Transcript

Michael Palumbos (00:48.162)

Welcome everybody to the family biz show. am your host, Michael Palumbos and from family wealth and legacy in Rochester, New York. today we've got a wonderful show. We've got Ken Johnson from Leonard's express here and Ken, before I, you know, introduce you and jump in, I just went out to your website and it's like, 

Michael Palumbos (01:09.4)

Food Logistics Magazine recognizes Leonard's Express CEO Ken Johnson as a rock star of supply chain. And at a time when everybody's talking supply chain for you guys to be hit with that honor, that's very cool. But then it went on to recognize one of North America's best fleets. They're your fifth patriotic truck designed to honor veterans and raise money. A Fleet Safety Award. 

Michael Palumbos (01:35.086)

It just goes on a flashiest fleet. think that's, you know, that's a really cool honor. Right. I love how you do two things. One is you immediately tell everybody that you're family owned. And I think in this world where trust is everything, I have, you know, I know that family owned businesses get bumped on the trust level because we are family owned and because we, treat people like family and that comes in. 

Michael Palumbos (02:04.29)

And then you use all the press releases in your things. You've got some great marketing people that are really standing behind you that have done a great job. So welcome Ken Johnson. 

Ken Johnson (02:13.45)

Thank you. I appreciate the opportunity to talk with you today. I also appreciate all the nice things you said. So we do have a wonderful marketing department that do a great job for us. 

Michael Palumbos (02:17.302)

That's all great. 

Michael Palumbos (02:25.56)

Yeah, it stands out and shows there's a, there's a few and far between when they, when you see them, you're like, yeah, they've got somebody special behind them doing this stuff. we have a tradition where we just ask people, how did you get involved in the family business? You know, what was, were you one of those ones that, you know, right out of high school or in high school, this is all you've ever done. 

Michael Palumbos (02:49.9)

Or did you take another route and it was kind of twisted and turning and then said, you know, here I am. So love to hear your story. 

Ken Johnson (02:56.302)

Sure. My dad started KJ Transportation in 1972 when I was about eight years old. That was his first company. He sold that in 98. I started going to work with him as a kid. I'd empty the trash cans for quarters. His first offices were at a local truck stop that's no longer in existence in Rochester. He'd give me quarters to go play the video games. 

Ken Johnson (03:19.502)

You know, so I moved on to working in the shop. I used mounting, dismounting tires as a way to get in shape for football in the fall. You know, I do that over the summer. You know, so yeah, I, you know, to me, it was never a question. I went to college for transportation, which was probably not my best choice because I had a pretty good education at the dinner table growing up. And I probably thought I knew more than some of the professors did. And, you know, so I probably should have taken something a little more challenging than that, but. 

Ken Johnson (03:48.29)

Yeah, and I wanted right to work out of college at KJ and work there until he sold it. And then we started Leonard's a few years later. 

Michael Palumbos (03:56.434)

And we hit on this earlier before we started the show, but you're actually, this is fourth generation in this industry. And you might share talking about that a little bit. 

Ken Johnson (04:06.19)

Yeah, my great grandfather started a company Langdon truck lines in Lyndonville, New York population about 500, think, give or take. It's a very small community in Orleans County. You know, he started, you know, with just one, one truck and through that, I have a picture in my office with him sitting on the hood, you know, a fleet of, think, trucks. All the drivers wore bow ties and, know, eventually my grandmother, his daughter and my grandfather took that over and 

Ken Johnson (04:34.126)

You know, they sold their company in 1968 and my dad was working for them when they sold and I was born in Suffern, New York. My dad was running their office down in Brooklyn. You know, so, uh, you he worked for them and then, you after they sold, changed jobs and I want to work for a company that's no longer in business in Bloomfield, New York before he then moved on to start his company in 1972. Yeah. So, um, know, trucking, uh, you know, some people might say we have diesel. 

Ken Johnson (05:02.8)

fuel in our veins. 

Michael Palumbos (05:05.186)

Fair enough. You know, it's interesting. Your family has taken an almost exact and opposite path than many family businesses. It's one that I think is brilliant. It's brilliant that, you know, the, great grandfather sold the business, you know, then they sold it again and sold it again. And then, you know, each generation pretty much started their own businesses. 

Michael Palumbos (05:34.734)

And where did those decisions come from? How did that happen? And what were some of the benefits and challenges of that? 

Ken Johnson (05:45.198)

Yeah, you know, I think I can't really speak to why my grandparents sold the first company they had. But I know my dad, you know, one of the reasons he was looking to us was there's four of us. I have two brothers and a sister. were all active in the business as well as some of our spouses. So I think he thought that was a way maybe to deal with the succession plan. I think 

Ken Johnson (06:14.988)

When we sold it, we sold it back during the dot com stock market boom. And it was a publicly traded company that seemed like maybe they were better funded than they were. so just really, they started doing things in a way that was counter to our values. so we waited out or not compete. We also had another business that's still one of our companies, Johnson Equipment. We were doing truck repair and selling parts. I worked there. 

Ken Johnson (06:43.854)

for the three years that we had to wait out our nine competes. And then we started seeing opportunities with customers that our former company wasn't serving. And that's when we decided to get together and to start Leonard's Express. And I didn't actually come to Leonard's right away. I stayed at Johnson Equipment for a number of years. My sister and brother-in-law, mother and youngest brother, they started right out in the beginning. 

Ken Johnson (07:11.21)

My middle brother, he actually stayed with the company we sold to for a few more years and then came over. 

Michael Palumbos (07:18.176)

Interesting. It's, I think, sorry, I just got tongue tied there, but from a succession planning standpoint, it really, it makes an awful lot of sense when somebody is passionate about it, of the business and willing to invest their own money, own, not just their time and their talent, but really, you know, the buck stops here. And then the other thing that it does is, so one, there's a lot of drive. 

