AK Material Handling’s embrace of positivity in the work place shapes its company culture
By Steve Guglielmo
It’s no coincidence that Minnesota Business Magazine named AK Material Handling Systems (Maple Grove, MN) its “Ultimate Fun Office” in its 2014 100 Best Companies to Work for Awards. It’s actually by design.
“We’ve built a culture here that is very addictive,” says Josh Smith, AK Director of Sales and Operations. “That’s what has made us so successful.”
The word culture has become one of businesses’ biggest buzz words. Merriam-Webster actually named “culture” the 2014 Word of the Year. More and more, companies are figuring out that the old adage “a happy worker is a productive worker” is true. And for AK, ensuring that the work place is a happy and positive place is intrinsically tied to its success.
“People are your greatest assets,” says AK CEO Al Boston. “And success brings in good people. We’ve had employees tell us that we do things that other companies don’t do. And that’s what we strive to do. And it’s why we don’t have turnover and everybody seems happy. Your reputation is something that builds every day. You can’t just decide one day, ‘Now we’re going to start doing the right things so we can bring people in.’ It has to be something you do all the time.”
And AK’s reputation is something that is constantly being cultivated, even as the company has had to reinvent itself over time.
People have always been the backbone of AK’s success, dating all the way back to the company’s founding in 1988, when it was called A & K Equipment Co. While that has remained constant, the business has had to adapt to changing trends and realities.
“Our first major growth happened in the early 90s when we made headway into accounts like Target, Kmart and Wards,” says Boston. “We supplied these accounts and others with backroom pallet rack and shelving. However, by 2005, Kmart had gone through bankruptcy, Wards was out of business and Target had begun buying direct through manufacturers by reverse auction bid. We had to reinvent ourselves.”
That reinvention was a several-pronged process. First, the company evaluated its strengths and decided to focus solely on pallet racking and not spend time on other allied lines. Second, they ramped up production in its wholesale division, WPRP Wholesale Pallet Rack Products, which is celebrating its 15th anniversary in 2015. And in 2006, AK took the time to build its own websites for several segments of the business.
“We invested our time and training to do the websites ourselves so that we could understand the process from start to finish,” says Boston. “It took time, but it built us to where we are today.”
That decision to undertake the website building process themselves set the groundwork for AK to consistently be on the leading edge of embracing new technology, especially on the Internet.
“During the Great Recession, when most companies were cutting back on training and education, we embraced social media and training,” Boston says. “We were investing in people and process.”
That decision stemmed from AK’s understanding that no two customers are the same or want the same exact experience. Some customers know exactly what they want and can order from a website without needing to be talked through the process. Others prefer to collaborate with engineered systems specialists on the layout and design of a system.
“The key is to have everything they want in a simple and user-friendly process so that your services are the best in class,” says Boston. “We try to approach it from our customer’s perspective.”
That devotion to customers is what the company calls The AK Difference:
“Even the best products and equipment mean very little unless you have the right service to back it up. That service is exactly what keeps our customers coming back. And it’s what sets us apart from the competition. With AK Material Handling Systems you will get experience, professionalism, expertise, on-time deliveries an acute attention to detail, and in-depth installations.”
Says Boston, “We want to be the leader in making ourselves attractive to do business with. That means we order properly, respect leads, pay our bills on time, promote our suppliers’ products through social media and blogs and educate users about the best practices.”
Though AK Material Handling Systems is aligned with some of the biggest and most-well respected suppliers in the country, the true differentiator is its staff. From the warehouse to the c-suite, AK is stocked with positive people who work hard and play harder.
“During the interview process, we ask several different questions that aren’t very direct to determine if a candidate is a positive person,” Boston says. “Josh, in his interviewing process, will ask what you do outside of work. We’re looking for people who are helping out in the community. We know those are positive people. Negative people are on the couch complaining about everything that’s wrong in the world. We’re looking for positivity because we know that’s what fits our culture. If we get somebody negative, it ruins the whole dynamic. You can’t move forward with people like that.”
The company has 22 employees and little to no turnover. And the group’s positive attitude makes it adaptable to change, which in today’s business environment is unending.
While many companies profess that the office is like a family, AK truly takes the time to ensure that.
