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Moving Target, By Kristen Hampshire, Lawn & Landscape Magazine From Lawn & Landscape, March 2003
Heaviland Enterprises is nothing if not progressive. If there is an industry pulse, it is right, smack on top of it. If there is a punch, the company already has it beat. In perpetual motion, Tom Heaviland pushes forward to find solutions before issues like labor, growth or legislation develop into sore spots. He anticipates them like a tornado warning and he plans for them like he would a cross-country trip, charting routes, pit stops and mile markers in a connect-the-dots course to his final destination.
He is a keen navigator – an energetic captain. And he enjoys a challenge.
"I love the industry," declared the president of the Vista, Calif.-based operation. "It is a challenge because there are so many moving parts to do the volume that we are doing, and with the equipment, the vehicles, the labor, the materials – all the moving parts it takes to produce the volume. It’s a risky business. But that’s the fun. That’s the challenge – and that’s what I enjoy."
Competitors notice this momentum, too, and see Heaviland Enterprises popping up on desirable bid lists in the greater San Diego, Calif., area, pointed out Glenn Wilhite, regional manager, The Brickman Group, San Diego, Calif. A long-time industry friend, Wilhite’s father and Heaviland’s late father, Ron, shared lunch regularly. The two sons met each other about eight years ago and have enjoyed a professional and personal relationship since.
"For most companies, I would say the business came and then you learned how to be a businessman," Wilhite generalized, noting the "big, infectious smiles" that characterize both father and son. "Tom and Ron were businessmen first. They were always on the bell curve ahead of where they needed to be. They asked the right questions and had the right plans in place before the growth got there."
THE TAKEOFF. Wilhite recalls a philosophical conversation he recently shared with Heaviland over lunch. Times are changing, they agreed. People are changing. "We were deciding whether it was good or bad change, and then we started to laugh and said, ‘Now we are sounding like the same people we used to laugh at years ago.’
"But things sure are changing real fast," Wilhite remarked.
And the Heaviland Enterprises company snapshot is quite different than when it started as a "small, struggling company" in the Palomar Airport Business Park. Tagged PABSCO, Heaviland and his father purchased the business and managed a few commercial properties in the corporate subdivision. This was in 1984, when Heaviland was playing professional hockey for the Hampton Aces and had never considered the green industry his next trade, though he admitted his hockey skills left him "big on heart and short on talent."
"My dad and brother and I were getting ready to play golf at Torrey Pines where they have the Buick Open," he remembered. "My dad was talking about this small landscape company that was for sale. I said, ‘I’d be interested in looking at it with you.’"
Seventeen years later, the company roster includes 88 employees and the business generated $3.25 million last year with projections for a 15-percent increase in 2003. Growth steadily inched up 15 percent the past five years, except for last year’s 4 percent, Heaviland said, noting softening sales.
The secret is focus, and Heaviland sticks to his forte: commercial maintenance.
"It is what we do best," he said simply. "There is so much potential in commercial maintenance in Southern California, and I don’t see the need to venture into other areas. I’m in more of the mindset that I would like to develop strategic alliances with other companies like an interior landscape contractor or a tree contractor vs. pulling our focus away from commercial maintenance, which is what we do well."
Large account wins and long-time employees also foster the company’s growth, Heaviland added.
"The key contracts we secured gave us some volume," he said of the company’s milestones. "One was a large industrial park. A couple city contracts also gave us some significant volume and boosted our sales. Also, we are starting to hire key people and our key laborers have eventually grown within the company. Two of my longest-term employees have been with me more than 15 years."
Heaviland credits a company success story, Gerardo Ramirez, who started with fieldwork, pulling weeds, and eventually worked toward certification and then moved into irrigation. "He is fluent in English, he got married, he bought a house, he has a family – he is a real success story," he said proudly.
Employees like Ramirez are hard to come by these days, Heaviland commented, describing a significant difference between the "old school" and new hires. He notices a younger incoming workforce – one characterized by a "What are you going to do for me?" attitude and a fickle demeanor.
"We have to find ways to motivate and offer incentives and give these guys opportunities, because they will get 50 cents somewhere else and then, boom, they are gone," he described.
Education and communication help build a work culture that empowers employees and encourages their input – this environment breeds long-term employees, Heaviland figured. A dedicated safety and training manager spends time with crews daily, training them on equipment, administering tests, holding safety meetings and answering in-field questions.
Regular employee surveys gather feedback – a valuable tool as Heaviland steers the company toward progress rather than letting it stall and sputter. One survey focuses on morale, asking questions like: Are you happy? Do you like your supervisor? The next questionnaire hones in on personal preferences, so the company can feed its employees’ personalities into its practices. It solicits details like: What do you enjoy doing in your spare time? What type of sports do you enjoy? How many kids do you have?
"We really try to get a lot of input from (employees)," Heaviland said, noting that younger generations are receptive to this approach. "It used to be, ‘Here is what we are going to do and this is how we are going to do it.’ Now, it is, ‘You tell us what you are going to do and how you are going to do it. What kind of equipment do you want? Let’s bring in some samples and let you pick out what you think will work best for your job.’ There is a lot more communication now."
Heaviland’s employees would agree.
The point is to put people first, and with a 100-percent Hispanic workforce, tapping into cultural innuendoes, such as a preference for carne asada over hot dogs and hamburgers at picnics, solidifies the company’s connection with its employees.
"You have to look for ways to keep them – good training and providing opportunities so they see there is room for growth," Heaviland reemphasized, adding that these are other mile markers closer his multi-branch growth destination.
THE PASSENGERS. Labor issues aren’t confined to incentive programs and satisfaction surveys. Unreliable employees zap efficiency, and Heaviland realizes the importance of clockwork systems now, especially, as skilled workers are lured to higher paying trades like construction. Today, employees simply cost more.