Michael Palumbos (07:47.48)

from the next generation, the rising generation, whatever you want to call it. But then from the other side of that, I want people to make sure that they catch this is you're cashing out along the way. So, know, if that industry took a turn, you know, you've already cashed out several times through the generations. And it's one of the concerns that, you know, when I'm talking to multi-generation business owners, 

Ken Johnson (07:59.384)

So. 

Michael Palumbos (08:16.066)

They talk about it all the time where they say, you know, we wanna keep the business in the family. We wanna, we're gonna gift it over there and do all of that work. And then the concern is, what happens if something goes wrong in the economy or the industry and we could be worth nothing? And that cashing out moment every generation is brilliant. Really great idea. 

Ken Johnson (08:37.004)

I'm not sure it was really planned that way, I think it's worked out in our case. We're starting to deal with it ourselves now. There's another generation behind us. Right now, my two brothers and I are all in the company and we all have family and the next generation coming along, which is great. We enjoy. 

Ken Johnson (09:02.092)

seeing them grow and more importantly grow an interest in our industry. We also have, I don't, both my son and daughter work for Lennards, but my two brothers both have daughters and sons that don't work in the business. But seeing that next generation grow an interest and maybe some of the ones that aren't will eventually come over simply because they're young and still finding their way. But yeah, it's. 

Ken Johnson (09:28.866)

but it also creates some of what you're talking about. We're gonna have to start thinking about how are we going to transition over time? I'd like to think we still have a little bit of time there, but time goes fast, especially as we're growing. And we've managed to grow, Leonard's and our other companies to a fairly good size. it takes planning to make these transitions. there's a lot of different ways to go. And some of them are better than others. 

Ken Johnson (09:57.87)

You know, so you want to make sure you make the best choice for your family and not just your family. mean, we like to look at everyone that works for Leonard's and our other companies as part of our family. You know, and I think that's part of what's made us successful. 

Michael Palumbos (10:11.086)

Agreed. Through the years, mean, you started in 1972 was when your parents started. What were some of the obstacles that the families run into running the business through the years? What were some of the, I mean, the seventies, I can just think about the gas crisis and things that were going on in the trucking industry. You mind talking about how did you guys overcome the obstacles? 

Ken Johnson (10:35.118)

Yeah, you know, my dad started one truck, you know, he drove it himself. And back in the seventies, the industry was still regulated. So you had to have shipper support to get your authority. And, know, and there was tariffs and, you know, was it in the, I believe it was early eighties that the industry was deregulated. So all of a sudden the barrier for entry dropped dramatically. And, you know, and dad had built a nice little company by that point, but 

Ken Johnson (11:03.846)

you know, in the more competition, you know, supply and demand, you know, so, you know, you know, started getting a lot tougher, you know, to make, you know, the profits, you had to work harder, you had to watch your costs more, you know, and not that they wasted money, you know, prior to that, but, know, it's just, you know, just ramp that up to another level and, know, and it's, been that way ever since, you know, it's, you know, it's a very competitive, business and over the years, you know, we've done several acquisitions. 

Ken Johnson (11:31.622)

Sometimes the timing haven't been great, or we bought a fleet that maybe didn't. I can remember one specifically, we bought a fleet out of Pennsylvania, probably had the greatest group of employees that we've ever, I don't want to say ever, because we've done some really good ones since then. But as far as the drivers go, almost every one of those drivers retired from my dad's company. 

Ken Johnson (11:56.206)

You know, we're, you know, in a lot of cases, you know, they, they leave, but they had a group of trucks that almost broke us mechanically. know, they were just unreliable and just, you know, very high costs and maintain. And, know, and it's probably the only time, you know, over the years that we ever made any sizable layoffs because, know, those trucks, you know, we just had to get rid of them and sell them and, you know, and move on. But, you know, so we've had, you know, challenges, you know, industry's up and down. You know, it's a 

Ken Johnson (12:25.518)

You know, right now, you know, the last three years were very good. You know, the pandemic created a lot of opportunities for our industry. People were spending their money differently. You know, the inflation hadn't really heated up as much, you know, and that changed overnight here, you know, several months ago, it seems, you know, so, you know, and we've dealt with those cycles, you know, throughout the years. Yeah, I think the biggest difference now, it just seems to happen. You know, the good times don't last quite as long in order to the bad times. 

Ken Johnson (12:53.94)

And I think because of knowledge and which comes through technology, it changes that quick. 

Michael Palumbos (13:00.984)

Gotcha. Thinking about, you know, family, let's talk about scaling. Let's jump over there. When you started Leonard's, how many trucks did you guys have then? How many employees? And then compare that to today and talk about how you and your family think about the strategies that you're going to employ if you don't mind sharing that. 

Ken Johnson (13:27.586)

Yeah, Leonard's actually started out as a truck brokerage, know, and mainly because, we wouldn't, we were looking at ways to, you know, take care of some of the customers that we thought were being underserved by the name of the company that bought ours was priority. You know, we felt they were being underserved and, but we didn't want to compete with them, you know, for drivers and, you know, that type of thing. know, we still had friends and family there. So. 

Ken Johnson (13:55.886)

You know, so we took that approach about 2007 priority closed down. And that's when we started adding trucks. You know, by then our brokerage was pretty good size. You know, we were, you know, moving, you know, several hundred loads a week. And when we started adding trucks, when those drivers that had formerly worked for my dad's company and had come to a priority over the years, we're looking for a job and you know, the trucks were available. So we bought them, started adding them. 

Ken Johnson (14:26.062)

Over the next 2011 was our first acquisition up in Eau Claire, Wisconsin. We've done seven since. That's been a very big part of our growth strategy. We usually only do acquisitions on the asset side, which is our own trucks with our names on them. And we've tried to grow the brokerage in parallel with that over the years. as a revenue stream, we have both customers and loads that we serve with 

Ken Johnson (14:55.118)

carriers using their assets and those that we served using ours, know, based out of, other than farming, every one of our terminals comes through an acquisition. And we have five that have truck space added and another seven that are sales offices, which are primarily brokerage. And I was just gonna say, you know, over last four or five years, we've started adding warehousing services and. 

