Editor's Note

Richard Paquette, president and CEO of Pyramide Rental Centers, headquartered in Chateauguay, Quebec, Canada, will become the 38th president of the American Rental Association at the 43rd Annual A.R.A. Convention and Rental Trade Show in Las Vegas in February. Paquette has served in a great breadth of A.R.A. leadership positions as a member, board liaison or chair of committees including Rental Excellence, Next Gener-ation, National Awards, Long-Range Planning, Investment, Governmental Affairs, Budget, Advertising and Marketing, State Association, Membership Definition, Education, Business Development, Political Action, Rental Management Business, BBS/WWW and Buying Group, as well as chair of the General Tool and Equipment Services Special Interest Group and a moderator at the A.R.A. Legislative Caucus in Washington, D.C. He was elected vice president in 1996.

Let's talk about your presidency in terms of your past association work. Why is assuming the leadership of the American Rental Association so important to you?

I get personal pride in doing something well. I set my sights on the presidency years ago to see if I could do it. I started working on A.R.A. committees 15 years ago - I volunteered for every one I could get on. I discovered that when hanging around good rental people, officers and leaders, it rubs off. You learn from the mistakes of others as well as the successes of others - they are both bright teachers. The way A.R.A. is structured has helped me learn to work with people and that has made me a better owner and a manager of people.

What does the term "association" mean to you? Why have you become so involved in it?

The motivation factor was to learn from other rental people. I am networking all the time. I'm the first one at a reception or an event and I'm the last one to leave. I try to meet with members of the committee and talk with them. You always learn about their business or the A.R.A. or your business.

Who has influenced you most? What leaders stand out in your mind as the key influences?

I'd like to be able to talk with people and meet people as easily as Hotch Manning. I would like to speak as well in public as Bill Turk. I would like to be as smart and as good a businessman as Dick Frechette or Keith Klarin. I would like to be able to get things done and start new projects as well as Pam McKenney. I'd like to be able to talk to people in such a genuine way as Bob MacFarland does. I try to learn from the best and bring some of my talents to the big picture.

What are those talents?

I guess what I will bring is the big picture. It has always been my philosophy, when I've tackled a job that I thought would take about one hour, to take the first five minutes and plan how I was going to do [the work during] the next 55 minutes, instead of starting the job and planning enroute and spending an hour and a half. I think you have to have the ability to change enroute. If you can't change, you're dead. I always step back and see the big picture.

What about the buying group that A.R.A. started last year. How important is the MBA for companies like yours?

The association helps the little guy compete with the big guy. The MBA Buying Group is part of that, but the whole range of services the association offers is the real value. I don't think that $300 for membership fees is any Page 20 From Page 18 stumbling block - people spend that on a new VCR. If you are not plugged into the pulse of what is going on, you are going to get farther and farther behind.

How would you characterize your "presidential style." What will you be like as a president?

I believe in delegation, which is basically getting people to buy into the big picture. If everybody has a vision of what the big picture is, it's easier to get the pieces assembled correctly.

How do you gain consensus?

You have got to get people to buy into it and convince them that it's best for them and the association and their personal goals. The rules of business should apply to running the association, too. Leave the door open and get people to buy in. That is always the best way. Make them part of the success, part of the profit.

What kind of manager are you? How do you operate?

Every time I look at something, I want to analyze and quantify it. I can make it better if I can count it. I always look at ways to do something more efficiently. As I said, my philosophy is: do five minutes of study before you do 55 minutes of work. First use your brain, then the hammer. That's the way I live my life and run my business. I study the matter, ask others for their opinions, and then I decide what to do and how to do it.

And I am much more oriented to profitability than to gross sales. One key ratio that I watch is labor cost-to-revenues and other expenses to revenues. First you have to get profitable, then increase sales. Page 22 From Page 20 Get profitable, and then get bigger - and always watch the numbers!

What's hard for you?

The hardest thing in business is to say no, to stop doing the things that you are doing, to stop renting something you're renting when you realize that it is not profitable. Watch the numbers! Also, I am not a good salesman. I'm much better at buying - I can negotiate pretty well when I'm buying, but if I have to sell something, I'm terrible at it. Especially in French - I call in my general manager to handle the big deals in French. French is his native tongue.

How do you want your presidency to be remembered? What do you want to be known for?

