Pragmatic Innovation Keeps Us Alive
Mike Van Houweling, Van Wall Equipment
January 16, 2018
Long before I even understood that our family business was Evergreen, my father was instinctively pursuing Pragmatic Innovation to survive challenging times.
Back in the 1980s, the farm crisis hit my home state of Iowa hard. It was devastating. As farmers lost their land or had to pinch pennies to avoid foreclosure, many of their businesses went under. But not our family’s John Deere equipment company, which my dad had bought in 1977. We had to make sacrifices as a family. Instead of cutting costs to the bone while hoping sales would come back, my dad focused on what innovative things we could do to drive new revenues and cash flow.
My father came up with the idea of creating a new attachment that could make farmers’ current field cultivators more efficient without having to completely replace the machinery. He manufactured this attachment, successfully marketed it and sold the patent to John Deere. My dad also figured out marketing programs that kept the dealership’s service department busy in the off-season. These ideas helped keep our business alive.
I was a teenager when I saw my father use innovation as a survival tactic. After working as an auditor for Union Pacific Railroad, I went on to business school at the University of Michigan, and then took a position as an online marketer for Hallmark Cards before working in my dad’s company for about five years. In 2006, I joined Southwest Airlines as marketing and strategy manager for Southwest.com. I was eventually given responsibility for the product development and advertising teams at Southwest.
In 2009, I had the opportunity to implement what I had learned from my father all those years earlier. The 2008 financial crisis had hit hard, and the airline industry was suffering. Based upon the lessons of my dad, I focused my team on what Southwest could do in a short period of time to drive revenue without investing a lot of money. In other words — Pragmatic Innovation.
Southwest had an open seating arrangement. As you checked in, you were given a number, like A15 or C26, which reserved you a place in line. I started thinking that people just might pay more to get to the front of that line. We came up with an idea that led to the creation of EarlyBird Check-In for an original price of $10 a crack. We tested it, and then implemented it successfully. It helped Southwest successfully navigate the recession and has contributed millions of dollars of annual profit ever since. I loved the People First culture at Southwest that sustained us even in bad times, and often thought how we could make our own family business more like Southwest.
By the end of 2014, I moved with my wife and children back to Iowa to lead my family’s John Deere business. It has not been the best time to be a John Deere dealer. We’re not experiencing a farm crisis like in the early 80s, but it’s been a crisis in terms of low commodity prices that have reduced gross farm incomes. In addition, many farmers had purchased significant amounts of newer equipment during the commodity boom prior to 2014. There’s tremendous tension in the marketplace due to both dynamics. The result is that used equipment values have suffered and most farmers aren’t buying equipment right now.
Like my dad, I view tough times as full of opportunity. We have grown from five agricultural dealerships in Iowa to 20 in the past four years. We’ve grown our employees from 300 to 600. We have diversified our business so we are now selling solar panels and forklifts to our customers instead of just relying on tractor sales.
About two years ago, we heard from a customer who wanted a way to plant corn seeds in closer rows for more corn per acre. We partnered with a local manufacturer to build the planter, which is now produced by John Deere for the open market. We saw a need, thoughtfully innovated to address that need and made the customer happy. Around the same time, we introduced our Solutions 360 service, which helps customers improve their profitability per acre by improving their agronomy choices and reducing the risk of a poorer crop year.
We’ve also recently designed a process for assembling precision GPS sprayers for chemicals so that there is less waste on large sports fields and golf courses. We have executed a marketing agreement with John Deere and we now distribute the sprayer through other John Deere golf and turf distributors.
While I have leveraged Pragmatic Innovation during tough times, I want to maintain this mindset even when things are going smoothly. It’s what will drive Paced Growth of our Evergreen company through thick and thin. It helps create more profit for the company and allows us to provide more jobs and opportunities for our employees. My dad still works full-time for our company, as do my two younger brothers. I hope that through our Evergreen values, we will have a strong business to pass on to our next generation as well.
Mike Van Houweling is the COO of Van Wall Equipment.