By S. Clayton Moore
Many companies across the world make their money on the backs of their employees but the workers it treasures are lifting one of America’s best companies up. Duncan Aviation, a comprehensive business aviation support organization with more than 1,750 employees at 30 locations nationwide, has once again made Fortune Magazine’s list of the “100 Best Companies To Work For.”
“Our people are everything,” said the company’s chairman, J. Robert Duncan, who represents the second of three generations of Duncans who have built up the company. “The experience, professionalism and attitudes of our employees are what we pride ourselves on at Duncan Aviation. These are the main things our customers mention when they describe the atmosphere at our facilities.”
It’s a massive operation. Based in Lincoln, Neb., Duncan Aviation is known worldwide for its support operations; its services include airframe and engine maintenance, paint and interior completions, and avionics installations. It also encompasses Duncan Aviation Parts Support Services (formerly Aviation Parts and Components), a worldwide organization that handles the buying, consigning and selling of general aviation parts as well as 30 years of experience in charter operations and an aircraft sales unit.
Its primary facilities are spread over 430,00 square feet at the Lincoln Airport. They include an $18 million, 123,000-square-foot hangar and shop facility as well as a 44,000-square-foot facility solely to support the Parts Support Services operation and a state-of-the-art 20,000-square-foot paint shop. The company added another 200,000 square feet when it expanded to Battle Creek, Mich., in 1998. Duncan also offers expanded service well outside of the Midwest with 19 government contract sites as well as 20 satellite avionics facilities that continue to grow.
Growing up with the company
It’s a long way from the small company that its chairman grew up around, riding in airplanes with his father.
“It’s just like growing up in any other family, I guess,” Duncan laughed. “You experience new things all the time and life is never the same. It’s a new challenge every day.”
The company owes it all to Robert Duncan’s father, Donald Duncan, who got in on the ground floor of the business aviation industry when he acquired the Beechcraft distributorship in Omaha in 1956. A tremendously charismatic salesman, Donald Duncan built up his business not only through hard work but also by building up personal relationships with customers, whom he considered to be friends. By 1963, Donald Duncan had secured Duncan Aviation’s place as one of the six original distributors for Bill Lear’s new affordable business jet.
“He had a great influence on the entire company and especially on me,” Duncan said fondly of his father. “His value system really set the tone for the company as it exists today. His hard work, the way he treated people, his strong belief in honesty and integrity were all critical. All of those ideas continue to serve us today. Nothing has changed in that respect.”
Robert Duncan really grew up with the company. He was born in Clarinda, Iowa, in 1942, as World War II was elevating the role of aviation in America. He took flying lessons starting in 1958. He soloed when he was just 16 years old, and had sold his first aircraft for Duncan Aviation before he graduated high school. After gaining his B.S. in business administration from Northwestern University in Evanston, Ill., he started working at the Lincoln location in earnest, managing the operation, flying charters and even pumping fuel for customers at busy times.
“It was a small business and you did what was necessary to make the business successful,” Duncan recalled. “One summer, I slept here at the hangar all summer just because it was easy and it was the right thing to do at the time. There were always decisions that needed to be made and jobs to be done, so why not be right here?”
He married Karen Kent after graduation and the two of them worked at the Lincoln location. Business school had honed his inherent management abilities and organizational know-how; Donald Duncan knew early on that his son’s administrative abilities were the perfect complement to his no-nonsense sales talents. By 1968, Robert Duncan was elected president of the company.
“We really were a very small company at the time that I joined,” Duncan admitted. “By default, I took care of the day-to-day management of the company. That allowed my father to focus 100 percent of his time on selling airplanes, which was the best use of his time.”
The tough times
Duncan Aviation rode high on the need for business aircraft throughout the recession of the 1970s and sales increased to a peak in 1979 when Duncan sold 71 aircraft and leased 27 with a value of $27 million. So it was an even harder blow for both Robert Duncan personally and for the company professionally when Donald Duncan died unexpectedly on Jan. 18, 1981. He was just 58 years old.
“We had a terrible time when my father died,” Duncan remembered. “At the time, we had tens of millions of dollars in aircraft ordered because the economy was good and the interest rates were high. That all collapsed around us. It didn’t put the company under, but I have to say that we came close. It was a very scary time and in the midst of everything, we had lost our best salesman.”
Robert Duncan took swift action to save the company in which he and his family had invested so much. Fortunately, his prudent financial sense led him to build up a financial reserve during the good times, which allowed Duncan Aviation to stay afloat. He also brought on a board of advisors that have been invaluable in pointing the company in the right direction.
“When my father was alive, he and I could talk about the company; after he was gone, there was no one for me to talk to anymore,” Duncan recalled. “The board has filled that role and they have been key to making the company successful over the years.”
He also made the critical decision to dump the company’s aircraft inventory and refocus Duncan Aviation on service. During its peak years, aircraft sales accounted for 80 percent of the company’s total revenues, but Robert Duncan recognized a major industry shift.
