The Fourth Trade

By creating a fourth trade in the home building industry, CEDIA president Lepper believes the home systems integrator will be elevated to the same level as the plumber, the electrician, and the HVAC contractor.
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By creating a fourth trade in the home building industry, CEDIA president Lepper believes the home systems integrator will be elevated to the same level as the plumber, the electrician, and the HVAC contractor.

In preparation for his final CEDIA EXPO as president of the association, Ray Lepper sat down with Residential Systems editor, Jeremy Glowacki, to discuss the state of the industry, his plans for the show, and his goal of creating a fourth trade in the home building industry. Lepper explains how he plans to bring the home systems integrator up to the same level as the plumber, the electrician, and the HVAC contractor.

RS: Please reflect on your two years as president of CEDIA. Youve done a lot with CEDIA University and strengthening the associations membership requirements. What would you most like to be remembered for as president?

Ray Lepper: Thats tough... but Id like to be remembered as one of the guys who worked on some of the most important initiatives. Thats it; I did my part in pushing a really important ball downfield. Whatever weve accomplished in these past two years began before then and will really bear fruit after then. Its not so much what Ive accomplished but that the people Ive worked with over the past six years have clarified their vision about the right strategy for CEDIA, the way to implement that strategy and what it looks like as we achieve our goals. And now weve got incremental action plans that lead us to those goals, and we can see them getting closer.

In last years Annual Report we had a chart of four arrows that converge in the middle. Well, there are four components to that. One is in the area of membership requirements and services. One of them is in education and certification. One is in legislation and public policy, and one of them is in outreach to building industry professionals. Those four things drive together to the middle to hopefully create an industry for CEDIA members that is long lasting. I think the clarity of how you do that is the biggest thing that happened during my presidency. Its not that Im responsible for it as much as all the work that led up to it finally took the shape that we could articulate this vision. The whole board can be nodding its head in unison, saying, I get it. And then it became easy to communicate that to the council chairs and to the action teams. If you take one, in particular: CEDIA University, those words and that concept go back five years to the very formation to the very first education council. When I came on board there was no education council. There were about a dozen individual initiatives surrounding education and I pulled together a group at the request of the board to talk about all of this.

One of the things that came out was this very initial, ambiguous thing called CEDIA University. So that was envisioned five years ago and now were rolling it out this year. So I had a little part in it, but it was all of these people that kept this vision alive. Now what youve got is the makings of a training program that will prepare people for certification, and a certification program that marries up to it. That whole program then leads you to an apprenticeship which leads you to the ability to go out and get the kind of legislation you need in state houses to create the fourth trade, and contractor licensing to manage it. See, all of the pieces have to come together to create this fourth trade, this building industry professional, called the Electronic Systems Contractor. As recently as two years ago if you asked a dozen CEDIA members, What are you guys called? Theyd go, Custom installer, systems integrator, electronic architect... How could you ever get consumers, architects, or designers to even return your phone call if you can never say who you are twice the same. Just simple things like that were a major undertaking for us.

What have you noticed as the biggest change within the association since coming on board as its president?

Theres one thing, but its not night and day because it was already halfway complete when Jeff Hoover was president. Im the beneficiary of work that Steve Hayes and Jeff Hoover did, moving the CEDIA Board from an action body to a strategic body. The creation of an organization of our volunteers and staff around core functional sections of the association was a tremendous development. It started when we organized the education council. The education council became the model for creating one area of business, if you will, where we needed to put all of the action teams underneath it, so that it could be coherent and we could put strategy at the top and get it to flow out.

Steve had been the first to propose having five councils. At that time, they werent practiced, and they werent nearly as organized and comfortable with that mechanism as the education guys had become. By the end of Jeffs presidency they were starting to get some rhythm in the way they managed their work and the way they reported up to the Board. By the time I got there, my first thing immediately after EXPO was to call a meeting of the council chairs, and I said, Hey, look heres the strategy thats come down from the Board. How does that feel? Yes, good, bad, do you buy in? And then wed create a plan to implement this vision, because these are the people that are going to do the work. The biggest thing thats changed now is the next president it going to have it easier than I did because now those councils and action teams are used to working that way. So weve got this momentum for how we do our business. The association can get more work done faster, which is coherent in its strategy, than ever before.

And this is still accomplished, essentially, with a workforce of volunteers, right?

Yes, and you know how it usually is with volunteer organizations: Most of the people doing the work, you cant hire them, and you cant fire them and you have to be nice to them and you cant say, You suck. But with CEDIA, we can. Were all volunteers, so we can be brutally honest with each other, and we all have a mechanism to tap the energy (our organization, our structure) so we can make stuff happen. The quality of the work coming out of our councils now is so good that its scary. It looks like stuff that you went to a big corporation and stole it from. Its that good. Its as good as any work that Ive seen produced in any company. In education and certification, in our new curriculum and some of our events, I defy you to show me a company thats producing better product. And we do this with a staff in Indianapolis and a bunch of volunteers. Im really proud of them.

