Below is the full interview between Mike Lessiter, editor of Farm Equipment, and Anthony Montag of Montag Manufacturing. According to Montag, efficiency of product is key. At Montag Manufacturing, family, strong communication and a consistent drive to learn make it happen.
Mike Lessiter: Tell us what Montag Manufacturing does, what their role is.
Anthony Montag: Montag Manufacturing develops equipment that is designed to maximize the efficiency of the product, or of the fertilizer used by placing it where it is the most available for the crop, both to achieve the most economic benefit as well as to minimize the environmental impact to the greatest degree possible through efficiency. A small company, that my father started, came out of an idea that he had in the mid-80s and developed. We build dry fertilizer equipment and steerable carts for the ag industry, and then partner with a good number of companies within that ag industry to market those pieces of equipment. I have the influence on engineering, marketing and manufacturing.
Mike Lessiter: How many employees?
Anthony Montag: We have about 35 employees now.
Mike Lessiter: And 2 sites?
Anthony Montag: Two sites, Emmetsburg, Iowa, which would be our main headquarters, and about 28 employees up there, and then a smaller parts distribution center in Milford, Neb. The Emmetsburg location is mainly focused on the large manufacturing, so that’s where carts, Gen 2s, Gen 1, our Generation 1, Generation 2, products come out of. A lot of our OE partnerships come out of there as well. Milford is more of a small parts assembly, a little cleaner environment, we’re doing gear boxes and plastic housings and components right there, and that’s also our parts warehouse, so parts come out of Milford. Marketing is out of Milford, engineering is out of our Emmetsburg location and we have some sales presence out of there as well.
Mike Lessiter: Tell us about your customer profile, who you serve in the equipment manufactured side and where you sweet spot is as a company.
Anthony Montag: Our customers tend to be conservation minded or efficiency minded farmers, farmers who are really looking at getting the most out of their investment in building the best fertility and taking care of their soil to the highest level. Those tend to be our customers. As typical in the ag industry, selling something new would tend to be in that 1500 to 5,000 acre farmer, that tends to be a lot of who we sell to. I’d say that dynamic is changing as well, though, we’re starting to see a lot of the larger farmers starting to look at it and starting to see more of those smaller farmers who are now starting to purchase used pieces of equipment as well now that we’ve been in business for a few years, starting to see some of that, but still a relatively small amount of used equipment really in the market.
Mike Lessiter: Affiliations with the other manufacturers out there, what’s the breakdown look like today?
Anthony Montag: We have tight relationships like with Kuhn Krause and Deere where we move equipment and have a fairly structured system and do that. But then we have a lot affiliations where we work closely with OEs, Blu-Jet, Dawn, Orthman, Great Plains just to name a few, where we have agreements where we work together and partner to sell equipment and those relationships continue to grow and continue to add new ones all the time.
Mike Lessiter: Describe to us what the engineering focus capacity operation is at your place… engineering and design.
Anthony Montag: So, mostly in the development of our products really to bring them and keep pace with the technology that’s changing in the ag world. Many people tend to think of agriculture as kind of a backwards way of doing things, but in fact it’s heavily technologically driven and, for example, the latest major project that we worked on would have been our new generation machine that has the ability to blend multiple products together, control those over a section off of a GPS satellite prepared and applied map and do all this in real time while driving across the field. So, developing those pieces and integrating that and then working with the computers in the different tractors.
Mike Lessiter: Before we get into the history, I want to know a little bit more about your dad’s background, and kind of encapsulate him growing up and what carried him forward to starting the company.
Anthony Montag: Often at times I’m convinced my father was born an entrepreneur.
Mike Lessiter: He seems like one.
Anthony Montag: Most certainly was. His junior high school project was building a skid loader in shop class, and this is before skid loaders were out. So he built a little 10 hp skid loader to scoop manure out from underneath the chicken cages in the chicken barn.
Mike Lessiter: What state were we in, city?
