How RMH Systems fully encapsulates its systems moniker
By Steve Guglielmo
RMH Systems can trace its roots all the way back to 1898, when Samuel Riekes formed the S. Riekes & Sons Company in Omaha, Nebraska. The company got its start as a dealer and distributor of glass containers. In 1938, S. Riekes & Sons officially entered the material handling industry, as it began to sell two and four-wheel hand-trucks and gravity conveyors. In the early 60’s, Riekes expanded into the Des Moines, Iowa, market selling forklifts and other material handling equipment. In the early 80’s the Des Moines branch and Omaha split into separate ownership. The Des Moines branch became Riekes Equipment Company in Des Moines, Iowa, a division of S. Riekes & Sons and was separated from the container branch and began to operate independently.
Riekes of Iowa was purchased by Steve Howard in 1991, after a chance encounter in an elevator in Des Moines that changed the entire trajectory of the company.
“In 1991, Steve Howard was in an elevator in an office building in downtown Des Moines,” says Todd Maxwell, COO of RMH Systems, Inc. “An attorney that Steve knew, asked him if he had heard of Riekes of Iowa, that it was for sale but was struggling to get the deal done. Steve pursued it, and after the original deal fell apart, he succeeded in buying the company.”
“When my grandfather bought the company, there were 12 people on staff,” says Ryan Howard, General Manager of RMH Systems, Inc. “Now we’re right at 100.”
In the nearly 30 years since Steve Howard purchased the company, RMH Systems has had a complete overhaul. It now has offices in Iowa, Minnesota, Nebraska, Illinois, and Missouri providing solutions for material handling, scales, packaging, cranes, and robotics. The two main drivers of the 12X revenue growth have been a revamped culture and strategic foresight.
“When my grandpa took over, he came in and instilled an entirely new culture from what was in place,” says Howard. “It was a top-down structure, where there was no ability to take risks and very little autonomy given to the sales team to make decisions, and he completely flipped it. My dad and grandpa instilled a culture of trust, loosened the management philosophy from micro-management to empowering the employees to make decisions, take responsibility for their own efforts, and build their own markets. That trust in the employees laid the foundation for the company that exists today.”
The company places an emphasis on customer service. Every team member is given a lot of latitude to make decisions on behalf of the company knowing they are in the best position to take care of the customer. RMH Systems embraces a “business within a business” philosophy meaning each salesperson, engineer, and technician are encouraged to take ownership of their market and customer base.
“We’re a very flat organization,” says Howard. “It’s not a top-down type of culture. We want everybody that steps into RMH to feel like they are the owner of their own business within the larger RMH business. Each individual ‘owns’ their customer relationships, sets their own pricing, designs their own solution, and manages their schedule as they see fit.”
To operate like that, RMH places a great emphasis on finding self-motivated employees, with a strong work ethic, initiative, and a desire to excel. With those traits, RMH can weave them into the culture that has been cultivated, and not necessarily focus only on specific technical skills when hiring. The culture and drive for success has led to a negligible 1-2% employee turnover rate over the past few years.
Maxwell gives an example of the business within the business philosophy.
“Our customers call our technicians directly,” he says. “They can call them on the weekend. The technician makes that choice to take that call and take care of the customer. Often, we don’t even know anything happened until they submit their paperwork on Monday morning. Everybody on the team is willing to take care of their customers like that without making a phone call. They just do it. Before working here, I had never been in an environment like that before.”
Maxwell joined the company in 2014. Howard, though he grew up around the business, joined officially in 2015.
“”I think the growth and evolution that we have experienced over these last 30 years, and especially these last 10 years, are a result of the culture that was put in place from day one,” Howard says. “We’ve been really good at getting the right people on board and letting them help us make the right decisions and build the strategic vision.”
The emphasis on culture is not lip service, either. RMH has been recognized for the last four years running as a top workplace in Iowa. This year, they were recognized as a top workplace in Minnesota, as well.
“That tells you a lot,” says Maxwell. “It’s all anonymous and it’s done as a survey of our employees. They can say whatever they want. So, it’s pretty cool to know that your team thinks enough about the company to say that not only is this a great place to work, but I would recommend it to my family and friends, too.”
An emphasis on building a strong culture was step one in the two-pronged approach that the Howard’s instituted when they purchased Riekes of Iowa. The second was an emphasis on sustainable growth and expansion.
“My dad came into the company in 1994,” says Howard. “He was a commercial lender by trade, and he brought that financial knowledge to the organization and helped build the structure for growth.”
Immediately, the Howard’s showed that they were not interested in simply maintaining the status quo. In 1995, Riekes of Iowa was renamed to Riekes Material Handling. In 1996, the company acquired Central Scale, a Weigh-Tronix scale dealer in Omaha that would set up a thriving area of the business that still exists today. And in 1998, the company sold its forklift division, thereby completely exiting the forklift business.
“That was a huge, ‘Whoa!’ moment,” says Howard. “It was a staple of the business. But they realized that a decision needed to be made for the future – focus on a lift truck market that was too small to effectively grow or concentrate more on the allied line portion of material handling. So, they sold it and began to really focus on material handling equipment and started focusing on becoming a systems integrator.”
