Service, Growth & Family Values Remain Keys to Success A company’s progress across 95 years can be measured in many ways. Business volume. Product lines. Market area. At Scharber & Sons Inc., these and other indices of growth are viewed as evidence of good decisions made in the past as well as harbingers of good things to come.
Mike Scharber’s mind because it was a time of leadership by contemporary family members — his grandfather Doug Scharber, his father Steve Scharber, and uncles Mark and Pat Scharber. It also was a period of growth for the dealership and for Deere & Company, as both companies experienced a level of prosperity that laid the groundwork and provided a strong foundation to move into the future.
Obviously, the Scharber heritage extends beyond the 1950s. The period between then and now may be more prominent in
The development of the dealership and of Deere continues in 2011. Scharber & Sons now is part of Minnesota Equipment Solutions, a merged group of five equipment dealers. Four of the dealerships — located in a crescent around the north and west sides of the Minneapolis-St. Paul metropolitan area — merged in 2008 to solidify their regional position and gain advantages of scale. The fifth dealer joined the group last year. Scharber & Sons and the other partners in the group continue to do business in their respective locations under their original company names. The roots of the Scharber dealership actually go back to 1836 when a struggling blacksmith named John Deere moved from Vermont to a rural Illinois area that only recently had been secured against remnants of marauding Indian tribes. In Grand Detour, Ill., Deere set up a metal-working shop, and the following year he found a broken sawmill blade and from it fashioned a self-scouring plow bottom.
He quickly realized the Sheffield steel plow was exceptional because it cut cleanly through the rich, boggy Illinois soil without repeated stops to scrape sticky dirt from the plow bottom’s face. After manufacturing the first polished-steel plow in 1837, Deere President Mike Scharber (L) and Secretary-Treasurer Dan Scharber represent the latest generation of family leadership at the helm of built two the following year, 10 the third year, and by Scharber & Sons. 1842 was manufacturing 100 plows a year.
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It’s a meeting across the family generations as (L-R) Otto, Doug, Steve and Mike Scharber, holding a mini John Deere tractor gather for a picture.
In 1848, Deere and partners moved their company to Moline, Ill., and in 1869 opened the first company branch in Kansas City, Mo. Other regional branch offices followed — one of them in Minneapolis. Plows and Groceries
It was from the Deere & Webber office in Minneapolis in 1916 that John M. Scharber began to handle Deere plows and other implements as part of his general merchandise and grocery store business in Rogers. Deere had been selling plows for 79 years by this time, but the company was still in its infancy. After all, not till 1918 did Deere buy out the manufacturer of the Waterloo Boy tractor, paint the product John Deere green, and start selling it as a Deere tractor. That first tractor moved on steel-cogged tread wheels, had a water-cooled, two-cylinder continued on page 6
(L-R): Doug, Steve, Mark and Pat Scharber see the showroom expand with the addition of lawn and garden equipment as they stand outside of the Scharber & Sons building in july of 1974.
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Proud partners with Scharber & Sons for 95 years.
Horse-drawn plows to tractors to satellite-guided machines. For 95 years, Scharber & Sons has been a valuable John Deere partner, serving the equipment and service needs of Minnesota farmers, landscape and commercial contractors, and landowners. We’ve endured, grown, and discovered success – together. From all your friends at John Deere, thank you for for being b a reliable, enduring part of the John Deere ffamily amily.
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from page 3
engine that burned kerosene, and produced 12 horsepower at the drawbar. But Deere wasn’t the only company experiencing the thrill of seeing a business begin to thrive. By the time Otto Scharber bought his father’s business in 1929, both the Deere lineup of products and the Scharber business had grown. Renamed Otto Scharber & Sons, the company was a key commercial enterprise in Rogers, a then-rural Hennepin County town of a few hundred (L-R): Steve, Doug, Otto, Pat and Mark Scharber gather in front of a John Deere tractor in people located 20 miles north1975. west of Minneapolis. This was farm country. The whole area around Minneapolis has been an active agricultural region for more than 170 years. Minnesota farmers, many of them immigrants from Germany, harvested their first crops in Washington County on the east side of Minneapolis in 1840, about the time John Deere was finding early success with his plow. So the rural area surrounding Minneapolis was ripe for agricultural implement dealerships and Scharber & Sons reaped the benefits of that need.
