Episode Transcript
[00:00:03] Speaker A: Welcome to AINA Insights, where prominent leaders and influencers shaping the industrial and industrial technology sector discuss topics that are critical for executives, boards and investors. INA Insights is brought to you by INA AI, a firm focused on working with industrial companies to make them unrivaled segment of ONE leaders. To learn more about INA AI, please visit our website at www.ina.AI.
[00:00:40] Speaker B: Welcome to another episode of the Titanium Economy Podcast hosted by ina. Today we are honored to have with us one of the most accomplished leaders in the sector, John Engel. He is the Chairman, President and CEO of Wesco International.
Wesco ranks 195 on the Fortune 500 list and is a global supply chain leader operating in more than 50 countries and generating more than 24 billion of revenue every year.
It operates in three segments, electrical and electronics solutions, communication and security solutions, and utility and broadband solutions.
Wesco works behind the scenes to enable the whole industrial ecosystem and John, with his focus on innovation, resilience and culture has led this to become one of the most influential companies in the industrial ecosystem today.
John himself joined Wesco as COO in 2004 and he took the reins as CEO in 2009 and became chairman in 2011.
Prior to joining Wesco, John had leadership positions at Allied Signal, General Electric and Perkinelmers.
John today sits on the board of the North American association of Manufacturers and he's a former director of U.S. steel.
John has a Bachelor of Science in Mechanical Engineering from Villanova and an MBA from University of Rochester.
John, it's a pleasure for us to have you on this podcast with us today.
Before we dig into the details of the conversation today, I want you to recognize one thing.
Wesco has been included as part of the i250 cohort, or what we call the Industrial 250.
The i250 is Iona's campaign to highlight 250 of the most important industrial companies who have meaningfully contributed to the American growth story in the past and probably as importantly, are in the leadership position to shape that growth story in the future as well.
Industrial as a sector accounts for about a quarter of the US market cap. It accounts for more than 60% of our exports. It accounts for about 20 million of employment generation in the country today. It's literally one of the most important sectors nobody talks about.
Wesco is a leader within that segment and has an enviable track record of continuous value creation of over nearly a century.
But probably more importantly than just purely the numbers of value creation, the role Wesco plays in enabling not just the industrial ecosystem, but also in many cases the non industrial ecosystem in terms of delivering value to the end customers is something to be very proud of and we feel honored to include Wesco as part of the i250.
And John, looking forward to our conversation here and learning more about Wesco's role in enabling the industrial ecosystem.
[00:03:30] Speaker C: Well Gaurav, first let me say we're honored and we appreciate being part of that conversation. I have to say I think it's a testament to the customers and markets we've served for over a hundred years.
Wesker is a leading B2B supply chain solutions company and operates in over 50 countries around the world. So we're, we're very focused on supporting the infrastructure that people rely on every day.
That's from data centers and utilities to commercial buildings to broadband networks to industrial factories and industrial facilities of all types of so when I think about Wesco and really our impact in the industrial economy, what I think about is how we're working in our ability to serve customers, increasingly complex and global infrastructure needs and supply chain challenges. I know we'll talk a lot more about that and we're doing that with an array of supply chain solutions at scale. So as you think about the secular trends at that are alive and well and enduring at this point. Digitalization, AI driven data centers, increased power generation and reliability, electrification, reshoring, near shoring. Wesco plays a critical role at the center of that ecosystem providing and addressing solutions for our customers. Very challenging supply chain needs.
[00:04:58] Speaker B: John Wesco is a Fortune 200 powerhouse with more than 25 billion of revenue. But often it kind of flies under the radar when in terms of conversations we talk a lot about these days, SpaceX, Facebooks and Google's of the world. But don't feel Vesco gets a deserved share of those discussions. Maybe for our listeners tell us a little bit about Wesco's businesses, operations and the role it kind of plays.
[00:05:26] Speaker C: So we're a complete supply chain solutions company and again operate in over 50 countries around the world. Vision is to be the best tech enabled supply chain solutions company in the word in the world. And the operative words are tech enabled. Our mission is to build, connect power and protect the world and specifically that's with respect to customers, their, their big infrastructure projects and their and their global supply chains.
