July 2020
Interview

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Babel Buster Network Gateways: Big Features. Small Price.
Control Solutions, Inc. - Minnesota

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Scott CochraneJohn DonahueScott Cochrane President, CEO
Cochrane Supply & Engineering
Contributing Editor

&

John Donahue, Founder
Control Consultants Inc.


The Death of a Temperature Control Salesman

From pneumatics to IP WTF... can you explain it in your eyes?

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This past month, one of my favorite temperature control industry mentors retired, walking away successfully from an industry that he helped build and guide for 40 years.    

It was about 20 years ago when I first met John Donahue.  It was at a vendor roundtable meeting where a group of controls distributors were brought together to give the vendor feedback on their products and services.  I was young and my dad, who ran the company at the time, sent me to represent us and made sure I understood his point of view which was essentially that “they were terrible.” Easy enough. 

John, Ken Farley (Universal Supply), Gary Burke (Burke Engineering), Rick Jones (Building Controls & Solutions, formerly Applied Automation), Andy Held (Jackson Control Co), Pat Marsala (M&M Controls), Jay Ranalli (Broudy Precision), Dave Smyers (DMS Controls Group), Eric Stromquist (Stromquist & Co) and other greats from the ranks of successful controls distributors set the tone for the meeting right away, which was not good for the vendor.  They pummeled him...  on delivery, on sales strategy, on technology. I felt like I had a pea spitter and they showed up with howitzers... Needless to say, after the presenter started crying and asking “Can’t we all just get along???,” I was impressed.  

John had a way with the vendors. It was like he was reading their minds and could almost predict how they would respond.  He helped all of us see the reality of our businesses and always had a very pragmatic understanding of what was happening.  And as he departs to begin a new journey, I hoped to capture just a few of his parting thoughts… 

Cochrane: So, John—you’ve been successful. I wanted to share your story because you have helped reestablish an industry. You’ve been a leader in it, not just from a business standpoint but for also bringing us together socially the way you did. You are a model for how good behavior and doing the right things can really help you and this business over time. 

Donahue: We see those behaviors from a lot of people in the industry. It’s not like I created them by any stretch of the imagination. I do think early on, about 40 years ago, we thought of other distributors as competitors, and then we realized we’re not competitors. We’re far better off being cooperative teams. But I think your dad, and some of those founding fathers, those guys talked. They had their group of guys they leaned on. I learned from them. That we need to listen to each other and that we can benefit from each other’s good experiences. That we need to try to take the best practices from each other and see if we can implement them into our own businesses. I didn’t create anything… I wasn’t a visionary… I was just an early adopter. I saw something and if I thought that it’d work here, I’d implement it.

Cochrane: How did you get started?
 
Donahue: On July 1, 1980 I started my venture into the controls distribution world after being hired by Steve Rush, the President and Owner of Energy Controls.  I was the son of an oil burner service mechanic so I knew next to nothing about the industry that would become my life passion. During my time at Energy Controls I learned a lot about customers, vendors, the industry, and business in general. So on July 1, 1989, from the trunk of my car, I founded Control Consultants Inc. (CCI) and spent the next 29 years supplying products and designing systems to assist customers in the forefront of the ever-growing intelligent building market. So, it is only appropriate that on July 1, 2020 I will start my first day of retirement from Control Consultants Inc.   

Cochrane: From pneumatics to IP WTF... can you explain it in your eyes? 

Donahue: Cave man to rocket man is how I see it. It was a tremendous wave of technology growth for our industry and I was fortunate enough to be there and ride that wave. From clock thermostats with red and blue pins to using iPhones to remotely accessing and controlling a 40-story building, man it was a blur.  I can’t wait to see what technology brings to this industry over the next 20 years. I’m sure it will blow my mind.
 
Cochrane: Do you remember the early days when they first gave DDC to distribution and the difference between us and the branches? Can you speak to how that has changed in terms of our relevance in the industry?
 
Donahue: In1980 when I started, there was no DDC on our side. My best recollection is the start of distribution, your dad’s company, and Stromquist and Smyers, these are guys who basically left the city desk at these manufacturers and started their own replacement pieces and parts business for the HVAC industry, which was growing. But it was still all mechanical. We saw our first computerized systems probably in the mid-80s. We had to go create customers because there really weren’t a lot of independent controls contractors. There were good HVAC mechanical contractors, but they really couldn’t figure out that control thing yet. From day one, we had to provide various services to support our customers that were far different than being a break-fix distributor.

Cochrane: Tell me about what you thought when Tridium came to town. How did Niagara change the distribution business in general in your eyes?

