General Aviation: Duncan Aviation’s Success Formula: Employees and Customers First

Ranked as having the "best" avionics and maintenance centers for more than 20 years, Duncan Aviation delivers superior customer service by investing wholeheartedly in its employees. Todd Duncan looks to continue that legacy.

A company is doing something right in a big way when its avionics and maintenance facilities are ranked #1 on the Professional Pilot magazine’s Preferences Regarding Aviation Services and Equipment (PRASE) annual survey for most of 25 years. Let’s define big: 755,000 square feet of engine, airframe, avionics, and parts services real estate in Lincoln, Neb. and Battle Creek, Mich. (including a $23 million expansion just completed at Battle Creek this May), plus 20 satellite avionics sites near key customers.

Let’s define customers: a loyal list of about 7,000 Citation, Challenger, Mustang, Falcon Jet, Hawker, Learjet, Gulfstream, King Air, Embraer, and Astra/Westwind aircraft owners, and related OEMs. These customers keep returning to Duncan Aviation for MRO services provided by nearly 2,000 employees.

Let’s define employee within the unique culture at Duncan Aviation since 1956: real people in an every day environment who are given the chance to forge a career path in aviation, work in tandem with management to make key decisions affecting the company, share in financial profits, receive multilevel training, and ultimately, determine the size of the corporate success zone through the quality of customer service.

People First, Money Second

Yeah but, yeah but....many companies run that party line about the importance of employees. If it was working so well everywhere, what’s up with those techs who are leaving aviation because they can make better money elsewhere, and who claim they "just can’t get no respect"? The deal is, most companies don’t put the level of dollars and cents into employee benefits as Duncan Aviation. "We commit the equivalent of 20 percent of after-tax profits for the overall technical and professional education and development of our employees. A part of this includes a significant level of in-house training, as well that provided through private training," reports Jeannine Falter, vice president of business development.

When’s the last time you heard a manager at this level say, "People first, then money"? Falter does, adding that "if you want to get the best out of people and sustain a climate of creativity, innovation, efficiency, productivity and great customer service, you have to mean words like ‘trust’ and ‘respect,’ and live that values attached to these words. Perhaps the best example of living those values is that during industry ups and downs, Duncan Aviation employees have not experienced layoffs or pay cuts." Now we’re starting to hear what Duncan Aviation employees may be hearing daily: that 1960s anthem only Aretha Franklin can do justice. It goes: "R-E-S-P-E-C-T, take care, TCB."

Three T’s in DNA

If ever a company has found the formula for taking care of business by putting both its employees and customers first, its Duncan Aviation. How? By creating the DNA of its business operations with three T’s: tradition, teamwork and transition. Tradition is at the very bedrock of this family-owned company, with three generations of Duncan lineage. Founder Donald Duncan’s entrepreneurial energy and knack for forging customer bonds got the company rolling in 1956. His son, Robert, became chairman in 1981, and has taken the company through the difficult industry transition after 9/11 and multiple growth segues since then. His son, Todd, currently vice chairman and president of the components division, will become chairman next month.

Part and parcel of TCB (taking care of business) for employee wellbeing includes:

• Hiring "the best and the brightest" with a strong worth ethic and a desire to seek a career at the company, rather than just snag a job. No one job is viewed as more important than any other, and every employee strives to enhance these core competencies along their own career path: action orientation, customer focus, optimum decision quality, ethics and values, improving functional/technical skills, cultivating integrity and trust, boosting intellectual "horsepower," learning on the fly when necessary, nurturing peer relationships, perseverance and problem solving, and exhibiting a drive for results.

• Offering compensation based on individual performance, with most employees becoming eligible for raises every six months as they continue to add responsibilities and expertise. The raises continue for two years after a promotion, and many employees achieve promotion every two years.

• Investing significantly and consistently in professional training for "soft skills" such as communications and team building as well as technical skills (this can include college tuition reimbursement and up to $3,000 for pilot training).

• Providing a company-wide wellness program with workout facilities in both Neb. and Mich. locations (and health club membership reimbursement for employees at the avionics satellite sites), as well as free health screenings, nutritional analyses, and stress management for employees and their families.

• Holding multiple six-day "Leadership Dynamics" retreat for business and technical leaders in the company.

