Episode 1—Pella Northland
Episode #1 | Ed Engebrecht and Peter Martin | Pella Northland
Two ownerships different paths to owning Pella Northland together. Ed cut his teeth at Pella corporate and Peter was with the Twins and Cambria growing both brands before wanting to own and operate one. We focus on culture and the importance of a balanced life and flexibility in management. Learning about how hiring and keeping good people is essential to the growth and glow of a company.
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About Our Guests
Ed Engelbrecht is a minority owner and retired CEO of Pella Northland, serving Minnesota, North Dakota, South Dakota, and Wisconsin. Ed purchased the Pella Northland territory from Pella Corporation in 2011. Prior to Pella Northland, Ed held various positions with PellaCorporation for 29 years including roles in Finance, Marketing, Sales, Distribution, and he also served as President and General Manager for Northern Illinois and Minnesota. Ed finished his career at Pella Corporation as Vice President of Sales. Ed is a past Executive Board Member of Housing First Minnesota Board of Directors and Wartburg College Board of Regents. He currently serves on both board’s Finance Committees. A proud graduate of both Wartburg College and Drake University, Ed enjoys golf, fishing, hunting, and traveling with family. Ed and his wife Carla make their home in Medina MN. They enjoy spending time with their 3 daughters and 7 grandchildren who live in the metro area.
Peter Martin is a senior executive focused on growing entrepreneurial businesses and delivering results. Experience in all aspects of business including serving on corporate Boards, leadership roles in sales, marketing, operations, and running a full P & L, across diverse industries. Ability to synthesize complex business opportunities and develop and execute effective action plans, resulting in stronger brands, expanded revenue streams, and improved profitability. Known for hard work, clear communication, and building high-performing teams. Quickly read people, situations, and identify creative solutions. Thrive in fast-paced environments where decisions are critical, and visibility is high.
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00:00
Welcome to the curious builder Podcast. I'm Mark Williams, your host today is joining us the owners of pal. I've got Ed Engel Breck and Peter Martin. Thanks, guys for coming on.
00:09
You're welcome. Thanks for having us.
00:10
Great to be here, Mark.
00:11
All right, well, we'll kind of jump right into it. I thought maybe each one of you guys could give us a little intro of kind of your background. I obviously know Edie because we've worked with you and your wife on a couple of your homes. And so you and I have known each other for a long time. And, Peter, since you've bought into Pella here, and you're partners with Ed, and we've gotten to know each other over the last couple of years, I know your history a little bit less than I know, Ed so why don't you kick it off and just give us kind of a brief overview of your career to where you are now
00:37
how much time we have. Well, this
00:39
is going to be a seven part podcast series.
00:42
Perfect. Most recently, I was with Cambria. So I've been in the building materials category and industry for about 15 years now. Started off at the University of Minnesota got my first job out of college and finance. So I was in working with Piper Jaffray, and then in banking, through a couple of mergers, ended up working for the Pohlad family, and then transitioned over to the Minnesota Twins. So spent some time in the entertainment industry with them, and worked on their new stadium effort, we got that approved. And then I was anxious to get back into corporate America. And so I had the chance to meet the Davis family through the the connection and support that they gave to the Minnesota Twins. And they were starting Cambria. And so I went over in a sales and marketing capacity and spent 12 years with the family and with with Cambria, and then we also purchased Sun country airlines when I was there. And so I had the chance to be on the board of directors and work with the crew over there. And we sold the airline and I was ready to do something new and fresh. And you know, that really lit an entrepreneurial spirit in me. And so I looked at the next, you know, 15 years of my career, and I wanted to get into ownership. And so through networking, and some of the people that I know, I get introduced to Edie, he was starting to work on his transition plan and was looking for the next, you know, leader and owner of his business, and we just really gelled and so bought into the business about three years ago, and here I am.
02:03
Yeah. Wow. That's amazing. You definitely have played in the big leagues. early on. I mean, did you know that you wanted to have an entrepreneurial career? I mean, even as a younger person, or what at what point did that kind of transition? Yeah, I saw other ownerships, like the Davis's and other like, Hey, we've had a lot of success. I mean, your companies were massive, right? You took Cambria from was it 50 million to like, 500 million? Yeah. About?
02:26
Yeah, it was like 35. And yeah, we grew it to six, you know, 650 million, I'm sure they're, you know, they're gotta be approaching, you know, eight 900 million now. And so yeah, we just had really exponential growth. And it was a fun time, it's a really good question. Because I know, you know, marketing for you. And you'll probably talk about it. But you know, you kind of have that entrepreneurial spirit from the very beginning. And it really grew for me over time, I think part of it was being with the Pohlad family, all the businesses they have are privately held, and then working with the Davis's and just having the opportunity to work in that very entrepreneurial environment. You know, they've got four or five different businesses from cheesemaking to dairy cows that they, you know, big corporate operations in our our foray with son country that we bought and sold six years later, very profitably. And then just the growth of Cambria that that really is where I think that seed started to match your aid and to grow for me. And as I looked at the next phase of my career, through a lot of the relationships and the distribution network that we had built at Cambridge, and my wife and I had talked many times about being on the other side of that table. And so, you know, again, as I looked at the last phase of my career, it was something that I wanted to do for myself. And that motivation, Mark was an all money. Yes, as you look at the success, sheepish to say that when we were at Cambridge, because we were building for success, but we certainly had some success along the way. But for me, as I thought about that next phase of my career, it was it was really about culture, and having that more or more autonomy to be able to impact and, and influence and build a culture and to be part of a team that I had, you know, more control over. And then certainly looking at, yeah, you know, that last phase of your career and how do I build, you know, wealth for the future and for retirement. So
04:12
and I would imagine, we'll touch on this a little bit later of what attracted you to add into Pella. You know, he originally with Pella Northland, but just also, I can only imagine having the diverse background that you've you've had, take kind of saying, hey, that worked, that didn't work. And then from all these different companies from huge companies, you know, buckling down now trying to take it to kind of, you know, just apella and seeing where you can actually impact the culture. We'll get into a little bit. Edie, how's it going, man?