So we tend to operate behind the scenes though with customers some to a degree what you alluded to in your question, we're behind the scenes, we're in the B2B value chain. We play this critical role but these Enduring secular trends really position us to provide complete solutions for our customers. And I want to highlight those again because I think they're very exciting. Digitalization and AI driven data centers, increased power generation, grid reliability and all things electrification and reshoring and near shoring back to North American markets. So we help customers solve those. There are complex challenges and problems. We're much more than a product space distributor. We've evolved into a full services and solutions provider. And what we bring to the table is we rely on our global scale, our expanded portfolio of product services and solutions, our increased domain and technical expertise, our expanding digital capabilities and our supply chain domain knowledge and prowess.
[00:06:59] Speaker B: So John, under your leadership of about 15 years, Wesco has delivered enviable returns. Like 15% CAGR over that tenure is incredible. Every time we do a chart, a scatter plot of returns, Wesco is in the top right quadrant all the time.
Maybe tell us a story behind the numbers. What has it taken to get to Vesco to that type of a return generation?
[00:07:22] Speaker C: I think it starts and is grounded on a relentless focus on long term value creation. We build a services led business model. As I, as I mentioned earlier, it's more than products, it's complete services and solutions. We've invested in secular trends and then we've also aggressively executed a disciplined M and A program scales what matters in distribution.
So we have a very strong balance sheet. We've had a leadership position but we've been aggressive with continuing to use our balance sheet to scale up our business, add scale and expand our capabilities.
And probably most importantly, in conjunction with all those, we've fostered a high performance culture. It's a culture whose attributes are speed, agility, relentless drive and execution and continuous improvement.
So we're driving this, this enterprise wide digital transformation. Now relying on all these other things that I mentioned about this is really the next phase of our journey. And this is an enterprise wide digital transformation where we're digitizing every part of the company.
Obviously AI is at the centerpiece of that and we're unlocking the power of our big data. I know we'll talk a lot more about this, but our greatest asset that we have is people. Our next greatest asset that doesn't show up on the balance sheet is our big data.
So digitalizing our company and unlocking the power of that big data allows us to run the business much better, drive better decisions, greater productivity, greater growth and ultimately provide more value to customers.
[00:09:03] Speaker B: So John, in early 2000s you entered into a merger of equals, Annixter and We all know the world was falling apart with COVID in 2020, I think your share price went from 60 to 20, if my memory serves right.
I think anybody was following Wesco, following all the commentary which was encouraging you to back away from the deal.
I think in many ways it's a case study of, at least from the outside, a case of courage and conviction that you went on with the deal. I think the numbers are there. Any metric you kind of look at, you outpaced your targets. Your share price accretion has been at 3x levels of what S and P has delivered. So it's been a home run in that respect.
But again, I do feel there's a story there in terms of how you went through that period. What gave you the conviction to not back off and go in many ways all in maybe walk us through a little bit of what it felt to be in your shoes at that time.
[00:09:57] Speaker C: Yeah, I think it's really indicative of clear vision, clear strategy, relentless drive and execution. So it's really what occurred prior to the pandemic that's important.
Working on our long term strategy, it was clear to us that we as we had a leadership position, but we were going to continue to scale up the business. As I said, scale is what matters in distribution.
But it was also very clear that we had to digitally transform the company. And this is back in 2018, 2019, the B2B distribution value chain had not seen the benefits of digitalization. The B2C retail distribution value chain had. And we've all been the beneficiary as the C, B2C, the consumer at the end of that value chain.
I used an S curve analogy with our investors in 2019. If you go back to that investor day that said industries like companies and products go through the proverbial S curve.
Retail distribution value chain had been going through it. And think about how over the last two decades it's been digitally transformed. We as a consumer have tremendous benefits in terms of digital products services at our fingertips. B2B was at its infancy at the beginning, part of the S curve. So. So that's the foundation. We continued to scale up, used our balance sheet, did acquisitions. But we sent a message to investors in 2019 that the bigs had to start to come together.
And because at that point in time, suppliers were consolidating at a faster rate. So we were going to lead that and we were going to lead, you know, a series of larger acquisitions of Bigs as the leader. We were going to lead that and then use that as a catalyst to digitally transform our business.
So what happens? Annexer decides to go private years ago shop, period.
We jumped into that process after a long competition for that we were able to overturn that. The Annexer board agreed to sell to Wesco and we combined these companies.
This was announced in the beginning of 2020, pre pandemic. So as you mentioned, yes, our stock price took quite a hit. We were at the $60 mark when the acquisition was announced.