• Encouraging family activities for employees and the communities in which they live. Robert Duncan encourages "the fun factor" of activities such as company and local sports teams, family cookouts, appreciation and holiday dinners, "really, celebrations of all kinds."

• Establishing the Silver Wings Club for employees who have achieved 25 years with the company. Besides a specially designed flight jacket, club members consistently earn other perks to reward their longevity, loyalty and experience.

The "Get" on this Team

The tool for accomplishing that experience is Duncan Aviation’s emphasis on teamwork, starting by linking new hires with mentors, and also including dedicated in-house training by senior managers, and about $2 million spent annually on outside technical training. The Professional Development Team works with employees to foster open communications at all levels, learn to make optimum value decisions, and follow and add to best practices guidelines.

Larry Arnold started in one the company’s Neb. warehouses, and is now the Debrief newsletter editor and works in components and parts support marketing. He met Lori Johnson, marketing and communications manager, and Steve Gade, vice president of marketing and sales, when he applied for a marketing specialist position. Arnold was attending night school and hadn’t yet earned his marketing degree, but Johnson and Gade hired him anyway, encouraged him to finish his degree, and helped him make a marketing career with Duncan Aviation.

Tom Burt, COO of the Battle Creek facility with 28 years at Duncan Aviation, tells AM that he came into the company as an A&P technician. Through the nearly three decades of his career, he feels he’s had the opportunity to be on the cutting edge of some the company’s most important changes. These included establishing a regional marketing group, a selling/quoting process, and developing customer service best practices. He also counts working with great people and being at the airport every day as added benefits for those times when "one must just grind it out through a tough period for the sake of your family."

Todd Duncan asserts that, "We educate our employees about our business, beyond their own specific bailiwick. In this way, they can understand the company-wide liability, insurance, investment and profit margin picture. When we’re considering important changes, we seek their input, since the changes will affect everyone." Tom Burt offers the latest example of this crucial dialogue, "We’re considering adding a third primary facility, in the West or Southwest U.S., and we’re looking for a community where we can maintain our culture and build a good team like we have in our current locations. Employees are engaged in the discussions about choosing this location, such as considering cost of living and quality of life for their families. When we expanded the Battle Creek facility, a number of employees transferred to Mich. from Neb., and this will be important with a new location as well." He adds that "obviously, customer convenience is also central to assessing another facility."

Bring on the Squawks

Overall, riding the wave of industry changes and fostering Duncan Aviation’s own company growth has always transitioned its level of customer service upward. In 1995, the company created its own computerized Customer Relations Management (CRM) software. Based on three primary elements — customer database, quote management and service plan — the CRM system continues to evolve.

"The CRM is much more integrated now," Burt reports. "Our quoting system drives the service plan, which provides proactive scheduling of MRO tasks. In fact, the quote system will soon initiate and open a work order electronically and incorporate a detailed scheduling request that will help our scheduling teams optimize accuracy and timing." Hilkemann points out that the quote and work order system "also transfers directly into our billing system. In a feature called MyDuncan, customers can trace the original quote directly into the work order system while the work is being done. At the end of the job, everything can be traced directly into the final billing from the original quote."

He explains further that MyDuncan evolved from a customer advisory board set up in 2003. "Customers wanted to be able to monitor and approve work on their aircraft from anywhere in the world with Internet access. They have told me they access their squawks [laptop computers, PDAs, cell phones] as soon as they wake up, and when they arrive at our facility, the project manager has usually already answered their questions, streamlined the approval process, and provided techs with continuous workflow." Another feature of the company’s CRM is that it tracks customers, companies for whom they work and aircraft. Even when planes are bought and sold, even when customers change employers, the Duncan Aviation database goes with that flow. When the phone rings for a new customer or one well known, the closed-loop CRM system provides the latest service data, status of MRO task scheduling, and ownership information for a particular aircraft.

MRO Service Diversity

Let’s define service: Duncan Aviation is factory-authorized on seven different aircraft models and turbofan and turbine engines, to perform airframe maintenance including heavy structural repair and modification; engine maintenance; avionics and instrument MRO; propeller and accessory repair; paint and interior refurbishment; line and pilot services, and carries an inventory of 400,000 new, used, and PMA parts in its parts, components and services network. DARs, DERs and ODARs are on staff, and facilities have multiple FAA, DAS, EASA and other international ratings. To date, Duncan Aviation is the first and only authorized service provider for Universal Avionics, specifically unit repairs at the board level as well as troubleshooting, repair and replacement of both warranty and non-warranty Universal equipment.