“We work hard and we have fun,” says Smith. “Some of the things that we do to keep things light and morale high is we will have spontaneous Nerf gun wars in the office. Or we’ll split up into teams and play capture the flag. We have a mini-putt course in the office and we will have putting contests and the remote employees will be on Google Hangouts interacting with us and picking a representative from the office to play for them. And we have prizes. Sometimes we do what we call the “Cannon Ball Run” where everybody hops into a car and goes to Dave and Busters for a skee-ball tournament. Things like that just give us an opportunity to give back to our employees and stay close to one another and reward all of the good work that they do.”
Says one employee, “Not everybody here gets to communicate with others on a daily basis, so when you do things like this it brings people from the warehouse who can connect with the inside sales staff, where typically on a day-to-day basis we may not communicate. And when you know that sporadically these things happen, you come in with a better attitude. They want everybody to be having fun and I think that the time that they take to ensure that means a lot to us employees.”
And the philosophy of paying it forward has really rubbed off on the employees of AK, who have started what they call the “Give Back Crew” or “GBC.”
“The Give Back Crew was started by employees. It’s a collective effort to get out and do their part,” Boston says. “Instead of each individual going out and saying, ‘I’ll get to it when I get to it,’ the GBC is a team-effort. They’ll plan outings like working for Habitat for Humanity on the weekend. They decide at the beginning of the year what outings they will do and when necessary they will ask for money from the company for donations. We all work together and it works great.”
Taken together, it’s easy to see how AK came by its brand as the “Fun Office.”
Embracing Social Media
In today’s day and age, a brand is determined by how others see you as much as it is from your inside culture. And in that respect, AK has done a tremendous job of utilizing the Internet as a tool for branding.
“From a social media standpoint, you can pick what you want to be known for online,” Boston says. “A lot of what we have on social media and on our blog isn’t directly related to the business. It has to do with giving back. You want to cultivate a following that is interested in what you’re interested in. We’re broadcasting to people that like to see a company whose employees give back. That’s a message they want to see.”
And AK has not only used social media as a platform for brand recognition but also to raise money and awareness for charity. In the past year, the company has raised money by participating in and challenging other MHEDA members to participate in the viral “ALS Ice Bucket Challenge,” has made charitable bets on the Minnesota Wild vs. Chicago Blackhawks NHL Playoff Series for “Feed My Starving Children,” participated in “Movember” to raise awareness for men’s health issues and had “Red Nose Day” to help improve the lives of impoverished children around the world.”
In addition to their charitable efforts, AK has mastered the art of using social media to supplement and improve its business.
“The first six months of this year, we were up 38% over last year, which was a record year,” says Boston. “A lot of that is coming in through what I call the steamroller of social media. It just provides such good, quality introductions and helps connect us to people we want to do business with.”
And that reach of social media goes beyond finding potential business partners. The company has even been able to find employees through its social media releases.
“When we secured a new building for WPRP on the East Coast we put a release in the paper and online announcing the acquisition,” says Smith. “A member of a former supplier of ours actually contacted us from having seen the announcement online and asked if he could come work for us. This was a guy who ran the operations for that supplier. It’s just such an outstanding tool.”
Though some businesses have been reticent to fully embrace social media and company blogging, AK has jumped in with both feet.
“We talk about millennials and the younger generations, that’s how they communicate,” Smith says. “How much of an advantage has it given us? It has given us a way to communicate our brand and given us brand recognition. And when people are online searching for material handling solutions, it has given us the ability to have our articles show up. We can highlight our projects and our suppliers. We can promote MHEDA. We’ve done a lot of cool things and people want to read about that.”
Boston says, “The buying process has really evolved from a sales rep calling on a territory meeting with customers and prospects and providing information on the products to educate the buyer to the customer arriving armed with 60% of the information and education already from things that they learned online. The buyer can research your company and people quickly and easily before they engage with your business. Why wouldn’t you want to control that message? I read a quote about a UPS study discussing how customer loyalty is waning for industrial distributors. It said, ‘Once price and quality standards are met, buyers are willing to explore vendors that better fit their needs, whether for a more convenient website, a better price or simply someone who quickly answers product questions.’ To that, I say Amen!”
As AK heads into its third decade, the path is set for continued growth and success. The company’s low turnover and willingness to adapt to the changing realities of the business ensure that it will be able to handle whatever is thrown at them. Today, AK and WPRP have 22 employees and more than $12 million in revenue in 2014.
“We’re going to keep growing and bringing fresh, positive people in,” Boston says. “Everyone likes to succeed so we’re going to provide the tools and training necessary to make it happen.”
And, if history is any indication, it will all happen with a smile.