Pandemic hits. Next thing you know we're in the 50s, 40s, 30s, below 20.
We, we, we again had confidence in our strategy and we did have the discipline and the, and the strong mindedness to stay the course because we, we saw the value of taking these two equal sized Fortune 500 companies, both leaders in their own right. But the portfolios were so complimentary to put those together. So despite having the, the backdrop and challenges of a, of an unprecedented global pandemic, we stayed the course, we executed, we delivered this and built a tremendous company. And by the way, that's what we did. We actually took the opportunity to build a new co while staying in the public domain.
So it may be as a final point, new vision statement, new mission, new company values, new organization design, new SEC reporting segments, new leadership team.
And here we are. That that new leadership team now had the ability to take advantage of a leading expanded portfolio and an unmatched global footprint. So yes, it's a great story. That was five to six years ago and we're really starting to see the benefits of that combination. We clearly saw benefits through the pandemic, but now we're on the other side of it. The secular trends have kicked in and we're seeing the power of what we built and it's very exciting.
[00:13:46] Speaker B: John, if you'd mind, I can ask you a follow up on that one. Because one thing we struggle at least it's not happening I think too much in your sector. But for folks who are less than 10 billion, we are seeing analyst coverage kind of dissipate and investor management is not a topic which I think a lot of folks, I mean if you did a G4, 10, you'll see people talk about it. You mind if I ask your question? I think that what it felt with managing investors in this period.
[00:14:10] Speaker C: Yeah, so. So during that period, obviously, you know, I had been at the helm for, for, for more than just a few years, so.
And Wesco had always been acquisitive. But this was a major acquisition. Again, an acquisition of an equally sized company is very challenging. We've studied all the other companies that did that very hard to deliver the value. I know we'll talk more about that.
But for investors in particular it represents a huge challenge because how many quote unquote mergers of equals have really been successful and have delivered the business case or the value they committed to?
So we, we had a lot of communication with investors. I will tell you during the pandemic as it hit and our stock price was dropping, there were a lot of investors that said you've got to get out of this deal. You can't do what's the break fee? You should, you should pull out. I said no, it's more strategic than ever. And here are the reasons. The one thing we did and this is when our stock had dropped into the 20s again. The deal was announced in January. We ended up closing in June of 2020. But in March of 2020 we chose a major investor conference and we went public.
I went public with post 3 year value delivery goals for the combined. So I said look, this is going to be transformative 3 years post close because we're full speed ahead on this. Here is what we will deliver in terms of sales growth, margin accretion, here's how fast we'll deleverage and increase cash generation.
And we established those targets and said we will measure against this each and every quarter.
And we put that out there publicly. And we had not closed the deal yet. We had not even financed the deal yet. So we proceeded then to create a floor to the stock. We proceeded to finance the deal pre close and we closed in the middle of the year. And then I, I'm very happy to say that we beat and raise those targets over a three year period. What I'm most proud of is the most difficult synergy type to deliver with any acquisition is what sales.
And so we committed to 1% of the pro forma sales net of any sales dis synergies. To deliver you had two eight and a half billion a year companies and eight and a half billion in sales to 16 at 17 billion. We committed to 170 million of incremental sales synergies net of any sales dis synergies over a three year period.
We committed to that and we built it into the financial profile. We ended up delivering over 2.4 billion.
And we developed a secret sauce around cross selling. The beauty of this combination was these portfolios were truly complementary. There was actually very little overlap.
So figuring out the recipe on truly doing cross selling across the entire portfolio was an incredibly important objective of the integration plan. And we've done that. So we're still realizing those benefits today. For each and every customer, we sell the entire portfolio. And it's incredibly important because what's one of our hallmarks, different than most of our competitors by far, is the number of end user customers we have versus contractors and integrators, which are also our customers that we serve very well. But these end user relationships, where we're closest to the end application and we're able to bring our full portfolio gives us a very unique advantage of delivering value where it really matters.
And we sell to 90% of the Fortune 100 companies directly. So again, I think it's a great question.
Managing investor expectations is always a challenge. It's an exceptional challenge when you have something like the pandemic occurring and you're putting two equal sized companies together. But the only way to get through that is you're going to have to actually, actually commit to here's the targets and then measure against it each and every quarter with full transparency.
And if you do that, you build the credibility.
