Any conversation with CEO Steve Thorne about what has made Southeast Industrial Equipment (Charlotte) a success story starts with his people. Far from a management platitude, Thorne’s assessment is a sincere philosophy that has a deep impact on how he runs the business. With average sales growth of 12% per year, the resultsspeak for themselves.
“The people make the organization. If you hire good people, train them well, and you compensate them well, they are going to stay with you,” says Thorne. “The loyalty that theybring to the table makes your whole dealership stronger.”
Thorne credits his management philosophy in part to the previous owners of the Toyota lift truck dealership who hired him as president in the early 1990s. Southeast Industrial wasthen owned by JM Family Enterprises (Deerfield Beach, Fla.), currently ranked by Forbes magazine as the 17th-largestprivate company in the U.S. with $9.4 billion in sales, and oneof Fortune magazine’s Best Companies to Work For.
In 1994, after Thorne had orchestrated a successful turnaround of the business, JM Family founder Jim Moran asked if he was interested in buying the company. JM Family is the parent organization of Southeast Toyota Distributors the largest franchised distributor of Toyota cars, trucks and vans in the world. At that time the company was looking to focus on its core automotive businesses. It was a once-in-a-lifetime opportunity, says Thorne. They set up a buy-sell agreement that was fair for both parties, and completed thebuyout in a year and a half.
Southeast Industrial Equipment:
A Life in the Business
Steve Thorne has been in the material handling business for 29 years. He was a salesman for Hyster and Clark, andmoved to North Carolina 23 years ago to be sales manager for a Mitsubishi dealership, where heeventually rose to vice president. Whenhe was hired as president of SoutheastIndustrial Equipment in 1991, Thornetook a hands-on approach, getting involved in every area of the business, applyinghis experience in sales and service.And he hired the best talent hecould find, mostly highly competent people who he had worked for or within the past who he knew that he couldrely on.
“I was able to develop a great team at Southeast Industrial Equipment,” says Thorne. “I have some excellent managers and I’ve got some excellent salespeople who have stayed with me for many, many years. My turnover rate in my management is very low. I think with the right people in the right places, it makes growth very easy.”
Southeast Industrial has grown from $20 million in annual sales, 83 associates and four locations in 1994 when Thorne took over, to $65 million in sales, 250 associates and eight locations today. Such growth roughly follows the market share growth of Toyota Material Handling (Irvine, Calif.) in the U.S. market, which Thorne attributes to high quality manufacturingand a quality product.
“Everything that Toyota does is first class and they always have the quality of the product in mind,” he says. “We sell the Toyota name first of all, then we sell the Southeast Industrial name second. With the combination of the two, the quality theme goes right onthrough back to the dealership.”
That’s not to say that he doesn’t have a healthy respect for his competitors or their products. To the contrary, Thorne says his market region is served by excellent Raymond, Hyster, Cat and Yale dealerships.
“The competition that’s in our market is, I would say, some of the best there is in the United States,” he says. “All of their dealerships are run very well, and they’re profitable and they make good business decisions. It’s a nice market to be in when you have that kind of competition.”
Such competition keeps his people on their toes, and ultimately benefits customers in the form of superior service. To keep Southeast Industrial associates focused, Thorne holds a lot of meetings. Twice a year he meets with all employees in each branch and brings them up to date on how the company is doing financially.
Thorne thinks sharing profit and loss information is important because it makes people feel like they’re part of the team. They also have to know how the company is doing if they are going to contribute to meeting annual financial targets. Each branch has specific profitability, sales volume, market share and other goals. This past year the company’s Charleston and Savannah branches hit all of their numbers, and they’re celebrating their success with a company-paid, 3- day cruise and 3-day weekend at Disney World respectively.
Southeast Industrial also picks up the tab for an annual company-wide celebration at Myrtle Beach. Associates from all locations and all levels can participate, giving everyone an opportunity to relax and see people who they may usually only talk to by phone. At this event the company recognizes the efforts of its technicians and administration people who often work behind the scenes to make it successful.
Just as Southeast Industrial goes the extra yard for employees, it also goes the extra yard for customers. For example, it holds an annual open house at each branch location. One of the highlights of these events is a special presentation on lift truck safety equipment.
“It gives our customers an opportunity to ask any questions they want of an OSHA inspector. Normally the inspector is the one who’s giving the class,” explains Steve Thorne. Every company screws up from time to time. How much an organiza-tion cares about its customers is reflected in how it responds.
“If you go ask one of our customers what they think of us, they will tell you that Southeast Industrial makes mistakes,” says Cory Thorne, Steve’s son. “[Customers] will tell you that when we do, we’re going to be fair and we’re going to make it right.”
The Next Generation
One characteristic that the Value- Added Award recognizes is how well distributors prepare the next generation of company leaders. Cory Thorne recently moved up to become president of Southeast Industrialfrom his role as vice president operations.
After working in the family business during the summers, Cory started his material-handling career selling aftermarket emissions control devices for another company. He says he wanted to prove that he could make it on his own. When he returned to Southeast Industrial he did some computer integrationwork before being given the challenge of opening a branch inRichmond, replacing a Toyota dealerthat had been canceled.
“The hardest part, when [a dealership] sits vacant for two years and you have no Toyota presence at all, customers get a really sour taste in their mouth. We had to fight that everywherewe went,” Cory recalls. The branch eventually became profitable.Cory eventually moved back down toCharlotte to become manager ofparts and service.
Cory echoes his father’s emphasis on talented people as the key to the company’s future success. As Southeast Industrial continues to grow, he says he wants to preserve the family feel of the company. He thinks having people who really care about customers and the company is what distinguishes them from their competitors. On a personal level, he says working with his father hasn’tchanged their relationship.
“He lets me make my own mistakes, just as he did when I was a kid so that I can learn. Then he comes in and asks, ‘What did you do? Where did you go wrong?’” Says Cory Thorne. “I’m happy that I get the opportunity towork with him on a day to day basis.”
Looking forward, Steve Thorne thinks his company has unlimited growth potential. “For years I’ve heard that we’re a mature industry. I don’t believe that. I think that we’re a growth industry,” says Steve Thorne. “You are always going to have to move product. There’s always going to be new industry coming in. With new industry that has to move products, they have to have material handling. Ithink the growth will continue.”
| About the Value-Added Award |
Every year Material Handling Management joins forces with the Material Handling Distributors Association (MHEDA) to recognize members that demonstrate exceptional success in adding value to clients’ businesses. If you would like to nominate your dealership— or one with which you are familiar—for recognition in 2007, send an e-mail message with appropriate contact information to David Drickhamer ([email protected]). Include a brief description of what makes the distributor worthy of this award.
B.J. Ferrell, sales coordinator,
Steve Thorne, CEO, and
Cory Thorne, president.