Empowerment can be a tricky thing. Howard Hansen has little desire to be a micromanager, and the president of Valley Office Systems in Idaho Falls, Idaho, much prefers to have his 100-plus member team take ownership of decision-making when the opportunity arises. In the process, he leaves a simple yet effective checklist that can help steer team members in the right direction.
With each decision employees ponder, they must ask themselves three questions: Is it good for the company? Is it good for the employee? Most of all, is it good for the customer? If the decision-maker in question can say yes to all three, then he/she is on the proper empowerment path.
“We trust our employees to make the right decision based on those three answers,” Hansen related. “If it ends up being the wrong decision, we’ll use that as a teaching opportunity. But we’ll stand by the decision our employees made.”
As Hansen leads the charge for Valley Office Systems with his wife, Colleen—both shareholders in the company—he also considers himself “just one of the guys,” so to speak. He preaches the belief that no job is beneath one’s title. He’ll jump in a truck to make a customer delivery, grab a broom to sweep the shop floor and he’s been known to scrub the toilets. That’s to be expected from someone who grew up on a dairy farm, where titles were nonexistent and chores needed to be done. And you damn well better take care of them because the to-do list keeps getting longer.
Bold Stroke
Perhaps that’s what helped Hansen develop the intestinal fortitude and garner the courage to walk away from a comfortable living with Yost Office Systems, his previous employer, which had been bought out and became an IKON Office Solutions satellite. It was Valentine’s Day in 2003 when he exited in order to purchase a 50% stake (partnering with Tom Gwinn) in Valley Office Systems, a tiny nine-employee operation with revenues that barely touched $1 million, mostly from a retail copy shop in the front of the building. After three years under the sometimes-oppressive IKON umbrella, Hansen wanted to take control of his own destiny, and this was his opportunity to start anew.
“It was probably the most terrifying decision I’d ever made,” he admitted. “I was leaving a good job with a strong account base, and I had a young family to support. But our dealer had morphed away from a locally owned dealership with local decision-making. It definitely wasn’t fun anymore.”
Today, Valley Office Systems boasts eight brick-and-mortar locations throughout Idaho, Utah and Wyoming; 115 employees; and revenues in excess of $20 million. A longtime Sharp dealer, Valley Office Systems consistently captures the OEM’s Hyakuman Kai award for sales excellence and has complemented that relationship by being named a Service Excellence Certified Dealership for the past 12 years as an authorized Ricoh provider. The dealer also counts Kyocera and HP as partners on the A4 side.
Xs and Os
The growth journey was carved out by following what may be the office technology dealer’s version of the Little Big Horn strategy. Knowing that Valley Office Systems, as an unknown quality, wouldn’t hold much cachet in major markets such as Boise and Salt Lake City, Hansen decided to work his way from the outside in, collecting business deals in rural communities about 50 miles away. The dealer grew its base and garnered solid relationships (not to mention references) as it pulled closer to the big markets.
“We were better received in those rural markets, and we landed school districts and government accounts, and that added to our legitimacy,” he said. “Those references were key as we came inside the larger geographical areas, and we had developed a reputation for exceptional services, which really helped build our credibility. It would’ve been a tougher road to start within those major markets.”
2022 has been an exceptionally strong year with 24% organic growth, especially impressive coming off revenue-neutral performances in 2020 and 2021. In fact, the pandemic years and 2008—the height of the Great Recession—are the lone outliers in the 18-year history under Hansen’s administration when the dealer didn’t register high-single/low-double digit growth. Considering the company’s early acquisition history entailed just a few sub-$1 million tuck-ins truly underscores the organic growth excellence.
Although the health care and food service verticals took a hit during the pandemic, education provided a boost with the production of at-home instructional booklets. While the rural areas didn’t face the harsher shutdown measures experienced in metropolitan areas, Valley Office Systems did experience an 8% reduction on the service side. Hansen was able to bridge that gap with modest growth in furniture sales in the rural areas; the dealer hired a sales rep with a background in that sector and he was able to offer portables. Of more consequence was the growth in backfile scanning, with the government accounts yielding roughly $1.5 million in business. That, in tandem with production device growth, represented a boon for Valley Office Systems.