"It’s difficult, because the quality of worker coming through the doors isn’t the same type of quality we had a few years ago," Heaviland remarked, "although we are starting to see it ease up a bit."
What is not easing up is competition and pricing. Proximity to the Mexican border allotted the region inexpensive labor for some time, but in an employee’s labor market, skilled workers aren’t a bargain. In addition, an influx of companies from the Los Angeles and Orange County areas have set up shop in the San Diego market, affecting the pricing structure, Heaviland noted.
"The client is used to a low, competitive price and now the labor market has jumped up drastically in cost and we haven’t been able to increase our contracts to reflect that, so our gross margins have shrunk due to that disparity," he said, noting a 45-percent gross margin target he hopes to boost this year. "Where we make it up is in the indirect and overhead costs. We are still showing a pretty decent net profit compared to industry standards."
The indirect and overhead savings Heaviland refers to fall in areas like equipment, which he turns over quickly, and the building, which he owns and leases back to the company.
And client education will play a large role in aligning the pricing structure to meet increased labor costs, he noted. "We need to educate our clients that (our employees) are more than just workers."
Heaviland compares his $24 man-hour rate to a Midwest company, which might charge $35. He knows his number is low, but by no means is he the bottom of the SoCal pricing spectrum – quite the contrary. The rate was figured by considering labor, equipment and overhead, and then calculating how much the company needs to charge to make a profit.
Of course, some jobs require more man-power – and certified landscape technicians might cost a client more – so the rate is flexible. "For example, LegoLand is a high-profile account that demands a certified landscape technician or a high-paid foreman to oversee the crew," Heaviland explained. "That will bump up the man-hour rating vs. a small, industrial property that doesn’t demand a whole lot of attention to detail. Man-hour ratings can fluctuate depending on the specific type of job."
But Heaviland’s enterprising streak prompts him to consider alternatives to make the most of man-hours. Where does efficiency fall short? Where are the cracks and crevices that cost the company time – and money?
Cloning might be the answer. An additional location in Poway, a northern San Diego city, represents 40 percent of the company’s overall revenues, a good portion of these dollars stemming from a city contract. Opened three years ago, 25 employees are based at the office, which functions as more of a satellite than a branch. "We are working toward a branch setup where they would have their own administrative staff and sales staff," Heaviland noted, explaining that these functions are centered at the home office in Vista.
But Poway is a success story, and Heaviland plans to repeat the structural formula that created such a well-oiled machine. "It is kind of the yard stick," he described of the location. "It is the benchmark by which (the rest of the company) is judged."
The "very efficient and highly productive" setup can be attributed to its internal structure, which will serve as a business model as Heaviland drives the company to its next stop on the growth map. Heaviland envisions an A, B and C location – A is Poway, B and C are Vista, with plans to break off C from the main branch. Each location will be staffed with an account manager, field manager, irrigation technician, enhancement crew, mowing crew, and trim and detail crew.
Heaviland expects to reinvent the formula in the next five years to tighten organization at Vista and spread the company’s reach beyond northern San Diego, where its accounts currently are focused.
"As we hire account managers, we will break them off geographically and they handle an area," he said. "Those geographic regions will somewhat blend tighter together and form a North, Middle and South."
THE DESTINATION. Market dynamics are an undeniable impetus for change at Heaviland Enterprises, but so are environmental concerns – a California constant. Water conservation tops the list, and Heaviland won’t sit while legislation passes.
"Water is a scarce commodity here," he said matter-of-factly. "We’re kind of the last group on the pipeline, San Diego. Our industry is highly dependent on water and we need to be good stewards as a company and an industry."
Customers must understand the importance of this resource, too. "You have to take a proactive approach," added Heaviland, who, consequently, had a water board meeting planned later that day. "I would rather be a leader and know what is happening and how it will affect us so we can prepare.
"We are looking at trying to better define our irrigation team in how we can service our clients in providing water audits and upgrading to systems that are more water efficient," he continued.
In this case, Heaviland hopes to beat legislation to the punch.
He wants to build an organization founded on sound moral principles, designed to outlast economic stress, labor shortages and industry qualms.
Heaviland examines his own role and fleshes out where he fits into the picture – where will he be stationed as the A, B and C branches progress and as employees gain more responsibility?
"My role, as the president, is to develop leaders within this organization," Heaviland defined. "I look at my role as developing the corporate culture from the top down, and developing key relationships with potential clients that can benefit our sales."
In the meantime, Heaviland continues to stay two steps ahead, always anticipating, planning and refocusing when necessary.
He remembers when this flexibility to change was first important – when his role shifted from co-owner in charge of operations to sole president after his father’s death in December 1997. "That was a real turning point in our company," he said, hesitating at the notion, which after five years still seems a shock. "I will still start to pick up the phone and call him."
The 13-year partnership shared by father and son still serves as a compass while Heaviland determines the company’s course.
As Heaviland charts "what’s next," he reflects on the business foundation he and his father cultivated during their joint ownership – the Torch Award the company earned in 2002 from the San Diego Better Business Bureau acknowledges the company’s sound principles. "It’s nice to be recognized for being a company with high ethical standards, and we are very proud of that," he said. "It is the kind of legacy that Dad left. He was a man of high integrity and character and his imprint still exists."
Perhaps this is why Wilhite calls Heaviland "one of the special ones."
"I couldn’t think of a better thing to be honored for – business integrity," he continued, pausing for the right words. "Tom is very deserving of that. In our industry and in our area, he is one of those good guys."
The author is a Contributing Editor to Lawn & Landscape magazine and can be reached at khampshire@lawnandlandscape.com.
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