Anthony Montag: He went to high school and West Bend, Iowa. So, this is his junior project. His senior project was working on a machine for moving grain bins, so he worked on that and then worked onto that the farm as well. And that’s what he actually started doing right out of high school — he farmed, raised some livestock, which was the common thing you did in the 70s, but then on the side he also would do some manufacturing stuff and he moved grain bins. He actually moved nearly 2,000 government bins as a side job, plus moving Quonsets and larger grain bins, but he lost track of the number of grain bins he moved. Around 2000 is what he estimates that was because he lost track in the upper 1800s. So yeah, kind of a different thing.
Then he started working on a lot of projects so farmers would come to him and he would take a new idea, and he would take and strip that down and make it into a pull type and he timed them for the seed corn, for picking seed corn so the ear actually never moved in the field but just up and timed everything.
So, he did some things like that, built some like he had the largest grain wagon ever built for a time and some fun projects like that. And I can still — that’s where I grew up. I can still — one of my earliest pictures in the shop is with Mom holding me at about 9 months and there’s Dad welding those large grain wagons in the background.
Mike Lessiter: It was an on-farm shop?
Anthony Montag: Yep. So he built it not too long after he got out of high school. He built the 60x40 shop there on the farm and that’s where he did a lot of different manufacturing projects. Many of them were shown in the Farm Show paper.
Mike Lessiter: What were some of the other ones that he tinkered with?
Anthony Montag: Well, he built a high boy, and that was actually the very first metering system that he built was on that high boy for applying dry fertilizer in crop and that would have been built back in the early 80s. It was — yeah, high boy, he built a couple of those that would have been really the beginning of what became Montag Manufacturing.
Mike Lessiter: So the early 80s, the start of trouble in farm country. Was this side job something that helped him being able to support the farm? Was it that kind of business or was it just a small handyman type operation at that time?
Anthony Montag: No, it definitely helped support the business. Dad did a lot of different things during the mid-80s. Like everyone else he was affected by that. They hadn’t taken a lot of the uptake in land and opportunities that a lot of people were doing earlier because they were more diversified, moving bins and things like that. So, they were a little bit more protected from it than some, but you couldn’t go through the 80s in the ag world and not have felt that in a significant way. And he did a lot of blacksmith work, things like that to subsidize and make it through that pretty difficult era.
Mike Lessiter: How old are you?
Anthony Montag: 36.
Mike Lessiter: 36, so that would have you — you were born in…
Anthony Montag: ’81.
Mike Lessiter: Right at the beginning.
Anthony Montag: Yes, so I have no memories before the 80s crisis. So the glory days of the 70s aren’t things that I remember. I just remember ag — really that early 80s all the way through into the early 90s was kind of a long, drawn out struggle.
Mike Lessiter: Because he had a young family and the manufacturing business was occupying a lot of his time, you had mentioned that that kept him from maybe buying more land during that up around that could have been more difficult for him in the years that followed.
Anthony Montag: Correct, yes.
Mike Lessiter: Blessing in disguise.
Anthony Montag: Blessing in disguise, yeah, they changed — Dad didn’t take some of the opportunities on some of the livestock side either because they were raising quite a few hogs, they had gotten out of the chickens at that point already, but yeah.
Mike Lessiter: Tell us what happened from ’81 or so to 2005 before it officially became the entity we know today as Montag.
Anthony Montag: So, Montag Manufacturing, if you trace it back, has roots in a company called NewMatics, which was relatively popular in the ag industry. I mean it has its place, or definitely had a presence. And that was the company that my father started with two other gentlemen, Michael McNeal and Ken Clark back in 1986. They came in in 1988 so and Dad had been developing this metering system. And they built a complete solution, and this is before strip-till, this is really in the beginnings of banding fertilizer, and they were just banders, used different coulter setups, worked with some different OEs and that company grew pretty rapidly and they started looking for an investor then in the early 90s.
So in 1993 they had an investor come out of the automobile industry, they came in and bought majority interest of that company, NewMatics, and kind of helped to continue to build that up, but had a little different focus on where that market was going. So, instead of selling the complete systems kind of ended up selling more just the metering systems to some OEs and not investing necessarily as much into the R&D side to sustain it in the ag world. That really brings you up kind of to that day in 2000.
Mike Lessiter: Did your dad stay with NewMatics after that?
