David and Morris Stern and David Siegel formed Standard Light Co. in 1919, at a time just after World War I when electricity was becoming more widespread in American homes.
The business manufactured light fixtures on North Water Street in Milwaukee. In the 1930s, the company shifted its focus to electrical supply distribution and changed its name to Standard Electric Supply Co.[caption id="attachment_329005" align="alignnone" width="770"] Larry and Matt Stern at Standard Electric.[/caption]
When it was time for the original founders to retire, the company passed into many different hands.
“They, as was fairly typical back then, gifted and willed all their stock to their children,” said Larry Stern, David Stern’s grandson and president of Standard Electric, which is now based in Milwaukee’s Menomonee Valley. “There being three original owners, that ended up being 17 individuals that were owners of the business in that second generation.”
Larry’s father, Adolph, worked at Standard Electric his whole career, never knowing what would ultimately happen to the company.
“He never promoted the company to (me and my brother) as a good opportunity because he didn’t know what was going to happen,” Larry said, and there wasn’t one clear leader.
Meanwhile, Larry graduated with an accounting degree and went to work for a CPA firm in Chicago, then later got his law degree at Southern Methodist University and began practicing corporate law in Milwaukee.
“Those second-generation owners were getting older, into their 60s and 70s,” he said. “None of those second generation owners had any children involved in the business.”
Those not working in the business wanted to get their value out of it and transition into retirement, so in the 80s, Larry used his legal expertise to help facilitate that process.
“During that process is when I developed a desire to carry on the business to a third generation,” Larry said. “So in my mind, I had really a strong sense of wanting to carry on a family business.”
In 1989, Larry and Adolph bought out all the other stockholders and became the owners of Standard Electric.
“Before I came into the company, my dad was the last president running the business,” he said. “He was probably in that role I’d say throughout most of the ‘80s and into the early ‘90s, when he retired.”
Larry became treasurer and traveled a steep learning curve as he gained knowledge about the industry and the business from his dad. He advanced to president and began running the company in 1993, around which time he acquired full ownership of the company.
Over the years, Larry has expanded Standard Electric beyond Milwaukee and into new verticals. The company has grown to 185 employees working at 15 Midwestern locations, supplying industrial and OEM clients with automation and control products. Its 2017 revenue is expected to be $95 million.
Now 60 years old, Larry is setting in motion a plan he formed back in the early ‘90s, before the youngest of his three kids was even born: passing the business on to the fourth generation.
While there’s nothing specifically documented about how the transition will take place, Larry knows it’s time to start talking about the succession plan because his kids have reached the right age. Jason is 30 and lives in New Orleans, Samantha is 28 and just completed graduate school to become a physician’s assistant, and Matt is 24 and works for Schneider Electric, a key Standard Electric supplier.
Matt decided to join the family company around his sophomore year of college, and has planned accordingly since then, he said.
“(Larry) never pushed me in that direction at all,” Matt said. “I think we always knew the family business would be an option if me or my brother or sister wanted to do it.”
Matt majored in business management and leadership at the University of St. Thomas, and went to work at Schneider’s Schaumburg, Illinois office to gain experience in the industry as a channel development associate.
“I wanted to get more information and learn as much as I could about the electrical industry before coming back,” Matt said. “I know I’d be back in a couple years and I’d learn a lot from my dad, but I thought it would be good to get background from other people in the industry, as well.”
Matt’s supervisors at Schneider and his dad know he plans to join Standard Electric at the beginning of 2018, beginning in outside sales at its Chicago office and then moving to the Milwaukee office after a couple of years.
“It all depends on looking at my management team at the time and what exact roles or opportunities are available,” Larry said. “I see having that two- or three-year window to solidify that thought more and frankly, it depends on how he grows or matures himself. Regardless, it’s going to be on the operational side.”
While his siblings may not come to work for the family business, Matt has talked to them about his plans to do so and they know the door is open if they decide to join, he said.
“I think it’s exciting to be able to come into it as the fourth generation and I’m glad I’ll be able to work under my dad for a few years to learn from him,” Matt said.
“One of the things that excites me about a family business is the uniqueness of the relationship you have with your children as a result of that,” Larry said. “The short time that my dad and I worked together, I really enjoyed that opportunity to have that special unique bond with him.”