Mike Lessiter: One of the things I'm picking up on in interviewing for this project is that the next generation was exposed to the business at a very young age. I'd like to explore that a little bit… Dad brought you into negotiations and big deals. You traveled with him. Tell us what you gained by being exposed to that much of the business from a young age.
Marc McConnell: I think a lot I probably didn't understand at the time, so I had to fill in the blanks later. I think I realized that there was a lot of hard work and scrappiness that has to go into making a small business go and to make deals happen. There's always a lot to be negotiated and there's always improvement that can be found in operations or there's always an improvement to be made in your bank deal or in anything. You don't give anything without trying to get a better outcome for yourself. I learned that early on, just being exposed to that. I think that grit, I think it's the difference between making it or not, and I was exposed to a lot of that along the way. Whether I was paying close attention to it at seven, eight, nine or later, that was kind of the norm.
Mike Lessiter: Yeah, yeah. That's a good word that also keeps coming up, grit, perseverance, just having to plow through and find a way.
Ward McConnell: Marc had... at a young age, he had a lot of moxie. He thought he could do anything and one of his very first ventures after college was president of a bank, which he still is. The bank is growing and it's doing the same thing we do now, buying another bank and so on. He just closed another bank a month ago. He has the fever, too, I think.
Mike Lessiter: Yeah, that's a genetic ... disposition there. Yeah.
Ward McConnell: Apparently.
Marc McConnell: Could be.
Mike Lessiter: It seems you guys have different paths into the business… from very, very small businesses, taking on a large corporate entity, and a publicly-held company later in life … and now you're leading a corporate structure, management teams, all that. How would you say your styles are alike and how are they different? Let’s start with Marc.
Marc McConnell: That's hard to answer…
Ward McConnell: And keep your job.
Mike Lessiter: I know that you, from my perspective as a magazine publisher, you're a lot nicer to the vendors in the market, Marc, than Ward is.
Marc McConnell: Right. I can say that. Yeah. I'd say the similarity would lie in the priority and pursuit of being profitable and encouraging long-term sustainability as a business model, that kind of thing. That would be common. I think how you get there, or the approach to getting there, is probably shaped by the experience. I, as you say, come at it from a different set of experiences and angles than he does.
In my case, I wonder if some of the answers might be generational. It might be. The fact that I'm my age versus his might affect how far I look out at things and decisions I make. I’ve just tried to learn from things that we could've done better and adjust, and likewise see the things that we did well and go with that, too. I try to go with the collection of experiences, good or bad, and try to get there that way. It's hard to have the same outlook on some things when you got there a different way.
Mike Lessiter: We're formed by the experiences we've had. How does his approach differ from yours, Ward?
Ward McConnell: He's more methodical than I am, which is a good asset. I was more seat-of-the-pants and do-it-my-way sort of stuff. Marc is much more methodical than I am, which is good.
Mike Lessiter: Yeah. Were there early days in your career, Ward, where things were real touch-and-go?
Ward McConnell: Oh yes. Yes. They're painful. I remember early on we made potato planters and we sold like 50 a year for two or three years and suddenly they didn't sell anymore. Potatoes were 10 cents per 100 pounds briefly. They were awfully, awfully cheap. The farmers weren't making any money and the dealers weren't either and I owed the bank and the bank came wanting to get paid. All I had, I think, to pay them with ... They said, "Well, you got all these planters. Where are they?"
"Well, they're in Maine."
"Oh, well, you get your ass to Maine and sell them. We want to get paid." I said, "I can't sell them. There's no money up there." They said, "Get your ass to Maine and sell them." Anyway, they were rough and I finally had to give in. I went to Maine and I'll never forget walking into the store dealership, Said, "I got to sell you some planters." He said, "We don't want any planters. We couldn't sell them if we had them." I had to go home with no planters sold and the bank really … God, they got rough. They were mean and ugly, every way they could be. That was real early on. It was maybe three or four years and they ... Eventually we ran into almost the same thing with tractors. Almost. We had a lot more moxie then and knew how to work our way out. We did work our way out, but those are the two most difficult times of my life really. When the bank gets on your back and rides and has no sense… what they force you to do doesn't make any sense and so on. Do you do that at your bank Marc?