Lenny Schlegel, a loyal 63-year employee, is ready to help customer finds exactly what they need as he mans the Scharber & Sons’ parts counter.
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There was plenty of work to be done to help keep the company growing strong. Otto Scharber didn’t have to look far to find that help.
duced New Generation fourand six-cylinder engines. The hand clutch went the way of the studded steel wheel. At the same time, Deere introduced the 215horsepower, 10-ton diesel-powered model 8010, the largest tractor Deere ever produced.
In 1938, another generation of the family came aboard when Otto’s son Doug graduated from high school in Elk River and joined the business. It was a propitious time for the company and for the country. The worst of the Depression was behind. The years immediately following saw ramped up agricultural production to provide food staples during World War II, and that was followed by a period of rapid mechanization on the farm. Around the time Doug Scharber began working full-time in the family business, Deere had introduced the “A” and “B” model tractors. The “A” had a 25horsepower engine and a fourspeed transmission. The tractors were the most popular the comScharber & Sons President Mike Scharber. pany ever produced, staying in production for 20 years with many refining changes along the way.
In 1970, lawn and garden equipment was introduced to the Scharber & Sons showroom. The next year, John Deere snowmobiles came to the floor under the slogan, “Nothing runs like a Deere.” A dozen years later, the snowmobile line was sold by Deere, but the slogan stuck around. The 1980s were, for Deere and the country, marked by recessionary economic pressures that continued on page 10
The evolution of John Deere product lines and of the Scharber & Sons dealership continues seven decades later. Changes have occurred on many fronts. New models and whole new products have come out of Moline; entirely new commercial relationships and markets have developed in Rogers, with the character of the community evolving from agricultural to suburban. On the manufacturing side, in 1960 Deere ended its production of tractors with twocylinder “Johnny Pop” engines and intro-
Manager of Aftermarket Doug Anderson, has been with Scharber & Sons for 22 years.
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The Scharber & Sons parts team of (L-R) Larry Urai (who’s in his 38th year with the company), Steve Riggs, Bruce Linden, Phil Scharber, Joe Hegge and Rich Swanson is ready to help a customer find any part they might need.
The Scharber & Sons service crew are, front row (L-R), Troy Ball, Marvin Kubitz, Jerome Doroff, Mark Windsperger, Todd Johnson, Dan Durant, and Frank Russ, back row (L-R) Service Manager Pat Scharber, Bob Bachmeier and Kendal Braun.
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from page 7
busy Friday afternoon at the dealership. “There was a much smaller line of machinery than we have today. John Deere has done a really nice job of expanding the product line and customer base.”
discouraged expansion. Yet at the start of that decade, Doug Scharber had the dealership solidly diversified into lawn-and-garden equipment to meet the growing needs of Minneapolis-St. Paul suburban customers. In 1981, he sold 150 garden tractors. He also moved 25 to 30 farm tractors off the lot each year, with the 150-horsepower model 4450 the biggest seller.
John Deere’s extensive line-up of commercial mowers has all been introduced since Anderson’s first days in the business, and the utility vehicle product line has mushroomed. “When I first started, utility vehicles were really new. John Deere really invented that product with the five-wheel AMT 600 and 622.”
Business still was good enough in 1982 that Scharber and Sons opened a new 150-foot by 200-foot sales and service facility on property just off Interstate 94, a site the dealership still occupies. The handsome, pre-stressed concrete building was divided into sections for agriculture equipment and for lawn and garden equipment.
