Bode Equipment Company works its strategic plan.
Bode Equipment Company was founded by Larry Bode in 1975. The 55-year-old ran the company with his wife Dorothy from their home in New Hampshire as a one-man operation for the next ten years, until he was ready to retire.
Meanwhile, native New Englander Steve Fawcett was working as marketing director for an engineered fire protection systems distributor in greater Boston. Prior to that, he had worked for a division of a Fortune 500 company as a regional sales manager in New Jersey. Fawcett grew up in a family business and always wanted to get into small business ownership. When his father, Dick, a friend of Larry Bode, told him about the potential business opportunity for buying Larry’s company, Steve jumped at the chance. He wanted to raise his family in New Hampshire and operate his own company. The purchase of Bode’s small company gave him the opportunity to do both.
Despite having no knowledge of the material handling industry, Fawcett purchased Bode Equipment Company in 1985. The first order of business was to move out of Larry’s home to an industrial park in Manchester, New Hampshire. Today, Bode Equipment Company resides in a 6,000 sq. ft. facility in nearby Londonderry, New Hampshire, and Steve Fawcett is preparing to pass the reins onto his son. Fawcett sat down with 2007 MHEDA President John Cosgrove, president of Atlantic Handling Systems (Fair Lawn, NJ), to talk about the company’s past, the present and what’s in store for the future.
John Cosgrove: What appealed to you about the material handling industry?
Steve Fawcett: Originally, I just wanted to buy a small business. I didn’t know what material handling was until I contacted Larry about buying his company. My background was in distribution, and I thought that would be enough.
John: Really? You must have learned quickly!
Steve: I wish Larry had stayed on board longer than four months to teach me. It takes a long time to learn this industry! I’m still learning today. I love the diversity of our products and services. Every day there are new and interesting challenges.
John: How has the company changed since you took over?
Steve: We’ve grown from a one-man organization to a company with sales, service and installation capabilities. It’s still small, with 10 employees, but the revenues have grown quite a bit. It’s very difficult to survive in a mature market like the material handling field, but we have grown. The company is celebrating its 35th anniversary this year.
John: Did you use a strategic planning process to grow your company?
Steve: Yes. I first was exposed to a strategic planning process at a MHEDA conference in Chicago hosted by Tim Hilton in 2000. I learned to set company, department and individual goals each year. We measure our success or failure throughout the year by whether or not we meet those goals. Every full-time employee has a bonus program based on individual goals that are reviewed quarterly.
John: What about in 2009? How were you able to use that process to overcome the economic climate of the past few years?
Steve: The first thing we did was balance our budget, which required scrutinizing every facet of the business. At the start of 2009, we put a freeze on wage increases and let go of some people. We didn’t buy anything that we didn’t need. As a result of these difficult decisions and actions, we stayed in the black.
John: How many of your 10 employees are in sales?
Steve: Three are assigned specifically to sales, plus I do some sales, so call it three and a half. My other half is spent running the business. We also have four service techs and two administrative staff.
John: What’s the company culture like?
Steve: We’re laid back but serious. We try to be employee-friendly, and we have a strong benefits package for a company our size. We hold company functions like Christmas parties or a night at a ballgame. In a small company like ours, it’s easy to give everyone some TLC and let them know they’re an important part of the family.
John: It’s so important to do that. What are the most important traits you look for when hiring? What makes the ideal Bode employee?
Steve: Beyond the skills to do the job, we look for someone with a history of success who has grown throughout his or her career. We look for honesty and integrity. Usually, though, when I finally have the right person in front of me, it’s just a gut feeling that tells me it’s the right person. Luckily, we have a good history of hiring the right people and holding on to them for multiple years.
John: What’s the average employee tenure?
Steve: It’s about eight years. Three people have more than 20 years’ experience—myself, my wife Pat and Mike Slide, a great salesperson. Pat has handled the bookkeeping for 20+ years, and without her help Bode Equipment would not have enjoyed the prosperity that it has. My son Scott has more than 10 years. He’s vice president but will be taking over as president in 2011.
John: That’s great news! Tell me about the succession plan you put in place at Bode Equipment.
