By Sue Colby, Special to PGA.com
The story of Kohler Company is one of American history and corporate success. It is a chronicle of self-reliant, independent-thinking leadership that has never wanted for original ideas. In the latter half of the 19th century, Austrian immigrant John Michael Kohler saw that his destiny lay with America’s Industrial Revolution.
He bought a small foundry in Sheboygan, Wis., and set to work making cast-iron plowshares and other agricultural implements for local farmers. Kohler’s foundry also made decorative cast-iron furniture, hitching posts and other ornamental iron castings.
In 1883, Kohler heated one of his existing cast-iron products and coated it with enamel powder. His catalog described the result as “Cast Iron Enameled Water Troughs and Hog Scalders. When furnished with legs can be used as a bathing tub.” Kohler Co. suddenly was in the plumbing business.
Four years later, plumbing fixtures and enameled ware accounted for 70 percent of the young company’s total business. By 1889, Kohler was president of a growing company of 65 employees, many of them immigrants like himself. Their Old World craftsmanship and commitment to excellence helped forge a company that today reaches far beyond the shores of Lake Michigan to encompass an enterprise of more than 44 plants in 13 countries and more than 26,000 associates worldwide.
At the turn of the century, John Michael Kohler took an extraordinary business risk that would establish the future course of the company. He moved his business to the tiny settlement of Riverside, four miles west of Sheboygan. Many called the move “Kohler’s Folly.” They found it difficult to understand why a successful manufacturer of farm implements and rudimentary plumbingware would relocate to the backwoods, away from a skilled workforce, utilities and convenient transportation.
For Kohler, the reasons were obvious: a wonderful natural environment with clean air and room for expansion. He saw the potential to create something of lasting value; a company with permanence built on quality, craftsmanship and services that would improve the quality of life for all who shared in them. At the turn of the century, the well-equipped bathroom was an exception. Bathtubs and other plumbing products were considered boring utilitarian necessities. However, Walter J. Kohler, a son of the company founder and a man of extraordinary vision, championed the idea that plumbing fixtures could be beautiful as well as practical.
Under his leadership, the company witnessed a flurry of intense innovation and product development. First, it developed a reputation for technological advancements with products such as the one-piece, built-in bathtub, a design considered revolutionary in the industry. Then, during the 1920s, it became a full-line manufacturer when it expanded its offerings to include vitreous china fixtures and brass faucets and showerheads. The entire concept of bath and kitchen décor also changed with the company’s introduction of color-coordinated plumbing fixtures.
From that point on, Kohler plumbing fixtures would come to mean beautiful form as much as reliable function. A focus of interior design, the bath and Kohler’s contribution to it were even part of an exhibit in New York’s Metropolitan Museum of Art in 1929. Commenting on the display of Kohler fixtures featured in black, a museum curator at the time said, “When the general run of American manufacturers are convinced -- as the Kohler people are -- of the value of art in industry, they will introduce into all the furnishings of the home the fitness of form to function, the same splendid serviceability and convenience which have made the world admit that the American bathroom is a thing of beauty.”
Walter Kohler also diversified the company by adding electric generators to the product mix. The first of those generators was called the “Kohler Automatic Power and Light.” It was a rugged 1,500-watt model powered by a Kohler-built cast-iron gasoline engine and it provided electrical power that rural America could depend on.
Admiral Richard E. Byrd took Kohler generators on his famous Antarctic expeditions. When he reported to the world that they had performed flawlessly under extremely adverse conditions, the Kohler name and its reputation for durability and dependability were firmly etched in consumers’ minds. It’s a reputation the company still trades on today.
Following the move to Riverside, small wood-frame homes soon began to dot the landscape around the factory. Ever the idealist, Walter Kohler had a genuine interest in the lives of his employees and worried that the community, which by now had been renamed and incorporated as the Village of Kohler, might become just another congested metropolis. He toured the garden cities of Europe in 1913 for inspiration. Returning home, he hired the Olmsted Brothers firm of Boston, renowned for its land planning skills.
Together, they devised and laid out a 50-year master plan, an organized approach to the development and growth of the village that protected it from urban encroachment and ensured a certain quality of life. The plan served as a blueprint for developing the Village of Kohler into one of the loveliest planned communities in America because in Walter Kohler’s words, “A worker deserves not only wages, but roses as well.”
