71. The Secret to Sustaining Over 125 Years of Family Business Legacy | Kathryn Poehling Seymour

Karthik Chidambaram: Hello, everyone. Welcome to a new
episode of the Driven by DCKAP podcast. We are joined by a very special
guest from Milwaukee, Wisconsin, Katie Poehling Seymour, President and CEO
of First Supply.

Katie, great to be chatting with you and thank you for joining the Driven
show.

Kathryn Seymour: Thank you for having me. I'm excited to be
here.

Karthik Chidambaram: So, Katie, the theme of this podcast
is Driven. And you are a fifth generation business. How are you driven? What
keeps you going?

Kathryn Seymour: Honestly, one of the things I'm really
proud of is being a steward of this business in this moment in time.

So what drives me is the heritage of five generations behind me, and the
legacy that so many people have built. Not only my family, but the family.
Thousands of families that have been part of this business that's hugely
motivating. But then my responsibility to continue to grow the business and
build on that heritage and keep it going.

So it's it's not only the recognizing the heritage, it's about what we can
continue to create and the world in front of us and all of the innovation,
all the opportunity, all of the customers out there to serve all of the team
members to join us all of the in the future is hugely exciting to me.

Karthik Chidambaram: What do you see as some of the
challenges in distribution today? Especially when it comes to plumbing,
Hedgewag, and industrial supplies.

Kathryn Seymour: A couple of challenges that are really
critical to distribution overall, number one is the pace of change and the
pace of innovation, right? It's Jack Welch who said that if the world
outside you is moving faster than change is moving within your business, it
couldn't be more true today.

I'm sure it's going to be true forever as we continue to go forward, but
it's critical to stay up to date about what's going on not only in
distribution, But in all industry around us my, my [00:03:00] husband teases
me that I'm obsessed with the news, but I explained to him it's part of my
job to know what's going on in the world, what external factors are going to
influence not only my business decisions, but also my customers business
decisions and then our communities and what's going to happen within our
communities.

So, but not becoming crazy about it, making sure you're just informed and
making sure all of that's going on. In plumbing and HVAC in particular
technology is shifting the business in a major way. We're seeing a
generational transfer of our customers as well. Many of them are family
businesses, multi generational businesses.

And as the next generation takes over their businesses they've got different
priorities. They want to do business differently. Their loyalties might be
different. We have many customers that their grandparents, My parents did
business with my grandparents, but that doesn't necessarily make them want
to do business with me.

We've got to continue our relationship and I've got to continue to prove why
our teams and our business is the best solution for their business. So re
establishing ourselves [00:04:00] constantly, that reinvention, that
transformation. So critical in any business is one of the things that I
think is going to be a big change and making sure we're reinventing
ourselves in ways that are true to our values and not just the flavor of the
week.

Karthik Chidambaram: Yeah. Keep reinventing yourself. And
you also talked about Jack Welch. I like him as well. I read his book
straight from the gut and that also helped. Yeah, he's a great strategist. I
love him as a CEO as well. Again, you know, there are people who like him
and dislike him, but there are definitely things you can learn from Jack
Welch.

Kathryn Seymour: Yeah, and one of the other great books I
love is Lights Out, which is another story of GE, and talks about what That
actually led to challenges at, at GE and kind of post Jack Welch, how
things, they got too big, so big. And then how culture played a role into
it. It was fascinating book about kind of the other side of GE, but it was a
great business story about challenges that arise in any business.

Karthik Chidambaram: Lights out. I should check that out.
You know, especially after Jeff Imlett took over [00:05:00] and then yeah, I
mean, I think thanks for the recommendation. So Katie, I was reading about
First Supply. Very fascinating story. You're leading plumbing. HVAC,
Industrial Supplies Distributor based in Milwaukee, Wisconsin.

It's a 128 year old business and you are the 5th or the 6th generation
entrepreneur?

Kathryn Seymour: The 5th generation, yep, exactly. So our
business was started back in 1897 by a handful of gentlemen who, it's an
interesting story they were customers themselves and they went to their
distributor partner for a new product, the newfangled metal windmills.

