Conference begins on the rails…

It’s unlikely that many discussions related to the equipment industry begin with what’s going on with the railroads. But that’s where WEDA’s 2018 International Dealer Conference began during its run Dec. 5-7 in Scottsdale, Arizona.

Brian Hancock, an executive with Kansas City Southern, kicked off the conference with an ominous tone about the rail industry, free trade and past and current trade treaties involving the United States, Mexico and Canada. With his company, a transportation holding company with rail interests in the U.S., Canada and Mexico, all tracks lead to somewhere and that somewhere is south of the U.S. border.

As Hancock noted, KCS connects the center of the U.S. with Canadian rail transportation companies and the tracks they share deliver product – lots of product – to Mexico.

While that sounds simple, a recently signed trade agreement, which still needs congressional approval, could turn into a game of chicken between the White House and Congress as well as result in heated debate in Canada and Mexico.

Dealers may recall when the North American Free Trade Agreement went into place, some White House aspirants said NAFTA would create a “huge sucking sound” from the number of jobs going to Mexico. There was, of course, a loss of hundreds of thousands of jobs that took a big bite out of some industries but it also led to the creation of millions of other jobs. The U.S. gained ground in Europe and China but despite some other shortcomings, NAFTA is mostly viewed as a success.

But Hancock said the new agreement, the United States-Mexico-Canada Agreement, or USMCA, has observers wondering if the U.S. will pull out of NAFTA, something the White House has threatened to do. While new trade agreements are generally layered over others, the threat to kill one trade agreement could derail the other and disrupt the flow of “ores, minerals and anything else that moves across the three borders,” noted Hancock. It could also lead to reverting back to global trade rules set by the World Trade Organization that were in place before NAFTA.

He said key elements of the USMCA, which he considers important, include protection of intellectual property and technology, rules of content origin, investor dispute resolution, and Rule 232 Tariffs. The latter is a loophole in the NAFTA agreement that was used by the White House to impose current steel and aluminum tariffs on Canada, Mexico and the European Union. Hancock believes these tariffs will be pulled when Congress begins to look at and ultimately approve the USMCA.

The biggest fear for KCS, added Hancock, is the possibility of the U.S. backing out of NAFTA without ratifying the USMCA first, which could result in chaos from a flurry of lawsuits and higher tariffs.

Eric Wareham, WEDA’s vice president of government affairs, also shared some of Hancock’s concerns about NAFTA, the USMCA, tariffs (those against trading partners and retaliatory tariffs by trading partners), and the overall effect on agriculture. He said China, for example, is already imposing tariffs on 90 percent of U.S. ag exports to the country, which he called “incredible,” and the tariffs are going to have an effect on the behavior of farmers in North America, namely what they plant and what they buy.  

For more of Wareham’s thoughts about what’s ahead with regard to trade, read his article, Trade and Tariffs, which begins on page __in this issue.

Precise or imprecise?  

Devin Dubois wrestles with the term “precision agriculture.” During the conference, Dubois said farming has always been about being precise not imprecise. He said agriculture has always been a precision industry – farmers put “the right product in the right amount at the right time in the right place.” What’s changed is how the industry uses technology-based platforms related to information, tools, equipment, and advice.

Two years ago, Dubois was a featured speaker at the association’s conference and he said then he was trying to understand where retailers, input suppliers and independent agronomists were headed. He admitted he didn’t have an answer then but said this time around that industry technology providers are “getting some clarity on how to evaluate what dealerships are doing to figure out what kind of resources or solutions are needed” to ensure dealership effectiveness and success.  

However, he cautioned dealers not to lose sight of their core business – selling and servicing equipment. But in the “digitized ag space,” Dubois’ term for precision agriculture, he said dealerships need to define their purpose, which is what his company, FieldAlytics Solutions of Canada, does when working with dealerships.

As one of the founders of FieldAlytics Solutions of Canada (www.fieldalytics.ca), Dubois works with dealerships to help them define their purpose and determine where they might gain ground – and earn money – in the digital ag space. He said there are three areas to look at:

1. Selling services or widgets (might include weather stations, sensors, tools, etc.)
2. Improving customer production
3. Understanding customer production

But, cautioned Dubois, offering more stuff raises the expectations of customers. For example, he said if a dealership decides to sell Internet-based weather stations for farm or home use, the customer expects dealers to provide service if the product doesn’t install properly or develops a hiccup. Depending on the investment and margin on the product, a dealership could spend time they can’t recover looking for a solution.   

