How to fix a spoiled company culture?

Discussion in 'Business Operations' started by GatorGardener, Jun 27, 2014.

  1. mikesturf

    mikesturf LawnSite Senior Member
    Posts: 793


    Good luck to you! I would be wary of opening your books to the managers. Since you are cutting their salaries, what is preventing them from thinking, "this guy sucks, coming in and cutting our salaries and expecting more work from us, hey lets start our own business-we are the people that show up to do the work, the customers know our work-that will show this new owner who's the real boss".

    Sounds like an ugly culture, you may need to thin the herd, but slowly so you have replacements that are good.
     
  2. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    I would never have mandatory OT.

     
  3. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984


    Dealing with numbers is not the same as dealing with people.

    At least his math skills are not lacking. :rolleyes:

     
  4. AintNoFun

    AintNoFun LawnSite Bronze Member
    Posts: 1,807

    pretty cool thread (not making light of your situation) I like to read threads like this that pertain to actual business not why redmax is better than stihl 3000 times...

    I would take all the cuts you want to make and tie them to production/quality. give the guys the opportunity to make the same pay while increasing revenue... I doubt production will go up 40% but maybe some type of happy medium? the guys are fat and happy now, let a few of the guys leave and find out what its like at other companies and hopefully word will trickle back or you'll be lucky enough to hire some back.. that will make a good statement to existing employees that its not better elsewhere I hope!
     
  5. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 893

    We start the year with an annual strategy planning session. Division managers, their key people and some administrative staff are invited. The previous year is reviewed and financial goals and the strategy to hit them are recorded.

    We have a weekly meeting where each division managers P&L is projected up on a screen in our conference room. They are expected to break down the P&L based on goals they have in place for the year/quarter. Specifically, they are responsible for sales, materials and direct labor. At the end we look at the whole company financials - so 100% transparent with that layer.

    The division managers share a collapsed version of the P&L with their next layer, be it an account manager, foreman etc. This is done on a monthly basis, usually over lunch.

    When it comes to much of our direct labor, it's blank stares when discussing financials. I did try an interesting exercise once with a cross section of all divisions. I had two employees come up to a large white board with very generic P&L items written without numbers. They were given $100 that represented the previous years total sales. Then in front of their peers we asked questions like - how much did we spend on materials and supplies? - how much on insurance? - how much on fuel? They had to give me dollars back based on the % of sales the specific line item was. At the end of the exercise they had $8 dollars in their hands - I then asked for $3 more to cover taxes. I then spent a few minutes explaining that the $5 left over was needed to fund growth - you service debt with after tax profits. Pretty cool experience for those who were there, you could see a couple of light bulbs turn on.
     
  6. PaperCutter

    PaperCutter LawnSite Bronze Member
    Posts: 1,939

    ^^that's awesome, because if you're making these big changes there are two ways of doing it. The iron fist from above, or you sell the changes. snomaha's example is a great way of selling it.

    I worked at a lot of companies before ending up in business. When I worked for a big multinational, every 12-18 months we'd get a new regional VP who was a big swinging d*ck who was going to shake everything up. We were profitable, we were kicking butt, but these guys saw change for the sake of change as a way to get noticed and move up the ladder. We did everything we could to undermine these mopes. Conversely, I worked for a small business where things got tough, the owners had a frank conversation with us and treated us like adults, and everyone put their shoulder to the wheel to get through it.

    Bottom line, if you want to retain the wealth of experience and client knowledge you have on payroll you need to view the plan as an operational challenge but the execution as a SALES challenge. If sales isn't a strong area for you, that may be worth bringing in some outside help.
     
  7. Armsden&Son

    Armsden&Son LawnSite Silver Member
    Posts: 2,357

    Wow, Snomaha....

    That is really interesting and that exercise with direct labor is really smart...

    Even when I was working for a 1 truck company, there was a misconception that the Boss was "rich."

    Well, maybe the Boss is rich but it's surely not from your direct efforts... LOL

    To the OP....

    Can I ask what type of company it is that you a running?

    Full service? Treatments? Design/Build?
     
  8. GatorGardener

    GatorGardener LawnSite Member
    Posts: 23

    Full service - maintenance, trimming, landscape installs. I've never cut anyone's pay besides reducing OT. My managers are on salaries with large commissions for getting sales.

    I think things got carried away when these perks became viewed as entitlements. Instead of motivating employees to work harder these benefits like OT and rain pay are viewed as things that are deserved regardless of performance. I think I'm going to continue trying to explain things using some of the tips above but there are certain guys that I can tell will continue to feel like they're getting screwed.

    I have some guys that aren't even foremen with 500 hours of PTO banked right now. The guy I let go was at $23 an hour with 5 weeks PTO a year - but he didn't have a drivers license and couldn't read or write.
    Posted via Mobile Device
     
  9. TX Easymoney

    TX Easymoney LawnSite Platinum Member
    Posts: 4,071

    Posted via Mobile Device
     
  10. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Posts: 7,607

    ok…. I don't give horse hokey about who is a CPA, or got their MBA or what.

    It's about the reality of a work force, and the fact that this company has a super rare thing, multi year, return employees with experience.

    Wandering around with a butcher's cleaver and a I know better than you attitude is going to do one thing.

    supply all your competitors with your wonderfully experience employees, and it will take your nice clean CPA hands , and stick them in the mud as you become a solo operation.

    Before you start chopping through your company like a food processor, spend a little time talking to OTHER company owners and become aware of what the issues THEY deal with are, and how difficult of a time THEY have turning a profit.

    Additionally, why said employee pay and benefits are the problem?

    Just because the company is losing money, doesn't mean payroll is the issue.

    You said yourself the parents took their hands off several years back and stuff went to pot.

    Equipment? Efficiency? Materials? All places to look.


    I don't see anything wrong with a $20/hr foreman who can't drive.
    Is he solo?
    No he's a foreman.
    Is he a driver?
    Obviously not.
    So why is the Driver's license part of his job description?
    It never has been, why is it now?

    Sounds like you are judging the guy for things going on in his own personal life.

    You pay him to landscape, doesn't require a DL.
    In fact, On the way to jobs, I prefer to have a lead laborer drive.
    That way If I need to communicate with the Foreman, he's not driving distracted.
    He can be doing paperwork, or ordering materials or all sorts of things.

    In the military, do you think the senior most man is the driver?
    Nope.
    That's low man on the totem pole position.

    Same thing in the corporate world.


    Where else in business do you see a driver being the important high paid guy?


    You need to rate the employees based on what they do, how they do it, and how efficient they are.
    Does this guy make you money?
    Does he not make you money.

    But all that takes time to gather data.

    I didn't see, does your company offer insurance?

    If not look into offering insurance through the company in lieu of gobs of vacation time and OT.
    Obummercare tax breaks could be a great thing for you at 25 employees.

    Take away PTO and guaranteed OT and give them insurance through the company.
    Then take the tax breaks from the government for doing so.
    Could open up a give and take that adds to your bottom line.

    I bet a lot of your employees will end up paying penalties at the end of the year if they don't have insurance, so if you take something away and give something back, you will get a lot less resistance.

    Just tell them you are restructuring the benefits package "because of changes the obama administration has made that effect small businesses"
    A lot of people are blaming Obummer for al sorts of things whether it is his fault or not, so why not jump on that band wagon, won't hurt anything.
     

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