They were well drillers and wanted these new windmills to put with their,
with their wells and the distributors decided not to carry them. It was a
brand new product that was uncertain. They said, okay, we'll do it ourselves
and the rest is history. We kind of, we continue that same foundation and
premise of being customer led, but employee engaged.

It's our teams that really. Decipher what our customer needs are in the
marketplace. And that legacy has continued all, almost 128 years.

Karthik Chidambaram: You worked for [00:06:00] Deloitte as
well before joining First Supply, but I'm very curious to know about your
early years. You know, what are your first memories of First Supply?

When did you first go in?

Kathryn Seymour: Gosh, that's a great question. One of my
first memories, quite honestly we had been around the business forever and
we sold we still sell kitchen cabinets. It's one of our, our great heritage
things is in 1940, my grandfather Gearhart added kitchen cupboards to the
plumbing showroom that he ran.

Making what we believe to be the very first ever kitchen and bath showroom.
Before there were bath showrooms and kitchen, but never together. And so we
had these amazing kitchens in our showroom. And it was like playing a life
size game of house. So me and my two sisters would be running around and at
the time in the 1980s, we had kind of fake food in them.

So we were like playing house in a real live kitchen. It was so much fun.
That's one of my first fond memories. My first work memory is we also are in
the waterworks area, so we have large pipe yards. And when the pipe would
come in in bundles, they were wrapped with metal bands, and [00:07:00] the,
the team would cut them off and, and offload the pipe.

So these metal bands would be all over the, the pipe yard. And I had to go
pick them up, which is not a fun job. They're sharp, they're hard, and it's
cold, and you're walking around with this big bag picking up metal, metal
pipes. So we all start somewhere.

Karthik Chidambaram: So you always knew that you were going
to get into the business?

Was that the thought process growing up? And did you guys have dinner table
conversations around business?

Kathryn Seymour: We definitely had dinner conversations
around, around business and I knew my dad had a really interesting job and I
knew that our whole family was involved. My grandpa worked there and, and
his my uncles and it was, is a big part of the family.

And, but I didn't necessarily always know I wanted to, to be in the
business. I knew I wanted a job that was as interesting in my dad's and he
got, and I got to do the interesting stuff that he did. I didn't know that
it would be his job that I eventually took. He instituted a role in our
family governance that we have to work outside the business for five years,
which is what took me to Deloitte.

After my undergraduate, I went to law school and then came and worked at
Deloitte. And [00:08:00] honestly, I wasn't looking for a job when he came
and asked me if I'd consider joining the business. I loved what I was doing
at Deloitte. I was doing interesting things and I'm working my way through
their, the organization.

But when he laid out his vision for the future and for the business and what
my career might look like, it was very compelling and I jumped at the
opportunity.

Karthik Chidambaram: I like the family governance part you
talked about. Can you elaborate a little more on that? Because I think
that's something a lot of distributors watching this would need.

And some of them don't have that. Can you talk a little more about the
family governance and how does that work and when was this constituted? And
how do you guys go about doing that?

Kathryn Seymour: So succession planning also has been a
huge core competency in the business for a very long time. It was important
to my grandfather.

It was important, it is important to my father. And, and it's important not
only in, in my leadership role, but all the way through our entire
organization. All 701 people have a succession plan about where they want to
go in the business. And then when they, when they move up or on or over.
What [00:09:00] happens in their role?

So we have a full plan and we talk about it every year about what what
everyone's going to do. Part of that succession planning for our family is
part of is the family governance. Excuse me. So we have, we've worked with
Northwestern and the John Ward Institute to ensure that our Our entire
family, four generations now of people active in the family governance from
my father's generation to mine to my Children.

