Celebration Corner: IDEAL Industries' 100th anniversary
The maker of products and tools for the electrical, wire processing, data communications, aerospace, automotive and construction industries planned to celebrate at Wrigley Field, also marking its centennial this year.
The Business: J. Walter Becker founded the Ideal Commutator Dresser Company in the kitchen of his mother's Chicago home in 1916. His original product was an abrasive stone used in industrial motor maintenance. Becker moved his company to Sycamore, Ill., in 1924 and a few years later developed another revolutionary product, the screw-on wire connector. The company changed its name to IDEAL Industries Inc. when it became a corporation in 1946.
"I don't think my granddad had much sense that this was a long-term legacy family business until right after World War II," says Dave Juday, IDEAL's third-generation retired chairman and CEO. "It wasn't until his sons-in-law came into the business that he thought [the company] really had a different future than what he had imagined."
IDEAL expanded beyond industrial motor maintenance into manufacturing and distribution of electrical components in 1950. Becker, who died in 1961, "was an engineer by training, [but] his strength was really in marketing, and in understanding and reacting to markets," Dave Juday says. "He knew when to get in—but, more importantly, he knew when to get out of a business. He knew when it wasn't working."
IDEAL expanded its operations to Canada, its first international venture, in 1962. By 1970, the company had shifted its focus to manufacturing electrical products. Eugene "Tug" Juday, husband of Becker's daughter Jean, retired as chairman in 1984 and was succeeded by his son Dave Juday, who grew the company through numerous acquisitions. In addition, IDEAL entered the retail market in 1992.
Today, IDEAL has 1,200 employees and operates facilities worldwide. Jim James, a non-family member, took over from Dave Juday as chairman in 2014. Under James's leadership, the company has adopted a new growth strategy that focuses on internally developed products rather than acquisitions.
During its centennial year, the company is in the process of moving into a new, 220,000-square-foot manufacturing facility in Sycamore. One operation that is not moving is the company's first: commutator stone manufacturing. "Our legacy from Walter, the founder, is that you make good business decisions," Dave Juday says. "We've had this product in the line for 100 years. It's run its course; now let's move on." The family plans to take one last photo in the old building; the family portrait will be shot in the room where the stones have been manufactured.
IDEAL products have played a role in several historic events. IDEAL fuse pullers accompanied Commander Richard Byrd's expedition to the South Pole in 1933, and the company's wire strippers were taken on the Apollo 11 mission to the moon in 1969.
The Family: The IDEAL family comprises 50 members; there are 30 family shareholders, who represent the third through fifth generations. The family council, established in 1992, is now chaired by Meghan Juday, Dave's daughter.
Dave Juday credits founder J. Walter Becker with establishing the family culture by creating a consensus model of governance, rather than a proxy vote model, for his two daughters. "He basically said, 'As long as you two agree, you can do whatever you need to do and run the business as long as you want,'" Juday says. The family moved away from governance by consensus over the years, Juday says. "One of the first things I did when I took over the company was to re-create that model." Today, he says, the family acknowledges that "all our opinions are important" but understands that ultimately they must achieve consensus.
Juday notes that the family has changed its governance system over the years to respond to succeeding generations' differing attitudes and expectations. "My sister and I made some pretty significant changes, and Meghan has redone the thing again," he says. Meghan Juday has spearheaded a revamping of the family governance system based on values shared by the fourth generation. "Much of what she has done in the years she's been leading on the family side is very different from what I was doing—and, frankly, what I was capable of doing," her father says.
Recently, the family has been working on creating a trust to replace the trusts that currently own the majority of the company's stock. Those trusts, formed in the 1950s, are destined to dissolve because of "rules against perpetuities."
"The previous generations had done wonderful estate planning work that essentially assured an income for them while passing on the growth of the business to the succeeding generations," Dave Juday says. "The problem was that what they did only worked for a single generation."
