John J. Engel doubled down on WESCO’s customers in a market slowdown

Doubling down

During the Great Recession, Engel says WESCO was very aggressive with how it managed the company in terms of cutting costs and right sizing. The degree of uncertainty around the shape and timing of the recession necessitated it.
When the company came out of that, Engle shifted to playing offense while others still played defense. As a result, WESCO had years of strong value creation and growth.
This time around, the company was stronger — more diversified with a better team and an excellent balance sheet. The downturn wasn’t as pervasive. Certain lines of business, such as utility, were doing well. The employees also could see that while costs were being cut, WESCO was still investing in areas that would pay off in the future, like e-commerce.
Without an all-out recession across all aspect of the business, Engel was able to play it more offensively.
“We saw the benefits in the Great Recession of when we turned to offense before others did and started focusing on the customer,” Engel says. “We did that in the Great Recession, but not from the get-go, and we saw the benefits when we did that. So, applying that playbook throughout the whole cycle in ’15, ’16 had its benefits.”
Engle says if you focus on the customers and double down with them during a down cycle, you enjoy superior benefits in the recovery.
“All businesses go through cycles, so our view has always been that next trough, we’ve got to be much stronger than we were in the prior trough,” he says.
If WESCO can sell its customers more, even if they spend less, it makes them more loyal and the relationship stickier. This has helped the company overcome those cyclical impacts.
WESCO’s competitors all have narrower portfolios, so WESCO developed a strategy called One WESCO after the Great Recession.
Engel says it looks at trying to maximize the total spending for every customer, because there is inherently a lot of white space. WESCO isn’t selling every product or providing every service it could to every single customer. The company could significantly increase its business without adding a customer.
“When things are tough, you double down because what you’re essentially doing is increasing customer share — and when things swing back you’re positioned to double down even more,” he says.

Talent remains a priority

WESCO has an ability to invest to a greater degree because it’s a large publically traded company.
“We have more scope. We have more scale. And as long as we do it properly, we have the ability to also attract very strong talent, because we’re larger and we’re stronger,” Engel says.
While the company was shifting investments in 2015 and 2016, it also strengthened the team. This was critical because WESCO doesn’t manufacture or design products. It helps deliver products and services.
“We are only as good as the strength and the quality of our team, and it’s our talent that is our most vital asset and the source of our advantage,” he says.
Even in a market slowdown, WESCO injected new talent from outside, while training, developing and promoting strong talent through its WESCO University, mentoring and college hiring programs.
Most companies have a strategic planning and budgeting processes, but WESCO’s leadership spends equal time on a third process: talent development and management.