pme in October interviewed Rob McDonald, president and CEO of A.Y. McDonald Mfg. Co., at the company’s headquarters in Dubuque, Iowa, about issues facing the plumbing and waterworks industry. Before taking on his current responsibilities in 2012, McDonald was vice president of sales and has held other positions in the company. Andrew Young McDonald, his great-great-grandfather, founded the company as a plumbing shop in Dubuque in 1856. Today, A.Y. McDonald’s products include waterworks brass, plumbing valves, pumps and water systems, and high-pressure gas valves and meter bars.
What attributes have brought A.Y. McDonald to the point where you will celebrate your 160th anniversary next year?
RM:Our key attributes that have led to our longevity are hard work, perseverance, ability to change and evolve, but most importantly, our people. We have a picture hanging in our office of our foundry employees from the late 1800s. While we may not know any one of these individuals’ names, it is never lost on me that the people in this picture are the reason we are still here today. Just like our people back then, the people who work here today work hard and moved the company forward. Over the years there have been a lot of people like this who have helped our family business grow and prosper. One of our sayings is, “More than a brand. We’re a family.” We take that seriously when it comes to our employees. We’re a family business, and that’s one of our great advantages.
Another driver of our success is our belief that “The Customer is the Boss.” This is our motto and our people truly believe it. You can have the best foundry around but if you don’t have customers, you are going to go out of business. We firmly believe our customers “hire” us when they begin buying our products and “fire” us when they stop buying. We want to keep our jobs so we do whatever it takes to keep our boss happy. To do that takes teamwork across the company, so no one minds going to the extra mile to help take care of a customer.
What do you see as A.Y. McDonald’s greatest accomplishment or most distinguishing feature?
RM:We are one of the top 100 oldest family businesses in America as determined by Family Business Magazine. To be considered, the same family must hold ownership of the company for its entire existence. We find A.Y. McDonald in good company on a short list of businesses like Zildjian Co., the famous cymbal maker; D.G. Yuengling & Son, the oldest brewery in America; the King Ranch in Texas; and Levi Strauss & Co. Our longevity is a great source of pride in the company.
What is the common denominator in products you manufacture for two of your primary customer groups in the plumbing and waterworks industries?
RM:Some of our wholesale distributors cater to both plumbing and underground utility contractors so ordering these different products from one manufacturer not only saves time but is also more economical. It allows our customers to become more important to fewer vendors, which is always a benefit in the negotiation process. Another common denominator is most of the products we manufacture and sell are used to make clean potable water available to people. We kicked off a marketing campaign a year ago under the slogan “We Make Water Work” as a collective tip of the hat to our employees, our distributors and all the end users who install our products whose efforts “make water work.”
What trends are you seeing in plumbing and waterworks in areas such as product materials, system design and pricing?
RM:Our customers want to deal with user-friendly companies and they want training. In late September, we conducted an Innovation Summit/Voice of the Customer event where we gathered 10 customers here in Dubuque from different sectors of the waterworks industry including distributors, municipal engineers and installers. The overwhelming theme was better service from the manufacturer in terms of product availability, quick shipping and in-depth product training. This meeting was very useful in providing some fresh ideas to our company but also confirmed that we are moving in the right direction in some of the initiatives we already had in the works. One of the amazing things was that the customers thanked us for asking them what we need to do as a company.
In what market sectors do you see opportunities for growth in today’s economy?
RM:A lot of our business is tied to replacing our nation’s proverbial “crumbling infrastructure.” Unfortunately, a lot of the actual infrastructure doesn’t get replaced until it literally fails. Water main breaks happen every day in America not because of just freezing or ground shift but because the materials simply corrode. The good news is when water mains fail, they get fixed that day. The bad news is they usually are only patched. Until our federal, state, and local governments come to understand and address the needs of their water systems, we will continue to fall behind. In the meantime, this sector can only get better from a business sense as the water infrastructure continues to deteriorate.
Do issues remain regarding the installation or specification of lead-free products?
RM:We were the first waterworks manufacturer to provide no-lead product in large quantities to a municipality for testing back in the 1990s. It was a colossal change for everyone across the waterworks and plumbing industries. Some waited until the last minute to take action while others like A.Y. McDonald worked tirelessly ahead of time so that when the change took place Jan. 4, 2013, it was just another day for us and our customers. With almost three years having passed, most would tell you there aren’t any large issues remaining with the changeover to lead-free brass.
In what new ways is A.Y. McDonald connecting with its customers?
RM:We communicate in a lot of new ways and we have more work to do on this front. We utilize all the usual social media outlets to spread our message and have had great success with our YouTube channel for training videos. One of the struggles of being a company that has been around for a long time is that it is easy to fool yourself that you know what your customers want. Our customers tell us they not only want training but they need it due to the skill level of people coming into their companies. If we can become a leader in this area, it will give us a competitive advantage. Our Innovation Summit this year with our customers served as a great platform to listen to what our customers want and expect from A.Y. McDonald. We have customers who like our old-fashioned no voicemail, no auto attendant customer service department that is answered by a person. But we also know we have some customers who want to email, text, or place and check their order online. We are working diligently to be a company whose customers can communicate with us how and when they want.
RM:No matter what your business is, it is important to be open to change and be able to evolve. Approaching our 160th year in business, A.Y. McDonald is a great example of the importance of this advice. My great-great-grandfather, Andrew Young McDonald, was a plumber when he started his business and when he retired, his company was not only a manufacturer but also a wholesaler. He understood and was open to change. There are thousands of families over the years, including mine, that are grateful for that wisdom displayed by our founder.