“Refocusing the company on service provided us with a much broader base,” Duncan explained. “We were seeing the manufacturers taking over the direct selling of new aircraft, which meant that there wasn’t much of a role for dealers any longer. Some people were slow to move away from that idea but we recognized that shift early. It was really the right thing to do at the right time.”
In 1984, Duncan founded the Aviation Parts and Components network to broker aviation parts. Duncan Aviation Parts Support Services now helps Duncan’s clients control their operating costs by giving them a vehicle for obtaining or selling off parts.
The following year, the company opened a handful of satellite avionics shops to bring services closer to customers, further sealing Duncan’s commitment to shifting its focus to service and support. In 1986, service sales exceeded aircraft sales for the first time; today, aircraft sales account for less than 10 percent of the company’s revenue.
It was a huge risk that reflects the audacious leadership of Robert Duncan.
“If you look hard at my personality, I love trying new things and I love taking risks,” Duncan said. “All of those aspects have translated into the business. Our company is known as an innovator in the industry, whether it was in our application of computers or trying new types of installations or even starting new businesses as we did when we started AVPAC. I love the arts and I love creativity and I believe those ideas are reflected in the character of the company.”
The 1990s were a time of tremendous growth for Duncan Aviation. New buildings were being built on an accelerated schedule to keep up with demand, including a 20,000-square-foot paint shop, a new building for AVPAC and new avionics and instrument repair facilities.
In 1996, the company brought in a key element of today’s success when they hired Aaron C. Hilkemann, formerly a banking executive with FirsTier Financial, as chief operating officer. In 1997, Hilkemann was named president of Duncan Aviation. It was another bold decision by Duncan, who felt the need to refocus the company once again on its original values.
“The company had outgrown my capabilities, to some extent,” Duncan recalled. “We had grown away from being the family organization that we once were. Some of our leadership wasn’t listening enough to the employees. We have a strong belief in giving people responsibility and letting them succeed or fail, but really try to coach them. Aaron has really brought back those values in a much stronger way, not because I told him to, but because he saw and believes in the foundation of this company.”
Hilkemann expresses the same strong beliefs in people on which the company was founded.
“The quality, integrity, diversity, knowledge and commitment to their careers that Duncan aviation employees possess is astounding,” he said. “Combined with the daily teamwork exhibited by everyone to serve the customer, these qualities and values make me proud to be part of the Duncan aviation team.”
Hilkemann led the company through a dramatic transition from a moderate-sized aviation support provider into the global powerhouse it is today. The company expanded dramatically in 1998 when Duncan Aviation purchased a former competitor, Kal-Aero. The move added more than 200,000 square feet of service facilities in Battle Creek and Kalamazoo, Mich.
“It was a bigger challenge than we had first imagined,” Duncan said. “We saw Kal-Aero as being very much like our organization in its value system and in terms of the size of the community that it’s located in. However, the management style was different than ours and the transition took some time. I would say that it’s fully integrated now and working very well. It’s an important part of our organization.”
It’s working so well, in fact, that the Battle Creek facility is being expanded this year as Duncan adds 125,000 square feet to the existing 200,000-square-foot facility located at WK Kellogg Airport. The expansion, expected to be completed by March 2007, includes a new 40,000-square-foot maintenance hangar, a 20,000-square-foot multi-use paint hangar and a renovation of all back shop work areas.
“2006 marks Duncan Aviation’s 50th year in business and I can’t think of a more fitting anniversary celebration than completing a brand new facility that will provide the hangar and shop space for a potential 30 percent increase in our total capacity,” said Hilkemann.
While Duncan’s new facilities are important to its success, Robert Duncan is banking on people like Aaron Hilkemann to lead the way.
“He’s just a superb manager and leader,” Duncan said. “He listens to people. He’s out on the floor. Our people trust him and believe in him. He’s just the epitome of great leadership.”
People are everything
Duncan has long been lauded as a great place to work. For several years, it’s been listed in Fortune Magazine’s list of “100 Best Companies to Work For in America,” demonstrating its management’s strong belief in its employees.
“I don’t bring a dime in the door,” Duncan said. “Our employees are the people that sell their service and bring all the revenue into the company. The job of management is to give them the resources, facilities, training and leadership to make it all happen. The people that do the work out there every day know they are the most important people in the company.”
Providing a unique work culture has taken an extraordinary amount of investment on the part of Duncan Aviation’s leadership as well as a strong leap of faith. The company invests over $200 million in training each year and each employee averages 40 hours of training annually. Each employee is eligible for up to $2,500 towards a private pilot’s license and an addition $2,500 for instrument training. Duncan also provides leadership training not just for its upper management, but also for all of its employees.