Michael Palumbos (15:14.424)

nice. 

Ken Johnson (15:23.544)

just opened a brand new refrigerator warehouse in January. 

Michael Palumbos (15:28.11)

that was something, you know, going through your website, talking about the difference between refrigerated and just delivery and trucking, it's a different industry, isn't it? 

Ken Johnson (15:40.128)

Yeah, know, and my dad retired about 10 years or so ago. really that was when my two brothers and I and my sister at the time was with us, we really decided to focus on the refrigerated side of the business. still do a fair amount of dry van work, we felt that it was part of the industry that maybe had a little less competition, especially if you devoted resources to technology and kept your equipment upgraded. 

Ken Johnson (16:09.506)

to the newest, that we could compete a little better and it wasn't quite as commoditized as some of the other types of freight hauling in our industry. And that led us to, we do a lot of dry warehousing, but we also seen a lot of demand in the refrigerated side, which led us to decide to invest in building that facility. And it's little more demanding. It takes a little higher level of expertise, not just from. 

Ken Johnson (16:36.418)

you know, technology perspective, but from a driver perspective, a lot of what we haul is, you know, fresh. So, you know, you got a load of berries, you know, that has a very limited shelf life, you know, so, you know, you have to have a driver that's reliable. You have to have equipment that's reliable and, know, you have to use the technology to make sure everything's working together. 

Michael Palumbos (16:56.268)

You probably have tons of operating systems and processes built in to be able to make that work. And just looking at the video, you guys use technology at a level that a lot of people probably don't in that industry. 

Ken Johnson (17:12.321)

Yeah, you we'd like to think we do. then we look around and see a lot of the technology we have in-house that we don't feel that we're fully utilizing, you know, that we could always do it better. know, so, you know, sometimes we're our own worst critic, but yeah, you know, technology's coming along ways. When I first got in the industry back in the early eighties, you know, was the driver would make a check call every morning, you know, report, you know, what the temperature was on his trailer, what, you know, the tomatoes or the fruit, you know, looked like some of the different fruits. 

Ken Johnson (17:41.42)

continue to ripen as they're being transported. maybe we'd make an adjustment. was a knob. If you were within a degree or two, you were fine. Whereas now, the trailers have computers on them where we have set points that are, in some cases, specific to our customers. We haul a lot of berries. And we have a berry profile that our customer has developed in collaboration with the refrigerated. 

Ken Johnson (18:08.632)

trailer manufacturers and the carriers that they use. So it has an exact temperature they want, exact range, as well as the humidity level they want in the trailer. So times have really changed with that. 

Michael Palumbos (18:22.84)

Wow, it's pretty incredible that you guys have kept up with that. There's a lot of family members in the business today. Talk about how many family members are in the business. 

Ken Johnson (18:34.158)

Let's see, it's gotta be somewhere around 12, I think. 

Michael Palumbos (18:41.838)

Have you set up like policies to say when somebody can come in? How do you, you know, how did you make those decisions? How do you decide where they fit? How do you pay? You know, how does that work in your family? 

Ken Johnson (18:54.69)

Yeah, you know, it's funny because my brother's son-in-law who works for us graduated from St. John Fisher and you he was very active in their family business program there. 

Michael Palumbos (19:08.514)

Carol Wittmeyer did a great job over there, still doing a great job. 

Ken Johnson (19:11.758)

there. 

Ken Johnson (19:12.418)

Yeah, and I've been fortunate he's taken me over to some of the presentations they've had with different family companies that they bring in for those programs. you know, and he's actually brought some ideas to us, you know, that, you know, as my dad, my dad was a big believer that if a family member wanted to come to work for him, he would hire him, you know, and find find a place for him. And, you know, sometimes, you know, that didn't work out. 

Ken Johnson (19:38.004)

most times it did. you know, and my dad was very good motivator, but he was also a very good judge of people, you know, recognizing their strengths and where they would fit in. In 1988, he had an opening for director of maintenance at KJ. I was in the business six, seven years and I had actually been working in different part. He told me he wanted me to do that. I worked in the shop growing up, but I really had no idea how to run it. 

Ken Johnson (20:08.014)

He gave me a couple of names of people in the industry to reach out to and, you know, get involved in some associations and, know, and, know, so that was the way my dad, you know, just, you know, sort of develop people and recognize their skills and, know, and it gave me a, know, great background in the industry. And, know, I did that till, you know, 2001, when I went over to Johnson equipment, which was still a maintenance deal, but, you know, but I wasn't running the fleet any longer. You know, so, you know, so 

Ken Johnson (20:38.03)

We've kind of carried that over. So we really don't have a structure if you have to meet this level. It's more a what are you interested in? And do you understand that this is our family's company and you're part of our family. with that comes responsibility. And it may not be a responsibility level that everybody is comfortable with. you have to want to work in our industry to make it work. 

Ken Johnson (21:08.148)

What has happened over the years with some of our family members in the next generations is, you know, they see it growing up from a distance and don't think, you know, it's all that interesting, you know, and it's, you know, the trucks are boring and there's no glamour to it, but they, you know, maybe come to work, you know, in a summer job, you know, when they're in high school or in my daughter's case, she worked for us part-time while she was going to school locally. 

Ken Johnson (21:33.058)

You know, and she actually changed her major once she started seeing what we do and actually got close to some of the people she was working with. You know, so, you know, that's it's worked for us. You know, we haven't felt the need to put a formal structure in place. We do we do meet with them as a separate group. We have a management group within Leonard's, you know, that other than my two brothers and myself, Kevin and Kyle and I, you know, we have their outside managers outside the family. 