Donahue: Again I wasn’t a visionary, I was about a year behind as far as introducing Niagara to into my company. The Niagara platform for distribution really became a game changer, though. Prior to that, any remote connection into any of our projects with our customers was a modem-based. The fact that we could take this blank canvas and make it web-based, whether it’s graphics, reports, and so on, the openness of it and the ability to have our customers make it whatever they wanted it to be was just a huge thing. It allowed us to go and take that technology to existing controls contractors that were dealing with a modem-based system and a manufacturer-supplied front end that was what it was and couldn’t be anything other than what it was. And now we gave them the freedom to put in something they could make their own. It became more about the contractor’s ability to meet their customer’s needs than it was about the brand of the product that they were installing. 

It took the handcuffs off of so many end users from the one-step manufacturers and those contractors that basically held end users hostage from the day their system went in. They spoke of open, and we have really preached that from day one, open open open, to really give the end user a choice. That was probably the biggest thing, it changed us from being a systems house and really turned us into an integration house where we became trusted partners now with our customers. We provided them with training, technical support, and design services. We went out and found third party software that allowed them to integrate into additional things. Without Niagara, that never would’ve happened. Niagara was the biggest turning point that I think our industry has seen ever. 

Cochrane: You merged with Kele, Inc. back in 2017, how has that experience been? 

Donahue: It has been a very positive experience. The Kele acquisition of CCI was a great thing for me and my family. Our business was in a good place and it was a good time to capitalize on what we had built. CCI joined forces with Kele to better serve CCI customers with even more product breadth, resources, and services. Being a member of the Kele companies has broadened our offerings and made us a stronger company. Kele has provided us with warehouses in Memphis, Dallas, and Seattle that we can pull from, which provides our customers with inventory when they need it. Under Kele leadership, I leave CCI in good hands to maintain and grow CCI’s place in the industry. 

Cochrane: You created the East Coast Control Summit—you basically started a fraternity. Tell us what does it mean to have friends in business? 

Donahue: The people that I have met along the way is what I have enjoyed more than anything during my time in the industry. My customers, my employees, my vendors, and especially my fellow distributors all have made the last 40 years a tremendous amount of fun.  This industry is stacked with tremendous people who have always been generous with their time, willing to share ideas, and always willing to lend a hand. Most of what I have come to know about business and this industry has come from conversations with my fellow distributors.  To the members of the East Coast Control Summit, the annual meetings the last 15 years have been an experience like no other and one I do not plan to retire from any time soon. 

Cochrane: What was your greatest value to your customers?   

Donahue: Honesty and Integrity. I have never in my career tried to sell something to my customers just for the sake of selling something. For the most part, my customers have come to CCI with a problem or an idea as to what they would like for a sequence and have relied upon CCI to provide them with a solution. CCI would only provide our customers with a solution that we believed in 100% and could and would stand behind. Our customers always knew we had their backs. 

Cochrane: What are your all-time favorite products? 

Donahue: Two products come to mind. The first would be the Honeywell Light Commercial Building Solution (LCBS), and the other would be the Niagara Platform by Tridium that we talked about. The LCBS product was the first “Lite” DDC product line sold through distribution where we could reach a much larger audience and train them to be completely self-sufficient in a short period of time. This product introduced a lot of HVAC service companies to the revenue stream that could be generated by doing their own controls. 

And then again, the Niagara Platform by Tridium sold through the Vykon channel was the ultimate game changer for the controls distribution industries. For those distributors that were early adopters of the Niagara Platform, it catapulted us from a being parts supplier to being trusted partners with our customers and vendors. It opened up so many other revenue streams. By providing training, technical support, design services, third party software, and all of the ancillary components that one would need to successfully complete an integration project, we became the go-to suppliers for our regions.  

Cochrane: You mentored me as a young controls distributor, who were your greatest mentors?  

Donahue: My biggest mentor in business had to be my father. My dad, a child of the depression, was a self-employed oil burner service technician with a sixth-grade education, and he taught me more about how to treat a customer than any self-help book anyone had ever written. “The customer always comes first” was drilled into me from my dad as soon as I was strong enough to carry his toolbox.  As far as the controls industry goes, a lot of my mentoring came from some of the founding fathers of the distribution world. People like your Dad, Don Cochrane, Sr., Cal Odom, Red Stromquist, Tom Smyers, Leo Walsh, Frank Balldino, Gary Burke, Jerry Peterson and others. In the later years it became the young guns like yourself, Brian Turner, Chip Cummings, and Frank Witmer.  I have been mentored by people from the past and the future, and have taken positive things away from both. 