I think I'd like to be known as the "Big Picture Guy" - the president who could analyze the large situation and look down the road. I believe that you execute for today, but you plan for tomorrow.

Give me an example of "Big Picture" thinking.

We should look internationally. I think the fact that Rental Manage-ment now goes to 42 countries indicates that there is an interest in rental out there for the rest of the world. We do not do enough with international rental organizations. You could have a Caribbean association in a heartbeat! A South American association. Asia, with all the construction going on there and elsewhere. We have the largest association for the rent-to-rent industry in the world. We will be missing a great opportunity if we don't look to international affiliations and form an international division of the A.R.A.

How would the A.R.A. be structured as an international association? What would it be like?

The "United States Division" would be the largest, of course, but the association would be international. I don't see that any big change is necessary. The association simply needs to welcome the rest of the world! It would take a long time to do and it would be expensive - it's not something we have to do right away, but it's a long-term goal that is a part of the big picture of the future and we have to be thinking about it.

Are there any downside risks to consider as you look out ahead at the future of the association?

The A.R.A. staff and the A.R.A. as an institution are spread thinner than ever. We are doing more and getting bigger all the time. I am a very conservative owner and manager. I think you have got to run the A.R.A. even more conservatively because you are risking other peoples' money. International expansion, for example, would be an expensive risk to take without a thorough Page 24 From Page 22 examination first. Another example: the convention. I wouldn't want to take risks with that.

What's on your agenda, as president?

First, we are going to wrap up some of the projects that are ongoing. Ten years ago it was easier to start a project and get it completed during your term as president. Now, the projects are bigger in scope, deeper in depth and magnitude and how they affect the association. They take longer to evolve, plan and execute, and all the directors and the officer corps have to have the big picture in mind all along the way.

We have to work as a team, and that's difficult when we all come from diverse backgrounds and we are all over the continent. That works against us [as an association, because we are] unlike a company, where the whole [management] team can meet together every week and deal with the issues.

Let's talk about the convention

The convention is not only a trade show - it's an opportunity for people to get together. That's very important. The networking infrastructure has to be set up and there must be time for people to get together. We should give them breaks [throughout the convention] that encourage - and even force - them to get together. I make a point of going out every night with rental people at the convention. It's part of my job to network with them. We need to encourage that networking opportunity with a structure and time frame, and a continuity that enhance it.

Do you see any changes in the convention format?

The show is growing, and there aren't many cities that can handle it. [Five: Las Vegas, Anaheim, Orlando, Atlanta and New Orleans; Chicago and New York could handle a show of this size, but the A.R.A. chooses not to go north in the winter. ­ Ed.]

We need to split out party. The show is just getting too big. If we held a separate event and party show, we could consider quite a few more cities.

It seems every year we ask the new A.R.A. president how things are going with CRA. Any progress?

My predecessors have made a genuine effort to build a positive relationship that can benefit both CRA and A.R.A. - the state association program, for example, would benefit CRA members, just as it has all the other state associations that have come into the program. There is always a potential for building a sound, valuable relationship. I would like to see some cooperative ventures together. My door is open - I'll deal with anybody at any time.

Let's take some small, cooperative steps first, then hope the bigger ones that we've been unable to accomplish will follow more easily.

What are your general thoughts about the association's structure in the future?

Well, you really have to ask, why are these states grouped as they are? We have representation on the board based on artificial geographic boundaries. Sometime in the near future we will probably change the board structure to reflect the diversity of the industry in a more realistic way. Skip [Evans, 1996 A.R.A. president] came up with this - maybe a board member that represents the consolidators, others representing another segment - get rid of regional directors and have them represent industry segments, types of businesses, types of membership. We have to slice our association a different way and have the representation on the board of directors to reflect the diversity that exists in the industry. How long a major structural change like that would take, I can't say - one president can't do it.

If you change the board structure, what about membership structure? The constituencies the board represents, in other words.

Yes, we will have to change our membership structure, too. Not companies, but individual memberships. We are due for that type of membership. The services that we offer are directed to company ownerships, not to individuals. We have to change that.

What is a "core member" these days?

