Standing in front of a small group of understandably nervous employees, Les Olson introduces himself as the general manager and partner with Plains Ag. He then cuts the tension by assuring everyone when they come to work the next day, the only thing they need to worry about is taking care of customers the way they’ve always done.

The message is consistent and clear for each group of 6-10 sales, parts, service and administrative personnel who often rotate through the showroom a day or two after they’ve been acquired by the Case IH dealership group based in Williston, N.D.

“Once we close a deal, I’m usually the one who goes in front of the acquired dealership’s employees with the previous owner to make the announcement,” says Olson. “I like having smaller groups, otherwise nobody will say anything but me. But I don’t want 6 or 10 of the quietest people. I want to field the questions and I’m fine if they get a little upset or kind of fight me because that let’s me know they care.”

This transitional scenario is one that Olson has navigated numerous times during the 10-store dealership’s 9 acquisitions in the last 12 years (the most recent completed in March of this year).

But practice doesn’t necessarily make perfect. Olson readily admits that despite a history of successful purchases, there’s always room for improvement when integrating cultures, employees and business strategies once the ink dries and the clock starts ticking on the first 100 days after an acquisition.

“There’s always an initial fear whenever you are the one getting purchased, like someone has control of me now,” Olson says. “That comfort and familiarity is gone and all of the sudden someone else is taking over. I need to communicate the fact that from the outset, we’re just trying to build a better business and we want everyone to be a part of that.”

Taking Stock of Assets

One of the first objectives for Olson and Plains Ag’s management is to evaluate the capabilities and ambition of employees from the acquired dealership. This includes one-on-one sessions with employees in each department to set expectations, but also see if there is unrealized potential that can be tapped.

“That first month is the honeymoon period, but I really try to figure out who we are getting during that time,” Olson says. “We’ve crunched the numbers and know the business. But I really look at the people. Who has what strengths? Who has what weaknesses? I’ve come to the conclusion that very few people want to sell their dealership because they’re having too much fun or making too much money.”

From a continuity standpoint, Olson prefers to be honest with employees from the outset as to why and how changes will be made. Department directors from sales, parts and service dissect the operational practices for each area of the acquired dealership and assess what’s working and what isn’t.

For example, if an acquired store has a profitable and efficient parts department, there is very little tinkering that Olson and management will do on the personnel side. The most radical changes might be streamlining parts ordering to be consistent with Plains Ag’s overall process and adapting the acquired dealership’s business management system to the DIS system used by Plains Ag.

Olson acknowledges that nobody likes learning a new computer system, but each store has an in-house regional accountant and the various directors to get employees trained and comfortable from day one. Plains Ag’s regional accountants also oversee financial operations at multiple stores, and this is one personnel area where Olson has had to deal with redundancies.

“We are not building a profitable company by letting go of good people, but I am not going to lie to someone either,” Olson says. “If I have 3 accountants already, I probably don’t need another one. We’ll see if we can somehow shift them to parts or administration as best we can.

“Either way, we need to go into the acquired dealership’s accounting system and adapt it to ours. We’re not going to change 9 systems, we’re going to change one. What we look for right away is where do all of their expenses go, so we can get them streamlined into the right department and operating the same as the other stores. A lot is just process, but it’s necessary to get an apples to apples comparison.”

Olson and management also work with outgoing owners early on to get details on employees and establish a baseline to determine whether someone will need additional supervision or training. Plains Ag’s sales director, parts director and service director will then spend the necessary time onsite at the newly acquired store to help get employees comfortable and productive.

“It’s not just popping in for 3 hours on one day,” Olson says. “Our directors may spend 2 or 3 days at a dealership or even a week if we feel there’s a problem. What we’ve found is people with behavioral issues can hide them for a day, but not many can do so for a week.”

But he also doesn’t want to overwhelm staff or employ scare tactics as a motivational tool. One of the biggest initial hurdles is clearing up confusion about the acquisition itself because employees tend to have the mindset that changes are going to be dramatic.

“I simply explain that if we didn’t think this was a good opportunity, we wouldn’t be here,” Olson says. “But one of the things we probably need to do a better job of is over-communicating what’s going on.

“If you’re a parts person, you’re still going to come to work, you’re still going to get parts for our customers. The way you order them and track them might be different, but the day-to-day isn’t going to change very much. If you’re a technician, you’re going to walk in the door, you’re going to fix stuff. If you’re a service manager, you’re going to run the shop.”

While he prefers there to be as little attrition as possible after an acquisition, Olson says some level of change is often necessary as both a statement to employees and also as a practical move to improve operations.

“Where I’ve had the best success is replacing a store manager after an acquisition,” Olson says. “Of the 9 stores we’ve purchased, only 2 have the same store managers in place. My philosophy is that if we changed nothing, we’d be foolish to think we’re going to have different results and it would be way too easy for employees to revert back to what they were doing.”

But a managerial change doesn’t always immediately follow an acquisition. Olson gives stores a chance to adapt and improve and realistically, it takes Plains Ag up to a year to fully take stock of employee talents and growth potential.

“It takes much longer than that first 100 days and my goal is by the end of the first year, to try and have the right people in the right places,” he says “But with an understanding that 5-10% of people who were there at the beginning will be gone, because as I said, dealers don’t sell because they were making too much money.”

Maintaining Control

Having rapidly expanded during the last decade-plus, one of the growing pains that Plains Ag endured was a need to revise its corporate structure. In 2013, the dealership divided its then 8 stores into regions — Border Plains Equipment, West Plains Inc. and Northern Plains Equipment — but maintained the Plains Ag parent company title.

The primary catalyst for the change was a realization that with as much as 250-300 miles between stores, one person couldn’t effectively oversee the entirety of the dealership’s operations.