Those “all materials transport” vehicles were the predecessors of today’s popular 4- and 6-wheel Gator utility vehicles that can be ordered in various configurations including with camouflage coloring and dump bodies. Anderson matter-of-factly accepts the changing customer base. “It is hard to pine for the past. I think of the farmers
By this time, Doug Scharber’s sons were fully engaged in the business. Pat Scharber set up the service department and still manages it. Mark Scharber is still active in sales, while Steve Scharber is semi-retired.
continued on page 14
Steve’s son Mike is now company president and his brother Dan is secretary-treasurer and represent the latest generation of family leadership at the helm of the company. The family tradition is continuing with Mark’s son Phillip works in the parts department, and Pat’s only son working in the shop while attending college. Decades of Dramatic Change
As the 1980s were coming to a close, Doug Anderson hired on as a salesman for Scharber & Sons. Twenty-two years later, Anderson is still there, now manager of aftermarket. Between 1989 and now, Anderson saw the nature of the Rogers market change dramatically, with the dealership serving fewer and fewer agricultural customers and more and more residential, commercial and contractor customers. “Lawn and garden was really just getting going 20 years ago,” Anderson said while taking a break on a
At the parts counter, Rich Swanson (L) and Joe Hegge are always busy filling orders and answering questions.
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from page 11
fondly, but the fact is there are far fewer farmers so there are far fewer ag sales opportunities. Yet there still are hobby farmers and commercial entities and landscapers. Tractors still are being sold, but now to the county and the city, and to schools for mowing and snow removal and field maintenance.”
Salesman Andy Bailey (L) shows Jeff Anderson of Grant, Minn., around the Scharber & Sons equipment yard and specifically this John Deere 2720 tractor.
Company president Mike Scharber describes the changing nature of the customer base in terms of housing. “Everyone is planting homes instead of crops,” he says. “I joke that we are about one housing
Scharber & Sons’ commercial salesman Jonathan Nordum is always ready to share his knowledge of John Deere equipment with new and loyal customers.
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boom away from not being in the large commercial agricultural equipment business at all.”
computer for four or five years,” he recalls. “Today, everybody has a laptop, desktop, smart phone…”
He reiterates that the dealership’s tractor sales — models up to 120 horsepower — now are to large property owners, county and city grounds departments, and commercial customers, with the model 6430 four-wheel-drive utility tractor being one of the most popular.
continued on page 16
While the Long Lake facility, which offers more complete lines of equipment, was always a Scharber & Sons store, the Ham Lake and Isanti locations were part of the 2008 merger. Like the Rogers dealership, the group dealerships in Isanti and Ham Lake expanded their offerings through the merger, as did a Savage dealership that more recently joined the group. Isanti now offers John Deere agricultural equipment, while Ham Lake expanded to include commercial equipment. The Savage location added both lawn-and-garden and commercial equipment to its lineup.
J.M. Scharber’s general merchandise and grocery store as it appeared in Rogers, Minn., in 1903.
The entire group operates with about 65 employees, more than half of which work at a Scharber & Sons location. New Challenges
When Anderson looks back on his two decades with the company, he naturally notices the technological changes in the office. The paper forms on which he penciled in orders have long since disappeared. “When I started, we had one computer in the booking office that the whole business operated out of. I didn’t have a desktop
In the late 1890s, J.M. Scharber opened a general store that first established the family name in the Minnesota business world.
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Otto Scharber in the late 1930s feeding his flock of ducks.
