Pictured Above: KMI President Clayton Camp meets Camp Equipment customers during an event celebrating the acquisition with customers and staff.
Davin Peterson joined California-based Kern Machinery Inc. (KMI) in April 2015 in advance of the acquisition of Hollingsworth Inc., a 3-store John Deere dealer group with stores in Ontario and Burns, Ore., and Weiser, Idaho, that would be renamed Camp Equipment. During his first 3 months leading up to the acquisition, he was involved in market analyses and assisting with a game plan the company would follow after the deal was inked. While he had been part of several acquisitions during his 20 years at RDO Equipment (including a stint as vice president of its Western Agriculture group), his experience with the acquisition of what became known as Camp Equipment was the deepest he’d been involved personally.
Because it was KMI’s first acquisition in 44 years, and took place 700-some miles away from headquarters, it offered learning experiences all around.
Peterson, GM of the new Camp Equipment, revisited the timeline and what happened and when following the acquisition, which was made official on July 7, 2015.
Having a Game Plan
Peterson has observed acquisitions that had little in the way of a game plan and he says the results are horrible. Having a plan is imperative, he says. KMI assigned an integration team to it (each with specific responsibilities), and everyone knew who was going to do what and when, with a 30-60-90 day timetable that was reviewed daily and weekly. Each person had specific responsibilities that they were taking and running with, and they had to trust each other to get it done. “We had 5 strategic areas to tackle; we weren’t going to try to do too much at once.”
“The Camps did a wonderful job of rolling out the news and what it meant to the new employees,” he says. “The PowerPoint presentation given by Clayton Camp (president) explained who we are, the history of the family and the business and the next steps. It was a high-level game plan of what we would accomplish the following week with the employee onboarding and benefits meeting and the general timeline for the changes, such as the change in computer system. It gave them comfort that the owners are real people, and they were encouraged to ask any questions. It’s a scary time for employees; they don’t know if they’ll have a job.” The newly formed Camp Equipment took that fear off the table right away.
The questions voiced at those announcement meetings, he says, were mostly around benefits and vacations. The presentation incorporated many anticipated questions from the onset. “It was a meat-and-potatoes kind of presentation, but shared a general timeline.”
And from day 1, the trucks were decaled with Camp Equipment and the salespeople were donning new shirts as well.
The following week was what is commonly known in acquisitions as the “rehiring” process. While it may be only semantics, Peterson advises against using “rehiring” nomenclature in this way. “That’s a negative word and can get the rumor mill going and cause customer distrust. That’s the last thing you want; you’ve got to establish trust early on.
“We didn’t let anyone go; and we didn’t make people re-interview for their current jobs. We said, ‘You’re all part of the employee team and on the company’s payroll.’”
The benefits discussion is the employee’s number one concern in an acquisition, he says, as widely different packages exist. To that end, Peterson says that great effort was made to go “above and beyond” expectations to get most questions answered. The KMI HR director and representatives from the benefits company were flown in and met with each employee individually. Spouses were also invited to attend to answer their questions.
After 3 months, all but 3 employees remained on staff.
Procedures & Protocols
Peterson says most of the implementation on paperwork/procedures began immediately. The computer system conversion planned for 5 months later in November brought some challenges, but accounting-type procedures were started right away. “When you become part of a larger organization, there’s always more centralization of things like warranty, accounting and payroll that takes getting used to. Managers end up handing things off to a complete stranger who they don’t know.”
“We were given room to create processes that worked for us yet brought the same result…”
To help with this transition, Peterson says the KMI and Camp Divisions were “cross-pollinated.” “We brought in KMI managers, service advisors and parts people who’d spend a week up here, sometimes on more than one occasion. We also sent our core management team from Camp Equipment to California to work with their services managers, parts managers and accounting to create that cross-pollination. In fact, our new sales administrator just returned from a week working with the two sales administrators and accounting department in California, so it’s clear what is needed from her and how she needs to do things.
“It works well, particularly in the beginning, because if someone is struggling with something, it’s a lot easier to pick up the phone and ask for advice if you’ve met them already.”
When asked if the new dealership was forced to do everything the KMI way, the answer was “Not in the least.” As much as the dealership would like everything to be the same, he explains, they are different businesses. “Some of the processes in service have to be different. They need to be because what works in California, doesn’t necessarily work the same way here. And we hardly do any rentals up here; so the exact same process wouldn’t necessarily make sense. We were given room to create processes that worked for us yet brought the same result, but there had to be a process that these 3 stores could use and implement.”
By the time the new computer system went live in November, some processes had to be altered again and Peterson says it took until January to get on the system 100%. “While it would have been nice to have been on the system from the get-go or rolled out a little earlier — we experienced issues beyond our control — I don’t know that I would’ve changed anything. It allowed employees to get familiar with us, our processes, and be at a lower stress level before going through the changes.”
