The Nordstrom’s farm-to-auto-recycling business is still growing things today, just in a different way from their dairy roots.
By Maura Keller
All Nordstrom’s photography: Dan Elliott Photography
Nordstrom’s Automotive Inc. is a family-owned business that has been involved in the automotive recycling industry in Sioux Falls, SD and across the U.S. via e-commerce for decades. Like many family-owned businesses, Nordstrom’s started with Art and Marie Nordstrom taking a risk and trying something different. It was in back in 1964 when the Nordstrom’s were tasked with taking over the family dairy farm.
But farming can be difficult and so Art and Marie started Nordstrom’s Used and Rebuilt Trucks as a “side business,” buying trucks and reselling them to the neighboring farmers and others in the community. Eventually, they decided to try their hand at selling used auto parts. Fast-forward nearly 60 years and today Nordstrom’s Automotive is one of the leading automotive recycling companies in the country.
Today, Shannon Nordstrom, Art and Marie’s son, controls the helm of this growing company, steering the family business into the future. Still located on the family’s dairy farm, the Nordstrom’s Automotive logo is of the farm’s dairy barn, illustrating that the company is continues to celebrate the family legacy while embracing the farming ethic that hard work and determination get the job done.
At the ARA 80th Annual Convention & Expo in Kansas City, MO, in the Recycler Keynote, Shannon shared his insights into what can help automotive companies succeed long into the future. Here is what he had to say.
Certification Is Key
Our company roadmap can be a good guideline if you’re not quite sure what to work on in your business. How we got to this point in time is what I would tell you to do. Based on our experience I will walk you through some steps that worked for us, and you probably should pay attention to, so you don’t get caught off guard.
You must work on sales, you have to work on things to be able to get things done, and you have to build your team. It’s not about having a perfect facility. But, if you don’t have your facility in line, it’ll just make it harder for you.
At Nordstrom’s, we made it a goal to become certified through the ARA Certified Automotive Recycler (CAR) program, including Gold Seal. In our story, the CAR program played a big part. That’s why I have passion for that program – because it was a game changer for our company.
When recyclers do the certification process, sometimes they say, ‘I don’t really see the return on investment.’ They want something back. They think, ‘I put all this money I should get this money back.’ I really think that’s the wrong way to look at it.
Think of it this way: You need to give your staff something to rally around, the story of how you started and then achieved things. So, we made certification our goal and I made sure we shared it with our staff. When we received the Gold Seal certification, we put the logo on our trucks; and it was a difference-maker to go from where we were to where we had something to brag about. Our difference maker was the certification program.
Growing Generations
Focusing on the generations involved in a business is another key step to take. It’s important to have a plan for generational succession. I’ve got a family and we’re trying to figure out what’s next.
I have to say “thank you” to my parents. I bring this up because they didn’t let their pride get in the way, thinking that they needed to hold on the reins for a long time. Now my dad, if you know him, runs 100 miles an hour. Post-ownership change, he still wants to be involved in anything and everything. I still have him as President of our Board as I want his input and influence, but at the end of the day, the final decisions are mine. He’s involved in everything, but he’s responsible for nothing and he respects my position.
When we look at the generational aspect of our business, my parents saw how eager and well-equipped I was. They wanted to eventually turn me loose and let me do what I could do. But if they would have waited too long, I wouldn’t have wanted to do it. Sometimes, you see people hang on a little too long. I don’t mean that with any low regard. But it makes it so that by the time they start a generational change, the other generation has lost their “fight” like they had when they were younger. I shouldn’t call it fighting, but I think you know what I mean. There’s a certain age in your life where you’ve got the gumption and the vinegar. That’s your “go” time.
I’m just thankful that we were able to do a great transition and they can now stand back with pride and see what we’re accomplishing. That’s been a big deal. So make sure you have a succession plan.
Defining Yourselves
Nordstrom’s had a fire in 2012 that was caused by gasoline in our dismantling facility. A dismantler, with a rechargeable DeWalt tool, pulled the trigger and started the gas tank on fire in our building. It did quite a bit of damage. We were ready. We had people that were trained and we held that fire until the volunteer fire department was able to put out the fire. That’s when I started on my own kind of plan in the background – what Nordstrom’s 2.0 could look like and what could I do if I could start with a clean sheet of paper?
I used what I’ve learned from everybody in this industry – all the stolen ideas. I also started taking some grid paper and cutting out shapes of buildings and laying out what we could do on the land that we had. I brought this into a meeting with my dad, and I thought he was going to go into some sort of convulsion. Instead, we put some more ideas on the plans, and worked on it.
We turned the idea over to our employees and they completely changed much of what I was thinking. With their help, we’ve now been able to successfully build a world-class facility on a dairy farm in Garretson, South Dakota. We’re not perfect. We don’t have it all figured out. I need to figure out how to handle parts more efficiently. But we do well enough to make money. And we do well enough to take care of our people. And that’s what’s so important to us.