Dubois said dealerships have the capacity to do a lot of things and “they’re in the digitized ag space whether they want to be or not.” He said the questions dealers need to answer is how far they want to go to help producers in the digital world. “Do you want to have an independent money-making venture within the dealership, which can be tricky? Is it about differentiating your dealership from others, using a selling strategy that results in customer loyalty, which has value?” He said developing partnerships with trusted advisors, such as agronomists, add more value to the relationship a dealership has with producers.

Finally, Dubois said dealers will have to figure out how to measure their success in the digitized ag space. He said the answer to this is not immediately known but, as he noted earlier, people who work in this field are gaining clarity about what is making customers happy and how to tell if they’re happy… and whether dealers are earning income from selling digitized services or widgets that ultimately strengthen their core business, which is selling and servicing equipment.  

Leadership – it’s a living thing  

Ask 100 people to define leadership and you’ll likely get 100 responses. That’s because leadership isn’t inanimate – it’s a lifeform that breathes and changes shapes to reflect the culture and objectives of business owners, their managers and their employees.

Even in our personal lives, leadership is fluid. What we do everyday defines the level of success we have or want to achieve. If we don’t plan, we don’t do. And if we don’t do, what’s left?

Brett Barriage is CEO of Premier Equipment. The Ontario-based Deere dealership operates 10 locations, has more than 300 employees and at least 50 are managers. Barriage said leadership at Premier Equipment is broken down into three categories:

1. How leadership is viewed
2. How leadership is found (externally and internally) and determined
3. How leadership is refined

One element used by Premier Equipment to determine what type of leadership mix it has within the operation is a Task and People Exercise or questionnaire. It’s a series of questions in which managers score themselves. Barriage said the responses determine whether managers are task oriented, people focused, or control freaks.

He said quite a few managers are thrust into roles that involve more than just getting a job completed. He said these task-oriented employees, most of whom are used to producing results individually, become responsible for managing people who contribute to the results produced. He said this is where the dealership determines the leadership capabilities of Premier Equipment managers.

Another piece of Premier Equipment’s leadership assessment is borrowed from the pages of the best-selling book by Patrick Lencioni, The Ideal Team Player. In the book, Barriage said the author identifies three leadership characteristics now used by Premier Equipment to evaluate managers. Those characteristics are humble, hungry and smart.

As noted by Barriage, humble leaders are ideal team players and lack excessive ego. Ideal team players are hungry and always looking for more to do or learn. Finally, ideal team players are smart and have common sense about people and how to deal with them.

“We use these three areas as a filter for assessing where our next leaders might be,” said Barriage. “We also use them as a growing tool to assess current leaders.” He said there is an assessment outline that comes with the book and all Premier Equipment leaders have been reviewed in the three areas. “We find we’re not perfect in some areas yet strong in others.”  

As written previously, leadership isn’t stationary and Premier Equipment is using its own instincts, internal programs and outside resources to make sure the leadership culture at the dealership is not only strong but evolving. Part of that evolution was the creation of Premier Leadership University, an in-house program for current leaders and employees identified as future leaders. The content is produced internally.

Barriage also added that all employees are now being assessed and scoring themselves in the areas of being humble, hungry and smart. It’s leadership in motion and motivated leadership is a good thing.

Owen Palm, the founder, president and CEO of 21^st Century Equipment, shared the stage with Barriage during the leadership discussion. He began his presentation with a nice word about working with the association in various capacities. He said he’s worked with Curt Kleoppel at Equipment Dealer Consulting and staff from the Dealer Institute. He said about 50-plus entry-level leaders have gone through Dealer Institute management programs.

Palm discussed keeping employees engaged. Why it’s important to keep employees is pretty straight forward, said Palm. He said there is a proven ROI when employees are engaged in the dealership. His list of pros for engaged employees include:

• increased productivity
• employee retention
• higher quality of work
• less absenteeism
• improved customer satisfaction   

Once you understand why it’s important to keep employees engaged, the next objective is tackling how to do it. As Palm suggested, “how” can be whatever works. At the 16 Deere locations that make up 21^st Century Equipment, Palm offered 10 things used by his organization.

