Tell us a little bit about Stone Age and why you have remained an independent business.
Stone age will celebrate its 40th anniversary next year and the two founders; one is a 4th generation Durango resident, the other one grew up in Denver so they both love Colorado. John moved down here to start Stone Age in the 70’s and fell in love with the town. They’ve always wanted to stay local and their vision was to keep the headquarters in Durango, we’ve worked really hard to maintain that. We always get offers–private equity offers, every one of our competitors has been here to try to buy us, but we always wanted to remain independent because we’ve also felt like for our business it gives us the best opportunity to stay local and to create the type of culture that we want to create, the type of products, the type of customer service we want, our secret sauce so to speak. Whereas if we get involved with the bigger multinational rep we wouldn’t be able to do any of that. For some businesses, doing that makes sense, but for us it hasn’t. So that was the biggest part for us, we want to be able to control our future and being employee owned and remaining in Durango is a big part of that.
Tell us a bit about your employee ownership model.
About 25 years ago, John and Jerry decided to start selling stock to the employees. It was their vision, twofold; one, to generate capital without having to go get bank loans and, two it was a way for them to be able to share in the success of the company. So it was an experiment and a homegrown program and we were very successful with it. The only issue was that we started to buy and sell more stock every year and we got to the point where we weren’t meeting the S.E.C. (Security and Exchange Commision) rules for safe harbors and we would be forced into having to register. That was a point to ask what model we really wanted to go by. We don’t want to be S.E.C. registered, that’s really big company-ish thing to be. What we would prefer to do is to have broad ownership and the only way to do that was through a formal E.S.O.P. (Employee Stock Ownership Plan). That’s something that is governed by the department of labor and ERESA, which manages all our 401K employee benefits. It was a change of model for us because prior to the ESOP, employees would invest their on money into the company which gave them skin in the game and with ESOP it’s given out to all employees based on an equal proportion based on your tenure to the company, but it’s a retirement benefit, you only get access to it once you retire. So it’s a whole different shift in the model–it’s shifting more towards a retirement entitlement benefit rather than a skin in the game investment benefit, but it was the only way we could ensure broader ownership of the company–we could have done employee owned, but it would have been just a small group of employees. The ESOP is what really made sense for us and our large size. We did that in 2015, so we’re in our third year of ESOP and every year shares are released into each employee’s account and every single person who is employed by the company is a part of the ESOP.
We’ve been employee-owned for so long that I don’t think the shift to the ESOP has necessarily changed much to be honest, but I do that in general being an employee-owned company is definitely a different model. I do think it helps with the retention but I think for some people they get that the employee ownership model is really interesting, a lot of people don’t know what to expect and so they maybe discount it, but once they’re in it they think it’s really great. I do believe that it’s very much a part of our culture. We are employee-owned and we embody the “own it” mindset. Each one of us takes responsibility for driving the success of the company and the “own it” mindset is really about accountability, teamwork, and showing up every day to work hard. It’s about your attitude that comes from the sense of being an owner in the company rather than here just for a paycheck. I definitely think that it’s embedded into our culture. I think it helps with retainment, I think it helps with engagement and it seems like when anyone comes here they walk around and note that everyone is so happy, everyone is smiling and they want to work here too. I think the employee ownership is a big part of that.
What do you think that Stone Age can offer that chains can’t?
I don’t think we do anything that somebody can’t do, but when you pick apart each component of our business model, you can see that being independent allows us to have control over how fast we do things, how to slow things down, what products we want to come out with, who we hire or what initiatives we have. In corporate America it’s very different than that. Our strategy is built on three things product leadership–about how we show up, customer responsiveness–how fast are we reacting to our customers, and our culture, and our culture is that ownership piece. It’s a big component of how we show up but I don’t thing being employee owned doesn’t necessarily mean we have better technology than others It’s all about how it all comes together that creates what StoneAge is all about. and that’s why we try to invite everyone to Durango, we want our customers to come, our vendors to come because then they can see what we’re all about and see that it is different and that they can rely on us for the long run.
What are your plans for 4th of July
To be honest, the week after 4th of July we’re having all our global employees are coming here for training so that week prior we have some people in town. We are getting ready for a big training and party on the 14th so I think we’ll be focused on getting everyone here. I’ll probably be doing whatever is going around locally and then I’ll be headed back to work. We’re really excited to have everyone here.
You can learn more about StoneAge Tools at https://stoneagetools.com/