Lenny Stahl Leads Dakota Storage in a New Direction

Anyone can steer the ship, but it takes a leader to chart the course.  ~ John C. Maxwell

A leader is not born; a leader is made. The rule stays the same for a business. Dakota Storage has manufactured portable storage buildings at their facility near Milbank for over two decades. The company has weathered its share of storms, but recently, with Lenny Stahl at the helm, it moved in a different direction and has grown to be an industry leader.

Lenny says, “My challenge has been to guide our company with a purpose, and our purpose connects four quadrants: our decisions must benefit the customer, the community, the employees, and the investors. I’ve discovered the best path to that goal is to serve our customers well. Then, the other quadrants fall into place.

He says, “About 65 percent of what we produce is sold directly to the consumer. Understanding why they purchase our product is key to our success. Nearly all of our buyers want one of two things. Or both.” He says, ”The first is to safe-keep your possessions. The second is to organize your life. You might be frustrated by a room in your house that’s full of stuff when you need to make room for a new baby or you want to reclaim the space in your garage to park your car. Yet, you still want to get to your things easily.”

According to the L.A. Times, the average house in the U.S.contains about 300,000 items. And, according to the U.S. Department of Energy, about 25 percent of people with a two-car garage don’t have room to park a car inside it. Around 32 percent only have room for one vehicle. A Dakota Storage building solves those problems. It’s a piece of a bigger puzzle that goes into the picture of your dream.

Sometimes that dream is even more obvious. For example, Lenny says, “I was driving in Watertown one day, and as I drove past a house, I noticed one of our garage-style storage units. This guy had decked it out – checkered flooring, painted signs, and a spotless –  I mean immaculate –   sports car sitting there and just glowing. It was fun to see and to know we had helped him to fulfill his dream. That’s our mission.”

Broadly speaking, Lenny says Dakota Storage’s customers fall into two groups and that’s the reason they created two product lines. Their standard product is really more of a luxury unit as Dakota Storage is known for its high-end materials. “There’s no compromise when it comes to the quality that is standard for our sheds,” Lenny says. “As consumers ourselves, we want a top-shelf product and we want to avoid performance issues.”

But not every customer requires top-of-the-line; some people just need to keep things safe and dry. “For people looking for something basic and inexpensive,” Lenny says, “the Dakota utility line fits them perfectly. It’s still a well-made and durable product, but we usually install a 30-year shingle instead of a lifetime shingle. We use 16-inch spacing in our standard line, but in the utility line, it’s a little less. Both products, however, feature the same quality workmanship. And that kind of craftsmanship can only come from our local employees that put their hearts into their jobs.”

It wasn’t always quite like that, though, Lenny concedes. Six years ago, he experienced an epiphany. “Until then, I had a reputation in the industry. For 20 years, I was one of the chief purchasing agents in our company, and my relationships with vendors were less than desirable. I think they thought,  ‘Lenny gets bloody. Lenny drives a hard bargain.’ Well, it was true. But, six years ago, I had an ‘aha’ moment and realized I couldn’t treat people that way. It’s crazy, but everything changed!”

“I took a good look at myself and wondered if I was treating my vendors so poorly, how in the world was I treating my employees? Of course, the answer was staring me right in the face. An employee came into my office one day and said, ‘Uh, I’m scared stiff to come and talk to you. If we make mistakes, you totally lose it.’ I discovered my style of leading wasn’t working, and I had to deal with it.”

One of the people who helped me establish a new method was Mark Deterding. Deterding wrote a book called Leading Jesus’ Way and he became my leadership coach. He basically broke things down to one question: ‘How am I as an individual – as a Christian – leading the Jesus way?’”

“You can’t lead in the ‘corporate’ way and expect the same results as doing it with the Lord. You can have lip service to Him, but that doesn’t work.

I had become tone-deaf to my customers and my employees. Now, I feel confident you’ll get the right answer if you go out on the floor and ask our employees, ‘Does Lenny practice what he preaches?’” 

Today, Lenny runs Dakota Storage like a business, but he treats his employees like a family. How is that possible?

The answer is cryptic, but enlightening. “It’s actually simple, but it’s difficult,” he says. “Six years ago, we went to a model called servant leadership and the concept is: As the leader, I am on the bottom of the totem pole and I serve up. I’m not at the top. Of course, Jesus is the greatest role model for servant leadership.” He says, “Changing is the hardest thing that I’ve ever done. You know, what’s a lot simpler? Implementing a policy from the top down with three strikes and you’re out. That’s easy. But, we don’t do that with our children. So, why do we do it with our employees?” 