04:38
It's going great. You know, I'd
04:39
love having you in here. You know, the idea that we you do a podcast and not be in person seems strange to me. I'd much rather look at your face to face so I can hit you and and if I have to, but anyway, you're good guest so far. How we'll see there's still time to mess it up. Tell us a little bit about your history. I mean, obviously I've known you for a long time. But you know, there are people out there that listen to this podcast that don't know you. So once you give a brief intro of kind of your history,
05:02
it's good. Well, since you've worked with Karla nine a couple projects, you know who the real bosses I do I do who the decision maker is. I do. Yeah. Well, maybe I should have had her on. She knows you well, adding a practice. Yeah, a little different path. And Peter. I came out of college and went right into Pella Corp and worked for appellate court for 29 years, I had 12 different positions, started in finance, and then customer service and marketing and sales and sales management. And then in that span, I got to run both northern Illinois as the General Manager, and Minneapolis branch. So that's where I really became to love the opportunity to run a branch. And then the last 10 years, I was head of sales at Pella corporation. So I learned a lot at Pella. A lot of people skills, process skills, things like that. But in my last 10 years, I saw a lot of the distribution and distribution management. And that's that's where I got the bug of owning my own business. You know, I thought that would be really good. I think the motivation somewhat similar to Peter, it's the flexibility, you know, corporate life, I think I can say it online sucks. It's, it's a drain, I have huge respect for corporate people. I think they're insane, that the lifestyle, you know, work life balance is not there at all. But to be able to control your schedule, and the flexibility and be closer to customers is something that I really desired and control your own destiny. And having that opportunity. Even though I was working for Pella as a general manager, I saw that path and said I need to do this. And I love Minneapolis. I love the weather up here. And the opportunities outdoors, right. So it just all worked out and in 2011 bought this branch from Pella Corp. And it's it includes the territory of Minnesota and a good chunk of Wisconsin, North Dakota, South Dakota. So it's it's a great market. And as Peter mentioned, about three years ago, we connected and now we're working on my transition and Peters transition.
07:21
Yeah, I'd love to talk a little bit more about that in a minute. Tell me a little bit more. I mean, I can tell you, like just looking on you, in some ways been kind of a quasi mentor. I mean, I look at someone who's established older, I mean, some of your greatest attributes are, you know, you're calm, you're classy, very collected, I can imagine that, you know, being essentially the owner of a company, as you get the ups and downs of Hino economies, right, you've bought in 2008 that's coming. I'd be curious, you bought it right after the crash. So home sales are plummeting in 2011. And you bought a window company, why don't tell me a little bit about that.
07:56
Some people thought is crazy, insane, and all that. But, you know, I think the housing market, there's always going to be a demand. Even on the replacement remodel, even when single family new goes down, it's a cyclical business, we also have the advantage, we do commercial work. And so I had full confidence that we had the opportunity to continue to grow in this market. You know, as far as being calm I ever seen small things bother small people. Some people like that some people don't I like to
08:29
sound like my wife. Yeah.
08:32
You're a big remodel.
08:34
Dress me? Yeah. But you got to make a mess to get where you want to go. You know, you control what you can control. And I really think you know, when I think about a business, any business, you need three things, you need great people, great processes and great product. And if you have all three of those, you will satisfy customers. And we certainly have great people. That is a differentiator, I truly believe. And then if you don't have process, they say you have chaos. If you need heroes, you do not have good processes. And then of course products, you know, come into services. Certainly mark with, with the quality homes that you build, you know all about that of the vendors that provide great products and great services. And so, you know, that's if you have that, I think in any business, you have confidence that you will do well. And the other I guess the other thing to think through is, even though the market might go down, there's always market share to take. And if you do well you will take share. So I don't think we need the market to grow for us to grow or a business doesn't need a market to grow, for the business to grow.
09:50
That's an interesting way of putting it I've avid athlete so I do a lot of competition and I'm just a very competitive person. And so it's funny when things were slow I used to always think like, I don't have to be the best builder or the best in my market. Well, yeah, I just have to beat the competition. So I guess that's how I phrased my own head. And so like, if that person is doing that, can I do it better? Yes, I can. So let's do that. And so, you know, kind of, I think just doing the 1% things, right. You know, and I think you've kind of already said it, if I can do you know, one good thing, do that and then start on the next one. Some people might not know this. Maybe you could expound a little bit on this. But because a lot of times people associate a big company with unknown brand, right. And I've had this extreme privilege to know the owners and have a personal relationship with both of you, which is extremely valuable. I talk about it all the time. Outside of even work, just it's really unique. And maybe it's not unique. Maybe every builder you treat this way. If so, kudos to you guys are amazing, but it's really neat to see but not all Pella branches are owned by Pella corporate Can you talk us a little bit through that because throughout the country, people would assume the brand appel, which you obviously have a very close symbiotic relationship with. But tell us a little bit more about like Pella Northland and how, how it exists within the Pella corporate structure.
