Growth has been part of the Gustave A. Larson Company ever since Gus Larson founded his business in Madison, Wisconsin, in 1936 as a supplier to the refrigeration trade. Within a year of opening a storefront in Madison, he expanded into Illinois and, in quick succession, added new branches in Wisconsin.
His business model was centered around being large enough to provide whatever the customer needed to be successful, while always maintaining a personal touch to care about their every need.
This approach is very much alive within the company today as his grandsons, Andrew and Scott Larson, move the business forward. The Gustave A. Larson Company is comprised of 53 locations, including two distribution centers, across 20 states from Ohio to Idaho. Along the way, its 450 employees have built a world-class logistics and distribution system that makes it easy for customers to get the products, parts and service they need.
Based in Pewaukee, Wisconsin, the company is family-owned and operated with Andrew serving as chief executive officer and Scott as president and chief operating officer. Scott and Andrew, both of whom have their MBAs, joined their father, Karl G. Larson, in the family business in the 1990s after establishing successful careers of their own in investment banking.
Having that outside perspective was really important. Our father was pretty wise in many ways and he didn't encourage us to work in the business, other than working in the business during high school.
—says Scott Larson
Scott Larson acknowledges that there aren't too many family-owned companies that successfully transition to the third generation. Because he and his brother brought different skill sets and experiences to the company, they've been able to look at it with different eyes.
"Having that outside perspective was really important. Our father was pretty wise in many ways and he didn't encourage us to work in the business," he says, other than working in the business during high school.
He also credits his father with having the foresight to establish an independent board of directors that continues to help to provide guidance to management. "They help us keep an outsider perspective and it adds a level of accountability to somebody other than ourselves."
While the company is based in Pewaukee, Larson does not like to refer it as the "headquarters." Calling it the headquarters, he says, implies that this is the central point of the company.
"The most important place in our business is where we're serving customers," he says. "We look at the local branch and the sales team as being the most important place in our business. We have 51 branches so we have 51 headquarters."
How the Larson Company has expanded has changed over the years, Larson says. Under Karl Larson's leadership in the 1970s and 1980s, much of the growth came through opening new branches in new markets. It was a time when the company was able to acquire brands and they expanded west into Minnesota and the Dakotas.
When Andrew and Scott joined the business in the1990s, there weren't many new territories ripe for expansion. The company's growth strategy would instead be through acquisition and the Larsons expanded into Chicago and then Nebraska, Colorado, Utah and Idaho.
Larson emphasizes that the Larson Company's acquisitions have all come about because the team took advantage of great opportunities to pick up new brands or move into new markets. "It's always been about leveraging our logistics, distribution and shared services," he says.
The company now utilizes two distribution centers - in Pewaukee and Laramie, Wyoming - to reach its branches across the 20 states where it operates. Leveraging its distribution center in the West, he says, has helped the company achieve a long-held goal of becoming a world-class distribution and logistics operation.
With the scale of its operations, the Larson Company has five regions, each of which is operated by a general manager who has P&L responsibilities: Great Lakes, East Central, North Central, Plains and Mountain. "We have a lot of decentralized decision making," Larson says. The field sales managers, sales consultants and store managers report to the general manager.
The teams go through each branch to determine if the needs of the local market are being met and then hold monthly follow-up meetings to ensure targets are being met. It's a pretty thorough process,
Meanwhile, the corporate office works to support the general managers and their staffs. "Their job," Larson says of his corporate staff, "is to support and help drive results throughout the whole organization."
The sales and operations functions within each region work closely with the corporate office on reviewing results and planning for the following year. "We look at the customer experience from the operations management side," Larson says. "The teams go through each branch to determine if the needs of the local market are being met and then hold monthly follow-up meetings to ensure targets are being met. It's a pretty thorough process," Larson says.
With 51 branches, some of which have been recently acquired, achieving a standard look and feel for each location is an ongoing process, Larson acknowledges. But the goal for every location is to make it easy for customers to get in, get the products they need and get out. "That's something that Karl was very passionate about - self-service branches," Larson says. "Get the product out from behind the counter and out to the front."
"We want very much to service the business owner, get the technician in and out of the location quickly. Their time is money," he says.
How soon the Larson Company transitions its newly-acquired companies to the Larson brand depends on each business being acquired.
"We try to be sensitive to the customers in the local market in terms of what we change," Larson says. "We want to make sure that we're taking the time to communicate what our company is all about, what our core values are all about and how we service customers."
All of the Larson Company branches offer what Larson calls the "three legs of the stool" - residential HVAC, commercial HVAC and refrigeration. In the company's most recent acquisition of Superior Distribution, which added five branches in Indiana, Kentucky, and Ohio the branches were converted to Larson branches immediately because the company been exclusively handling residential HVAC equipment.
"We know that when we're firing on all cylinders in each of these three areas, then we're more successful as a company," he says. "We wanted to be able to offer all three legs of the stool with Superior."
We want to make sure that we're taking the time to communicate what our company is all about, what our core values are all about and how we service customers.
"Legendary customer service" has always been part of the Larson Company culture, so instilling this value with new employees is important. Larson says this involves the basics: answering the phone before the third ring, having an employee who can understand a customer's issue and possessing the technical knowledge to give them an answer or a solution.
Another important cultural norm for the Larson Company is adding value to the customer. "It's about helping our customer be more successful so we're not just the company that has the lowest price but we're the solution seller, solving problems for the customer to help them make more money."
The Larson Company also provide a number of third-party services for customers - whether they need a crane or a new website. "We've taken this further in terms of offering value added services. There are so many different ways to wrap ourselves around our customer needs," Larson says.
Being the solution seller extends to education. Karl Larson was particularly focused on educating his customers in all phases of HVAC and HVAC business. It was Karl who started the Larson Learning Center (LLC) that brought training and education classes to the local markets. It began as technical training with dedicated rooms set up in the branches, whenever possible, to hold classes.
The technical training was so well received that Karl Larson began adding business training for both customers as well as his employees. "We were training them to be better business people," Larson says.
Today, the company is rolling out training to its dealer base through Larson Company's online portal. It's a natural extension of how business is done today, he acknowledges, as their customers are spending more time on the road taking care of business and have less time to spend in the classroom.
"We are always looking at how we can add value to the customer," Larson says. "Identify their pain points and then try to take it away so it can make them more successful and tie them closer to us."
This extends to offering online and EDI services for their customers. "It frees them up to be able to do business more effectively with us and to give them more information at their fingertips," Larson says.
Called E-fficiency B2B, this online portal allows customers to order online 24/7, check stock, availability and pricing and check invoices, among other services. "This allows the small independent business owner to not have to worry about getting an order in by 5:00 and choose how they want it delivered."
Larson says the company has also adapted to EDI. "We were on the forefront of EDI with suppliers 20 years ago," he says. "Now we're seeing it take hold at the customer level."
While primarily larger customers and customers who are part of buying groups are currently using EDI with the Larson Company, Larson says this will continue to create greater efficiencies as more customers adapt it.
"Pushing efficiencies is key," he says.
In every aspect of its operations, the Larson Company continually examines how it can get products to customers faster and how it can do this as efficiently and as cost effective as possible.