Lenny Schlegel in that late 1930s fixing a lawn mower.
next generation of computer systems for the company and how we can implement those changes.”
from page 15
Part of his responsibility at Scharber is to coordinate systems and practices among the merged dealers, much of which is electronic. “There always are challenges when it comes to merging organizations and putting practices together. There are simple but important things like making sure the computers are talking to one another. We’re learning how to deal with Internet sales and social media sales. We’re already looking to the future in talking about the
And, Anderson says, John Deere “has become a different company. It interacts with its dealers much differently. There is less emphasis on field personnel, for example. Now we interact by internet and e-mail.” A pivotal change for Scharber & Sons was, of course, the merger, a consolidation that they had envisioned and encouraged. The Rogers facility was the oldest and largest of the dealerships, but the other dealers also were firmly established, having been around for decades. “Some of the other stores couldn’t get some product lines themselves, and generally, across the country, dealers are getting bigger, not smaller. It was time,” he says. Dan Scharber thinks the merger was a natural progression of what was happening in the industry. As John Deere dealers in the area were merging, the company leaders felt Scharber & Sons would be an ideal situation for another successful merger. “That was part of it,” he says. “But from an inventory standpoint, historically we and the other dealers have always competed on deals. By merging we can better utilize our resources and move through inventory quicker.” Anderson views the merger as a launching pad for sales growth. continued on page 18
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(L-R): Otto Scharber, Alec Weber and Lenny Schlegel loading another tractor for delivery from page 16
signage and displays. Our customers certainly are more sophisticated than they were 20 years ago.”
“We can specialize a little bit more now,” the manager of aftermarket says. “Combined, we have a bigger operation and more staff. That means we don’t have to know everything about every product. We can expand and specialize using our special talents, and leverage all that to sell more to a bigger trade area.
Statistics of Change
The numbers tell the story of Rogers’ changing demographics. As it has become a commuter community, it has become more affluent. The estimated median household income in Rogers in 2009 was slightly more than $89,000 compared to $55,000 for Minnesota as a whole. The median house or condo value in 2009 in Rogers topped $300,000 compared to $200,000 across the state.
“I see growth. With the additional locations, there is market area we can expand into. Several stores haven’t carried much in the way of commercial and ag products and we can expand the product line-up in those stores.”
What this means for Scharber & Sons is that residents with several acres planted in grass or short crop rows have supplanted full-time farmers as the customer of choice. “We are catering to that next generation of large property owners, the part-time producer who works nights and weekends, possibly even less in the future with the ever increasing demands day-to-day schedules,” Mike Scharber says.
Of all the challenges facing Scharber & Sons, the changing face of its customer base is perhaps the most enduring one. Says Anderson: “Our bar keeps getting raised. We have to keep adapting to how people interact and purchase things now, including on the Internet.” This new customer dynamic manifests itself in such basic ways as the appearance of the Scharber & Sons showroom in Rogers.
The marketing goal is consistency, he says, steady sales rather than new markets. He recalls how when the housing market collapsed three years ago, contractors went away immediately but the municipal business continued to be a steady customer for two more years before it too felt the impact of the recession.
“Customers have expectations about having a nicer facility to visit,” the after market manager says, “so we’ve upgraded the facility over the years. We raised the ceiling in the showroom and added windows to allow more natural light. We have had to spiff up our marketing in store
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“The market we are going after now in terms of our equipment mix is pretty stable,” Mike Scharber says. “We are constantly trying to find the right mix of equipment to meet their needs. The equipment may come from John Deere or from some other manufacturers.” Scharber & Sons’ specialty equipment lines include Felling trailers, Carlton stump grinders, and Woodsman wood chippers. These are product lines that the dealership sells across the state.
The 1932 Chevrolet “Mobile Grocery Store” allowed Otto to travel the countryside selling groceries door to door.
that every business in the state must acknowledge in its business plan. The Twin Cities, in fact, has one of the coldest climates of any metro area in the United States, with an average temperature in January of 4 degrees Fahrenheit, warming up to an average of 12 degrees in February, according to U.S. Climate Data.
The list of non-Deere equipment also includes an articulated implement carrier from Swedish manufacturer Belos. The swivelly machine is sort of a cross between a skidsteer loader and a tractor and frequently is utilized to plow snow from sidewalks. Boasting hydrostatic four-wheel drive and a comfortably warm operator cabin on a cold day, it can zip along at 25 mph between locations. Minnesota is a wintry region, after all, a climatic reality
continued on page 20
Otto Scharber farming after hours.