11:07
Yeah, that's a great question. So there's about 60, Pella distributorships around the country, about 10 of them are corporate owned, the other 50 are independently owned, we go to market very unique, most of our competition to steps or go through dealers or lumber yards, we go direct and we feel you know, with with the right people, we can provide the expertise. This is all we do. We're window and door geeks. Yeah. We know a lot. We may not know a lot about other things, but try to stump us on windows and doors. And that would be a good podcast, maybe? Yeah.
11:45
All right. We'll bring on guests the guests questions right out of stuff like that, right.
11:51
So in this market way back in, in the 90s. This used to be an independently owned and then Pella Corp bought it in 97. I was the first general manager up here from 97 to 2000. And then Pella owned it from 97 until I bought it again in 2011. So the markets might switch back and forth to Pella Corporation ownership. But I do believe independent ownership is the best. You can make quicker decisions. Yeah, you have the relationships that maybe some of the company owned stores don't have and don't have the flexibility. So is
12:29
that when you kind of mentioned before early on of wanting to own your own company, or to essentially be an entrepreneur, you kind of have the best of both worlds. Is that true? Like you are an entrepreneur and the fact that you own your company, you can make decisions on a quicker basis versus of corporate. I don't know what the strata is I only would know biases of like, stereotypes and how long it takes to get things passed.
12:47
It's it's frustrating. Yeah. To get things passed. And maybe it Yeah, almost as bad as the government maybe? Yeah, I don't know. Yeah, it's it's different levels. So if there are 10 company owns distribution networks, all of them have to agree on whatever it is, right. And you can't get
13:07
nobody to make that sound. arduous. I also do not think I've often you guys both told your stories. And I can just sum up my quickly. I mean, I had a lawn mowing business in high school and maximum will pay me to mow their yard. That sounds great. So that's what I did through college sold my business. I never worked for anybody. You know, the classic joke of entrepreneurship is that, you know, we're nobody would hire us. So we had to start our own business. I often wonder, especially the last couple of years with COVID, how difficult it's been managing everything there is every once in a while, when I've had a rough week or rough month or a year, I'll be like, Man, how would I do incorporate? I honestly think about it. And I'm like, oh, yeah, I don't I don't know how long it would last. I actually kind of want to do it just to see if I can do it for like a week and see if like, oh, yeah, no, I guess the freedom that I do have and do enjoy? Well, it comes with a lot of difficulties. I don't think people I think people often look on Hey, you own a business, when you must be made in the shade. You can do whatever you want, which obviously we know is not true. There's a ton of work that goes into it relationships, and you know, we've all had ups and downs in our careers and your evolution is kind of amazing. We just celebrated 17 years, you look back and you're like, wow, I cannot I mean, you never start out with the end in mind. Or at least I didn't and I had no idea I was gonna be doing high end homes. I mean, I think the first home I rebuilt was, you know, 500 600,000 Which again, at the time was No, no small thing. It was still a really nice home and especially your first house right? You know, I just saw
14:27
you just post I just, it was the coolest thing to see you are kind of going back in time and you're walking down the street and saying this is the first house and and you know, and look at the size of the trees. And it was it was readily cool. That
14:39
evergreen tree was massive. So yeah, it was I had a little time between meetings. So I went in front of this house that I've built and that is something that's very valuable about I guess building homes is it's you know, I have three kids now. So to bring the kids through a neighborhood that we built 17 years ago and like yeah, we built that house with people and it is that is something that's really special about building a So tied into the fabric of, you know, quote The American dream you hear about homeownership, and it's really important. I know you guys are both on committees with Minnesota Housing First, and they do a great job of celebrating that message. And we can get into that a little bit later. But just really talking about our history, I guess, of how we get to where we are. It's funny how people come along at a right time and make an impact on us that, you know, changes our career to a different art path. And, you know, for you, you had so many different companies, maybe and I'm sure there are special people in those companies that acted as mentors for you, Peter, that kind of directed you would I mean, how would you how would you say that being at these other companies, how have they fit you now into ownership of your own company and shaped you in a way that you maybe wouldn't have been otherwise? Yeah,
15:44
I mean, right, both of your paths were a little straighter. And there's the old saying, and it's, it's Christian based, but God writes straight through crooked lines, right. And I look back at my at my career, and it was very crooked. You know, the, the twins is a big brand and a popular place to work and to be and people used to always ask me, you know, how do you get hired by the Minnesota Twins? And I totally fell into it, you guys, right? I mean, I got, I was working in financial services. And the Pohlad family sold that business to Wells Fargo. And I was like, I'm not going back to banking. So just just through connections, you know, got there. But back to your question about, you know, mentors. Yeah, you you run into a lot of different personalities along the way. And you try to take the good and leave the bad. Sometimes you end up modeling the bad because that's the culture and the environment you're in and you try to learn from those things along the way. You know, I think one of the greatest people I worked with and and learn from was Dave, St. Peter at the Minnesota Twins. He's still there. He's the president, CEO, and just a tremendous, tremendous leader. He was a guy that outworked everybody in the organization was willing to roll up his sleeves and get involved in all aspects of the business, you know, the guy that would walk around the concourse and talk to fans, if we had to hand out giveaways at the Gates was there doing that, you know, and that was just, it was a really inspiring kind of, you know, individual to work under. So, you know, I just have a lot of gratitude for the opportunity that he gave me and the culture that they built there. You know, it was a really fun place to work. I mean, when we talk to, you know, not this is cliche now, but people say, oh, you know, our businesses is like a family. And that was the one place where we absolutely were a family because we worked like 24/7. I mean, we attend 12 game home stands. We are there at eight o'clock in the morning games are over at 1011 30. At night. We were we were truly a family. But I only did it for six years, because you just get burned out. It's just a really hard industry to work. And
17:40
did you have a family at that time?
