The Performance People

Naumann/Hobbs Material Handling truly puts the customer first.

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A lot of companies give lip service to putting customer needs first or being a service-driven company. That, however, is truly the way of life at Phoenix, Arizona-based Naumann/Hobbs Material Handling, which refers to itself in its marketing materials as The Performance People. “Our business focuses on the customer,” says President/CEO Bryan Armstrong. “Being ‘The Performance People’ means there are lots of things that we have to do right. Wherever we touch the customer, if we make their experience the best we can, then that customer will want to return again. That’s our whole culture—to grow through performance.”

COMPANY SNAPSHOT

President/CEO: Bryan Armstrong
Year Founded: 1949
Year Joined MHEDA: 2008
Headquarters: Phoenix, Arizona
Branches: 16 in Arizona, California, Nevada
and Mexico
Employees: 348
2010 Sales: $93 million
Website: www.performancepeople.com

Judging by the company’s history, the strategy appears to be working. Founded in 1949 when Les Naumann became the Arizona sales rep for Clark Equipment at the Robert H. Braun Company, the company has been in growth mode ever since. By 1957, Naumann bought the Arizona territory and incorporated Naumann Lift Trucks. Bob Hobbs joined the company in 1965 as a salesperson and then purchased the company in 1979 upon Les Naumann’s retirement.

Building the Brand
Not long after Hobbs took over, Naumann/Hobbs Material Handling went on a spree of acquisitions and changes to grow its geographic territory and product offerings. In 1984, Naumann/Hobbs acquired South-Ray Storage Systems, marking its first major entry into the storage products and systems businesses. Naumann/Hobbs added other product lines such as Crown Lift Trucks in 1991 and Mitsubishi and Caterpillar lift trucks in 1997 to further serve the needs of customers. Naumann/Hobbs’ acquisition of Exide Arizona in 1994 resulted in the formation of Southwest Battery Company. Its purchase of Inland Empire Equipment and the forklift division assets of Cashman, both based in Las Vegas, Nevada, led to the establishment of Inland/Hobbs Material Handling in 1998. In 2007, Naumann/Hobbs purchased lift truck distributor Hawthorne Lift Systems in San Diego, California.

This series of strategic acquisitions helped grow the company to its current size of 16 branch locations with a territory covering four states and parts of Mexico. In that wide geographic territory, the company serves a diverse customer base that includes warehousing, mining, food, automotive, retail and manufacturing businesses. “We’ve grown a lot over the years, but the customer service focus has never changed,” says Armstrong, who joined the company in 1980.

Naumann/Hobbs Line Card

Naumann/Hobbs brochures alert customers to all the company’s products and services.

An accountant by trade, Armstrong was working as senior auditor on the Naumann Lift Trucks account for an outside firm when Bob Hobbs made him an offer to join the company as controller and treasurer. Armstrong accepted, and eventually moved up the ranks as operations manager, vice president of operations and chief operating officer before becoming president in 2006. Having such a long history with the company is not unusual at Naumann/Hobbs, where the average tenure is just shy of ten years, a number that would likely be even higher if not for acquisitions that skew the numbers downward. “Many of our employees have been around a long time because it’s a good place to work. They feel like we’re a part of their own family,” Armstrong says.

Employees as Owners
Part of the camaraderie comes from involvement in the company’s Employee Stock Ownership Plan, which Naumann/Hobbs adopted in 2006. “Our owner at that time, Bob Hobbs, encountered some health problems and couldn’t commit to growing the company going forward,” Armstrong explains. “Knowing that, I worked with Bob to figure out how to continue to grow the company and reach our true potential. The end result of our planning was that we formed a partnership between our own people, our banks and a private equity group to develop a 100 percent ESOP. It was a true win-win proposition for all involved.”

The ESOP route was chosen because it met all the requirements of a successful ownership transition. It took care of current and future ownership while at the same time rewarding the people in the company. Employees who stay at the company for six years become vested in their ownership shares. At the same time, Armstrong says, it’s a good way to communicate the financial aspects of the company to the work force. It drives an open-book culture that helps the employees understand how their jobs fit in with the company’s bottom line and also eases the cultural transitition after an acquisition. “We’re very much in touch with our people and educate them about what’s going on in the company financially,” Armstrong adds.

Naumann/Hobbs executive team

President/CEO Bryan Armstrong (seated) leads Naumann/Hobbs along with the executive team of (l-r) CFO Keith Sawottke, Executive Vice President of Sales & Marketing Tom Hobbs and COO Stan Sewell.

To make sure employees get the recognition they deserve, Naumann/Hobbs holds an annual Recognition Day in each of its geographic regions, a practice that was halted during the recession but that Armstrong plans to re-introduce this year. The company invites all of its associates to a local resort for an awards program and lunch with the employees’ families. Awards are given for high achievement in each company department. “We’ve done it for more than 30 years, and we’ve found that our people really appreciate it. It goes to the fact that people want to be recognized for the value they contribute to the company,” Armstrong says.