Anthony Montag: Yep. He was really part of that company and we actually continued to build parts after that majority interest buyout, Dad still continued to work for them and we built — made parts and components for the metering systems and continued to work in that business more as a contractor than an employee of NewMatics.
Then around 2000 started to see some opportunities to develop some other things and we worked on a few projects with NewMatics on the metering system. But we have some ideas that we wanted to start working on mainly coming up with a poly tank. We’d been working on the development of the steerable cart and building a meter that was more technological, such as getting away from the old ground wheel drives and bringing it into a GPS driven platform. They weren’t really interested in investing into that, so we developed those projects on our own just as a blacksmith.
In 2005, we decided it was time to incorporate the business and just give it a name and start marketing some of these products. So, that’s kind of the beginning of where that comes and 2005 was definitely an interesting year. I mean we started out as essentially it was Dad and myself and my two sisters working part time in the company and we built a couple machines, branded them, developed a website with some friends locally. And we’re still working out of that 40x60 shop on the farm place.
But then, no sooner did we start doing that, and started putting a brand on it and we started seeing some dealers coming to us and this was something we hadn’t really anticipated much. We were just going to kind of follow that old NewMatics model, but all of a sudden we started seeing some dealers coming to us and saying yeah, we’d like to sell that product for you. And right away you start getting into this debate are we going to be a manufacturer selling and trying to handle all of this or are we going to just focus on the part we do well which is manufacturing and find dealer partners to go with and support us in their markets. That wasn’t an easy decision in 2005, but it’s one I know we’ve been really happy and grateful that we made and I think made the right decision to start partnering with dealers in the development of our products.
Mike Lessiter: So 2005, you’re 24 years old, so you been around this entire chapter for Montag since incorporation.
Anthony Montag: Yep, I learned to weld when I was early in my teens and yeah, I’ve spent the hours and the nights bending and forming and shearing and cutting parts and grew up with that.
Mike Lessiter: You were definitely doing that work in the early days — personally doing that work in the early days.
Anthony Montag: Yep. Answered the phone during the day and worked at night.
Mike Lessiter: Tell me about what happened between end of high school and 24 starting this business with your father.
Anthony Montag: I graduated high school and started working in the shop right away. So I just very much followed my father’s footsteps of doing blacksmith work and we were kind of a traditional blacksmith shop at that time. We had this fab job that we would do, work on for NewMatics and then we would build things that people wanted us to work on or to build. As with everything that Dad was doing, we always were working on some new project or some development of something as well. So, you had your day job and then you had something you were working on, the fun thing that came along after that was done.
Mike Lessiter: I bet there were no days where your feet were up on the desk with an entrepreneurial, inventive, tinkering…
Anthony Montag: No, we were very much the — yeah, entrepreneur meant getting the chalk out and sweeping a spot on the floor and starting to draw. That was the definition of what we would do.
Mike Lessiter: So, incorporation day, go back there for a moment. Did you have a 3, 5 year plan or were you kind of like yeah let’s do this and see where it goes. What was your thought process on the day that it went into incorporation?
Anthony Montag: Incorporation date is January 1, 2005. So that’s our — I think it actually filing because the first is the third, but that was the day we were shooting for. The real intent was just to give a name to what we were doing on the manufacturing side and to develop some products. Outside of having jobs for ourselves and maybe growing it beyond that a little bit. That was about it. The hope was to partner with some other OEs and sell them some components as NewMatics had done, but never really had a scope of it growing to the extent that it is today. I mean those early days — we started seeing some of that opportunity as we got into it a few years, but not in the beginning. In the beginning, it was more just giving a name to the job we were already doing and enjoying the work we were doing.
Mike Lessiter: It would have been difficult at that frame of time to have seen what you guys have become today 12 years later. I imagine it exceeded your expectations at the time.
Anthony Montag: Yeah, I would say our vision for the company was probably met at around 2008 or 9 is where we kind of met our vision of that. From then on, it’s been an amazing ride.
Mike Lessiter: So, your thought process initially was you would get the work of other OEMs to carry forward. Did you get some of those or did the dealer opportunity also present itself?