Ken Johnson (22:01.166)

But we also meet with the family members quarterly just to discuss what's going on, you bring them up to speed on some of the things we've got working, you know, some of the plans we're making and to listen to their ideas, you know, you know, what area of the company are you working in? Are you comfortable there? You know, what path would you like to see yourself go down over the next five or six years? And, you know, really not necessarily make them uncomfortable on purpose. 

Ken Johnson (22:29.326)

but make them really stop and think about what their next steps might be if they're not given the opportunity. So we're not trying to spit a square peg in a round hole. We're trying to use their skills and interests so that they can contribute in their own way, but still be a part of the family business. 

Michael Palumbos (22:49.186)

Yeah. What happens, what you're describing by default is written in a book called Every Family's Business. Tom Deans talks about, know, his family did a few things. One, they always sold the business every generation. And then there were some other things like meeting with the family on at least a quarterly basis. He said, at least annually, you guys are doing it quarterly. 

Michael Palumbos (23:17.516)

And you're just having those conversations. What do you see as the SWOT analysis for the company? What do we see? Where do you see the vision versus where do we see the vision? And you're just having some great dialogue. So hats off and congratulations. It's a really testament to how you were able to scale, how you were able to bring family members in. My gut says that if somebody has the responsibility for 

Michael Palumbos (23:45.278)

maintenance, they're getting paid the same as everybody in that division. And if somebody is working in marketing, they're getting paid based just like everybody in marketing is that 

Ken Johnson (23:55.534)

Yeah, it's close. Yeah, I mean, you know, certainly, you know, we take care of family, you know, we try to take care of everybody. You know, it's my mother always believed in equity, you know, so, you know, so, you know, she kind of put that sense of treating all her grandchildren equally, just like she treated her children equally, which probably was one of the reasons they were a little bit challenged deal with the 

Ken Johnson (24:22.402)

transitioning to the next generation, which is why I believe that they sold their first company. with this company, they decided to bring in some outside help. And that led to where we are today. that I think we may or may not look at a little different path than they did. But I think it can transition without necessarily selling. yeah, there has to be a plan. 

Ken Johnson (24:49.87)

And then that may eventually be the option, but at this point we've got a much larger group than maybe a few years ago to bring into the conversation. 

Michael Palumbos (25:01.216)

Understandable. 

Michael Palumbos (25:05.56)

Take a break from business for a second. We'll just talk about the Johnson family. What are some of your favorite traditions outside of business with the family? 

Ken Johnson (25:15.758)

Oh, you know, one of my favorite things, you know, growing up is, you know, the large family gathering at Thanksgiving, you know, Thanksgiving for whatever reason has always been my favorite holiday. I think mainly because, you know, as the largest group of family that, you know, we got together every year, know, it's like Christmas seemed to always be a little a little tougher to get everybody in the same place at the same time. But we would all would all gather, you know, we. 

Ken Johnson (25:44.952)

We spent a lot of time, you know, you know, with, you know, being a family business, you know, with our family vacations, over the summer, just growing up where generally my dad had an office in Owensboro, Kentucky. it's probably not on most people's, top 10 lists of places to go on vacation, but his way of letting it was a smaller office with maybe three or four people in it. And, he would go down and work in that office. that's those people could have, 

Ken Johnson (26:11.566)

someone to take care of their job while they were on vacation. And, you know, we'd spend the summer, there was a camp not far from there, you know, with the lake, with swimming and, know, so, you know, that was fun, you know, doing that. We've always, I've always been a big race fan. My dad was as well. We'd go to the Eton 500 a lot of years. I think I was the only one of my family members that that stuck with. My wife and I still go to the Eton 500 every year. You know, so yeah, you know, it's 

Ken Johnson (26:40.18)

different things like that. Growing up, my dad sponsored some race cars, know, the local racetracks, you so I would go hang out with them and, know, and that was, you know, that was my golf game, I guess. I play a little golf, but, you know, not near as much as my two brothers do, so I'm more into the cars. 

Michael Palumbos (26:56.942)

There you go. And we're blessed we've got Watkins so close. Some really neat, know, it's different racing, but just definitely neat stuff happening there. 

Ken Johnson (27:06.21)

Yeah, sure. Yeah, I've been there plenty of times. 

Michael Palumbos (27:09.358)

What are some of the tough parts about being part of a family business? 

Ken Johnson (27:15.566)

Well, you know, growing up and even now when you're with family, you generally are talking about business. You know, it was very difficult to separate the two. You know, I used to joke once in a while that Christmas dinner was our annual board meeting. You know, it's just hard to get away, especially at times, you know, I've had cousins, you know, especially when my dad was still running the company, I had cousins working there, aunts and 

Ken Johnson (27:43.814)

So even the larger family gatherings still revolved around business. So having conversations, it was nice after dad retired, which he said he retired, he never really did. And he was still a trusted advisor to not only me, but my two brothers, as well as we have a lot of long-term employees that still would talk to him on a regular basis. But it did allow an opportunity to talk about things other than trucks. 

Ken Johnson (28:13.07)

you know, you know, and I enjoyed, enjoyed those conversations and miss them. So, but that, I think that's probably one of the tougher things growing up in a family business, especially one like trucking, you know, because, you know, my dad used to joke his slogan was we doze but never close. And it's true, you know, it's a 24 seven business, you know, we, have people working every day of the year, every hour of every day, you know, so, you know, it's, it's not like, you know, 

Ken Johnson (28:41.486)

You can shut it down for a week and go on vacation and just forget about things. so. You know, that's that was one of the probably the challenges, but on the other hand, you know, I think it's given our family a very stable life that we didn't miss much growing up. You know, we did the Disney trips. We did the, you know, things like that. You know, so, you know, we certainly, you know, but a lot of times we're waiting to go on rides and dad was over on a pay phone checking in to make sure everything was good at the office because. 