17:42
I did. I was I've been married probably maybe eight or eight or nine years, we had our daughter, Greta. She's 18. Now but I and I remember Kirby Puckett died. We came back from spring training. My wife and daughter were here. And we were in the middle of spring training. And so the team flew back. We did a big memorial service was televised here locally. And there's a huge winter storm that night, and I came home and my wife was was sitting up with my daughter, and it was 11 o'clock at night. And she just said to me, Peter, I can't do this anymore. Like, I need you to find another job. You're never home. And she was absolutely right. It was it was the best thing that she could have done. It was you know, I left a lot of friends behind there. And I learned a lot from that place. But you know, happily celebrating 25 years of marriage. And I don't think we would have survived that if I would have stayed kind of, you know, to Ed's point. I mean, that grind of corporate America is really hard.
18:37
I'm kind of curious, because I've never been in any sort of corporate setting, other than, you know, essentially what pop culture teaches me or hearing your stories. What do you think has led to that? Or why is it that way? And you know, people talk about culture, they talk about, you know, it'd be very curious to have someone on who is in a corporate setting? And would they maybe do have a positive culture, but why is it that it has to be that way? I mean, you might have some more insight on that versus because it's not like Pella Northland is that small company either, like, how big is your company?
19:05
Yeah, I mean, we're seven, we'll do $75 million. top line,
19:09
how many? And how many people?
19:10
Will you enjoy 30? Employees?
19:11
Yeah, I mean, that's still so if you take I mean, how do you avoid the pitfalls of that? Because I'm sure, you know, a bigger company like the twins, or let's say, you started as a farm ball team, like, you know, you start small, and before you know it, you've created this, you know, kind of this big behemoth and it kind of the culture kind of almost takes care of itself. I guess what edit said that I really liked that if you don't have a process, it becomes chaos. And so do you think that corporate America becomes chaos? Because the process isn't linear or clean? Or why is it that that you hear that so often?
19:41
You know, I'll take a stab at that. I think it is the culture and what the priorities are. And I think too many companies are driven by profitability only. And certainly the public companies a quarterly basis. So you know, they have to make money and they make some short term decisions. When we own our own business, we can make long term decisions. And you know, culture is a big deal. And you know, the old saying culture, Trump's strategy, you really need to think about whether Peter was talking about the family culture that you want. But corporate, it's, I think it's a grind because they always are trying to make more money. There's other priorities. And I think the culture to me, you think about the values first, and then how you want the company to be run. And then above everything else, how do you measure success, and its profits importance, so his growth, so his customer satisfaction, and employee engagement. And so I think it's just the laser focus that makes corporate life such a great grind, just profit, profit, profit.
20:56
I feel like we have a quote book over here, this guy is I'm writing down like your quote, machines, started a new book. Those are some those are some pretty impactful things you've learned over your career. Yeah,
21:06
have been in many meetings,
21:08
corporate doodling like what are you doing? In the beginning?
21:11
I'm taking down these quotes. Oh,
21:13
I see, that's even better. Oh, that's funny.
21:18
I think one other thing. You know, Peter talked about one of his best mentors. Mine was guy named Gary Christianson, a CEO. He came from GE, and he hated that culture. And he wanted to a different culture. But one of the things he brought was appreciation. And I think that's there's a big difference between recognition and appreciation. If you appreciate people, and it's the small things, Peter, you do that well to going around and just sharing a friendly hello, and how's your day versus recognition, you think you deserve recognition, but everybody deserves appreciation. And at corporate, I think they don't appreciate their talent as much as individuals, maybe as positions and what that individual can do for him. But you really have to appreciate your people as individuals.
22:11
That's interesting. I, someone had, I forget where I learned this, but every Friday, I write to thank you cards. And you know, there's no money involved. There's nothing like that. It's just really thanking someone for going above and beyond for something that they do. And I did that because, you know, I think we've learned so much from being married and having kids, you talked about how your wife, you know, helped you kind of realize that that moment time we need these check ins, because we get so focused on whatever it is we're working on to kind of say, Okay, you need to zero it back in and that helps you it makes you a better person makes you a better leader, and all those kinds of things. And I feel like, well, I know for myself, you could always do a better job of what you're talking about of appreciating the little and I've heard recently that people that the reason people leave this will transition into my next question for you guys of how you retain or how you hire people and retain people. But I've heard that people, I think on the list of why people leave money is like third or fourth, it's recognition, its appreciation probably should be above recognition. It's, you know, how they feel valued in the culture, and really their work life balance. I know, it's a kind of a millennial hot topic. You know, there's plenty of spoofs and SNL skits about people not wanting to work at all, I think you can have a work life balance. But something does have to give I mean, you can't do everything. And I speak because about this, because I do try to do everything. And I think my wife has definitely helped me prioritize things. And we can talk a little bit maybe about, you know, little life hacks that we've we've enjoyed over the years that have helped us. I mean, as your kids are obviously much older, you have grandkids now or Peter, I have young kids and Peter as middle aged kids. And so it's interesting how you take being a parent and a husband and you apply a lot of these principles to work into a business, would you would you feel that way that when you sometimes are faced with a decision, you often think about it almost paternally?
