Welsco, Inc.

Emphasis on employees and education paves way to success for Arkansas distributor.

Many welding and industrial, medical and specialty gases distributors say that their employees are their best assets. When Welsco, Inc. Chairman and CEO Angela Harrison says it, she does so with the fervency of one who’s had cause to realize just how vital loyal employees have been to not only the success, but the very existence of her company today.

When a series of upheavals left Welsco in a precarious position in the early 1990s, Harrison relied on the company’s employees to help Welsco maintain its growth in the market—and to help her adjust to her new role as president. Through teamwork, loyalty and old-fashioned grit, Harrison and the Welsco team have kept the company independent and growing by leaps and bounds, ensuring that employees and customers alike can benefit from Welsco’s continued success.

Four Generations

33a_welsco1

The late Richard G. Harrison (second from right) founded Welsco in 1941. He is pictured here with his wife, his son Stephen Harrison, who now serves as chairman emeritus, and his granddaughter Angela Harrison, currently chairman and CEO.

Welsco—originally named Welders Supply Company—was founded in 1941 by Harrison’s grandfather, Richard G. Harrison, with the financial backing of his father, Claud G. Harrison. Richard G. Harrison had no previous experience in the industry, but he saw a growing need for gases and welding supplies in his area. “He started the business with a route truck and a dream,” says Angela Harrison.

In 1959, Angela Harrison’s father and uncle, Stephen E. Harrison and Richard C. Harrison, joined the business, and in 1965 the two men took over the company from their father. Over the next 20 years, they worked together to expand the company to several locations throughout Arkansas, and in 1979 they built a new 30,000 sq. ft. headquarters facility in North Little Rock with an acetylene plant and a larger warehouse. In 1985, Richard G. Harrison sold his shares of the business to Steve Harrison.

Six years later, Angela Harrison followed her father, then Welsco’s CEO, and her brother into the family business. “I had worked as a behavioral counselor for a couple of years after college,” she says, “but my dad talked me into coming to Welsco and doing something different. I had not really been involved in the business at all prior to that, other than painting cylinders and mowing the grass when I was a kid.” Over the next few years, she set to work learning the business, starting in the front office, working with the company’s new computer system, then moving to the sales counter in Little Rock, and finally back to headquarters to start a human resources department.

Hard Decisions
In 1993, tragedy befell the company when Welsco’s president, Bill Layton, passed away unexpectedly at an NWSA convention. The company was reorganized with a new president, Angela Harrison’s brother, Brian. However, only a year later, Brian Harrison left the company, leaving Angela Harrison facing a tough decision: Buy out her brother and attempt to run the company herself, or sell.

33b_welsco4

An Easter Seals representative (right) accepts a donation from Welsco Chairman/CEO Angela Harrison, CFO Steve Hyatt and AR Manager Ann Abbott. Welsco has been a corporate partner since 2003.

“This was around the time when consolidation of the welding supply industry hit Arkansas, and everyone was selling their companies to large, billion-dollar corporations. Rumors were rampant that we were going to sell too,” she says. “But I could not sell the company. I had too much pride in what my grandfather and father had worked so hard all their lives to build, and too much loyalty to our employees.” And so, at the age of 27, Harrison became president and CEO of Welsco.

“I took a huge risk,” Harrison admits. “When I bought my brother out, it took the company almost to a negative net worth. My father promised to help me get up to speed, but he was forced to take a medical leave of absence at that time. Luckily, I had good people. I worked to teach myself, I attended NWSA seminars, and I relied on our employees to teach me what I needed to know. I told them I had no intention of selling, but that I needed their help. Together, I knew we could make it work.”

Robert Boshears, vice president and general manager of Welsco’s cryogenic division and a Welsco employee of 43 years, remembers that time period well. “Angela came to the board of directors to say she would run the business and keep it family-owned, and to ask us if we would help train her,” he says. “We had a good working relationship with her, and we were willing to try anything she wanted to do to help the company move forward.”

Boshears attributes the company’s continued success during the transition period to both Harrison’s management skills and the loyalty and longevity of the company’s employees, who were willing to support Harrison’s mission to keep the company family-owned. “I’ve worked for her grandfather, her uncle, her father, her brother and now her, and it’s always been a good group of people to work for.”

Harrison remains grateful that employees supported her during the transition, and that they continue to show their loyalty to Welsco. “I had to earn their trust and respect,” she says. “But they saw how hard I worked, and I think they appreciated that I took a huge risk to keep the company going. Soon people started to realize, ‘OK, we can do this.’” In fact, in Harrison’s first year as president, the company completed its most successful year to that time.