Anthony Montag: Yeah, both. So some of the OEs that NewMatics had worked with we definitely had some opportunities and worked with some carts with them. It would have been progressive in ag systems mostly at the time. Another contact that they had — Ray Rawson — did some things. Those were some contacts that we had worked with early on, but then the dealers started coming and we actually built a fairly aggressive dealer base in those early years and have continued on that course. We’re a little more selective now than back then.
Mike Lessiter: I remember, it must have been pretty early on when I first came across your dad at one of the farm shows, and I wasn’t familiar with Montag at the time, and we stopped at or camera back in those days we took pictures of new products at the shows and did writeups on them. So I’d had a couple interchanges there, but I remember being in Jim Bassett’s utility vehicle, a gator, at also maybe a farm show the following year and he told my dad and I, we were both in that thing, you guys got to check out what Montag’s doing. From them on that’s probably when I got to meet you and it’s been fun to watch your business grow during this time.
Anthony Montag: Yeah. And farm shows have been an integral part of what we’ve done as a business always. I think our first farm show we went to was in 2005. We had the opportunity to get into of all places the Clay County Fair, 2006 we got into Farm Progress Show in some places. Again, not shows that when we first started the company we didn’t really anticipate getting into.
Mike Lessiter: What was the first dealer interchange that you remember, that someone came to you in kind of your “aha” moment that we have a product that dealers are very interested in getting behind and selling?
Anthony Montag: Actually it was probably — we had 2 dealers at the time that came to us and it was odd because they were both competing in a similar territory and didn’t really know where either one of them were going to go. They both Brokaw and Heartland Ag came to us, I mean very much competing dealerships in a very tight space. They both came to us within a very short time, and we had known Hartland Ag a little bit through Ag Systems before Brokaw really came in. They really, really wanted to be a dealer for us, had us come down there and met with us and they really wanted to sell our products and actually starting marketing them and that’s the first dealer we had, with them and then Van Wall.
Mike Lessiter: Don Van Houweling?
Anthony Montag: Yep, out of Story City. Yeah, we had some pretty good dealers. My first memory, strongest memory would actually be the very first machine we sold as a company.
Mike Lessiter: Tell us about that.
Anthony Montag: It was a little bit of a challenging machine. It was sold to a gentleman in north central Nebraska and it was 24-row machine behind a planter. So we started in January of 2005 and this was our April sale. And it was a 24-row 9-ton machine behind an 8800 White planter. And we were putting the dry fertilizer solution on, but he also had saddle tanks on the planter and on the tractor so he was going popup starters, spraying, planting and doing his tillage and incorporating dry fertilizer all in one pass with a 24-row planter. It was a huge machine to go put together. That was our very first order, that was quite a first machine mount. We had to develop and understand some technology pretty quick because there was a lot of things going on in the cab already.
Mike Lessiter: And he was using it that first season?
Anthony Montag: Yep, he used it that spring to plant. That was before we had any dealers. That was our very first sale as a company.
Mike Lessiter: And how did that spring go for him?
Anthony Montag: Went very well. The machine performed really well. But we also did learn in the process here we are, we’re driving out there a few times to do some support and to set up and do things like that. When the dealers did start coming to us, we had an experience of — that’s a 5 hour drive to go see that customer, it is nice to have somebody out there that’s supporting that.
Mike Lessiter: Tell me what happened the next couple years of the company.
Anthony Montag: The next couple of years we just continually were adding some dealers with some rapid growth, we’d seen 400% growth in those early years.
Mike Lessiter: How long did it take you to set up the first dealer after incorporation?
Anthony Montag: 2006 we had quite a few of them come in.
Mike Lessiter: Okay, a year or two.
Anthony Montag: Year or two. We were full into it in year 2, and really by the time we got into 2008, 9 was definitely a slowdown in the ag industry and we felt that, that was our first experience of really feeling a slowdown in the ag market. And that was a pretty blow on us early on. We’ve been in this 250% growth was our poorest year, and then all of a sudden we had a 20% reduction in sales in one year.
