EXECUTIVE SIDE JOB

Steven Cesare, Ph.D.

A loyal business owner from Massachusetts called me the other day about a problem he is having with his long-term Chief Operating Officer. The landscaping company is successful doing $9,000,000 in annual revenue with outstanding gross margins, fueled by a steady workforce bound by a results-based team-oriented culture committed to enviable job quality and personable customer service. They are doing very well, supported by an impressive track record and an optimistic trend line.

Concurrent with undeniable success for this year, the owner has begun to sense his Chief Operating Officer is no longer fully committed to the company. The Chief Operating Officer oversees the entire field operation (e.g., construction, maintenance, snow, irrigation, enhancements), has been with the company for 15 years, earning $140,000 in salary complemented by an adequate bonus plan that approaches 20% of annual salary, based on exceeding field performance metrics and the company’s net profit goal.

It seems the Chief Operating Officer is not where he is supposed to be when he is supposed to be there. He is not always on job sites providing oversight. He has begun to miss customer meetings. His project estimates, change orders, and enhancements proposals lack accuracy in that he is not double checking the numbers nor proofreading the documents for content, quality, and application. He is not submitting necessary paperwork to the appropriate office staff on time, thereby complicating payroll, job costing, and operational planning. He is seldom in the yard for morning departure, with even less attendance in the afternoons for yard arrival. He has become a routine no-show on Friday afternoons.

After noticing two or three of the above cited instances, the intuitive business owner began reviewing the GPS history of the Chief Operating Officer’s company truck and company cell phone records. The results were not good. The Chief Operating Officer was spending an increasing amount of company time on non-company related activities. Time for a one-on-one meeting.

When presented with the evidence, the Chief Operating Officer stated he is taking on side work as a real estate agent to supplement his family income. As such, “sometimes” he has to meet with his real estate clients on company time, make phone calls to them on company time, and submit documentation to the real estate home office on company time. Feeling betrayed, the Massachusetts business owner offered the following action items to his once trusted executive ally.

Totally rededicate yourself to the landscape company that is paying your salary
Cease all activities related to your side job real estate business while on company work time
Do not use the landscaping company vehicle, any company resources, or organizational branding for any activities related to your real estate business
Immediately refocus on job quality, cost containment, and managerial oversight of your portfolio
Become more detail oriented on all aspects of your jobs: scheduling, estimating, invoicing, billing, pricing, follow up, job costing, gross margin, overtime, etc.
Double check your accuracy in all administrative, paperwork, and job-related purchasing functions
Reorient those employees who now believe they do not have to do a good job since you are so noticeably detached from your own company responsibilities
Reconnect with your key customers who feel you no longer have their best interests at stake due to your lack of direct communication
Be in the yard every morning for crew departures and in the afternoon for crew arrivals, and on job sites throughout the day
Become trustworthy again

The Massachusetts business owner hopes for the best, believing his Chief Operating Officer will return to the mother ship with the same intensity he once represented. As a capitalist, reading between the lines, my advice to the business owner was to increase the daily, weekly, and job-based accountabilities of the Chief Operating Officer, underscored by unmistakable vigilance, communication, and follow-up.

What do you think the Chief Operating Officer will do? How would you then respond to his actions?

How would you treat an Irrigator or a Foreman doing the same thing?

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