Episode 174: 2024 CX Event - The Founders

[00:00:00] Speaker A: Foreign. [00:00:09] Speaker B: Welcome to the Clear Impact Podcast, brought to you by PGTI University. Thanks for joining us today. My name is Sheri Conner and I am your host. [00:00:24] Speaker C: So, good morning. We are here on the Clear Impact Podcast and we are recording from Scottsdale at the CX event 2024. But at the table right now we have Jim Milgaard, Pete DeSoto and Rod Hershberger. Welcome to the podcast. [00:00:39] Speaker A: Thank you, thank you, thank you. [00:00:41] Speaker C: And so just to give a little background, I know a little bit about Rod's story. So Rod, you started pgt, which was originally vinyl tech, correct? Right. And that was in 1980. [00:00:53] Speaker A: 1980. [00:00:54] Speaker C: Okay. And then you handed the reins off at what point? [00:00:58] Speaker A: Well, we grew the company until about 2018. And in 2018, I'd had a couple things that had happened in 2016 made us think a little differently about the rest of our life. So we started making preparations to transfer the CEO role to another gentleman. And we were working through the details of that and it worked out really well. And so at the end of 2018, I announced that I was going to retire. I stayed on as chairman of the board, but I didn't have the day to day responsibilities anymore. [00:01:25] Speaker C: Okay, and then with the acquisition of Miter Brands this year, you are now part of the Mitre Brands board, right? [00:01:32] Speaker A: Yeah, that's correct. [00:01:33] Speaker C: Okay, so still not 100% retired. [00:01:35] Speaker A: You know, it's a shame when you're in the window business. You can't leave. It's like Hotel California. You check in and you can never leave. [00:01:43] Speaker C: Oh, boy. Okay, so Pete, tell us a little bit about your story. So I don't know very much about the beginnings of mi. And like, at what point did you start the company and then when did you hand it off? And what is your current role? [00:01:56] Speaker D: First of all, I didn't start MI. I started the MI window portion. But okay, MI Metal Industries. That's what MI stands for. Goes back to 1947. Two guys that had been pilots in World War II, although not combat pilots, they were training pilots, were in Clearwater, Florida, trying to make a living teaching people to fly on the GI Bill. And suddenly somebody grew up and said, why are we doing that? We have 10,000 pilots came back from World War II that need work. So they cut the GI bill off. So anyway, the long short of it is one of their students showed them how to make a window screen and they thought, oh, maybe this is a good idea. We'll make aluminum frame window screens. And that's how they started. And making those in the back of the hangar. So by the time I met one of the founders, it was about 1956. So nine years after they'd been in business. And I met them at a ham radio club. Where you learned how to become a ham radio operator. I read in the newspaper where they had just opened up a new plant and were expanding. So I started bugging them for. For an after school job or in Saturdays. And finally he relented. So that's how I started with the company. I was 16 years old. [00:03:04] Speaker C: Wow. [00:03:05] Speaker D: And I worked for them through high school, through college. Date on actually they paid me while I was in the army so I wouldn't leave and came back and moved around the country setting up screen plants. I set up two. We ended up with about 10. And later when opportunities became available, do different things. And one of them was storm windows. We got into that and then slowly evolved into a window company. [00:03:28] Speaker C: And what is your role now? [00:03:30] Speaker D: Well, I'm chairman of the board. [00:03:31] Speaker C: Okay. [00:03:32] Speaker D: So much like Rod, I don't have any day to day responsibilities. But they do get day to day suggestions from me. Not necessarily every day, but they get some and some they listen to and some they don't. [00:03:45] Speaker C: Right. Okay. And Jim, tell us your story because Milgard is your last name. So did you start Milgard Windows and doors? [00:03:53] Speaker E: No. My father started in the glass industry in I think it was 1934. 4:35. [00:04:01] Speaker C: Oh gosh. [00:04:01] Speaker E: During the depression. He had a chance to work at a Tacoma glass company. Worked on the counter and answered the phones and started there and wound up as general manager. Ran up until 1948. My dad went on with another partner and their separate glass shop. And in 1958 my brother was ready to join my dad and we started Milgard Glass Company. Little 5,000 square foot building. [00:04:29] Speaker C: Okay. [00:04:29] Speaker E: Doing everything auto glass, mirrors, shower doors, anything related to glass and glass replacement. And I joined in 1960. We started selling aluminum windows as a dealer. Then in 1962 we had the chance to build our own products. A company down in California was an extruder and he would teach us how to make windows. And this was a new venture for us. So we couldn't mess around with this glass company doing 500,000 a year. We had to make sure we're gonna be successful. Had to be in another entity. So it was Milgard Manufacturing. [00:05:02] Speaker C: Okay. [00:05:03] Speaker E: We eventually changed it to Milgard