23:54
Yeah, for sure. Especially as an owner, right. It's very different. And I think that kind of gets to Ed's point, when we're talking about what's different about corporate America versus our businesses is that I feel in some cases, corporate America, people are expendable. I mean, you know, they are and I don't mean to beat up on it. I think corporate America continues to try to evolve and right be more employee friendly, but that drive and demand for a 90 day dividend, you know, forces them to be focused more on profit, as Ed said, maybe versus the individual. And the big mindset for me that I think has shifted as an individual is that care of the individual, and the flexibility that we have as owners to help our people to go above and beyond perhaps what a they were expecting, and be, you know, what, what's typically allowed in a in a larger organization because you've got a strict set of HR policies that you have to follow and you know, our HR policies us it's what we determine it to be.
24:51
That's amazing. I mean, that's funny, I don't obviously have an HR department and so sometimes I'm like, Man, if I did I wonder how our HR I guess I am Wow, my HR departments very lacks. So going to that question, how do you how do you hire people? What's your process? And how do you keep people? That'd be curious to know, you know, while you're not corporate from the sense that you guys say you're not corporate from a company like us, where I have five people, you know, for 270 that you're at, walk me through a little bit about how you hire people and how you retain them.
25:21
Yeah, I mean, I can jump on that, I guess, um, you know, I think it's very, it's a two fold question, obviously. And hiring, I absolutely think that the best way to hire people is to be networked in the marketplace, we can hire recruiters, you can hire an HR team to go do your recruiting for you. I tell our managers and our people all the time, that the job to recruit and to find people is not HR, if we find someone through HR, great, that's fine, that's gravy, but their job is to be out in the marketplace, networking and identifying individuals that would be good fits for our business. And so you know, I think that the the best and only way to do that is through networking. You know, I met Edie and I make it a practice every single week. I'm out doing a networking, coffee, lunch, happy hour, whatever it is, in some cases with somebody I've never met before. But also with that network that I have that goes back right 20 years, like we all have, and making sure that you maintain those relationships that have formed in the past as you go forward, I think is really important, too, because those can be great, great read referrals for you as you move forward.
26:24
I'm curious, do you time block that like every Thursday from 11? To one I try to make that or how do you fit that into your busy schedule? Well,
26:31
it's a good question. I wish that I did I just make it. It's just an inherent thing in my head that literally every week, I think about have I done that? Who did I meet with? What have I done to maintain because there is just so much flexibility you have to have I wish I could say every Thursday at 730, I'm going to do a coffee. I'm not that discipline, partly just because of the way people's schedules are. But I think that's, you know, I think it's an important habit. And it's certainly something that over the course of my career, I've gotten busy that I got away from and as I have been at, you know, Pella, I just wear a different hat as an owner and an operator. And so maintaining those relationships is really important. And that has to be our best, our best feeder to our to our business in in my opinion. We're not perfect. I mean, it's a tough market out there, you know, right now. But you know, I, I think that networking is absolutely the most important way to recruit good people.
27:21
And and maybe you can answer the question of how do you keep them once you have them?
27:24
Yeah. Well, in addition to finding the people, then how do you screen them? Yeah. And we do profile testing. We do panel interviews. So you're looking for everyone for the soft side? Yeah, we're looking for the culture. And that's that's a tough thing. If you hire right, hopefully, they'll stay longer. Yeah. But yeah, I think how you retain team members, it's the culture. It is. It's one, I think you have to have a common goal, you have to be able to share in the success of the company. And by that I mean, with benefits, obviously, compensation, but yeah, health care, you know, all that stuff needs to be there. We have profit sharing program. But then we have fun stuff, too. We have everything from a Friday. What do we call that Friday? Hello, Friday? Yeah, little Good. Good. Yeah. Good Friday weekend. Just little stuff, two, annual boat rides, you know, like minute talk and things like that.
28:27
That's more along the lines of appreciation. Yeah.
28:29
And I think that helps with retention, that this is more than just you need to do your job, right. It's we care about you, hopefully you care about us. And what can we do for you? Right?
28:41
I think Mark Two minutes is a huge topic, right and a huge issue. And Edie and I talk a lot about this because your Atomik we can do the boat cruises, we can do them every month, if that's what it just took to build a great culture. I always say, you know, I'll buy as many ping pong tables and foosball tables as we need it. That's what's really going to make people happy and stay at the end of the day. The real challenge with culture is those intangibles, it's that feeling within the organization are people do feel people feel cared about? Are they treated with respect, we are a culture of servant leadership. And again, that can be cliche, but I think we've taken it one step further. And it's about you know, our culture, our environment, and our business is going to be one of being will be firm, but we're going to be friendly and fair with our employees. And that absolutely starts with us. And that permeates down through the organization. I always say I when I when I do orientation with employees, I'm like, This is not an organization where we're going to be yelled at. So not an organization where we custom swear, it's not a prudish thing for me. I've worked in those environments. And it was absolutely what I wanted to leave behind and was not going to have you know, moving forward and I was fortunate because when you're buying a business, you don't necessarily know what that culture is. Because you're not working in it day in and day out. And I got really lucky because Ed and the team there had built such a strong on culture, of respect of appreciation, and of, you know, servant servant leadership, and that just resonated with me when I came in the door. Well,
30:09
