Cover Story: Deep roots
1 Jul, 2009 By: Daniel G. Jacobs Landscape ManagementEmployees of The Davey Tree Expert Co. always have direct access to at least one of the company's owners. One can simply walk over to the nearest mirror and look the reflection squarely in the eye.
 Karl Warnke (ALL PHOTOS COURTESY: THE DAVEY TREE EXPERT CO.) |
Since 1979, any full-time Davey Tree employee with at least 90 days of service is eligible to purchase stock in the 130-year-old, $600-million-a-year business. Davey Tree is one of the largest and oldest ESOPs (employee stock ownership plans) in the country.
Granted, a heart-to-heart with the person in the mirror won't resolve all issues, but employee ownership is one reason the company has survived a dozen recessions and the Great Depression — and expects to handle the current recession without too many troubles.
"We essentially have 6,000 employee-owners," says Karl Warnke, chairman, president and CEO of the Kent, OH-based company. "Our company has really blossomed in great part because of employee ownership. We pride ourselves on strong internal leadership and have grown without direction from outside investors or partners who have equity or management interests in the company. The ESOP business model has served us well."
It's that combination of strong management and employee ownership that has allowed the company to develop deep roots that serve as a strong foundation on which to grow and support healthy branches throughout the country.
 Davey Tree ranked No. 4 in our June 2009 LM 150. |
"Just having employee ownership is not the answer," Warnke says. "It's what those employees commit to and accomplish."
Employee ownership helps motivate staff, but it's also essential Warnke and his co-workers make savvy business decisions at the top level and communicate them throughout the company. "That, as much as employee ownership, if not more, is what makes any company successful," he says.
Balanced offerings
One of those good decisions was to diversify the company's offerings. As the company's name implies, it started as a tree care operation, and throughout the years added and subtracted services to find the right mix. Currently, the company comprises four major divisions: tree and lawn care services, commercial landscape services, utility services and the Davey Resource Group, which offers technical consulting to utility, commercial and municipal markets.
The mixing continues.
"We started working in '07 to change our business direction and reduce the emphasis on businesses that don't fit us," says George Gaumer, vice president and general manager of the commercial landscape services division.
The willingness to adjust services allows Davey Tree to focus on its strengths, offer just what's needed in a given part of the country and keep the company strong amid the ebb and flow of the economy.
For a while, the commercial landscape services division delved into the bid/build arena. But in past few years, Davey Tree has begun to downscale that part of its business.
 George Gaumer |
"Right now, the landscape construction part of our business is struggling," Gaumer says. "It would have been good if we'd been able to downscale services to that segment two years earlier because it was going to do it to itself anyhow."
In any operation where struggles exist there are also opportunities.
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