Windows as a name. But anyway, that's how it started. I know the first day it took us all day to build an 8 by 4 half vent. All day. [00:05:15] Speaker C: Okay. [00:05:16] Speaker E: And we've slowly got more profession at it. This is all single glazed, mill finish, aluminum and slowly built. The business got into insulating glass in the, I don't know, late 70s, early 80s, and then started branching out and building window plants throughout the west coast. Started down in Portland, Oregon and went to Sacramento and up north of Seattle. We had one up there in Hollister, California, Temecula, California, Simi Valley. In the mid-80s we were still building about half of our windows single glazed and more of them more insulating. But fortunately California changed the building codes to insulating glass. So we already had the product and we were able to capture a major part of the market at the time and that's how the company grew. [00:06:06] Speaker C: That's awesome. And so you're not involved anymore? [00:06:09] Speaker E: No, I'm not. [00:06:10] Speaker C: When did you step away? [00:06:12] Speaker E: Well, we sold the company to a public company in 2001 and committed to say, three years. And after three years I was still called on to come to some of the sales meetings and management meetings and stuff, which I did for a number of years. But fortunately the company, Massco that purchased us decided to get out of the window business and Miter Brands was fortunate enough to come along and buy us. And we were fortunate enough for them to buy the company because it was a family business that had the same kind of work ethic and philosophy. And it was a great marriage in our side of it and I think they feel the same way today. [00:06:50] Speaker C: Yeah, I would agree. That's how the acquisition has felt for us too. We were, it was interesting to hear the recount of the tale of, you know, oh, Masonite's going to buy you. No, no, we're not giving up quite yet. So that was a little bit of a tumultuous time for us too. Like, wait, what's going on? So were the three of you competitors all at the same time then? [00:07:10] Speaker E: Not really, no. [00:07:12] Speaker A: You know, I think the window business, like, it's not that big. We all know each other and there's a tremendous amount of respect in the window and door business for people that perform really well. So we weren't, you know, did we sell against each other once in a while? Yeah, we did, but we had the utmost respect. I think the competition was really the guys out there that are working out of a pickup truck or working out of a garage and trying to cut costs and really not doing everything right. But when you got three really good window companies, there's a place for all of us. And I think that's the way it worked. For Milgard MI and pgt. [00:07:46] Speaker C: Yeah. Well, it's amazing to set how many years experience between the three of you? [00:07:50] Speaker D: 150. [00:07:51] Speaker C: 150 years. [00:07:52] Speaker A: That just means we're old. [00:07:54] Speaker E: Yeah, I know, 50 years each. [00:07:56] Speaker D: That's about what it is. [00:07:58] Speaker C: It means you started when you were young, right? [00:08:00] Speaker A: Well, Jim said he started when he was 2. I think I was 4. [00:08:03] Speaker C: That's right. [00:08:03] Speaker D: I was 2. [00:08:05] Speaker E: I meant to say 20. Yeah, I said 2, didn't I? [00:08:08] Speaker C: Yeah. So one of the questions that I think is fascinating because I've worked for family owned businesses before, obviously much smaller, but what's it like to hand over the reins to the person that maybe they didn't turn in their homework when they were supposed to and they, you know, forgot your birthday or you know, what's it like when you hand over the company that you've built to the next one in line? So, Pete, I think this is a great question for you since Matt and Mike are so heavily involved in the company. [00:08:39] Speaker D: Yeah. Well, number one, I have three boys and two of them absolutely love the business and they couldn't have been more excited for the opportunity. So I was very fortunate. As I said earlier, the original owner, his son really wasn't interested in the business and that was very, very disappointing for him. I don't think he ever really recovered from that. So how did it work for me to leave? Actually it was at a sales meeting I think that we had in Orlando that they announced my retirement. I was 68. [00:09:08] Speaker C: Okay. Did you know they were going to announce it? Did they just say, hey Pete, you're retiring, or did you have something to say about the fact that you were retiring? [00:09:15] Speaker D: It was quiet, let's say it was not really discussed in detail ahead of time. But I wanted to lead a little different life now. I'm sure like Jim and Rod and Gary had eat, sleep and breathe that business every day of my life for a lot of years. And I was getting more into flying some and skiing some and stuff like that. So really it was time for new leadership. So I didn't resist that at all. [00:09:41] Speaker C: Nice. And Jim, did you have any family members that got involved in the business? [00:09:45] Speaker E: Well, my son was actually. He was the service manager in Tacoma and then I think he got up into the plant manager when we sold the business. He