In short, the 348 Naumann/Hobbs employees are treated as valued customers. “I look at all the people in our company, and those are my customers too,” Armstrong explains, adding that the Golden Rule is included among the corporate objectives. “We recognize the personal worth of our people. The more we can get them to believe in what we do and how we do it, then that makes it easier each time we encounter an external customer. So, our people are very key to our success, and they’re the ones who have brought success to this point.”

Naumann/Hobbs Geographic Market

Naumann/Hobbs has a branch or technician presence in 16 cities in Arizona, Utah, Nevada, California and Mexico.

Cultivating External Customers
The make-them-feel-respected philosophy works on external customers as well. “It’s important that the customers we deal with know that we’re on their side. We must understand what their needs are, and then be committed to getting those needs satisfied,” Armstrong says. In an industry where many distributors have carved out success by offering single brands, Naumann/Hobbs offers product lines from more than 100 suppliers, including several brands of lift trucks. All those product lines are highlighted in the company’s “Gee, I Didn’t Know You Did That” brochure, a flyer the company created to explain to customers all of its capabilities and offerings. “We found that even our longtime customers weren’t aware of everything we do, and this brochure is a good way to show them,” Armstrong says.

It all comes back to serving customer needs. “No one product is the best solution for every customer’s problem, so when we talk to a customer, we want to make sure that they have a fair choice to do what’s best for them,” Armstrong explains. “It’s not about selling the most expensive piece of equipment. Regardless of which one they choose, we provide the best backup service to make the customer’s experience as good as possible.”

What Customers Are Saying

“We have had a partnership with Naumann/Hobbs for many years. As a dealer of Caterpillar Heavy Construction tractors, we like to use Cat Lift Trucks in our business. That is what brought us together. We’ve stayed together because Naumann/Hobbs provides us with great service. We have a maintenance program for all our forklifts at all of our locations. We basically turn our fleet over to them to manage. They do a great job.”

— Randy Lamb, Director of
Properties and Purchasing,
Empire Southwest LLC (Mesa, AZ)

Naumann/Hobbs is obsessive about internal improvement to make that experience as good as possible. The economic downturn forced Armstrong and his team to focus on enhancing internal processes and efficient ways to deliver products and services to the customer. Among the metrics Naumann/Hobbs tracks in all of its locations are service call response time, parts availability, rental utilization and more. “It doesn’t matter to the customer whether we’re having a problem; what matters to them is that we solve their problem,” Armstrong says. “If we’re always aware of those various metrics, then we can deliver quality products and service every time. If we are failing somewhere, then we have the ability to move resources around to fix the problem.”

Managing Technology
To better manage those metrics, Naumann/Hobbs switched to a new enterprise resource planning (ERP) system in September 2008, and is currently investing more resources to further refine the system to take better advantage of its tools.

Such attention to technology is nothing new at Naumann/Hobbs. “We believe that technology is what’s going to take us into the future and help us continue our success. We’re not just a forklift company. We strive to bring our customers the most current technologies in the industry,” Armstrong says. “In order to hold yourself to the highest standards of the industry, you must be dealing with current technologies and doing things as quickly and efficiently as you can.”

The next projects are to complete upgrading the entire company to a matching customer resource management (CRM) system, followed by computerizing all 130 of the company’s service vehicles to have the ability to invoice a customer immediately at the time of equipment service, a process Armstrong expects to be in place by the end of 2011. “It’s quite an investment, but we feel it will be a big help to both our technicians and our customers,” Armstrong explains. “The technicians will have historical information, parts availability and technical manuals at their fingertips that they didn’t have before.”

The company’s focus on technology also includes a retooled website that is optimized for search. “We try to bring people to us by looking at what customers actually search for. Just because we know it as a forklift doesn’t mean that’s what the end-users call it or search for. We hope to see some traffic from that,” Armstrong says. “There’s not a tremendous amount of activity over the Web, but every day it gets a little bigger. We’ve invested in this because we want to be ahead of what’s going on with Internet technology.”

Naumann/Hobbs corporate headquarters

Naumann/Hobbs corporate headquarters in Phoenix, Arizona

What Customers Are Saying

“We used to split our business for material handling needs between Naumann/Hobbs and some other providers to try to keep everybody honest. But Naumann/Hobbs proved themselves above the rest. For example, we didn’t know who to call when our floor sweeper broke down. I’ve never thought of Naumann/Hobbs for floor sweepers, but, sure enough, we called them and they knew how to repair it. I would consider Naumann/Hobbs a valuable partner in the continued success of our operations running smoothly.”

— William Stern, Vice President,
Stern Produce (Phoenix, AZ)

As always, the impetus is what’s best for the customer, a strategy that will continue to drive activity at Naumann/Hobbs for years to come. Armstrong’s goals for the company remain to increase market share, diversify the product line to further serve customer needs and achieve growth through acquisition. “The reason we’ve gotten to the size that we are is by holding true to our company philosophy and ensuring that all our people live the same culture,” Armstrong says. “It’s not easy having a lot of branches and a lot of employees, but by having a core set of principles that permeate throughout the entire company, we’re able to make sure that we deliver a consistent message to our customers at every branch.”

At Naumann/Hobbs, it all comes down to performance. By sticking to its core principles, the company can expect to remain The Performance People for years to come.

Material Handling Equipment Distributors Association