#246: Jimmy Kirchdorfer, Chairman and CEO of ISCO Industries – Grow the business so your people can grow with it

0:00People want to work for a growing company. If you're reinvesting in a growing industry, you're going to grow as a company. And growth creates opportunities for people. If a company is in an industry that's flat and it's not growing, you really got to wait for somebody to retire or for opportunities to come. But we've always been able to provide that. And our mission statement starts with, ISCO exists because to provide long-term opportunities for members of the ISCO team. And the only way to do that is growth.

0:39You know that old saying, a rising tide lifts all boats? Well, this week, we're talking about what it takes to raise that tide. Welcome to How Leaders Lead. I'm David Novak, and every week I have conversations with the very best leaders in the world to help you become the best leader you can be. Today, I'm sitting down with my good friend, Jimmy Kerstorfer, the chairman and CEO of ISCO Industries. I got to tell you, I love the ISCO story. They started out as a small golf irrigation supplier, but they dreamed bigger, and they expanded into HDPE pipes for sewers and water lines and all kinds of infrastructure projects.

1:19And this turned out to be a huge global market. Today, they're approaching the billion-dollar mark in revenue and even sponsoring a PGA Tour event, the ISCO Championship, which teased off next weekend right here in Louisville, Kentucky. But all this growth isn't just for its own sake. For Jimmy, growth is how you create opportunities for your people. Opening up pathways for others to succeed is one of the most fulfilling parts of leadership, and it's absolutely essential if you want to build something that lasts. This episode shows you how to get it done. Plus, Jimmy was at the jail the morning Scotty Scheffler got arrested at the PGA Championship last year.

2:00Now, I didn't say he was in jail. I said he was at the jail. And you got to hear the story from his perspective. So here's my conversation with my good friend and soon to be yours, Jimmy Kirchdorf.

2:16you know jimmy i know you're a huge golfer and uh you got the isco tournament coming up which which you sponsor you're also the the co-owner of of valhalla but i have to tell you one of the things i know that really distinguishes you is you're one of the the only guys i know that's actually been the top play on sports center can you tell us that story actually yeah that's my fun fact I say a lot I've been I've been on SportsCenter I was playing the American Express Pro-Am out in Palm Springs and hit the shot of my life made a hole-in-one and just so happened I picked a good time to do it because there were cameras filming so and I have that forever actually watch it sometimes David on on my phone and the ball goes in every time I had this dream one time at Liptown.

3:08That was a shot of my life, and it happened to be on video. I'm going to get more into what you're doing in the world of golf, which is considerable. But I want to hone in on how you get to do so much in the world of golf because you've had so much success. You're the chairman and CEO of ISCO. Just give us a snapshot of ISCO and the business that you're in. Yeah, ISCO was started in 1962, actually, as irrigation supply company. My father started it as a golf irrigation company. We sold sprinklers, actually sold sprinklers for lawns as well. And, and it grew, my brother and I got involved and bought it in the 90s and actually changed it to ISCO because irrigation supply really didn't encompass everything that we did.

3:55We changed it to ISCO, focused more on HDPE piping. My father thought I would love the irrigation side of it, the golf side of it, but ended up focused more that we could scale on the HDPE piping. And today we have almost 900 people. And ISCO has been an incredible success story that very few people know about. You're one of the most successful family businesses in our country. You know, you start this business and it's the$12 million in revenue. And now you're approaching a billion. You know, what was the key to really taking this business, which was so small, and turning it into this, you know, category leader?

4:34You know, we started off as, you know, golf irrigation. I think it was the moment that we were able to change, we saw something, a product that we could scale. The golf irrigation was just in Kentucky. And I remember, it's kind of an interesting recognition story. I remember one year, we had a phenomenal year. we probably sold 80 or 90 % market share in Kentucky for irrigation. And we thought that was a big deal. I went to the national trade show thinking, hey, we're kind of hot stuff here. Look what we've done in irrigation. And I got there and we didn't get a sniff. No one even recognized us.

