Rental Hall of Fame Honors the Right Stuff

Nov. 17, 2009
Over the past few years, the American Rental Association has inducted quite a few worthy people into its rental Hall of Fame. Industry pioneers such as Leonard Hawk and Sam Greenberg, Bill Grasse and John Doran, manufacturers such as Ed Mahlzahn and Irv ...

Over the past few years, the American Rental Association has inducted quite a few worthy people into its rental Hall of Fame. Industry pioneers such as Leonard Hawk and Sam Greenberg, Bill Grasse and John Doran, manufacturers such as Ed Mahlzahn and Irv Levine, and many others who have contributed to the development of the rental industry.

Recent inductees have included more modern developers such as Dan Kaplan whose leadership of Hertz Equipment Rental Corp. paved the way for the successful national rental company. Kaplan's HERC was really the first national rental company with processes and systems that can enable a large company to efficiently integrate operations and benefit from economies of scale. So many people in leadership roles of major rental companies were trained by HERC, too numerous to mention, and so many of the metrics companies now commonly use to measure performances such as time utilization and dollar utilization were popularized by Kaplan. And if you haven't read Kaplan's book on the rental industry “Service Success,” I highly recommend it.

Other recent inductees include Dugan Hill, who played a leading role in the development of Grace Equipment, which evolved into what is now RSC Rental. And Brad Jacobs, who made a major impact as the industry's leading consolidator, transforming the industry dramatically almost single-handedly.

This year's inductees are another interesting pair. Bill Bourque was a major factor in the growth of the industry's first successful franchise operation, Taylor Rental Corp., which at its peak had more than 600 branches, and later Grand Rental Station. Many current owners of rental companies started out in the Taylor system and credit Bourque as an influence.

Mike Watts, chairman of Sunstate Equipment is, I believe, the first of the Hall of Fame inductees since the Hall began to still be fully active in leadership roles with the companies they were associated with. It would be like the National Football League Hall of Fame inducting Bret Favre while he was still quarterbacking the Green Bay Packers.

Watts acquired single-location Phoenix rental company Belden Rentals in 1977 and later changed the name to Sunstate. Starting in Phoenix, the growth of Sunstate has been one the industry's great stories, growing from a single-location rental center to a chain of 54 locations in eight states. This year Sunstate is No. 12 on the RER 100's annual listing of North America's biggest rental companies — see more on the RER 100 — and Sunstate has been in the top 15 for as far back as I can remember. In my conversations with Watts, he's always had a growth-oriented philosophy but not growth for its own sake.

If you want to learn more about Watts and Sunstate, please read RER's cover story on the company called “The Plane Is Leaving” in February 2009 RER or take a look at it online right now. The title of the article refers to Sunstate's adoption of a slogan used by Southwest Airlines a few years ago. Southwest developed systems that enabled it to turn planes around quickly, so as to get more flights out every day, and limiting downtime sitting at terminals. Sunstate used the same slogan and philosophy to turn around equipment more quickly and grow utilization.

I've spoken with Watts at least a couple of times a year for just about as long as I've been with RER and I've always noticed that it seems that when it comes to every new development or innovation in the rental industry, Sunstate is always either involved in it early or at least analyzing it and taking a look at it.

Not all of Watts' ideas are popular or universally adopted in the rental industry, such as Sunstate's practice of compensating its sales staff by straight salary rather than commission. But Sunstate's reasons are always well thought out.

One of my favorite stories Watts tells about his early days in the rental business was when he worked for Apache Rentals before he went into business for himself, and they hired a consultant whose philosophies went completely against the grain of what Watts believed. The consultant urged the company's sales people to go to jobsites and try to bump competitors' equipment off the job by offering a lower rate.

“ ‘And if you're not successful with the superintendent, talk to the owner and try to get the guy fired,' that's what he told me,” Watts told me. “That went against everything I believed in. I said, ‘I can't do that, I don't believe in that. You have to earn the business.' ”

I like the way you think, Mike. That's the kind of philosophy the rental industry needs.