Clash of the Megatrends: Chris Hoffmann

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When megatrends are buffeting your industry and your business, how do you respond? What drives the decision to zig when others are zagging?

How do leaders gain the confidence to make a choice when the future of the business—and more than 300 employees—is on the line?

Episode description

In the heating-and-cooling industry, they’re calling it “The Great Consolidation” as the pace of company acquisitions has risen from about 20 in 2011 to 120 a year by 2019. Meanwhile, The Great Consolidation is slamming head-first into the pandemic-born Great Resignation, as firms battle for a share of the scarce pool of talent on the market.

That’s the environment Chris Hoffmann has faced since 2016, after taking over the St. Louis-based, family-owned business his father began 28 years earlier with four employees and a simple business model. Today, while he watches competitors grow through acquisition and consolidation, Hoffmann sees an alternative path: scaling up geographically and serving existing customers more deeply.

That’s why he’s expanded into Nashville. That’s why he’s exploring adding pest control to his suite of commercial and residential services. But there’s still that other nagging problem. "The companies that are going to be able to grow are the ones that can solve the talent issue,” Hoffmann said on a recent industry podcast. “Everyone knows that. Everyone's talking about that."

In this episode of On Principle, we talk to Chris Hoffmann about how he came to realize Hoffmann Brothers would have to make some big investments to thrive in a heavily fragmented but consolidating industry. What drove his decision to grow by expanding his service area and his services? Why did he decide against buying his way into new markets by acquiring existing residential and commercial services firms?

And what does it take to move from simply recruiting talent on the open market to growing your own in a newly built, 15,000-square-foot training facility?

Related Links

• The Hoffmann Brothers website
• The family office site Chris and his family created to manage investments
• More about Peter Boumgarden
• The Koch Family Center for Family Enterprise
• A piece Chris Hoffmann wrote for the Tugboat Institute on employee engagement
• The St. Louis Business Journal reports on Hoffmann Brothers’ expansion
• The Olin Brookings Commission project referenced in this episode

Credits

This podcast is a production of Olin Business School at Washington University in St. Louis. Contributors include: 

• Katie Wools, Cathy Myrick, Judy Milanovits and Lesley Liesman, creative assistance
• Jill Young Miller, fact-checking and creative assistance
• Austin Alred and Olin’s Center for Digital Education, sound engineering
• Hayden Molinarolo, original music and sound design
• Mike Martin Media, editing
• Sophia Passantino, social media
• Lexie O'Brien and Erik Buschardt, website support

 

Download the podcast transcript PDF