5:11There's California, Texas, Florida, all these irrigation companies that were so much bigger. And then I realized, even though I love the golf side of the business, the sprinklers, we needed to I really kind of got out of the sprinkler side of the business and focused on this new technology, this kind of newer product in the market called high-density polyethylene pipe. So that allowed us to scale the business and really be something, we found something we can be good at. And that's something I tell a lot of young people that come and talk to me. You know, I have kids in their 20s and sometimes their friends will ask me is, I'm not a big believer in the do what you love thing that a lot of people tells them.

5:50I'm a big believer in do what you're good at. Find something you can be really great at, top 1 % in the world, top 5 % or whatever, and focus on that. Because that's a good example. I loved golf and we were in that business. And now we're, you know, we sell pipe for landfills, for water lines, sewer lines, power plants, industrial lines, gas distribution all around the world. Well, that's, you know, that's incredible. But you're also in a very competitive category. You talked about going to that trade show and you saw all these irrigation companies there that were much bigger. How have you become the market leader?

6:23What do you think was the pivot point that really took you to the point where you can have the kind of business you have today? Well, it was, you know, we were very small at the time and we were just kind of we saw that we could we could scale that the business hadn't been consolidated. There was no one really doing it all around the country. We were just one location. You know, some reason, somehow we were able to attract really good people and retain them. And it was my first job out of school. So I don't really know what we were doing magical because I hadn't really worked somewhere else. But people believed in our cause and believed in the growth story that we had.

6:59They believed in our mission statement about providing opportunities for people. And we got great people and gave them the opportunity and we just ran with it. You still have a real competitive issue out there. And, you know, one of the things that, you know, as I've done my research on your company is that you branded your product. You know, you created a brand around something that is typically generic. Yeah. Back in the day, we were just a distributor, which means like we would take the brand of the manufactured product and pretty much put our sticker on it. We take all their literature. This is before the website.

7:36So in all their brochures and put our little sticker on it and hand it out and promote their product. Well, we realized that at ISCO, we can have a complete solution instead of just having a bunch of different product lines made by different manufacturers. We can really brand the ISCO solution, which is encompassing all different types of products. And we became a manufacturer as well on the fitting side. So we would distribute the pipe, manufacture a lot of the value-added products, and provide a complete solution branded under ISCO. And now you have this great, great success story, but we all know that there's bumpy roads along the way.

8:12Did you have a point where you really wondered if you were ever going to be able to pull this off and build a business like you've done today? You know, at the time, we just kind of put our head down. Um, uh, in fact, we had kind of set a goal of, I remember back in the nineties, I got in front of everybody and said, Hey, we can be a hundred million dollar company. And we may have had 15 or 18 people. And the looks on their faces was so amazing. They're like, you know, there's, there's no way you could think that big. And I said, here's how I said, here's the vision, but also here's how we're going to have multiple locations around the U S which was something different.

8:48We were just in Louisville, Kentucky. We're going to be doing business around the world. We're going to have expertise. We're going to start manufacturing and going that way. And we really just had our head down and we're working. And kind of when we hit that goal, I don't even think we really realized it till somebody kind of said, hey, we're there. Because we had just had our head down, just kind of doing the work and enjoying the journey rather than just trying to get to the end there. But, yeah, there's tough times. I remember the tech, you know, I guess crash kind of in at the end of, you know, 2001, two in that time frame, which a lot of pipe was being used for that.

9:25That kind of changed the industry. They were kind of piping the Internet at the time and that changed. But really, 2009, 2008, 2009 financial crisis kind of had a price of pipe fell. We had a lot of inventory and we had had so much success. that was our first real adversity that we had to, that we had to go through. But at the end of the day, as we got through that, I'm like, that made us such a stronger company because it's not all roses. At the time that we were just thinking we were invincible, then having to have some adversity actually made it stronger. So, you know, when, when things go south, you know, and it's not all roses, you know, what do you do as a leader to get through those periods?

