Executive of the Year: William Stockwell makes lasting impact on his family's company, employees

William Stockwell always wanted to follow his own path. Oddly enough, embracing the same family legacy he initially felt would prevent him from forging his own identity has allowed him to do just that.

At a time when other companies were chasing lower-cost alternatives overseas, Stockwell resisted the urge to follow suit, and in many cases lost customers. But a funny thing happened: He found a better way to do business in his home of Philadelphia.

He just needed his company to get faster.

"We doubled down on a lean business initiative," said Stockwell, the firm's president. "A lot of times people looked at lean as a cost-cutting measure. We approached it as a way to go faster. If we were faster than anyone else on the market at certain things—we'll never be bigger, we'll never cost less—but speed wins in many situations."

The foundation he set for his soon-to-be 100-year-old company, Stockwell Elastomerics Inc., has led to excellent growth for the silicone molder and fabricator since 2010, to the point where the company completed a new expansion earlier in 2018 and exceeded $25 million in sales for 2017.

His hard work and subsequent success has led to Stockwell being named Rubber & Plastics News' 2018 Rubber Industry Executive of the Year.

"He's not an absentee owner by any stretch of the imagination," said Brian Shipley, a customer service manager with Stockwell. "He works here more hours than anybody. He has a vested interest in it, and it shows the management team that if he can do it we should be doing it too. He doesn't place a lot of demands on people, but he expects you to bring your A-game every day. If you don't bring your A-game, he's not going to say anything, but because of the culture he's established, everyone else is going to get on you to make sure you get your A-game."

Finding his way

Stockwell joined the family business when he was 16 years old as a material handler in the summers, becoming the fourth generation to work at the company founded by his great-grandfather in 1919. At the time, the business was located in a multi-story series of hollowed-out row homes.

"I did all the grunt work, but it was good for me to experience that," he said. "It also gave me a chance to observe my father working and see my grandfather a bit more. He and I were always very close, I looked up to him big time."

By the time he finished up college, earning his MBA at the University of Pittsburgh, he had decided that he wanted to forge his own path. His decision disappointed many of the longtime employees with the firm, but his father and grandfather didn't pressure him. Though, Stockwell said, he could tell his grandfather was remorseful.

His journey didn't last long.

Stockwell was working with Rockwell International's corporate finance department in 1977 when, that November, his grandfather died. While attending the viewing and funeral, he said he saw a group of former Stockwell employees. They pulled him aside and, in his view, shared an unflattering opinion of his father's company.

"I felt they were really mocking the state of the business, and even worse mocking my father for not being able to pull the company out of its decline," Stockwell said. "I was both grieving the loss of my grandfather and seething in anger that these guys would do that. That stayed with me for a period of time."

Stockwell decided a few months later to leave Rockwell and, on May 1, 1978, he returned to the family business. His welcome home present was realizing the company was on credit hold with most of its vendors.

"That was the beginning of my tenure with my company," Stockwell said. "It took a lot of hard work and long hours the remainder of that year, really into 1980, when my dad decided that I should become president of the company. I was only 25 years old. He was willing, in a very gracious way, to be my wingman."

Shifting focus

In less than two years, Stockwell was named the company's fifth president—following in the steps of his great grandfather, great uncle, grandfather and father.

Stockwell and his father decided that the company needed to change. In the late 70s/early 80s, Stockwell said that the region had 28 other gasket cutters all fighting over a shrinking pie. The firm was more of a distributor then—selling matting, hose, belting and flexible tubing—but so were most of its competitors.

The company also didn't have a focus at the time. Like many other rubber job shops, it tried to be all things to all people, and ultimately spread itself thin.

"We had to look at the product line and realize some of the things we were trying to sell didn't make any sense," Stockwell said.

The first change was moving out of the distribution business to double down on custom manufacturing. Its main priority became securing a more efficient facility. Eventually they found the original facility on its current site—it now has three total there—and purchased the building, moving in March 1981, right during the teeth of a recession.

Help was on the way. As the U.S. increased its defense program, Stockwell found new business opportunities and was able to help carry the weight for a lot of the regional players as defense/electronics became the key industry that pulled the company out of its troubles.

Its decision to go all-in on manufacturing paved the way for the extra work.