1. Focus on what matters to your organization, including sharing financials and other performance information with employees so they understand what’s at stake.
2. Practice walk-around management. This means getting out of the office and visiting with employees where they work – parts counter, service shop, accounting department, sales department, etc.
3. Avoid trying to sell ideas that really don’t matter. This doesn’t mean you shouldn’t try new things but don’t keep moving forward on something that isn’t meeting expectations.
4. Fail fast. Concentrate on what is working instead of what’s not working. Treat failures as a learning experience.
5. Have meetings but keep them short and have an agenda. The agenda is helpful to keep the meeting on point and give people an idea what to expect in advance.
6. Keep workloads realistic. Don’t overuse and run the risk of burning out employees who perform at remarkably high levels. Spread the wealth. Also, consider how to recognize or reward achievement.
7. Money matters to employees. Be committed to paying employees on time and avoid late pay periods. Employees, particularly those who live paycheck to paycheck, need consistency and late payroll has an effect on all employees.  
8. Don’t play favorites.
9. Break bread with employees and include families in some activities.
10. Be a model of enthusiasm. Leadership sets the tone – be positive and don’t let nagging problems curb your passion for the business.

Palm concluded the session with an effective comment. “Energized and engaged employees are just like farming. If conditions are favorable, production flourishes.”   

Table talk

The association tried something new at this year’s conference – roundtable discussions. Attendees broke into four groups and discussed various topics, including:

• Dealership aftermarket managers and how they work together. The bottom line is they don’t work well together, said Michael Piercy, manager of WEDA’s Dealer Institute. They’re not adversaries but they “tend to work in silos.” He said the dealers in the group all agreed this is an area that needs improvement.  
• Recruiting and retaining high-quality employees. There are a lot of ways to recruit employees and this group had quite a few ideas, noted WEDA COO Jennifer Luce. She said the group talked about using current employees and offering recruitment incentives for bringing in new talent. She said the group also discussed using social media and leveraging the dealership’s involvement in the community to attract applicants. Another idea that surfaced was using customers to lure talent. “When customers have a good experience at a dealership, they’re likely to refer other people to you,” even potential employees.
• Time, territory and sales management. WEDA Vice President Larry Hertz led the group in a discussion that was probably more open than what salespeople share among themselves. He said visibility was a key point. “Most dealers want their sales personnel at the farm gate or sitting at the kitchen tables” of customers. However, seasoned salespeople – those with the most success – are sometimes reluctant to share information that may be helpful to other members of the sales team. Hertz said the group supported a yearly sales meeting at dealerships where territorial information, whether it’s about sales, events attended, customer contacts, etc., is not only discussed but added to a database that could be reviewed and used by other employees.
• Customer share vs. market share. Market share has been a discussion item for eons. As WEDA Dealer Institute trainer Trent Hummel noted, “Market share tells the dealers different things than what it tells the manufacturer.” He said the group agreed that market share is viewed as “what’s achievable and what’s sustainable” and that can be (and usually is) a snag in a dealer’s relationships with suppliers. With regard to customer share, Hummel said it defines how “good your relationship is with a customer” but measuring how much of a customer’s wallet you get is difficult. He said when a customer comes to you for advice about where to buy a product you don’t carry, you’re into “that customer’s heart” and that adds value to your dealership.

The millennial manual

Ryan Jenkins approaches his work speaking as one of the people from a generation that businesses are trying to figure out. He’s a millennial and his profession is to help organizations under his generation and Generation Z, the group following millennials. He says knowing how to work in a multi-generational workplace will determine the ability of an organization to thrive in this century’s marketplace.

He said the next generation is providing data points – things that tell us how to lead, how to market, how to sell, how to communicate, etc. He said previous generations also had data points but they were tangible. “Most of what we put our hands on are inventions of the past, tangible things that took years to develop.” He cited the automobile as an example of a physical (or tangible) invention. It’s been around a long time but it took decades to shape it into what it is today.

By comparison, noted Jenkins, consider the launch of the Pokémon Go app. Showing the app’s logo, a round ball that few, if any, in the audience were able to identify, Jenkins noted the app was downloaded 130 million times in the first 30 days of being released, the fastest growing app of all time.

Within 90 days, the Pokémon Go app generated $600 million. “This is a prime example of a non-physical invention that hits the app store and it changes behavior and it disrupts industries.”  

What this means, added Jenkins, is that one in four Generation Z workers expect this type of “augmented and virtually reality experience” inside the workplace. “This means we have to be students of the things happening around us because it is shaping the next generation,” said Jenkins. “And if we’re not aware of it, we can’t effectively pivot to sell, to market, to engage, to lead the next generation.”