Building a Team

COMPANY SNAPSHOT

33c_logo

Chairman and CEO: Angela Harrison
Year Founded:
1941
Year Joined GAWDA:
1948
Headquarters:
North Little Rock, Arkansas
Branch Locations:
Benton, Bentonville, Conway, El dorado, Fayetteville, Fort Smith, Little rock, Malvern, Pine Bluff, Russellville, Smackover, Springdale, Stuttgart, West Memphis, Arkansas; Tulsa, Oklahoma

Employees:
111
2007 Sales: $33 million

Web Site:
www.welsco.com

Among the first steps Harrison took after assuming the presidency was to bring in an outside firm to survey the company’s employees about what they did and didn’t like about working at Welsco, and what they saw as problem areas. Based on responses to the survey, Harrison began to develop initiatives to build Welsco’s employees into an even stronger team.

Among the concerns employees expressed was that the company had a communication problem. To change that, Harrison began holding quarterly team meetings at Welsco headquarters with non-managerial employees from each of the company’s branch locations. “Each branch would choose somebody to send, and it had to be somebody different each time,” Harrison explains. “It could be a driver, a pumper, a counter person—anyone but a manager.”

The absence of managers gave employees leave to be open with Harrison about the issues they saw in their branches’ daily operations, and Harrison encouraged employees to share both positive and negative experiences, as well as ideas for how to help the company grow. “They came up with a lot of great ideas that helped us streamline our operations, like cutting out a lot of steps in the purchasing process,” she says. “But there were also little things we did to improve morale, like holding a company picnic.” The meetings proved so successful that Harrison continues them to this day.

In 2003, Harrison implemented a new program aimed at encouraging employee development, with the ultimate goal of providing best-in-class customer service. All employees were asked to read a series of books by management guru Ken Blanchard, including Whale Done!: The Power of Positive Relationships, which shows how accentuating the positive increases productivity and improves relationships, and Raving Fans: A Revolutionary Approach to Customer Service, which teaches how to give that extra one percent to turn satisfied customers into “Raving Fans.”

“Everybody from route drivers to upper management read the books,” says Boshears. “We talked about what we got out of the books, and we applied that to Welsco. Then we all sat down as a group to write a vision statement for the company. It really helped the employees get better focused on where we all wanted the company to go.” The “Whale Done” and “Raving Fans” concepts are built into the company’s vision statement, feature prominently on Welsco’s Web site, and crop up casually in conversations with Welsco employees, who have taken the mission to heart. New employees read both books as part of their training to better understand the company and its philosophies.

33d_welsco5

In 2006, nearly 3,000 people attended Welsco’s Arkansas Welding Expo, held at North Little Rock’s Alltel Arena.

“Employees are rewarded for showing that extra effort,” says Boshears. “The company matches a percentage of our 401(k) contributions, and Angela initiated a series of safety bonuses, as well as quarterly ‘Raving Fans’ bonuses based on company-wide profits and monthly ‘Whale Done’ bonuses to recognize employees who go above and beyond. She’s turned the money Welsco has made back into the company and into the employees.”

Educational Advantage
Among the most important investments the company makes in its employees is regular training, including both computer training and product training. In 2007, the company opened its own product training facility, converting a 3,000 sq. ft. warehouse behind the company’s Little Rock branch. After a year of work, spearheaded by Welsco Vice President, Eastern Division Chris Layton and with the assistance of several manufacturers, the facility was completed for under $10,000.

“In the first half of the training center, we have our cutting area, where we do plasma, oxyfuel and propylene training, and in the second half, we have five welding stations for MIG, stick and TIG training,” says Layton. “We have equipment in there from all the different manufacturers, because we have to learn each product we sell, and it’s also nice to know what our competition has out there.”

33e_welsco2

Chairman and CEO Angela Harrison (center) meets with (from left) AR Manager Ann Abbott, CFO Steve Hyatt and IS Manager Gary Manion.

Training classes began in the new facility in summer 2007, with class size ranging from 6 to 12 employees to allow for plenty of individual attention. Each training class lasts one day, but is repeated three times so that all salespeople and drivers from each of Welsco’s 14 branch locations can take part without decimating a store’s sales staff for a full day. The company maintains a trainer on staff, but also brings in vendors to provide training. Currently, classes are limited to Welsco employees, but within the next year the company hopes to begin offering training classes for customers as well.

