Mike Watts' First Coffee Cup

Dec. 1, 2009
I've always liked the idea of the rental industry Hall of Fame developed by the American Rental Association. An actual hall of fame museum such as professional

I've always liked the idea of the rental industry Hall of Fame developed by the American Rental Association. An actual hall of fame museum such as professional sports leagues have would be very cool. Just like you can go to the baseball, basketball, hockey and football hall of fames and see memorabilia and caps and uniforms and cards and pictures of the enshrined athletes, I can imagine going to the rental Hall of Fame and seeing Leonard Hawk's first backhoe or the coffee cup Ed Malzahn drank out of when he designed the first ride-on trencher.

Well, I don't know how likely that scenario is but I always enjoy learning about the pioneers of this industry and how their businesses developed and grew and how their business philosophies evolved. This year's inductees are Bill Bourque, who played a major role in the development of the Taylor Rental and Grand Rental Station franchises, and Mike Watts, founder and still chairman of one of the industry's largest independent rental companies Sunstate Equipment (see story page 16).

I don't know much about Bourque because his career in the rental industry was before my time, but I do know Mike Watts and speak with him a few times a year. I got the opportunity to spend a day with him and some of the other executives at Sunstate in preparation for an RER article, which you can read in our February 2009 issue, or online at www.rermag.com. I learned about the philosophies that guided Watts as he grew the company. It might be more accurate to say his philosophies evolved as he evolved. A young man starting out in business often has a certain sense about how he wants to do things, an internal code of ethics and a feeling about the best way to do things, and these ideas evolve into a more concrete philosophy over the years with experience.

While Sunstate's growth story is pretty amazing in itself, starting in 1977 with one branch and growing to more than 50 stores in eight states, never was there a sense of a dramatic, hell-bent-for-growth for its own sake. As Watts says, “we were just kind of ‘steady as you go.’ Develop a training program, improve every operating efficiency that you can and deliver it to the bottom line.”

For a long time, Sunstate's margins were among the best, if not the best, in the industry. Many companies have improved their systems and processes and ways of doing things, and I've heard more than one executive with companies bigger than Sunstate credit Watts as an influence.

A lot of Sunstate's success has to do with the way people are treated. They promote from within for the most part, and its core values are about respect for people.

“But not just our people,” Watts told me. “We say there are three classes of people, three groups that you value. You've got your customer for sure, you've got your vendors, and you've got your employees. Treat all with respect; it's got to be a ‘win-win.’ Don't try to squeeze too much out of your vendors; they've got to make a profit too. And just have mutual respect all the way around. And by doing that, I think it's given us a good reputation that we're a fair employer, and that we're good to do business with.”

Watts says this philosophy has had a lot to do with the company's success and its ability to retain customers when competitors are offering cheaper rates. “It's challenging,” he says, “but most of the time we're successful at retaining somebody without having to do any price change because they like that relationship and the service is value added and not a commodity.”

All right, I know, you've heard it before. These aren't exactly revolutionary concepts and probably somebody out there will differ and say it's not true — that Sunstate cuts rates just like everybody else and they don't really treat people that well. Well, I don't think Watts claims to be perfect, nor does the company never make mistakes. But if you try to live by those codes as much as possible and you work hard and do your homework and try to anticipate market changes and give more than lip service to customer service, chances are you'll be successful too.

We probably don't need to see Mike Watts' first coffee cup, or the first baseball cap he wore, or the first rental contract he ever wrote or his first desk. But his is one of the many companies we all can learn from, in rental and in life.