"We solved some pretty critical programs out there," Stockwell said. "We were able to solve some problems for people. It was very exciting back then. For a new person in this company, it was a lot of fun."

Rapid response

Manufacturing changed for a lot of companies in the mid-to-late 90s, and Stockwell was no exception. The allure of the low-cost Chinese market caused many companies to take their business out of the U.S., reshaping the industry's supply chain.

But as everyone else was leaving, Stockwell stayed put.

"I have never worked for a more visionary person," said Sandy Ratcliffe, Stockwell's treasurer and controller. "He can predict what's around the corner better than I've ever seen, and drives that vision downward to his employees. If the rest of the world is going to the right, and Bill is going to the left, I'm following Bill. I've rarely seen him make a strategic move that doesn't work out for all of us."

He still needed an answer, and it materialized itself from an old connection now working within New York-based Symbol Technologies' engineering department. Prior to him joining Symbol, Stockwell had went out of its way to help him with a design problem, a gesture the engineer remembered.

At Symbol he was faced with another challenge, so he sent two engineers to Stockwell. They returned with the answer—a better shock dampener—and the company received an audience with Symbol's purchasing department.

One of Symbol's biggest product lines was hand-held technology devices—the ones used by Hertz, FedEx and UPS that had to survive being left outside, sitting in the rain, heat and being able to be dropped six feet onto concrete. The firm needed a gasket producer that could turn around cushioning pads quickly. Stockwell saw an opportunity, returned home and developed a rapid response capability based on Symbol's demand.

"It was just one beautiful cycle of win after win," Stockwell said. "Thankfully, email came about shortly thereafter. We'd often get a call at 5 o'clock on a Friday evening. My wife knew not to expect me home on Friday evening, because we'd get that call from Symbol Technologies. I'd often go out to the floor, grab samples and drop them off at a FedEx depot on my way home. They were working, and we'd be working too."

By 2000, Symbol had become about 38 percent of Stockwell's business, which paid for a new addition to the company's manufacturing operations. It also provided Stockwell with an answer to the offshoring trend—speed.

"We had companies ask us what our China strategy was," Stockwell said. "The real question is: When are you going to set up a facility in China? That's the last thing I wanted to do."

Stockwell said he had many customers in the early 2000s tell him "don't come back," as they were not going to entertain any conversations with the firm until it set up shop in China. But within a year or two, Stockwell said a couple came back because their design teams were still in the U.S. despite their assembly systems being in Asia. They still needed materials that they couldn't get in Asia, and Stockwell had the technology.

By 2004, the firm saw a great surge from companies that stayed in North America and was even able to withstand the 2008 recession thanks to its rapid response model, specifically its need for Stockwell to stock ahead so it always had material on hand to quickly address customers.

Stockwell said the firm did suffer a drop of about 13 percent, but the firm was able to avoid reducing its work force. That sometimes meant finding jobs for people to do, like going out and painting a fence.

"We had to keep people busy," Stockwell said. "I wanted to make sure people were here when we recovered because my experience has been in every recession that I've been through, the recovery has always been fast. If you're able to respond when the market picks up again, you have some open field running ahead of you."

Entrepreneurial culture

That open field materialized quickly, and Stockwell was ready.

The company had its core competency nailed down and a rapid response model that differentiates itself within the industry. The firm has experienced strong growth for most of this decade with its sales reaching about $25 million.

This past summer it opened a 10,000-sq.-ft. building, the third on its Philadelphia campus, for additional warehousing of raw materials and distribution. The project represents a $3.75 million investment.

The bottom line is important for any company, but Stockwell sees something bigger: If the company doesn't take care of its relationships with its customers and employees, it won't thrive. He takes it to heart and is willing to lead by example, to do whatever it takes for his employees to succeed.

"What I do in my CEO job is I look for the thinnest part of the hull of the ship," Stockwell said. "Wherever we're thin, wherever we're leaking, I go and fill it. If it means I've got to be the buyer for the week, or handle a difficult situation with a customer or be the estimator for a day, whatever it takes. I don't want to make a career out of those other positions, but whatever it takes until we get reinforcements to fill the gap."

Alex Santayana, a senior applications engineer at Stockwell, said he can tell Stockwell enjoys taking people in and watching them grow, adding that there are countless examples throughout the firm's 90-person work force.

