Steve Hohn is the second-generation leader of a family business that has grown and thrived for decades, but he was nervous walking into a room filled with outside expertise.
“There’s bankers, wealth management people, tax people, and they were all asking questions,” Hohn said.
“In some ways, it’s a little embarrassing. It pulls the scab off the wound. But you’ve got to be willing to expose yourself in order to heal yourself, and that’s what we did.”
Parkston-based MDS Manufacturing is an agricultural manufacturer that started as a producer of attachments for farming equipment. That division began serving a single dealer with production of agriculture loader attachments and has grown to serve approximately 1,800 dealers.
To meet the demands of the state’s growing swine industry, the business added its livestock equipment division, which builds, manufactures and installs equipment. The swine complexes range from 200- to 7,500-head farms.
The company’s headquarters consists of an almost 100,000-square-foot office and manufacturing facility. MDS also recently purchased an adjacent 10 acres, which includes a 15,000-square-foot building. That will allow the company flexibility to meet future business needs.
Five years ago, Hohn and his brothers Brian and Bradley participated in a live case study through the Prairie Family Business Association.
It helped illuminate areas of focus that were needed in their business.
“We’re a 47-year-old company, and we should have had this guidance years ago,” Hohn said. “The expertise in the room was nerve-wracking in one sense, but the rewards of what you found out outweighed any embarrassment you might have had. They said, ‘We’re here to help, but you have to tell us where you’re at.’ We’re three brothers who love to design and engineer and run a business, but we became sharper-focused and more efficient as businessmen as a result of the Prairie Family Business live case study.”
After that, the family business embarked on a multiyear process of integrating new technology and data into its operation to give a better sense for how MDS was performing and what strategic moves were needed to advance it.
“That’s the goal behind a live case study, and to see how effective it’s been for the Hohn family is so rewarding,” said Stephanie Larscheid, executive director of the Prairie Family Business Association. “Every family business is different, but the experts we bring together in the room know the right questions to ask to help you focus on what you uniquely need to do to optimize the future for your business.”
Evolving for the future
MDS Manufacturing Co. Inc. was formed by Marlin Hohn in 1976, along with sons Darrel and Steve – the three initials behind MDS. Later, brothers Brian and Bradley joined the business, and Darrel left in 1990 to pursue other ventures. Steve has served as president since 1995 when Marlin retired.
Brian serves as vice president and plant manager, while Bradley is secretary/treasurer and department head of the livestock division.
The third generation consists of one son from each of the three brothers in the business. Kelly Hohn, after completing a career in the National Guard, joined MDS in 2017 as an agricultural equipment sales representative covering South Dakota, North Dakota, Montana and Wyoming. He now serves as national sales manager. Kyle Hohn, formerly with NorthWestern Energy as an electrical engineer, joined in April 2022 to become operations manager. Alec Hohn, a recent graduate of the South Dakota School of Mines, joined MDS in May 2022 as a mechanical engineer and livestock equipment salesman.
“I originally went a different path and didn’t think MDS was a possibility because we didn’t have a plan for succession,” Kelly said.
That changed as MDS connected with advisers and the resources of the Prairie Family Business Association.
“The Hohn family took one of the most critical first steps: understanding one another and their organization’s preparedness for the transition,” said Agatha Johnson, founder and president of WillKate, who helped guide the family.
“They worked on cultivating stronger relationships, created alignment around a shared vision, developed strategies for the family and the business, and codified ownership, leadership and governance. They also engaged the next generation in the discussions, as well as their spouses. The inclusivity of the approach has made them stronger today. The approach was to blend a parallel process to ensure the family was family and the business was business.”
The third generation now has bought into ownership and acquired officer titles. Kelly is the president of sales, Kyle is secretary/treasurer and Alec is the vice president of the livestock division. The second generation — Steve as president, Brian as president-manufacturing and Brad as president-livestock division — are still officers to assist in the transition over the next few years to ensure the long-term success of the company.
“One of the areas that showed through for this family was the strength they have as a family that supports each other and their work ethic,” Johnson said. “This does not mean they did not have their differences or challenges; it means they had shared values, which were seen each day and even in difficult times. Every meeting that was set and the topics that were discussed — difficult or not — they showed up and did the hard work.”
The Hohn family regularly connects with Prairie Family Business Association, especially its annual conference.
“The last conference kind of felt like when you’re sitting in church and someone says something and it’s like they’re speaking directly to you,” Hohn said. “That was what the whole annual meeting felt like. It was the right timing to hear what we needed to hear and reaffirm what we’re doing. I try to shake as many hands as I can there because the people who are there are successful but not there to brag. They’re there to ask what they can do to help you.”
Since going through the original live case study, MDS has embraced more formalized meetings, an advisory board and scheduled strategic planning.
“In many ways, it was amazing they were able to do what they did for so long with things running smoothly because we definitely learned the business had become more sophisticated than the tools we were using,” Kelly said.
The next generation also has benefited from the Prairie Family Business Association Next-Gen Retreat, which Kyle and Alec attended last year.
“They thought it was awesome,” Kelly said. “Sometimes in this process, you feel like you’re in a boat by yourself, and this reminded us how many others experience the same things.”
Today, MDS counts nearly 80 employees and has taken an intentional approach to being a preferred employer with a culture shift focused on safety, engaging regularly with the team and showing appreciation.
“There’s a lot of exciting growth here,” Hohn said. “Our third generation has the knowledge and drive to fit into key roles, and they know we have to see beyond the numbers. There’s expectations. It makes you work twice as hard as the person beside you.”
Most importantly, through intentional and ongoing attention to the business, he feels it’s positioned to carry on.
“My father never wanted it to be sold,” Hohn said. “So I would say mission achieved, and I think my father from heaven is smiling down on this.”
If you are interested in a live case study with Prairie Family Business Association, send an email to assistant director Peter Hauck at firstname.lastname@example.org.