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Dakota Supply Group (DSG) has a rich history; founded in 1898, it recently celebrated its 125th anniversary. DSG has proudly contributed to building our nation for more than a century. Boasting 54 locations across Montana, North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Wisconsin and Michigan, this wholesale distributor offers a staggering inventory of more than 130,000 items. Its extensive produact range spans sectors such as electrical, plumbing, HVAC, refrigeration, communication, utility, automation, and on-site sewer, water and wells.
As prominently stated on its website, DSG stands firm in its commitment to service, championing the slogan, “We enable building futures.” The company’s vision extends beyond business; it’s about nurturing communities, customers and employees.
DSG operates as an employee stock ownership plan (ESOP), fostering pride in workmanship and service among its 1,000 employee owners. Bold proclamations in videos on the company’s website and social media platforms encapsulate its ethos: “Building futures, one job at a time.”
Catering to electricians, plumbers, HVAC technicians and contractors who operate in the realms of residential, commercial, industrial and municipal projects, it’s evident that DSG is deeply invested in building futures. At its heart, the company’s vision is clear: “To serve the people and industries dedicated to building our communities.” DSG’s success hinges on its foundational core values — integrity, commitment, teamwork, respect, and excellence — propelling the company to exceed expectations.
With a solid standing for 125 years, we wanted to hear more about the company’s milestones and future plans. We sat down with Paul Kennedy, president and CEO of Dakota Supply Group, to hear what’s in store.
“DSG is in a unique position in our market, being proudly independent and one of the most diverse wholesale distributors of innovative products and solutions for many industries,” he says. And that is just the start.
The Wholesaler: DSG has come a long way, growing from a single storefront to establishing numerous locations across states from Montana to Michigan. In 1991, employee ownership was reestablished, laying the foundation for ongoing growth. What other milestones have guided its current trajectory?
In 1898, a small plumbing supplier in Fargo, N.D., opened its doors and little did they know it would expand into something truly incredible, spanning eight states, serving multiple trade industries, having 54 locations and powered by 1,000 incredible employee owners.
DSG grew and adapted through the times, continuing to meet customer demands, expanding our regional footprint and bringing new product lines to our communities.
DSG was, for most of its history, Dakota Electric Supply Co. After expanding into new territories and supplying more than electrical, the company switched to the all-encompassing brand our customers know and love today — DSG.
In 1991, four employees repurchased the company, investing their life savings with support from a handful of other employees to establish a KSOP (combining an ESOP with a 401(k)), pioneering the culture of employee ownership we are most familiar with today. There were 65 employees and two locations at the time.
DSG became 100 percent employee-owned in 2006, a pivotal moment in the growth and development of our workforce. All employees had a higher stake in our collective success, and the impact of progress would reward everyone involved in building our future together.
In 2023, celebrating 125 years young, we’ve reached 54 locations across eight states and hired our 1,000th employee.
TW: DSG’s purpose, vision and core values steer the company and contribute to its longevity. Could you provide more insight into these guiding principles and how they drive the company and its growth?
Our purpose, vision and values are relatively new to the organization but have since helped us develop a common language on who we are, who we want to be, why we exist and how we achieve the growth we want to continue seeing.
Our purpose is why we exist, a question every successful company must define before developing a growth strategy. DSG’s purpose is “To build futures, one job at a time.”
How we fulfill that purpose is through having a clear vision to guide our everyday decision-making: “We serve the people and industries dedicated to building our communities.” This keeps us focused on what matters most: staying intentional and moving forward.
Our five core values are the characteristics and behaviors of our employee owners, the way we carry ourselves every day for our customers, our supplier partners, and for each other to stay true to the purpose and vision. These were rolled out this past year through leadership at the local level, facilitating employee-owner input to define further what the values in action mean at DSG.
1. Integrity: doing the right thing, being ethical, honest, and fair;
2. Commitment: being dedicated to the success of our fellow employee owners, customers and partners;
3. Teamwork: working together toward united goals;
4. Respect: carrying ourselves with empathy, consideration and a willingness to help others;
5. Excellence: elevating performance beyond expectations.
TW: DSG prides itself on exceptional customer service, distinguishing itself through three unique services. What is the Customer Service Guarantee Plan and how does it set customers up for success?
DSG considers every one of our customers to be a partner; their success is key to our own.
Although the Customer Service Guarantee is no longer an active program, the principles remain a facet for our customer-facing employee owners.
They included optimizing systems and processes for order precision, a seamless return or replacement item process, and always having popular items in stock. These are all areas of opportunity we recognized early on to see customers succeed.