was all of 28 and really too young to think that he would take the reins of the company forward at that point. My brother had a son and he was with the company for a while but got tired of the window business and went on to another endeavor. So Gary was 66 and I was 62. And this industry is not all one way up. There's a lot of pits and falls and market softness and downturns and everything else. And the building industry has always been that way. So we were on a really strong roll at the time and thought, well, if we're going to do this, maybe we should do this. And so we went out in the public market and offered our company for sale. And that was a real education once we were acquired, that I had to listen to someone else and their advice, and it wasn't all that great. But, you know, when they. They spend the money, they're going to do what they want to do, and you don't realize that's going to happen. But we're very fortunate that Miter Brands is now the parent company and got Milgard turned around compared to what it was there for a little while. [00:11:01] Speaker B: We are sharing our expertise around all topics relating to the window and door industry. Whether you are a customer selling our products or a homeowner doing research, the Clear Impact podcast provides helpful content that makes an impact. Subscribe today wherever you listen to podcasts. [00:11:20] Speaker C: That's awesome. Okay. And so, Rod, obviously Benji is still part of the company, but you have other family as well, and Benji's not running. You know, he wasn't the CEO. He's VP of Customer Success and things like that. So has Benji always been involved in the business? [00:11:37] Speaker A: You know, he did. I have two sons, and both of them interned. My other son's an engineer and lives in San Diego. Both of them interned at bgt. And one of the things the boys knew is they had to come in, work as an intern for a summer or two, and work in different departments, and then that department would make a choice as to whether they wanted to offer them a job or not. Because that's typically how we hire a lot of interns. And it's great when they come back for the second year, means that they're interested, and then we get to choose if we're interested in them and offer them a job. So Benji was offered a job and took it. And he said he spent his first year convincing everybody in the plant that he got the job because he was talented enough to get the job and not because he was the boss's kid. [00:12:21] Speaker C: Right. [00:12:21] Speaker A: And my youngest son was offered a job also. He's an engineer. And he said, you know, I've got some really good job offers out there. I think I'm going to go work someplace else for a year or two, and then I'll decide and I'll come back and, you know, I'll get some experience. And he's got a wonderful job, travels all over the world. He's not coming back from Southern California. He loves to surf, and his wife is deeply into, you know, what they do out there also. She's got a great job in biotech. She's also a chemical engineer. So he's not going to come back. But we were a public company, so as I stepped out, we needed to make sure that we did the proper CEO search, which we really didn't do because we had some really good internal candidates and we'd spent a couple years making sure they were ready. So as the board looked at it, it was a pretty easy transition to do that, even though it took two or three years to get it ready. [00:13:08] Speaker C: Okay. I guess the only question I have is, like, what advice would you have for other owners maybe, that are at that age where maybe there's something more exciting like skiing or fishing or piloting or just relaxing? What advice would you have for someone who needs to maybe hand the reins over? [00:13:28] Speaker E: Well, this isn't dress rehearsal. This is only one pass in life that we have. [00:13:33] Speaker C: Okay. [00:13:34] Speaker E: And I don't know if I ever left the desire to get out of the window business, but I think in retrospect, it was time. I still miss it. What I really miss is the growth of our people. Hiring young people and seeing them grow into management roles and everything else. That was the best part. [00:13:51] Speaker C: Yeah. [00:13:52] Speaker E: And also the growth of the business. That was always exciting to watch. [00:13:56] Speaker C: Well, and obviously you're still in a mentorship role because you were invited to speak today. And so there was a lot of wisdom shared. [00:14:03] Speaker E: Yeah, yeah. I'm like an old cold. I can't get rid of it. See, I keep showing up. [00:14:10] Speaker C: Pete, what would you say to that? What would you advise someone who needs to step back and hand off something that they've spent their lives building? [00:14:17] Speaker D: It's a very hard decision. But if you read the books, and one of the classics was written about Henry Ford. Henry Ford built Ford Motor Company, and he damn near broke it because he stayed on too long in our particular company, Metal Industries. Mr. Walker, who obviously was my biggest mentor in life. So he spent the last number of years mainly concentrating on that one division that made girls registers and diffusers for central air and heat systems. And he was very instrumental in starting that and building that part of the business. But he also