At various times in its long history, employee ownership has been part of the fabric at Dakota Supply Group.

When the company was repurchased by employees in 1991, stock ownership was limited to 35%. Five years later in 1996, DSG rolled out an employee stock-ownership plan and in 2001 the distributor became 100% owned by employees through an employee stock-option plan or ESOP.

“Our employees are owners and they see the rewards of ownership,” DSG CEO Todd Kummsays. “We don’t have employee votes for all decisions because you can’t react that way, but our employees feel more connected to the organization. It motivates employees to do the best thing. They see more of an intrinsic value. They don’t feel like they are working for the man.”

DSG Sales Manager Ryan Tracy feels the ESOP aspect of the company is a game-changer. “I think our people care more,” he says. “Would you rather work for somebody or work for yourself? When you walk in here in the morning, treat this building like it’s yours. If you see a can on the ground, I hope you pick it up. If the phone rings at 5 p.m., I hope you pick it up instead of going home because you are an owner. I think we look at customers a little differently because of it.”

Kumm says when the company makes an acquisition, the ESOP facet of DSG takes a while to set in. “It’s an interesting phenomenon,” he says. “It doesn’t necessarily hit them until the first or second year here. That first year is really more about am I going to lose my old job and am I going to go backward in benefits? The longer they are with the company, the more they see the benefits of the ESOP and what it’s doing for them.”

Chief Segment Officer Mike Tupa says DSG might not be the company it is today without that ownership plan in place. “It’s an attraction as an owner to pass that opportunity on to your employees and it’s an attraction for acquisitions,” he says. “When it’s your company and you get that direct benefit of everything that goes on where you work along with the value of your stock, you should work hard. You can influence everything you do. You’re not just an employee. You are an owner. We always are open to ideas and suggestions. That’s how we encourage our branch managers to be their own entrepreneurs.”

Tim Glander, an account manager based out DSG’s Rochester, Minn., branch, pins a good chunk of the company’s success on the ESOP. “Being an ESOP company is really important,” he says. “Our ideas and views are taken into consideration and relayed to upper management. You have ownership in the company. I have the freedom to act and see things through to the end. I also feel like I’m part of each of my customers’ companies. I want to make them profitable.”

Tracy puts the power of DSG’s ESOP into perspective. “A lot of people are retiring as millionaires at Dakota Supply Group,” he says. “We have counter guys who have been here 20 years retiring with a million dollars. I want to retire with a million dollars in my account. I’m a driven dude. We have to double and triple that stock just like the people who are retiring right now did. Where else can I do that? You can’t do that working for anybody else.” — Mike Miazga

Supply House Times Supply House of the Year 2017: Dakota Supply Group.