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Tuesday, March 3, 2015

This week's TK SUCCESS Feature ... Mike Callahan …

Amici:

Today’s feature is about a family business that has grown from small to substantial through the efforts of its owner, Mike Callahan, Jr. Mike’s ability to improvise an inclusive work environment formula has incentivized his workforce with a piece-pay system that engenders individual worker accountability as well as financial motivation.
 
Callahan Lawn Care and Property Maintenance, Inc. was started in 1994 by Mike Callahan, Sr. When Big Mike retired and turned the business over to his eldest son, the company served just six commercial clients. Today it is a thriving million dollars plus business. It is also a staple of the local community and economy it serves—Rochester, New York.
 
The last point is a significant one. Now that his business has grown, and continues to do so, Callahan finds his company up against national competitors with little to no community investment outside of profit; corporations whose investors live outside the city where the work they profit from is performed. Who would you rather have working your property, someone with a vested interest in the community, because it is where he was born and continues to live with his family, or someone looking over a faxed report in the clubhouse of a golf resort after playing 18 holes in the Bahamas?
 
If we’re talking about the snowfall in Georgia, I guess it wouldn’t make much of a difference, but when we’re talking about the kinds of snowstorms that hit western New York, having a local home-grown business with an impeccable work record seems like the smart choice to make.
 
So, how did this small business grow to the point where it has gained national attention and its owner is often quoted in national industry journals?
 
For starters, it took a lot more than muscle and good luck for Mike Callahan to grow the family business. Mike earned his business degree from Rochester Institute of Technology, graduating with a 3.4 grade point (something his father points to with great pride). After he took over the business, Mike put his empirical and intellectual knowledge to work. Like any business, perhaps more so because of the unpredictability of Mother Nature, especially in Rochester, New York, maintaining profitability in the lawn care and snow removal business requires constant vigilance. What does or doesn’t produce employee and/or customer satisfaction directly affects the bottom line. Adapting to an ever changing business environment is as crucial as adapting to changes in the weather.
 
Mike didn’t just pick up a snow shovel one day and figure it all out. Nor did he learn everything he needed to attain success in some classroom.  Mike learned by getting his hands dirty working the business inside and out.  With pride in his blue collar roots and the requisite strong work ethic of independent business owners, Mike grew Callahan Lawn Care and Property Maintenance, Inc. with hands-on experience, and from the experience of other colleagues in the same business. Mike recognized the competitive advantage in applying technology to his trade and was quick to install web-enabled laptops in two of his company vehicles, as well as tablets in all his other work vehicles. In an article titled, “The Digital Divide”, in the national industry journal, Lawn and Landscape Market Leadership, Callahan’s use of technology is discussed.
 
During a rough year for him personally, Mike and his business took a financial hit that required spending some extra time in the field with a colleague in the business. Together they performed the necessary due diligence analysis to pinpoint the problem: where $70k of his business revenue seemed to disappear over an 8 month period. Their field research yielded the following result: wasted man hours for which workers were being paid without producing. Callahan’s solution was the implementation of the piece-pay system wherein workers were invested with accountability and rewards. Rather than pay per hour, they were paid per job.
 
The same national trade publication offers articles involving case studies that showcase solutions to specific issues confronting lawn and landscaping business owners. Mike has been featured in several such case studies, including the issue of labor and how best to provide a fair and balanced work environment. From Lawn and Landscape: “We had one crew that was backed up, and they were budgeted for 1.5 days of work from 7 a.m. to 11 p.m., but they got the job done by 5 p.m.,” Callahan says. “I paid them until 11 p.m., and that was a big game-changer at our company. Employees heard about that when they got their checks Friday." Another game-changer was a lesson learned about travel time and preparing for jobs. One crew neglected to load their truck before heading across town to the job site. “They knew it would cost me more than $100 for them to drive back and grab the equipment,” Callahan says.
 
“I said, ‘Your shop time is 8:05 to 8:10, and I paid you for that, so you’ll have to come back and get the equipment (on your own time). Once we held those guys accountable, others heard about it and it changed the culture to where the guys are working for themselves under my umbrella – they are making the right decisions within the guidelines we set.”
 
Callahan says introducing the system to employees and gaining their buy-in required a couple of incentives. After a careful look at the numbers, he realized he could give employees a $1 raise with the new system, so he gave the team an instant boost. Then, he explained that the point of piece-rate pay is not to take dollars away from employees – rather, to reward them for doing good, efficient work. So if they finished a job faster than it was budgeted, they’d still get paid the full amount, plus have an opportunity to earn more by filling the “extra time” with more work.
 