In 1918, Walter, who served one term as the governor of Wisconsin from 1929 to 1931, also commissioned The American Club to house the immigrant workers -- “single men of modest means” -– who held jobs in the factory. The facility had modern kitchens, a beautiful communal dining hall, reading rooms, card and billiard rooms, a barbershop, a “tap room,” and even a four-lane bowling alley.
Encouraged to enter the mainstream of American life, club residents attended free evening classes in civics, American history and English grammar. Each spring, the company designated a Naturalization Day when employees were given the day off with full pay and taken to the Sheboygan County courthouse on company time to obtain their important “first papers,” an initial step toward citizenship.
In 1940, the leadership of the company passed to Herbert Kohler, Sr., the youngest of John Michael Kohler’s seven children. His first task was to convert the plant to war-time production that included manufacturing torpedo tubes for submarines being built at the shipyards in Manitowoc, Wis., just 23 miles north on the Lake Michigan shore. During World War II, the company also increased production of its generators, or electric plants as they were called at the time, to meet the needs of the armed forces.
Thousands of Kohler generators were shipped to troops in the European, African, Italian and Pacific theaters, as well as to Alaska and Central and South America.
After the war, and on the occasion of the company’s 75th anniversary in 1948, Kohler Co. diversified again. This time, the new products were lines of stand-alone industrial engines. They became the springboard from which the company launched its very successful Global Power Group.
The 1960s proved to be the start of the company’s second distinctive era of intense innovation and product development. The “Bold Look of Kohler” emerged in the form of a new ad campaign and an array of bath and kitchen products in vivid accent colors. It was the first of many daring introductions throughout the decades to follow as the Kohler name became synonymous with state-of-the-art design for the American bath.
Kohler innovation continued meeting consumers’ needs with a fresh approach to design. His-and-her baths with double lavatories for two-career households gained popularity. The company also advanced the trend toward increased luxury in the home by fostering the master suite concept. Console tables and bath vanities began to share a unity of design with bedroom furnishings. Luxurious whirlpools transformed bathrooms into retreats for relaxation. Technological improvements enhanced the bathing experience while promoting water conservation.
The “Bold Look of Kohler” campaign was significant in that it solidified a culture and attitude at Kohler Co. It represented leadership in design, technology and service. It gave worldwide recognition to the Kohler name among the consuming public and set the stage for one of the most exciting and most expansive times in Kohler Co.’s history.
Assuming the helm in 1972, Herbert V. Kohler, Jr., current chairman, chief executive officer and president, continued the generational focus of his predecessors, ensuring the longevity, vitality and strength of the Kohler family and the company that bears its name.
In the early years of his leadership, Kohler Co. spent considerable time creating effective, closely-knit management teams at various levels of the corporation. As a result of this effort and the regenerative, post-recession spirit in 1975, a strategic corporate model was constructed which went beyond the normal time horizon for objectives. It laid down fundamental precepts based on hard business logic as to what the company should be, and could be, over the long term.
By the mid-1970s, the Village of Kohler was little more than a sleepy town with a big factory at one edge. In keeping with the company’s long-term environmental sensitivity, a second 50-year plan was initiated in 1976 to further guide the orderly development of more than 4,000 acres within the village. Under the auspices of Village Realty & Development, the plan actively addressed the ongoing need for “green space,” woodland and wetland preservation, and clean air and water.
The master plan, which utilizes the company’s historic and environmental assets, spurred the development of several businesses that today form the company’s Hospitality and Real Estate Group. The centerpiece of the plan is The American Club, the historically significant structure that had outlived its original purpose as a temporary home for the many immigrants who worked at Kohler Co.
Lavishly restored as an elegant resort hotel and subsequently placed on the National Register of Historic Places, The American Club is the only AAA Five Diamond resort hotel in the Midwest, even though it sits directly across the street from the Kohler factory and corporate headquarters offices, which employ 5,500 people. It is complemented by Blackwolf Run and Whistling Straits, four championship golf venues that are consistently ranked among the top resort courses in the country.
Other successful hospitality and service businesses include a private 500-acre wilderness preserve, a health and racquet club, a spa, nine restaurants, a second hotel, the Kohler Design Center, and a collection of home furnishing and specialty shops.
The “garden village at the factory gate” is tangible evidence that nature and progress can exist in perfect balance. By taking the long view with these facilities, company leadership established the Village of Kohler as a premier resort destination, increasing its prosperity while preserving its charm. For the first 111 years of its history, all of the company’s growth came from within. It came from decisions such as adding a pottery, a faucet, and a generator plant at its Wisconsin location in the 1920s; expanding into the production of engines and precision controls in the 1940s and ’50s; increasing vitreous china and plastics manufacturing capabilities by opening plants in South Carolina and Texas in the 1950s and 1970s, respectively; venturing into hospitality businesses in the 1970s and ’80s.