Ken Johnson (29:08.238)

didn't have cell phones back then. right. 

Michael Palumbos (29:11.928)

That's funny. We talked about transition, you're working on those things right now. You guys have historically done things differently. looks like there's a possibility that it'd be different again going forward. that's, I think that's really powerful as well is the fact that you're not just, this is the way we've always done it. So this is what we have to do. You're open to having some discussions, say, okay. 

Michael Palumbos (29:39.788)

what do we need to do for this generation? I think that's smart. 

Ken Johnson (29:44.046)

Yeah, you know, I think, you know, we're in fortunate position that I'm the oldest, you know, and there's eight years between me and my youngest brother and Kyle and Kevin's in the middle. You so we're not in any rush. But we also know that, you know, over the next several years, you know, we need to start having that in the back of our mind. You know, just, you know, looking at opportunities, you know, 

Ken Johnson (30:11.244)

you know, is this the right thing to do long-term? You know, we're still actively looking for growth opportunities. You know, it's a little tougher, you know, when interest rates are doubling and tripling when you're in a trucking business. As some of our financial advisors like to say, you're in a very capital intensive business. but yeah, we're still in a growth mode. We're still running the business, but you always have that in the back of our mind a little bit that 

Ken Johnson (30:40.654)

you know, we need to manage with a sense that, you know, at some point there's going to be a transition that needs to take place. And what does that look like? You know, and giving yourself that runway, that long lead time gives you a lot of opportunity to look at all the various options because there's a lot of them, you know, there's a lot, you know, you can, you can continue to grow. can, you know, stay until you're, you know, 80 years old and 

Ken Johnson (31:08.414)

You know, and just keep running it every day or you can look for an exit strategy in those exit strategies. You know, there's dozens of them really. 

Michael Palumbos (31:15.982)

Agreed, agreed. Yeah, we're working with one right now. They have always been, tell me if this phrase rings true. The founder was the benevolent dictator. Everything was on his shoulders. The buck stopped with him. And in order to transition, they're looking and hoping to go to an ESOP. Because it's 170 employees. 

Michael Palumbos (31:43.606)

and nobody in the family wants to continue it. But when you're the benevolent dictator and you're making all the decisions, you haven't really grown that leadership team to be able to do that. It sounds like you have a management leadership teams that are some family, some non-family, then you have the family board kind of working on a quarterly basis. And that work, you probably, you know, through the years when you started, 

Michael Palumbos (32:13.73)

company, it was the three of you making all the decisions every single day. You've transitioned out of that. sounds like otherwise you wouldn't be able to be sitting here doing this podcast right now. 

Ken Johnson (32:24.204)

Right. Yeah. And, you know, we've always been fortunate. I think this is something that, you know, my dad and mom started, you know, with like giving, making sure that we always had a very positive reputation, you know, built a place that people want to go to work, you know, and then once they get there, they're happy, you know, that they're there. You know, it makes it easier to hire good people, you know, that, you know, because if 

Ken Johnson (32:51.66)

Trucking, you we talked a little bit about the technology earlier, but it's still a very people intensive business. the, you know, so, you know, we're up to right around a thousand employees between our four companies. know, so it takes, you know, it takes a very strong team. The, on the other hand is I look back at my dad, you know, and sitting in this role and he didn't have two brothers. It was him and my mother. And, you know, 

Ken Johnson (33:21.006)

we can bounce ideas off each other. We have titles, but we treat each other as equals in the decision-making process. I think Dad had the weight of the entire company on him where it's a bigger company, maybe a little heavier load, but it's shared. So I think that's a very powerful benefit. 

Michael Palumbos (33:47.106)

Yeah. And then the work to go from, you know, just being one person or even just three, the three of you couldn't do all the work without having a great team and trusting them to be able to do it. can't scale without the right culture and the right people. Important that you pick that up, you know, a long time ago. We share this with everybody that we talk to. 

Ken Johnson (34:08.472)

Absolutely. 

Michael Palumbos (34:16.661)

Is that you're not in whatever industry you think you're in. That's not the business that you're in. You're in the business of people, customers or employees or family, or it might even be for like, for, for a family business, you've got people that aren't in the business. They've got their opinions on how they think you should be doing things. Right. 

Ken Johnson (34:24.33)

Exactly. 

Ken Johnson (34:38.41)

I'm sure. Yeah. And then I'm sure that not every decision we make that everyone agrees with, you know, like I said, over the years, we've done several acquisitions and the last one was a little bit bigger than anything we'd ever done before. And, you know, and I'm sure there were people that, you know, they created a little extra work for them that maybe they questioned the wisdom of it turned out to be a great, great addition for us. We've had a whole bunch of wonderful people that was out and 

Ken Johnson (35:05.134)

Caldwell, Idaho, which is outside of Boise. The only challenge there was, you know, we did that in the middle of a pandemic after a lot of the airlines had cut the number of flights per day. So it was a lot easier to get there prior to imposing in the pandemic. think it takes three flights from Rochester to get there most of the time. So, but yeah, it's, yeah. So I, sure that not every decision we've made, not every opportunity we've taken advantage of, know, that the entire company agreed with. 

Ken Johnson (35:34.958)

Um, but I think that, uh, um, I think that, you know, in my leadership style, if we make a mistake, we admit the mistake and move, um, you'll make the change and move on. Um, you know, and if, uh, you know, we find something that works, you know, we find a way to build on it. And, that's, you know, seems to have, uh, you know, worked in, you know, my two brothers and I, you know, share that philosophy and, we're not, we're not afraid to admit when we're wrong. Um, you know, it's just, if you're not making mistakes, you're not trying and, you know, and that's, you know, we're. 

Ken Johnson (36:04.556)

Certainly you're not afraid to take a risk every now and then. 