Attention to materials and technology improvements has extended the diversity of the company’s MRO services. This includes composite maintenance and repair. Burt reports that "we are tooling, training and working on much more composite structure these days, with both facilities equipped for major traditional damage rebuilds and with significant experience in fuselage reskinning. Sometimes," he adds, "our challenge is in helping customers understand the different demands, timing and precision required for composite repair as compared to metal repair."

New equipment investments also extended the competitive edge: a water jet cutting and computerized machining unit installed this spring are "enabling us to fabricate ‘hard to make’ parts that have previously caused our customers significant delays," Gade says. Aluminum up to a foot thick can be cut with the new equipment, as well as composite laminate and prepregs, leather for interior components, even instrument panels for the Glass Box cockpit display innovation. "In one recent case," Gade reports, "we were able to save a customer thousands of dollars and 8 to 10 weeks in downtime with our ability to fabricate a replacement part in-house in just two days."

Warranties are an area customers depend on having honored by MROs. Last year, Duncan extended its warranty coverage for parts and labor in avionics and instrument repairs and overhauls, to a year from the date of unit shipment from a Duncan Aviation facility.

Glass Box, Outside the Box

The beginning of Todd Duncan’s own legacy as chairman of Duncan Aviation may well be attached in part to flat-panel avionics retrofit technology developed at the company in 2003 as the Glass Box Project. Commercialized in 2004, this "outside the box" innovation in active-matrix, liquid crystal cockpit display offers both primary flight and multifunction data that can be integrated into six different aircraft avionics platforms. To date, Duncan Aviation has completed 35 installations, and estimates another 20 this year.

Pilots have responded with enthusiasm to the design and enhanced functionality of the large, high-definition Glass Box displays that deliver established avionics imagery (such as TCAS, TAWS, radar and navigation) as well as added features such as Jeppeson electronic maps, Nexrad real-time graphical charting, and enhanced infrared vision systems.

The primary goals of Glass Box technology are to reduce downtime and improve aircraft safety and operations value. Duncan Aviation is ahead of the curve in this avionics enhancement after securing customer, OEM and FAA buy-in to its early market research and assessment of exactly what product could achieve these goals. The end result, Hilkemann states, "is a product and MRO service focused on the right avionics upgrades for the right aircraft with prescient timing, and enables our employees to contribute to an innovative product that reduces aircraft downtime and pilot workload." To date, this encompasses company installation of Glass Box cockpit panels on the Falcon 50 and 900, Challenger 600, Astra, Hawker 800 and 800XP, Gulfstream III and King Air 300.

"We’re considering adding a third primary facility, in the West or Southwest U.S., and we’re looking for a community where we can maintain our culture...."

The RESPECT, TCB Destiny

"People in this industry thrive on relationships and trust," says Robert Duncan, and that includes both customers and employees. If taking care of business for its employees boils down to equal portions of decent wages and acknowledged respect, then Duncan Aviation is painting the TCB and RESPECT letters Hollywood-size on its long-term horizon. "Teamwork and people remain our paramount assets," concludes Hilkemann. "Even if we had unlimited access to capital, we would not be able to grow faster than the experience and personal growth of our employees." Larry Arnold reflects, "To respect an employee is rare these days, and I am envied in my job by my friends. There is no ‘us against them’ attitude. I know Robert and Todd Duncan, and they know me by name. Within this family of company owners, employees talk with them at ease. We’re all heading along the same path toward the most positive future of this company."

J. Robert Duncan

What would you say are the top accomplishments for Duncan in the past two years?

First, I’d say finishing the Battle Creek facility. It is completely remodeled and has a new energy. It turned out unbelievably, just beautiful. That was a really big deal. Next I’d say celebrating our 50th anniversary. It was a great celebration. We commemorated the event by giving away a 1956 Chevy Bel Air. A guy in Michigan won it. [Duncan Aviation Founder and Robert’s father, Donald Duncan, was a GM Dealer in Clarinda, Iowa. That’s where the car idea came from, according to a company spokesman].

