00:00Think of Trane Technologies, we're a global HVAC player, okay?
00:04So think of a heating, ventilation, and air conditioning.
00:06We're also a leader in transport refrigeration with our Thermal King brand.
00:11We're a pure-play climate innovator.
00:13And, you know, our purpose is to challenge what's possible and innovate for a sustainable world.
00:18And over the last six years, we've had just a great run.
00:22I mean, our compound annual growth rate on the top line is 11%, a little bit over 11%.
00:27And on the bottom line, it's over 20%.
00:29So I'm super proud of what our team's been able to accomplish.
00:33And as I always tell people, we've had a great run over the last five-plus years.
00:38But the future looks even brighter than what I saw five years ago.
00:41And the company itself, I mean, I'm familiar with you guys from your home product,
00:45which is a smaller portion of your portfolio.
00:47But the company itself has existed in some form since 1913.
00:51And you've been around, well, almost that long.
00:53No, I'm just kidding.
00:53But you did start at the company, not in existence.
00:57I wish I had a compliment when I came down.
00:58Someone said, you look younger than me.
01:00I'm sorry.
01:01I meant duration.
01:02You've been at the company.
01:04But you started as an intern.
01:05I started as an intern back in 1985, just to date me a bit here.
01:11But yeah, I mean, when I came out of college, I was going to go into investment banking.
01:15And I decided, no, no, I'll take this opportunity and go learn a business.
01:20And I figured I'd be there for just a short period of time.
01:23But I just had so many different roles in the company.
01:26I kept advancing to different areas of the company.
01:29And people always ask me, well, how did you get to where you are?
01:32Is it luck or hard work?
01:34I tell them, the luckier I get, the harder I work, right?
01:38But I've had the opportunity to run all the businesses that we have in the company today.
01:43So I know them very, very well.
01:45And it's just such a great company.
01:48You know, when I started as CEO, and I've been the CEO now for coming up on my fifth year,
01:53I knew we were a great operator, and I knew we were a great innovator.
01:57But we weren't thought of as a growth company.
02:00Why not?
02:02Because we weren't growing at the rates that we should be growing at.
02:05And I knew we had every opportunity to be this growth company.
02:08And trust me, you don't become a growth company just because the CEO puts it on a PowerPoint and says,
02:13hey, let's become a growth company.
02:15If only.
02:15Yeah, it doesn't work quite that way.
02:17But one of the things that we did was we had to change the mindset.
02:20So we have, as I'm sure most companies do, we have an annual operating plan.
02:25And that kind of sets every business's plan for the year.
02:29And I won't say it was a negotiation, but it kind of felt like it at times.
02:32Like people wanted a lower number because nobody wants to miss their forecast.
02:36And early on, we changed it.
02:38And we basically said, so the business, the first business comes in, presents their operating plan to us.
02:43And I was like, I don't know, 2% or 3% growth, right?
02:46Which is, you know, incremental.
02:48So the assignment that they took away, I said, come back in two weeks, and I want you to tell
02:52us, my CFO and myself, what you need to invest to grow at 15%.
02:58Swing for the fences.
02:59Yeah.
02:59And so, you know, here we are.
03:01So roll forward.
03:02Each business comes back two weeks later, and they come back with these investments.
03:05And my CFO is kicking me under the table saying, Dave, I don't know if we can afford all these.
03:09I said, no, it's not.
03:10They'll never be able to spend that amount of money.
03:12But, by the way, I need a mind shift change.
03:17And that was kind of the catalyst for us to start thinking about, hey, we can be a growth company.
03:22We are going to invest.
03:24You mentioned your optimism for the future.
03:25We're at a moment where so many businesses are being disrupted by AI or have the potential to be disrupted
03:29by AI.
03:31Talk about your involvement in this boom in data centers that I mentioned just a moment ago.
03:36So suffice it to say, you might not have predicted that a few years back, but this has become a
03:40huge growth opportunity for you, a huge driver of the growth that you're talking about.
03:43Sure.
03:43I mean, look, data centers, we've always been strong in the data center vertical, okay?
03:48But we're also very strong in other core verticals.
03:51And we track 14 different verticals.
03:53And, you know, data centers is one.
03:54But data centers has been very, very strong.
03:57And we're part of the thermal management system within a data center.
04:00So data centers produce a lot of heat.
04:01That heat has to be removed.
04:03We're the company that helps the data center OEMs remove that heat.
04:08And it's really through chiller technologies.
04:11It's through what they call CDUs or cooling distribution units, fan walls.
04:15There's lots of different components that make up that thermal management system.
04:19But we're a leader in that space.
04:20But we've been a leader in that space for decades.
04:22But this is kind of controversial because these data centers are going into areas and they're driving up energy costs.
04:28And as much as people like to chat GPT things, they also like to not pay a ton for energy
04:33bills.
04:33Is there a balance to be struck there?
04:35Yeah, I believe there is because, like I said, we're very strong in other verticals, right?
04:40And we need the intelligence from data centers to help us make buildings smarter.
04:45And if you think most buildings, they use about 40% of the energy in a building.
04:50And by the way, globally, 30% of all energy is for buildings.
04:54But 40% of that is for heating and cooling.
04:56And we know most buildings operate very inefficiently, like 30% inefficiently, a very conservative number.
05:03We've developed algorithms to make buildings smarter.
05:07And this is why I'm so excited about the future.
05:10Dave, talk a bit about who you're hiring to work for your company.
05:13So I mentioned 45,000 employees.
05:16Are you able to find the kind of workers that you need in this environment?
05:19I know that there are reports that this is a difficult labor market for a lot of people.
05:22Who are you looking for?
05:24And what is the training process like for those new employees?
05:27Yeah, great question.
05:27Look, five years ago we had, when we started as trained technologies, or six years ago now, we had 35
05:33,000 employees.
05:34Today we have, you know, over 45,000 employees.
05:37So growth companies create job opportunities.
05:40I'll start with that.
05:40Now, you need to be able to recruit the right talent, like service technicians, right?
05:45We're always looking for great service technicians.
05:47And we learned during the COVID period that it's really hard to recruit these positions and find the right talent.
05:53So we developed an apprenticeship program.
05:56And today the apprenticeship program is now backed by the Department of Labor.
06:00I believe we have about 400 employees that are part of this apprenticeship program.
06:05And, by the way, depending on your experience, this apprenticeship program could be two years to four years.
06:11And here we're just changing lives of people.
06:15We now use our hourly workforce as a place to recruit for the apprenticeship program for technicians.
06:22Whether it works or not, you're going to learn a lot by saying yes and understanding what someone else's problems
06:28are, right?
06:30And, you know, that's our whole mindset.
06:32And we love being close to customers.
06:34We love working towards yes.
06:36And we love our innovation.
06:39Dave, thank you very much.
06:40Appreciate it.
06:41Thank you for being here, for being our very first CEO Saturday, C-Suite Saturday guest.
06:45I feel privileged to be here.
06:47So thank you very much.
06:48And thanks for your time today.
06:49And good luck with your show.
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