Currently, Dakota Storage has about 25 or 30 employees on the payroll, and indirectly five or six drivers from the shed-hauling company. Lenny says he could use more. “The shortage of labor is our biggest headache.”  His vision, however, includes becoming an employer of choice in the community. He believes when workers learn Dakota Storage treats each employee as family under the model of servant leadership they will be eager to get on board. He expects them to be surprised when they hear him say,  “You are not here to serve me. I’m here to serve you and to help you win.” 

He also believes his purpose in the company’s transformation is to help people use their abilities to reach their God-given potential while, at the same time, adding lasting value to the world.  “It doesn’t matter how down and out someone has become,” he says. “Their life can be broken and shattered, but God has a purpose for it. Employees are not monkeys to peel our bananas! They are people who have potential.” 

“I’m really not an owner of the company; I’m a steward” he continues. “I’m kept accountable by how I am adding to the kingdom of God and adding value to other people’s lives. That’s what counts.”

Inside the warehouse, Lenny moves with ease among the workers and stops to chat briefly. He comments that one has a dream to become an airline pilot and one just graduated from high school and plans to go to Dakota State University to study computer science. He nods to a small group of employees and says, “Those four men recently arrived on green cards. They’re just happy to be in America and making a living.”

Lenny is quick to point out that the development of the company is a journey and not a destination. Dakota Storage is always learning and improving. “We have different departments such as framing, painting, hardware, siding, roofing, and quality control. The more we implement the TPS (Toyota Production System), which is also called the Yoda Production System, the more we find that when an employee does less, the more efficient we become. For example, each employee used to spend a lot of time gathering materials. So, we’re creating a new position for one worker to build a picklist and also keep the shelves stocked,” he says. Then he adds, ”Efficiency is another infinite journey.” 

“One of our goals is to have 90 percent of our workforce cross-trained. That challenge is hindered right now by our unbelievably tight labor pool, though.” He says, “The reason I say 90 percent cross-trained is because 10 percent of people are not gifted at being cross-trained, but they excel and produce at 300 percent efficiency in the job they do. It doesn’t make sense to lower their efficiency.”

The supply chain issues plaguing the country have not caused him as much pain as labor has. Lenny points to a truck backing into the lot and says “ I think that’s probably the third truck today. We have up to four trucks of (materials) deliveries coming in every day. “Some stuff has been nip and tuck, though,” he admits. We still have challenges getting garage doors.”

 As far as Dakota Storage’s contribution to the supply chain goes, it is  doing more than its share. They sell on their website and as the Dakota brand,” Lenny says, “We have about 35 locations where our product is showcased.”  Shoppers can stop by in Aberdeen, Watertown, Sioux Falls,  Madison, and Mobridge to name just some of the places in South Dakota, and Breckenridge, Brainerd, Sauk Centre, and St. Cloud to name just a few of their locations in Minnesota. “We call them display lots as they are unmanned,” Lenny says, “and we also have additional sites where we store inventory.”

When a customer orders a shed that is on a lot in another town, Dakota Storage transports it to where the buyer lives. Every order is overseen by their central office in Milbank. “However,” Lenny says, “if a person walks onto one of the display lots and says, ‘I want that.’ They can scan a code, click ‘Buy Now’, and they are good to go. Technology is great! We’ve invested a lot in technology.” 

Technology also provides a creative element for Dakota Storage customers. “We added a design-your-own building option to our website and customers are really having a ball with it!  They can customize their size, paint colors, and roof color. Things like that. It’s great for couples when one is more logical and the other one is more concerned about how it looks. You can build it your way. You can visualize it. You can dream.” 

“Our customers love to do their own thing with paint, too. Six years ago, we partnered with Sherwin Williams because every market we serve is in Sherwin Williams territory. Now, we have 13 Standard paint colors. The sky’s the limit, or actually the Sherwin Williams swatch deck is your limit.”

As he walked around his enormous lot dotted with sheds, Lenny sized up each one he mentioned and rattled off its dimensions. The biggest building he recalled delivering was 16 by 52. “But, he says. “We’ve also built some   36 by 40 sheds onsite.”  

He points to another structure and says, “See those shingles. That’s a shed in our standard line, and those are Northgate shingles made by Certainty.  They’re a class-four rated shingle and about $100 more a square than a regular shingle. People don’t even put that on houses.” Excited to illustrate how the new Lenny does things, he continued, “Here’s the deal. Before, we used an entry-level shingle. Northgate, however, is a very, heavy shingle. In the first place, that’s important because we transport the sheds down the highway. Secondly, in the past, we might have delivered a shed in October and two weeks later, a big wind would come up and the customer would call and say, ‘Hey, our shingles are blowing off.’”