And now my cousin's Children are having Children. It's the next gen. The
seventh generation, honestly, is being born. So all of those people need to
be informed about it. Yeah. Not only our business and our business
practices, because not everyone's connected, it's just my cousin, myself and
my cousin in law, our CFO, are the only two family members engaged in the
business, along with my father, of course, who's our chairman emeritus, but
The other family members aren't directly involved in the day to day
business, so they have to have a level of understanding about what we do,
who we are, who our teams are, who our customers are, but then [00:10:00]
also about best practices and family business governance.

So we're creating a common language that allows us to really be the proper
stewards for not only each other and this asset our family has, but also the
701 families that rely on First Supply as an, as an ongoing entity. And we,
we really take that very seriously, our responsibility to that.

Karthik Chidambaram: This is very cool.

You hire experts and you hired Northwestern to help you with that whole
process. And then you structure that, you know, and you iterate along the
way. It's very, very cool. So you have a fifth generation business. And you
guys have built a great company for supply, you know, leading distributor,
but what is your vision?

Kathryn Seymour: One of the first things I did when I took
over for my father and kind of gathered our leadership team was we recast
our vision and mission statement. We had a vision and mission statement that
served us very well through a very fast pace of growth that my father built
the, the scale of the business, but we needed to know.

What was next for us? How are we going to take this scale and continue?
Because in distribution, if you're not growing, [00:11:00] you're dying. So
you better keep going. So our vision is to distribute Innovation and
partnership in our communities for generations. And all of those are not
just words we put together.

It's really important to us that all of these things mean something.
Distribution's what we do. Innovation's what we strive for. In our
communities, we live and work and play in our communities. And it's critical
to all of us that we're we play a key role, not only philanthropically, but
also just the engagement in our communities.

And we intend to do it for generations to come. So it really laid out what
our intentions are, and it, hopefully, the goal was that it's something that
every single person in the organization can know and remember, and the
meaning carries forward for them too. Whether you drive a truck or whether
you're an executive on the team, all of those things carry meaning, and they
relate directly to your role and how you will, Live and execute really the
vision of the business.

Karthik Chidambaram: Yeah, you need to feel important and
whatever be the job, you know Whatever you're doing, you know, that's very
[00:12:00] very critical for the business and you communicate that Really
well, but I'm just curious, right? So, I mean you talked about emergency
preparedness and even the way you became CEO was very interesting when I was
reading about it Yeah, you know, all of a sudden, you know, you had a
succession plan in place, but things didn't go well, and then, you know, you
had a family emergency, and then you just have to step in.

Can you talk us through that, you know, what really happened, and and how
did you just get in to the role of the CEO?

Kathryn Seymour: Sure honestly, that succession plan can be
the greatest gift in any organization. And, and part of what, it wasn't just
a succession plan that was a big deal. The best kept secret in the company,
everybody knew the board knew the succession plan, the family knew the
succession plan, the team news, the succession plan.

So my father had a stroke and we called an emergency board meeting. It was
about a 15 minute meeting because everybody knew the plan. All we did was
execute the plan, and that was really an incredible thing. We didn't have to
worry about who is going to do what, when we could, we knew what the plan
was, and we could just simply get on with the [00:13:00] task of running the
business and then also taking care of each other in the state of crisis and
emergency.

So we had time and space to do that, but also to keep the business going and
running. That was really key to our, not only our teams, but our customers
and our vendors, too. I sat around my that I made a whole bunch of phone
calls and explained to everyone this is the plan. One of the coolest things
about doing that, you know, it's not a fun thing to do necessarily, but when
I called our customers, when I called our vendors and I explained, Hey, I'm
taking over.

This, this is the plan. Most of them said, I know. They already, they just
assumed that was the plan. They kind of saw what was going and what was
happening, which made it a really easy conversation. But rewind way before
that. Joe had taken a lot of steps to make sure we were prepared for this
role.

Some of that was the family governance piece or corporate governance, making
sure we were engaged with the board before we even joined the board of
directors. And then making sure that we understood who our customers and
vendors were in each of our key divisions. [00:14:00] So tied and I spent
time going to the meeting the customers, meeting the vendors, going to that
industry's association events and really Deep dive into that part of the
business so that when we came into a leadership role, we knew the
differentiations between all those aspects of the business.