10:02Yeah, I think people are watching you very closely. They're watching the look on your face. Are you concerned? And the worst thing you can do is walk around and seem concerned. I was, which was hard. I think, I think I had to keep that to myself, not in front of the other people, but remain positive and optimistic and remind them that we're in this for the long haul. You know, we might have a tough year. We, we may have dinner and not dessert this year, but, you know, cause we've been eating dessert every year and have a lot of success, but they're going to look at your face and really study to see how concerned you are because that's, you know, this is their livelihood and they want to know how secure their job is.

10:39So that's what I tried to maintain a positive outlook. And we got through it and then started another big growth sport. You know, you're a vision guy, you dream big, but earlier you really attributed your people as the key to your success. And one of the things I know you and I are is we're kindred spirits on recognition. How do you use recognition in your company to drive results? Yeah, I'm a huge believer in that. And I think, you know, I've gone in times in my life where you have received recognition and how great that feels. And I'll tell you one story that I love that back when I was putting that vision together and explaining to people at one location that how we can have multiple locations throughout.

11:23And we were pretty much a mom and pop. I mean, I would see everybody, the job they did, you're able to go fist pump them and say thank you. And, you know, you knew, you knew everybody. But I'm like there's going to be a time when we have people throughout that we're not going to see the great work that they're doing And how can we recognize someone it's easy to recognize them When you're right there with them face to face, but how are we going to recognize people at different locations? So we came up this with this award david that i'm really proud of it's called the starfish flinger award And we've been giving this out since 1997 And it's that parable i'm sure you've heard where a young boy on the beach and sees all these starfish that have washed up onto the beach, picking them up, flinging them out into the ocean.

12:07And with that, a man comes up and sees the young boy and says, you know, son, what are you doing here? Why are you doing this? And the boy says, well, you see, sir, these starfish have washed up and the sun's out. They're going to dry out. They're not going to make it. They're going to die. I need to get them back out into the water. So the man says, you know, son, look down this side of the beach and look down this side of the beach. There are starfish as far as you can possibly see. Now, how in the world do you think you can make a difference? So with that, the boy picked up the starfish, picked up another one, took a good look at it, flung it out into the water and said, well, sir, I guess it made a difference to that one.

12:46And I was so worried that we were going to grow and get big. And all of a sudden you have thousands of customers and all these people and people were thinking, that's just one customer we messed up on. That's one load of pipe we didn't do correctly. It's no big deal. I can't make a difference. So we started giving that award, recognizing it's a big award. And now we have a name plate with going back since 1997 that we give out every year. We have multiple awards like that that are that that that we do. And it's fun. I said that the best recognition thing we do that I that I love. and I started this maybe about 10 years ago, is we started the ISCO Hall of Fame.

13:22You know, we've been around a while. And once I think your company's kind of been around 50 years or so, you can really do this, is we bring back somebody that has retired from the company. They have to have left the company and we honor them. We may do a black tie ceremony or whatever. We bring them back and we have a Hall of Fame ceremony. We honor the work that they did and we put them up. We actually have a Hall of Fame conference room with several pictures on the wall. and kind of enshrined them. And those are the people that really dedicated their career and made us what we are. So that's a form of recognition that's a lot of fun and to see the looks on their faces and the pride that they have that, you know, they're part of something that's going to continue to go on.

14:02So, you know, one of the things that I really admire about you is how you share success with others. And obviously, when you started this business, it was a family business, and it was you and your brother, Mark. And you teamed up and you always give him so much credit for where the company is today. How did you guys delineate who was going to do what? You know, David, this is the, if there is a perfect partnership, this is it. I mean, Mark is four years younger than me. We have a great relationship. And I think maybe that's important because we never really competed, him being four years younger.

14:41He maybe was competing with me, but I never saw him as a threat. But we have a great brother relationship. And we were just wired differently. I mean, Mark, he's a great operator. He has an engineering degree. And I think I would go out there to customers and make promises. And he would make it happen and make me look good. But the great thing is none of us can benefit without the other one benefiting. I mean, we are 50-50 partners in really everything we do. and I tell our staff, which is important. If you tell Mark something, I'm never gonna come to you and say, why didn't you tell me about that?