We still have work to do and that’s why it’s about constant never-ending improvement.
Remember, the people that can help you grow are probably right in your business today. You just need to talk to them. Those folks in the middle of the fire every day at your facility are the ones that have all the ideas that you need.
Sometimes when you take that big leap, you force yourself to learn things you don’t know. From a book I just listened to, I can now look back and call it my “10X move” – that’s a brave move. It forced me to trust my ability to figure out the parts I did not yet have figured out. It’s a God move. You’re going to have to have a lot of faith. You’re going to have to have a lot of confidence. For me, that’s what it was. I had a lot of faith that I’m doing the right profession. I could have crashed and burned but it worked out alright.
Facility Growth
Investments in your facilities and infrastructure are also vital. To think that we’re going to successfully build a $4 to $5 million facility is amazing. I can do it in South Dakota for that amount – but those in big cities probably will spend more. We have some luxuries in South Dakota because of where we’re located. I often joke that I could have my customers wade in waste oil in my lobby and probably no one would complain – we’re in South Dakota. We can do things here that you can’t other places.
Our big move was making this 2.0 facility; we took a risk. We learned a lot along the way and got good at construction projects. We had the pleasure to work with some great people and achieved a great project from our combined efforts. We welcome you to visit.
Growing People
Your employees are your most important assets and it’s important to get your folks to embrace your story. They don’t have to love your story. They don’t have to think it’s a good story. But what if you don’t tell them your story? How will they ever even have a choice whether they want to embrace it or not?
During orientation with new employees, we share the story of the business. I do it myself and for time’s sake, I sit down with several at a time and spend an hour or so with them, going through the history of the business and the industry. I give them the picture that they’re entering something that’s probably bigger than they’re thinking right then.
Sometimes when you take that big leap, you force yourself to learn things you don’t know. I call it my “10X move” – that’s a brave move. It forced me to trust my ability to figure out the parts I did not yet have figured out.
We embrace our story in our lobby. There’s a real Ford tractor, with a miniature barn to replicate the barns we had. It is a place where kids can play while they’re at Nordstrom’s to pick up parts with their family. On the wall we have pictures of the history of our family business and, of course, a large Gold Seal logo.
Remember, the people that can help you grow are probably in your business today. Those folks who are in the middle of the fire every day at your facility are the ones that have all the ideas that you need. You just need to talk to them. You can go to all the classes in the world yet some of the best ideas and best solutions are going come from the folks in your business.
Your people want to do things for you – you’ve just got to let them. Ask what their ambitions and goals are and see if they align with your new ideas. Don’t rely on the word on the street if you’ve heard that something is hard to do or cannot be done. Don’t choose that as your outcome unless you go check it out yourself.
What I found in my life: most of the things that I thought were going to be impossible because other people told me how hard they were, really weren’t. Once I started knocking on doors and asking questions, it wasn’t nearly as hard as I thought it was. I was just intimidated by the thought of how hard it might be. And you don’t know unless you start digging in. And so I would encourage you to do that.
It was our nature as we grew our business to invest in the people. You have to be able to support them. One of the things we built in our new facility was a nice meeting space. During our meetings, we try to highlight people, like their employment anniversaries, to build people up. We try to make those meetings as positive as we can. Then, we’ll squeeze in some CANI (constant and never-ending improvement) items to show where we broke down this month. Those are learning opportunities to show people what they can do better.
Improving Staff Potential
We also have regular employee reviews. Every month, my CFO gives me the list of each person with a work anniversary, and we put out a calendar where I slot each one to a day. The review starts with their supervising manager level, who goes over a performance evaluation sheet. If we’re doing it right, the employee also gets a sheet to do a self-evaluation. The manager and employee do their evaluations and what I’m really looking for when I sit down with them is whether they are close. For example, as it pertains to listening skills, if the manager gives them a two and they give themselves a five on a one to five scale, I’ve got a difference between that manager and that employee that I need to investigate.
I take each employee to lunch once a year at a location of their choice and we break bread. We sit and talk about for an hour and a half, or maybe two. We talk about the employee – that’s their time. They can ask me questions. I’m interviewing them, they’re interviewing me, and I want to get to know them so that they know that I’m not some distant inaccessible creature. It’s important to me.
When you’re sitting down with somebody, what you’re trying to do should be 80% preview and 20% for review. If it’s 80% review and you’re just chewing them out for all the things that are wrong, you probably should fire them. Focus on where you’re going to encourage that person. And once again, we don’t have this perfect but that’s the goal.
Listen to them and try to make what’s important to them, important to you. It goes a long way because if you can do that, guess what? Those folks will make themselves important to the company because you’re paying attention and giving respect to them. It goes a long way as these employees are full of ideas.
This is a rhetorical question; on your profit and loss statements or bank statement – where are your employees listed? They are listed as expenses, right? But shouldn’t they be under assets? You can’t do what you do without the people. If you have an asset like something in your building that breaks down, you fix it? So, if your people are somehow broken down, shouldn’t you try to help them?