Michael Palumbos (36:07.726)

Michael Palumbos (36:08.046)

And here we go again, by default, you nail some of the best business books out there. So Patrick Lencioni wrote the book, The Five Dysfunctions of a Team. A lot of businesses have utilized that and talk about it. And the foundation of that is trust. And the way that you build trust is being able to talk about your faults, to talk about your mistakes, being vulnerable with your 

Michael Palumbos (36:34.284)

with your employees so that models for them to be able to come to you to say, Hey, I screwed up. I, and here's my thinking for some solutions. What do you think? It just changes the dynamic inside of the company. 

Ken Johnson (36:49.134)

Yeah, I agree. I think one of the things that we did several years ago, and I happen to be the same gentleman that advised my family on my dad moving from the CEO role to our chairman and partial retirement. And I moved in the CEO role and so on. And I brought him in because we were growing fast. people were looking to. 

Ken Johnson (37:17.718)

Myself, my two brothers, my sister was still with us time some of the other leaders, you know, and you know, to make answer or make decisions and give answers. And, you know, as we were getting bigger, that just was a bottleneck. And, you know, so we started a program called LA Leadership Academy, Dr. Jim Kestenbaum, you know, local. 

Michael Palumbos (37:37.858)

Sure, 

Michael Palumbos (37:38.807)

Jim has been on the show. 

Ken Johnson (37:40.214)

Okay, great. So you know what I'm talking about. Absolutely. We're on currently there's a group in LA 11. And there's been other groups that we've done. he's probably done 17, 18 different programs for us, the leadership Academy being the most frequent, you know, in the teach leadership skills, you know, even if to use one of his terms that you're still an individual contributor. 

Ken Johnson (38:04.14)

but give you the skills to make a decision and give a customer an answer or give a coworker an answer that you don't have to wait for somebody higher up to make a decision, empower people to make decisions and get things done quicker. And he's been great on helping us develop that. I really think that's been part of our growth successes doing that. Cause we bought companies over the years where 

Ken Johnson (38:33.486)

you know, one or two owners, you know, and their quality of life was terrible because they didn't let anybody else make decisions. And in most cases they had great people, you know, and, uh, but, know, they felt the buck stopped with them. And because of that, they had to make all the decisions and, know, and, um, and it probably costs them some on the quality of life scale, you know, it's, uh, you know, they weren't able to do some of the things that they wanted to, and they had no exit strategy other than to sell. you know, fortunately we've 

Ken Johnson (39:03.628)

found over the years a few very good ones. And I think we were able to give the former owners a little bit of their life back. 

Michael Palumbos (39:14.798)

That's great. So two things come out of that conversation for me. One, I want to talk about, you're smart enough to bring in outside consultants through the years. My gut says it's probably wasn't just Jim, Dr. Jim. And, and that I think is one of those blind spots for people is they think they have to do it all that rugged individualists, know, American, I I've got this covered and it's just. 

Michael Palumbos (39:44.399)

smart to say, I don't know what I don't know. 

Ken Johnson (39:47.566)

Right. Well, you know, and that's especially true in the trucking industry. know, as you know, most not all, know, predominant predominantly most trucking company owners started as a driver that maybe bought their own truck and then started to build off that. There's a few that maybe worked in the industry in other capacities. you know, you know, up until maybe the last seven, eight, nine years, it was a very male dominated 

Ken Johnson (40:17.494)

industry and in some areas of it, still is. you know, so you're dealing with a, somebody that built a company and very, you know, trucking is, very competitive, you know, and it's, you know, it's a very, it's a business of pennies, you know, we measure things in pennies per mile. And, you know, so you get very protective, you know, make the decisions, you know, when you're starting from nothing and building it up and, you know, some 

Ken Johnson (40:46.528)

Some have done very well at recognizing their limitations and bringing in additional help and using it. Others, you're still limited by their own capacities because they're afraid to give that up. they look the only way to giving it up is to sell and let somebody else hopefully continue to build their company for them. 

Michael Palumbos (41:06.51)

which goes to the other piece that I wanted to talk about is acquisition. So that's been the growth strategy that you have used through the years is acquisition. Walk me through and just share with our audience when you are acquiring a company, what are the important pieces? do you merge? one, how do you know that it's going to be a good fit? 

Michael Palumbos (41:31.414)

And two, how do you ensure that it's a good fit? What are the steps that you're taking to make sure that your culture and their culture, you know, are, are meshed. 

Ken Johnson (41:40.654)

You know, it's funny, one of the first things we do when we get an opportunity across our desk, and I get a lot of them that, you know, just, you know, for whatever reason, you know, it's neither the timing isn't good or we got something else going on, but, you know, I get, you know, several a week and if I see one that I think might be a good opportunity, you know, I'll reach out to the broker that's representing that company and they'll send over. 

Ken Johnson (42:08.75)

you know, some information, you know, numbers, you know, it's at that point, it's usually fairly high level. It's a lot of confidentiality, you know, in this process. within the first couple of steps, I want to have a sit down lately, virtually, you know, with the owner. I want to have a conversation and just talk like you and I are talking here today, you know, and just, you know, general, you know, 

Ken Johnson (42:35.702)

I generally, you know, and my two brothers generally participate in that as well. And when we try to get a sense of their business philosophy, you know, and how they run their company, that'll generally give us a pretty good idea, you know, how the culture of that company is. it was, we always integrate our acquisition into, into, into Leonard's. You know, I mentioned the last one was a little bit larger than the typical one. We actually, 

Ken Johnson (43:03.854)

I had nothing to do with this. was my middle brother, Kevin, in a group that he took out to Idaho. They changed the name on 165 trucks. And I think in about five days, which is a very, it's a lot of work. So it's important that we have a strong compatibility from a culture perspective. And our culture is, 

Ken Johnson (43:32.808)

you know, it's each location kind of has their own subculture, know, just because of where they are in the country, but, know, it's, you know, it's a general culture of doing things the right way, you know, doing what's right, even if it's not easy. And, know, when we're looking for people that, you know, have the same mindset, you know, you know, we have a little over 700 trucks on the road, you know, so, that's a lot of opportunity for things to go wrong. If we're not thinking about safety. 