Youve mentioned earlier about creating what you call the Fourth Trade. Could you explain what that is, exactly, and where the idea came from?

First, in that strategic plan and implementation chart that I referred to before, the thing at the middle where all of the four thrusts of activity converge, says Members Prosperity Increases. That means that our members grow,
prosper, become more profitable and healthier, etc. The CEDIA member is a subset of a larger industry. The industry includes a guy who started in business yesterday and a guy who has been doing this for 30 years. It includes CompUSA and Best Buy and the highest end CEDIA award winner in Electronic Lifestyles. Thats the industry. CEDIAs role is to insure the prosperity of its members, not necessarily the prosperity of the industry. If the industry prospers because CEDIA prospers, then thats fine. But were not trying to grow the industry per se. Were trying to improve the condition of the CEDIA members within that industry. Our role changed from grow an industry to improve the lot of this subsetour membersin that industry.

Initially, we had to do the first thing. This idea of the Fourth Trade is, in some ways, a throwback to that grow an industry approach. And the reason we had to do it for the whole industry and grow the whole trade, including the good, the bad, and the ugly. We cant be the Trade. The trades going to have to be bigger than CEDIA, and the CEDIA member is going to have to be a subset of it. The goal of the Fourth Trade is to get outsidersbuilding industry professionals, government regulators, consumersto come to believe, as a matter of course, that when you build a house, you need a plumber, an electrician, an HVAC guy, and an electronic systems contractor.
Those are the four mechanical subsystems that make a house not just a box made out of wood and drywall. So those are the active thingsthe systems that really make life comfortable, convenient, healthy, safe, and fun. If we dont create that Fourth Trade, were just going to keep bouncing around out there like some weird specialty option. Thats not good for the industry, and it certainly is not good for CEDIA members. Its our position that certainly in sophisticated homes and sophisticated home design that electronic infrastructure is a key component of what the homeowners expect. You need a professional to do this or its going to continue to be inconsistently delivered to those people. So I can make a case that its better for consumers to have a professional group of people/businesses doing this work, and I can sure make a case that its better for CEDIA members to be those guys than just to have to figure it out on your own and try to establish who the hell you are and what we call you guys and who relates to you. So it just makes perfect sense for the benefit of the industry and ultimately, selfishly, for the benefit of CEDIA members to get the public and legislators and industry partners to say, Yeah, Fourth Trade, there is one. There was a time when there was no indoor plumbing. Pretty soon everybody wanted plumbing so much that people said, We always need a plumber. Well, there was a time when you didnt put structured wires, home networks, lighting control, multi-room audio, home theater, and music service. There was a time when you didnt put that in a house. One day people will say, Of course you need an ESC. Were just trying to precipitate that and cause it to coalesce around now.

What are the initial steps that need to be taken to get that going?

Its very hard, but its very simple. Most states regulate the other three trades. They may not regulate general contractors, but most all of them regulate the three others. And they do it with contractors boards and a set of regulations that look remarkably similar from state to state. So the template for becoming regulated in the same way that HVAC guys, plumbers, and electricians are already exists. Our plan is to put together a small action team that will start to do the investigation about which states would be receptive to this as a piece of politics and to start working with individuals in those states to actually have legislation introduced that creates regulation of our trade.

One is to find friends in the legislature that understand why this Fourth Trade ought to exist and how its in the public interest, and start to work with them in the drafting of this legislation and get that introduced. A part of that that everyone of these things will require is the ability to offer up a training and certification programin essence, an apprenticeship, that has a series of coursework and a series of on-the-job training hours that come together at a period of two years, three years, four years, that says, Yep, youre now a journeyman. So CEDIA Universitys EST (electronic systems technician) coursework very much stands as the after-work education for that sort of apprenticeship program. Unlike a CEDIA Installer Level I, an EST certification will require documented, on-the-job hours verified by your employer. Thats an apprenticeship program! Thats what it is, if youre ever looked at those.

States where you want regulation of contractors, the first thing they always talk about is journeymen. The journeyman is the guy who does the work and works for a contractor. So were going to create, through CEDIAs University EST program, a journeyman electronic systems technician, and he would work for an electronic systems contractor. Right now you have journeymen electricians who work for electrical contractors. Even the language that well be using runs parallel to the existing three trades. So thats really how it begins. Within CEDIA University, we carry on through Designer, Project Manager, Customer Relations, and even Business Management. Those arent necessarily things that are needed by a contractors program and that kind of regulation. Its the journeyman technical stuff thats really needed. So there will be plenty of room for CEDIA members to differentiate and extend off that basic regulation that the states will require, but that at least creates an initial bar or floor that says that youre not really a contractor unless youve got journeyman technicians and you meet contractors regulations like the other trades. Were trying to say that we want to meet the same requirement that you guys meet in the common ways, and we want to establish a set of technical trainings and testings.

Dont you anticipate some kind of push back from CEDIA members on this?

