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A Cup of Coffee with… Michael Evans

1) Who, What and Where: (Your name and your formal title at your company.)

coffee-50Michael Evans C.E.O. Centennial Management, Inc. Corporate offices are in Aberdeen S.D. We currently operate 9 retail locations in MT, ND, and SD. We have been in business for 43 years.

2) Background: (Educational/Professional snapshot before entering the factory-built housing arena.)

BS in Business with minor in Psychology, Northern State University, Aberdeen S.D. I have worked since I was 10 years old having put together a customer list of lawn care opportunities. Other than summer jobs during college this was my first full time job which I actually started with 1½ years of college left to finish, which I did finish.

3) When and How: (When and how you began at Centennial.)

mike-evans-centennial-homes-posted-mhpronews2-com-In 1970 I moved to Aberdeen S.D. to complete my education which I began at South Dakota State University. I took a job as a general laborer at a very small manufactured home dealership called Centennial Housing in order to earn a little money while finishing my college degree. My first jobs was to take the tar off a 10 wide with a gas can and a rag. That is definitely starting at the bottom.

In a matter of 6 weeks the manager/salesman left and I was the one to open the dealership every day which eventually led to selling a couple of homes. Apparently the search for a replacement manager/sales person was stopped and I had a job I did not plan on while going to college for the next 1½ years and running the business at the same time.

In December of 1972 I bought the business from the owner who was kind enough to loan me 100% of the money as I had none. Over a 10 year period that loan was paid back and Centennial Homes took a couple of attempts at multiply locations with very poor success. I had not leveled up my skills for running a multiple location company so we took a couple of steps backward.

In the late 80’s Centennial Homes, Inc. expanded to several other markets and eventually operated 10 locations. Today, Centennial Management, Inc. oversees 9 retail locations and some land development projects. With 145 employees and $46 million in annual sales.

4) What are your personal interests or hobbies? How do you like to spend non-work time?

I spend my time working when I am not working. I just change the environment or location but I seem to always be working on something related to planning and/or managing the business and investments we have made. Obviously I do take some time off to spend at my second home in Scottsdale, to play a little tennis, and travel quite a bit.

5) While some in our industry see doom and gloom for independent factory built home retailers, Centennial has continued to expand its operations and market penetration. What are the types of factors that cause your optimism?

I spend all of my thinking and planning time looking for opportunity. There is always an opportunity somewhere no matter what the external factors are. It is just a matter of being able to see the macro issues and then develop a business model to capture the opportunity that is evident. The business development process works on any business and in any economic cycle. I follow this basic plan all the time:

  1. Identify the opportunities which usually come from doing what no one else will do or cannot see because they do not take things seriously enough.

  2. Set your goals which musts be in line with your values.

  3. Determine the strategic and tactical plans needed to capture that opportunity.

  4. Develop a business plan that uses the 3 resources business owners and managers have to accomplish the task: CAPITAL, TECHNOLOGY, HUMAN RESOURCES.

  5. If any of the 3 are not in balance with the others your plan must include how you acquire the missing resource.

  6. You must also have a plan “B” when you original plan was wrong or in need of change.

  7. Then we come to the part of Leading People and Managing Things. That is basically what business is really all about. Most owners have not invested in leveling up their skills to understand this very important distinction in business.

Finally, the very simple fact that people will always need housing make this a business that always has opportunity if you know how to look for it. The game certainly changes many times as the markets change but all that does is require one to change the strategic and tactical plan to capture the opportunity that exists.

6) Many companies give little or no training to their sales staff. Centennial Homes takes a different approach. Please tell Industry readers more about what your firm does to improve team and individual performance.

First of all we take training very seriously knowing that most of the people we hire have really had very little quality training and follow up to that training in their previous employment. So you have to change the paradigm most people are in relative to training before you can really get their attention and start training them.

We know that performance has a direct relationship to two very important factors; training and leadership. It is a given that without strong leadership most people do not reach their maximum regardless of how much training they may have had.

