In addition, Emineth and Nelson represent the first participants in the MTW podcast. Listen to the full conversation — including how DSG’s business model can benefit owners later on — below.

DSG was founded in 1898. Relatively speaking, that's pretty old. Has the company held on to anything from its earliest history?

Emineth: DSG has held fast to the spirit of being an entrepreneurial company. As an ESOP [using an employee stock ownership plan model], everyone is an owner, giving way for each person’s entrepreneurial tendencies to drive our focus on customer service, vendor relationships, and taking care of our DSG family.

In addition, we have a long history of acquisition activity, bringing together a melting pot of strong companies. The best practices of each respective company have helped DSG to experience continuous improvement and a legacy of growth.

What was the hardest decision — up to now — that you have had to make in the HVACR distribution business?

Nelson: Generally speaking, it’s always difficult to make a business decision to shift purchases away from vendors and reps that I enjoy working with. We get so close to our vendor and manufacturer reps that it’s often difficult to separate business from personal — the friendships forged are very real.

At the end of the day, however, our primary job is to provide the best products and services to our customers, and as an ESOP, to always make sure that the decisions are in the absolute best interest of all of my fellow employee owners.

Is there a business leader, famous or not, that you have admired and whose knowledge you have incorporated into your own work?

Emineth: My uncle, Jim White, comes to the top of my mind. He has been a small business owner for over 40 years and is going strong today. I attribute much of his company’s success to the fact that he is a servant leader. He embodies the notion that if you take care of your people, they will always take care of the customers and the business. People first and everything else follows — this is what motivates me to keep moving forward.

Nelson: Honestly, it’s my dad Merlyn Nelson. He was a store manager for a large Midwest-based furniture store chain, and I had the pleasure of working for him for many years. His basic business philosophy was to do the little things right, and to do them right the first time. He had a rubber ink stamp in the shape of a foot with the word “DIRT” underneath it. Amongst his staff, this was known as the “DIRT FOOT,” an abbreviated acronym for “Do It Right The First Time.” If you saw the DIRT FOOT stamp on your paperwork, you knew that you had made a preventable mistake and the boss caught it.

Getting DIRT FOOT’ed wasn’t something you looked forward to, and his staff worked very hard to avoid it. His philosophy is the baseline for my own business strategy and leadership style today — I strive to do the little things right the first time.

On the other hand, what was the worst business advice you ever got?

Emineth: I had a leader tell me once that “everyone is replaceable, anyone can do the work, so just put someone in there and they will get the job done.” While I agree that every need in business must be met, a person’s unique skill set and passions determine whether they will get the job done. As a leader, you must give people your best for them to be successful — but start with getting the right person in the right seat on the bus. I ignore that leader’s advice.

Nelson: To accept the current state of the business. I’ve heard it at several steps in my career that “this is just how things work and we need to accept it,” or “that strategy won’t work,” or “that territory is mature and will have a hard time growing,” etc.

These statements may be true in some situations, but I’ve found more times than not that there are several ways to skin a cat, and accepting the status quo because “that’s how it’s always been done” is rarely beneficial. At the end of the day, I’m stubborn and like to push the envelope — so far, it’s worked out pretty well for me.

How is your company dealing with the ongoing threat of e-commerce and consumer-direct HVACR sales?

Nelson: We are continually adding to our own e-commerce site (dsgsupply.com) with the ultimate goal of having a true one-stop shop for our customers where they can research a product, check availability, and ultimately place the order.

As far as consumer-direct sales are concerned, it’s important for both wholesalers and contractors to be reminded (and remind others) that we provide value and expertise in the channel and are not just a place to buy product.

This is how it is in other industries. Take the medical field, for example. We count on a doctor to perform surgery and understand that there will be a high cost for the procedure since we are essentially paying for that person’s knowledge and expertise. We need to continually leverage this same idea in the trades as a way to justify our place (and our value) in that chain — our experience and our knowledge is something that Amazon or other consumer direct platforms can never replace and thus carries significant value.

If we execute our plans accordingly, we don’t see these as threats but rather as additional channels to give contractors access to the value DSG provides.

What is the most distinctive benefit and/or challenge of the ESOP model?

Emineth: It’s difficult to narrow down the benefits of an ESOP, because there are many. From a big picture standpoint, there is a palatable level of ownership and pride that you will experience from the employees.

The biggest challenge is helping the emerging workforce understand the value of being part of an ESOP, because it’s not a concept that is heavily researched by this group entering the workforce.

What was your favorite high school or college course? Why? Was it the content, the teacher, something else?

Nelson: I studied Marketing in college and enjoyed courses around consumer/buyer behavior and the science of “why we buy.” The course content was spectacular, and it was fascinating to learn about how companies and brands cater to their audience to influence their customer’s behavior. It was a blast dissecting different marketing campaigns to determine why it worked (or didn’t work). This is a part of my job today that I really enjoy. I typically jump at the opportunity to work with our dealers on how to grow their own businesses.

If you could have built a career in any other job or field, what would you have chosen?

Emineth: That is an easy question. I would have chosen to be a college football coach. I love the game, I love the strategy required to build successful programs, but mostly I believe the thrill of the process, playing the games, and helping athletes find their best self would be the most rewarding career a person could have.

Oddly enough, much of these benefits exist in business today — just not the gameday adrenaline rush!

Nelson: At this point in my career, it’s difficult to imagine doing anything else, but in all likelihood, I would have been a teacher. I love working with kids and think it would be a blast helping them learn and grow. Now that I have two kids of my own, I know how important teachers are in young people’s lives — it would be awesome to have the opportunity to impact so many young people.

Is there a type of "minor" HVAC equipment that you're seeing trending way up or way down these days?

Nelson: Without a doubt, it’s anything related to improving indoor air quality in both homes and businesses. IAQ has always had a place in our world, but it hasn’t been universally accepted as a required solution until COVID-19.

We are seeing dramatic increases in upgrades to 4-inch media filters, whole-home ventilation products, and most dramatically of all, UV lights and ionization products for air purification.

DSG covers about as broad a range of trades and equipment as any distributor we've talked to for this feature -— electrical, plumbing, HVAC, automation, waterworks, on-site sewer/water/well, metering. Can you point to an insight or two picked up while dealing with one particular trade that carried over to how you do business with others?

Emineth: Some of our trades require DSG to provide significant technical expertise. When you think about designing an HVACR system, or complex site drainage design, or an automation panel that DSG engineers and builds, you are getting into a realm of expertise that many distributors don’t offer.

We often build on this expertise to bring service offerings to our other business segments. We use training concepts or ideas to help inform our customers in other business segments and round out their ability to upsell, create add-on solutions for existing clients, or develop capabilities in their service offering that are in addition to what they already do. It serves us well to have this expanded windshield, which forces us to be better across multiple disciplines.

For access to more podcast episodes, click here.