IDEAL's current senior generation has devised a method of using a set of newly created trusts to replace the existing ones and resolve the issue for the long term by avoiding the "rules against perpetuities." The new planning will result in "assured income for the older generation with the growth accruing to the younger ones," Dave Juday says. "This is the third time a generation has faced the same problem, but this time we can put it to bed for good."
"The same year we're celebrating our 100-year anniversary, we are setting the company up for success with this perpetuity project for the next hundred," Meghan Juday says. "We are basically securing our future and all the work that we've done up to this point."
The family governance work set the stage for progress on the business side, Meghan Juday says. "In my mind, it's pretty apparent that had we not had the good will of the family, and had we not really done some very, very hard work over the last many, many years in terms of our family governance in building trust and maximizing engagement and building cohesion, there is a high likelihood that we wouldn't be here today, or we would be looking very, very different. I don't think there is any way we could have hired anybody like Jim James," or attracted high-caliber independent directors or management team members, she says.
The Celebration: IDEAL began its anniversary activities in January. The company sent letters to customers and employees, thanking them for their role in helping IDEAL to reach the century mark. Along with the letter, the company sent a calendar that highlighted important dates in its history. IDEAL also published a new company history book to honor its centennial.
IDEAL has entered into a marketing partnership with the Chicago Cubs baseball team beginning this year. The team has been expanding and renovating Wrigley Field, which coincidentally marks its 100th year as home to the Cubs in 2016. IDEAL's Audacy wireless energy management system is being used in the renovated stadium.
On July 6, IDEAL and Wrigley will hold a joint 100th anniversary celebration, featuring 1916 replica throwback Cubs jerseys given away to 30,000 fans. IDEAL family members, management team members and employees will attend the July 6 Cubs game.
As part of the marketing partnership, IDEAL receives 50 tickets for every Sunday Cubs home game. The company is offering these tickets to its employees via a raffle.
"I think the event that we're going to be co-celebrating with Wrigley Field is going to be absolutely thrilling for the family," Meghan Juday says.
"The deal with the Cubs, that kind of big public splash, is very atypical for us," Dave Juday notes. "Out of character as that is, there's a real good reason for it."
Along with the shift from growth through acquisition to organic innovation, he explains, IDEAL—which had traditionally sold its products via distributors—moved into a different sales channel. Supplying the Audacy system to Wrigley Field required IDEAL to work directly with the architects and engineers. "This is going to be a great learning experience for us," Dave Juday says.
Also in celebration of IDEAL's centennial, the family will host a dinner at the annual family meeting for the management team, advisers and other key people. Employee events, many with an international theme, are scheduled throughout the year, and a major celebration is planned for the November/December holiday season. In the fall, IDEAL will invite retirees to a catered luncheon and tour of the new building.
IDEAL is also partnering this year with Northern Illinois University to create and fund the IDEAL-NIU Intrapreneurship Program. NIU juniors and seniors accepted into the program will work in interdisciplinary teams to develop business plans that address issues important to IDEAL. Students who successfully pitch their business plans to IDEAL executives will be hired as interns; the experience could lead to the company providing resources for product and marketing development or job offers upon graduation. IDEAL facilities in DeKalb, Ill., that the company is abandoning as it moves into its new manufacturing plant will house the "intrapreneurship" program.
The Advice: Dave Juday says families preparing to celebrate a milestone business anniversary should think about their future in addition to honoring their past.
"If you're going to spend all your time focused on 'Weren't we great? Didn't we do a great job?,' that would be a terrible conversation," Dave Juday says. Instead, he recommends that business leaders think about what the next generation will have to do differently from the current modus operandi to ensure the company's survival.
"Use your hundred-year anniversary mark to spend time looking back and celebrating all those meaningful moments," Meghan Juday says. "And then also spend a lot of time talking about what you're doing to set yourself up for the future. Celebrate both of those, and try to get some big wins with that."
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