But then we bounced back out of that in 2010, our first OE, real big OE comes to us, Kuhn Krause, and they just finished developing the gladiator and they wanted to work with us in putting this platform on. That was a real big boost to us at the time, and still is today. That’s been a phenomenal relationship but when they came in we were only 5 years old and had a lot to learn as a manufacturer. Through that experience we definitely have learned a lot, it helped us in developing a lot of the things that go along with just making and completing a complete system and just looking at all the different aspects, safety and different things you need to take care of and look at.
Mike Lessiter: So that was the Gladiator was their entry into strip-till, correct?
Anthony Montag: Correct.
Mike Lessiter: They were hitching your wagon to you in a pretty big way so to speak.
Anthony Montag: Yes, very much. They came to us and worked a lot with Curt Davis on that project and they came to us they wanted us to continue to take care of the warranty and support the product and let us keep our main on the side of the tank and do somethings like that. Really helped — those type of relationships really helped us build some rapport in the industry. So it was quite an honor for them to have selected us at that time in our growth.
Mike Lessiter: And they promoted the process very heavily and everywhere they were going people were seeing the Montag product on it.
Anthony Montag: Yep. I think it was the opportunity to really — Kuhn was a wonderful company to learn from because they had a really good understanding of what I call the golden rule in agriculture of how to treat and take care of customers. So they were great to learn and develop with in those early years. And that really built a strong foundation for us to grow and start to develop.
And really after that you start seeing Montag changing from being in the early years being a manufacturer, then this kind of begins the next chapter for us which is really starting to become a developer of products, and marketing developing started to take a strong influence in the company with that agreement between us and Kuhn Krause.
Mike Lessiter: What year was that?
Anthony Montag: 2010.
Mike Lessiter: Capture for us how significant that agreement was at that time in the business.
Anthony Montag: It was a big play because it was the first time a major company in the industry had, what I would say taken us seriously as a startup company. I mean they essentially looked at all the different fertilizer application systems out there and said you know what, we feel the Montag has the best product to complete and work best with this strip-till bar. And we’d work with a lot of other companies, but Kuhn was the first, or Krause at the time was the first really, really big one to come.
And it started to give us some stability because it also started getting us out of just being a seasonal marketer because they were working with dealers to stock machines and started to give us more of a diverse market to hit, which was huge at that time for us. It was a great experience and it helped us both from a moral standpoint to help us in our development of products and it helped us really in understanding the market.
Mike Lessiter: Major turning point.
Anthony Montag: It is, yeah.
Mike Lessiter: When that agreement went into play, I imagine there were all kinds of changes that happened back at Montag in terms of investment in technology, people all those things.
Anthony Montag: At that point we had one engineer and he’s still with us, our engineering manager, Isaac, does a great job doing that, but he was managing the engineering, or doing the engineering stuff and he was also working on putting our ERPs and inventory management and helping with purchasing. Everybody wore so many hats at that time it was amazing.
Mike Lessiter: So you got the Kuhn order and you had to do some things differently and make some investments differently now that the company was turning into something bigger than it had been previously.
Anthony Montag: Yeah, it was definitely — it started us down a path of asking the question, “we’ve built this product up to this level, what is our next step?” And started the conversation of developing what the next metering system would be. Subsequently, in 2012 we felt that we talked about it enough and started development of our Generation 2 product platform.
Mike Lessiter: Tell us a little bit about that.
Anthony Montag: So Generation 2, people ask me where did all the ideas come from? Was it out of engineering or…? it actually came from listening to customers. And what were the things — what were the paying points for the dealers, what were the paying points in the market, what would that next metering system look like. So we had a pretty deep list of wants and in 2012 we took, we wrote those all down and started developing what controls are needed to take place to do that. It ended up taking us down a very different path than we anticipated into the development of a completely different metering system. I don’t know if we knew how much of a challenge that would have been I don’t know if we would have jumped on that boat quite then.
But we ended up taking out on lot of things in 2012, development of new generation metering system, changing our ERP system, updated all of our parts to a new standard, implemented an EPDM management for our engineering software and started the process of working with John Deere on a quality audit and a contract ultimately with them. Did all that and started all that in the same year.
Mike Lessiter: Not much rest that year I take it.