15:20It's my job with Mark for us to communicate. And likewise, if you tell me something, it's my job to communicate with Mark. You don't have to worry about telling two people about something good or bad because we talk every day and we share all that. Hey everyone, it's Kula from How Leaders Lead. And if you've watched our podcast for any number of episodes, you probably know that a common theme from all of the great leaders we interview is that they are active learners. They have this commitment to continuing to learn and grow so that they don't stay stagnant and so that they continue to see success in their leadership and in their life.

15:53This theme of active learning is so important and it's what David's latest book, How Leaders Learn, is all about. It's all about helping you develop that skill of active learning so that you too can continue to see success in your leadership and in your life. The book is really entertaining. It pulls stories from some of our greatest podcast guests and pairs those stories with insights that you can incorporate into your leadership and into your life right away. Grab How Leaders Learn on Amazon or wherever books are sold. And I think you're really going to love it. You feel David's personality through the pages and through his storytelling.

16:27And it's a really powerful way to level up your leadership. One thing that I know about you is, though, you like to make money, you know, and you're big time in the margins and you were big time in the margins, you know, when you were a kid. Tell us that story about how you put Mark to work and who made what. Yeah, I was at a very entrepreneurial spirit as a kid. And I realized, hey, I, you know, I had to as a chore, I had to cut my lawn, right? My dad bought a lawnmower. And my job was to do that once I got old enough. But then Mark would always kind of watch and he's kind of intrigued with machinery and so forth.

17:03But I started to go and try to scale this little business. And I go around the neighborhood and for$5 or whatever, cut, cut lawns. And then I realized, well, Mark's just itching to get out there and help. And I think for a dollar a day, I mean, he would work so hard. I'm glad there were no child labor laws I had to deal with, but he, he would just being part of it. And I scaled it to then Mark would go cut the grass and, and we became partners there. And then actually I went, when I got older, he took over the grass cutting business and did well on for himself. But so what'd you charge, what'd you charge Perlon and how much did he make and how much did you make?

17:39I, well, he just got a flat fee for, I kind of owned the business kind of thing. And of course he was four years younger. You got to remember that. So you got to pick on your little brother, right? That's kind of the, kind of the thing. But I would charge like three or four dollars. I remember trying to negotiate this. I was like, I hope I can get four dollars from this lady. And I actually said, she said, how much would it cost? And I said, three or four dollars for some reason. Well, obviously she picked three and I learned I wasn't a very good negotiator at that age. You know, your dad started this business.

18:13You know, what was the biggest leadership lesson you learned from your father? Well, my dad was, he was a contractor by trade. So he said, you know, I like to take 10 or 12 people and do a project in a small group. And I saw how he valued the people he had. He was always talking about, hey, all we are is people. And, you know, you think about in the contracting side, you know, it's a people side. And then we, as we got going in Isco and started supplying some of the products for the golf. So I learned from him how important it was to take care of people and to find the right people. Yeah. And, you know, speaking of people, another one in your family, you know, So, you know, I've been privileged to get to know your son, Jay, who played golf at the University in Kentucky and also at Rice and got his MBA there.

19:00And he just entered the family business. And he's unquestionably is one of the most impressive young leaders I've met. I remember him just probing me about leadership and wanting to learn everything he could about culture and the importance of that. What kind of advice do you give Jay now as he enters the business? because he's a little bit older than what you were when you and Mark started the business. But he's obviously going to play a huge role in the future. How do you bring him into the business and what do you tell him? He's coming into an entirely different business than my brother and I have.

19:36And he even said, we talked about it, hey, do you want to go work somewhere else first? And he said, no, I want to be around you and Mark and learn as much as I can while you guys are still active. I mean, Jay wants to do every part of the business. He started working in the plant and we have some excellent, you know, it's a very important part of our business is the value added. So we started there. We have some excellent pipe welders. You want to learn from them and get around to different parts of the business because and we've been transparent. You know, we are training Jay to someday own and run the business.