Steve: After Scott became vice president, we laid out a rough succession plan. My son Matt was part of that original plan, but he chose to leave the company about four years ago to pursue other interests. It is important in family business that family can leave, like any other job, without thinking you are letting the family down. I also have two other children, Rick and Suzy, who are not involved in the business, but we all talked extensively to figure out what was best for everyone. Scott made the long-term commitment that this is what he wanted to do, and we all remain a loving group.
John: Working with family is always interesting. Any advice for other members in a similar position?
Steve: Most important, we didn’t make a secret of our plans. People at the company have known for several years that Scott would be taking over the business sometime next year. I have confidence in his ability to lead, and so do they.
John: How involved will you be once Scott takes over as president?
Steve: I don’t use the word “retire.” I’ll be a key member of Bode Equipment for a number of years to come. The biggest challenge will be giving him room to grow and prosper without feeling any sort of threat or interference. But I think I can support him in numerous different areas going forward.
John: What is it like to be the patriarch of a family business? Any advice?
Steve: I enjoy it immensely. In a family business, you must be very careful not to take stuff home. We try not to talk business away from the office. I’m so happy I took over this company, and I feel a tremendous amount of satisfaction that we’ve been successful.
John: Like you, we’re a storage & handling house. What are your primary lines?
Steve: No manufacturer makes up more than 15 percent of our sales. We do represent some terrific manufacturers, but we’re pretty diversified and not dependent on one in particular.
John: Is that diversity what sets you apart from your competition?
Steve: Yes, we do storage & handling of all types. We actively sell in four states. We also do dock and door repair and service, which not all of our competitors do. We service and install anything that we sell. That’s a niche that makes us a little different.
John: Having such a diverse product mix, how do you train your employees on all the different types of product you sell?
Steve: That’s a challenge, because there’s a big learning curve in this industry. Training people takes time. We hold sales meetings every Monday and service meetings every two weeks, and we invite our manufacturer partners to come in and educate us on their product lines during those meetings.
John: We’ve done that here as well. It’s a big help.
Steve: It takes salespeople about a year to grasp the enormity of what we sell. We’re regularly bringing in new products that require training, and that knowledge is critical to differentiate us from our competition. So we put a heavy emphasis on it. We also participate in MHEDA’s training.
John: Speaking of MHEDA, how do you utilize your association membership?
Steve: As I mentioned, we use the strategic planning model, and our compensation program was modified from a MHEDA conference. We utilize MHEDA-NET, which is a forum to exchange ideas with some of the smartest guys in our business. Having other executives with whom I can exchange ideas has been invaluable to me.
John: I tell people that all the time. MHEDA membership is so valuable.
Steve: I’ve been a MHEDA member for about 10 years. MHEDA has made a big impact on this company in terms of education, culture and friendships.
John: What does the future hold for Bode?
|Bode Equipment Company has successfully implemented a succession plan by keeping it in the family. But there are also considerations for people looking outside the family. The Biltmore Estate’s Steve Miller gives advice to business owners, exclusively in The MHEDA Journal Online.|
Steve: In 2008, we grew 25 percent, so even though the recession redefined what it means to be successful, Bode is in an excellent position coming out of the recession. We’re a relatively young and vibrant company; we average under 40 years of age. We’re young, trained, strong and our leadership for the future has been identified through Scott, so we have reason to be confident.
John: Where do you see the industry as a whole going in the next few years?
Steve: The future is good. Material handling is a huge, diversified industry, and it will recover and start growing again. We’re just treading water until the New England economy is a little stronger, though we don’t expect to see any recovery until maybe the fourth quarter of this year.
John: How will you capitalize on that recovery?
Steve: We’ll immediately start to re-invest in people and rebuild our sales. That’s a stated strategy for this year. With consolidation going on in the industry now, there are people on the street to hire who would normally not be available.
John: Any final thoughts?
Steve: The need for forklifts, conveyor systems and storage & handling equipment of all types is ongoing. As those sales and purchases of our equipment start to increase with the recovery and economy, everybody who survived the recession is going to start a new era of growth. As long as distributors offer value-added service, we’ll all be back in a growth pattern very soon.
John: That is good advice. I hope you are right!