Anthony Montag: No, no, that was quite a year and really that whole process took about 3 to 4 years for most all of those things to really come to fruition, but they all were started in that year, 2012, and we just essentially was looking at a core competency of the business and saying we can wait and do it when we are starting to feel pain in all these points or we can look at it right now and say we need to tackle these things now and work through them before it became a pain point for us. I think a lot of good decisions but should have been probably spread over a few more years.
Mike Lessiter: There are small family companies who get to a certain level and they’re satisfied and they just keep making the same product again and again. We both know some of those. Tell me about the psychology, the drive, the determination, however you want to put it that you guys were going to be different.
Anthony Montag: There’s always the desire to build the next thing better. Good isn’t good enough, and the challenge of doing something better. I can remember my grandfather always had a statement to use “A job worth doing is worth doing right.” That also means that when you’re developing things and you’re running a company, just being good isn’t good enough. Developing it to the next level, developing the next thing, listening to your customers. If you’re listening to your customers, you’ll be growing and changing and developing as a business because their needs and wants aren’t stagnant. And I think that’s part of what drives Montag to developing new products, to working with new customers or new OEs and the excitement of new opportunities, and ag is a fabulous place for new opportunities.
Mike Lessiter: Very dynamic.
Anthony Montag: Yes. So there’s as many ideas out there as there are farmers.
Mike Lessiter: Tell me a little bit about the Montag family first.
Anthony Montag: I’m the oldest of eight children. My father and mother were married in 1979 so not too long before the ag crisis started to hit.
Mike Lessiter: You could afford a good honeymoon in 1979, not so much the next couple years.
Anthony Montag: That’s probably true; that’s before my time. But family has always been really, really important to us. We’re very — I’d say we’re a very close knit tight family. So we grew up, we were home schooled all the way through. Actually all of my siblings have been home schooled. For us, the typical day was you woke up in the morning and started school, after school we went and worked either on the farm or with Dad after 5 p.m. So, oddly school for us normally followed more of a business day period. I don’t ever remember the 8:30 to 3:30 — that was never school hours for us. School hours were always 8:30 to 5, but more followed the structure of a business day.
But growing up in that very tight knit family has allowed us — as you’re well aware, family businesses have some challenges. But being in that close knit tight family structure has helped us to be able to work through those challenges. Six of my siblings, six of the eight of us work in the company and we’ve been doing that. As each one has graduated high school they’ve come in and worked, worked in it for a time. I have two sisters that don’t work in the business. One’s a nun and the other one’s still in high school.
Mike Lessiter: So the ones that are working, tell us their name and what they do at the company.
Anthony Montag: I’m the oldest and then after me my sister, Rachael. Rachael works in the accounting side of things. Then Rebecca would be after Rachael. She works mainly in helping organize and managing things that are going on in the office, a lot of the different tasks and things like that that we’re working on. Then Benjamin, Ben works mostly on the manufacturing side of things. Then the next one would be Margaret, and she’s a nun so she doesn’t work in the company at all. Prays for us I guess, keeps us all on the straight and narrow.
Mike Lessiter: That’s helpful.
Anthony Montag: Yes. And then William works in marketing. Joseph works in the parts department and also helps on the development side of things. And then my youngest sister, Mary, is still in school. Then my father works full time and my uncle works in the company and has since 2005 — he does some deliveries and helps with trade shows and different things. And my aunt usually goes along with my uncle and helps with some of the paperwork and things like that. And my mom, she helps a little bit in the business in different areas but has mostly been a stay at home mom and she’s the one who had to teach us also.
Mike Lessiter: A big job!
Anthony Montag: Big job!
Mike Lessiter: So truly a family affair. One sixth of the employees got the last name Montag. What is the key to making that work in this fast growth environment that you’re in.? The pace of growth by itself is a challenge and you guys are making it work with a family that’s still getting together for Thanksgiving and doing things together like your bike ride with your brothers. Tell us what the key is.
Anthony Montag: Communication and respect. When either of those two things starts to fail or starts to get left behind, it’s not too long and there’s going to be some conflict. But ultimately communicating with each other, being honest and upfront and telling them ahead of when it’s already happening. Everybody has a different perspective when you have that many family members in a business you’re going to come up with a lot of different perspectives and all of them are worth listening to and taking seriously. Generally speaking, if you communicate well and you communicate with respect to each other, it goes a long way towards making everything work. So those I think would be the two key things, and keeping a solid prayer life in there as well. We can always tell when those things start to fall apart as well.