What we have in place today to support our purpose, vision and values is a brand promise, focusing more comprehensively on what we do for customers.
Our team of employee owners consistently goes above and beyond to ensure our valued partners are set up for success. Whether it is delivering the right solutions, providing service from knowledgeable specialists, or expanding customers’ technical training and business know-how, empowering their future is part of the everyday job for us.
We do more than supply products. We are a part of their communities, helping them support clean water, power buildings, heat and cool homes, enable energy automation, provide high-speed communications and build futures.
TW: DSG operates across multiple states. Its purpose is intertwined with investing in the communities it serves. What are some examples and the impact it has made?
DSG’s flagship giving program centers around granting our employee owners the opportunity to give back to their local communities through volunteerism at charitable organizations of their choice. We offer eight hours of paid volunteer time off annually as a benefit to employee owners.
In 2022, more than 1,080 hours were put back into our communities because of this benefit. This year, we have plans to double that impact.
In 2023, we have seen an increase in local leadership advocating within their branch or region to make a difference in their community. Here are a couple of recent inspiring examples of true champions taking ownership.
1. In August, 20 passionate employee owners from six different branches in Minnesota gathered at the Greater Twin Cities United Way’s Action Day, where they packed more than 600 backpacks for kids in need of school supplies.
2. In May and June, our branch in La Crosse, Wis., exceeded its goal of achieving 125 collective volunteer hours at the local food bank and community garden. It also joined the other three branches in the state to pack 125 backpacks distributed to the Boys & Girls Clubs of Wisconsin.
These are incredible examples of regional teams banding together to make the best local impact possible for causes they, as owners, care about in their communities, all backed by the purpose of building futures.
“Doing Something Good” is more than a hashtag at DSG. It is a mindset we share as employee owners in our communities as we collectively can make a difference in building futures at the local or regional level.
TW: The importance of investing in the future of the trades was initiated with a Kid’s Club in 2007, providing children of employee owners and customers an opportunity to experience and understand the industry. What other initiatives promote the growth and development of the trades?
DSG is always looking for innovative ways to connect and engage with our audience, including the next generation of tradespeople who will become customers.
Our efforts moving forward will focus on reaching beyond our customer base and into the communities we serve, which will make a greater long-term impact and create meaningful connections with our customers, partners, employee owners and those around them.
An example is our recent investment in a premier career academy in our region. In March 2023, DSG announced a long-term partnership with the Moorhead Career Academy in Moorhead, Minn. DSG is helping shape one of six custom career pathways, the Distribution, Manufacturing and Transportation Career Pathway. Through this partnership, the wholesale distribution industry will have representation in our public school system.
We are proud to be at the forefront of this educational movement to help our current education system better serve distribution, manufacturing, transportation, skilled trades, and more.
In that sense, we are building the future in alternative high school education with this partnership while also building a promising talent pipeline for ourselves, possibly even our customers and supplier partners. This approach is more inclusive of the entire supply chain of our industry, from the manufacturers to suppliers/distributors to our customers.
An additional way we promote the growth and development of the trades specifically is through our scholarship program, the DSG Education Connection Fund.
Since 2009, we have helped build the futures of nearly 125 high school seniors interested in continuing their education and pursuing a skilled trade, a very fitting milestone this year.
In 2023, through our generous donors and our company contribution, we were able to grant 14 scholarships to high schoolers from five different states, ranging from $1,250 to $2,500.
TW: In the face of a rapidly changing business landscape, what strategies have you implemented to ensure its continued growth and competitiveness?
The future of our industry relies on creating seamless digital buying experiences. Our industry is behind consumer-facing companies in harnessing the power of data and insights to bring helpful recommendations to customers through multiple touchpoints at the right time. Because of this, we have made strategic hires to drive our digital strategy, most recently an e-commerce director, a data management director and a chief digital officer.
Additionally, DSG has partnered with the National Association of Electrical Distributors’ Education and Research Foundation, known as NERF. It provides education, training resources and industry research, digitizing our industry and aligning with our strategy and our purpose of building futures.
On top of investing in our industry and its future, we heavily invest in our people at DSG: a professionally sourced, in-house leadership development program for equipping managers with critical leadership skills to help their teams thrive called LEAD DSG; opportunities for all associates to explore multiple career pathways; internal training initiatives resulting in a robust learning management system; and offering a work-life balance to meet the needs of employee owners of all backgrounds through a progressive benefits package.
These are a direct result of having a highly engaged workforce with a stake in our collective success as employee owners through our ESOP.