On the subject of production, Valley Office Systems benefits from staffing several former print shop owners who have the nuanced perspective of the print-for-pay market, which is vital when discussing service, reliability and training. Post-sale support that buffers client growth solidifies the long-term relationship while creating future opportunities. The dealer has also made significant inroads with in-plant operations, as reps are well versed in production color and outlining opportunities, and the religious sector is also a big consumer of production color work.
“Acquiring the right talent was key for us, and it’s really allowed us to take off during the past 18 months,” Hansen noted. “Most of that 24% organic growth can be attributed to production color.”
While the dealer didn’t adopt a work-from-home strategy, Hansen leveraged down time to address various facility projects. By painting, constructing a retaining wall and building a fence, it not only kept idled employees busy, it prevented the dealer from having to hire a contractor.
OEM Support
It was also a good time to be a carrier of Sharp products. Hansen notes the OEM enjoyed a roughly 85% delivery rate, with other manufacturers seeing mixed results. Sharp has played a large role in the dealer’s growth, buffered by diversification opportunities with AQUOS BOARDS, various displays and laptops.
“I feel like we did about 10 months’ worth of business in a 12-month period last year, and we’ve been fortunate enough to have some catch-up this year in regards to back-ordered equipment that’s beginning to arrive,” he said. “We’ve heard some horror stories in the wild, but we really haven’t experienced the same level of frustration and lack of products as other dealers.
“Sharp has been a true partner, and they’ve been with us for the long haul. COVID forced end-users to communicate from afar, and we’ve provided customers with a lot of technology through Sharp that we wouldn’t have had access to otherwise.”
Valley Office Systems has an interesting dynamic from an ownership perspective. Around 2015, Gwinn began to experience serious health issues, which necessitated him selling his share and exiting the business. Gwinn and Hansen fielded overtures from manufacturers, industry consolidators and venture capitalist firms. But given the autonomy Valley Office Systems enjoys at the local level—and the owners’ collective experience of being under IKON’s thumb—none of those options represented an ideal fit.
However, Sharp saw a potential connection for the duo in the form of the Olson family…yes, some of the same people behind Les Olson Company of Salt Lake City, a competitor. Thus, after about a 10-month courtship, James Olson, Troy Olson, Lisa Thaller and Ryan Bingham invested into Valley Office Systems as Gwinn exited.
“The deal just made sense,” Hansen explained. “Colleen and I weren’t ready to hang up our hats just yet, and if we went down the road of a consolidator, they wouldn’t have needed us. But we wanted to stay along for the ride.
“Colleen and I considered buying Tom out, but that would have required us to leverage the company. From the beginning, we used our own capital to buy Valley Office Systems and it was important for us to remain debt-free.”
Valley Office Systems maintains its independent status, and the two firms still vie for up-and-down-the-street business in the Utah market. “They have industry relationships with manufacturers and have industry know-how that brings value, and they can be collaborative,” he said. “But believe me, we’re competitors; we compete all day long.”
Talent Pool
The ability to win share hinges heavily on the dealer’s success in finding top-notch talent, which is no small quest in the rural markets in which Valley Office Systems competes. The dealer makes the best of a smaller pool of candidates, as it’s difficult to recruit individuals to transfer into an Idaho or Utah market. Thus, once Valley Office Systems identifies and hires a quality employee, the onus shifts to maintaining, and Hansen believes that employee empowerment and autonomy go a long way toward that end.
Another difference maker for Hansen is the internal leasing company he’s grown over the years, which provides for more creativity and oversight of transactions. Trust is fundamental in a smaller geography, and that permeates every aspect of the business, solidifying relationships with clients and employees alike.
Speaking of creativity, Valley Office Systems’ approach to service and how it incents techs provides a salutary impact on clients, and it also helps set the dealer apart from competitors. Like the marketing team, techs have the opportunity to qualify for president’s club trips. But rather than measure performance by the number of calls they handle in a given day, Hansen follows the philosophy that spending extra time with clients and providing more preventative measures during a visit can help enhance first-call effectiveness and reduce the number of follow-up trips.