While the name Kohler has long been synonymous with quality materials and innovative plumbing products, it represents much more. In the 1980s, the company began to develop a family of companies to supplement its internal or organic growth with new materials, products and markets. Each new venture offered the finest in products and services within its respective industry, providing new opportunities for excellence.
It started in 1984 with the purchase of the Sterling Faucet Company, which brought synergistic manufacturing facilities and direct access to growing retail markets. Kallista, a more recent addition to the Kohler portfolio, offers collections of classically styled luxury products for the kitchen and bath from manufacturers around the world. Over the years, Kohler Co. established a solid plumbing beachhead in Europe by bringing such companies as Jacob Delafon, Mira and Sanijura into its family of European businesses. These market leaders not only provide an effective base from which to distribute throughout Europe and the Middle East, they also bring excellent product technology and significant position in growing product categories.
Beginning in the mid 1980s, Kohler also expanded its influence on interior design and fostered the merging of the bedroom and bath, a concept it had already pioneered, by entering the furniture and accessories business. Baker and McGuire, two of the finest brand names in the home furnishings industry, brought new markets, technologies and design resources to Kohler that fit hand in glove with Kohler’s contribution to gracious living.
The company further expanded its presence and influence in the kitchen and bath by bringing cabinetry and tile manufacturers into the fold with brand names that included Canac, Robern and Ann Sacks.
From the 1920s to the 1980s, Kohler Co. was the leading exporter of high-end plumbing to the People’s Republic of China. Today, the company is the leading manufacturer of mid-range to high-end plumbing in the People’s Republic with three large, fast-growing manufacturing ventures that produce vitreous china fixtures and brass faucets, along with cast iron and acrylic baths and whirlpools.
The story of Kohler engines is a story of engineering ingenuity which produced a succession of advances in basic engine design. New technologies such as the invention of the automatic compression release and the automatic choke assembly in the 1960s and ’70s helped to establish Kohler’s reputation for easy starting engines. In 1988, Kohler leapfrogged the competition with the introduction of the industry’s first overhead valve small engines.
Today, Kohler engines, which now roll off production lines in Kohler, Wis., Mexico City, and Hattiesburg, Miss., are used by major manufacturers to power lawn and garden, agricultural, industrial, construction and recreational equipment.
Pulling together its resources and reputation in generators, plumbing and hospitality, the Global Power Group has, in recent years, spun off a new business addressing the rental power requirements of meeting planners in the mega-billion dollar corporate, sports and entertainment industries.
Presently, Kohler is a world leader in products for the kitchen and bath and one of the oldest and largest privately held companies in the United States. It continues to be a venture driven by innovation and design excellence. From factories and showrooms around the world, Kohler ideas, craftsmanship and technology are at work today leading the way to more gracious living in kitchen and bath products, engines and generators, fine furniture, and hospitality and real estate services.
A person standing back looking at the activity and growth of Kohler’s collection of businesses might observe that the business groups would have more value standing on their own. If so, that person would miss the real essence of Kohler Co., which is people working together around mission and principles, focused on living environments within the home, around the home and within public space.
An effectively run business has opportunities to create the kind of society employees want to live in. Throughout Kohler’s 131-year history, these opportunities were and continue to be met with innovative products and services that reflect the changing needs and wants of its customers. Long-range planning and investing to create tremendous, lasting value continue with today’s family leadership.
“The best family firms are those whose owners are committed to generational perspectives,” says Herbert V. Kohler, Jr. “They don’t think in terms of exit strategies or maximizing financial returns over the next three months. They seek maximization of inherent value defined not by the market, but by the family.
“Being an independent, privately held enterprise has had tremendous impact on what this company has accomplished. We’ve had great leeway to think and act long term.”
That approach is evident in such unconventional decisions as moving the Kohler factory to the farmland in 1899, branching out into the generator business in the 1920s, and developing a second 50-year plan for the controlled growth of the Village of Kohler in the 1970s. All of these actions reflect leadership that was focused on creating something of lasting value. Each generation has taken independent thinking to new heights while pursuing a singular vision of what the company can become. With a new generation of Kohlers active in the company today, the stewardship of the Kohler heritage continues.
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