There is no such thing as a "core member" now. We have many kinds of members now and we need to service them all. The mom-and-pop store is not the core member. I From Page 25 don't even like the term "mom and pop" any more. It doesn't fit our image. The industry has moved beyond that. Now, we have to define as many possible types as there are out there and ask them what they need [A.R.A. products and services] and then supply it. There are a lot more specializations in the industry. People are doing more than they ever used to. We are trying out the field office concept now in Texas. [The Texas Rental Association headquarters in Austin became an A.R.A. field office when TRA joined A.R.A. on Oct. 1. ­ Ed.] That's getting closer to the membership, which is what we have to do. If this pilot project works well, we should do more of it.

Will the large players - the megacompanies and the consolidators - eventually rule?

For the short term, five years, the independents will continue to dominate the A.R.A. leadership, because those are the ones who volunteer. But the large companies will become more involved. If our association provides a place for everybody, embraces change and offers value to all of its constituencies consistent with the special needs of those constituencies, large and small, then no single kind of member will ever rule. We will be an association representing all rental people and we'll all participate in the task of accomplishing good things for the industry.

Someone once said that the only one who really likes change is a wet baby. But what's your view of change, in, say, philosophic terms?

Change is necessary, something to be embraced and advocated, not to be avoided. Change is not a four-letter word. Embrace it and make it work for you. That's why I want the board to meet more often and the officers and the executive committee much more often. You have to watch what's going on all the time, and be on top of it. The pace of change is exhilarating and accelerating. You have got to be able to respond to that.

We have a responsibility as an association to help people plan for transition, plan for change. We have come to the crossroads and we have to ask: Are we producing the right goods and services for the right people? We have been coming up with a lot of stuff for everybody, and that won't work. We need to define our membership categories accurately and then apply the services that we offer more specifically.

How do you manage change? Can it be managed?

A lot that goes on, you don't have any control over - for example, the consolidation in the industry. The association doesn't have any control over that. All we can do is react to it. You have to become a planner of reaction - judge the situation and as it changes, be prepared. It is really important to set up a structure that allows you to evaluate change, re-evaluate and then change again. Con-stantly re-evaluate progress and the process. Always keep your fingers on the trim tabs.

[Paquette is a pilot, rated for twin-engine aircraft. Trim tabs apply fine adjustments to control surfaces on the wings and tail to make flight smoother and the aircraft easier to control. ­ Ed.]

What do you think about this wave of consolidation? Where will it stop? Will it saturate the industry?

Consolidation is not going to go to saturation. It's not going to threaten the littlest guy. Consolidation is a threat to other consolidators, but guys like myself, the smaller operators, are operating under the radar of the big companies. They don't want to spend the time and effort required to rent Mrs. Jones a wallpaper steamer. They would rather rent a backhoe or a boom lift. They are looking at this industry from the financial point of view, not from the livelihood point of view.

You are a fairly typical independent rental company, and successful at it. How are you going to preserve your way of doing business and your success as the big companies get bigger?

Whatever the big companies do, I don't care, because I am just going to keep changing - so that I am never in their gun sights. We've got to hope that new independents keep opening new stores and joining A.R.A. as members keep getting sucked up into the bigger entities.

Those who are not in an association - or who are not part of the buying group or don't have somewhere they can learn and be in a position to take the pulse of what is going on - are going to be in trouble in five years.

Two perennially hot topics for rental people are training and purchasing. Any connection between these issues, in your experience?

We won't rent a piece of equipment unless we see the person who is going to use it actually use it. It makes a lot of sense to standardize on a brand for training and safety and liability purposes, as well as for service and maintenance. So you only have to train your people on that one line of paint sprayers, let's say. By standardizing, you reduce your cost as well and improve your profit.

Once you decide on a quality product, don't switch around unless there are situations that are beyond your control, like the company folds or quality falls off for some reason and you have to switch.

Let's talk technology for a moment. You were a systems analyst before coming into the rental business and your store was one of the original sites for the Solutions by Computer rental system back in 1984. So with the perspective of a seasoned pro in computerization, what's ahead in rental technology?

The next thing that this industry just must have is bar-coding. We have to get our suppliers involved in it. Look, it takes 30 seconds to turn in a rental car - somebody prints out your receipt the minute you get out of the car. We need that efficiency in this industry.

If you are not computerized, all I can say is that I wish you luck. You're ripe for somebody to move in across the street and take your business away.