Edie, this is a big compliment, but you're one of the classes, individuals that I've come across. And, you know, I thank you, Carla for raising. She trained me well, JD well, but I can say it, you know, a big part of building a home because it's such an emotional journey. It's somewhat, I would assume, analogous to building a company in that you spend a lot of time with people, and you get to know their families, obviously, you get to know what's important, but you know, as you transition into, you know, to having employees and keeping them happy, you know, they're really, I don't even like the word employees. I mean, I never I never liked it. When someone says, I work for you. I always correct them. I said, No, you we work together with I can't stand this idea of, because, you know, I often will say, I mean, I can't, you know, I actually almost always say this in my first interview with a client, you know, hold up my hands, and they have calluses, but they're from tennis and weightlifting. And I said, you know, like, if you see me on a job site, like call 911, or call, something has gone drastically wrong, because that's not my skill set. And I am so fortunate to be surrounded by these amazing craftsmen, amazing trade partners, people that help us be what we are in the marketplace. But really, it's it's really, it's highlighting them. And I actually I love we do this thing every Thursday, right, that's called Thank you Thursdays. And so we'll do a photo of a guy in the field, you know, maybe he's laying the wood floor, maybe he's painting whatever it is, they're not usually the heads of the company. I mean, that's nothing wrong with that. But it's going back to your appreciation thing. And I got a call from someone at Alpine hardware, we took a photo of one of his guys, and he called me I got to come emotional about it. And he just said, you guys, you don't know what he's been struggling with. He's a very shy, introverted individual, much like the three of us. And anyway, he, but he said, he's been showing that to everybody, you know, his girlfriend has his brothers and sisters. And like, it came along at a time where he needed a boost of self confidence. I didn't know that I obviously I would not, I would never know that. And, and so but this idea of celebrating the smallest thing on a job site, I mean, I like clean job sites, and they're never clean. And so it's like, Man, if I ever see someone clean something up, like, you better believe you're gonna get rewarded some way somehow, because it's those little things that ultimately make you a better company and perception, I like have a big thing on signs. Every time I drive by one of my job sites, and I see dirt on and I'll take a picture of that and send it to the project manager. I'm like, really, like I have like two hot buttons, the location of the Porta Potti in relationship to my sign, they're actually one thing, don't put something ugly in front of my sign and my sign better be clean. That's pretty much it. That's, that's about it. I've
32:41
got a great story of that to mark as it relates to you, which was, we were installing a door a big multipanel door and we had our crew out there and you film that. And you put it on social media. But the one thing is you gave hats and T shirts to our to our guys and they still wear them but they came and they were so proud of those hats, and then it'll never fail. And you can you can you can tell this other builder this this story, but it never fails. Well, we have a uniform policy. We didn't tell them that they can't wear mark do they told me that's
33:09
my side of the story when I'm done. Okay, go ahead. You didn't know.
33:12
So week later, they're out of Kramer and Sons job site. And I get the phone call that they cannot believe that we are at a John Kramer and son's job site doing work wearing another builders. Was
33:24
it? Was it the pm or was it John or Garrett? You can't say okay. I gotta get started for them. What did you What did you say?
33:33
I didn't I just you know, I didn't really say they say yeah, thanks for the feedback, you know, marks a great partner. You know, we aren't trying to show you guys up here. They were just out on a job site. He gave them you know, hats and they appreciated. They'd be happy to take one from you. And it was the PM. Yeah.
33:49
Okay. I figured, because I've seen many John Kramer, my guy has a hard hat. And I took a picture of it and sent it to John, and be like, hey, if he's on my job site, will you pay his bill? But no, you're so your installers. That's funny. So we just made some new swag. And some new shirts and new hats. And your dad showed up that day to do that bifold door. And you know, as everyone knows, just windows have been like a lot of things just been delayed. So we were so excited. And I had all this stuff walking up to the house. I'm like, Hey, you guys want hats and shirts to commemorate this special moment? They're like, oh, sorry, sir. It's against our company policy. I'm like, Okay, I'm gonna do it. First of all, that sounds very corporate America to them. So I'm gonna rebel against that. I said, here's the deal. You wear all of these on my job sites anytime you can wear them out to date night dinner, I don't care where you wear them. If you don't want to wear another job site, that's fine. But I encourage you to do so I said, If anyone has an issue with this, why don't you tell Edie and Peter that I gave them to you. And they're all cracking up and laughing and so I'm glad to know they got a little bit of trouble. Yeah, it was great. Yeah. That's funny. It's like giving a little kid a Swiss army knife and telling him not to get himself it's gonna happen.
34:53
But they absolutely loved it. I mean, that was like he would have thought was Christmas for them. Yeah. And he really I mean, it's a little it's just a little Things seem.
35:01
Now I get to start a clothing vendor company and just hand them out to everyone. I do like that stuff. I mean, it is it's funny because you you do the things that you like to do, right? I mean, I think this is basic human psychology that we procrastinate on the things that we don't want to do. I've been trying for myself to try to embody that touch at once rule in my emails, which is a challenge, right? You tend to do the easy emails first. And like, Okay, I read that one twice. I'll get back to that another day. But it's really hard. And you know, it tried to tell your team to also do it you just more efficient, right? So well, why don't you tell us a little bit about how this transition process works? Mainly, it's just very fascinating, like Edwin, did, you know, you know, how do you sell a company like Pella and Peter, for your part? Like, how many other companies did you look at and walk me through this process? I'm fascinated to know the answer to this.
35:46
Yeah, well, it's something you usually only do once. And so yeah, I saw a lot of transitions. When I was head of sales at Pella, I probably saw 20 transitions. And so I learned a lot there. I think the big difference in our our deal, it was a transition versus a transaction. And we talk a lot about that. And what I mean by that is I wanted to stay on for several years. And I think Peter saw the advantage of that as well. So instead of selling your business and just handing over the keys, good luck,
36:22
right here,
36:23
let's let's do this together. But the tough thing is to find your new partner and who you're selling it to that is not easy. As Peter mentioned, we did it through networking, it can do it through a broker, you can do it through other recruiters. But I think the networking is probably the best because you do business with people you know, and trust. And obviously the person that Peter and I knew, mutually, we respected and so I valued his opinion. Yeah. He said, You should meet this guy. I know you want to sell your business.
