Besides the challenge of providing top-notch customer service, businesses are equally tasked with providing utmost care of their employees.
“Would you rather work for a chain, a large familyheld business, or a best-place-to-work that gives you a piece of the pie?” asks Van Meter Inc. President and CEO Kevin Powell when discussing his 100 percent employeeowned company.
One would be hard-pressed to find an organization that does more for its employees than Cedar Rapids, IA-based Van Meter Inc. Employee-owned industrial companies are rare enough, but it’s even more to find one that provides an unpoliced vacation policy, six weeks of paid paternity leave, as well as a one-month sabbatical for long-term employees-owners.
For Van Meter, being employee-owned is one of its top selling points as it continues to grow.
“It’s a very compelling argument when we’re recruiting to bring people in,” says Powell, who has led the company for nearly four years. “If you look at ESOPs (employee stock ownership plan) around the country, they are the best performing companies in just about every industry.”
Van Meter – an 88-year-old industrial and electrical supply distributor and service provider – became fully employee-owned in 2005. Doing so created a close-knit, family corporate culture that has grown stronger each year since.
The Van Meter family has had significant growth over the past few years, first appearing on Industrial Distribution’s annual Big 50 List in 2014 at No. 38 with $235 million in sales, a fi gure it raised to $285 million in 2015. Until December 2014, the company’s customer base was almost entirely within the Iowa state border. Now, it stretches across most of the Midwest.
Prior to his role at Van Meter, Powell was president of Cottage Grove, MN-based Werner Electric Supply for 14 years. Under his lead, Werner was named a ‘Best Place to Work’ by the Minnesota Star-Tribune in each of his last three years – 2010-2012 – and he continued that prestige with Van Meter, which the Des Moines Register named ‘Top Iowa Workplace’ for a fourth straight year in 2015.
“To me, it’s affirmation that we’re in the upper echelon of companies when it comes to how well we work together as a family and create an atmosphere for people to stay and succeed,” Powell says of the honor. “It gets us attention from the people who are top performers who are seeking to work for a top-performing company. It’s allowed us to attract an even higher degree of talent year-after-year.
Van Meter’s background dates back to 1928 when R.L. Van Meter and R.W. Lemley founded the company just before the Great Depression. The duo became well-known for installing fluorescent lighting at its Cedar Rapids headquarters – the first building west of the Mississippi River to have such a feature.
The company distributed primarily industrial products for most of the next 75 years until it diversified into the electrical contractor space. From there, it enhanced its electrical offering over the years with products and services in automation, datacomm, lighting, renewable energy, and power transmission.
Van Meter’s employee-ownership is emphasized through education. The company takes great strides to make sure new hires understand what the concept really means – what it means to think and act like an owner. Van Meter has a three-level course for staff to learn about employee-ownership, the specific traits of Van Meter’s ESOP, and business in general.
Van Meter recently rolled out its current vacation policy, called TOTAL™ – Time Off To Appreciate Life. It goes untracked, putting more emphasis on why staff should take time off when needed. Before that the company rolled out its 6-week paid paternity leave policy.
“They tie really close with the ownership piece,” says company COO Lura McBride. “We’re adults. We take responsibility for understanding when we need time off to recharge and be away from the workplace. We’re accountable to each other.”
Once employees reach 20 years of service, the company gives them a 1-month sabbatical. During that time, the employee is disconnected from company email use to ensure their thoughts aren’t on work. Ettleman – a 22-year Van Meter Veteran – took his sabbatical in 2015.
“It was an absolute gift from our company and I enjoyed every minute of it,” he says. “I came back recharged and ready to tackle the next phase. It also allows you to test drive what retirement might look like.”
Speaking of which, Van Meter’s ESOP has led to many employee-owners being able to retire in their 50’s. The company’s headcount stands at 457 as of late January, with an average employee age of 42.6. The average tenure is 7.5 years – a figure that has decreased with the company’s recent expansion.
Growth & Expansion
Powell says Van Meter’s revenue growth expectation is to always double what the market does so that the company takes significant market share each year, noting, “we’ve done a good job of hitting that goal over the past 10 years.” Powell says that during the 2008-2009 recession when the industry was down 30 percent, Van Meter was down by less than half that. For 2015, the company’s growth rate was in the mid-single digits.
