Passion, integrity, humility feed company’s hunger for success.
In July 2001, Peoria, Illinois-based material handling distributor MH Equipment Company had just finished making an acquisition that left it several hundred thousand dollars in the red. The management team met in the basement of the home of CEO John Wieland to figure out a plan to return to profitability. “We felt that we would be profitable for the second half of the year. But the biggest decision was that starting that month, July 2001, we committed to donating 10 percent of our annualized budgeted income or actual net income, whichever was greater, to a foundation that would serve the community in which we live,” he recalls. “That was a moment in time that helped define our company.”
The company formed His First Foundation, which has become the cornerstone of the company’s business model over the last five years. “The Foundation was established to come alongside our employees’ passion and get them interested in making their community better,” Wieland explains. “It is a great way for us to give back to the communities in which we serve.”
Employees can request funds in three broad areas: non-denominational faith-based organizations, secular good works organizations and random acts of kindness. Wieland recalls the example set by the company’s Bowling Green, Kentucky, branch, which banded together to help the family of a young boy who became paralyzed in an accident. Employees at the branch requested financial assistance from the Foundation to pay for wood and materials to build the family a deck and ramp to assist entry to his parents’ home. The branch employees supplied all the labor, tools and commitment to help the family. “At the end of the day, our business vision includes the opportunity to impact lives, and the team in Bowling Green did just that,” Wieland says.
His First Foundation is funded completely by MH Equipment Company, contributes mostly to local charities, and has also donated to help people affected by Hurricane Katrina and the 2004 Indian Ocean tsunami. “We want our business partners and employees to realize that there is something different about our organization. We constantly challenge ourselves to be more to the community than just a place of employment,” Wieland says. “For us, it’s not about maximizing profitability. The thing that truly gets our leadership group stoked is hearing about the improvement in individuals’ lives from serving their community. We feel that if we are an excellent, well-run organization that is passionate about service, then profitability will follow.”
Owning a business may have seemed unlikely when Wieland became an accountant at Peat Marwick in Peoria soon after he graduated from college. One of his clients was MH Equipment. “I audited MH Equipment for six years, during which time they were virtually bankrupt,” he says. “But I always felt that if the company was properly capitalized, and if management was a little more aggressive, it could be a successful company.” He left the accounting firm to become CFO of a Steelcase office furniture dealership, but in 1993, the CFO of MH Equipment told him that the company was looking to make an ownership change. Wieland remembered the potential he felt MH Equipment had, so he purchased the company in April 1994.
At that time, MH Equipment had 50 employees. Since then, the company has grown through both acquisition and organic growth. “We did not have a long-range strategic plan other than to be flexible and opportunistic. Our passion for fleet management within our original footprint was instrumental in growing to 150 employees. Eventually, we decided to take advantage of opportunities to grow geographically,” says Wieland. Those opportunities included the acquisition of the Indiana-Kentucky Hyster dealership in September 2000, the Iowa dealer in January 2001, the Ohio-West Virginia distributor in January 2003, and the Nebraska-South Dakota territory in August 2006. Branches now total 24 in nine states, with a work force of more than 600 employees. “Along with that, we continue to have organic growth through our focus on fleet management and our desire to be good stewards of our customers’ money.”
The approach to business is one of the unique things about MH Equipment Company. “We are a secular company that made a business decision to run itself based on Biblical principles,” Wieland says, clarifying by adding, “Do what you say you will do. Let your yes be yes and your no mean no. Work hard. Serve others. Focus on the future without neglecting the present. These are some of the values we strive for at MH Equipment.”
He is quick to point out that these beliefs do not make MH Equipment a Christian company. “It is our desire whether someone has faith in Christ or another faith or no faith, that they would absolutely love working for MH Equipment. One of our biggest differentiators is that we truly want our employees to be passionate about something outside their place of employment.” It was this belief that led to the establishment of His First Foundation.
Employees respond well to these principles, which have allowed the company to retain a small-company feel despite its growth. “It is our desire that all employees say they are treated well, are respected, are given opportunities for advancement, and that the company supports a balance between work and home,” Wieland says. He is a strong believer that an employee with a strong home life is a better performer at work. The company therefore encourages and pays the way for employees to attend family life and marriage conferences.
“We’re not a perfect organization; we sometimes stumble and we fall. But I think most of our employees understand that we truly want to create a culture where there is personal growth for them.”
More than a Homepage
With 24 branches spread across nine states, it’s important for MH Equipment to be as efficient in its operations as possible, particularly communication. “VOIP (Voice Over Internet Protocol, a way for phone calls to travel over the Internet) has reduced our telephone expense. Data-sharing also makes us more efficient,” Wieland says. The company also provides service technicians with laptop computers to perform diagnostic checks and has installed GPS units in all company vans. “GPS has improved our dispatching efficiency. We think our next step will be to go to on-site invoicing by technicians.”
