Hall of Fame: Michael and Dan Schwab: Staying True to Their Roots
For Michael and Dan Schwab, co-presidents of D&H Distributing, the list of accomplishments they have achieved at the helm of this multi-generational family business, started in 1918 by their grandfather, who was then succeeded by their father, Izzy Schwab, the company's current CEO, is a long and distinguished one.
Both brothers attended Pennsylvania's Wharton School, and Michael got a law degree from Villanova. Neither had originally planned to come into the business, but when they were brought on board at the company, Michael
recalled, "we started in entry-level positions with the same compensation as similar roles, and we had to earn our success."
according to Michael, but they huddle daily to collaborate on joint decision-making focused on "empowering managers, combined with strong communication in all directions." Michael encapsulated the D&H cultural philosophy as: "'Roll up your sleeves and work hard, but have a good time. We all spend more time at work than with friends and family, so let's make it a fun and fulfilling time together.'"
d Barry Schwartz, vice president/sales for the Digital Products Division of Toshiba America Information Systems, and an industry colleague of the Schwabs for 15-plus years. "Michael and Dan truly care about their vendor relationships and all the product categories which their company brings to market."
d overseeing the transition of the business from a regional model in the late '80s to a national model with more than 100 new manufacturers as a career high point. Dan, for his part, counted among his proudest moments the creation of an Educational Division that ballooned from $1 million to $100 million in sales, "then moving on to become vice president of marketing, helping truly to establish the D&H brand in the IT and CE channels."
But perhaps most noteworthy is how, during the 2008 recession, as Dan pointed out, "when U.S. distribution shrank double digits, D&H grew double digits that year and in 2009." He attributed that extraordinary result to increased hiring, advertising and customer and employee benefits—and to a business philosophy underpinned by a motto: "In difficult economic times, don't follow the herd, but instead make decisions that address what will happen years away versus just this quarter."
Dan said. "When we became co-presidents, we realized one of D&H's most important strategic differentiators was its company culture, and it was our job to maintain and expand that." He noted that D&H became an ESOP (Employee Stock Ownership Plan) company in 1998, and that currently, D&H employee co-owners own 36 percent of the company "and have a tremendous work ethic and pride. ... When we became an ESOP, that put an exclamation point on the fact that every employee is part of the success of the whole, and we all share in providing great service, leading to outstanding growth."
d Michael. "Everyone in the company, from the credit department, to the warehouse, and obviously, to sales, goes above and beyond to exceed the customer's expectations."
Dan said, "is that we helped, along with other incredible D&H management, to grow from a $400 million company in 2000 to a more-than-$3.5-billion company today—with no acquisitions, just organic growth. We still have the same unique culture today—even stronger."
Dan said. "We, and all of D&H, have ingrained in us the concepts of long-term thinking and planning, and Izzy stressed the importance of every single person in the organization. His philosophy is to hire good people and give them the tools to be successful, but also hold them accountable," added Michael.
id they are ready to meet any market changes that could alter the distribution—and by the same token, the retail—landscape. "The future of our industry will be marked by rapid product transition, in keeping with the Internet of Things, and it will also result in a more educated customer," Dan predicted. "Many new technologies and products will also be coming from startups. It is critical that salespeople be more highly trained in our business in order to add value."
projected that "retail will have smaller footprints" in the future, "with a continued shift toward ecommerce. From D&H's standpoint, we need to complement that transition by being incredibly cost-effective, and experts in logistics. D&H plans to be ahead of the curve, through continuous evolution."