Marc McConnell: We try not to. Some borrowers require it.
Mike Lessiter: Was that a time where you weren't sure you were going to come out on the other-
Ward McConnell: No, that's right. Neither time.
Mike Lessiter: Yeah. How did you get through?
Ward McConnell: I fought and fought, and in both cases, the following year the stuff sold off. We had to get to the following year, though. I sent everybody home. It was tough.
Mike Lessiter: What are the proudest moments when you look back on your career? It sounds like the Ratliff experience and selling the tractor to AGCO were part of that, but are there other ones that come to mind?
Ward McConnell: It was a major project that was under-financed at the time. I remember right after we bought it, we didn't have a tractor. We made a big box about the size of this room, painted it red and made it out of plywood in the form of a tractor and took it to Manitoba to a farm show and showed it off … coming soon, stuff like that. While I was up there, we had a dealer meeting. It was the first dealer meeting I had with them and I went home with 10 orders. I had $1 million worth of orders in my pocket.
Selling off of a wooden tractor… We made the 10 tractors and delivered them up there. The was exciting as hell because we didn't have anything underneath that box. I went up to the farm show and took the dealers' orders in our hotel and had a beer. Every dealer gave me an order for a tractor and they were around $100,000 a piece.
Mike Lessiter: Wow. Pretty good salesman then, huh, Marc?
Marc McConnell: Yeah.
Ward McConnell: That was a good sale. That was a highlight. It gave breath.
Mike Lessiter: Yeah.
Marc McConnell: His woodworking was good.
Ward McConnell: Plywood. It was shaped like a tractor. It worked.
Mike Lessiter: What were some other moments that come to mind?
Ward McConnell: Those banking moments have more memory than anything else. It's kind of nice to have the bank kissing our ass now.
Mike Lessiter: Yeah. How about you Marc? I know you're still a young man in this business, but what have been your proudest moments?
Marc McConnell: It's kind of hard to answer because it's early on, right? I can forecast the proudest I’ll be will be when we're on the other side of the ag downturn now. After that's fully lived through, I would expect that to be.
Other than that, I had some early success in other companies that was really good. Early on, my first real responsibility outside of college was with a small ladder company that we had purchased that was basically defunct. To get that going and go from about 12 employees to about 118 in a couple years… I was kind of up there by myself trying to make that happen. Early on, that was big. I was proud to have earned my way to the position I'm in now with Art's Way and that was an important moment, too.
On the banking side of the business, that was also a turnaround project that I was involved with. To get on the positive side of that and start to see success made me proud. We'd just finished our first add-on acquisition and that was a milestone for us that we'd been seeking for a while. It was taking us to a new size and kind of coming together. But I know that highlight will be when this cycle is through. That'd be an accomplishment under adverse conditions really.
Mike Lessiter: Did you know that you were going to end up doing this? At a young age, were you thinking you would be working alongside your dad and running these companies?
Marc McConnell: That was basically the plan from pretty early on. I knew that's what would make him happy. But I also thought that was probably my best chance financially to have a better outcome than normal was to play the good card in front of you and do that. Pretty early on, that was sort of assumed, I think.
When it got close to having to really confirm that, say about high school, that's still what my thought process was. During those times, he'd sold a tractor company and sold some things. After he sold a tractor company, it was a concerted effort to rebuild, so there'd be business there for me to go into because he could've retired at that point and that kind of thing. At 63 years old or 64 thereabouts, he kind of doubled down. He got into all these other things. In part I think I was coming along to an age to go to work and it was what I wanted to do.
Mike Lessiter: Make an investment in you at age 64, right?
Marc McConnell: Yeah. I don't know that was the real impetus for it but it …
Mike Lessiter: It came out that way.
