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Gentlemen, you are the masters. You represent the oldest, most experienced businesses in the industry, the elder statesmen by virtue of the age of your companies. How did you get into this work?
Tom Hyslop: My father joined Petroleum Equipment, the company started by his father-in-law 75 years ago. I came on full time in 1979. I learned this business around the kitchen table listening to my father and grandfather discuss their work. They taught me there are no shortcuts. And the rules of this business are unforgiving. They taught me to remember those fundamentals and never to take my eye off the ball.
Bart Scowley: I was directing a national trade association for the electronics industry. Prior to that, I worked for two companies: I was a branch manager in San Francisco for Burroughs Corporation, which later became Unisys, and I did sales and marketing for 3M. In 1981, I was hired as vice president of sales & marketing at Shields, Harper & Co. The two owners, Nick Kemsley and Ken Martin, purchased the company in 1972 from Dresser Industries, who had been running it as a distribution arm for a number of years. In 1992, Kemsley and Martin sold the company to their employees by way of an Employee Stock Ownership Plan (ESOP). That's the year I took over control of the operations.
Ken Hagman: I was working for an employment agency in 1967 and I set up a job interview at E.O. Habhegger Co. for a client. The owner, Mr. Habhegger, just didn't know that I was the client! The company is now celebrating 80 years.
What attracted you to petroleum equipment and this industry?
Ken Hagman: After the service, I worked for a short period of time as a production foreman for a meter company in Brooklyn, New York. I knew something about meters. And my father worked at Gulf Oil for 40 years.
When did you become president?
Ken Hagman: Four years after joining the company I became vice president and bought into the company. In 1976 I was named president and now I'm the major stockholder.
Your companies have a lot of history behind them. What would you say is their biggest accomplishment?
Ken Hagman: We have 21 employees at our two E.O. Habhegger locations and expertise in several areas. This can be a rough industry and the current climate is that everybody wants to buy cheap. When dealing with environmental issues, cheap is not always the best way to go. I'm proud that we are able to supply important and related information to our customer base to keep them safe and in tune with regulatory requirements.
How do you do that?
Ken Hagman: It's a combination of going to meetings, reading journals and listening to our customers because we learn from them as they learn from us. We're partners in this.
Tom Hyslop: There is very little turnover among our 13 employees, one of whom has been with the company for 35 years, another for 20. The key to a successful business is knowledgeable employees, not only in the office but out in the field. I'm proud that Petroleum Equipment is a good place to work and we've been able to avoid turnover.
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Bart Scowley: Across the board, employees of Shields, Harper & Co. have a tremendous amount of industry knowledge. We serve our customers well and we serve our suppliers well. We try to make the work environment such that when our employees walk out the door to visit a customer, they're excited about what they're going to bring to them. The more comfortable and happy employees are at the home office doing their jobs, the better they're going to serve their customers.
What is your rate of retention for employees?
Bart Scowley: I don't think there's a standard way to measure that, but we like to look around and see bald heads and gray hair.
That leads to another question. Are you bringing young people into the business?
Bart Scowley: It's getting harder and harder to do. We are hiring entry-level salespeople and grooming them. For technical openings, we're training our own employees.
Tom Hyslop: I'd love to find some young blood and rev things up. But in Milwaukee, there isn't a long list of people knocking the door down. Young people are not thinking about this industry as a career choice.
Ken Hagman: Our success in finding young people is not that good either. Today, whether you pick the right person or the wrong person, a lot of young workers stay for the training, work awhile and then move on to try a different industry—now trained and experienced!
Then how are you planning for your company's succession?
Bart Scowley: Planning some succession before you're ready to walk out the door is pretty important because in smaller businesses you can't just decide, “I think I'll retire next week.” We have some employees who have been brought up through the business. Executive Vice President Dave Sarginson started as a warehouseman. He took a number of classes to improve his business knowledge and worked his way up the ladder. Our IT and service managers also did that. We find good people and make sure they stay.