Karthik Chidambaram: And how long were you in the business
prior to being the CEO? Just about 10 years. Oh, 10 years. So you had
already a CEO in the making.

Kathryn Seymour: Yeah, a little bit. And honestly, I, my
favorite joke is just a terrible one is I talk about it. People say, how
long have you been in the business? And I say, A little over a little over
12 or a little over 40, depending on how you're counting because I've, I've
been in training for, for my whole life in many ways.

Karthik Chidambaram: And you talked about the board and a
lot of large distributors have a board, but up and coming ones don't really
have one. When is a good time, do you think, you know, in your perspective
to constitute a board and who should be on the board? You know, how do you
guys design, right? So who's on your board and how does that work?

Kathryn Seymour: is yesterday. You know, just having for
many companies, it's a bit of an [00:15:00] evolution in terms of having a
maybe a trusted board of advisors. Maybe it's not a fiduciary board to start
with. Especially in family businesses, making the transition as fewer family
members are involved in the day to day operations of the business, making
sure that there's Great external support and that it's a very legitimized
board of governance so that those family members when they look into how the
business is being run, they know that a group of experts is advising their
family members who are tasked with running the day to day operations.

That's really key to us. So we start our independent board actually started
in the 19 nineties, by my uncle, Ed Felton, who was running the business at
the time, very forward thinking guy. And you think about innovation. He
actually bought our first computer, so technology was key to him. But to
him, innovation happened in people and process.

He was all about training, and he was all about making people feel connected
to the process. So for him, that independent board of directors was key. It
was finance person, a legal person, and then just a really great business
person that he knew [00:16:00] in the community. So we started with three
independent directors, and then we've gone through, we've instituted a
refreshment policy.

So we've used consultants to help us go out and find the best people who are
thinking about things that we're doing. And then we've also used our other
board members networks to say, hey, Who else? Who do you think would be good
on our board? Maybe it's someone that you're not super close to, but someone
you know that you think, hey, their insights would help our company.

So we've added to actually sitting CEOs of local businesses both family
businesses, one in distribution, one in manufacturing to the board. And then
we have someone who was a retired chief technology officer of a
manufacturing company, and then another gentleman who does a ton of M&
A, and that's a, that's a really core competency that he brings to our
board, along with a strong finance background.

Karthik Chidambaram: This is something I relate to a lot,
from what you said, I mean, anytime you need help, you just don't look
within, you look outside, and you bring in external help, and I think that's
a great strategy, right? Because when you bring in external consultants,
they tell you things that, which you don't [00:17:00] know, and which you're
not even So I really love that.

And you talked about technology investments, right? How are you guys
investing in technology and? And how is that helping for supply?

Kathryn Seymour: So one of the, the largest project we've
ever done, we're undergoing right now. We're about two thirds of the way,
I'd call it, into this project. We're building a brand new distribution
center.

And, great, we could build a big building and fill it full of product, but
what's really key is the processes that, and the technology and innovation
that this building will bring to us, and this project brings to us. So it
involves a brand new warehouse management system, a WMS. It involves a new
TMS, Transportation Management System.

It has robotics and automation automated picking equipment, things like
that. So a lot of really fascinating things that will help move us forward,
improve our productivity, improve our efficiency, but also improve the
safety for our teams and their ability to operate safely in the building. We
just heard from the last speaker.

[00:18:00] Oscar Munoz about automation and in the airlines. He's the CEO of
United Airlines and automation, eliminating jobs. And I get that same
question, Katie, you're going to automate this building. What about the
people? So we have 11 people that work in our distribution center today, and
we're really proud that all 11 are moving over with us to the new building.

But then we'll actually need to hire 40 more to get. And then 20 more, 20
more. We believe about 80 people will ultimately be needed to run this
building. So 8 times the number of people that we need today. It's very much
about a job creation scenario. And this is very much a growth lever for us,
not a cost cutting exercise.

