The Secret to Success - Best Practices
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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The Secret to Success

Written By: Mary Sedor

Article Date: 01-02-2006
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.

Hawthorne Machinery celebrates its 50th Anniversary.

Remaining in business in a cyclical industry is truly an achievement, and Hawthorne Machinery is proudly celebrating its 50th year in 2006. Chairman Tom Hawthorne and President and CEO Tee Ness agree there is no secret to staying in business for 50 years - it depends on great products, a market in need of those products, and outstanding customer service.

Hawthorne's father, J.B. Hawthorne was a building contractor and, in 1956, bought a Cat dealership in San Diego county. The company officially became known as Hawthorne Machinery Co. on November 19, 1956. Tom and his father were equal partners until his father retired in 1964.

In the 1970's, it was Tom Hawthorne's vision to move into the short-term rental market, which was basically being ignored at the time.

"It was a slow entry for us, but over the last 30 years, it's grown to be a significant part of our business," says Ness.

Acquisition and diversification also played key roles in the company's longevity. The company has several divisions, including Hawthorne Rent-it, Hawthorne Power Systems and Hawthorne Lift Systems. The power service division was formed 35 years ago, the lift truck business began 32 years ago, and the rental business was added 30 years ago.

"The divisions we've added have been an integral part of our growth," says Tom Hawthorne.

Most recently the company purchased an equipment dealer in Hawaii. Hawthorne kept all the staff and facilities and is in the process of integrating the two companies.

"The secret to staying in business," says Ness, "is having great products. Being a Caterpillar dealer affords us that opportunity. And, we have a market that needs those products."

Also Key, says Ness, is hiring and retaining quality people.

"The secret is to make sure you're hiring the best people and training them like crazy," says Ness. "We pride ourselves on having the best trained and most skilled employees we can offer our customers."

Over the company's 50 years, it's been Tom Hawthorne's desire to reinvest profits into the business to ensure the company could retain its employees and maintain a sound financial base to carry them through tough times.

The company works to keep its employees motivated and focused on the customer, says Ness, "exceeding expectations in everything they do."

Taking Training Seriously

Hawthorne Machinery doesn't just talk about training, they are committed to it. The company has a training division with certified trainers on staff.

The trainers teach employees and customers the technical aspects of the machines, and provide in-house management and supervisory training. In addition, each employee goes through eight hours of customer satisfaction training.

The company also has a certified operator demonstrator that helps salespeople learn to operate the machines so they can better relate to their customers.

"It provides extra support for our customers and helps them get more production out of their machines," says Ness.

In order to retain employees, Hawthorne Machinery prides itself on growing its own management staff.

"We value the experience our employees develop over the years," says Ness.

Sailing Through The Cycles

"We seem to go through business cycles every 10 years or so," says Ness. "We prepare by putting a lot of effort into business planning, and trying to forecast. We look at what the market trends are and what our customers are telling us in terms of business activity.

"We try to keep our organization as lean as possible so we can respond to our customers' needs, but at the same time not add too much fixed cost base to the company."

Tom Hawthorne says diversification has been key to staying in business.

"When markets are extremely poor and things are down, many companies in the construction industry go broke," says Tom Hawthorne. "That's when our lift truck division and engine divisions carried us through."

But, all things considered the equipment industry is a service industry.

"The real backbone of being a construction machinery dealer is having a strong service operation," says Tom Hawthorne. "It's a vibrant market and you have to offer your customers more than just another brand of tractor."

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