It’s worth adding that the next generation now makes up the majority of the workforce… so the time for being prepared is well underway.    

For more insight about working with millennials and Generation Z, check out Jenkins’ book, The Millennial Manual: The Complete How-To Guide to Manage, Develop, and Engage Millennials at Work.

Getting along

The workplace is a dynamic place. Everyone who sits in a chair, stands behind a parts counter, sends out invoices or pays bills, sells a piece of equipment, or crawls on the floor to repair a machine brings an attitude and personality to work. This means there will be times when personalities clash and it’s not always the result of people who simply dislike each other. New ideas cause friction, running late draws frowns, playing Pokémon on a smartphone when the phone is ringing off the hook can trigger a spat.

This begs the question whether everyone can get along and Tom Healy, COO and corporate sales manager at Burnips Equipment in Dorr, Michigan, said “NO” because it’s just the nature of people working together. The dealership’s flagship brand is New Holland but all six of the dealership’s locations sell a variety of allied brands as well as Mahindra tractors.

When reflecting on the growth of Burnips, Healy said one store was hard work. The addition of a second store created a people divide. Store three increased the number of managers, which can be exhausting. The addition of stores four and five created chaos and more chaos, respectively. When store six came along, Burnips committed to streamlining operations, which included working with the association’s Dealer Institute in conducting a personality test, which identified the dispositions of the dealership’s 23 managers. Four personality types were identified – analytical, driver, amiable, and expressive – and each encompasses specific attitudes.

By knowing the personality mix of the dealership’s managers, Burnips created an inclusive management structure to help everyone understand what is expected in the way of sales, parts and service performance. Managers meet – a lot. Every month top managers meet and every week departmental managers meet with Healy.  

Also, service managers meet with sales managers “and tell them about every piece of equipment that is in the shop, why it’s there and who the customer is,” said Healy. “We also do customer callbacks every week. With every piece of equipment that’s delivered, we call the customer to find out what they’re working on, what issues they might have, if any, and that feedback is given to the managers immediately and we get the issue resolved within a day or two.”       

Today, noted Healy, all the managers are working together “to make sure the customer is getting the best experience possible.”

Carrie Roider is a third-generation dealer. As CEO of Erb Equipment Company, which is based in Fenton, Missouri, she is guiding the eight-store Deere construction dealership through its 72^nd year in business. Roider was quick to point out the dealers of today will be shifting from a mere service provider to a provider of solutions.

She said as service providers, dealers are mostly reactive to transactional issues that are initiated by customers. Equipment goes down, the customer becomes irritated and calls the dealership, the dealership jumps through all the hoops to take care of the problem, and then waits for the next issue to crop up – and it will. But, going forward, will jumping through hoops be enough to satisfy customers?

In Roider’s view, Amazon is setting a new standard. Not only is Amazon a service provider but it’s also a provider of solutions.

“Amazon has consolidated several suppliers under the Amazon wrapper, adding free shipping, free music, free video streaming, free photo storage, etc.” she said. “But most importantly for the cost of a Prime Membership, Amazon has figured out our real desire isn’t for the goods we’re buying, it’s really the convenience they give us and the time they save us all from the comfort of our couch.”

While replicating Amazon may be far from practical in the equipment industry, Roider said there are some lessons to be learned from Amazon’s ability to provide immediate solutions. “The solutions our customers really want are the ones that increase their productivity and lower their risk. These solutions are the key components that address machine selection, uptime, owning and operating costs, and machine control.”

Roider said shifting to being a provider of solutions gives dealers the opportunity to reimagine their organizations.

“Being a solutions’ provider creates a proactive relationship with customers who are supported by a team comprised of sales, machine technology and product support,” she said. “It’s this customer solutions’ team that gets together and is charged with identifying what solutions customers need in order to be profitable – up front – and to develop a more forward-thinking plan to meet your customers’ needs.”

As mentioned by several conference speakers and echoed by Roider, taking today’s dealerships to the next level to serve tomorrow’s customers will take a commitment from management, strong leaders with vision, engaged employees, a focus on technology and communication, and a strategy to bring it all together for organizational growth.

Tax and policy changes

Curt Kleoppel, WEDA’s CFO as well as president of Equipment Dealer Consulting, joined the association’s government affairs expert, Eric Wareham, to provide updates on tax law changes and regulatory issues in the U.S. Kleoppel and Wareham have provided updates in various articles published in the association’s magazines.