Everybody’s got their trials and tribulations, and they need grace. You’ve got to show people some grace and you’ve got to realize that people are hurting. They’re hurting over things they are going on in their own life, their mom’s life, their sister’s life, their cousin’s life, their stepfather’s life, whatever they happen to be. There’s stuff going on, it’s heavy, it hurts, and it’s everywhere.
The world is full of hurt. I want to bring hope to people, that’s what’s important to me.
We have a chaplain that comes in, called “corporate care.” And he spends a half a day with our staff on Tuesdays. He’s an angel and gives support to my employees with resources. He can help if they’ve got things going on. He’s helped people through deaths in the family and cancer, but he also just helps people be encouraged. We’ve had this chaplaincy service for about probably eight years at the company.
Providing the Required Tools
There are several tips that we’ve found that work in our facility and so many of these ideas came from employees. For example, when we’re working with returned parts to get restocked, we use pylons that we set on parts, just those simple little soccer pylons. A red pylon means: “Stop. This part needs some attention. We got to figure something out.” Yellow means that it’s waiting on pictures before it gets put away. Green means we’ve got things ready to roll, put it away and go into the warehouse. Those pylons are something that we use quite a bit.
We embrace technology. There are certain things that we found that were really good for us to use and the Fastenal vending machine commodity control system is one of them. An employee has an access number, and they go in and they can get sawblades, as an example. So, we are tracking which employees are getting sawblades. We get electronic reports every month of who got what items, and I can look and make sure it appropriate to the tasks being performed by that person. It’s also hooked up electronically to Fastenal, and they keep it refilled, and we don’t have to be worried about restocking. It is a great way to control commodity costs.
We’ve also got a daily production staff scoreboard in our facility to show individual and group numbers. If your staff doesn’t know the score, how can they know how they’re doing? If they have a bad day, the next day could hopefully be better, instead of getting discouraged and give up. The daily scoreboard rotates between each department, and they can see it in plain view. Sometimes a little competition between departments doesn’t hurt anything.
We also keep track of our safe workdays and every 120 days, we do a meal for the staff for hitting the safety goal. For us minor first aid doesn’t count. We’re interested in tracking situations where it turns into a worker’s comp claim with medical attention.
When it comes to high-voltage batteries and vehicles, safety is first. I suggest that you establish processes from the beginning and that can start with the High Voltage Vehicle Certification through the CAR program. We need to learn to be safe and not be scared. If you don’t handle these correctly, they can be dangerous, but if you put just a little care into it, they’re stable items.
E-Commerce Know-How
When we first entered e-commerce, we were selling stuff on eBay. We learned that to get to any sort of scale, we had to automate, which we did. Today, we still consistently sell well over $200,000 in items every month. We learned more and grew internal processes so that we can maximize sales volume. We then built our systems to match what was happening with e-commerce – what was good for e-commerce was good for making all of our other sales work better.
Invest in Efficiency and Those Being Efficient
My advice: Put everything on wheels, it makes the job easier.
We’ve also given everyone in our system the ability to “stop the plane.” They can stop the plane if they see a safety problem or if they see a quality control problem. Is this perfect? No, because I still spend time on quality control problems. While it isn’t perfect, it’s pretty good. I know what our return rate is, which is below the industry average, and everyone in our facility has access to those numbers and we talk about them in meetings.
Like in aviation, you must put your flight plan up, but your flight plan can change. Clouds can pop up and you’ve got to deviate your course. You have to adjust course sometimes to get to your goal because things come up. So don’t be afraid to change your flight plan every once in a while.
We try to keep to our roots and measure things around the harvest theme. Recently, we started a “crop share plan.” Every quarter, we look at the profitability of the company and we take a predetermined percentage of the profit and divide it equally between all the employees. Length of employment does not matter. You must at least be there that complete quarter before being eligible, and that way everybody is pulling in the same direction. We’ve given all the employees checks up to $500 at a monthly meeting. That’s cash in their pocket along with the 401k and other things that we do, and in the profit sharing that we do at the end of our fiscal year.
There’s lots of ideas to implement with commissions that help people realize that they got a piece of the pie. I love those ideas; we’ve used them for years. We use a blend of commissions and salary, and commissions and hourly wage where they’ve got a base wage, and they could grow that by their commissions.
In our employee reviews, one of the things I ask is for them to name a recent positive improvement they’ve seen in the company. People will too often focus on negatives, so we ask them to point out a positive.
Get Real
Is there anybody that thinks that they don’t have blind spots? You’re lying if you don’t. We all have blind spots. We have things we don’t know.
So don’t act like you know everything because you don’t, and you’ve got people around you that can help fill in your blind spots. They can help you learn things that you don’t know. Remember you do have blind spots. Everybody’s got them and if you can recognize it, it makes it that much easier.
Based in Minneapolis, Minnesota, Maura Keller is a seasoned writer, editor, and published author, with more than 20 years of experience. She frequently writes for various regional and national publications.