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Tom Hyslop: I have two children who have no interest in the business. I think it's still a little early in the game for me to get too focused on that. I know it's coming, and I'm probably procrastinating because I know I only have three options: kill the company by holding up the wrenches at the auction, find a buyer, or somebody in the family changes their mind.
Ken Hagman: My son works for the company, and I have some key people within the organization.
Bart Scowley: When I came to Shields, Harper & Co., the owners made it clear that even though they had children they could find jobs for, they weren't going to do that. They decided they would never say, “I want to keep this business in the family.” They treated their employees as the family that was going to help the business grow and survive. That was important for me, and it continues to be important because now we can go outside and look for the individuals we want to fill those positions.
It's said that everything old becomes new again. What trend do you see repeating itself in our industry?
Ken Hagman: Everything old is new again? Not in this industry—everything that's old is old! It never comes back.
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Tom Hyslop: This business doesn't change, it's in constant repetition. The core of every project is the same. I tell office staff that they are going to see the same piece of paper come through the office many, many times during the course of the year. We're ordering the same material, we're doing the same forms, we're doing the same regulatory paperwork. You just have to get really good at it.
Bart Scowley: I don't buy that old platitude. There's so much going on these days that there's something new around every corner. We're not in the transfer of information business, like so much of the world is in, where leaps and bounds are made in those industries every few months. We have a physical product. Fuels have to be handled, and progress is in the ways of dealing with it. Sure, some things go on for a long time; we're still making steel tanks to store fuel, but those steel tanks are tripled walled, they're fiberglass coated, they're filled with electronics. In the old days, they were just a piece of steel rolled up with end caps on them.
What is necessary to ensure that your company continues to grow, rather than simply gets “older”?
Tom Hyslop: We have to be able to read the trends and adapt to the size of the market. I remember that run we all had between '88 and '98 when the feds condemned all the tanks. We had to double our personnel to keep up with the work, but the minute it was over, we had to let the air out of the balloon and shrink the company back down to the size of the market. It's just as hard to shrink a company as it is to grow a company, but you have to be able to do it.
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Ken Hagman: It's important to maintain the customer base without stretching our limits. What we do, we do strong. We don't take jobs that we can't oversee and then start making mistakes or not see things happen and find out it's hurting our bottom line.
Bart Scowley: It's the year or two ahead of us that is important, not the 90 years we just completed. There is no surety; there is no guarantee. There's just the effort that we make to stay fresh in our approach. The things we did 90 years ago, or 50 years ago, or 10 years ago are all history. We just can't say, “Let's do that again”; it has to be something brand new. People come to work enthusiastic about looking to do something fresh and new, so they are creative in their approach to customer solutions.
Still having fun?
Ken Hagman: Absolutely. I rely on other people to do some of the daily grind and I'm still active in sales. I don't sit behind a closed door reading reports and telling everybody what to do. I'm out there talking with customers. That's where the real fun is.
Tom Hyslop: I make fewer mistakes now so it's more fun. When I was handed the reins, I made some colossal mistakes, but I lived through them and learned. With experience comes a lot of wisdom and you learn where to pick your fights. So it's easier now, because I can see the big problems coming before they get me.
Wisdom does have its advantages.
Tom Hyslop: It comes with age, and we all hate to admit it.
Bart Scowley: In some ways, this business is kind of mundane. It's not real exciting cocktail party talk, except when we speak with people who begin to understand how vital it is to their lives. And the rise of gas prices has sure made people become more aware of what we do.
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We've talked a lot about your success over the years. What is one thing about your companies we have not talked about that has helped it age gracefully and will help it grow into more successful years?
Ken Hagman: We've maintained loyalty to our manufacturers.
Bart Scowley: We spent a lot of money on inventory.
Tom Hyslop: My coming to work every day is what got us here; three generations did that.
Anything else?
Bart Scowley: Um, I guess not lighting a match in the wrong place!