No, totally right. I

Karthik Chidambaram: relate to that. Technology does help
with job creation, and you don't do the same good thing for too long, even
if you're very good at it. Okay, you know, this job is not there anymore,
but I can do something better. And that also helps me improve as a person.
Absolutely. You know, totally relate to that.

And another thing which I found very interesting is something you said,
right? Let's say, what if your largest customer becomes the smallest. And
what if, you know, the [00:19:00] largest vendor becomes the smallest, you
know, in terms of strategy? I think that's a great thought process. So is
that how you think? Or, you know, I mean, you guys talk about this all the
time, or how does that, how does that happen?

Kathryn Seymour: I'm kind of laughing because one of my
favorite meetings last year, so we rolled out our new vision and mission
statement, and then we said we need to identify strategies. around how we're
going to fulfill this vision and mission statement. And we had identified
the leadership team and identified three things.

And we took it to our senior team to say, how are we going to fulfill these
strategies? And the three strategies were innovate our revenues. Innovate
our workforce and innovate our processes. So we said, okay, we've got big
buckets of things that we, innovation was at the core of all of them. We
needed to think differently and the exercise we went through, we broke up
into groups in a big conference room.

And we said, what if our smallest customer becomes, or our largest customer
becomes our smallest, but if our largest vendor becomes our smallest, what
does that mean? And everybody had to think it was so cool. The conversation
that flowed from that, because everyone took it. To a really positive place.

Nobody thought, [00:20:00] oh, it's because we're failing that now our
largest vendors are smallest because we no longer buy that it's because
maybe another vendor became our largest because we grew into another segment
or we acquired a company that in different division. And all of a sudden
that became even bigger than our core business.

So it was a really neat exercise that all took us all out of our day to day,
but allowed us then to populate these strategies with ideas. That we
probably wouldn't have thought of if we hadn't done that thought exercise
first.

Karthik Chidambaram: Yeah, I also think the best time to do
these exercises is when things are going well, right?

And you know, if it's a crisis, you know, it's hard, and you just have to
get on, get down and dirty and just work on the crisis. I'm just curious,
right? So what does a typical day look like for you? I mean, what time do
you start and what time do you end? What do you do during the day?

Kathryn Seymour: What I love most about this job is there's
no typical day.

Every day is different, and to me, that's what's exciting about it. It's
funny. My husband's a college professor, so for him, his day is very
prescripted, and that's what he loves [00:21:00] about it. So neither of us
would ever be able to do each other's, but it It makes it fun. I have three
little kids that I've mentioned to you earlier.

I have a five year old and almost four year old twin. So my mornings and
evenings revolve heavily around them when I'm home. I wake up when they wake
me up. I no longer need an alarm clock. But no, it is about, and I, it's
something I've learned over time too, is I've you know, I've only been
growing into motherhood now for about five years.

So I had to learn how to carve out times in my day to Keep that time.
They're only little for so long, and it, I, I approach my day very
differently than I did six or seven years ago, when I was much more selfish
about my time, and I could really dictate my time in a much different way.
So And I've got a team of helpers.

My assistant does a great job of keeping my mornings pretty sacred. I try
not to start meetings until a little bit later, so I can make sure that I
get them all off to school. And I try to make sure that I'm there in the
evening as much as I can. Shifted my travel schedule a little bit so that
I'm home.

I try to be home [00:22:00] either morning or evening and not be gone more
than two nights in a row. So I've kind of put these self prescribed rules in
place to try to give me that time and space because everyone needs to
multitask to a certain degree. But I find if I can kind of pick up and put
down It works a lot better.

The other thing that's really important to me that I talk about a lot, I get
asked about work life balance a lot, many people knowing I have little kids,
there's no balance. It's all blend. I use that phrase a lot. Because this
weekend's a great example. It's my twin's birthday and I have a board
meeting in California.