Peterson says some things can be done right away to quickly set a new tone. KMI’s history of upgrading facilities was one example. “We’re proud of the company’s branding standards,” he says. “So we showed employees we were going to reinvest back into the business; redoing the flooring and painting the showrooms, remodeling conference and training rooms and professional landscaping, along with providing updated vehicles, furniture and computers. New bathrooms are next.” Some things, he learned, take longer than you’d expect, like shop uniforms and signage.
Initial Steps for Business System Conversion
The transition to the Charter Software system was planned from the start with a conversion timeline for November. “We didn’t want to do it during harvest and disrupt the business any more than was necessary,” he says. “We also needed to do a lot of cleanup with the old John Deere system in order to get a more seamless transition.” During the 5 months leading up to the conversion, there was a lot of supplier-based training and visibility into what takes place behind the scenes, which helped people get comfortable with what they were seeing.
In terms of ranking the challenge of the computer system, Peterson says it is difficult to score. “The younger generation generally picked it up quickly, while the ones who have been on the older system for a long time naturally have a more difficult time. But even so, there were some that got it right away.”
Starting in July and continuing on through November was what Peterson called the “all about people” period. It started with one-on-one meetings with employees. “We tried to do these meetings one store at a time, and started with the largest store in Ontario.” Peterson was often joined by Camp and Larry Sitzman (sales manager).
As a rookie to the Kern Machinery team, Peterson was in a unique and helpful, position. “I used the meetings to tell them about myself and break down that wall,” he says noting that while he had 20 years of dealer experience, he was almost as new to KMI as they were. “I told them about my family, hobbies and that we’d be doing a lot of learning together and we’re going to be OK. I asked them about themselves and their family. I got to know them on a personal level first and then began addressing their concerns.”
Some of those meetings lasted an hour, others only 10 minutes. “There weren’t a lot of concerns because I think we did a good job of explaining the what and why on the front end. But there were still questions about vacation and benefits and paperwork, but not a lot that we weren’t able to answer right out of the gate.”
He says those meetings started the ball rolling on training discussions — on what each had and what they needed to have to do their jobs and meet the John Deere expectations.
Getting Out to the Farms
Concurrent with the employee one-on-ones were customer meetings. A key account list was prepared that was targeted for on-farm visits. “One of the obstacles we faced was that most everyone in sales had been here for less than a year — many didn’t know the customers well. We were blessed to have a parts manager who has been here for 40 years and knew a lot more about them than just the previous sales history.”
Peterson accompanied the salesperson (along with KMI management whenever possible) and spent those visits asking them about their farms (which were very different from KMI’s California AOR), their families and answering questions they might have. “That was very helpful to ask what we should be doing differently and needed to improve upon, as we couldn’t fix something if we don’t know it’s broken. With our growth goal, we’d need to know those areas that we needed to shore up.”
The feedback was nothing unusual; things like more wholegoods inventory, better stock of parts and keeping the techs trained up. Peterson heard a few things a customer needed to get off his chest, and they followed up to let him know that his concern was dealt with back at the store. They also heard the positives of what they were doing well that farmers hoped would not be changed.
One of the ideas that they heard about from a peer group was hosting a customer roundtable. “The idea is to get 10-15 customers in for dinner and get them talking about their issues and what they like and don’t like.” As things settle in, Camp Equipment will be looking at doing something along these lines, which will also help monitor progress being made.
Celebrating with a Customer Event
Peterson says that when Clayton Camp is in the area, there’s never a time that he does not meet with customers and thanks them for their business. And while they weren’t waiting on a big event to share that sentiment, they were planning a major event since the deal had been inked in July.
In November, the company held a grand opening in Ontario, Ore., and Weiser, Idaho, and followed it with an event in Burns, Ore. “We had a nice tri-tip lunch for customers with several John Deere representatives and our owners and managers present.” The opportunity to express thanks to the customer base, and the response generated, will turn into an annual event, he says.
Advice for Integrations
Since November and into the early months of 2016, Peterson says the focus has been on identifying training needs and getting out with customers. Now that the dust has settled some, he was asked what advice he could give a dealer about to embark on the acquisition journey.
Though it represented KMI’s first “modern” acquisition, Peterson thinks the transition went well, though he admits no one would say they have it all figured out. “There isn’t anything we could say with certainty that we’d absolutely do differently next time around.”
Over his career, he’s seen both the good and bad. “The biggest mistake I’ve seen made going into it is to tell everyone that ‘Nothing is going to change.’ How can that be true when ownership is changed, there’s a new name on the building and a different person is signing paychecks?” He says he always agreed with the idea of being as transparent as possible, something that he said the KMI team did well with the process.
What would he have done differently? “We saw what the advantages could’ve been with a more formal process manual, particularly since I was new to KMI.” An integrated process manual might be part of a future acquisition system, he says.
“Going into an acquisition, your employees and your customers can either love or hate you. We’ve been blessed because both have been very welcoming and employees have gotten on board and been top notch. That’s been great, because I’ve seen it go the other way, too.”