Special Leadership

Feb. 1, 2009
There are quite a few managers and executives that make Sunstate Equipment tick, and Mike Watts would be the first to give credit to counter personnel

There are quite a few managers and executives that make Sunstate Equipment tick, and Mike Watts would be the first to give credit to counter personnel, sales staff, mechanics, drivers, IT people, accounts receivable and payable and all the various branches of the company. Even on the management level, there are too many to list. However, RER interviewed three key leaders who are playing major roles in guiding the company.

A Constant Challenge
Benno Jurgemeyer, CEO

As a (roughly) $250 million business with more than 50 branches, financial, legal and property issues need to be attended to on an ongoing basis and generally cross the desk of the company's quiet but energetic CEO Benno Jurgemeyer. Jurgemeyer also takes the lead responsibility on fleet management-related issues. The IT and training groups report to him as well.

Jurgemeyer is involved in almost every facet of the business. “Just about any aspect of the business can come up on a given day,” he says. “It might be a call from the CFO talking about a tax issue, or any other financial issue such as renewing a bank loan or working on an increase in our capacity to buy back bonds. Could be fleet management issues where a manager wants a particular piece of equipment; sometimes human resources issues come to my attention, or the status of a given market, reviewing our strategy in terms of the sales team, the fleet, or any other area.”

Jurgemeyer comes from a financial background, worked as a CPA out of college, then worked in commercial real estate, and then for a small investment boutique. Jurgemeyer managed portfolios, had a lot of interaction with Wall Street and a wide variety of companies and their management teams. During his tenure with the investment firm, he came to know Mike Watts, who needed some financial expertise at the time. Having also had some background in construction — his father, who he worked for for 15 years, had a carpet installation business — Jurgemeyers' financial expertise included knowledge of the construction industry. Jurgemeyer soon became CFO, later chief operating officer and then CEO.

Whenever the company is involved in a major transaction — such as the deal when Deere became a minority partner, property acquisitions or the purchase of a rental company — the preparations, negotiations, due diligence and financial structuring will inevitably involve a lot of Jurgemeyer's time.

Fleet management issues involve a lot of analysis of how equipment fares in particular markets and how the company should structure its inventory. “We look at the mix we have put to work in every market and how productive it is, and what kinds of trends are taking place,” he says. “The customer drives a great deal of what mix you do have, but when there are larger job opportunities in the pipeline that we may or may not want to play a major role with, I'll typically be involved in looking at what's the pricing look like for a project, how much fleet would we have to acquire to supplement what we have to cover the project and if it is the type of fleet we really want to introduce.”

Still, with so many areas of responsibility, Jurgemeyer says the most important one always comes down to what makes the company tick — people.

“For our business model to continue to be successful, it really comes down to the development of the people at each and every branch, and developing a very strong team,” he says. “We have excellent systems and processes, but a business model, especially in this industry is only as good as the people that are executing it. And that's a constant challenge.”

It Comes From Within
Larry Cox, director of sales

If anyone has any doubt about Sunstate Equipment's policy of paying salary rather than commission, there is no more enthusiastic advocate than the company's director of sales Larry Cox. “The sharing of accounts, the handoffs, it just works so beautifully,” Cox says. “When I interview prospective salesmen I ask ‘Do you ever find yourself at the end of the day going through the invoice stubs to make sure your territory got credit?’ ‘Oh yeah, all the time,’ they answer!” To Cox, the lack of commission takes all the self-interest out of selling.

But will they be motivated? Emphatically yes says Cox! “If they are trained properly and you hire the right guy, they are driven to succeed,” he says. “Salesmen are highly competitive people. And they want it bad, not because they get $5 on their paycheck, but because that's their job and our expectations to excel and deliver at a high level are there.”

Besides, Cox says, motivation has to come from within. “I can't motivate a guy in L.A. or El Paso to go out and do it,” he says. “If you're wired right, you love it. You don't have to bite me to go out and make a sales call because I'm going to go out and do it!”

Has Cox ever hired somebody and found out he wasn't as good a salesman as he expected? Of course, he says. Sometimes they are good people, but “we just misread them” and the company will see if they'd be more effective in operations or some other area.

In hiring sales people, Cox doesn't typically look for people with rental industry experience. “I would say a majority of the people we hire have no industry experience,” he says. “They have sales experience. If they have industry experience we have to re-train them because we do things differently.” Some of the best sales people Cox has hired, he says, were people in the construction industry who understand jobsite processes from selling equipment and tools rather than rental. Cox also found some fine sales people from the car rental industry, where high-level customer service is emphasized.

“We also have people who were ex-professional football and baseball players,” he adds. “They've got that competitive spirit.”

As for sales techniques, Sunstate has an in-depth training program for its sales staff. “Some of the training programs I've heard about [with other companies], they toss you the keys to the car and say ‘go get 'em.’ So they have no loss other than the expense of the vehicle and gas,” he says. “We believe in giving a guy a career, helping him get down the road and stay with us.”

Bringing It to the Table
Chris Watts, president and chief operating officer

The rental industry, like many other industries, has seen entrepreneurs build successful multi-million dollar businesses, eventually retire and pass the business on to their sons who take it for granted and proceed to squander it. That does not seem to be the likely future for Sun-state Equipment.

In fact, for a long time, Chris Watts wasn't sure he would even make a career in rental.

“I very much was of the mind that I wanted to make my own way,” he says. “I had respect for what my father had done and built and kind of wanted to prove I was capable of doing the same thing and doing it in an industry of my choosing. At the same time, I often thought, ‘what would I be missing out on, how great would it be to work with my father and all the opportunities and benefits that go along with this business.’”

Chris Watts was not just handed his position, something he's quite proud of. “I grew up around it and I worked in the summers,” he recalls. “My first job was probably taking out the trash and cutting down weeds, but then I graduated to the paint shop, working on a sander 12 hours a day in the middle of summer, and then the wash rack.”

Chris Watts continued to work summers as he went through college, in various capacities. He got his undergraduate degree in environmental studies and then his MBA. “Out of graduate school, I went to work for an environmental consulting firm and I did Phase One assessments for property transactions, Phase Two and Phase Three studies, so I was involved in property transactions, soil and groundwater contamination, environmental assessments or environmental impact statements for transmission lines. It was a great experience.”

In the mid-'90s, around the time Sunstate partnered with Deere, the company needed a full-time environmental compliance manager to deal with property transactions and hazardous waste management, putting all Sunstate's programs in place. “I thought if there was ever an opportunity to get involved in the family business, I felt good about it because I could bring something to the table,” Chris Watts says. “I was qualified for the job, I wasn't just the boss' son coming to work in the rental business.”

Chris Watts took the job and continued to work his way up, getting involved in operations and, as he grew on the job, eventually growing into his current position.

The father of almost-year-old twins, and two other toddlers, Chris Watts knows what it means to work hard and work your way up, both at home and at work.

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