ABOVE: PrairieLand Partners’ Executive Team (from l) includes: Amanda Cooper, Director of Human Resources; Steve Kaufman, Integrated Solutions Manager; Darrell Pankratz, Director of Sales; Curtis Beagley, Controller; Doug Neufeld, CEO; Benny Ray, Corporate Service Manager; Loren Balzer, Director of Aftermarket; and Drue Durst, Director of Marketing.Category: Large, Multi-Store Operation
Founded: 2008 (via merger of Deer Trail Implement, Conrady Western and Pankratz Implement)
Major Line: John Deere
Other Lines: Great Plains, Landoll, Kuhn Krause, Stihl, Honda, Haybuster, Frontier, Kinze, Westfield, MacDon, Brent, J&M, Koyker, Kuhn, Land Pride, Orthman, Schaben, Unverferth, Maurer, Shelbourne, Sitrex and Ogden Hay Rakes
Locations: 9 (McPherson, Marion, Emporia, Anthony, Wichita, Winfield, Hutchison, Andale, Kingman)
2013 Revenue: $266 million (80% wholegoods; 13% parts, 7% service).
2013 Market Share: 55.9%
2013 Return on Assets: 15%
2013 Parts/Service Absorption: 79%.
Net Promoter Index (John Deere Customer Service Surveys): 76.39%
Ownership Group: Doug Neufeld, Marc Conrady, Darrell Pankratz, Loren Balzer, Joe Pavlovsky, Tom Conrady, Bill Wall, Dan Cammack
The 2014 recipient in the large, multi-store category of the Dealership of the Year program — PrairieLand Partners, headquartered in Hutchinson, Kan. — embodies much of what you’d expect from a professionally managed dealership group for the 21st century. Things like decisiveness and objectivity, action plans that groom and test the next generation, and hard discussions about getting people in the right seats on the bus — and moving those who are not.
Yet despite some “old-school” elements (Christian values displayed without apology and an expectation for “all hands on deck” when customer uptime is at stake), there’s also a progressiveness that must create vulnerability and unease for insecure managers. The most direct example is a self-governing committee in every store that allows anyone to throw a flag at any time, including on top management (which has happened). A “because I said so” answer from a manager is no longer acceptable.
Formed via a merger of three competitors 6 years ago, this John Deere dealer group has brought a business culture that was new to all of the parties while aiming to meet the more demanding needs of its farm customers.
Innovations as Differentiator
“Most companies teach a customer-focused business, but PrairieLand demonstrates it each day,” says Jamie Gudeman, John Deere territory manager for Central Kansas. “And they have shown you can be profitable at the same time.”
But PrairieLand doesn’t limit service only to delivery and uptime; it’s also about improving them through the dealership’s own product innovations.
One of the things that management says is a big differentiator, and source of pride, is its own technical product innovation. “Real leaders in this business will stay even a step ahead of the manufacturers,” says CEO Doug Neufeld.
One such area of expertise is in forage harvesting. It’s been a long-standing speciality of the store in McPherson but hit stride when the bigger and more complex John Deere 6000 forage harvester hit the market in the early 1990s. McPherson has 6 techs fully assigned to forage harvesters, and their service calls take them from Texas to the Dakotas. The company’s forage harvest clinics now attract farmers from states away.
“We’ve been able to specialize due to that expertise, and have provided some innovations that help the machine perform better than the original equipment,” says Wayne Unruh, forage service manager. Hay crop deflectors, lower front feed roll right hand hub and short-crop feeding guides are all developments that PrairieLand pioneered itself, and now sells from its parts department.
PrairieLand Partners’ revenues have seen an annual growth rate of 12.9% since 2011.
A second example is seeding and planting, where the Hutchinson store is making a name for itself with innovations farmers can’t find elsewhere. The Integrated Solutions Group has applied technologies for liquid and dry fertilizer, and variable rates between planters and air seeders, to offer unique solutions before they were commercially available.
Darrell Pankratz, director of sales, credits such innovation to the company’s “why-not?” thinkers. “They love a challenge and devote lots of hours to dig into things and make them work. We discuss it, but we turn them loose and let the horses run. If you hold them too tight, you’ll stifle them. They know they have the freedom to design a system that the customer is asking for.”
“In a small dealership, values can be learned through osmosis,” says Pankratz. “In a big organization with 200-some people who are making decisions every day, you’ve got to be more intentional about it.”