The past 18 months have included rapid geographic expansion for Van Meter. Already with 12 Iowa locations through the end of 2014, the company opened 2015 with the acquisition of Miller Electrical Supply, gaining its locations in Dubuque and Clinton, IA, right along the Mississippi. This past December, Van Meter expanded out of Iowa east and west with the acquisition of Chicago-based Bright Electric Supply, and announced it will open a new facility in Omaha, NE during its fiscal second quarter. Those moves gain Van Meter two new metro areas and extend its service capabilities across Illinois, southern Wisconsin, and into Nebraska.
“On the western front in Omaha, we’ve got very good customers and suppliers who’ve been asking us to join them out there for some time,” Powell says. “With Chicago, that’s a strategic move for us with a very exciting new market.”
Powell says the Chicago expansion provides an opportunity for Van Meter to grow in the next 10-20 years as the Chicago metro is expected to add another 100 million to its population by 2025 and become the second-largest electrical market in the U.S. Bright Electric’s product focus is on lighting and commercial construction. And with Bright Electric being only a four-hour drive from headquarters, Van Meter can use its existing distribution model to serve those customers.
That makes for a lot of expansion during an industrial recession that has lasted for most of the past 18 months. “I think the majority of our employees would echo that we are blessed to work with a company that has enough financial security and staying power to make investments in an economy that most companies wouldn’t, or be in the habit of pulling back,” says Todd Ettleman, Van Meter Regional Vice President. “There’s an expression, ‘a recession is a terrible thing to waste.’ We have the approach that the gas pedal remains down and we’re betting on what the future looks like.”
Van Meter has been offering e-commerce to its customers for the past 10 years, and is constantly reinventing it. The company just launched a new website on Feb. 1, marking its third generation of e-commerce. But far more than just offering online product sales, the new site offers richer content than before. The site is now easier for customers to search products, gain technical knowledge, and see the breadth of Van Meter’s product offering and services offering. The site revamped its search engine optimization, making it easier for Van Meter products to be found. Along with the site launched an enhanced new mobile app.
Van Meter also offers ERP integration to some of its major customers, linking its purchasing and service website to a customer’s purchasing and ERP system to enable a seamless flow of electronic transactions.
Why Choose Van Meter?
In a market that includes fellow large electrical distributors like Sonepar, Anixter, Graybar, and others, customers have a lot of options. So what is it that makes Van Meter’s customers choose Van Meter besides just location? Ettleman says the biggest reason expertise, noting that Van Meter actually has more product specialists on staff than account managers.
“That allows us to control our destiny, and largely control the success of our customers with our ability to keep their facility up and running,” Ettleman says. “Be it a drive specialist, a lighting specialist, an enclosure specialist, etc. That is a huge differentiating factor between us and our competitors. Our ability to get a plant up and running, and keep it running I think is superior to most.”
Van Meter has a local automation support team with half a dozen specialists that the company says can answer almost any technical or solution issue a customer might have, which lets customers get an answer or solution in one phone call and not instead have to contact the manufacturer.
“We pride ourselves in being able to provide answers here in-house,” says VP of Automation Rod Reinerston. “We have the quickest solutions for the customer.”
As an electrical products distributor, renewable energy products come with the territory nowadays. Van Meter has been in the renewable energy industry for about five years, and has escalated its involvement over the past two. Most recently in December, the company made its first minority interest in a business, investing a 25 percent stake in Ontario-based Eyedro Green Solutions, an energy monitoring company. Van Meter provides a significant amount of solar design and installation training, bringing in contractors or target customers to be trained over a three-day period.
“Over the past three years we’ve put a renewed focus on the green energy space and we’re really looking to expand on it moving forward,” says Scott Cornish, Van Meter’s VP of Diversified Business.
Each time Van Meter has renovated or built a new facility, it takes the path of getting it LEED certified, which incorporates geothermal energy, daylight harvesting, solar panel roofing, and other measures. A great example is the company’s Iowa City branch, roughly 20 miles south of Cedar Rapids. The old facility there was 8,000 square feet and had a $9,000 annual utility bill. The new facility there is 23,000 square feet and has a miniscule $334 bill, generating its energy through geothermal, solar power, cooling the facility in the summer months, and other efficiency measures that made it Gold LEED certified.
“We’re leading by example,” Cornish added. “And it makes fiscal sense.”