[00:18:27] Speaker B: John, you talked about how culture was the key to success as the two companies came together.
Obviously Divesco had its own culture and had its own culture. You came up with a new one for the whole company. What did it take to kind of get it to a level where everyone
[00:18:41] Speaker C: is, I mean, first I have to say I do think culture trump strategy. You know, strategy is incredibly important. But when you look at, you know, major combinations, transformational combination over decades of business history, what is the driver of success? Or let's say it this way, typically if it does not succeed, what's the, the top driver of it not succeeding?
Cultural issues, cultural mismatch.
So we spent a tremendous amount of time on that.
There were some core elements of each culture that matched up pretty well. I will say, in addition to culture, I always believe that best talent wins, always.
So we worked the talent equation very aggressively with culture. And as I mentioned earlier, we took the opportunity to build a new CO in the public domain.
So think of it as kind of an LBO in the public domain. To build this NewCo, New Vision started with a clean sheet of paper, new mission statement, clean sheet of paper, new company values went out to our workforce, engaged inputs from thousands of our folks through three cycles to refine the wording of the values that took 90 to 100 days.
New organization design.
Everyone was evaluated for their role, starting with my direct reports on down.
New SEC reporting structure for the PNLs, new talent and leadership team. When we were done and we had the new team solidify.
Yes, we acquired Wesco, acquired Annex. These are two equal sized companies, but 51% of the management team was annexed. When you took all management layers.
After we had that assembled and we were executing for a period of time, I'd say three years post close, we had a third that was Wesco, a third that was an issue. A third we injected from the outside. So we've got the strongest leadership team we've ever had as we sit here at this moment.
And I think that's required in conjunction with culture. The culture is incredibly important. We use an employee engagement survey, we do it biannually. We just got those results. They were stellar. They showed improvement over the last series of results. So we feel very good about that and we work on culture every day. But it requires the best talent and the right talent. And again, our culture is one of speed, agility, disciplined and relentless execution and continuous improvement. And that's really important. Lean is foundational to how we run the company.
And we introduced agile development as part of our digital transformation when we put these two companies together. So I think we have an interesting secret sauce of Lean plus Agile that we continue to build off of.
[00:21:41] Speaker B: John, Wesco has a history of more than a century and you're leading it on a digital transformation. You're very open about the fact that people are your number one asset, but data kind of follows pretty closely after them.
Maybe walk us through what it takes to move a company which has got century of history behind it into a digital journey and both from a customer perspective and from an operational perspective.
[00:22:04] Speaker C: Well, I think first the recognition that big data is incredibly important and because of where we fit in the value chain, we have a unique set of data around our customers and their operations and our supply chain needs. We have a very unique set of data around our suppliers, their products, how they fit together with our services and how they match customer applications. And we have unique insights on all our transaction data. So I think starting with the acknowledgment, the recognition that our big data is something that's an incredible asset and we want to turn that into a competitive advantage that was foundational to our digital strategy.
And so we, you know, we're in the midst of this digital transformation. It lines up very nicely with the acceleration of AI.
And obviously what we've, we've taken a very interesting approach. We're looking at building a completely connected digital ecosystem and supply chain starting at the customer. So we start with the customer.
We, we are the Next step in the value chain and our supplier partners. And we're very much focused on applying our digital applications and AI to our customer solutions and how we interface with customers, improving our operations and how we partner with suppliers. The centerpiece of our digital transformation is a world class data lake. We're building a quote unquote AI native tech stack for a Fortune 200 company. In fact, when we're done, we have a few years left to go. It's a complete new tech stack for our entire Fortune 200 company.
Think about that. We're doing that while we're in the public domain and it's best to breed subsystems. Our own proprietary architecture wrapped around one world class data lake.
And we're hydrating all our data, customer data, supplier data, our own data into this data lake. So that becomes the centerpiece of really how we're going to use digital to unlock the value of that big data and serve our customers better. We have an array of generative and agentic AI applications already running and so we've been recognized by a few external bodies on what we're doing with AI. So I think, you know, the reality is this, right? I think we had, we had launched down this digital transformation journey well before, you know, AI was the operative word of the day.
You've got to have command and control of your data to really unlock the full power of it using AI. And so we're on that journey. But I'll end on this point. It is all about creating a much more efficient, effective business to serve customers better. And we're making great progress on that front.