basically ruined it. Because as times changed and they needed to make some serious changes in how they were doing business, how they were developing products, how they were going to market all these things, he couldn't do it. He wouldn't do it. And he also became embittered. He got to where he didn't like the customers or the suppliers. Oh, and this is not uncommon of aging entrepreneurs and reform. Same way. So it's unfortunate when they don't do it the same. Very much true. The same person that builds a business can ruin it. [00:15:23] Speaker C: Yeah, I can see that. Rod, how about you? [00:15:26] Speaker A: Yeah, I think our story is probably a little bit different. You know, do you miss it? Yeah. You do you miss the time spent with your employees? Because that's kind of the highlight of the day. And the second highlight of the day is your customers. And, you know, I'm fortunate that I'm in a role now where I still talk to a lot of customers. I can walk through the plants and see our employees. So that's really gratifying to see that happen. But we were in a public company setting at the time. So as that turned over and then we had bids, we had a chance to really look at who was going to be the buyer and how is it going to work. And, you know, when you think about the people in the window industry that you really admire, you know, we're able to pair up with, you know, two other guys that just built wonderful companies. So that worked out really well. But, yeah, it's a tough thing to do because like Pete said earlier, you live it like it's not a 40 hour a week or 50 hour a week or 60 hour a week job. It's a seven day, almost 20, 24 hours a day. We can, you know, we all know, we all have the same stories. Like, we can go back to the early days when, you know, you'd go an entire year and you'd look back and say, I didn't take a single day off this entire year. I worked every Sunday this entire year. And, you know, we shut down on Christmas Day so people could go. But other than that, you basically were working almost every day. So it's gratifying to see where it's at now. But it's hard sometimes to look at the company and not be there all the time. [00:16:50] Speaker C: Yeah, you don't have a parking space with your name on it, but, you know, you can come by anytime and everybody knows you and you're so approachable, which is what I really appreciate. And even though I just met, you know, Both of you, you seem that very same way. And early on I did a podcast with Mike and also with Matt, and I said, oh, what about your dad? Like, do you think he would come in? And they're like, well, he's kind of retired, but maybe. So I'm thrilled that we got a chance to record. I won't keep you. I know lunch is around the corner. [00:17:17] Speaker A: So this is an industry we love. [00:17:19] Speaker E: And yeah, we know it, so we like to talk about it. Yeah, yeah, we can go on longer than you can go on. [00:17:28] Speaker A: We can tell stories that you can't put on your podcast. [00:17:31] Speaker C: You know what? Well, if you have any stories that you want to tell that we can put on the podcast, we could certainly keep going. I'm not opposed to that. [00:17:38] Speaker D: Okay. One of my favorite stories is we were selling one of the early home center chains that did not survive Home Depot Lowe's intrusion into their business, if you will, was a company called Heckinger, originally started in Washington, D.C. way back in the late 1800, early 1900s by a guy that when they would tear down buildings, he would buy the stuff that didn't need to be thrown away, like bathtubs and sinks and faucets and stuff like that. He would buy that stuff and he'd set it and then he got a storefront or something, he started selling his stuff. Well, ultimately, Huckinger's became a very successful home center. Smaller footprint type stores than the current Lowe's or Depot. [00:18:17] Speaker E: Right. [00:18:18] Speaker D: But they were very, very successful in the Middle Atlantic region. So they were a major customer of ours for storm windows and storm doors and multi fit replacement patio door screen. So anyway, when we got a vinyl replacement window going, I said, gee, what a perfect place to sell these stock sizes. Because that area of the country had a lot of stock size wood windows out there, just hundreds, maybe millions of them. So you can take the sash out and put in this new replacement window without having to measure or anything, just because they're standard sizes. So I went to them and I said, look, here's a window. I'm going to show it to you. This is a replacement window. This is the new thing. Nobody is stocking and selling them out of a storefront yet. You could be the first. And there's no reason they won't work because you're selling stock sized storm windows that are going on the same size windows. So, okay. He said, gee, sounds like a great idea. So they gave us an opening order. Well, number one, we hadn't made a window yet. The window I Showed him. I bought from a competitor. And then we got. About a year later, we got vendor of the year award. And we're standing up there and I mean, they sold thousands of them the first year. Thousands of them. We had a hard time making as fast as they were selling them. So then I told the story and they were all appalled that we had had the guts to sell them a product