Ken Johnson (44:01.55)

first, you know, it's we're going to do it safely regardless of, you know, if we're late because of weather, you know, and we stopped to get out of the weather or if, you know, if traffic's backed up and, you know, we're not going to take a back road just to get around traffic. If the interstate's the safest way, we want to operate as a safe company and, you know, and it's a priority. 

Ken Johnson (44:27.02)

When we look at acquisitions, besides meeting with the owner and the culture, trying to get a gauge on the culture, we also look at some of the publicly available safety information on them just to make sure that they have that same value. 

Michael Palumbos (44:41.634)

That's great. When you look at, you you and your brothers get together right now, what would you say over the next 12 to 18 months is your top priority today? 

Ken Johnson (44:54.894)

Ken Johnson (44:55.174)

They'll probably, you know, in the last several months, trucking has gotten a little bit more challenging. You know, mentioned, you know, it's, again, a lot of the local press comes to me when the fuel prices go up and how are you dealing with it? Because they know we use a lot of fuel and we do. But I worry more when the price of fuel goes up because our contracts are all tied to fuel, you know, so that 

Ken Johnson (45:20.972)

You know, what we charge our customer goes up as the price goes up and then subsequently goes down and they're going to pass that on to their customers. know, you know, inflation has an impact on, you know, our economy and trucking especially, know, most everything, you know, that you use or consume at one point or another is on a truck, you know, maybe several times. And, know, as our costs go up and we pass them on and other costs go up, you know, from other 

Ken Johnson (45:50.99)

directions, people are people's dollars don't go quite as far. You know, and you throw in that we're a capital intensive business, you know, with high interest rates, you know, that's, you know, both, both are creating challenges. And, know, we think we've put ourselves into a very strong position. But I think that's probably going to be the focus is just make sure that you know, our costs are in line. And, you know, that everybody's on the same page, you know, that, you know, we're still going to do things the right way. 

Ken Johnson (46:20.448)

And we're still going to maintain our values. And it may be a little more challenging than it was last year, but probably next year will be a little bit better. And we work hard to put ourselves into that position. We always look at acquisitions. Sometimes it's not the right one, but you can't time your opportunities. they come at you when they come at you, and we'll just have to decide whether it's the right time to take a look or. 

Ken Johnson (46:46.03)

if we want to wait a little bit. There'll be other opportunities if we decide to pass. 

Michael Palumbos (46:51.022)

What else? This has been fabulous. You shared an awful lot and just like your vision on how you do things. I'm telling you, you I don't know how many business books you've read through the years, but you're just, you're pulling them right out. You know, the people side of things is Jim Collins all day, get the right people on the bus, get the wrong people off, get them doing the right things, you know, and measure it. 

Michael Palumbos (47:20.278)

And so you've got KPIs for everything. When you're down to pennies on the dot, you on the mile, you're really tracking the KPIs at a really good level. That's nice. 

Ken Johnson (47:29.582)

Well, you know, besides having a very influential industry leader and my father, you know, I haven't read a lot of the books. You know, I've read some of the books that you're referring to, but you know, one of my favorite things to do is read books about successful business owners, you know, and over the years I've actually the last book I read in paper was Steve Jobs. Yeah, was. And after reading that, I went out and bought an iPad. Everyone's since been on. 

Ken Johnson (47:59.15)

electronically. So I guess it worked. But yeah, it's, you know, and I think that, you we all have our own leadership style, but you know, we're influenced by the people who are around and the people that we admire and, you know, our mentors, you know, so, you know, it's, you know, it's, worked for us. And, and I'd like to think that, you know, my two brothers and I, you know, we kind of have complimentary leadership styles, you know, and complementary strengths, you know, I think that's one thing, you know, that's helped us as a 

Ken Johnson (48:29.422)

family company transition successfully is that we all have different strengths and different areas of interest. So we're not tripping over each other. It's you go do this, you go do that, then I'll do this and we'll circle back at the end of the day and see how things went. And it's worked for us. 

Michael Palumbos (48:52.076)

That's great. You talked about reading biographies of successful people. I think that's a fabulous way of doing it. I always forget, you I got on a kick of reading biographies and it was just like idea, you know, tons of great ideas. And I haven't read a biography in a while. So I'm going to go back. I'm going to go find, find what I love. The Steve jobs one was fabulous. was, 

Ken Johnson (49:16.535)

Yes, it was. 

Michael Palumbos (49:19.498)

The other thing that I want to point out, we're getting close to time, but as you're talking, we do a thing with clients called the market map. And you've mentioned competitors, you've mentioned customers, you've mentioned potential customers, you've talked about associations, you talk about, you know, where you're spending your money. That's the market map. And my gut says, and I'm just curious, do you have that? 

Michael Palumbos (49:47.784)

mapped out on paper someplace for other people to see? 

Ken Johnson (49:50.99)

Um, not really. You know, it's, uh, you know, it's, uh, we try to, uh, um, you know, we have, you know, a vision, you know, that we share, um, you know, and, know, we talked about, you know, like, you know, focusing on growing our refrigerated side of the business. You know, we, we didn't walk away and we still take up opportunities on the dry side. It's more regional, um, you know, or, you know, if it fits what we're currently doing and helps grow it, we'll, uh, you know, we'll take a look at, you know, most opportunities there, but. 

Ken Johnson (50:18.888)

Overall, our guiding was grow the refrigerated side, take advantage of our expertise. We share that in our conversations. I have several ways that I communicate with our employees. Every month there's this program I call it the Worst Television Show on the air, Ken's Corner. It's a teams meeting that anyone in our company can join into. I have an email address specifically for that that they can. 