36:56
Is that pretty down on the low on the radar? I mean, how long have you been kind of thinking about selling? How many people even knew that?
37:02
Yeah, it's that's a great question. It took me probably three years before Peter and I did our deal. And two years before I met Peter. So when I met Peter, we had several conversations on for about a year just getting to know each other and, and I was doing a parallel I had a couple other candidates that were interested in buying the business as well. But prior to that, you know, just getting the business ready to sell getting candidates that you would want to buy the business. And then with with mother Pella, they have say and who can mother Pella mother Pella that's
37:43
funny today?
37:44
I think that's, I can say that right? Yeah. I'd left the other word out. Yeah. Yeah, it's it's something you do only once. There's some great books that you can pick up. There's there's different steps. But one of the things that owners need to think about when they transition is what they want to do after they sell their business. And I was very fortunate have a few hobbies, golf, hunt fish, occasionally. But I also like to help other individuals either sell or buy Pella branches. So I've got a consulting business and doing that. And I know that Yeah, and so I want to be had that. It's probably been four or five years now. That's amazing. Others I'm involved with three deals right now. And so that also gives me a backstop after Peters than put putting up with me talk about
38:39
a unique background, though. I mean, having been with Pella for your entire career in different avenues and then owning it. I mean, wow, that sounds like you could have no competition in that world. You are the you're the godfather of brokers. And
38:52
I feel that all too. So yeah, I think to your point you do things that you're good at and you enjoy. And I think the older you get, when opportunities come you have to you have to either say heck yes or heck no, yeah. Don't say maybe right. And too many times I've said maybe to be on a board I really didn't want to be on and then you're just going through the motions. So that gets back to your work life balance. You know, Do things you enjoy, be with people you enjoy, and don't do things you really don't enjoy. Yeah, it seems so simple. Yeah, but it takes takes a while to figure that out.
39:31
It takes discipline to Yep. And I bought for your side Peter. You know, your search of you know, I know you talked a little bit about you know, after Cambria hey, I want to buy a business. I'm getting excited about owning one. Walk me through your search process. Yeah, you landed on Pella.
39:44
No, it's uh, I appreciate the question and I just right it's like God has a plan and it takes it takes time. It's on his schedule, not yours. Right. And so I had looked at several different businesses had made serious offers on them only to see them get outbid by Private Equity backed by significant multiples that got me discouraged.
40:05
Was that through a broker or through networking, or that was
40:07
through network, okay, but I also talked to brokers. I mean, I had relationships with three or four different brokers that are constantly feeding you, you know, deals and opportunities. I spent a lot of time at private equity networking and private equity firms, for businesses that they were looking maybe to get ready to spin off, etc, I think one of the advantages that I had in coming into the palace system and I think a really important point of differentiation is that Pella wants and requires active owner operators in the business. And so that limits in some cases, private capital or private equity, from coming in, I think, you know, hopefully, that'll evolve over some time. But it's a really important part of the model seems really
40:44
wise to me. Yeah, no, I mean, having a silent partner, someone that just not that you need people with funding and money to own a business to but I mean, obviously, it just makes sense. If you're the owner, operator, you are in touch with your investment. And it seems very wise of pellet to have made that.
40:58
Yeah. And so, you know, like Ed said, I met him and it's a process. It's a process of approval through Pella. And it's a probably was I had to let Ed work through his process, as he said, he had multiple people that he was interviewing and considering for the business. And just by being patient with that, staying in touch with him, ultimately, for whatever reason for you know, it ended up being an opportunity that it was, okay, let's let's try to do this thing it was about a year was that it was about a year process for us. And there were some bumps and twists and turns along the way. I know for me, and I just give you a lot of credit for this, we were probably two thirds of the way through the process. And at one point, he he called me to the house you built for him and we sat down. And he just said, we're at the point where you and I just have to trust each other. And at that point that they'll all the anxiety of the whole thing just came out of me. And it was like I just gotta let let myself go and let this process go. And it's been we've been we've been full bore ever since. That's. And you know, Janice, and my wife and I talked about, we just got really, really lucky. Our process, I think was very different. Ed will tell you, we were in front of banks, and they would show up and you could see this weird look in their face. And like they were afraid to sit down. I'm not kidding you. Because we think we interviewed four different banks, or they interviewed us.
42:12
So you mean after you guys came to terms to bank? Yeah, well, yeah, yes. I'm
42:15
sorry. Yeah. So we had terms, but and then they were like, We're gonna sit down. And we're like I was we're like, why? And they were like, well, we are never in the room with the seller. And the buyer like this is not normal. So what's going on. And it was just because we had a very specific plan around transition. And I felt I think Ed felt that the value and what we were doing together, that it wasn't transactional, it was transitional. And that having edit the table and them showing that he that he and I had a plan over several years to transition the business and work together I think gave them confidence, right and knew what he was doing, give me time to come in and be really patient with the business. In hindsight, I didn't realize what a gift that was because I'm a little more like you mark in terms of person, I would have been in that we've been turning things over and doing this just to see right how the organization acted. And that wouldn't have been healthy for it. And so I was able to come in and just be really patient with the process to learn the business not make any significant changes in the first year was the was the thing that I committed myself to was a chance for Ed and I just to work together. And it was invaluable with hindsight. And I would tell you, if I would have done it the other way, I think it would have been much too much disruption for the organization.