Marc McConnell: It coincided. Yeah.
Mike Lessiter: When we get to these meetings, Ward, usually gives me a free hour of consulting time and obviously there’s a lot of wisdom. You can read situations right and there have been times you told me your opinion. What are the things that you've learned from him, Marc, that you intend to, if this business is something that your kids are interested, the core values, the core tenets about business, that you want to pass onto the next generation who might take the keys?
Marc McConnell: Yeah. I think the core things would be, despite the size of the business or anything, to figure out how to remain entrepreneurial and not get too detached from where commerce actually happens. I think it's important to stay close to the market in any business that you're in. There's that.
There's keeping banks off your tail. I think there's a lot about managing risk and liquidity and all that that is really important for longevity. Hard work is obviously a necessary ingredient to all of it. That'd be very much a part of it.
Being in this business, particularly in a cyclical business like ag, is inherently challenging in some ways and it's rewarding as well but you have to have ... He likes the word moxie, but you have to have that to be able to withstand all those things and come out on the other end. Those are three key elements to succeeding in it and if you're not paying attention to those things, it might not give you the best outcome.
Mike Lessiter: Right. Were there things, Ward, that you were going to drill into Marc, come hell or high water, non-negotiables that you wanted to expose him to from an early age?
Ward McConnell: I don't think so. I think it was by osmosis. He and I have always communicated pretty well. I don't think there was any time he got picked on very bad.
Mike Lessiter: You got to him through sheer repetition I bet.
Ward McConnell: Probably. Always use repetition.
Marc McConnell: I don't remember you biting your tongue.
Ward McConnell: It hurts.
Mike Lessiter: You never learned that skill I bet, did he?
Marc McConnell: No. No. He has the tongue of a 20-year-old.
Mike Lessiter: Probably why the Deere thing didn't work out quite right, huh? There was no tongue-biting. What would be some things that, if you were presented with a magic wand and got the classic do-over, what would those things have been?
Marc McConnell: For me? I probably would've benefited going to work elsewhere early in my career for other people and, I guess, having to sink or swim a little bit in a more independent situation. That probably would have been good … I know they say that's kind of the best thing for people in a family business. In our case, just due to my age and all that, I didn't think that I had time for that at the time. Knowing what we know now in terms of longevity and health and all that, I would've probably benefited from that. I think learning some things the hard way where you don't have a safety net is probably good.
Mike Lessiter: He needed you at the time to rise up and step into the role that he put you in, right?
Marc McConnell: Yeah.
Mike Lessiter: What about you, Ward? What if you got another shot at something you might have done …
Ward McConnell: I'd be more aggressive. Not towards Marc but towards the business world.
Mike Lessiter: Yeah.
Ward McConnell: My bites were pretty small. We grew them afterward but when you start with nothing, it's still nothing or very little. I think if I were doing it now, I'd get more aggressive. Bigger deals.
Mike Lessiter: You enjoyed that part of it?
Ward McConnell: Oh yeah.
Mike Lessiter: Being in the hunt and to acquire something and build it up from there?
Ward McConnell: Finding some old dog that somebody had that we could make profitable. We made everything we bought profitable. That part's been fun.
Mike Lessiter: Marc, if you had to describe your dad to someone who doesn't know him from a business perspective in one word, what would that word be?
Marc McConnell: I was about to say cantankerous but... Scrappy is probably the best word for that.
Ward McConnell: That's a little better than cantankerous.
Mike Lessiter: We all knew what he meant and we're nodding here.
Ward McConnell: Yeah.
Mike Lessiter: If they were going to do a movie about Ward McConnell, who would you choose to play him and why?
Marc McConnell: Wow. Think about that one… I got to think of somebody surly enough. Who are some of those people… ? Caught me off guard with that one. I don't know… Gene Hackman?
Mike Lessiter: Yeah.
Marc McConnell: I'm thinking about "Hoosiers." Probably something like that.
Mike Lessiter: Ward, what's your one word to describe Marc's business personality?