Ken Johnson (50:46.904)

send in ideas for topics or questions they have or different things within, whether it's within the company or within the industry. And I'll talk about that for 45 minutes or so once a month. Then I have, it's supposed to be weekly, but I call it the occasionally weekly update that I send out. I try not to jam up people's inboxes just for the sake of maintaining a schedule. 

Ken Johnson (51:11.65)

You know that we, you know, I'll use that, you know, sometimes it's just, you know, reminders of some, you know, at the end of the year, the HR gives me a lot of things to put in there for, you know, health insurance renewals and changes and that type of thing. But other times it's just talking about trends in the industry or trends in the company or, you know, initiatives that we may be having, you know, internally, you know, and we've got four operating companies, you know, so that, you know, that it's not always just about Leonard's, you know, it's 

Ken Johnson (51:41.166)

You know, we have the driving school, which is a for-profit driving school. We happen to hire a lot of their students on the Class A side, but we do, you know, cars and smaller trucks as well. You know, we have integrated logistics, which is basically a financing company for small fleets. know, we buy their accounts, receivable, fund them, you know, as soon as they provide us, you know, the required paperwork. then, you know, and then we collect the money from their customers, you know, to improve their cashflow. 

Ken Johnson (52:08.558)

And then Johnson Equipment, know, Johnson Equipment is a big part of Leonard's as they maintain all of Leonard's trucks. But we also, you know, have outside customers. You know, our body shop, was in last week and I walked around with a big smile on my face because not a single vehicle in there said Leonard's on the side of it. yeah, in our business, you know, not having anything in our body shop is a bonus. know, so, you know, it's, you know, so, you know, so I have to, you know, balance that. It's not all about Leonard's, know, and 

Michael Palumbos (52:25.794)

That's great. 

Ken Johnson (52:37.39)

But Leonard's is the big company, know, and everybody knows that. you know, so a lot of it dominates there, know. And I tried to give everybody the opportunity to ask questions, you know. you know, it's and that all started during the pandemic. was driven by the need to communicate initially about restrictions, requirements, you know, all the things that, you know, we don't want to talk about anymore because we're tired of it, you know. 

Ken Johnson (53:06.284)

what communities had mask rules and there was talk about mandatory vaccines and all that. And some of the responses I got from some of that varied widely. There's a lot of different opinions on that. But we saw the value in those using those tools as a way to communicate the good things and the necessary things rather than using that platform. I love that we can now get together in person. 

Michael Palumbos (53:35.8)

thing is geography anymore. 

Ken Johnson (53:37.458)

Right. But I hope that the technology is going to improve. We'll go back to meeting in person, but we'll also use the technology to meet more often. 

Michael Palumbos (53:48.44)

I love it. Yeah. It's you talk about how you made some changes and did some things using the pandemic as an opportunity. This podcast wouldn't exist without the pandemic. was using it as a, happen to know like guys like Dr. Jim, I know more, you know, consultants because of, you know, the work that we've done with family businesses through the years. I'm like, let me just get these consultants on to help people. And that's how we started. And then. 

Michael Palumbos (54:16.652)

We had, it was Ray Isaac and Anthony Danielli came on and I had so much fun talking to them about their businesses. We started to pivot to say, I'll bring them in the consultants every once in a while, but we learned more from other people doing it than people telling us what to do, you know? 

Ken Johnson (54:33.454)

Right. So, know, and we have a podcast. We get tens and tens of likes, but we're hoping to grow it. And I'm the co-host. We have a, of our risk control managers out of our Delaware facility hosts. And, know, we, we balance it, you know, same way, you know, it's, you know, we bring in our internal people, you know, there's a story to tell, but we also, you know, try to bring in outside folks like you were big and supporting. 

Ken Johnson (54:59.662)

you know, the fight against human trafficking in January's human trafficking awareness month. And, you know, there's association truckers against trafficking that we support. And, you know, so we brought somebody on from truckers against trafficking, you know, in January. And, you know, we've had our initiatives with the breast cancer sport. You know, we've had people from the breast cancer coalition of Rochester on, you know, so it's a mix of internal and external. And I have a lot of fun with it. You know, it's a good thing. It doesn't cost a lot because, we're 

Ken Johnson (55:29.434)

you know, it's just, slow growth and getting listeners, but, it's, it's a lot of fun, you know, and I think we do a pretty good job. 

Michael Palumbos (55:37.934)

Yeah. And I want to say thank you for all your time today. you know, anybody listening to this, hopefully you go back and listen to it again, because there's nuggets inside of here of things that you just did naturally and from, you know, watching other people's success and just implementing it hats off to you. 

Michael Palumbos (55:58.286)

Hats off to your mom and dad. I want to give them a salute for, know, they did a great job of, you know, teaching you and your brothers, you know, the foundational aspects of all this stuff. 

Ken Johnson (56:09.708)

Yeah, I agree. we have an award that called the Pat Johnson Award. It's one of the big things that big initiatives is supporting women in trucking. And in my mind, she was one of the pioneers. She started with my dad and. 

Ken Johnson (56:28.138)

You know, and she just, not only was she a great mother, you know, raising us and teaching us, you know, she was a great business leader, you know, and side by side with my dad and, know, certainly learned a lot from my dad as well. you know, we like to say that the doing things right, you know, came from her. You know, she was a big believer. we're going to do it, we're going to do it right or we'll just stay home. 

Michael Palumbos (56:49.56)

That's great. Johnson, Leonard's Express. Thank you for joining me today. Really, really had a great time. My name is Michael Palumbis. I'm with Family Wealth and Legacy in Rochester, New York. And this has been the Family Biz Show. If you happen to be listening to the show and you're a family business, feel free to reach out. We'd love to have you on, especially the multi-generation family businesses. 

Michael Palumbos (57:13.954)

tell your story and share it with other people. Thanks everybody. Have a great day.