Years with Organization: 21 — previously Captain in the U.S. Army and served during the Cold War, Just Cause and Desert Storm.
“I see my role as setting the direction of the business,” says the 52-year-old. “It’s making sure I’m informed on all aspects — the economy, the factors influencing our customer base, the dynamics with our distributors and manufacturer partners and all of that. Steering the ship in a direction that keeps us out of the icebergs is my single biggest mission.”
If the maxim is true that “an educated man is one who has learned to learn and never stops learning,” then it’s safe to believe that Brian Carpenter is bringing an example of educated leadership to his dealer group.
The president and general manager of Champlain Valley Equipment, Carpenter returned to the family business in 1993 after his “first career” in the military, though he remains in the Vermont Army Guard today as Brigadier General. Through that involvement, and experience on national dealer association boards, dealer advisory boards, peer management (20) groups, he is investing in his own skills as a leader, and demanding it from his team as well.
When asked to describe his managerial approach, military terms abound. Words like “Minimizing chaos through structure; leadership, accountability, heavy delegation, supervision and checking” were all cited. But polling Farm Equipment editors who had not met him previously also showed observations very different than the traditional views of the hard-core military persona. In Carpenter, our staff saw an even-keeled, quick-to-laugh professional who brings “discipline” and “heart” to the table — in equal helpings.
Carpenter places a premium on getting around, leaving his desk and touching base with people. And he’s clearly “big” on initiative (more so than experience or knowledge), followed by authority and accountability. “We’re not a zero-defects company, so people don’t need to hide here. We want to know when something goes awry so we can mitigate any problems,” he says.
Not the Cheapest Dealer
Virtually every successful organization can hang its hat on an identity. Champlain Valley decided long ago it would be known for high quality of service, not the cheapest price.
As Carpenter explains, the bitter taste of a bad customer experience hangs around for a long time. “So we wanted to be the high quality provider,” he says. “But you can’t just say that; you have to be able to explain why doing business with you is worth the extra money.
“We needed to operate with enough margin to do the little things that will leave a bad taste in customers’ mouths if you don’t,” he says, or the things that volume-oriented dealers just can’t afford to do. Examples include swallowing the trucking and/or a portion of a repair (even when the manufacturer refuses), or eating the freight on a wrongly-ordered part.
“Particularly if the customer’s a repeat customer,” he says, “our managers know they have the latitude to keep him happy. They don’t have to come to me for it.
“We’ve got a small market and it’s not growing. Dairy farms are consolidating here, and Vermont, while stable, is not expanding in population. In this kind of market, word of mouth and repeat business are the two biggest things you can do to grow.”
Brian Carpenter: Molded by the Corps
President General Manager Brian Carpenter was a captain in the U.S. Army, and served in support of the Cold War, Just Cause and Desert Storm, before choosing to leave in 1993 for his family, the business and for a more limited military career with the Vermont Army Guard. The Army put him through his bachelor’s and master’s programs and provided great learning experiences for him personally and professionally, he says.
Today, the 52-year-old is Brigadier General for the Vermont Army Guard, and has responsibility for manning and training 2,900 soldiers for state and federal missions. During his watch, the Army Guard faced the most active state emergency in the last 100 years (Hurricane Irene). His retirement request was accepted and he plans to fully retire in the fall of 2014.
Ends, Ways Means
For Carpenter — a goal-setter and disciple of strategic thinking — looking at the business in terms of “ends, ways and means” has served his style well.
Once an end goal is identified, he goes to work at defining the structure to reach it. “We look at the structure needed to meet a goal. I try to minimize chaos with structure but not to over-structure something. You don’t want to squelch peoples’ initiative, the feel of the family business or your own ability to take advantage of opportunities that arise.”
Determining the “ways” of the business requires continuous reviews of core competencies, the customer base, and staffing (“All are changing all the time,” he says). From there is the assessment of the desired customer experience and then training to make sure the team has the base knowledge to get the job done.
Training is a big part of Carpenter’s approach, and took on priority status in 2002 when he hired Dr. Jim Weber to train his management team. “We go through the full business training and make sure they understand the business and how it runs and the whys behind how we do things. They’ve got to understand the whole business and the metrics we’re looking at and how they impact them, and how their individual department fits into the total business model.”
The “means,” then, is about resources. That often turns into dollar discussions, and releasing funds or borrowing. Staff is given the parameters and ranges in which they need to manage. “We give them the business criteria, the background, the stuff they need to run the department. They don’t need a master’s in business, but they do need to understand what drives the business.”
In acquiring stores during recessions and investing in new facilities, CVE has demonstrated it’ll take risks. “You sometimes hear from customers about the risk of our acquisitions and investments, but it’s not as risky as people think because we’ve studied it in such great length first.”
The Art of Delegation
Having such a diverse product in a dealership whose revenue is based on low-ticket sales makes juggling multi-stores more problematic than many farm equipment dealerships. With Carpenter’s military training, he likely had an advantage in learning — and applying — the art of delegation. “In the military, your structure is set, it’s a pyramid and each subordinate leader has specific authorities and responsibilities. So delegation was natural for me.
“It’s my responsibility to assign the authority on decision making, and we communicate what the limits of that authority are. I’m on the road a lot between visits to the other stores, board responsibilities and my military work, so it’s a necessity,” he says, noting he was gone 30 days on military work during the middle of the season last summer.
Carpenter says CVE’s team is well versed on what needs to come his way for a decision, and is disciplined to provide the depth of information so he can make an informed call. “If it’s a used equipment question, they know to send enough information, pictures, full description, cost sheets, projected sale price. Modern communications makes things easier, but they know to include the background for a quick decision.” If they provide the proper information, his team will get a timely answer, he says.