Within the first year of the merger in 2008, management initiated a process to develop a language that would bind all employees together. With the help of the Spader Group, every employee at each location was tasked with exercises that would set the direction of the new company.
Their shared values are:
- Integrity — “Be honest; only make promises we can keep; show respect and dignity for all; practice the highest standards of ethical conduct.”
- Excellence — “Take personal initiative to improve performance; proactively solve problems with a sense of urgency; be receptive to feedback and new ideas; hold ourselves accountable to the highest performance standards; demonstrate continuous improvement and support innovative action.”
- Financial Success — “Provide a fair return for our efforts, risk and contribution; work from sound, adaptable plans; use resources wisely; continually develop and invest in people and assets; seek future growth opportunities.”
- Partnering — “Be respectful and positive with all; effectively communicate and listen intently; work toward shared goals; maintain a helpful attitude and treat others as we want to be treated; have fun while working together.”
“These values are our beacon,” says Neufeld, noting they are in order of importance — financial gain is not to come at the expense of integrity and excellence. The values are posted everywhere, and discussed in job interviews as well. “We know we have a quality candidate when they’re impressed by the values,” says Amanda Cooper, director of human resources.
For decades, the McPherson store has been known internationally for forage harvest expertise. The dealership developed several parts of its own in search of solutions, including hay crop deflectors, lower front feed rolls and short-crop feeding guides that are now marketed via the website and over the phone. “The parts came out of our goal to do anything to make machines more reliable and serviceable,” explains forage service manager Wayne Unruh.
PrairieLand has a progressive method in place to see that those values are adhered to — through each store’s “Managing By Values (MBV)” committees. These committees are made of 3 individuals who are tasked with resolving any values-violations that arise. While the committee makes sure the store manager is informed, it’s their responsibility — not the store manager’s — to see things through.
Through this arrangement, values are “owned” throughout the organization, not just by those with manager titles.
In practice, if an employee sees a violation of company values, a “gap” form is signed and filed, and presented to the location’s committee to resolve. One example, says Cooper, was inconsistency in clocking out for breaks. “Most issues are resolved through transparency and communications,” she says. “When a gap is filed, it’s announced in meetings and communicated how the matter is resolved.”
Merger: Keeping an Eye on the Ball
When you speak with the management team at PrairieLand who navigated the merger, the term “keeping an eye on the ball” is cited nearly universally.
Discussions started informally about 18 months before the 8-store merger was completed in February 2008. Two of the units — Conrady Western and Pankratz Implement — were family businesses, while Deer Trail Implement was a management group that revealed what the corporate structure might do for the collective parties.
“In the negotiation of 5 owners, there were times when each of us wanted to walk away,” recalls Doug Neufeld, CEO. “At various times, each of us had to remind the other to keep their eye on the ball, to remember the big picture of what we were trying to do. Remembering how it would positively impact our future with our customers, employees and John Deere carried us through.”
Each of the companies came from a different perspective. One group considered itself “from the gut” thinkers who relied on intuition, another was highly-analytical and yet another was managed by risk, says Neufeld. “But we were committed and had great respect for each other, which was evident during the final ‘true-up’ process — there was no nickel and diming.”
Neufeld recalls what he was told by a farmer friend. “It’s like a marriage — everyone needs to feel like they’re giving 100% in the relationship. If you stop at 50%, it won’t work.”
Today, a strong MBV committee handles issues long before a gap is filed, says Cooper, and a good leader will seek out problems to address. “It can be more powerful for a co-worker to address an issue than a supervisor.”
The MBV committees have had varying degrees of success as the process was implemented (“some ran with it, others have taken longer to get there,” says Cooper), but successes point to common denominators. “Getting the right people on the committee is key,” says Cooper. “Rotating personnel can create a high-performing committee very quickly.”
Paul du toit, store manager at Emporia, adds: “You can’t take your youngest employee and say you’re giving them a ‘hand-me-down’ MBV position. It can’t be viewed as a dumping ground or one more thing to do. In reality, it’s a leadership growth opportunity.”
At Emporia, the MBV team (which consists of employees from parts, service and sales) meets weekly with du toit and the departmental managers, and also has lunch together once a month.
Loren Balzer, director of aftermarket, has a piece of advice for any dealership considering such a model. “If you go to a store and say you’re going to take care of something, you’d better follow through on it,” he says. “If you say you will and don’t, you’ll hear about it.”
