Toro Co. CEO Mike Hoffman has proved a shareholder’s delight.
The company’s stock price has tripled since he took the helm of the Bloomington-based maker of products that dig, install, mow, blow and irrigate. And the company is headed for profit and sales records this year.
Yet Hoffman believes Toro’s foremost “stakeholders” are employees.
“It starts with an engaged workforce,” he said in an interview last week as the firm celebrated its 100th anniversary. “That drives [good products and service] and customer satisfaction and, ultimately, shareholder success.”
“That’s always been true here,” Hoffman added. More so than ever as Toro’s employment has hit a record 5,050 around the globe. Along with last week’s celebration, Toro also opened a $25 million addition to its headquarters.
Hoffman, 59, is the rare CEO who started in the business with a blue collar. Toro hired him in 1977 to repair lawn and snow equipment.
“I was a ‘mobile service representative,’ ” Hoffman recalled. “I wore a tie and coat, which would come off and I would roll my sleeves up and get my hands dirty. My nature is still to ‘fix things.’ That can get me in trouble. But I’m more of a product guy than a sophisticated marketer.”
A graduate of what is now the South Central Community College and technical school in Mankato, Hoffman and his younger brother used to joke that they graduated from “MIT,” meaning “Mankato Institute of Technology.”
But Hoffman’s folksy style belies a precise mind, seeded by his mentor and predecessor, retired Toro CEO Ken Melrose, a graduate of the real Massachusetts Institute of Technology.
Melrose, a crack strategist and marketer, took over the company at its lowest point, during a near-brush with bankruptcy in 1981-82, and drove it to success for 24 years.
Hoffman earned undergraduate and graduate degrees in business in night school after joining Toro. He rose through sales, marketing and operating jobs over nearly 30 years.
He faced his own moment of trial during the Great Recession of 2008-09, when Toro was forced to temporarily lay off and seek early retirements from workers.
“Mike Hoffman has always been a straight shooter,” said Bill Frels, a veteran portfolio manager at Mairs and Power funds. “We have owned Toro since the 1980s. It’s been amazing what they have done for stockholders without penny pinching. Hoffman is a little like CEO Pat McHale at Graco in Minneapolis. Work their way up from the factory. These are not mercenary managers from the outside who sell themselves to the highest bidder. They understand their companies and their industry. And Mike is a great manager of people.”
Jeff Appelquist, who wrote an unvarnished history of Toro for its centennial, said Hoffman, when asked about his expected legacy, responded, “I don’t know.” Asked what he would like as his legacy, the self-effacing Hoffman told Appelquist, “He was a good leader. And he was one of us.”
“He treats people right,” Appelquist said. “He is also a tough, exacting boss who expects a lot. He is whip-smart, has an engineer’s eye for detail, knows his industry … and is a very good strategist. He cares deeply about the people he works with and the wider community. He manages and learns by walking around and talking to people. He is also extremely well-read.”
Hoffman doesn’t tout performance numbers and metrics as do some CEOs.
He’s happier to point out that Toro’s “employee engagement” surveys in 2009, amid layoffs, early retirements and pay cuts, reflected an understanding of why management was doing what it was doing. At a time when profits were halved and revenue dropped 20 percent, Hoffman and the executive team took the lead on compensation cuts.