Cochrane: What are the #1, #2, and #3 keys to a good distributor/vendor relationship? 

Donahue: #1, Know your place in the food chain. #2, Respect each other’s position and listen twice as much as you talk. #3, Don’t make it personal, make whatever you say, about the industry and not your individual business.  For 30 years, I ran with my company with the following principles: 1. Take care of your customer’s needs, because without customers you have no business; 2. Develop strong loyal relationships with your vendors, because you both need each other; 3. Take care of your employees, make sure that they buy into your vision; 4. Don’t worry about the money, if you get #’s 1, 2, and 3 right, the money will take care of itself. 

Control Solutions, Inc Cochrane: As you retire, I feel lonely. We need to find some young people and bring them around—who’s going to fill your shoes?! 

Donahue: Well, the door is wide open my friend, they’re not very big shoes to fill. You just have to find a little bit of time. There are some tremendous people in this industry, that’s what has made it so much fun. You just need to find some people who are committed to the business and who really want to learn from others. That was the whole idea of us always getting together was to listen to each other.  And as much credit as you want to give me, I listen to you more than a lot of people. Early on I’d listen to your Dad and Cal Odom. Then I did my own thing for a while, then realized this is getting beyond me and I knew I had to start listening to these young kids. I think I’ve had to ask you multiple times what my Apple password was… 

Cochrane: You guys have been the inspiration for me the whole time. As you know, I was brought in the business by people who knew it well and have been in it a long time. I always felt like I needed to be around people who respected the industry like I did and I chose my friends accordingly in the industry. 

Donahue: You hit a key point, age had nothing to do with friendships. It was people who respected the industry, were committed to it, and who wanted to grow it. There was a tremendous wave of technology growth in our industry during the last 40 years and a tremendous amount of change going on. I surrounded myself with people like yourself who were not afraid of change, and more times than not it was the younger group that pushed us to be better with the “Change or Die” mentality.  Most of the change that I have seen over the last 40 years has been positive, however things as of late have become frustrating for independent distribution.  The frustration right now is the manufacturers and their lack of commitment to really listen to what the industry needs. They’re totally reactive to what Wall Street needs as opposed to what the industry needs. 

Cochrane: Do you feel like there was a time when they truly cared about the industry and their customers and that’s changed? Or do you feel like it’s just more apparent now than ever? 

Donahue: I don’t know if I was naďve or not, but I’d like to think years ago there was a time that they actually wanted to be the best at what they did. I remember distinctly I was actually working for Energy Controls at the time, in 1989, when we first coined the idea of an authorized system distributor. The vendor really wanted to own the market and they were all about creating new products at that time. I do think back then in the late 80s/early 90s, there was a focus on being the best. But then we saw a shift in who they hired, they thought they had to hire everyone who had an MBA and it was less about technology and more about financial results. I think the focus on financial results to Wall Street hasn’t helped any of them. I look at Belimo for instance, I think they still strive to be the absolute best at what they do. I think they’re one of the few. I think Tridium, despite being owned by Honeywell, still has enough insulation around them that they try to, though I think it’s become more and more difficult for them as well.
 
Things are just different now. When I was your age, Scott, I was dealing with people that I did feel cared. I just don’t know any more. They don’t even care to call you back nowadays. I always respected who we were as a distributor. I always respected where we fit in the food chain. I fully understood I really wasn’t a customer of any of my vendors. I served at their pleasure. I didn’t make anything. All I did was I had the ability to make money based upon things that they made. Mutually, we understood that, but I think it’s changing. Now they treat us like we’re sub servants of theirs and they pound, pound, pound for results and yet don’t do anything on the other end to help create results. I think it’s difficult for someone today to not make it personal. And I think that’s always been the key over the years is that in my conversations with any vendors, I tried to not make it personal but to make it based on the industry’s needs. Whatever I said was for the industry, not necessarily for CCI.

Cochrane: You’ve had an incredible 40 years in this business... to those of us controls distributors who continue on, to the vendors in the industry, what words of advice will you share?

Donahue: To distributors, the one word that comes to mind is Loyalty. If you expect your customers to be loyal, then you have to demonstrate loyalty in every aspect of your business.  Be loyal to your customers, vendors, and employees and everything will take care of itself from there. My parting words for the vendors on my way out the door would be to focus on being the best in the industry at what you do. Work harder to meet the industry’s needs rather than Wall Street’s needs. Again, focus on the customer and being the best, everything else will take care of itself. With that said… I am sorry for being so long winded. While over the years I have been famous for my Irish exits, this time I just could not do that to you, my friends.

Sláinte ☘️


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