Hammond Power Solutions Inc (HPS) is the largest manufacturer of dry-type transformers in North America. Established in 1917, HPS has grown from a small family-owned business in the shortwave radio market, to going public in 1986, and is now the industry leader in magnetic transformer design and manufacturing, with facilities in Canada, United States, Mexico, and India, and 11 regional distribution centers throughout North America.
Bill Hammond, CEO and Chairman of the Board, joined OG100 members for an intimate and candid discussion about the trials and triumphs he has navigated with HPS. He attests that while they have weathered many storms, he never lost confidence in the business – and it has clearly paid off.
GROWTH THROUGH DIVERSIFICATION AND GLOBALIZATION
HPS offers a broad range of products to diverse markets, compared to the past, when the industry was very focused and not diversified. The company serves customers in public infrastructure, commercial construction, data centres/network infrastructure, industrial, renewable energy, mining, oil/gas, and utilities. Their sales channels are also diverse – from distributors, to OEM direct, to private brand – which has helped HPS reduce competitive risk factors. In fact, working with distributors has decreased their dependence on the resource-based sector, and introduced the company to new markets and opportunities. Also, acquisitions have secured new technology, extending the company’s reach into new and evolving markets.
HPS is also leveraging strong global currents, and expects more global growth opportunities, as green infrastructure is expected to boom in the near future. With 35% of their business in Canada, 60% in USA and Mexico, and 5% in India, the company is investigating further opportunities to take manufacturing globally. However, big opportunities can come with big challenges. With cultural differences between various regions, you need to set and be accountable to a clear Code of Conduct. Taking advantage of your strengths and best practices, provides the foundation to enter and succeed in global markets.
COMMITTED TO COMPANY CULTURE
HPS is a proudly Canadian, family-controlled business, which creates a culture that brings many advantages to its global business. Customers remark that their focus on employee culture and engagement, and lack of bureaucracy is noted and appreciated. For example, when the pandemic hit, the immediate focus was on employee’s health and safety, which resulted in minimal cases, which meant production continued, which also meant they were able to keep all employees working throughout the pandemic. Employee surveys continuously score exceptionally high loyalty and engagement ratings. The hierarchy and bureaucracy that can exist in large multi-national companies doesn’t exist at HPS, and it’s worked well for them.
STRATEGIC AND SUCCESSION PLANNING: MAKE THE INVESTMENT
The resources dedicated to strategic planning have been a worthy investment and proven fundamental to the company’s growth. Strong leadership teams need to come out of the weeds to separate strategic and operational discussions through an externally focused process to evaluate markets, competitors, and have necessary high-level discussions about the company’s future. In the 1990s, the electricity sector dealt with significant and lasting changes, and Bill attributes strategic planning to their survival. As well, it’s a critical component of leadership development and succession planning. HPS works to develop and promote from within, transitioning management over time. This allows the existing leadership and culture to strengthen the foundation of the company and prepare for transition. It could be a period of instability, but not if you do it right, treating it as an opportunity to review and reinvent processes, and set new directions. Good planning takes a lot of work, money, and painful decisions, but it’s critical to a company’s success.