The bottom line is once workers are invested in the process, they will treat the business as their own (because essentially, at that point, they become partners). It is a win-win-win scenario, during which workers are hustling and taking pride in their production, while simultaneously earning more for their efforts. The concomitant result is a happy client (for having their concerns handled in a timely fashion), and a happy business owner. While the business owner still has to oversee the entire operation, which is no small task, he/she can sleep a little better nights knowing that they’re building something good for everyone involved. Read about Mike's experience with piece-pay in this Lawn and Landscape article, "Case Studies" here.
 
No doubt Mike picked up his strong work ethic from both his parents (Mike Sr. and Donna), as well as his grandparents. Mike’s paternal grandfather was a fireman in the city of Rochester. His maternal grandfather was a milkman back when milk was still delivered door to door. Mike’s father worked as an electrician prior to starting the lawn care business, while his mother, Donna, taught special education in the Greece Central School District before retiring just a year and a half ago.  Donna’s mother, Adriana, born in Milan, Italy, 99 years ago, continues to live on her own in her own apartment.  Mike has a younger brother, Ryan, whose heart and soul NHL and Olympic hockey identity was also built around the same work ethic as his older brother.
 
So, what’s it like to run a growing operation during snow seasons the likes of which often blanket Rochester, New York? I asked Mike about a typical day in the life. His outline included monitoring the weather, especially for snow and ice, every hour, seven days a week. When snow or ice events occur, his trucks are immediately dispatched to make the magic happen. A normal day outside of snow removal involves getting summer crews out at 7:00 a.m., requiring his presence at the office an hour earlier to get things started. Mike estimates and QC run from 8:00 a.m. to 5:00 p.m., at which time he can call it quits, but not necessarily call it a day. Mike interviews Mondays and Wednesdays from 7:30 a.m. to 9:00 a.m.
 
Mike believes in family time, then resting and regrouping for the next challenge. Recently Mike’s wife, Sarah, gave birth to their first child, Stella Harper (a great name).
 
Some of Callahan Lawn Care’s recent media exposure.
 
 
 
 
I thought about changing some of an article Mike wrote himself, but decided his words and experience far exceed anything I can add.  Here’s a terrific article penned by the owner himself.
 
Handling High-Volume with Efficiency & Ease
Written By: Mike Callahan, President
 
The familiar wail of your alarm jolts you to your feet. It’s two o’clock in the morning. Outside you notice the white flakes have piled up to the point of no return. You race to the bottom of the stairs, ruler in one hand; phone in the other. The cold smacks you in the face and you begin dialing your manager to alert him to the six inches on the ground. Your mind goes to work; it’s going to be a long night that will surely string into the following day. The feat – 575driveways, 69 commercial properties, 24 employees, and 20 vehicles on the road combating the storm with about six hours to deadline. The surmounting stress is paralyzing.
 
The challenge of handling a high-volume of snow removal jobs plagues many contractors in the northeast. Managing this feat is standard practice at Callahan’s. From November to March, Callahan’s manages the stress of snow with a simple three pronged approach.
 
 
The strategic benefits to standardizing equipment results in improved economic performance. Callahan’s quest for equipment standardization began with snow plows; all plows are the same make and model leading to interchangeability for every truck. Snow blowers and company trucks follow suit in the standardization. Callahan’s even works to hire subcontractors based on the make and model of the truck and plow they use; although it is not always possible in cases of subcontracting. The company even keeps a stock pile of back-up equipment at a central location. Equipment standardization allows for employee proficiency in operation, efficiency among crews, and preventative maintenance remains predictable.
 
The need for a standardized process for on-time job completion is essential. The system must be rigid enough for human accountability but remain flexible enough to adapt to unpredictability with equipment and weather conditions. Each employee and subcontractor signs an employment contract which outlines the following: job description, chain of command, details regarding payment for services performed, repercussions for failure to complete work, expectations for performance on-the-job, route sheets with budgeted man-hours to be met, and directions on how to complete and submit standardized work logs. Each employee receives on-the-job training regarding standard operating procedures.
 
Customer satisfaction is the critical element to success and technology is the key at Callahan’s. Routes are optimized using MapPoint. Service Autopilot and Ring Central automate communication with customers regarding service via text messaging and email during a snow and ice event. These same systems are utilized through mobile apps in vehicles to allow for seamless communication between employees in the field and those in the office. GPS is employed in all trucks to allow for real time crew tracking, job costing, and coverage for slip and fall litigation.
 
Through proper implementation of resources and equipment, early adoption of technology, and stellar training Callahan’s will continue to promote customer focused work of the highest quality. Continuous improvement of these systems will allow Callahan’s to remain a market leader and continue growth well into the future.
 
 
 
 
—Charlie
 
Sharing the knowledge… Mike has produce videos to aid colleagues in the business.


Should I accept one-time snow plow jobs?
 
Best Practices for hiring subcontractors …
 
Hiring & Retaining Snow Removal Employees ...