Margaret Robinson, who works in sales support and was the firm's buyer for about 20 years, will celebrate her 24th anniversary at Stockwell in January. She said coming out of school, she wouldn't have imagined being where she is now.

"I started as his receptionist, and he just saw something in me and I became his buyer," Robinson said. "I'm not the only one. This is the way he treats each and every individual throughout this company. He truly, truly cares about each and every one of us. If we have a hardship, it's almost as if it becomes his hardship."

One of the main reasons his employees thrive is because Santayana said they have the freedom to make decisions and learn their jobs. Stockwell said he gets this mindset from his dad, who allowed him to approach the business like an entrepreneur, with fresh eyes.

He added that his dad didn't look over his shoulder and would watch as he made the same mistakes. He stressed that he'd never let someone put their health or the business at risk, but some lessons are better learned by experience.

And there's always the chance they might be right.

"I have very smart people here," Stockwell said. "Most people here are smarter than me. I let them do their job. I'm always glad to give them my advice, but I'm not big on telling them what may happen because I might be wrong. I don't have it all figured out."

Santayana experienced this first-hand when the company was having a bottlenecking problem within its water jet cell. Santayana wanted to move some parts over to die-cutting. Stockwell cautioned him, saying there were a lot of challenges as customers would have to re-qualify their parts for the other line.

He advised Santayana to find ways to improve the cell, but gave Santayana the freedom to pursue his idea. Santayana said he found that it became an immense effort, and after a month he confided in Stockwell and told him it was an awful idea.

"I asked him why he let me do it," Santayana said. "He told me that I wouldn't have valued it had he told me. I had to experience it for myself. In the end, when he was right he was kind about it."

Shipley intends to retire in January, ending a long career in manufacturing, the last two decades spent with Stockwell. He said Stockwell is the best place he's ever worked.

"Everything that I have, and my family has, is because I work here," he said.

Lasting legacy

Ed Stopper—owner and CEO of Elray Manufacturing Co., located about 45 minutes from Stockwell in Glassboro, N.J.—has been a friend of Stockwell's for 25 years and sits on Stockwell's advisory board. He said that Stockwell could be more profitable if it did business outside of Philadelphia, but his loyalty to the city, to his roots, has kept him there.

"He's really an extraordinary guy," Stopper said. "Nobody outworks him. He's smart, customer-focused and he's really done fantastic work with the company. The sales growth in the last five or six years has been phenomenal. He's a highly capable businessman."

The business will turn 100 years old in 2019 and has been in Philadelphia since 1920. Stockwell does not have someone in his family he can pass the business to as both of his daughters followed their own path. And like his father before him, he supported their decision.

But it left the company without a clear line of succession, and Stockwell turns 65 in 2019. He knows if he followed up on one of the many offers he's received to sell the business, that buyer—be it private equity or strategic—would quickly see that the regulatory costs and tax expenses of doing business in a major Northeast city were not worth keeping the company in Philadelphia, leaving his employees out in the cold.

So he's giving the company to them, setting up an ESOP last year and selling 30 percent of his ownership stake into the trust. He intends to scale up with another minority share in the next 18-24 months, and sometime after that sell the remainder.

"I understood his reasons for doing that," Ratcliffe said. "I was very excited that he thought so much about all of his employees to entertain that option. He is not financially driven. He could have bought and sold this company 10 times over. He cares more about his legacy and his employees feeling value. I've luckily been a part of all those transactions, and the valuation, and learning what the outside world thinks about ours. It opens endless opportunities for all of us."

Shipley said the move made perfect sense given Stockwell's personality. Robinson said the work force was in awe. Ratcliffe said the company is still working through the process of making sure every employee understands the positive implications of this opportunity. And Stockwell said establishing succession leadership will be one of his priorities in the near future.

Santayana realizes the uniqueness of this situation, adding that many other firms within the industry make short-term decisions based on stock valuations. He's happy with the long-term focus of Stockwell and believes it will inspire employees to stay longer because they can benefit in a big way if the company continues to grow.

It's safe to say Stockwell's investment in people has paid off.

"Everyone here would take a bullet or run through a wall for the guy because he'd do the same thing for them," Santayana said. "His care for the company goes way beyond the ledger and the brick walls. It's more about the people who are here."