For us training is something that goes on forever. We constantly remind all of our team members that we are “students of the game forever” and we never quit learning. For example, our training plan for sales people starts with one week at the sales location, then 10 days at the corporate office with our full time trainers.

Next comes a two week period back at the location with the location leader followed by a shadowing by the location leader for another two weeks.

After 90 days we bring sales people back for a refresher course on all of the issues they have faced in selling up to this point. We then put on ongoing training classes for all sales people several times a year.

We have a leadership training program for anyone in a leadership/management role in our company. We have 3-4 training sessions for our service departments during the year.

7) Dodd-Frank, SAFE Act and CFPB are all among the common concerns for manufactured home (MH) retailers and MH communities alike. Please tell our readers of the kind of balance you seek to strike between protecting your business and the industry you are in while making sure you are growing your business' sales and profits.

Call me cynical I guess but I rarely pay attention to what politicians or regulators do to impact my business. My business plan always includes “what if’s” for many of the things that are externally applied to what we do.

In the area of financing for example, we never put all our eggs in one basket and we develop relationships with many different lenders from many different sources, not just the traditional ones.

So it seems we always have a place to shift to when the landscape changes. As for documentation and transparency to meet all the regulations, we simply do the work and always make sure we are in compliance.

Regulation to me is usually a punishment of the innocent for something someone with less integrity did and is usually a gross overreaction. Most of it I feel is a total waste of valuable business time and resources but as long as it is the regulatory environment at the moment that is the rule we follow.

I learned early in my career that there are 5 most common reasons businesses fail and failure to follow the regulatory environment is one of those; we never violate that rule. You always play by the rules and if you don’t like them there is always a process to get them changed, but until they are changed that is what you follow.

8) Marketing is another of the many things that Centennial is respected for, so please tell us in broad brush terms more about the various kinds of advertising and marketing methods that you use and why you think this is important for retailers to be more engaged in solid marketing.

Marketing is a very big subject. Most businesses think they have a marketing plan but if you really looked at it you see a bit of an advertising plan not a comprehensive marketing plan. We start with a strategic plan (where we want to be at a certain point in time). From that we develop a tactical plan (how we get to where we want to be). As part of the business plan to accomplish, we look at the marketing aspect. This certainly includes advertising and all related media that may be used, but is it so much more.

Comprehensive marketing must consist of branding your business, knowing what your positioning statement is, to the word about your business, making sure everything you do in marketing gives the same message.

It is absolutely critical that you make sure your customer gets the same message from your advertising efforts, to how they are handled when they call your business, to their first encounter with your people at your sales center and all the way thru your efforts to have that customer on your team as a silent sales person for your company.

We have a marketing staff within our company to coordinate all of the many ways in which we market ourselves to our customers. We use all of the traditional advertising media: radio, TV, print, billboard.

But those have faded as effective ways to market, so the internet becomes the place where most marketing is done today.

Web sites, auto response systems to our customer inquiries, automated direct mailing to our prospects, interactive platforms for our customers to obtain service, prospect recording and pursuit systems we have developed for internet activity, etc. are just some of what we do in our marketing efforts.

None of this is a replacement for the best marketing of all here in the Midwest; satisfied customers and word of mouth. Getting everyone in our company to fully understand what “customer centric” really means and how it manifests itself in what we do every day is a large part of our marketing efforts and it has really paid off over 43 years.

From the day I got in this business knowing absolutely nothing about anything, I never understood those that argued or ignored a customer over a $100 service call when the VGP generated from that customer telling someone else how well he was taken care of amounted to $20,000. I made that servicing choice in our business model right from the start and it has been a large part of our success.

mike-evans-rv-mh-hall-of-fame-award-centennial-homes-posted-mhpronews-com-9) You were inducted into the RV MH Hall of Fame last year. Tell us about other rewards and recognitions that you and your firm have earned and why you think the RV MH Hall of Fame is important for the MH Industry's members to participate in and support.

It was very nice to be recognized for my time in the industry, I really appreciated that. We have received a lot of awards over the years, the normal production awards for the largest dealer in the US for a specific manufacturer, awards from associations for having the largest market share, customer service awards, community service awards and the like.

