Automation Components gives back in good times and bad
The following is the first in a series of three profiles on local winners of the 2014 Wisconsin Family Business of the Year Awards.
Troy Schwenn started Middleton’s Automation Components, Inc., with two partners in 1991 while the nation was in the grip of a stubborn recession. They were young men in their 20s, and their employees averaged a green-as-grass 21 years of age.
Sounds a little like the setup for that viral YouTube video in which that German guy cannonballs into a pool, only to discover it’s covered in ice.
“If it’s made here and it’s relatively competitive, it’s going to be sourced and purchased locally or nationally. It’s just what we do. It’s what we believe in.” — Troy Schwenn, president, Automation Components, Inc.
But sometimes jumping in feet first is the only way to go — and sometimes, the water is just fine.
“We didn’t know what we didn’t know, what was out there,” said Schwenn, president of Automation Components, Inc. (ACI). “A couple of us were married, but we didn’t have any kids and we were young, so we knew if we did fail we’d be able to pick ourselves back up and know that we would have gained a lot of experience and would be very marketable.
“But we didn’t look at failure as an option, to be honest with you. We set a lot of goals. Goal-setting was something that we’ve done from the day that we started. … We didn’t have the experience — it was just work your tail off and hope what we’re doing is correct, and learn from our mistakes.”
Twenty-three years later, Automation Components, Inc., a manufacturer of performance sensors for the HVAC industry, is thriving. Not only has it seen consistent growth — even through the Great Recession — it has twice been named Wisconsin Manufacturer of the Year, and it can now add a Wisconsin Family Business of the Year Award to its crowded mantelpiece.
The business recently won the Family Business of the Year Grand Award in the medium company category, and while that’s certainly a reflection of the work of Schwenn; his brother Chad, who joined the company in 1994; and Schwenn’s three daughters, who are all getting a feel for the business through their work as summer interns, Schwenn says ACI’s extended corporate family and its company culture are the true drivers of its success.
Part of the reason for that success, he says, is a low employee turnover rate, which in this age of dismal employee engagement rates, helps set the company apart.
According to Schwenn, his company succeeds where others might not because of the family-like atmosphere.
“I think everybody’s listened to,” said Schwenn. “Everybody has a say. It doesn’t matter if you’re working on a line or you’re a manager or you’re an owner. We’re real flexible in our hours. We’re flexible if your daughter has a Christmas program you want to go to. We would look poorly upon somebody that doesn’t go to that. We encourage people to be with their family when there are events. You can always make up your hours, and more importantly, it’s getting everybody to give more than they receive, and that’s kind of a motto that we have. We try to be a company that gives more than it takes.
“We want to have a great corporate footprint here locally, nationally, and honestly, internationally.”
For ACI, part and parcel of treating its employees like family is providing family-supporting wages. To that end, the company has set an example by going out of its way to source materials domestically. In the past two years, ACI has purchased two U.S. companies that had been manufacturing their products in China, but Schwenn ultimately decided to onshore the labor.
“Not everything we can get here is made in America,” said Schwenn. “There are some things that we have to source internationally. But if it’s made here and it’s relatively competitive, it’s going to be sourced and purchased locally or nationally. It’s just what we do. It’s what we believe in.”
It’s also been less of a financial bite than one might think.
“The direct labor cost is significant, but I think what we’ve learned is that when we do source locally, the overall cost, the return rate, the rework rate, are less when we have control over the process,” said Schwenn. “And we train our people to do it in the right way, so the overall cost has almost been a wash.”
The company and its employees also place a lot of importance on giving back to the community. The company has supported The American Red Cross, Habitat for Humanity, American Family Children’s Hospital, and other organizations. However, one charitable effort that’s particularly close to Schwenn’s heart is the company’s fundraising on behalf of the UW Carbone Cancer Center.
“My wife has cancer and has been battling it for seven years,” said Schwenn. “We’ve been doing a bowling outing [for Carbone] for more than seven years; we didn’t start it because she got cancer — it just happened that way. So that one’s very close to our heart, and we’ve raised well over $100,000 for the Carbone Cancer Center.”
Of course, the company, which has prospered in both good times and bad — largely because building owners are always looking to cut costs through efficient HVAC systems — is not taking its success for granted. Not anymore, anyway. According to Schwenn, the biggest lesson he’s learned over the years is that any business, whether it’s thriving or not, needs to continue to set goals and continually raise the bar higher.
“We set goals when we first started the business, and the first goal was to make sure that we’re around and can pay our employees,” said Schwenn. “So we set a revenue goal and we reached it — and we reached it, I think, in 1999. But we didn’t continue to set goals. So we kind of sat there for two or three years, and we grew a bit, but then Sept. 11 happened and it slapped us in the face, and we said we can’t rest on our laurels. So we reset our goals and got everybody on the same page, and we’ve just been going great guns since.”
But true to form, Schwenn is quick to credit his employees with driving that growth.
“ACI’s success is not because of the owners,” said Schwenn. “ACI’s success is because of 160 men and women who buy into what we are. And of course we’re in business to make money, but we look at the bigger picture. We’re here to be different. We’re here to be better. We’re here to be great.”
So if Schwenn could go back in time and talk to that foolish young man who insisted on starting a new company in the midst of a grinding recession, what would he say to him?
“You’ve done pretty well,” said Schwenn, laughing. “Better than we thought we were going to do. But we’re going to do better than we are right now.”
Click here to sign up for the free IB ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.