Don and Kay Shilling celebrated their 40th wedding anniversary on Aug. 3, 2014 and took their first cruise, which departed Fort Lauderdale and sailed through the Caribbean to St. Thomas, St. Martin and Puerto Rico.
Even though Don Shilling has a long and active history with AED, he’s keenly focused on the future of both the industry and the association. One of his top priorities as 2015 Chairman is to continue building the number of AED-accredited technical school relationships through the United States and harnessing the power of The AED Foundation to attract young people to careers in equipment distribution.
“Dealers have a tendency to focus on sales. In my opinion, with equipment getting more sophisticated, we have to have the service capability or we will never get the second sale, and price will not dictate whether or not you get deals,” said Shilling, who is president of Fargo, N.D.-based General Equipment & Supplies. “We need to have a small army of fresh faces coming through those [school] programs or our future will not handle growth — and will stagnate.”
It’s more than words — he hired a full-time recruiter at his dealership; and both he and members of his staff serve on advisory boards at three schools near their business, too.
“Not every dealer can afford a recruiter, but every dealer can and should afford the time to connect with the schools that give us those fresh faces,” he added.
Keeping the workforce development pot well stirred has been his passion for a while. He’d been an employee-education advocate at his company for many years, but Shilling’s focus on developing new industry talent started heating up in 2002 when he joined The Foundation Board, following service on the AED Board back in the mid-’90s.
He said he had always assumed the primary work of The Foundation was solely centered around training, but after a few meetings he began to see how important workforce is, as well. He ended up leading The Foundation as its Chairman from 2005 to 2007.
As Shilling takes the helm as AED 2015 Chairman, he is the first to have chaired The Foundation prior to chairing the association.
Other Work to Be Done
As Chairman, Shilling recognizes the need to keep public policy advocacy on the front burner, too, and he’s ready to step out of his “comfort zone...working on workforce development,” and do whatever it takes to keep the pressure on Congress to act on AED’s top legislative priorities, including long-term highway funding, water infrastructure, simplifying the tax code, and reducing excessive and unnecessary regulations.
“To be effective in workforce and political advocacy, we need a strong AED,” he said. “We are committed to growing our membership — we intend to do that by retaining current members and demonstrating the value of AED.”
That includes drawing in the next generation of leaders.
He added, “My company is managed by people under 40. AED needs participation of young people under 40, as well. We need to be that resource young people look to, as well as the experienced managers. Fresh ideas and the energy of the young people.”
He never strays far from his focus on the future — which, off course, belongs to the young.
Shilling reflects on his first AED convention in 1981. “I was in awe. I was 30 years old and meeting dealer principals twice my age, and interesting owners and managers.” He’s been to every annual Summit since, and he says, “I still enjoy the networking and rubbing elbows with some of the most interesting people in the industry.”
A Good Future Takes Planning
Today at 63, he’s all about pumping the energy and enthusiasm of young minds into the industry through workforce programs, into AED through new Future Leaders engagement, and — living proof of his future-focus — he keeps it real right at his own company with a smoothrunning succession plan that has moved a group of under-40 guys into ownership, including Shilling’s son Jonathan.
Whereas some owners procrastinate succession planning, Shilling and his partner Jerry Kern turned their attention to creating a strong plan a few years ago, knowing it would take time to enable their successors to buy them out. The two had acquired the company from its third and senior owner, Orvis Stockstad in 2000, and over the course of several years enjoyed growth that ultimately doubled the size of General Equipment & Supplies.
“It became obvious to Jerry and me that if we were going to pass the business on, whether to key employees or family members, that we were going to have to start a long ways in advance — otherwise we were going to have to say, ’Forget it,’ and sell to a third party conglomerate with enough cash to pay for it, “ Shilling explained.
“We didn’t want the company to change a great deal from what we had. A lot of dealers probably have the same concerns,” he added. “After we’ve grown this thing it’s like your child. We don’t like the idea of selling to somebody who’s going to make wholesale changes, fire a bunch of people, and run it totally differently.”
So for two years they worked with a consultant and set in motion a 12-year buyout process whereby the senior owners have sold stock to the young team, who are making payments back to Shilling and Kern in semi-annual installments. When they do retire in a couple of years, the pair will remain on the board and basically “kind of check on things and then pick up a check and go home,” said Shilling.
