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.
Keep your fire hydrants clear … Callahan’s gets the nod from the local Rochester newscast …
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
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 ...
