Steve Andres, 27, VP of Toyota Material Handling Northern California and a member of the MHEDA Edge Advisory Committee, sits down with 2005 MHEDA President Dave Griffith, who also is CEO of Modern Group Ltd. The two talk about the industry, its future, and what’s in it for a new generation of leaders.
Dave, how’d you first become involved in material handling?
I was an executive with IBM for almost 20 years, before joining MCI as VP of Product Marketing. During those years, my wife and I moved 18 times. I retired from the technology industry in 1991 with an ambition to stop moving.
Plant your feet on the ground, that’s great!
We had two small children, and I wanted to be around more for them. A tremendous opportunity that offered stability and a chance to get into a great industry was presented to me to join Modern Group.
So you came from another industry and just got sucked right in. How does that color your views on hiring from outside the industry?
My view is to hire the best available athlete. We’ve had luck from both inside and outside the industry. It depends on the position.
How did you become involved with MHEDA?
MHEDA is how I learned the business. From day one, everyone said to me, “You want to learn this industry, go spend time there.” So I went to a convention, met Executive Director Liz Richards and Board members Joe Verzino from Liftech Equipment Companies and Gary Moore from MHECO, and it just took off from there. I’m the fourth MHEDA president from Modern Group. The other three are Joe McEwen, Allen McCully and George Wilkinson. It’s been a great tradition.
It seems the industry is at a real turning point with the younger generation moving in. Do you think this is attributed to second and third generations coming into family-owned businesses?
I think that dynamic is very much in play right now. As the WWII generation retired and Baby Boomers begin to move on, these businesses have to get leadership. I feel very good about our industry in terms of next generation. It doesn’t seem to be a terribly sexy industry, but it really is once you peel the onion. I think that’s one dynamic, but I’ll also tell you the fundamentals are going to attract investment from outside.
Yes, Generation X is moving in.
And if you think about it, that’s not a bad situation if it’s done right.
What type of services and opportunities does MHEDA offer to the young employee?
Obviously, MHEDA Edge is one example. The three things MHEDA does better than anybody are education, networking and benchmarking. The education is just phenomenal, especially because industry-tailored education is hard to come by. Networking programs like MHEDA-NET provide the opportunity to meet peers living the same issues, and it really is a great value of membership.
That’s huge. That’s what I see as a pretty big need out there, too. Everybody’s always looking to meet with other people.
Let’s be honest. I’m sure you work closely with your father, but sometimes you wish you just knew someone in another dealership that you could run it by. That’s a huge up. Most of our guys are family businesses, and sometimes you can have some family dynamics that get unique. Let’s call it what it is. The ability to have a mentor that you’re not having Sunday dinner with is huge.
I have a wonderful relationship family-wise, but family is family and business is business, and there are times when it’s best to keep them separate.
What are some current and upcoming industry trends to focus on?
The biggest issue is finding, training, growing and retaining technicians. Also, we need to understand health care and insurance costs as they become a much higher percentage of our expense structure. Product liability is a big issue that must be resolved before we can really open up the industry. A lot of what is going on in Europe right now in terms of Class 2 stacker cranes, rental with operator, those will be things we ought to keep an eye on.
You are a truck dealer. What’s specific to the forklift business?
Engines are becoming more sophisticated, and proprietary software diagnostics is going to change our world, very similar to what it’s done with automobiles. I think the independent service provider for forklifts is going to be challenged pretty hard.
What do you think the average material handling end-user is looking for?
As much as it pains me, I still think they look at price. Smart customers are looking for total cost of ownership, and we’re increasingly seeing dealers who are able to articulate and sell that concept and drive additional applications. Engineered systems are less of a commodity, so I think more value is placed on integration and sophistication.
As we age into the industry, what do you see in the future of material handling?
More people will pick up additional lines and services and try to leverage the rental and training aspects of their business. Companies on the Engineered Systems side will get bigger. They have to. The hardware side of our business will continue to be viewed as a commodity, and we’re going to have to come more together with all the value-added services such as warehouse automation and RFID. People will take the good things they do and leverage them across other products.
That’s what we’re seeing. Everybody is going to a more diverse product line, more of a one-stop shop.
Right, maybe it’s not all forklifts. Maybe it’s generators or compressors. I’m fascinated that the battery service for an industrial electric forklift is the same battery that you can use in a UPS system for computers. Why aren’t we servicing those batteries? That guy gets $125 an hour. We’re getting far less and it’s the same service. We have to get more white coats!
How is technology affecting our industry?
We’re right at the tip of the iceberg. The big explosion will be in wireless PCs, handhelds, dispatch, customer interaction and the Internet. You and I are not going to impact street pricing very much, but we are going to spend a lot of energy on the back-end expense. Technology is one of the biggest drivers of productivity and back-end expense and that will feed into our industry more and more.
What is the most important lesson you’ve learned throughout your career?
Every business is a people business. Customer service and financial strength are obviously very important, but at the end of the day, you rise and fall with your human resources, your people.
Do you have any special advice for the young people in this industry?
Wear muddy boots. Go out and get your shoes dirty to learn the industry. Talk to everybody you can—the people who make the product, the people who work on it, the people who sell it, and the people who use it. Wear muddy boots, because you can’t manage a business from behind a desk. This is not an MBA industry, although if you have an MBA, it’s not a bad thing.
I love it! I might steal that and put it on the wall of my office!
You wouldn’t be the first.