I'm bringing them with. So we're going to go a couple days early. We're
going to have a great time. They can be with a babysitter. And my mom's
actually coming with, I shouldn't call her the babysitter, but they can be
with my mom at the pool and enjoy while I do my work, but it gives me the
opportunity then to have dinner with them or on a break, say hello.

And usually at this particular meeting, they serve ice cream. So I was
bringing my ice cream in the afternoon. They love that. They think mom's
work is so fun, [00:23:00] but, also making sure that I carve out time for
things I like to do. I love to play tennis. I don't get much time to do it,
but I I do it typically at my neighborhood tennis club where I can see my
friends.

I can see my neighbors have a glass of wine and I don't get to do it enough,
but it's something I really enjoy and gives me a little bit of a break and
connect back to my community too.

Karthik Chidambaram: I love playing tennis as well. And you
may really like how you're spending your day, right? I mean, it's not, like
you said, right?

It's not the work life balance, you know. It's all integrated. Or I call it
the life work balance. You know, you kind of revolve everything. And it's
really nice, right? Even as a leader, as a CEO, it's not just business. You
know, you have to take care of your kids. You know, you have to take care of
your home.

And then you blend that to work. I think that's a Great story. And what has
parenting taught you, right? I mean, how does that help business? What are
things you learn from your kids which you apply at work?

Kathryn Seymour: Honestly, I think a lot of it is about
doing the things that are most important, and there's no time for the rest.

You have to be diligent and efficient. And some of that I've [00:24:00]
Learned. We have a lot of opportunities to make a positive impact in our
communities as well. That's critically important to me. It's been important
in all five generations of our business as well. It's why it's part of our
vision statement because it's something I know my great grandfather did.

And we need to carry that legacy. So I found ways to also integrate them. In
our philanthropic efforts so that our impact to the community is even
greater. It's not just something that's important to me, something that's
important to our whole family and then something that our business can also
take on as well.

Right now we're kicking off a diaper drive. So when I became a mom and
people said, Oh, aren't you worried? Aren't you nervous? The thing that made
me nervous is I didn't know where the next. or their next meal or I wasn't
able to take care of them in the way I wanted to. I'm very fortunate to have
the resources to do that.

How could I help others who don't or who have less also be able to do that?
And it's something our business has rallied around. My girls come with me to
do the diaper drive drop off every year. They think it's a ton of fun. We
fill the bathtubs in our showrooms with diapers and they think it's
[00:25:00] hilarious, but it's, it's, again, it's a cool way to blend
everything.

That's taught me about that efficiency. Can I, I can do something that is
great philanthropically for the business, or I can do something that covers
all those bases, and it's made me really think critically about how the
efficiency is in our business.

Karthik Chidambaram: And I would like to end with this
question.

What is something that you're reading right now, or something you've
recently learned which you've applied into your business, and that's helped
your growth?

Kathryn Seymour: My favorite thing to read, I just talked
about efficiency. I love reading Harvard Business Review because it's quick
hits of the things that are the most critical that are the most important
topics of the moment.

And I can flip through it. I'm always usually carrying one around with me in
my bag because I don't get to it and then I can sit down and read it. But
it, it gives me, it's thought provoking. It gives me a lot to think about.
But it, it really makes sure that I, I'm up to date on the most current
issues and there's almost always something in there that I'm sending to my
team almost [00:26:00] every time it's whether it's my VP of IT or my VP of
HR.

Hey, check this out. How can we use this? So it's helping me bring tools
back into the business too. But again, quick hits of things that are forward
thinking research that I can digest.

Karthik Chidambaram: I was chatting with the CEO of IPS
packaging, Derek Murdoch, and this is something he said as well, right? So
he reads something.

Okay. And let's say you find something really, really cool. He definitely
passes it on to the team. I think that's great leadership as well, right? So
you read it and then just send it to the team and then they read it and
everybody's on the same page and all of us are aligned and we grow together.
Yeah.

So Katie, thank you so much. I really enjoyed this conversation. Great
seeing you in person and thank you for your time.

Kathryn Seymour:Thank you very much for having me.