Carpenter reflected on the family-run stores that CVE acquired, and how, in nearly every case, the owners were controlling decision making authority. When customers are accustomed to dealing directly with owners, that’s a challenge to step into. “As we’ve grown, I can’t make all those decisions; it’s impractical,” he says. “Our team must be equipped to provide those answers.”
Transitioning away his own sales was difficult when it came to customers, some of whom he personally looked after for 20 years. Roles change dramatically when you go from running a $2 million business to one doing $38 million in multiple stores.
“You’ve got to convey to customers that it’s better for both parties to transition the daily sales responsibilities to someone else. You try and make sure they realize you still care and will be there if they have a question, but you can’t be their daily sales contact because of the strategic elements of the business.”
He admits he has lost a couple of customers because it wasn’t handled properly. “It needs to be a one-on-one discussion; email is not a good way to handle it. Now, with each acquisition, we personally visit the top customers — we know they were used to doing business with the previous owner. I tell them we want their business, that I’m available if they need me, but ‘Here’s your new salesperson.’”
Carpenter also follows up now to make sure that new salesperson is working out. Interestingly, he’s found that customers can have more demanding expectations when it’s no longer the owner calling on them. They may have understood that the owner had other responsibilities, so they tend to think a dedicated salesperson should give them much greater attention, Carpenter says.
Metrics That Rule: Leverage, Turns & Cash
In addition to monitoring the cash in the checking account, the fundamental metrics President & General Manager Brian Carpenter uses to run the business — and get his team to support — are inventory turns, financial leverage and expense ratios.
“The biggest one I’ve tended to watch is leverage. It’s in good shape now, at 3 times debt-to-equity, even after buying two businesses in a year. That’s the fastest it’s ever come back down after acquisitions. When at a 3-4 figure, it’s acceptable for us to grow, and we want to remain under 6 at any time during an expansion,” he says noting that it’s been as high as 7 in the past.
Turns also get much attention, though systems keep managers well in tune. “One of the things that Dr. Jim Weber taught me was not to fall in love with assets. If they’re non-performing, it doesn’t matter if they have any value 10 years from now. Cut your losses, take what you can and turn it into something you can make money with. We never would’ve thought of pulling parts off the shelf and throwing them in a dumpster before. Or returning to a parts warehouse with the hope that we’d get a credit if they were sold. But we don’t have qualms of doing that now because we’ve seen the numbers and they’ve proven themselves over the years.”
Cash management is another core aim, and Carpenter ensures they have the resources on hand to capitalize on opportunities as they arise. “Another belief is to never lose a discount. While we can’t pre-sell up here — our customers very rarely will do it up here — we try never to lose a discount. Maximizing every discount we can get makes us highly competitive.
“When you’re buying inventory, you have to be very smart about it, especially on big tractors when we don’t have them sold. You’ve got to make good decisions, make sure we’ve got real leads and work to get it moved quickly.”
The Family Transition
When Carpenter joined the family business after his military career, it was a challenging time. “It was a tough business, I’d taken a cut in salary and the hours were grueling at first. It’s a lot of hours regardless, but when you’re a small business, you can’t afford all the help. At one point, I was the only salesman, I was running the shop and I was the store manager. I feel for the small businessman when he’s in that mode. You’ve got to start somewhere, but you hope that they have a vision of what they want to grow and continue toward — so that they’re not in that place forever.”
Carpenter credits his dad, Russ, for the smooth transfer. “My father was willing to release the reins and step aside to allow me to use my own initiative and judgment, but to be there as a sounding board and as the wise elder when questions arose. But he never weighed in so much that it caused significant tension.
“Transitioning a family business can be very difficult, especially with high-caliber young guys coming up who either want to be in charge or do something different. You can start to feel a little squelched and lose that initiative that got you there in the first place. So you have to feed that initiative as opposed to holding it down.”
His advice to dealer-principals preparing to transfer ownership to the next generation? “You’ve got to find ways to keep the young talent motivated, energized and engaged. Looking back, I wouldn’t have been happy without authority. And that’s why our managers have authority,” Carpenter says.
“If you want good people, you’ve got to give them some authority. They may not do it the way you want them to do it, but if they’re getting the job done, it frees you to focus your energies on the growth that you wouldn’t have time for if you were trying to oversee all the daily stuff.”
Recruiting — What CVE Looks For
When asked about his greatest source of pride over the last 21 years, Carpenter’s answer was the team that they’ve assembled. “I look for employees with a degree of selflessness. Some of the best players are not the superstars but they just fit the team the best. We look for people who want to be a part of a team, not necessarily the QB or the running back. We need people who can fill roles. Then our challenge is to keep people recognized and motivated.”
He’s also unafraid to go to unusual places for talent. “Like we do in the Army Corps, we look for guys that have the capacity to perform. We don’t care about their degree or work experience,” he says, citing several examples of backgrounds totally unrelated to farming or equipment. “I’ll take people who are smart, trainable and have a good attitude. We’ll carry them for a year or whatever it takes to train them.”
He clearly values initiative and shared several examples of “deputizing” employees who showed an interest in an area CVE needed help; even if just on a temporary basis.
Mission: Eradicate Mediocrity
When asked how he’d like to be remembered at his eventual retirement party, Carpenter replies, “I’d like them to say he cared about his employees, he cared about his customers and he wasn’t just about the money. That he enjoyed the business, had a passion for it but pursued excellence. And wasn’t happy to be mediocre.”The push for excellence, he says, creates tension at times. Sometimes, it contrasts with both the employee and customer. “You try and treat everybody with fairness and not tread on them, but you need to make sure that you don’t accept mediocrity.”