The impetus to calculate market share in the electrical contracting industry came about long after it was already an established practice in other large parts of American commerce. It’s a “hand-me-down” to the contracting industry that has never really fit the construction sector very well.
The First Step in a Major Miscalculation
In some industries there are multi-billion-dollar corporations that have enough heft to earn them a big chunk of the graphics on any market share chart. Walmart, McDonald’s, Starbucks, Hilton Hotels, and Pfizer, for instance, are dominant players across the board in their respective industries. In another kind of example, General Electric holds a commanding lead in a number of market subsets such as aircraft engines.
If the market position of each and every electrical contractor in the US were presented on a pie chart in a business magazine, however, no single company would warrant a slice thick enough to be visible to the naked eye.
Of course, electrical industry watchers have never chosen to produce analyses to portray the specific market share of individual firms. Rather, from time to time they attempt to calculate the combined market positions of all of the union employers versus all of the non-union employers.
Such an effort always has been, and always will be, the first step in a major miscalculation.
The Results Everyone Can Count On
In the unionized sector of the electrical construction industry whenever the discussion turns to relative market share statistics, you can almost certainly count on hearing someone contest the accuracy of the percentages that portray the split between union and non-union positions in a given geographic area. In a mixed crowd of local labor and management representatives, this difference of opinion is virtually assured every time the subject comes up.
Is there a solution to this dilemma? Yes, we think there is. We’ll describe it in a moment.
Meantime, construction industry players can take heart in knowing that in other business sectors where only a few major corporations dominate their field, even when market statistics are gathered and interpreted by independent, third-party experts, there is still grumbling about the accuracy of the answers that the experts provide.
The Little Things Everyone Overlooks
The second misstep in the market share calculation conundrum comes from the failure in most analyses by those compiling the data to drill down far enough below the surface to identify rising and falling trends in subcomponents of the big picture. What is trending up? What is trending downward?
Finer measurements of subcategories would lead to much more interesting—and strategically useful—information. Little things mean a lot.
Big blasts of information portraying present-day activities are potentially less important than weak signals portending changing conditions.
The Big Things Everyone Overlooks
But the ultimate miscalculation—and everyone is guilty of it!—comes about when electrical contractors simply fail to recognize the potential possibilities in various kinds of electrically-related work that are outside of their present purview, things that they ought to be pursuing. Those opportunities which they fail to recognize are symbolized by the “missing piece” bordered by the broken line in the pie chart above.
The two solidly-colored slices that are side-by-side on the pie plate symbolize the union and the non-union shares of the market. They are not to scale. But the accuracy of their proportions is not crucial to this discussion.
The relative size suggested by the outlined piece is what’s important. It symbolizes the business potential in work activities that most electrical contractors simply do not fathom. Their inability to discern that business potential is analogous to what happens in a “looked-but-failed-to-see” traffic accident.
Opportunities are hiding in plain sight.
A Better Solution for Everyone
Case studies in business schools are full of stories about the many ways that companies—and sometimes entire industries—have miscalculated existing data and missed out on coming trends. The construction field is no exception to that experience.
The electrical construction industry could serve itself well by stepping away from trying to measure relative market shares. It’s a fool’s errand.
The industry would do better instead by focusing its attention on its customer base. Starting at the level of the individual company, if electrical contractors made it a fundamental business routine to cultivate and preserve their customer base, the industry would take on an entirely new character. Contractors would come to appreciate their customer base as the off-balance-sheet asset that it truly is.
Market-share calculations at the level of any individual company are not measurable. At the level of the entire industry they will always be dubious and debatable.
But if electrical contractors were to apply regular effort to tending their customer base, amazing things would come about—including clues to the big chunk of business activity that contractors currently cannot see. Loyal customers would introduce them to new possibilities that they would never likely discover on their own or from any other source.