Oct 29, 2014

By Rumasa Noor

UW-Whitewater alumnus Aaron Jagdfeld has reached the heights that many people only dream of.

Jagdfeld, CEO of Generac, is a Milwaukee native who graduated from UW-Whitewater in 1993 with an accounting degree. He started his career at the public accounting firm, Deloitte. After spending a year in public accounting, he decided to join Generac.

He held different positions in the accounting department at Generac, and moved his way up to becoming the Chief Financial Officer (CFO) of the company. He became the CEO in 2008. Jagdfeld was recognized by Forbes magazine as one of America’s 20 most powerful entrepreneurs under 40 years of age.

He was invited by UW-Whitewater Innovation Center to talk about his journey and the story of Generac.

History of Generac

Generac is a manufacturing company that primarily manufactures residential, commercial and industrial products. It was the first to “engineer” home standby generators and is now the number one manufacturer of home backup generators, according to its website.

The company was founded by Bob Kern in 1959, who led the company until it was sold in 2006. He retired when he was 82 years old, Jagdfeld said.

Generac had humble beginnings, according to Jagdfeld. When Kern started the business, he was unable to pay the rent of the building, which got him evicted off the facility. He then moved to a different location to operate his business.

The company saw several bumps in the road even decades after its founding. Kern faced financial troubles during the early ’80s. He told Jagdfeld that he had less money in 1982, than he had in 1959 when he started the company.

Despite difficulties, Kern did not give up. He had a “never say die attitude” which kept him going, Jagdfeld said.

“He was in his 50s and he didn’t give up; it would have been easy to take a job at Walmart or something, but he didn’t give up on it, and 30 years later his business is worth $2 billion,” Jagdfeld said.

“When I started the company we had 80 million dollars in sales, we had about 250 employees and that’s very different from today,” Jagdfeld said.

Generac operates with 3,400 employees and billions in sales.

Success strategy of Generac

Jagdfeld credits two things to Generac’s success: Innovation and acquisitions.

“You have got to constantly reinvent yourself, Jagdfeld said. “Just having one idea is a great way to start, but it’s not a very good way to finish.”

Generac was operated “organically” under Kern, according to Jagdfeld. The company did not do acquisitions until 2011.

“We turned to acquisitions to really broaden our portfolio, broaden the markets we are involved with, broaden our geographic scope which is really hard to do organically,” Jagdfeld said. “It’s one thing to grow organically in the U.S. it’s another thing to try and to grow organically in Europe, China, India, Italy or elsewhere.”

Jagdfeld emphasized that the key to a company’s success is continuous innovation.

“The reason we got to $2 billion was not because of the products we made in ’50s, it wasn’t because of the products in ’60s, ’70s or the ’80s; it was new products all the time,” Jagdfeld said.

He also said Generac follows a strategy called “Powering Ahead” which has been the basis for his company’s growth for the past 4 years.

“If you want your employees, your suppliers, your customers, your investors to understand what it is that you are doing, you have to be able to give your elevator speech,” Jagdfeld said. “You have 30 seconds to tell them what your strategy is and so the key to that is keeping the strategy very simple but broad enough that allows you enough flexibility to be able to grow organically and in our case inorganically through acquisitions.”

He said he tells his employees that if they start getting tired of hearing his strategy, it means it’s working.

Secret of Jagdfeld’s success

Jagdfeld said the secret to his success is hard work and having a strong work ethic. He said he strongly believes in making his own luck.

Jagdfeld said it was “cool” to receive recognition from Forbes, but there is one other achievement he is very proud of.

The alum was also a Track and Field athlete at UW-W, which he still values to this day.

“The only award I would say probably rivals that [Forbes] is my Whitewater Athletic Achievement award,” Jagdfeld said. “I had a decent career. It was cool to be able to have that kind of recognition from the athletic department here.”

He said most sports in college are all-year round, including track, and being able to balance sports with college and succeed at both is more of a challenge than one thinks.

Jagdfeld said his company has recently bought a facility in Oshkosh. It has also acquired a facility in Nebraska, South Dakota, and Georgia.

Generac has plants in foreign countries such as Brazil, Italy and United Kingdom too.

“We are starting to expand our business outside of USA, but those are only about 14 percent of our revenues outside North America,” Jagdfeld said. “We have a long way to go to be a really, truly international business, but we are acquiring our way there and kind of growing into that.”

Jagdfeld said the company was made public in 2010 and is now traded on New York Stock Exchange.