MH Equipment is now testing call centers that track calls and can communicate to customers. For example, when a technician is dispatched, the call center employee will send an e-mail to the customer confirming the time of dispatch. When the technician completes the job, the call center enters the info and automatically generates a confirmation e-mail. “As a bean counter by trade, I am conservative by nature,” Wieland says. “We’re constantly working on improving our efficiency to the customer regarding the internal costs of doing business.”
An outside board of directors has been instrumental in helping the company conserve its pennies. “The day I bought the company, I put myself under the authority of an outside board. Not being accountable for your actions, in any area of your life, is a bad deal,” Wieland offers, and credits the board with diligently challenging the company’s leadership to focus on cost structure. “We need to be a good steward of everything we do. If we can buy widgets for $1.50 instead of $2, we need to do so.”
Motivated by Service
“We are a service organization,” Wieland says. That commitment to service is true in all the products that MH Equipment carries. Certain branches of MH Equipment sell Rail King rail car movers, aerial work platforms, JCB construction equipment, and Kaeser compressed air equipment, in addition to MH Equipment’s traditional Hyster lift truck line. “Our goal is to grow contiguous to our core. We don’t want to get too far away from material handling when we look at different markets and products. However, we also need to take care of the customer. Regardless of the customer base, our core competency is being a service organization.”
MH Equipment services manufacturing companies, industrial warehouses and has recently begun servicing the retail market. “We don’t want a short-term relationship where we try to hit a home run,” Wieland explains. “We want relationships based on trust and performance that last for 15-20 years where we’re just hitting a lot of singles.”
The long-term relationships are maintained by the company’s service technicians, who comprise close to 50 percent of the work force at MH Equipment. “Field technicians are our lifeblood. They are MH Equipment to most of our customers,” Wieland says. For that reason, MH Equipment employs a staff of five full-time trainers, two of whom are dedicated solely to teach technicians how to maintain superior levels of customer service and technical expertise. “Part of our formula for success is hiring the type of person who will fit our culture,” Wieland says. “If we hire the right kind of person, training our employees to be a spokesperson for the company is easier, because they already believe in our vision.”
Managing with Core Values
Ideal MH Equipment employees have three qualities—passion, integrity and a servant’s heart. The first trait is addressed through the company’s Foundation work. The second and third are of particular focus for the company. “People with servants’ hearts aren’t concerned about what’s in it for them, so they can be completely engrossed on how their actions affect the customer,” Wieland explains. As for integrity, he says that there are really only two ways to be quickly fired from MH Equipment—failing a drug test, or demonstrating a lack of integrity in business.
His five divisional presidents, Coit Edison, Fred Metzger, Bill Meek, Randy Kaluza and Darrell Randall, exemplify the traits of the employees MH Equipment looks for. “They run their divisions with passion, excellence and integrity, and the intimacy between MH Equipment and the customer is as strong as it was when we had only 50 people,” Wieland says. “When customers find out how large the enterprise is, they’re surprised because they often deal directly with a president.”
The group meets at least six times per year, plus a conference call every week. “The leadership team is a smart group of people who could probably sit in my chair and do just as good a job, if not better,” Wieland says. “I don’t think all wisdom lies with me. When you have talented people, you have to make sure that they feel like they have ownership and they’re doing the driving. It is because of what the presidents and CFO Brad Barrow bring to the table that convinced me to share ownership with them. For MH Equipment to grow, my influence has to be less.”
“We want to be at the $200 million level on an annualized basis by 2009, at which time our next target will be $500 million,” Wieland says. “I believe we can achieve that, but we will not do it at the expense of our culture or our mission.”
The company’s growth from this point forward will be more organic than geographic. “We plan to continue to get better at fleet management,” Wieland says. “We have so much more opportunity to grow incrementally within our own footprint that if we take care of business, we will achieve those growth goals.” Wieland points to taking on complementary product lines, as well as a joint venture with a minority business enterprise (MBE), Myca Material Handling, in Cincinnati. “We think we can provide a great resource for Myca and help to fill a need for customers who have diversity spending goals and are looking for an MBE that can add value.”
MH Equipment knows that growth won’t be easy to attain as American manufacturing continues to erode. “In terms of percent of GNP, I think manufacturing will make up a lesser percentage as time goes on, which means warehousing is going to be of greater interest,” Wieland says. “Class II and III products will be a more integral part of a successful dealership.” Wieland also highlights the retail sector as a growth market. “The number of lift trucks in America is not necessarily going to rise, so we must grow contiguous to our core to drive revenue through all of our brick and mortar.”
To accomplish that, the leadership team stays focused on the two H’s: humility and hunger. “We know that we have not arrived yet, and we know that we have been blessed with good fortune,” Wieland says. “As stewards, it’s our responsibility to leave MH Equipment Company in a much better place than where we found it.”