The group is not only tasked with fixing things; positive reinforcements are another key duty. Each store has a “Values Champion” who is recognized monthly, which, in turn, feeds a companywide champion presented at the annual employee meeting. The group is also in charge of the each location’s community service projects.
As du toit says, the committee provides employees with opportunities to learn, and demonstrate leadership. Cooper says the model is now being applied to additional activities as well, including a wellness initiative.
In citing PrairieLand’s outspoken value-based culture and the MBV activities that empower all employees to do the right thing, Gudeman says “I’m consistently impressed at the open, outward discussions by employees. It garners tremendous loyalty from both employees and customers alike.”
Emporia Store Manager Paul du toit watches activity at the 100 x 200-foot community garden it operates adjacent to the dealership. The garden serves as one of several community projects in which the Emporia location participates.
A Hybrid Organizational Structure
PrairieLand describes its structure as a hybrid. Centralization is seen in processes, procedures and functions such as accounting, HR and marketing, all of which are handled at the 16-person office building in Hutchinson. Meanwhile, everything that involves customer interaction is decentralized.
“We run more effectively if decisions are made at the store,” says Neufeld. “If work processes are followed, the customer will get what they need at the store 95% of the time. We want the customer to know that issues can get resolved there.”
And while guiding values are expected to be followed, management is careful to preserve store individuality. “They should have their own personalities,” says Neufeld, “and have freedom to get to the result in their own way.”
Open-book management is practiced, and Neufeld provides quarterly reports to employees that show the company’s high-level financial performance. “We’re careful not to create competition in a way that would cause people to hold back ways to help one another,” adds Balzer. “So we manage that in a way that’s positive. And we know that a store manager who sees their store was last on fill rate one month will have a meeting with his team.”
In addition to the firm’s executive team (see p. 24), there’s an additional board that consists of 6 owners plus 2 outside directors, who bring backgrounds in accounting/finance, engineering and manufacturing to the table. “The outside representation on the board was one of the best moves we made,” says Neufeld. “They don’t bring history nor bias, and nothing is personally gained or lost. The board listens to them because they know it’s not a personal thing.”
Neufeld believes outside board members can be very effective for dealers, particularly family-owned ones. “There are a lot of well-run family businesses but things do get constrained as the business gets larger. Traditions are harder to give up.”
The firm maintains a strategic plan that looks 3-5 years out (and is shared on a Google drive system so it can be updated and reviewed). Supporting the larger strategy are specific business plans for market share, leadership development, recruiting/training and retention and Integrated Solutions.
Above the parts counter at the Wichita operation (led by Marc Conrady, store manager) is the public declaration of PrairieLand’s principles. The group’s Christian values and aim for service leadership are also reinforced through additional framed messages including that of Pastor Chuck Swindoll.
Integrated Solutions: Reallocating Investments
“We believe John Deere is still ahead on equipment innovations, but other manufacturers are catching up,” says Neufeld. “What we’re doing with our Integrated Solutions is going to be a differentiator, and will keep farmers from viewing our services as a commodity.”
The Integrated Solutions Group is a new department of 8 employees (including an agronomist) that’s directed by Steve Kaufman, who had previously been a store manager. “What started out as AMS support on cell phones to machine startups to the call center has evolved to a whole different level,” he says.
CEO Doug Neufeld: Cut His Teeth as a Custom Harvester
Doug Neufeld’s path to running a large dealer group is unique. He was a custom harvester (Neufeld Brother Custom Combining) whose family business handled cutting from California to Texas to Montana. After selling his business in 1996, Charlie Gause (retired vice president of marketing for John Deere), recruited him to work for John Deere as a combine specialist — his first exposure to the retail side of the farm equipment business.
He worked 2 years for Deere before being pegged by Deer Trail Implement’s ownership group to become GM in 1998. “On my first day on the job, I pulled all the employees together — about 20 at the time — and said, ‘You all know more about this business than me. I was asked to lead, but the only way we can make this work is if you’re willing to make me a leader.’”
When the PrairieLand Partners merger was finalized in 2008, he was asked to serve as CEO for the skills he’d demonstrated during the merger process. “Buy-in and keeping people at the table is important,” he says. “Sometimes you need to leave something off the table for a bit, or approach it differently, until you can get everyone there.”