You’ve made Fortune Magazine’s list of the top 100 best employers several times. To what do you attribute that repeated recognition?

We’ve made that list four times. It actually is the most gratifying thing in my whole career. If your employees love coming to work, that means everything. Years ago we looked at areas that we considered the most important to our business. We looked at our responsiveness, our shareholders, customers, employees, and at first I thought the customer is the most important thing. But then I realized that the employees were the most important thing. I think we got that right. In thinking about our customers, wouldn’t you rather have a happy person working on your aircraft?

Duncan is known for keeping employees a long time. Why do your employees show such loyalty?

There is no one single thing but there is something that we have done in the past 10 years that has been a factor and that is leadership training. I think the leadership training is more important than the technical training. This training teaches employees how to relate to customers but it also helps them in other areas like their family life. For years we used an external trainer but we now have our senior team leaders do the training. One of the outside training programs from about eight years ago was Vannoy Training run by Steven Vannoy. Training happens at every level. We had some resistance to this from some of our employees. One guy was our paint shop manager. He went very reluctantly, complaining all the way. He said, "This is a waste of time." After the third day, there was no greater advocate for the training and that is typical.

What about future growth for Duncan?

We will continue to add people at Battle Creek and Lincoln. Up to 500-600 during the next three years. There are areas we want to grow, like the paint facility, but we are restricted by environmental releases.

How do the Nebraska and Battle Creek facilities complement each other?

When we purchased Kal-Aero we saw it as an extension of what Duncan does. It’s located in a smaller city with a comfortable, reasonable cost of living. It’s closer to the East Coast market than Lincoln. We interchange people between Lincoln and Battle Creek. We interchange ideas, people, and relationships. We spend a lot of money on that effort.

What about growth outside of those two facilities?

We are looking at a third location in the West. We like to do something about that sooner rather than later. We have a long list of criteria. We are looking for the right environment for our employees, a good community. It probably won’t be on the West Coast but somewhere like New Mexico, Utah, or Nevada. We have a lot of customers in the west. It won’t be an acquisition. We will start a new facility. To maintain the Duncan way, we will send 150 employees [from our current facilities] to go and start up the new facility.

Aaron Hilkemann is president of Duncan Aviation. Tell us about Aaron.

Aaron came on board from the banking industry — another business we are involved in. He was the vice president and director of financial operations of a bank we sold and I hired Aaron as COO of Duncan Aviation in 1996. In 1997 he became president and it has worked out well. He has helped reinvigorate the family feeling of the company.

What is your vision for Duncan Aviation during the next 10 years as your involvement level goes down?

It will be so great! This company is not run by a single person. My activity level will go down. I’ll hand over control to Aaron and Todd [son, Todd Duncan]. Aaron will remain as president and Todd will be chairman. Todd will be attending a six-week program at Stanford this summer. For 25 years we have had an outside board of advisors. There are five outside board members who are top industry and non-industry people. Our senior management team are coaches, managers, enablers and everyone on that team understands that it is the men and women on the floor that make this company great.

What do you think will be the hardest thing for Todd as he transitions to chairman?

I’ve been around a long time so it’s a bit scary for him. He’s got to build relationships. He enjoys people and the employees admire and respect him. It’s going to be easier than he thinks it’s going to be.

What will be the biggest challenge going forward for Duncan Aviation?

Our biggest challenge going forward will be to stay creative, innovative. It’s a real challenge. We need a successful, predictable business so we have to invest back into the business. We have invested $100 million in 10 years. We’ve been good at making deliberate choices but also at taking risks and embracing new ideas.

How does Duncan encourage creativity?

You need to have creative people in the organization, but you can’t have all creative types. Cross-teams work. We try to have a team made up from all four different segments of personalities. We use a tool called Emergenetics to better understand ourselves and those we work with so that we can appreciate our differences and use them to our advantage. Emergenetics is facilitated by three of our vice presidents that have been certified to administer the program. Emergenetics measures four thinking preferences, social, structural, analytical and conceptual. It also measures the behavioral attributes of flexibility, assertiveness and expressiveness. A simple example of how it works is that a person with a high preference in analytical might prefer to work with other’s of like kind but the reality is if the outcome is to be universally accepted it is important they align themselves with team members that have a preferences in the other three areas. But it is just a basic tool. We take that tool and apply it to fit our organization and you end up with creative people in your organization. Another way we are promoting creativity is that the senior team is all going to Oshkosh this year. There is more creativity in aviation now than ever before and a lot of it is happening at Oshkosh. I suggested to Aaron to take the team to Oshkosh to feel that energy.