However, Wareham said changes in U.S. tax policy led to tax changes in Canada. He also said the association remains active in the Small Business Coalition in Canada “that is fighting against the tax changes that have been floated in the past, including income sprinkling and other factors.”

“Some of the tax changes that have been prompted on accelerated depreciation have come about because of the carbon tax that made it more onerous for Canadian dealers,” said Wareham. “The association is still fighting against that,” he concluded.

Closing thought

WEDA CEO John Schmeiser was a spectator at the 2018 WEDA conference. He didn’t take the podium or pose for glamour shots. Like others in the audience, Schmeiser was a spectator and he listened to the strong lineup of speakers. But Schmeiser wasn’t absent of thought when the conference was over.

“The initial feedback we received from attendees was that the program and speakers were outstanding and exceeded expectations. On a couple of occasions, dealers mentioned that they wished more time was allocated to some speakers because their topics and information was valuable and engaging,” he said. “We will continue to strive to put on a program that allows dealers operational insight and advice and provides dealers with strategies they can take home and implement in their dealerships.”

Editor’s note: The association also held a special session on WEDA Digital, a new association program to help dealers determine the right digital marketing strategy for their businesses. More about WEDA Digital will be in the spring 2019 issue of Western Equipment Dealer. For information, visit www.wedadigital.com.

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Big award for a “big deal”

Harley Adams named 2018 Dealer of the Year

The Western Equipment Dealers Association presented its prestigious Dealer of the Year award to Harley Adams, Concordia Tractor, Inc., during the association’s conference in December.

Adams, who announced his retirement prior to accepting the award, is closing the book on a career that began with John Deere in 1972. It was his first job out of college. Within a year, he became the company’s youngest territory manager a year later at age 22.  

In 1978, Adams became a partner and worked in ag sales at CTI, a John Deere dealership in north-central Kansas. Harley’s brother, Johnny, joined the company as an owner in 1980.

Harley, along with his brother, promised their local customers that if they would support them, they would totally commit themselves to supporting their businesses. That meant 100 percent of their time, energy and resources – no distractions, no other business interests, just total devotion to John Deere and supporting local customers.

CTI concentrated on parts and service support and developed a great team of employees. When sales demand rebounded in the early ’90s, CTI was ready. Customers came from other areas to do business with CTI, which weathered the soft times and its commitment to serve paid off.

The Adams brothers grew to four locations between 2000 and 2007 and increased their level of customer support with inventories, training and technology. Harley’s son, Kyle, and nephew, Michael, joined along the way. Plus, the dealership recently merged with PrairieLand Partners, a Deere dealership that now operates 13 locations with the addition of the four CTI stores.

Kyle spoke of his father during the presentation of the Dealer of the Year award. “In the mid-80s when times were tough, Dad was always the last to get paid. If there wasn’t enough in the bank, his check would go in the drawer. His secretary, Jean, would let him know when it could be covered. Vendors and employees always came first. Again, he chose what was best for them, not necessarily him,” recalled Kyle.

“There hasn’t been a day since I joined the business that Dad hasn’t been concerned that my family was happy, that we are glad to be home, and that I enjoyed my work,” he added.  “No matter what I told him, he’d say, ‘I just want you to be happy.’ He didn’t ask me to come to work because it would benefit him. He wanted me to work because he thought it would be good for my family. And he was right. Again, he wanted what was best for another.”

The praised heaped on Adams during the presentation was probably more than he wanted to hear but it’s difficult to ignore the contributions and success of someone who has spent a lifetime in the equipment industry.

“While I’m celebrating this award, I want you to celebrate also. Tonight, I guess I’m kind of a big deal, but you are a big deal also. Our industry is a big deal,” said Adams. While making other comments about the industry, working with family members, his fondness of dealership employees, and contributing to the communities in which dealers operate, Adams summed the role of equipment dealers. “You help feed the world and that’s a big deal for which we should all be very proud.”

“Harley Adams is a well-deserved recipient of this award,” added John Schmeiser, CEO, WEDA. “Harley and his team have set the standard for service excellence and world-class customer experience.” Now, that’s a big deal.

Editor’s note: The WEDA Dealer of the Year award recognizes individual dealers for their leadership within the industry, their dedication toward growing their business into a successful entity and their commitment and legacy to their communities.

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Article Written By WEDA Staff