[00:24:50] Speaker B: John, you've spoken very, very vocally about how critical innovation is for Vesco. And if you take a step back, Vesco is in the distribution space, not related or at least not linked with innovation that cleanly. But Vesco clearly is driving a lot there. You talked about data transformations, you talked about, about AI. You walk us through where you're seeing value come from AI and potentially where it's still maybe a couple of steps behind.
[00:25:15] Speaker C: Well, well our, our approach is, is, is very focused in terms of let's get our own house in order first.
And it starts with, again I mentioned this earlier, it gets back to your data, the quality integrity of your data, customer data, supplier data, product data, services data, all the transaction data with all the various attributes, getting command and control of that, improving the quality and fidelity of that, putting it under configuration management and control is imperative.
And so I see a lot of companies moving very fast in terms of trying to do AI applications but their underlying data quality and integrity has, has substantial issues and challenges which is causing them quite frankly to not see the benefits of AI because you know to over, not to overstate but the quality, the, the quality and fidelity of your AI application is directly proportional to the quality and fidelity of your data.
So we've taken that approach first. Second thing we've done is focus inside our four walls. First. This is a part of getting your own house in order.
I'm highly confident this will provide exceptional values for customers on that end of the value chain and suppliers on the other end of the value chain. Again, we're in the middle but let's, let's first really demonstrate, learn and demonstrate that we're getting the real value inside our four walls.
So we worked on, invested in our big data. This has been a multi year process and will never be done, will constantly be refining and improving our data. We've added a tremendous number of attributes, actually order magnitudes of attributes we've added that we're now managing. But it's also about applying generative AI and agentic AI to our own processes inside our four walls. And as I said, we're using generative AI more for I'll call it the analysis or analytics based priorities.
We're seeing good value there.
Agentic AI we're doing in conjunction with robotic process automation, in conjunction with RPA on some of the repetitive and I'll call them lower level tasks and then freeing up our folks to do more value added work. So to be fair, we're in the early part, this is going to be a decades long journey. We're in the early part of this journey journey. We're seeing some benefits, but we're seeing the benefits because we, we've spent years on our big data and we're taking a very focused approach on where we're applying the generative and agentic AI applications inside our four walls. And we've been clear with customers and suppliers. We're highly confident that it's going to deliver tremendous value to you.
But as, as we bring that to bear on our relationship on the customer end of the value chain, supplier end of the value chain, when we do that we will have confidence and maturity and so the value you'll see, the speed to value will be there. And this is where I think not every company is taking the same approach and some are, are just moving with lightning speed into AI and they're not seeing the benefits because of issues with data, but also where they're, where they're applying it and I think selection of the use cases is also very, very, very critical.
That's use case selection is, is vital to really seeing value and not trying to solve, you know, the entire problem with the initial AI applications.
Bite sized problems to start with. So hopefully that helps.
This is, you know, everyone's learning and on, on how to best use AI I believe and I'll predict that you're going to see large disparity between winners and losers in terms of the ability to really leverage the power of AI.
[00:29:18] Speaker B: VSCO occupies an enviable position in the whole industrial landscape. You see so many suppliers, you see literally the whole ecosystem from a customer perspective. We've talked about trends like reshoring really being tailwinds for the sector.
How do you see those trends panning out over the next few years?
[00:29:37] Speaker C: So I'd like to answer that question in the context of decades. I think it's really important.
The global pandemic put an electron microscope on the extended fragility of the global supply chains.
If you take a multi decade view and I'll just kind of start with the US but it's true for European countries and other countries around the world.
You know, most of the different value chains and industries I had been in across my four decades, manufacturing was getting outsourced south of the border into Southeast Asia.
And what happened over a series of decades was you have these global extended supply chains that were built and honestly, you know, if you looked at them, no one ever predicted a black swan event where the world would shut down supply chains in a global synchronized manner.
And so these extended supply chains in some cases were single threaded.
Single threaded.
So the pandemic did that. This is the really the result of the pandemic.
So what's happened as a result? Supply chain is a C suite priority now.
It's a board level priority, it's a country level priority. You're now hearing heads of countries around the world talking about supply chain, the importance and what they're going to do relative to it. So it has created a completely different dynamic.
And I've used the analogy the knife edge switch has been thrown.
