashion or another in any market. But in the HVAC market, I think HARDI can really help us better understand all those forces so that we can make better decisions.

DT: If you could get the crystal ball out, what do you see ahead in the coming year for HVAC distribution?

Liu: I think it’s going to vary by region. I think, fortunately, in the Southwest region, where we’re (Standard Supply) located, in Texas and Oklahoma, we’re going to be a little bit more immune to certain market conditions. Overall, just from a high-level perspective, we’re probably going to see a lot of the same in the first half of the year.

If the Fed starts to lower interest rates, I think you’re going to start to see some of the pent-up demand, create some increasing demand for our products and services in the second half of the year.

DT: Tell me a little bit about your work at Standard Supply. What is the typical day like, if there is such a thing? What do you enjoy most? What do you find the most challenging?

Liu: I don’t think there’s a typical day.

There’re four other companies under our ownership that I also help support. But I spend the majority of my time with Standard Supply.

The thing that I enjoy doing most is to take a step back from working in the business and look at it from the perspective of, “How can I work on the business better and identify opportunity areas for improvement?” So, really taking the time.

I think there’s a tendency we all have, that we get absorbed in working in the business the majority of our time, that we forget that we have to take a step back and work on the business.

The other thing that’s most enjoyable for me is to get to know the people within our companies, understand the talent that we have within our organization, identifying talent that will become the next leaders in our company, getting to know them better and serving as their mentor to help them, essentially, become our successors.

DT: And what do you find the most challenging?

Liu: Two things, and they relate to people. One is acquiring good talent that aligns with your culture. And the other one is making sure that there’s a clear understanding of accountability across the organization, and that people are actually performing the roles and responsibilities.

DT: So, last question. What would you say is the biggest challenge facing the HVAC distribution sector right now, and how can HARDI help members meet that challenge?

Liu: The thing that’s top of mind with a lot of distributors right now is just the pending changes that the EPA (Environmental Protection Agency), government agencies, are still in limbo about deciding.

We’re basically in a state of flux right now, just waiting, not having definitive dates. And so the ability to operate becomes a little bit ambiguous. So we’re just basically waiting for what we know is coming. But we don’t really have the dates to work within.

DT: Are you speaking of things like, um—

Liu: I’m speaking of like the A2L —

DT: — the sell-through of R-410A products?

Liu: Yes. That’s the main one, yes.

DT: I heard that the EPA is considering allowing that through next year and 2025?

Liu: That’s correct. That’s my understanding. … It looks like it could be postponed ‘til sometime next year.

We’re coming out of a couple of unique years where we had supply-chain issues, lead-time issues, pricing increases, COVID. This year (2023) it seems like it’s more of a continuation of last year.

Interest rates were rising last year, and now we’re hearing that interest rates will probably start to come down, which will, I think, help, but the main topic of discussion that I often hear right now is, “OK, what’s going to happen with the EPA decision?”

DT: So how can HARDI help members with that challenge?

Liu: I equate it to how HARDI helped us navigate COVID.

The government came out with the Cares Act and the PPP (Paycheck Protection) program. That was all new, and people weren’t sure what to make out of, let’s say, for instance, the PPP program.

HARDI understood the inner workings of that: What were the pros and cons? Is there any risk? I think in a similar way, HARDI has resources that interact with those government agencies and are very smart (in) understanding the language and being able to decipher that for us non-government type of employees, where we don’t speak that language.

(They) are able to decipher and translate it for us to where we can understand it: What does that mean for our business? And how do we act going forward? So I think that they’ll play a key role in being the intermediary between those government agencies and us, and helping us to understand how we should act going forward.