“It’s like a weight’s off our shoulders now, because we know what’s going to happen and everything is running pretty close to how we had hoped. It’s a giant relief.”
Shilling’s dad was a contractor who had worked in construction at the end of the Depression, then in the Army Corp of Engineers during World War II, and he was part of the post-war boom. From his model, Don says he learned the value of being conservative with resources and money, a strong work ethic, as well as an attitude that dares your competitor by doing the job faster, safer, cheaper and better.
Construction is a different brand of brutal out in the Rough Riders state — with maybe seven or eight months of good weather, deadlines get intense and contractors work holidays, weekends, and two shifts to meet promised completion dates.
As a kid watching dad under pressure, he saw that “when something broke down, it really threw a monkey wrench into the schedule,” he said. Which actually prepared Don for the empathy needed for his dealership’s customers. When they call up and say, “This loader is down again for the second time this week, this is killing me,” Shilling gets it. His mentality: “We’ll figure out what we can do to cover this for you.”
You might say it was that empathy for the customer that triggered GES’ launch of a new holding company across the Canadian border. Over time, GES had developed a strong sales business with Canadian contractors who bought in the U.S. and transported their machines back North. But selling, renting and supporting the customer was getting gnarly — for example sending a technician over the border is an ordeal fraught with technicalities and penalties. In the end, the solution was to set up a Canadian division, but even that had its challenges. Forming a corporation in Canada requires Canadian citizen ownership, with the exceptions of two provinces, Nova Scotia and Alberta. So in 2008, GES started doing business through its new General Aggregate Equipment Sales ULC based in Nova Scotia. They’re able to do business in Winnipeg, Manitoba, and Regina, Saskatchewan, their Canadian target markets, by filing necessary government paperwork.
“Our mantra has always been to take care of the customer; that’s the most critical thing that we need to do after he buys something from us,” said Shilling. “So it was important for us, rather than to just broker equipment across the border and be done with it, to be able to support it once it’s over there, selling parts, selling service.”
Meanwhile, back in the U.S., GES takes care of customers from facilities in Fargo, Bismarck, Minot and Williston, N.D; Shakopee, Minn., and Sioux Falls, S.D. The company had a lot to celebrate on the occasion of its 30th anniversary last April — employing 250 people, the Komatsu dealership approaches $200 million in annual sales and has $75 million in inventories.
It doesn’t take a genius to deduce what keeps the dealer chugging at such a successful pace. “Energy is everything,” said Shilling.
North Dakota has long been an agriculture-based economy, which tends to insulate the state from large swings and overly painful cycles. But on top of that, in 2009, while the rest of the U.S. was falling off a seemingly bottomless cliff, North Dakota’s oil boom was just revving up. At the same time, commodity prices on the agriculture side were ramping up, too. That double whammy — coupled with the wisdom and balance instilled by former owner and mentor Orvis Stockstad — caused GES to double in size between 2010 and 2012 and it’s been growing ever since.
But there more to the energy market in Shilling’s territory than oil and gas. Out on the prairie of North Dakota, the wind blows all the time, he says, so construction of wind farms as well as supporting manufacturing has been another boon.
Coal, too, has been an economic staple for the state for 60 years, Shilling adds. Four mines yield cheap, lowgrade lignite coal, which is exported to Great River Energy in Minneapolis and to Montana Dakota Utilities, as well.
Shilling loves the equipment business and wouldn’t trade it for anything, but he almost missed out on all the fun.
As a college student at North Dakota State University, the young Don Shilling was working on a bachelor’s degree in Political Science with the intent on going to law school.
Luckily, one day his dad asked him to help return some water pump parts over to General Diesel, the company whose liquidated assets Shilling eventually purchased to form GES.
“My dad struck up a conversation with one of the owners and asked if they were looking for someone to help out,” Shilling recalled. Next thing you know, he was their next wash bay laborer — and first day on the job he helped hook up a Hotsy Steam Cleaner and was asked to drive a Terex TS24 scraper into the bay and clean it.
“The work was wet and a little dirty, but for some strange reason I loved. I was starting at the ground floor of my life’s career and didn’t even know it. This story was reprinted with permission from CED Magazine, February 2015 issue.