And so this is truly a secular trend where there's reshoring and near shoring back to US and North American markets. Other countries are looking in other regions the same type of thing because again they want to have greater control over their supply chain. So this is very clear that this, that this is occurring and that's the secular trend that I think has legs to it. So again I'd answer it in multiple decades, you look at the prior four to five decades, what's occurred, you look at the next four to five decades. This is clearly where things are going now for Wesco. We are a leading supply chain solutions provider globally. We view this as our core competence where we have deep domain knowledge. So we sit in the middle of this ecosystem between customers and suppliers and we're helping them manage their infrastructure needs, their supply chain needs as they evolve, given this secular trend. So it's an exciting and great place to be.
And I know that there's a lot of folks that are saying, well, I'm not seeing evidence of reshoring in a given month or quarter. This is secular. And so you've got to take a look at this over a longer period of time. If you look at the level of capital investments that are being made now in us, Canada and Mexico in particular, and it's not just AI driven data centers, it's across many other market verticals. This, this speaks to what decisions have already been made and it speaks to the strength of this secular growth trend.
[00:32:47] Speaker B: John, maybe switching gears a little bit to the people side. You talked about how culture is core to how things run at Vesco.
As a sector industrial is struggling with talent attraction. There's a problem with the trades, there's a talent gap there. Need more digital capabilities coming into the sector. So maybe walk us through your philosophy at Vesco and being able to attract and develop the right kind of talent.
[00:33:10] Speaker C: So I, you know, you're spot on. Talent is a defining question, defining issue, defining challenge for our industry. But I also say across the world, given the impacts of what AI will do, and as I mentioned, I believe that best talent wins always. So when you look at the nature of the work, more digital, it's more complex, it's, it's, it's much more technical.
And so that drives the talent needs and the talent equations. My view is all companies need to become tech companies.
And so we're building a digital first culture and we're working that talent equation aggressively.
And so it's really an approach with two dimensions. Dimension one is our current workflow workforce. And so how do we upskill and support our current workforce? So we're, we're aggressively working and developing our current workforce with a series of AI training.
And again, this is in concert with our digital transformation. The second thing that we're working in parallel is injecting new talent. And so I think you've got to, you've got to have work that you know is meaningful.
It's relevant, it's inspirational, where you can really add value. So it's something we're working. Working aggressively on. I do think this, again, is. Is the defining challenge in our industry, as you kind of alluded to, but it's also a defining challenge around the world because of the impact that AI will have. So it's incredibly important that, that, you know, we're focused on this, and it's incredibly important, important that companies get this right.
[00:34:55] Speaker B: John, you've spoken about how acquisitive Wesco has been. You've also talked about literally standing up a new CO in a public setting. And so a lot of critical decisions on capital allocations, from M and A to growth to innovation.
What's your framework to balance these?
Is there one which takes more priority over the other? How do you get that right?
[00:35:17] Speaker C: Yeah, and this is always one of those questions of, you know, how do you balance what's got the priority? The qu. The reality is you got to do both. I mean, you just. You have to do both.
You got to, you know, and I'll just kind of reframe it a little bit by saying, you know, you must deliver in the short term to be able to survive in a long term, but if you're not maximizing value over the long term, you will not survive.
And they're actually not in conflict.
And so that's just. I mean, that's, that's the approach that we've taken.
We think we have clear secular trends. We build a leading portfolio, we're investing in the business organically, and we want every day to be better than yesterday, this week to be better than last week. It's just part of our continuous improvement culture. But we continue to use our balance sheet as well, which is very stronger than it's ever been, to scale up and continue to add to our capabilities. So for us, and again, as I mentioned before, scale is what matters in distribution. So for us, it's. It's a matter of doing both.
And you can't always control the timing of acquisitions, so you have to be working a continuous process there because, again, you do not have control of timing.
And so you have to be positioned to move when opportunities open themselves up and be aggressive and move with speed and agility.
Your organic business, though, you're tending to every day. And so it's got to be a continuous approach of, of continuing to, you know, kind of improve that business. So. So, you know, we're really at the. At the center of this ecosystem, as I said before, between customers and Suppliers and we've been expanding our portfolio, we've been scaling up, using our balance sheet to do that while improving our core business. That's not going to change. We're going to continue to do that ad infinitum into the future.
The difference is that we're in the middle of now is completing a digital transformation which I didn't mention earlier. We build a new company with Wesco and Aster coming together and we've done some acquisitions since then that are very different in terms of scope and capabilities.