Valley Office Systems incents techs on how well the machines operate between failures; more images between visits equates a bigger bonus. For instance, if a print drum has about 10,000 more images before it needs to be replaced, Hansen would rather the tech change it while there and save the client on the labor cost of a dedicated visit to swap out the drum. The upshot is a wider berth between visits and a cost savings to the client. Plus, it helps that his techs carry four times as much car stock than the average dealer.
The firm is also bucking a recent trend of sourcing its marketing needs to an outside agency. While Valley Office Systems does rely on a third-party company for website development, Hansen believes his marketing team is better attuned to the unique characteristics of the markets it serves.
“We have three very distinct markets,” he said. “We have a very large market share in our eastern Idaho market, which is relationship-driven, backed by our involvement in the community. Our Boise market is funny, because it wishes it was Portland, and our Salt Lake City market wants to be Los Angeles. You can’t use a cookie-cutter approach, and our marketing department has a good handle on it.”
Moving forward, Hansen wouldn’t rule out entertaining M&A opportunities, but given Valley Office Systems’ rural markets, he doesn’t anticipate any moves in the near future. He’s been in talks with would-be prospects in recent years, but was unable to bring them to fruition because they were ultimately not the right fit.
Still, Hansen is quite content with the team he’s assembled. There was a time when he could feel the endorphins flowing after completing a large deal with a client. Now, he finds satisfaction in watching his charges grow and develop into not only high performers, but entrepreneurial-minded individuals who may someday start a business of their own. Hansen feels their success deeply and considers his team a family.
For the first time since the pandemic reared its head, Hansen is looking ahead with unbridled enthusiasm. The budget, and the bar, have been set high.
“This is the first time in a long time that we’ve set lofty goals for growth,” he said. “And this is probably the first year that we’re going to obtain that growth from a budget perspective. We’ve always done well, but we’ve set some pretty high expectations for ourselves and the company. The next six months are going to be very rewarding in enabling us to hit those goals. I can’t wait to see it play out.”
Valley Office Systems Technical Scholarship: Creating Opportunities Where None Exist
Like many industry dealers, Valley Office Systems is a staunch supporter of its community, participating in food banks, golf outings and other fundraising activities that assist the missions of charitable and non-profit organizations. Perhaps the one initiative that resonates the most with owners Howard and Colleen Hansen is a scholarship that addresses a tier of high school students who tend to fly under the radar.
High-performing students can either benefit from the resources at their parents’ disposal or any number of scholarship programs that can help bridge the gap between the cost of attending a college or university and the family’s ability to pay. The greatly disadvantaged students with superior academic performance but little to no resources to meet tuition requirements can also avail themselves of programs that can cover most, if not all, the cost of attending a higher learning institution.
Then there’s the class of student that not only lacks in financial resources and parental support, but also doesn’t qualify from an academic standpoint for much, if any, continuing education assistance. These students may have a positive attitude and drive, but aren’t considered candidates for even junior college admission. Not every high school graduate is inclined to attend a college or university, but some have an affinity for a specialized skill. For them, the slightest bit of momentum could be just the spark that leads to gainful employment and a bright future.
That little push has taken the form of the Valley Office Systems Technical Scholarship (VOSTS). For nearly 20 years, the Hansens have partnered with local high schools to encourage students to apply for the scholarship, which entails applicants writing an essay about their desire and goals. In working with high school counselors, the Hansens are given the perspective on students who may not be among the top in their class academically—nor have any significant support structure at home that can provide guidance for their future—but demonstrate an attitude and aptitude in forging a path forward.
“These are the students that get passed over for traditional scholarships,” Howard Hansen said. “We focus on students that are maybe not the most gifted or don’t have the support they need from a parental perspective. They need an education, but traditional school isn’t their thing. Maybe they want to get into a trade, mechanics or electronics.”
The Hansens feel blessed that their own children were able to carve out a future path of their own choosing, but they know many others aren’t as fortunate. Colleen Hansen is extremely passionate about the program.
“It can be difficult for children who come from a humble background,” she said. “Not every student has parents that are championing them to go to school. We’re looking to help those who wouldn’t have any opportunity. It’s made a difference in their lives.”