I dont blame anyone who has that initial reaction. But the fact is that without some of that regulation you really cant develop as fully. We see that everywhere. Its like the creation of standards. The broad audienceconsumers and homeownersare not going to be comfortable adopting this stuff wholesale, when they start having the horror stories. The alarm industry had to get itself regulated because it was so out of control. It turns out that the same reason that CEDIA was founded was to raise the standards of an industry to preserve the health of the industry. Were going to do the same thing again.

When you talk about the states that would be most receptive, what are you looking for in that regard?/b>

[Laughs] Well, its not going to be Massachusetts, Illinois or California, and thats because the unions there are incredibly powerful and incredibly selfish. Theyre narrow-minded. The fact is that they currently do not offer the breadth of training programs, if any, to address the realities of electronic systems contracting. The electrical contractor unions in those states want to be grandfathered in, because some of what we do flows over copper wire. Im sorry, but thats just not fair. Were not saying that we want to close you out, but you can bet your buttons that were not going to let you close us out. Especially not on that argument, because its much more about bits than it is about volts. So what we want to do is say, Hey, level playing field; everybody can play. And some of the training that journeyman electricians already have would absolutely be equivalent to and substitute for some of the training in EST. Theres a lot of commonality there, but at a certain point, youre still going to need coursework. It might not be that much, but youre going to need some. So I think where youre going to find it is in states, or localities within states, where they really see how all of this technology in peoples homes is a serious business, and its good for economic development. Heres one that I just love: were going to be employing Americans right here, and these jobs cant be exported. They are service jobs in the homes and communities in your state. Thats good stuff. I think from the public interest standpoint, youll end up with a state thats kind of sensible, kind of conservative, probably pro-business, but at the same time buys into regulation. Im not trying to be draconian at all, but we need to have training and certificationa journeymens programthat sets a minimum standard that the public can expect from these sorts of folks. Our industry is going to hurt itself if we dont. If everybody that wrote Bobs Electrical Service on the side of his truck and came to work on your house, youd have cooked people all the time. Well, we dont cook people so muchwe use lower powerbut people are depending on our stuff for communication. If we mess up your network that might prevent your telephone from working and you cant dial 9-1-1 in an emergency. Thats really not funny anymore. We install integration that could leave your house cold and dark; that can be unhealthy for a grandma who is two weeks out of the hospital. This is getting real. Its not just games and toys anymore. Were delivering electronic infrastructure that people depend on. Its grown up. Its not a novelty. There will be legislators that agree with us, but its a long process. You could argue that it has taken us 15 years to drive the industry to its current state, well its going to be another 10 years before people say, Of course there are four trades, what were you thinking? Theyre not going to say it next year or in three or five. But in 10, I think they will.

So youll no longer be just a group of hobbyist retailers at that point.

Right. Were going to move away from being another form of retailer to being an Electronic Systems Contractorpeople who design and build living environments, for convenience and entertainment. Were codifying our industry.

You in particular are going to lead this action team?

Im going to be the chair of the public policy and legislative action team, which is an action team that works under the membership council.

Looking toward EXPO, its expected to be another packed event. What are some things we should look forward to in terms of events and educational
opportunities there?

The EST school, if you will, of CEDIA University will actually be on show and ready for action at this years EXPO. The coursework, the handouts, and the instructors, you are going to see the real deal all across the board in that school, or what we used to call a track. The quality of all of that is just really solid. People are going to say, My God, it all flows together. Its not overlapping and redundant. I knew which classes to take. So they will start to see that there. Some of the Designer curriculum will be there, and some little bits and pieces of the other five schools will be there. The first full-tilt, this is what a chunk of CEDIA University looks like, thats really big for EXPO. Beyond that, we have a very interesting keynote with Ray Kurtzwell. But we have another piece that youre going to hear about at the annual membership lunch. Were going to hear from a guy from RSM McGladrey who is doing the survey work on best practices for the industry. Heres what were trying to do: Our companies are growing up, and most of us in CEDIA member companies didnt go to business school. They were just technical guys or whatever. What we would like to know is what sorts of behavior do the best of our companies routinely exhibit and theyre probably similar to the same behaviors as companies in other industries, but we would like to know for ourselves, what are the ones in this industry that really stand out as the great companies. And were going to define what that means: long-term profitability, low turnover, high morale, high customer retention, and high customer loyalty. Can we create training programs that teach people how to adopt those best practices, saying that across the board, this is what our best companies do. Several of us locked onto this idea when we talked about raising membership requirements. We wanted to make information like this available to the more ambitious members through a specific course of study. The information that we get back from this study is going to tell us who is doing what, how they do it and how we can build curriculum around it and share that in a very disciplined and comprehensive way with our members. It may sound boring, but its hugely valuable because when we create that Fourth Trade, we want the CEDIA member to be at the pinnacle of it. We want him to be the go-to professional for electronic systems contracting. Serious homeowners, builders, architects, and designers will say, Oh you need a CEDIA member to do that. Having CEDIA members be better-run companies can helpe to deliver the brand values that weve always been saying we have.