Do you have any regrets?

I worked really hard when I was young. I worked every day of the week. But I don’t have any regrets. My wife Karen is a strong person. She did a great job raising our family. I know Todd spends more time with his family than I did, but times are different now. He has a wonderful family — his wife Connie and twin 13-year-old sons. We don’t expect anyone at the company to sacrifice family. [Duncan also has a daughter, Paige, involved in another family business, banking].

Any last comments?

We love this business. We’re going to continue as a family business. The payback to me and to Todd is our reputation and standing in the business and knowing we’ve done a good job. I’m not going to die or go away but it will be Todd’s and Aaron’s responsibility from here on out. It’s been great fun working in this business. — By Joy Finnegan

Todd Duncan

We caught up with Todd as he was attending the Stanford Executive Program at Stanford University. The purpose of the six-week program, according to the Stanford Web site, is to equip senior executives with the knowledge, relationships, and tools necessary to drive results at the highest levels of global management.

What are you doing at Stanford?

I’m participating in a general business program, a six-week executive immersion program offered by the Stanford Graduate School of Business. The curriculum is intense and consists of a lot of case studies. At Duncan, we have a board of advisors, an outside board, and they recommended this program. I just feel great that I work at a company where the culture and environment I work in supports this type of training opportunity.

In addition to your position as vice chairman of the company, you’ve been president of the component services division since it was formed in 1996. Tell us about your work there.

This is our send-in business where we support our customers and also other businesses with component repair. It’s a core competency and we’ve built around that and grown that part of our business. We have a satellite avionics network as well with a total of 20 avionics repair facilities at some of the busier airports in the country. It has been a great way to reach our customers.

What are your long-term strategic plans for the company?

I think the next five years will look not dissimilar to the past. I think our strategy will be to broaden the depth and breadth of our capabilities within the company. We will refine and support our processes with our IS system (information systems computer program). This is a Web-based mechanism utilizing technology to allow customers more flexibility. Customers will be able to give approvals online, and check the status of the their aircraft online. We will continue to improve our information and communications processes. We have also talked about a 3rd location. There are some customers that we don’t touch or haven’t touched in quite a while due to location. We want to address that with a location out West. We will make an announcement by the end of this year. We have narrowed the location down to two states: New Mexico and Utah.

You’ve been part of the Young President’s Organization. What has that group taught you?

It’s really about executive education. It’s been a great support group. The organization breaks down into smaller group forums and we help each other with business issues, processes and rely upon each other for support.

On a personal level, are you finding it stressful as you are about to take the chairmanship?

No, it’s not stressful. This company is not run by one person, and I have had a tremendous mentor in Aaron [Hilkemann]. He deserves a lot of accolades. But it is not just Aaron. We have great people. A great senior team. I’ve been a part of the senior team for a while now. I’ve grown up in that environment. We are not focused on titles or mired in hierarchy at Duncan. I foresee good times ahead but as with anything there will be bumps in the road. And don’t forget, Dad will continue to be involved in the strategic planning of the company. He loves this industry, too.

Do you ever disagree or have different ideas than Robert?

No. He is the perfect guy to work for and with. He is open to creativity and ideas. He is just a great guy to work for. I have a vested interest in saying that but I’m not the only one that will tell you that. Just ask any of the team.

How have you been preparing to take the chairmanship?

My focus has been to really be around our customers more in Lincoln and I have been traveling more. We have been holding dinners, we call them leadership dinners. We, the senior leadership team and I, get together with heads of flight departments to hear what they have to say and get to know their needs.

How will you continue your company’s legacy to promote creative thinking?

That’s always going to be a real challenge. It’s tough to evolve but our path has been to evolve. We have some programs in place that have been really good at promoting creativity and we will keep doing those, like our leadership training course.

Any concluding remarks?

Our family has a passion for this industry and I have that passion and interest level. We understand what customer service is and I will work in the same framework as before. I can’t tell you that I understand every part of this business perfectly, but I work toward understanding it perfectly. — By Joy Finnegan