In that respect, he might be the only business executive in the Kansas City region whose sleep is thus disturbed.
“It’s one thing to be stressed about the weather” in a business sensitive to changes in temperatures, says Wambold, who was elevated to chief executive at Ferrellgas last month. “But the last two years have been unbelievable in terms of cost volatility. We try to cover all of our fixed gas needs in the summer, but the markets have turned upside down in the past few years.
“At the end of the day, though, the difficulties end up on the customer; the customer suffers when markets are spiking.”
That view is a reflection of the relentless organizational focus that Wambold, 41, is placing on customers, and Ferrellgas’ efforts to increase their numbers in the riotously competitive propane-supply business. He took over the reins of the $2 billion company Oct. 1 after serving as president and chief operating officer, roles that brought him to the Kansas City area in 2006. His ascension to CEO completes a journey that began quite by chance. Payless Cashways, his previous employer, was running into trouble in the 1990s, and Wambold found a logical, and attractive, way out.
“Two and two came together” to prompt the switch, Wambold said. Ferrellgas was “looking for someone in that part of the world and I was familiar with the organization, paying a small fortune to the guy who showed up with the propane deliveries three times a week.”
So Wambold began learning the propane business quite literally from the ground up—at road level, driving a delivery truck during some brutal Indiana winters. The experience, he said, gave him the perspective on customer needs that would become his own vision for getting the whole company on the same page. “It’s more than just a fair price; customers want excellent service. Things we do to generate assistance for the people in the field generate more customers.”
That field mentality has put a keener edge on the corporate culture. “It’s easier to put a goal out that is field-focused,” he said. “As a result, everybody invested in Ferrellgas is heading the same direction.”
Wambold’s elevation to CEO comes during a time of particular challenge—and opportunity—for the propane industry. Unlike other energy sectors such as motor fuels and coal, where relatively few companies control market share, the propane-delivery sector is made up of thousands of competing companies. The four largest, including Ferrellgas, account for about 35 percent of deliveries nationwide, Wambold said.
In that environment, there’s a lot of “I-steal-one-from-you/you-steal-one-from-me,” activity that moves the pieces around on the competitive chess board, but does little to advance the industry’s broader shared interests relative to other fossil fuels.
Among those: a better propane-fired vehicle, which Ferrellgas has been working toward in conjunction with Roush Performance. Because emissions from propane are roughly half those of conventional engines, that could open new marketing vistas with school buses, delivery vehicles and other fleet customers.
With the industry poised for expansion, Wambold’s chief worry is what may come in the form of regulatory change. The company, he said, is keeping a particularly watchful eye on Congress’ cap-and-trade debate.
“Our No. 1 concern is that we’re kept on an even footing with natural gas,” Wambold said. “We certainly want to make sure we can hang onto the tax credits we have; they have survived two administrations.”
And they’ve helped Ferrellgas weather the wild swings in propane prices over the past two years.
“We came through the recession with flying colors,” Wambold said. “We’re actually stronger and bigger today than we were going in, and not many companies can say that. So we know how to perform in tough times. But Washington could lend an assist to the entire industry by keeping those credits in place.”