As the vice president of sales for Uponor North America, Bill Gray was one of a few senior managers meeting with prospective applicants to help select the next president of the cross-linked polyethylene pipe maker for plumbing, fire safety and radiant heating and cooling applications.
Gray had only been in his position with the Apple Valley, Minn.-based company, for a few months. However, he had three years in as Uponor's general manager of Canada going back to 2008 and his team managed to take market share in some flat times with customer-centric efforts.
Before he took on U.S. sales, too, Gray had convinced Uponor officials to shift some resources. The goal was to bring internal resources, namely channel marketing, under sales control to more effectively execute strategies. So, Gray had a lot of questions in 2011 for the applicants who advanced to the short list and could be his new boss.
“I was fairly vocal in challenging some of the leading candidates on their industry knowledge and cultural fit,” Gray, now 50, said in a telephone interview. “In the process, my name came up as a suggestion.”
The external search took an internal turn. Gray ended up getting the job at a time when the “the head winds had stopped” in the U.S. market and there were opportunities to foray further into commercial as Uponor had done in Canada with high rises and hospitality spaces.
Since then, Uponor's net sales in North America increased from $170.1 million in 2011 to $265.2 million in 2014. U.S. sales went from 11 percent to 17.6 percent of all the dozens of countries where the Vantaa, Finland-based Uponor Corp. does business. And, North American operating profit rose from $14.2 million to $41.6 million last year.
Gray downplays any correlation to his appointment. He explained why.
“It takes a lot of people doing the right things to make this happen,” he said. “And, I know if stuff isn't built, this could disappear overnight.”
Uponor's products are part of a bundle of goods that contractors buy along with the sink and toilet in Gray's words. They go behind walls and under floors. There's little brand recognition from the end users so it takes strong business-to-business relationships to drive sales through distributors, contractors and installers.
How does Gray see his role in the company's success?
“I had the opportunity to re-exert the notion of a partnership where we became easier to do business with,” he said. “We were easier to talk with about programs, allowances and promotions. It was really positioning and communication.”
In the channel
Uponor had gone through a period where it was a little too bold about its power in the value chain and its ability to control the decision-making process, Gray said.
“If I'm a nationally well-known faucet manufacturer and you're a homeowner and you say I want that faucet, it gives that brand power in the channel,” he said. “Everyone knows you want that faucet for its unique design, its shape or material. There's something about it and it's an emotional consumer-driven decision. That's way different than a piece of pipe behind the wall that you don't know you have.”
Being a behind-the-wall company that was flexing its muscle resulted briefly in some alienation in the channel.
“We were hearing that Uponor had become arrogant. Uponor is hard to do business with. Uponor thinks they're bigger than they are. Those kinds of things,” Gray said. “That's what we were dealing with. We didn't have the same allowances and we were squeezing rep commissions.”
Gray said he tried to create loyalty and drive demand by shifting the focus back to working with customers. The result: A lot of customers again go to wholesalers and ask for Uponor because they took a training course or they like a connection method or Uponor will help train their employees on job sites.
“We spend a lot of time trying to develop our people so they are most valuable resource in the market,” Gray said. “Instead of saying to distribution or the value chain, we're Uponor and we're going to tell you how things are, we flipped that around. If we create demand, then we create that mutual interest to do the right thing to serve the end customer.”
Uponor remains on a healthy track in North America. Net sales for the third quarter of 2015 were up 16.4 percent to $83.6 million compared to July through September 2014. Most of the growth came from plumbing sales from both the traditional housing market and the commercial initiatives.
Still, it troubles Gray to some extent that Uponor's success is tied so tightly to the construction market. In 2013, he helped launch a new subsidiary called Uponor Innovations LLC to put the company's resources to work in new ways.
Anyone can pitch a product or even a new business. The ideas are filtered and if any are pursued, Uponor will put its engineers, distribution network, technical services and funding behind it.
“Strategically, one of our weaknesses is our lockstep to the construction market,” Gray said. “A lot of what we spend our time on is what sub-markets can we grow to give us a little detachment from that.”
A couple innovations are percolating and could be announced in the next 6 months.
“Innovation and new business development is a kiss-a-lot-of-frogs kind of process in order to find the right princes,” Gray said. “It's got to fit on so many levels – and address our strategic Achilles' heel.”