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Otto and Lenny pose for a picture in the equipment lot.
turing representative after college, says “taking care of people” is the heart of the business.
from page 19
Scharber’s sales track the seasons. Lawn and garden machinery and similar equipment keeps sales and service employees busy during the growing season, which ranges from April to October. Contractors warm up as the summer does, with John Deere skid-steer loaders, light excavators, material handlers, and other machinery moving to work sites
“We’re all working at that,” he says of the Rogers store and of other dealers in the dealership group. “We don’t have any partners or owners who aren’t working a full week. The biggest thing I like is working with a broad and large customer base, helping them get what they need. I like teaching them, helping them make a decision.”
It is the winters that challenge machinery and implement dealers. During that season is when Scharber & Sons increasingly looks to local governments, school districts, and contractors.
He acknowledges that keeping intact the company’s 95year legacy of sales and service is a challenge. He says the decision to merge, for example, was perhaps not one his grandfather would have made. “I looked on it as doing what we needed to do to keep alive and strong and competitive. Grandfather might have taken different steps, but that has nothing to do with right or wrong. It is just the changing nature of business.”
That is the time of year when those customers are augmenting and updating their equipment inventories, looking ahead to busier seasons to come. Much used equipment is traded in for new equipment as a new generation of John Deere machinery is prepared to take over mowing and snowplowing tasks.
The Community and the Future
The wholesale makeover of Rogers in recent decades has been a little surprising for natives of the town, like Mike Scharber, who watched the community explode from 1,000 residents to 8,000 residents in just 10 years.
This seasonal cycle of activity has been playing out for 95 years at Scharber & Sons in Rogers. Groceries and hardware no longer are mainstays of the business. Customer consideration still is. Mike Scharber, who joined the family firm in 2000 after several years of working as a manufac-
It’s quite a change from the days when Otto recognized virtually every customer’s face and needs and also creates a
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The 1938 delivery truck is ready for action.
The company is very likely to still be leading the community in various ways when it reaches the 100-year benchmark five years from now. Doug Anderson has spent almost half his 50 years at Scharber & Sons; the after market manager is convinced that successive company leaders, like the “founders,” will keep the company on track.
challenging situation for Mike and Dan to stay on top of an expanding customer base. Quips Mike: “It’s just seven thousand customers I don’t know yet.” He probably exaggerates, but there is no question the influx of commuting residents and large property owners has changed the character of the sales business.
“There seems to be a common trait through the years,” he says. “That is, the company has always been very progressive in a business sense. Whoever is leading it never has been fearful about seeing what the next opportunity is for growth and expansion. They do a good job of looking ahead.”
“The composition has completely changed,” he says. “Our customers now are more sophisticated, more short on time than in the past. This changes the customer service and retention aspect of the business. But it still comes down to being a part of the community.”
This forward-looking attitude has taken the John Deere dealership from groceries and plows in 1916 to implement sales of $50,000 in 1938 and $5.5 million by 1981. But those numbers aren’t the most important to a company that has kept the family values it was founded upon and the belief in community service that has helped complement the business side of Scharber & Sons.
The family has worked hard at good citizenship for a long time as well as being actively involved in civic, service and community organizations. Doug Scharber was mayor of Rogers for 22 years beginning in 1957. (He also was president of the MinnesotaSouth Dakota Farm Equipment Association in 1983.) Doug’s son Steve was mayor for 14 years. Steve’s son Dan has served on the city council of Otsego. Steve, Mark, Pat, Mike and Dan Scharber are all longtime members of the Rogers volunteer fire department.
What began as virtually a one-man operation has grown to a company that now employs nearly 100 people. In a challenging economy and constantly changing business climate, that’s the type of figure that might be the best measure of Scharber & Sons’ success as it reflects on its past while enthusiastically looking toward its future.
Steve and Mark are both members of the Rogers Lions Club, contributing their time to help with fund raising activities to help better the community.
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