20:07So we tell everybody that it's not going to and it's not going to be a surprise. He he's the first in a lot of times in the morning. He he is a big golfer and he's conscious about going out and playing golf. He gets asked in so many customer outings and vendor outings and other people want him to play. He said, hey, I can't be the golf guy. You know, I got to I got to come in here and work just as hard as everybody else. But it's great to see. And I appreciate you saying that, David. And how great is it for him to have a mentor like you in starting off at age 25 in business is fantastic. So I think he has he's been humble and golf teaches a lot of those things.

20:44Right. You can think you're a hot shot. and you have it one day and then all of a sudden you have a lot of adversity. So I think that's positioned him well. Yeah, well, that's great. And so now you have this really big business approaching a billion dollars. You know, what's your vision for the future? Well, I think we have the vision now is called the billion dollar baby. And after we've kind of, we always kind of have visions and we set them to numbers, but that doesn't really mean anything, the numbers. And I said baby because I said, when we get there, that's not a destination. I think we'll still be a baby.

21:16I think we'll still be in the early life cycle of our product and our businesses. So, you know, I think it's just continued. Growth is the important thing at ISCO. And I think people want to work for a growing company. And like I said, I tell a lot of young people that, you know, really, as they're trying to start their career, get into an industry that is growing, get with a business that is reinvesting and get with a business that's thinking long term if you do those three things it's it should be a great place to work as long as they have a good culture but a growing industry a business is reinvesting if you're reinvesting in a growing industry you're going to grow as a company and growth creates opportunities for people if a company is in an industry that's flat and it's not growing you really got to wait for somebody to retire or for opportunities to come, but we've always been able to provide that.

22:13And our mission statement starts with, ISCO exists because to provide long-term opportunities for members of the ISCO team. And the only way to do that is growth. So growth is part of it. Mark and I reinvest back in the business. It's hard to ask somebody to grow when you're not reinvesting in it. How do you reinvest in your people? You have to provide people opportunity. And when they succeed, it's not on us, it's them. And if they fail, it's on them. So we do a lot of training. We do a lot of recognition, different types of things, and a lot of mentorships. And sometimes people get thrown into jobs.

22:54We're growing fast, and maybe they don't have all the chops yet, but we really need people. We do a lot of promoting from within. We haven't had as much success in bringing people from the outside into high levels in our company. It's been better as we bring them into our culture and grow with them. But I think they see other people grow. And we've had a lot of success recruiting kind of the 20-somethings nowadays because, you know, I'm 56 and you hire a lot of people your age. So I hire people my age as we've grown. And now we're looking around saying, hey, we might fall off a cliff here with a lot of people aging out.

23:30Let's go find the 20-somethings. And we've done a great job recruiting them. 900 people. Now, you don't have a 1 ,000 % batting average. And you have to make tough calls every now on who's in and who's out. Share with us a story of the most difficult management challenge you ever had with a person and how you dealt with it. That's a great, great story. Yes, we believe in failing fast. And I tell our people, the managers that are hiring people, you know, you're going to you're not going to bet a thousand. You're going to have some people that don't work out or don't live up to how they you thought they would in the interview.

24:09So I'm never going to get upset if you fail fast. If you keep that person for a long time, they don't fit our culture. That's that's the problem. And I've fallen into that or had people, you know, we have a big thing called psychological safety. Like when you get into a room, and I have it with our executive team, you want to feel safe and not that someone's judging you or not that somebody's trying to get your job or, you know, we don't want people competing with others to try and get a job. But I've had people that, I remember one person that when he would miss one of these meetings, the psychological safety went way up in the room.

24:48People were more open, more vulnerable. And then I realized when he's in the meetings, wow, everybody kind of shuts down. So those are always tough calls, especially when people have been with you for a while. But I think it's the culture is the main thing. If they work hard and they meet your culture and they believe in the long term, what we're trying to create, we normally can make it work. And how do you communicate with your team on a regular basis? You know, it's easier nowadays, I think, with video and that things that you can do. I try and be extremely visible. We have our headquarters.