2023 Most Respected Business Leader: Rich Stinson, Making Sustainability Profitable
At the wire and cable manufacturing company’s helm, Rich Stinson focuses on clean energy’s money-making potential.
Rich Stinson is more than just an advocate of sustainability in his industry. He practices what he preaches, seeing and acting on new opportunities in renewable energy, power distribution, 5G and electric vehicle charging.
In just a few years, he has taken Southwire, his Carrollton-headquartered company, from a $4.9 billion wire and cable manufacturer to what he describes as a $9 billion diverse electrical industrial company, a major player committed to helping shrink the U.S. carbon footprint via increased electrification. The mix of business has changed as Southwire has expanded into additional markets with new products and services. Stinson expects the company to be carbon neutral by 2025 – he says it’s more than 60% there already – and he sees more growth and more profit ahead.
“It’s a great time to be in the electrical industry, and it’s a great time to be at Southwire,” says Stinson, who came to the company in 2015 as president and became CEO in 2016. “This is my 40th year in the electrical industry, and it’s more exciting than it’s ever been. In the ’80s, it wasn’t all that exciting to be a power engineer. Today, where the industry is going, it’s tremendous.”
The to-do list for his industry and his company is a long and formidable one. But it is one that Stinson is tackling with energy and enthusiasm – and results. For his efforts, he is Georgia Trend’s 2023 Most Respected Business Leader.
“The U.S. carbon footprint has to shrink,” he says from his office on the Southwire campus. Statistics – and common sense – back him up. Energy-related carbon emissions increased in 2021, following a COVID-related decline the previous year. “The fact is we have to do something about it. Industry is doing a lot, so the idea of de-carbonization – how’s that going to happen? Electrification is the solution. It’s right in our wheelhouse.”
A Long History
Southwire, a privately held family business, was founded in 1950 by Roy Richards Sr. It grew out of a company he started in 1937 to erect power poles. A post-World War II shortage of wires for those poles led him to a decision to go into the manufacturing business. Within two years, Southwire had shipped five million pounds of wire. Today half of all American homes have wiring from Southwire, and half of all the wire and cable transmitting electricity in the United States is produced by Southwire. But it has moved well beyond its original emphasis.
“Employers that have their act together and want to grow have to recognize that the world has changed. You have to have a very strong culture, with empowerment, trust, consistency, inclusion.” Rich Stinson, president and CEO, Southwire
The company was led by the elder Richards and then by his son, Roy Richards Jr., for many years. Stuart Thorn, whom Stinson succeeded, was the first non-family member to serve as CEO.
Stinson came to Carrollton with his family – wife Rebecca and four children – from Pittsburgh, where he retired from Eaton Corporation, a publicly traded company, as president of its $5 billion Electrical Systems and Services Group. His history with the electrical industry includes a stint at Westinghouse and posts in Japan, Puerto Rico and Mexico.
He liked what he saw at Southwire. “I really wanted to work for a private company. I got tired of earnings-per-share. The key within a private company is we look at things long-term. The other thing that excited me was the opportunity and challenge around sustainability, the environment, and the expectation of shareholders on how well we should work within the community. It’s a lot of work getting sustainability into the fabric of the company. That is exciting for me, something I believe [in] as a person. It’s really important to take care of our environment.
“Roy Sr. and Jr. had put [in] a very good basis and foundation for the company and formulated a wonderful culture,” Stinson says. “We’re taking a lot of their foundational work and accelerating it. What hasn’t changed in my leadership is a strong culture, what hasn’t changed is a strong alignment between board members, shareholders and the management team. What has changed is more processes and more production in our functional areas.” Combining the push for clean energy and continuous improvement, “we’ve taken it to next level.”
The growth and success of recent years, fueled by some key acquisitions, has allowed Southwire to build its organizational capability, refine its strategy and earn recognition. “We’ve gotten results,” Stinson says. The company is listed as one of the U.S. Best Managed Companies by Deloitte and the Wall Street Journal and as a Top Employer by DiversityJobs.com. It has received the Energy Matters Award for Best Sustainability by a Large Company from the Georgia Public Service Commission and is on Fast Company’s Best Workplaces for Innovators list.
“I would suggest that Southwire has had a good culture of sustainability, and we take sustainability to a much broader distribution – living well for our employees, safety, growing green, giving back from a community standpoint,” Stinson says.
As for sustainability and the bottom line? “There is no doubt that our environmental programs are paying for themselves. Our energy usage is down – gas, water, electricity. Our operational costs go down as we become more and more sustaining. The markets we are serving are very sustainable, very environmentally friendly, and [are] providing us a revenue stream. The costs go down on one side, and we have revenue stream on other side. I’m one of those people who firmly believe sustainability doesn’t cost you money,” especially for a large company. “It’s another avenue to make money.”
Southwire’s growth is building on its strong history as a wire and cable manufacturer.
“Power is generated by a coal-fired plant, a gas-fired plant, a nuke, wind, solar,” Stinson says by way of explaining Southwire’s traditional role in the electrical industry. “So what we do, we take it from that generation to the transmission, all those big lines overhead. Then it comes to a substation. We do all the wire and cable in the substation; from the substation, it goes to primary power. We do all that wire and cable. From there it goes to a transformer; it’s reduced to low voltage and becomes secondary power. That secondary power is then translated into that socket and those lights.” He points to a wall plug and the overhead lighting in his own office.
The company’s basic wire and cable business has grown by about $2.5 billion since his arrival, Stinson says. But there has been significant growth in new areas. “Now we have a TCAS [tools and component assembled solutions] business,” an $800 million operation supplying hand tools, equipment and jobsite lighting, in addition to another $200 million business providing electrical services for the utilities market.