“We have the same problem as everybody else—it’s almost impossible to hire skilled people anymore,” says Layton. “So we’re hiring young people and training them from the ground up. With the new facility, we can cover all that training here, without sending a new employee away for six weeks. And once we can start training customers, that’s going to be an invaluable service. Instead of training at a customer’s location, where there are interruptions and other problems, we can bring their employees here and do one-on-one training to help make them more profitable for the customer.”

Achieving Growth
Welsco remains a full-line distributor with a broad customer base. “We work with hospitals, construction companies, the state highway department and rural farmers, among other customers, depending on the region,” says Harrison. “There have been a lot of new companies coming to Arkansas as well—everything from manufacturing facilities to labs. With our customer base becoming more widespread, we don’t see a lag in business.”

Currently, the company’s sales are composed of approximately 60 percent hardgoods sales and 40 percent gas sales, with gas volume nearly tripling over the last decade. “We started doing microbulk sales, and that has really caught on,” says Boshears, who heads Welsco’s cryogenic division. “Until the last ten years, most of our gas volume came from construction and manufacturing. The advent of laser cutters in our market added another revenue stream for gases.”

33f_welsco3

The Welsco Management Committee

The growth of the company’s microbulk sales has slowed to some degree as competitors entered the market, so Boshears foresees Welsco moving into larger volumes: from the current 300- to 500-gallon tanks to 900- to 2,000-gallon tanks. “We already have several trucks and trailers that we deliver bulk gases through, and I think we’ll pursue that a little harder.”

One of Welsco’s primary marketing tools is the annual Arkansas Welding Expo, which the company established and trademarked in 2004, and which is held every December at Alltel Arena in North Little Rock. Vendors are invited to provide product demonstrations, and Welsco customers are invited from all over. In 2006 alone, nearly 3,000 customers attended the Expo on a single day. “It costs a lot of money for us to put on,” Harrison says, “but it’s worth it because our customers get to see all the products we have available, all in one place, and our vendors can’t get over the attendance it draws.” In addition, Welsco hosts small open houses at three or four branch locations each year to accommodate customers who could not attend the Arkansas Welding Expo.

The company continues to grow its footprint by opening new branches, primarily through acquisition. The most recent came in 2005 with the acquisition of Ozark Welding Supply, which provided Welsco with branches in Fayetteville and Bentonville, Arkansas. Today, in addition to its North Little Rock headquarters, the company operates 14 branch stores in Arkansas and Oklahoma, as well as a fill plant and distribution center in Smackover, Arkansas. “When we consider an acquisition, we look at whether it makes sense in the marketplace, and whether it’s a good company,” says Harrison. “That’s a strategy we plan to continue. There are a couple of markets we’re already looking at, but I like to do a lot of research first.”

Winning Team

33g_welsco6

A 3,000 sq. ft. training center in Little Rock enables the company to offer training in both welding (including MIG, stick and TIG) and cutting (including plasma, oxyfuel and propylene).

The evidence is ample that the Welsco team is making all the right plays. Since 1993, revenues have grown from $13 million to an estimated $33 million in 2007, and the company has been recognized in numerous ways, including being named one of the Top 500 Woman-Owned Businesses in the United States by Working Woman magazine for four years in a row, and being named the 2005 Arkansas Business of the Year in the 100-plus employees category by Arkansas Business.

“The growth we’ve had, especially these last few years, has been just phenomenal, but it really, truly is based on our employees,” says Harrison. “We have a saying: ‘Do not ever say, It’s not my job.’ And they don’t. We truly work as a team.” That team mindset was put to the test yet again in the fall of 2007 when Welsco’s CFO, Steve Hyatt, passed away unexpectedly. “Everybody here at our headquarters pitched in and did whatever they could to help me cover his responsibilities until we could get a new CFO trained,” Harrison says.

In addition to the unselfishness Welsco employees show on the job, the company also gives back to the community. In 2002, Welsco became a corporate partner with Easter Seals, so each year the company donates money to the organization, holds a golf tournament where vendors sponsor a hole and all proceeds go to Easter Seals, and invites children to the company headquarters for a cookout and activities. “The whole company has gotten involved, which is great to see,” notes Harrison.

Going forward, Harrison has every intention of keeping the company independent and family-owned, which has been a major contributor to the growth of Welsco over the past 66 years, and which she believes will continue to be a factor in the welding and industrial, medical and specialty gases distributorship’s success. “This is a family company, and we truly care about our employees,” she says. “That’s one reason I’ve never sold: I didn’t want to do that to our people, who have made Welsco what it is. I’m so proud of them and of what we’ve built together.”

Gases and Welding Distributors Association