Though the company didn’t fully rebrand into RMH Systems, Inc. until 2013, the seeds of that transformation were planted with that sale of the forklift division in 1998. While today, RMH is recognized as one of the most forward-thinking, cutting-edge integrators in the industry, just 20 years ago, they were a small localized player in that segment of the industry. Only through the strategic initiatives instituted by the Howard’s and the support of the all-star team put in place have they been able to achieve those heights.
“The re-branding to RMH Systems was important,” says Howard. “For many years, Riekes was known as a material handling equipment and lift truck supplier. By 2013, we were a full-service systems integrator. And to this day, we are maybe the only integrator in the country that offers packaging, material handling, cranes, scales, robotics, and service under one roof. Our biggest competitive advantage is being a true turnkey, one-stop-shop automation house.”
In 2001, Riekes started its packaging division, which sells packaging equipment and supplies. In 2010, the company acquired Weigh Better, an independent scale dealer in Omaha, which they integrated into their scale division. In 2013, Riekes acquired Packaging Film Group (PFG), an independent packaging equipment dealer in Omaha. In 2015, RMH acquired Great Plains Packaging Systems. In 2016, it acquired Electronic Scales in KC. In 2017, RMH completed arguably its most important acquisition to date, acquiring Skarnes, Inc., to enhance its engineered systems business, and further penetrate the Minnesota market.
“Our world has gotten a lot more technical over the years,” says Howard. “Fifteen years ago, I don’t know that RMH had a true degreed engineer on staff. Now we’ve over a dozen. Because some of the basic material handling equipment has become more commoditized through the internet or through competition, it’s pushed us to be more engineered systems-focused. Really, it has pushed all distributors to be more engineered systems-focused. Our sales and engineering teams grow every single year. We are in the position that we are today because of our talented core of engineers, technicians, and salespeople that have taken ownership of developing our customer relationships across the region.”
RMH has proven time and time again that it is not satisfied to sit on its laurels. Its devotion to building a strong culture and growing its market segments has allowed the company to grow to more than 12 times the size it was when it was purchased just 30 years ago. The company is always on the look for what is next, and that has put it in an advantageous spot as the industry has evolved.
“The biggest customer complaint, across the board, is not having an adequate labor force,” says Maxwell. “Automation is a quick and easy way to ease that issue. Automation solutions allow you to repurpose your workforce into other jobs. Most of the time, robotic solutions are doing jobs that humans don’t want to do. Palletizing boxes of product that weigh 50 pounds. Nobody wants to do that, so let the machines do that work and repurpose your staff to work in other areas of the business.”
Howard adds, “Technology is evolving so quickly. Our customers have important production issues that they need solutions for now. Our business model puts us in an advantageous spot as an integration partner, but I think it’s a constant reminder, too. Applications and technologies are always changing, so we need to make sure that we’re continuing to be on the leading edge for hiring talent, remaining relevant with evolving technologies, and understanding the changing issues on the frontlines with our customers. Our evolution demonstrates our adaptability to the marketplace with the development of our robotics division and the more recent integration partnerships with Fanuc Mobile Robotics and Kardex Remstar.”
RMH has an incredible breadth of services it offers. In addition to its engineered systems solutions, today, RMH offers warehouse automation and robotics, cranes, scales and packaging solutions. The company also services all of these areas.
“Every robotics cell that we design, we take a heartfelt interest in, as if it was our own,” says Maxwell. “Our sales personnel stay on the project from inception through installation, so they are accountable for the promises made during the sales process. Our engineers design the system. We help them write the scope of work. If we see a problem that we can’t address, we’ll tell them that. If a customer comes to us with a solution, we aren’t simply order-takers. Our engineers will work with their engineers to design a solution that will best address the issue the customer is facing. We’re only successful if whatever we do for the customer is successful. It is a truly collaborative process.”
And it’s not just the products that have evolved technologically. RMH has also put an increased emphasis on digital marketing, culminating in the launch of a new website this year.
“If we’re not growing our digital presence, then we’re going to be falling behind and not truly taking advantage of our position within our market,” says Howard. “It has definitely changed our business for the better. We’ve seen some really nice projects come through our website.”
Adds Maxwell, “We’ve always had a difficult time getting the word out as to what we do and all of the different products that we sell. If you used us for scales, you might not realize we do material handling or sold cranes. Our website helps tell our complete story and helps with cross-divisional sales. That’s been our biggest opportunity.”
The die has been cast as far as RMH’s growth strategy. The company will continue to expand its engineered systems opportunities and look for opportunities to grow or expand its other offerings through organic means or by acquisition. Today, the company has five main offices.
“In the next five years, I would hope to see us on the same growth trajectory we have been on,” says Howard. “Last year, we did an exercise where we staged out what our expected revenue goals were. In five years, we were looking at about a 33% growth over where we are now.”
To achieve that growth, RMH, like many others in our industry, must contend with how to adequately capture the existing knowledge of staff that may be retiring as Baby Boomers continue to exit the corporate world. As with every other area of the business, RMH has a strategic plan that it continues to execute to solve this issue. Today, one-third of the business is under the age of 40. With a strong culture and a solid strategic plan, it’s a solid bet that RMH will continue to grow and flourish.