Founded in 1962 by William E. Newland, Hercules Industries is one of the largest companies of its type in the western and midwestern United States. It operates four manufacturing facilities and 17 sales and distribution centers in Colorado (Denver, Colorado Springs, Fort Collins, Pueblo, Grand Junction), Utah (Salt Lake City, Sandy), Arizona (Tempe, Phoenix, Flagstaff, Tucson, Surprise), New Mexico (Albuquerque, Roswell, Las Cruces), Wyoming (Casper, Cheyenne), and El Paso, Texas.

Hercules had been owned and managed by members of the Newland family until October 2019. On Oct. 1, 2019, the company successfully closed the transfer of ownership to its employees. Hercules Industries is now an employee-owned company, also known as an ESOP, ensuring its customers can continue doing business with the same family feeling they have been accustomed to for more than six decades.

Since joining AD in 2006, Hercules has had its leadership serving on the HVAC division board, product committee and newly created Hydronics and Refrigeration Task Force. AD has recognized the manufacturer several times with awards celebrating its support of AD supplier manufacturers and its top-of-the-line annual market planning processes.

The Newland family has consistently been a strong force of energy and enthusiasm for independent distribution, participating in AD committees and task forces to represent the collective voice of the AD membership. 

Most recently, Newland served on the HVAC Product Committee. In 2020, he also joined the AD HVAC Divisional Board, helping to shape the division’s overall strategic direction. Since the inception of the AD HVAC division, Hercules has been a trusted partner and, with multiple generations offering a resounding voice, has helped guide the division to the success it is today. 

Randy Lee: Your company has been in business since 1962, founded by your grandfather. Running a family business for that long is amazing, especially by today’s standards. In 2019, you made the change to become an ESOP. Why was that important to your business and how does it affect how you operate today?

Pat Newland: Anyone who has built a business over any significant period as we have understands that it is built on the shoulders of many; in our case, 20-, 30- and 40-year employees. When we needed to create liquidity for the company’s owners, we couldn’t stomach the thought of selling it, potentially to the detriment of those people. 

The ESOP approach was the perfect solution to generate liquidity and maintain control over the company’s culture and legacy. Of course, now everyone also has skin in the game. We can hold everyone to the same standard of making decisions like it’s their own money, because it is!

RL: Hercules is a company with a great marketing focus. I had the honor of attending your summit this year and seeing firsthand what a well-oiled machine you have constructed. How do those help you get a jump on the year? 

PN: We have used AD Field Marketing Summits for many years to connect our entire salesforce with our vendors and become aligned with products we need to focus on to gain share and detailed tasks we need to accomplish to grow share mutually. 

Along with partner alignment, we also use this time to connect and build camaraderie with our team. It is a joy to see our team connect on a deeper level than only business over the two days we spend together.

RL: As an AD owner/member, you are highly active in the community, serving on various boards, committees and task forces. How is that experience for you? How have you felt you have helped to shape initiatives at AD? 

PN: Serving as the product committee chair and on the HVAC board has been a privilege. To see such a talented group form together and collectively use the many years of experience and relationships throughout the industry that created best practices is amazing. The use of our incredibly talented members has had a major impact on making AD such a great group that we all use to improve our businesses.

RL: In today’s climate, serving customers online is extremely important. How did you navigate the change of setting up an e-commerce storefront and how has this impacted your business? 

PN: We subscribe to AD’s eCommerce Solutions program and are happy about the data we use to help our customers’ digital experience. 

Anyone who has gotten serious about building a website with the content that our contractor customers need knows how burdensome it is to build the amount of data necessary to do so. The idea of sharing the cost of building this data with other members has made this task much more feasible. 

With the data available from AD, we’re now embarking upon a total website refresh. The data component is a much less significant part of the task than it otherwise would have been.

RL: How do you leverage the AD community to help you navigate running a business?

PN: We value the networking component of AD the most. We have implemented countless ideas at Hercules as a direct result of the discussions and relationships formed in the networking groups: IT solutions, operational ideas, different sales strategies, retention/recruitment ideas, and staying at the forefront of industry product changes. 

I am even more excited now about the recent changes in the networking groups which will further foster relationships among independent distributors at the C-level.

RL: Giving back to your local community is high on Hercules’s priority list. Can you tell us about how your team serves your community and how this impacts your team’s morale and culture? 

PN: With the risk of getting a little philosophical, one of the highest and enduring sources of happiness is contributing to a cause greater than yourself. More than 20 years ago, we created a 501(c)3 entity called the Medal of Honor Fund, which is funded primarily by the company and is run by our employee-owners as a way for them to contribute in a meaningful way to the communities we serve. 

A component of the fund is used for employee hardships; otherwise, it is a way for our people to get involved in their community. It is great to see how much fun people have getting involved in some great organizations and we’ve made a very meaningful contribution along the way.  

Randy Lee serves as the president of Affiliated Distributors (AD) U.S. HVAC Division. With a commitment to innovation and cultivating robust partnerships, he plays a key role in ensuring AD maintains its position at the forefront of the HVAC industry by helping members and suppliers grow faster than the market. Prior to joining AD, Lee contributed 19 years to Honeywell, showcasing his expertise in various global sales leadership roles.