43:26
Now that's interesting. I just thought of an analogy that we have a sailboat like steady ontact. And you and I are motor boats or jet skis and like, Oh, that's a good idea. I mean, at least for myself, I am. You know, I'm like a you know, the bunny, I'm just jumping every which way I need to surround myself. It's funny, as you look at a team, while my team is much smaller than yours. You know, hiring people that have a different personality. You know, not everyone on the team could have the same personality or? Well, that would be interesting. Yeah,
43:53
I would be the worst pilot, right? Like, I'd be out there in the cockpit. I'd be what is this? But yeah, what does that mean? Playing to be going? Oh, you
44:01
mean like when my dad flew the airplane. And that was that was a memorable moment? Well, just kind of here in closing, tell me a little bit about where you guys see the next couple of years. We didn't mean many would have to bring you back on. We even talk about probably what we were going to talk about just shortages and just navigating the last couple of years of supply and demand. But what we'll we'll say that for another time. Tell me a little bit about how you guys see the next couple years unfolding as far as the building market, specifically in Minneapolis. Like what are you guys seeing right now?
44:32
You know, you hear a lot in the media about being in a recession or going into recession, whatever that means. I think the advantage we have is we have so many sub segments. We have single family new and within single family new you have entry level, semi custom, custom and luxury and then in remodeling replacement, you have quite a few segments and commercial. So I think that it's still the future looks bright. I think there's all kinds of opportunity. I think the interest rates will slow down the entry level homes, obviously. But as you know, and certainly as Housing First is has explained very well, we have a housing shortage with the number of households, man, he's just 60,000 aside her, you just look at all the apartments going up, you know, there's a lot of households that want to buy, we have affordability issue at the entry level. So we certainly have challenges. But I, you know, that it's a healthy economy here. It's a diverse economy here. So I'm optimistic. And I also think the downfall of the last housing cycle, we won't go through that, again, that the conditions were different, there's too many speculations and very little equity in those homes. So I'm pretty optimistic. So I don't know what Peter thinks. Yeah, I
45:53
would agree. I mean, I'm always I hate being on tape, right? Because who knows what that future is going to be. But I too, am optimistic. I think the fundamentals are very different. I just came back from some Pella corporate meetings where all the owners were together, along with our, with our sales leaders across the country. It is yeah, so we had, you know, break 250 300 people in a room and they had an economist on who talked very much about the differences between, you know, oh, 60708 or nine to a now and we do have a very, you know, healthy housing stock, I would tell you, in the next six months to a year, I think the industry needs a bit of a slowdown and a pause, right, we need to catch up, we really do, Labor's a challenge for all of us. And I know for you as well. And so I hate to say that a slowdown is coming. I don't know if it is, but it would actually help us in the short term. And I think that the prospects over the next 12 to 18 months are are very positive. You know, Ed mentioned the affordability issue, it's a passion of mine, it's so frustrating in to be in the industry. And I'm sure you as a builder can relate, where you just see all of the rules and regulations and other things that drive up the cost of housing, and just recognize that the entry to homeownership for people in entry level homes in this market is is nearly impossible. And that has to change. It has to change for the economy, because right most people's wealth is in their homes, right across America. And those people deserve the opportunity to have an affordable home, and how we solve that as a as a as a state, but as in industry and at the Capitol. It's a very complex issue, but really important.
47:31
Yeah, I agree. I know, they talk about it at length. I mean, I think, you know, maybe a national builder is better equipped with getting their numbers. But I saw a stat that basically in Minnesota Housing First had this on a slide that I saw that basically, you know, the five, six states around Minnesota, that same house being built in different locations, it was like $40,000 More in Minnesota than the other states
47:52
were one of the worst in the country. Yeah, as it relates to those rules and regulations. And Mark, you know, we need those people because they gotta go into their second homes, and then their second home is probably right, where they start to get into your market for that a third, you know, home or dream home that those people are building in their 40s and 50s to live in. And so, you know, all that's feeders for the industry moving forward. So,
48:11
you know, I think, you know, a balanced market and a balanced sales, you know, you touch base on all the different segments. So you guys can do commercial, you can do low high and you guys can kind of do everything, which is amazing diversification Where are some of the fastest growing portions of your business over the last couple of years?
48:27
Well, certainly all of them quite honestly. Yeah, we've we've grown all of them. Commercial is probably the one that has the the biggest cycles, but what do you mean by that? Exactly? Well, it's either boom or bust I say and we have some very good years and commercial and then maybe the next year, you're working through the projects you just sold before you get the next big Isay project, you know talk a little bit about the housing stock Think of how many homes in this market are 20 years or older men every year there's another batch then what do they need roofing siding windows right so that that is always a consistent growth market.
49:11
You had mentioned one of your competitive advantages over other window companies was selling directly why is that? Why did Why do the other window brands not adopt your model and or has it Pella always had that no one else has like why why is that?
49:25
Yeah, I think that's exactly it. That's where pela started. That's how they did it. Way back 126 years ago, they were selling green screens. They were they were selling roll screens Door to Door
49:37
Man. The roll screen that you guys have in your double hung windows is next level. That's impressive. It's funny because I did my own remodel on my home. And I know PAL is doing a spotlight on our home video in a video and I think like three months later, they rolled out with that Architect Series window now it's called the reserve with the roll screen in the window and I was like what I didn't even know about this. I probably would have waited because it's that cool.
49:57
There's some very cool things Yeah. Ah