Ward McConnell: I don't know how he attained it or where he got it but he has business acumen that's really, really authentic. Maybe you know how you attained it? A little bit each stop, collecting from up in Canada to going through the border to whatever. He had a lot of exposure and I tried never to interfere with it … Go collect the money.
Mike Lessiter: Yeah.
Marc McConnell: Figure it out.
Ward McConnell: You figure it out… and that worked.
Mike Lessiter: Just speaking about American manufacturing for a moment, what do you think is not appreciated or properly understood out there?
Marc McConnell: I think a lot of people tend to assume that everybody that has a business is successful, and that kind of thing, that every business would fall under the category of corporate America or something. Really, it's mostly not that. I think it's a lot of small entrepreneurial manufacturing companies that may have 10 people or 20 people, 30 people that are actually bending metal to create parts and designing things and all of that where there’s a lot more challenge to it. Of course, we all have difficulty in hiring people, in hiring qualified people and all that is very difficult, especially in a competitive environment for labor, a competitive environment.
For your product to really be successful and have longevity, though, you kind of have to have something that's a little different, that provides value, that's compelling in some way. These days to have an also-ran type of product doesn't get you anywhere at all. It's very challenging, I think, for American manufacturers and they have to be nimble to manage risk and all those kinds of things. It's very difficult and I would think quite underappreciated by people that don't realize the hard work that goes into running a business that actually employs people in America. I think it’s kind of largely taken for granted.
Mike Lessiter: Well said. Ward, was there anything you'd want to say about Marc having gone through the chairs and led the association at a young age? You must have been the youngest FEMA president ever, correct?
Marc McConnell: I'm told that. Yeah.
Ward McConnell: He had a lot of experience, I think. I think it went well, I believe. I don't go to meetings, but you go to meetings. Did they go well?
Mike Lessiter: Yes. He did a fine job.
Ward McConnell: Yeah. He'd had quite a lot of exposure, I think, before that that probably helped him. Hearing me bitch…
Mike Lessiter: That's an important life lesson. Anything, Marc, that comes to mind?
Marc McConnell: We are really pleased to be improving our business through what's been a prolonged downturn and really a very a long-term focus on getting the job at Art's Way. Three years ago, we entered with having a good firm foundation that he left for me and that's part of how we've managed to work through the tough times. Going forward, we're looking long-term, developing a lot of new products and focusing on quality and customer service and product development as key ways to really make an impact in the market. The marketplace is very challenging for shortline manufacturers, but I feel like we're doing the things that'll give us an opportunity to be successful long-term. We've been in business for 61 years and we're certainly trying to get to some bigger milestones in that regard and I think we're focusing on the right things to get there. We appreciate the opportunity to sit with you and discuss all these things.
Mike Lessiter: My memories of getting to know you guys … we had just bought Farm Equipment magazine in 2004 and I was at one of the FEMA meetings, might have been in Orlando, and your dad was one of the first that came to check us out. You know, not familiar with you and what's the story and we laugh back at the office about the Ward McConnell rule when it comes to subscription pricing, and Dave Kanicki has a lot of funny memories. We saw some of the negotiation tactics firsthand as well but it always was fun. I appreciate the business relationship and the friendship, for sure. It's a highlight of coming to these meetings to see you guys.
Marc McConnell: Appreciate that. Us, too.
Ward McConnell: Right, us too. I want to say something. I really enjoyed your and my relationship and our walks and so on. It's been a wonderful, wonderful friendship.
Mike Lessiter: Absolutely.
Ward McConnell: Just friendship. That's been wonderful.
Mike Lessiter: You've passed a lot of stuff onto me that got me thinking and I brought some stuff back to our management team through those conversations. I was listening. I didn't listen 100% of the time when I should've but I was listening.
Ward McConnell: We bullshit pretty good.
Mike Lessiter: Yeah.
Ward McConnell: Yeah. I've enjoyed that much. We've gotten slower and slower but ...
Mike Lessiter: We still get out there, though.