His group has developed packages that include data management, variable rate recommendations and field prescriptions that tie the hard iron it sells to the advanced technology and data possible today. “We use the customers’ data in a comprehensive way that’ll allow them to make decisions on varying the rates of nutrients and seed populations within very targeted zones — to maximize yield and minimize cost.”
Last February, the dealership launched its own trademarked “Field Command” services that include data analysis, precision start-ups, GreenStar support, Field Connect, remote support center access and “technology-based” consultation services. With the exception of the grid sampling (outsourced to a third party), the work is being done in-house via data-analysis software.
In 2013, the Integrated Solutions Group directly generated $127,000 in revenue. “It’s a cost center today, but our vision is to be a profit center,” says Kaufman. Just as important as a positive bottom line, he says, is the loyalty it can bring to the dealership. The value of such services to the farmer extends beyond the iron.
A Look at PrairieLand Partners’ Aftermarket Focus
PrairieLand did $36 million in parts and another $18 million in service in 2013. Here are a few things to note on those numbers ...
Neufeld explains: “We lost 5 deals to another brand last year, and in all cases, none were tied in with us on the precision end. They went elsewhere this year just because someone was selling equipment cheaper. With more of a complete solution now available, the Integrated Solutions Group and our Field Command Program will build loyalty.”
Bringing the Next Generation Along
Succession is a priority at PrairieLand, which has long-term strategies for management retirements as well as an emergency plan. “We know that success is about the collective team of people here,” says Pankratz. “If we aren’t replaceable, then we haven’t built a good company. The business should not see any dip due to personnel leaving — but you do that only by building the team up.”
As far as filling the ranks of tomorrow’s leaders, Neufeld notes that 4 of the 9 store managers are in their 30s. “Our store managers are running an entire business unit on a defined scale. They are showing us how they run the operation and handle employees, customers, sales responsibilities and corporate directives. The experience is a testing ground for how they’ll do running a larger business responsibility down the road.”
He adds: “We encourage them to try new things, to go out on the edge a bit. What often holds people back is a feeling of not wanting to fail. We need to push them and encourage them to look at anything that can be successful.”
What the Judges Say
“Very good dollars generated per employee of $956,846” ... “Highest ROA, highest market share and higher absorption rate in the large-dealer category” ... “Developed a complete Integrated Solutions Division” ... “Very strong in community involvement” ... “Succession plan in place.”
But with that, is an acceptance that failure will occur. “If you want to succeed, you must also learn to deal with failure with respect,” says Balzer. “You can’t make a spectacle of it. We need to help them get over it and encourage them to go and do it again.”
The mentoring process is informal, says Neufeld, but processes and boundaries of what people can and cannot do, help direct decisionmaking. “We’re there more to answer questions and steer them to others who can help with a given situation. But in the end, we’ll tell them to make the call — that it’s their responsibility and they should handle it.”
Pankratz says that the “school of hard knocks can have a high tuition,” but it’s the one place you’re guaranteed to learn. “That’s where the rest of us learned it; we made mistakes. We try to give people the experience and not micro-manage; they need the chance to make their own call on things.”
The Hutchinson headquarters building now has a training room that allows distance learning as well as an array of personnel and HR-type training.
A Journey Never Completed
Neufeld feels good about the future. But as the business becomes more sophisticated and fine-tuned, profitability for dealers won’t come as easy. He expects farmers to become more demanding in their examination of per-acre input and equipment costs, but says a dealer who provides the 360-view will be sought after. And moving in this direction will protect PrairieLand as the commoditization of equipment continues.
When asked what he’s most proud of, Pankratz points to the dealership’s sense of team. “We were able to bring a lot of good people over in the merger, and we’ve been able to hire a lot, too. We’re humans, so we aren’t perfect, but overall it’s a group that really wants to take care of the customers.”
He reflects back on the merger and their hope to develop a brand for the dealership that could be as strong as John Deere’s. “We can’t just be selling stuff or just paying an employee. We need to be partners with the customer, the employees, with each of the locations, with John Deere. It’s needs to be a win-win for all.
“Sure, we still fail on a regular basis, but we never stop trying. It’s like managing your cholesterol. You can be in a good range, but if you don’t stay focused and work on it every day, it’ll get away from you.”
Farm Equipment’s Lynn Marcinkowski Woolf and Darren Foster also contributed to this article and the online exclusives.
+ PrairieLand’s Checklist for a Successful Merger
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