we'd never made. [00:19:46] Speaker C: That's awesome. That's like saying yes and then figuring it out later. Right. [00:19:50] Speaker A: It's almost like making your first impact window. [00:19:52] Speaker D: Yeah, yeah, exactly. [00:19:55] Speaker C: Oh, gosh. Any stories, Jim? [00:19:57] Speaker E: Our first insulating glass manufacturing was done by hand. [00:20:01] Speaker C: Oh, yeah, sure. [00:20:03] Speaker E: And this was at the glass company still, before we ventured on and added to the other window manufacturing business. But we would take saw horses and set up and get hoses out and wash the windows and squeegee them off. Well, one time we used paper towels to get them all clean and everything else. And then we would make the spacers fill it with desiccation and then make the sandwich unit. And then on Friday nights, this is only about 12 units a week, I'd make. Oh, gosh, okay, 12 to 15 all week, getting ready for this. [00:20:36] Speaker C: Okay, so three a day. Okay. [00:20:37] Speaker E: Then on Friday night, I'd seal them all off with polysulfide and little one gallon mixers and shoot. And the following Monday, the glazers came in and loaded up the truck to take this order out. And this one laser said, jim, come on, I want you to see this. And I went over there and here was this lint from the paper towels. [00:20:58] Speaker C: All over the windows on the inside. Yeah, of course. [00:21:02] Speaker E: And we spent all week getting this order ready. And we were already about three weeks late on the order. [00:21:07] Speaker D: Oh, no. [00:21:08] Speaker E: I said, just take them out there, put him in. Tell them we'll make another set as soon as we can. Anyway, he came back and the job was, I don't know, about 25, 30 miles away. The roads weren't perfect, so going down there, bouncing around everything else, all the lint fell to the base of the river. And he said, they're fine, Jim. We don't have to do anything. True story. [00:21:31] Speaker C: Wow. Okay, that's interesting. [00:21:33] Speaker A: You've heard the story about flying window over to Daytona Beach. [00:21:37] Speaker C: I haven't heard it from you on a podcast. [00:21:39] Speaker A: Oh, okay. So our motto was almost like Pete's motto was complete on time delivery. And for the first three years we were in business, we never shipped a window late. We never backordered a window. Like everything got Delivered, and it had a three to five day lead time. So everything's getting delivered within a week of when they were ordered. [00:21:57] Speaker C: Wait, three to five day lead time? [00:21:59] Speaker A: This isn't porch enclosure products. It's not actual glass windows. So we controlled everything in that. In that schematic. Yeah. So that's changed a little bit, especially with impact. So we built the windows, we delivered, and our driver called us from Daytona beach on a Thursday evening, and it's like, there's one window missing on this order. It's like, can't be. Like, we know we built it. We went out in the warehouse and sure enough, there was one window that was forgotten to be loaded. And we had this reputation, like, we ship complete and we ship on time. Our VP of sales at the time, Herb was a pilot. [00:22:32] Speaker C: Okay. [00:22:33] Speaker A: And I called Herb, and it's like, we got to get this window over to him. And of course, it was a vertical four track window. And it was, you know, I don't know the exact size, but it was probably like 60 inches wide and probably 80 inches tall. It doesn't really fit real well in a one engine prop plane. So we tore the window apart, completely loaded it in, flew it over to Daytona, got a taxi to take us to the guy's place, and built the window at his place so that we could keep our reputation of we never ship late and we never backorder products. [00:23:06] Speaker C: Wow. [00:23:07] Speaker A: But, you know, it's those kinds of stories that of course, then you tell them to the plant. So everyone knows how important it is that we get everything there in time. So it's just, you know, it's a. It was a fun thing to do. [00:23:18] Speaker C: Yeah. [00:23:18] Speaker A: And it gave them an excuse to fly. I'm sure Pete understands that. [00:23:22] Speaker C: Absolutely Right. And so you're a pilot. [00:23:25] Speaker D: Yeah. [00:23:25] Speaker C: Nice. [00:23:26] Speaker E: Yeah. [00:23:26] Speaker C: That's excellent. All right, well, this has been such an amazing conversation. I'm so thankful and humbled to be part of it today. Thank you for your time and your expertise and just sharing your wisdom and your history. What an honor. So thank you. [00:23:41] Speaker E: Thank you. [00:23:42] Speaker C: Have an awesome day. [00:23:42] Speaker E: Thank you very much. [00:23:43] Speaker C: All right, take care. [00:23:47] Speaker B: The Clear Impact podcast is brought to you by PGTI University. We are a part of Miter Brands, a family of leading window and door brands united by our passion for quality and relentless pursuit of 100%. One of the missions of Mitre Brands is to unite and deliver the finest customer experience possible across the nation. Our window and door brands deliver regionalized expertise and products backed by a national company. PGTI University is here to educate you, our listener, so that you can be a more informed consumer of window and door products.