Mike Lessiter: Your role, I know that you guys probably aren’t real big on titles, but what is the title that you have on your business card?
Anthony Montag: I’m the General Manager. I manage the general of the activities of the day in all the different aspects of the company, but to your point, titles don’t mean a lot in the company. I manage that, yet it’s still communicated through the different shareholders and we work together as a team as to what we’re going to — how we’re going to go develop or work on the next project. My father’s influence is mainly in the engineering, that’s where he likes to spend his time more on the engineering and development, especially that next thing that we’re going to be working on.
Mike Lessiter: Describe your leadership style. What are the things that you hang your hat on that you aspire to be in what you do, your philosophy of leading the business?
Anthony Montag: Leading by example, being able to make a decision, but being able to listen to the input of the others around you. Not making hasty decisions but making informed decisions off of listening to others. I’m not that big CEO that goes in and makes all the decisions in 5 minutes and walks out of the room; I need the input of others who know what’s happening in those areas, and yet trying to not procrastinate too long on making decisions, but making them in a timely manner. That’s what I hope to be in my management style. I’m not always perfect at it, but I try to work at that.
Mike Lessiter: Observation that I’ve seen, you guys are very committed to education with a lot of the events that you run, even that you help run, the amount of reading that I can tell that you do of what’s going on in the ag media. Can you speak to an approach to that?
Anthony Montag: That really comes out of the home schooling probably. We were taught that you had to learn and master the different things that you were working on. And honestly having the love for learning. It’s always — there’s always something exciting to learn and there’s so much research out there, and it’s one of the things I really enjoy about the different publications and things that you guys do at Lessiter. It’s informative, but it’s cutting edge, it’s what’s happening — doesn’t necessarily work for everybody but it’s “here’s a story of how it’s working for this guy. This farm is doing this, this company is doing, implementing this change.” You guys have a great listing of articles and honestly it’s my first resource for a lot of those things.
Mike Lessiter: Appreciate your support on that. What would you say are one or two of the most defining moments in Montag’s history?
Anthony Montag: Defining moments. Well, ultimately the decision as a family to incorporate and really start down this path was a bit of a leap out, a leap of faith to do that. Then there were some pivotal times in which people had listened to what we were doing as a company and had confidence in us, be that a banker, my uncle and aunt came in and invested in the company in 2006. There were some early players in the company that helped to propel it and bring it to where it was. 2010 when Kuhn Krause came, but 2006 we had all those dealers coming to our door and knocking on the farmhouse door saying yeah, we’ve seen this ad in the paper, we’ve seen this or we’ve seen this machine running, we’d like to be able to sell that. Those were some defining moments.
But then also on the flip side of it, you also learn a lot during those times when things aren’t going so well. 2009 would have been one of those years when we learned a lot on the downside, how to be more careful of inventory, how to be cautious of things like that. So there’s a point for being bold and brave and enjoying 400% growth, but there’s also the risk of a 20% reduction in sales.
So all those moments combine to teach, and I often say I didn’t go to college so I don’t have a degree, but I have a degree in Montag. It’s the education of both those highs and lows and experiences.
Mike Lessiter: What did 2009 change your perspective on? Something that you started operating the company differently after having gone through that downturn?
Anthony Montag: Really in 2009 we just listened to the phone, took phone calls. It was taking orders by phone. All the way up until that point all we had to do was just build stuff and answer the phone. And in 2009 the phone didn’t ring in May of ’09, it just stopped ringing. Nobody was interested in buying anything right then. So it meant we had to do the grownup thing of sales and go out and see people. We had to make programs, we had to put together more literature. We had to change how we engaged the market. It wasn’t just enough to simply have a piece of equipment and sell what you could sell.
Mike Lessiter: At that time would you have characterized the team as more engineering focused, or?