“After we switched to Northgate, our service calls went down to almost nothing. Yes, our product costs went up, but now our homeowners have less stress, and I have less stress because I don’t have to keep a service guy on the road. A win for our customers and a win for us!” 

“Another example,” he says, “are the locks we put on. We could get by with a cheap 10 or $15 lock, but we upgraded to expensive Schlage lever locks. Before, the cheap ones were stripping out, and we got too many service calls. So we put on a real lock and got it fixed!”

Also, unlike our competitors, we don’t use roll-up doors. Roll-up doors don’t keep moisture out; moisture creates rotting. We use a lot of exterior, prehung doors and our cost is pushing 500 bucks, but you know what? Our customer wins and we win.” 

“Same with lumber,” he says, “We want lumber that has four corners and is straight. So it looks nice. We actually import a lot of wood from Europe, which is something our competitors also do. Why? There’s not much lumber in North America you can get on a consistent basis that has four corners.”  

“A lot of our buildings also go to North Dakota and Minnesota.  Minnesota probably has the most rigid building codes in our region,” Lenny notes. He says they manufacture their standard line buildings to meet – although, they often exceed –  Minnesota’s building codes. “We do things right the first time! Our standard product line is going to be the highest quality. Of course, our standard line also comes with a little higher price tag.”

“These are things that have helped our footprint to grow massively in the markets we serve. Our markets now include private labeling all the way from the Bakken oil fields of North Dakota into western Wisconsin to the Canadian border, and down into Lowe’s stores in the Omaha market and the Minneapolis market.  Likewise, our facility in Milbank has expanded. We also just acquired 16 more acres for future expansions.” 

What can customers look forward to? Lenny says, “Turns out, life is not all about just organizing yourself. People have a lot of critters that need organizing, too. At the end of 2018, we introduced chicken coops.The chicken movement was in full swing, and it was all about raising your own chickens for eggs or finding them locally. In the past two years, it’s really exploded. This year, it was fueled by poultry disease in thousands of flocks, and people say they are tired of worrying about food insecurity.”

Canine lovers have been savvy to Dakota sheds for hunting dogs and the gear that accompanies their four-legged friends for quite a while. But Lenny says, ”This year we’re also entering the commercial dog breeders market. We’ve had so many requests for sheds for three, four, and five dogs. So we’re going to try it! This shed is amazing! It’s insulated and wired. You can hose it down with a pressure washer, and it has a drain that drains out. The floor is all insulated, and it even features insulated windows.”  We would love to get into horse shelters and greenhouses, too,” he adds, “But it’s the same issue: We need more workers.”

With growth and innovation on the horizon, Lenny says he is grateful he is surrounded by people who have completely different gifts. “Although I am the majority owner of Dakota Storage, I have three partners. While I was the GM for 16 years, my work focused on day-to-day tasks. Now, my job as CEO is to look ahead. Where do we want to be in a year? Two years? Five years?”

‘My partners bring an unbelievable balance to my imbalances,” Lenny says. They are James Stahl, our sales manager; John Kaufman, who handles all of our production; and Ryan Tschetter, who is our VP of production. Ryan schedules and ensures there’s a flow. We all have a great relationship. Do we see life differently? Absolutely. That is how we build synergy.  I don’t want rubber stampers.  A rubber stamp would just lead me to my demise.”

How does this hardworking, always-on-the-move CEO relax? “I actually do a lot of working with meat,” Lenny says. “I’m into barbecue and smoking.  Lately, I’ve been getting into charcoal smoking. I also love hanging out with my wife, Martha, and my kids. I have three girls: Latisha is nine, Desi is six, and McKenzie is three, and I love taking them to the park.”

“I love to read, too, and I read a lot.” He devours an average of two books a month. “Letisha counted my book stack the other day. She said, ‘Daddy, you’ve read over 110 books just about being a leader.’ It’s obviously a subject I’m passionate about.”

He says, “The book that has inspired me the most, though, is the Bible, which I read on a daily basis. I don’t know how to separate books by their impact on me personally and professionally, because in my mind it’s all intertwined. I cannot be somebody personally that I’m not professionally.”

The thing is, I need to feel good about myself when I lay my head on the pillow. Did I help the people I serve to reach their God-given potential? If the answer is yes, that brings me satisfaction and fulfillment, because I know that’s the model Jesus left us with.” 

However, we all know that a journey to greatness for a man or a business such as Dakota Storage is never easy. And, although Lenny did not mention if he has any poetry on his bookshelf, maybe there’s still some room for Emily Dickinson. After all, she’s the one who said. “I am not afraid of storms, for I am learning to sail my ship.”