“I was wearing too many hats and having 13-15 people directly report to me, so I stepped back and asked myself, ‘When did our organization work the best?’” Olson says. “It was when I was overseeing 3 stores with store managers at each location.

“We were all close enough and I was able to get to a store, walk through the shop, walk through the parts. I knew every name of every employee, their spouses and children. I even knew who was expecting a baby. Having that connection worked well for us.”

Even though Plains Ag didn’t formally regionalize its operations until 2013, the change had been on Olson’s mind for several years prior. After starting Frontier Equipment in 2002, ownership acquired Markle Implement in Glasgow, Mont., (2004) and West Plains Inc., a 4-store operation in southwestern N.D., in 2008.

Shortly after the acquisition, Olson was spending the majority of his time getting the West Plains stores integrated into the Plains Ag business model and he actually ended up moving from Williston into the southern part of North Dakota for a while to ensure a smooth transition.

But the consequence was a growing disconnect with the dealership’s other stores and Olson eventually heard about it from employees and customers.

“The people in Glasgow said they just felt abandoned, because I wasn’t there,” Olson says. “That was a wake-up call and started me thinking about what we’d need to do to make sure we could accommodate future growth.”

In addition to having store managers at each individual location, ownership established regional managers to serve as visible corporate touch points for employees and customers. The regional managers oversee operations within their 3-4 store group and report to ownership, but are also accessible to sales, service, parts and administrative departments at each store.

Plains Ag acquired Stanley Equipment in Stanley, N.D., in 2013, which became part of the Border Plains Equipment region with the stores in Glasgow, Mont., and Williston, N.D. The dealership merged with Northern Plains Equipment in Mandan, N.D., (2014) followed by acquisitions of single-store dealerships in Minot, N.D. (2015), and Garrison, N.D. (2016), which established the Northern Plains Equipment region.

“I’ve coached each of our regional managers and set expectations,” Olson says. “When they walk into any of their stores, I expect them to know each of the employees, their wives, who’s expecting and what’s going on.”

While the regional structure has helped strengthen corporate bonds with employees and customers, it has also provided Plains Ag with business flexibility. One of the ulterior motives of the regionalization was to keep the dealership groups operating in the $75-$125 million range for annual revenues.

“The theory is that if the time comes that one of our partners wants to retire or get out, we’re in a position to sell one of the regions, because the odds of someone coming in and buying 12 or 15 stores at once are slim,” Olson says. “But we’re also in a position that if the next generation wants to take over one of the regions, it’s not going to be overwhelming. But it should be a strong, viable business to manage.”

The final benefit that Olson sees from making the move to regional dealership groups is a competitive one.

“Customers will often price our stores in one region against the others and my theory is that very few farmers will purchase anything without getting 3 sources,” Olson says. “If they price shop against 2 of our other stores, I figure that increases our chance of getting the sale by about 33%.”

Avoiding Culture Clash

While Olson doesn’t mind customers doing a price comparison between Plains Ag’s stores, he wants to avoid inline competition and overlap when it comes to the dealership’s own sales team after an acquisition. To head off any potential rivalries or disputes between existing salespeople and those being added through the acquisition of a competitor, Olson will make sure everyone is on the same page with the transition.

“After we made the Minot purchase, we talked with their salespeople and asked them who their best customers were and had them get on the phone or get out and visit them to explain what is going on,” Olson says. “In this business, it’s amazing how few core customers we make our living off of and we want to keep those people after an acquisition. It’s probably 80-85% and when we purchase a store, those salespeople need to know who that group is because those are who we need to be talking to first.”

But there is sometimes inevitable competition that arises when multiple salespeople want to maintain the primary relationship with a customer. In situations where salespeople from an acquired rival dealership and those already with Plains Ag want to retain a customer’s loyalty, Olson communicates to both salespeople that they need to work as a team, or neither will succeed.

“There’s often a history there because both salespeople know a customer and there’s a certain pride,” Olson says. “Now all of the sudden, they’re going to be teammates. But that’s why we lay out a structure and communicate that they can both still talk to the customer and that we want the customer to choose which way to go.

“I expect the new salesperson to tell the store manager and the store manager to call the other salesperson and say, ‘Joe is dealing with this customer. Just wanted to let you know.’” But if someone is consistently trying to sneak around, that’s a trust issue for me. There should be enough customers for everyone and if we acquired a store where there isn’t enough business to support it, then we made a mistake.”

Immediately after an acquisition, Olson also works with Spader Business Management to conduct a culture study. The process includes interviewing every employee of the acquired dealership to assess how they align with Plains Ag’s core values of trust, quality, teamwork and success.

Olson says the study results often provide useful insight into an employee’s feelings about the transition, their previous work environment and future expectations.

“David Spader will follow-up and visit with employees and explain the process, so they know what we’re doing,” Olson says. “Otherwise, it’s just a survey they took with no real accountability. This goes back to the need to over-communicate and this is where I think I have failed the most.

“The assumption is that you talk to an employee, you explain it and they understand, but that’s not always true. When they don’t understand something, they’re going to inject what they think and more often than not, it isn’t going to be positive.”

That’s not to say Olson doesn’t encourage employees to be proactive problem-solvers and in his words, he wants Plains Ag to be a “thinking organization.” Every acquisition has added depth to this strategic plan, but Olson says it all comes down to people investing in the process.

“When I’m talking with those new employees for the first time after an acquisition, I let them know, we’re all in this together,” Olson says. “We’re not coming in here to drop the hammer and rule with an iron fist. But they are going to be a part of a larger organization so it’s not going to be 100% the same. Change is inevitable if we want to succeed.”

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