Anthony Montag: No, we were essentially at that point we were manufacturing focused. It was always our bottleneck, all we could do. It was odd we were a very seasonal company so we would build equipment and then after we were done building we would do just expansion projects, so we may put a lean-to on the shop, or we may do this or that, build our offices on, add another office room on and that was a winter or a summer project, usually a winter project. My father always said you couldn’t pour concrete until it was too cold and you had to insulate it. It was a joke, but the reality is that’s when we got done building equipment then we would go pour a slab and do an expansion. But it was always focused on how we could build more equipment until 2009. And then 2009 we had to start changing our philosophy there.
We started changing a little bit on the engineering side and started making some drawings and things like that, but prior to 2009 we didn’t even have engineering drawings hardly. So, we were very much a blacksmith philosophy company up until that point.
Mike Lessiter: When you needed to adjust and become more sales oriented, how did you prepare yourselves to do that? How did you make that adjustment?
Anthony Montag: My uncle and I jumped in the truck and we went out and started seeing customers, Dad went out and started seeing customers, so we just — that was the next challenge, that was the next opportunity we needed to work on so got to roll up our sleeves and go into that mode. It was good. It was important that we did that, but started calling on customers and calling on our dealers more. And they responded. 2010 ended up being a really good year for us.
Mike Lessiter: It worked for you.
Anthony Montag: It did.
Mike Lessiter: A lot of companies — and ours included — had early years where wasn’t clear they were going to make it. Did you have any of those moments in your case?
Anthony Montag: Yes. Predominantly there was that time when that rapid growth was happening where definitely we were growing as fast as we could possibly grow. And in 2009 when we kind of capped out, quite a few things happened. One, we had been on a cash base accounting for the IRS all the way through, but 2009 was our first year for being on accrual. We weren’t really prepared for that, so we had a 20% deduction in sales, switched over to accrual cash and we built a ton of inventory. Talk about three things to never do in the same year. So the stars really aligned badly for us. And that was a big challenge. 2009 was definitely a testing year for us. At that point you’re really going through it and there’s really no path forward, our path other than to go forward through it. But it does really test your resolve to how you’re going to go through it. And it was definitely a challenging year.
Mike Lessiter: To use a metallurgy term, you were kind of annealed after going through the fire?
Anthony Montag: Yes, very much so. And sometimes you have to get beat over the side with a hammer and knock some shale off. I guess Montag’s success isn’t one person’s story, it’s a story of our family working together in developing this. And then all the people that have come along in the path that have helped us, being that internally or externally. Our success and it’s something that I can really feel passionate about is due to a lot of people coming around along at the right times, be it a friend helping us get our first loan in 2005 or somebody from the CPA firm coming along and helping to teach us how to do accounting and how to take on that. 2005 and ’06 were done in Excel. That was our accounting and inventory and billing matrix. But just consistently along the history of our company we’ve been blessed to have people come along at the right time that have helped to bring us to the next level or teach us the next thing we needed to learn. It’s been a fabulous time.
You mentioned the fact that you could tell that we like to learn, like to study, and it’s true, but it’s been — we’ve been fortunate enough that along the way those things have happened and continue to happen and really can tell the providence we got at doing at the timing that that’s happened.
Mike Lessiter: You got two words here. I’m going to ask you about your father first and your mother second. Give me one word that describes Roger.
Anthony Montag: Integrity.
Mike Lessiter: Now Mom.
Anthony Montag: Nurturing.
Mike Lessiter: And Montag the enterprise.
Anthony Montag: It’s a family. You can tell that and feel it oftentimes. We still sing happy birthday and have birthday cake for everybody. But yeah, we still sing happy birthday, have Christmas parties and enjoy being with each other.
Mike Lessiter: And that family environment, I feel it, it extends to your suppliers, your dealers, the other manufacturers here.
Anthony Montag: Yep. It’s quite a joy to be able to come to an event like this and to be able to have a good, positive relationship with everybody in the room.
Mike Lessiter: That is unique. You don’t see that in every segment.
Anthony Montag: No. We have good relationships with a huge segment in the ag industry and we try to do our piece and do it well and not step on too many toes. We’re very fortunate to have really good friendships and good relationships with a lot of a large portion of the ag industry that we know.