“The technical training goes without saying; we do a lot of it but most people outside the company don’t realize that we do an equal amount of leadership training,” Duncan explained. “We’ve gotten about 600 people now through leadership training from all levels of the company. They learn a lot about relationships and it helps them not only in their job but also in their family life. We have had a lot of people come to us and tell us that it has helped them to be a better father or mother. It’s a real key to building up our culture and making us who we are.”
Another reflection of the company’s dedication to its employees came during the dramatic downturn in the aviation industry following 9/11. When other aviation companies were laying off workers, Duncan was doing everything possible to make sure that every employee kept their job until the tide had turned.
“We made a decision at the start of the economic downturn to keep our work force intact,” Hilkemann said. “Instead of following the industry trend of reducing headcount, we chose to deal with the difficult economic situation by implementing a wage freeze. Our team members are in tune with the industry and realized that this was the more desirable option. This allowed everyone here to remain focused on serving our customers instead of being distracted by concerns of personal security.”
The lack of layoffs just adds to the number of people Duncan recognizes at three-, five- and 10-year anniversaries. Robert Duncan and his wife Karen personally host dinners for the company’s “Silver Wing Club,” which recognizes employees with 25 years of service. More than 100 of the company’s 1,800 plus employees are members.
“A lot of people that worked for us 25 years ago are still working here,” Duncan said admirably. “That adds up to a lot of technical knowledge, a lot of support for our culture and who we are, and a lot of family when it really comes down to it.”
The work force continues to grow. Duncan conservatively estimates its base of employees to reach between 2,000 and 2,400 within the next five years. However, he says that size doesn’t affect the company significantly.
“I don’t think it’s any more difficult to run a company this size than it is to run a small business,” Duncan said. “In some ways, it’s easier because we have the professionals throughout the company to make the right decisions each day. You can imagine the number of things that are done here each day from the bolts removed to paint supplied to transistors changed. There are thousands of things that happen each day and there is no way that managers can influence the quality of those decisions because they’re made on the spot. You have to trust people. You give them good training and the equipment to do the job and you let them go do it.”
The company’s compassion extends to the communities it inhabits. Employees are encouraged to volunteer at Aviation Career Days and regularly take part in community events including American Heart Walks, charity bike rides, Red Cross blood drives and other events.
“It comes back to the employees,” Duncan said. “If you want good employees that will stay with you, they need to live in a community that’s rewarding for their families and their children. It only makes sense that we do our part to make sure that this is a vital and friendly place to live. We’ve always believed in that idea. I’ve spent a lot of time in volunteer and community work and others in the company follow that lead.”
Duncan’s offerings continue to expand. One service is JetResources, designed to help clients wishing to purchase a pre-owned aircraft. Another is the in-house publication, Duncan Intelligence, a series of newsletters providing up-to-date information about airframes, engines and parts specific to the needs of Duncan’s customers. The Duncan Debrief magazine offers details about the company’s business status and service offerings. As this knowledge base began to grow, Duncan Aviation began offering Intelli-Conference Symposiums at its facilities in both Lincoln and Battle Creek, giving technical presentations on maintenance issues, trends and support concerns.
The core of all the company’s efforts is providing its clients with the best service possible.
“We cater to customers that want a very high quality of service delivered absolutely on time but at a fair price,” Duncan observed. “It’s critically important that we meet the delivery timeframe; if customers are interested in one thing, that’s it. We have a lot of experience in this area and when we say we’ll deliver a product on time, we mean it.”
To that end, Duncan has taken dramatic steps such as starting a $7.5 million loaner program, which extends the reach of its satellite avionics shops.
“That was good for the customers and it was good for us,” Duncan said. “The loaner program really helped build our avionics business.”
The company is still privately held and is sticking to its family-owned roots, although Duncan admits it has grown to perform at about $300 million in volume per year. Although its reach has become national and even international, its leadership remains cautious about growing too quickly.
“We’re limited because we’re a private company,” Duncan said. “We don’t have the capital to go out and start two or three different businesses or open a bunch of new locations. We have to really make careful decisions about what we do. We think about it a lot and we’re careful and deliberate before we start a new venture. We look at other businesses, but right now we don’t feel that we have a commanding share in the markets we serve currently. Our focus right now is to increase our market share in those services.”
Nevertheless, business is good. Duncan is unusual for a private company in that it shares its financial health very openly with its employees, gaining even more trust.
“We have had a really good 12 months,” Duncan said. “We had some years where profitability was down after 9/11 but last April, business got good again.”
Although he never could have envisioned the little company with 15 employees growing to this size, he does believe that the economy and the company’s vision are coming together to ensure even more success.
“I do believe that there is a new demand for business aircraft from a whole new segment that wasn’t using business aircraft before,” Duncan said. “There’s more need for people to travel and the airlines are more and more difficult to use. It’s a good time for aviation and I predict that business aviation will do very well.”
For more information, contact Duncan Aviation at 402-475-2611 or 800-228-4277 or visit [http://www.duncanaviation.com].