The best for me is the recognitions our team members get for their service to others and recognition for their growth as a person while working with us at Centennial Homes.

I have always looked at my job as simply making sure everyone on the team grows personally in their time at our company. When that happens our business does just great and we have our most important rewards in accomplishing that personal growth.

I owe a lot of thanks and credit to my entire Centennial Homes team, current and past, to be able to say here that we have been profitable for 43 years in a row and that the most recent years we have been breaking records with the most recent year being the best we have ever had. We have a business model that works but more importantly we have people that work the plan and give their all to this company.

The Hall of Fame is very important for everyone to become involved in and support. It houses the industry’s heritage, and in that is all that we have learned and implemented in making this industry what it is and has been. That knowledge and history to draw on as we run our businesses daily is invaluable. You get a lot of confidence when you “know that you know” and many of the people in our Hall of Fame made that possible by sharing what they know.

10) What do you consider the largest challenges facing the industry in general today? How do you think industry professionals ought to respond to such challenges?

I think the challenges are the same ones that have been there all along. Sure the landscape and environment has changed and some things are much more difficult than they were. But really our challenges are always in getting out of our own way. We are truly our own worst enemy.

Ask someone what could make their business more successful and you will rarely get any answers that are internal to that business, you usually hear all of the things someone else could do to make their business better.

We create most of the hurdles and problems for ourselves, sometime in what we do and more often in what we do not do.

The problems that are external to our businesses pale in comparison to the problems we have internally and we cannot do anything about the former anyway yet we rationalize that those are our real problems.

We just need to focus on the internal things we can do something about. Get out of whatever paradigms are holding us back and think out of the box.

Sure financing is tougher, sure prices have risen, sure other forms of housing are taking market share, sure we have a lot of regulation taking our time and money, but what are we doing about it in our own enterprise? Can we change any of those external issues?

No we can only change how we deal with it or plan around it, so we need to spend our energy working on the internal matters that will make a difference in dealing with the external.

So we should respond to the challenges as I see them in this way which has always worked for me:

  1. Take your business very seriously.

  2. Make sure your business plan is always a win/win for all involved as no one can lose if you want long term relationships and those are the only ones worth having.

  3. Do your homework as there is no easy way to success.

  4. Continue to level up your skills in all areas forever.

  5. Remember that you cannot maintain the status quo; you will either have growth problems or liquidation problems.

  6. Have a plan, don’t just show up and hope it is going to be a good day.

11) In spite of what HERA 2008 called for – namely, the Duty to Serve manufactured housing, first the GSEs and now the FHFA have failed to implement what the law seems to require. What steps, if any, should the MHI or other industry groups and players take in addressing such issues?

First of all we need to be consolidated in our efforts and message by all that represent our industry. We cannot have any turf that we try to defend from others in the industry.

If we appear weak to those that we are trying to influence on our position on issues we will fail. I don’t think we have done as well as we did years ago at finding “friends of the industry” in Congress. I believe that it is a must to have some inside support in order to really make any progress.

Finally we obviously have not found a way to show how well we can actually serve the part of the housing market that so desperately needs us. We need the message clearly identified and a new way of presenting that; our plan needs major review and study.

12) Closing thoughts or comments, sir?

What a great opportunity we have to create our own business, to become whatever we want to be if we can really understand what is going on in business. Sometimes we run in to experts that tells us about a very complex secret they have discovered to success and of course it usually involves us buying that from them. But in reality, my experience tells me that it is indeed not complex at all, we just make it that way because it couldn’t possibly be simple, right?

If we just:

  • respect each other,

  • give real value in a business exchange of any kind,

  • make sure everyone wins something,

  • not get too full of ourselves and

  • remember what our team did for the cause,

  • have some real integrity not just talk about it,

  • be very in touch with our values that will drive our goals,

  • and give back to those that are less fortunate that us and in need,

life gets pretty damn good. Someone much wiser than me once said “life is really simple; we need something to do, somewhere to do it, and someone to do it with” and for me it doesn’t get any better than it is now.

Thanks for that Centennial team...and especially thanks to Barbara! ##