The possibilities are limitless, he says, largely due to the opportunities afforded by the electrical industry itself and Southwire’s expansion into vertical, or specialty niche markets, like renewable energy, solar, wind, 5G, microgrids (small networks of electricity users with a local source of supply), distribution. “The fact that we’re electrifying our seaports, our airports, working on EV – electrical vehicle charging for cars, buses, trucks – the space of mass transit” works in the company’s favor.
“The verticals we have chosen and are growing in – we are going to be the market leader in those going forward. People are going to look back 20 years from now and say Southwire got themselves in these emerging markets like EV charging. There’s going to be lot of infrastructure based on the need to charge cars. Home is going to need more power; strip malls are going to have [more] plug-in units.”
The already-promising growth possibilities for Southwire and other industry players are greatly enhanced by the Inflation Reduction Act, signed into law in August 2022 by President Joe Biden, and the Infrastructure Investment and Jobs Act that preceded it, signed in November 2021.
“All that helps us because there’s going to be a lot of government spending,” Stinson says. “The infrastructure bill’s $1.2 trillion – that will affect us. Within our business, there’s probably about $4 billion or $5 billion of market that’s going to be created, and we want to take a 50% share. Our objective is to be best of class in wire and cable but at the same time changing our market profile, getting in new businesses, becoming a diverse, industrial company.”
He sees potential as well in strengthening the country’s power grid. “The grid is in trouble – the whole idea of resilience and reliability and the need for us to rebuild the grid. We’re one of the players within the utility business, and we see this as an extreme opportunity, see the markets grow[ing] in the utility industry at double-digits, and we’ll continue to play at double digits.”
Wire and cable is a $26 billion market in the U.S. and Canada, he says, and TCAS is another $31 billion market, which means the company is operating in a $57 billion market. “Throw the electric utility market on top of that,” Stinson says, and “we’re going gangbusters.”
Acquisitions have been an important part of Southwire’s growth strategy, facilitated by increased revenues. Stinson says the company has bought more than 12 different companies since 2016, to bolster all segments of the company. “An acquisition has to fit our strategic plan. It has to gain us market share, gain us revenue, gain us technology – has to do probably two or three of those. We buy manufacturers, buy technology and assets to increase our capacity, which generates more revenue. Lastly, we look at the culture of a company, make sure it fits. And we look at sustainability. The environment does play into a decision.”
Despite the successes, Stinson’s time at Southwire has included what he calls the biggest challenge of his career: dealing with COVID. “I’ve managed through some tough times, managed in other countries, managed through downturns, through violence in Mexico, but COVID, the pandemic… I’ve never seen anything like that.” At certain points, 11% of the company’s workforce had COVID, “not because they were getting it at work,” Stinson is quick to say, but because it was so widespread. The company responded by producing close to 100 videos aimed at its employees, providing information, urging vaccinations and communicating the guidelines it was following.
The Path Forward
Looking ahead to whatever twists and turns the economy might take, Stinson is optimistic about Southwire’s ability to deal with a slowdown or a mild recession.
“My overall feeling is if you are a Tier 1 [top] contractor, distributor or manufacturer in the electrical industry, you are semi-buffered from economic woes,” he says. Smaller companies may take some hits, “but if you are a Tier 1 company with a No. 1 market share, you are going to have a reasonable year. If there is some geopolitical event, all bets are off. But a slight recession, even a medium-sized recession, I think we’re in pretty good shape. Our liquidity is good.”
What does concern Stinson? Supply chain and workforce, he answers quickly. He believes Southwire has pretty much overcome supply chain difficulties but says workforce shortages are an industry-wide problem. The company estimates there are two jobs open in the electrical manufacturing industry for every available worker.
To combat this, it is incumbent on a company to offer good compensation and benefits, but also to pay attention to employees’ working environment. “Give them autonomy, so they feel challenged. Give them a career path – that’s all important.”
COVID opened a lot of people’s eyes to the importance of flexibility and autonomy in the workplace. “Employers that have their act together and want to grow have to recognize that the world has changed. You have to have a very strong culture, with empowerment, trust, consistency, inclusion.” Southwire has provided inclusion training for more than 7,000 of its nearly 9,000 employees, he says.
Part of being a good employer, Stinson says, is a close relationship with the community that includes philanthropy. Southwire has a committee that determines how and where it disburses money. But he mentions two programs he is especially proud of: The POWER Fund that provides short-term emergency assistance to employees in times of need, and a 12 For Life work program for high school students at risk of dropping out, which has a 94% graduation rate among participants.
Stinson himself is active in civic and industry matters: He is board chair of the National Electrical Manufacturers Association, board vice-chair of the International Cable Federation, a board member of the National Association of Manufacturers, a member of CEO Action for Diversity and Inclusion and the United Nations Global Compact, and a former board member of the University of West Georgia’s Richards College of Business.
Although Southwire has a new office presence in The Battery in Cobb County, adjacent to the Atlanta Braves complex, Stinson says Carrollton remains the company headquarters. He echoes what other business leaders say about the benefits of being in Georgia, with its well-trained workers, excellent higher education system and transportation assets, including “probably the best airport in the world.”
It’s clear Stinson has a lot to keep him busy. But at this point in his career, what is it that wakes him up in the morning, eager to start the day?
Turns out, it’s the whole package. “The idea of these emerging markets, an infusion of money from Inflation Reduction Act and the infrastructure bill that we’ve never seen before, the need to de-carbonize and go to electrification. It brings all the opportunities for this company and other electrical companies.”