Earlier this year, Tacoma, WA-based Stellar Industrial Supply announced the addition of Larry Davis, former president of ORS Nasco, to its executive team as executive vice president and chief commercial officer. The move was part of a strategy by Stellar to grow “faster and more effectively.” MDM Publisher Tom Gale recently spoke with Stellar’s executive team, including President & CEO John Wiborg, Executive Vice President & COO Steve Slater and Davis, about the shifts in the market that drove the shift in strategy and where the company is heading.
This is an excerpt from that interview. Listen to the entire interview at www.mdm.com/stellar-interview.
MDM: What do you consider to be Stellar’s key differentiator as an industrial supplier?
John Wiborg: We’ve done a really great job building a culture and a team around driving profit and ROIC for our partners, both customers and suppliers alike. We have a different concept of partnership that includes customers, associates and suppliers. Stellar’s value proposition focuses on delivering strong partnership performance in order to deliver significant profit enhancement on behalf of all our partners.
I can’t overstate enough how we try to find ways to really engage with customers, suppliers and our associates, take the power of the team and bring it to creating value.
MDM: How does customer service fit into that equation?
Wiborg: The customer defines what customer service means to them. I see a lot of metrics around customer service, and we have those too, but what we try to do is go into a customer to understand what their issues of the day are, what their long-term pain is and how Stellar can engage with them to help alleviate that in a way that drives the bottom-line performance, return on capital. Rather than an approach that says: I have this solution. Do you like it? Do you have that problem? Or do you want to do it with us anyway even if you don’t have that problem?
We feel that having great customer intimacy is the key to being able to help that customer do things that matter for their bottom line.
MDM: Let’s get to the question that you’ve all been asked many times this summer: What’s the strategy behind adding Larry Davis to Stellar’s management team?
Wiborg: Larry has significant strengths and experience in the industry. We know how to grow, but we want to do it faster and more effectively. Larry brings a proven skillset around sustainable growth, a great, robust understanding of our markets and our business, and knowledge related to operating large organizations. Larry’s a great team player, and he’ll definitely improve our ability to correctly lay out our strategic plans. And execute against those plans.
MDM: Larry, what do you hope to bring to this position? What are your goals?
Larry Davis: I think the first thing that I bring is gratitude, and maybe that sounds unusual, but it’s truly not every day that you have the opportunity to join an organization that values culture, possesses world-class talent and is committed to driving sustainable growth that also has a proven value proposition. When you bring those facets together, you have to be excited and you have to be a little grateful for that opportunity.
From a goals perspective, I’d really like to contribute, as John said, through helping develop the strategy and ensuring that that provides us line of sight to a lot of accelerated growth opportunities. We really view that in terms of opportunities around growing within our customer segments, in new customer segments, penetrating more effectively our current product categories and adding new product categories. And doing the same thing with geographies.
I look forward to sharing some of my market experiences. And supporting the team in translating the strategy into execution and ultimately results.
Probably most of all, I’m looking forward to learning the business from a different vantage point and being able to support the team in making a difference in the marketplace. I came here because I believe there is a unique opportunity to drive true quality growth while delivering measureable value to our partners. For me, that’s tremendously exciting.
MDM: Steve, you’re the steward of the infrastructure and keeping the wheels on the bus. What’s your perspective on the shift that’s taking place here at Stellar?
Steve Slater: I couldn’t be more excited. Larry’s a great talent, and I’ve been privileged to know him for a long time.
He’s equally a man of the highest integrity and value. I think he fits perfectly with what Stellar’s about, our foundational pieces. And I think he’ll bring us a new view, a new set of eyes. And frankly, to Mr. Wiborg’s point, he going to make us better, faster.
We’re all about continuous improvement, so I see this shift as just an
incredibly wonderful opportunity.
Larry also understands the two foundational pieces of Stellar are privilege and obligation. We truly believe it’s a privilege to work at our fine company, Stellar Industrial, that Mr. Wiborg started. And also the obligation that comes with that, the duty to all the stakeholders. Larry understands that completely and will honor not only that but our fine legacy going forward.
MDM: What are some of the shifts you’re seeing in the marketplace that point to opportunities for Stellar to grow, and why are you making this move right now?
Wiborg: The landscape’s getting much more competitive in terms of demonstrating value to the customers and supplier partnerships in a way that creates opportunities for all concerned. Additionally, there are product categories our customers are asking us to address, and we can address those and expand our presence within our existing customers.
There’s a generational succession happening out there, and we feel that creates opportunities, as people are looking at their businesses and what they want to do, what kind of legacies they want to leave behind.
There are geographies and market segments we feel we can successfully address. To be able to realize the opportunities we see in the market, we have to continue to evolve as an organization and as a team. You bring a talent and a great mind, and a person of great integrity on board like Larry Davis, you get all new perspective and opportunity to energize that, perpetuate it and accelerate it.
MDM: What’s going to change about the way Stellar goes to market?
Slater: We recently accomplished AS9120 certification, or more correctly I should say we’ve just been recommended for certification after last week’s successful audit. The way we operate to deliver high quality service, continuous learning and consistency has changed.
We’re doing a much better job of really understanding who values or might value our offerings. We’re doing a better job of training our staff to drive value creation. We’re doing a much better job of segmenting the market, our customers, our verticals, our product categories and the product selection. And we’re getting better at ensuring we deliver that value consistently in each and every customer and supplier interaction.
MDM: You mentioned a little bit about customizing your offerings based on the end-market vertical segment. What does that look like? Is it really to be clear about what the value is as defined by the customer, as John said before, and in terms of how to profitably serve that?
Slater: John has done a fantastic job of leading, and Larry also brings that type of vision where we’re shifting on how we’re sequencing and looking at our priorities. With the AS9120 certification, that will of course help us in defense and aerospace and how we approach that market. We also are making specific looks at different markets in how we strategize.
But it’s more of a change from a geographical look to more of a product category offering, and really at the head of the lists, finding a customer base that will pay us, reward us in volumes for our value-added propositions.
MDM: Is there a change for your supplier partners?
Slater: I call it an enhancement. They participate in our growth. They understand that we know how to grow our business, and they’ve benefitted first hand from that. They know that the benchmarks for us are vision and transparency and loyalty and determination and commitment, and as Mr. Wiborg has set forth for us, a win-win philosophy is a must.
Our approach with our supplier engagement is to become true partners in that vein and execute together – and the key word is together – in the marketplace. We’ve proven to our suppliers that if they achieve partnership status with Stellar, then they will grow and they gain market share along with us. So as we continue to grow and create more value for our customers, we’ll be asking our suppliers for a higher level of partnership and better, more effective execution.
MDM: Arguably in the five to seven years, there have been more changes and threats from alternate channels to industrial supply than ever before. What are the biggest challenges that Stellar faces to reach its goals?
Wiborg: I think the most important thing that we need to do, and it is a challenge, is to make sure that we’re selective and intentional in what we do and make sure that we execute whatever we do with excellence.
Another one is – and it’s not really a challenge per se but – making sure that we walk the talk of our mission, vision and values. It’s vital to our success. You asked me earlier why is it different? We have strong philosophical concepts and every day we work hard to make sure that it’s not just marketing talk but we actually bring it and do it. …
We understand there are pressures to conform to some of the trends that are out there in the industry. We’re cutting our own swathe. We’re going to stay true to our mission, vision and values and build a team that can support that, can get excited about that and works constantly every day to bring it to market to create value.