Technology Convergence and Leadership

i.e. the New Lighting financial reality

Lighting Guy, 30 years Industry Observer and Active Participant Talent assessment => Industry leaders

My background…..

Past Market Observations, SiL 2013◦ Channel Diversity◦ Lighting mega-trends◦ Trend predictions

Talent market Market threats Ideas for success in the future

Agenda

Channel diversity (SiL ‘13)

Emerging trends◦ Leased lighting◦ Franchised distributors◦ ESCO emergence◦ Electronic distributors◦ Channel consolidation◦ A/V installers◦ Controls integrators

Trends updates◦ Very little growth◦ Growing◦ Growing◦ Components only◦ Tipping point◦ Growing◦ Growing

Lamp replacement DC Power distribution Building integration Design New markets Consolidation Alternative energy => Synergistic

Lighting Mega-Trends (SiL ‘13)

=> “Power Ball”=> Gaining traction=> Nascent=> Lagging=> Blue Ocean strategy=> Darwinian

Lighting will cease to pierce the plane of the ceiling

Residential design will coalesce solar power and native DC power distribution

Smart design will enable a new system approach: Lighting, HVAC, Desk-top, Security, Sound, etc.

Quality Lighting and Quality Design will intersect into a holistic smart building Gestalt.

The US lighting market will bifurcate: New Market v. Installed Market

5 Mega Trend Predictions (SiL ‘13)

Unemployment is near ZERO

Unemployment Level as of April 2014 Some HS, HS, Some College, Degreed

Boomers are retiring, GenY isn’t ready Existing talent has been absorbed by the

rapid growth of new companies Recession led to shallow bench strength GM’s are dropping Salaries are rising, rapidly Influx of semicon talent, with little channel

or product application knowledge Skills no longer match needs

Talent challenges

Limited access to talent that grasps the emerging channel opportunities

Replacement lamps are overshadowing the core lighting market

The explosion of technology is confusing the core issue of selling lighting

Competition for reps is driving up SG&A and diminishing the focus of reps

Buying influences are expanding and the need for broader market coverage increases

Market threats

1. Pick a strategy and develop a plan to own it

2. Focus closely on channel partnerships3. Minimize the adhesions of the past4. Develop synergistic alliances: controls,

software, integrators, security firms5. Expand your grasp of building changes:

◦ HVAC, controls, security, communications◦ Installation, DC power, solar, technology R&D

6. Invest: Talent delivers the highest ROI

The way forward

“In times of rapid change, experience could be your worst enemy” J. Paul Getty

Ted Konnerth, PhD tk@egretconsulting.com

847-307-7125

epilogue