Adding more services as a result of our digital transformation, we're going to create an altogether another new company.
It's that transformative which is very exciting.
[00:37:42] Speaker B: So John, you became CEO during 2009 during the quote unquote great recession and then you led Wesco also through the recent pandemic and the economic crisis came with it. So not an enviable spot to be in leading a public company through that. Walk us a little bit through the evolution of your own leadership style, your own decision making frameworks through these journeys.
[00:38:01] Speaker C: First, I have to say, timing is everything in life and business. Okay, I became CEO 2009. Great global restaurant session. I've had the honor, distinct honor and pleasure of leading Wesco for 17 years.
I've seen a number of business cycles and some what I would call, I think many would call a series of unprecedented crises.
So it's been, it's been, you know, and that's the external environment which you do not control.
You know, I, I really, here's my thoughts. I've got four things I, I kind of focus, focus on and, and they'd be in this order. First, maintain your ability to perform at the highest level that you can. Try to control the best of your ability. It's your health, it's mind, body and soul. So maintaining that, investing in that is critical and that's continuous. Number two, surround yourself with the best talent.
You're only as good as the team you have around you.
Number three, focus on what you can control.
No victim mentality, you know, be decisive, move, you know, there was drive and determination.
Move with speed and agility as I mentioned, but maintain stamina. This is a long, long race.
And so you know, you got to be winning battles every day, but you got to maintain the stamina. And fourth, which is, which is incredibly important and maybe even the most important is lifelong learner. Be a lifelong learner. I believe fundamentally if you're not evolving, adapting, growing, learning every day, if you're not doing that, it's Digital, you're dying.
And so as plain and simple. And so those are kind of the four ingredients for me. And that's what I expect of myself, that's what I expect of our leaders.
And I think if you do that, you know, you're, you're putting yourself in the best position. Again, you can't control the outside world and everything that's happening around you and what's going to happen to the company.
But if you do these things, you've got a much better shot at kind of controlling your destiny and that, that's what it's about, taking the proper actions to try to control your destiny.
[00:40:23] Speaker B: So John, thank you so much for your time. Maybe stepping back.
You obviously lead Wesco. Wesco's position is very pivotal in the industrial ecosystem. You have a unique access to how industrial economy in the US is burgeoning. Our thesis is that this is a sector which doesn't get due in terms of it's underappreciated, misunderstood, undervalued.
How do you think about just the sector overall? How will it evolve? What is your kind of sense of where this will go first?
[00:40:54] Speaker C: I'm very bullish.
I've spoken at this at length. I believe fundamentally we're in the beginning of an industrial super cycle.
So I WISH I was 20, 30, 40 years younger.
So I think the future is exceptionally bright. So for companies, we've mentioned a few of these things, but maybe I'll say summarize it by saying, you know, you've got to digitalize your business.
All companies got to become a tech company to, to, to a certain degree, number one. Number two, you got to invest in a talent. Number three, I think you got to make supply chain a priority and, and, and give it the highest attention because increasingly, especially with AI, all businesses are now operating in the context of a bigger value chain and there's much more transparency and things are moving much faster. And so again, giving supply chain the highest attention I think is important. The companies that win in my view going forward will take their engineering expertise or manufacturing expertise, you know, their invention and design and development expertise, combine it with technology and AI. Okay, but then do that and then manage the company in the context of the entire supply chain or value chain.
And that's what I think is different. I mean for again the better part of my career, supply chain was relegated to operations and purchasing function and now it's very different. As I said, it's, it's a C suite, board level, country level priority. And so again, I think, you know, you can't just focus on your company and what you do. You got to understand how it feels fits in the context of the total value chain. You're, you're, you're competing in and how value is really created. And so, so there's my, there's my input but again I'll end on the, the note I started on very bullish on the industrial end market and, and and opportunities going forward.
[00:42:57] Speaker B: So on that optimistic note, John, thank you so much for your time and insights you brought to us today. It's not always I get this bullish tone about the sector and it was great to hear from a leader and think about where this could go in a positive manner for the sector.
[00:43:11] Speaker C: Thanks. Great conversation today and it's been my pleasure.
[00:43:15] Speaker B: Thank you.
[00:43:22] Speaker A: Thanks for listening to INA Insights. Please visit INA AI for more podcasts, publications and events on developments shaping the industrial and industrial technology sector.
