Rancho Mesa's Vice President of the Landscape Group Drew Garcia interviews CFO of LandCare, LLC Dan Krems on business best practices such as operations, leveraging resources, analyzing analytics, training employees, and utilizing peer groups.

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LandCare, LLC

Director/Producer/Host: Drew Garcia

Guest: Dan Krems

Editor: Megan Lockhart

Music: "Home" by JHS Pedals, “News Room News” by Spence

transcript

[Introduction Music]

Drew Garcia: Hi, this is Drew Garcia with the Landscape Group. Thank you for listening to today's interview brought to you by our Safety and Risk Management Network, StudioOne™. Welcome back, everybody. We got a great opportunity today to talk with Dan Krems. He's the CFO of Landcare. Dan, we appreciate you taking the time to join us. Could you go ahead and just give our group a quick overview of who you are and talk to us a little bit about Landcare?

Dan Krems: Sure. Thank you for having me, Drew. I'll talk about Landcare first. We're a national landscape maintenance provider. We are specialized in commercial services, mostly on the maintenance side. We don't do a ton of construction or design build. We'll do a bit for our existing clients but have a national footprint. So, our business stretches all the way from Washington in the northwest, down the west coast, across the center of the country, and then up the East Coast, all the way to New Jersey and across the Midwest as well. We're close to 300 million in revenue in 63 operating locations. So, that's a little bit about Landcare. Business has been around for close to 30 years. The leadership team here has been together since the beginning of 2015, really going in a specific direction that reflects Landcare today and our company is owned by the management team and when I say the management team, that's broad based ownership, there's 125 equity owners of our business. It's a unique structure in our industry and it means the leaders of our business day in and day out across the country are also the ones that make the long term decisions about our strategy and our culture. In terms of me, I came to Landcare eight years ago. I had not worked previously in landscaping. I came aboard as the CFO. I had worked in service based businesses and interestingly found that there is a lot more similarity in landscaping and where I work previously, which was financial services, than I would have initially guessed. You know, clients, they want good communication, they want reliability. They are hiring you for your expertise and, you know, I found it to be a very, very enjoyable industry to work in from the get go, amazing people and have really enjoyed it.

DG: Well said. I appreciate that. And can echo a number of things that you mentioned there. And one piece, Dan, you and I had a chance to hang out quite a bit at different industry events and then there's a lot of common interests there with sports and baseball. So, I've always found our conversations to be, you know, there's always plenty to dive into. But I thought one thing that was really interesting is when you got going at Landcare, didn't you have a week where you went out into the field and you experienced a little bit about what it looks like outside the office? Was that kind of your initial role and is that how- I thought I heard a story about that or something.

DK: It was. I'm laughing about our shared interest in baseball. You're a family of big leaguers. Mine is a family of Little Leaguers. But yeah, come love of baseball. And what you're referring to is the way that I was able to get my introduction to our company and even to working in the industry. And something we try to do for every single one of our employees, not just people who will be working close to our landscaping crews, but everyone, whether you go to work in the accounting department, payroll, wherever, we like to take our employees and in their first week here at Landcare, send them out on a crew for a couple of days and you know, we tell them, put your boots on, set your alarm early, you're going to be up and you're going to be working alongside the teams. We won't ask you to do anything dangerous or complex. You won't be riding around on a GT-R or getting the chainsaw out, but you will be working side by side and doing things that we do every day in the business, helping with maybe an irrigation project or an enhancement or planting or pruning. And I got the opportunity to do that for a couple of days. I certainly was a, you know, a backyard Weekend Warrior project type that wasn't completely unfamiliar. And I'd done, you know, a number of jobs like that growing up. But it was a great reminder of where- what's happening in the heartbeat of our business every single day. And it makes my day to day decision making so much more relatable to really the thousands of people that I need to be taking into consideration when we make leadership decisions here at our company.

DG: It's super powerful. The fact that you guys are doing that all the way around, it just gives that perspective and it kind of leads us into this, this first topic that we came up with here, having different perspective and then using that group approach to problem solve and do better in the business. You had mentioned a relationship that you have with your operations vice president and talk to me about how finance and operations cohesively work together, how you collaborate within your jobs to better Landcare or to better rollout scenarios.

DK: Yeah, I'm fortunate to have a really terrific business partner here at Landcare in the form of our Vice President of Operations, Rob Barber, who has spent his career working around operations and safety efforts in landscaping businesses. And, our collaboration, and the reason I think it's so helpful, I think to both of us and to the company is that he is seeing things operationally and he's hearing things anecdotally as he speaks to our safety officers, as he talks to some of our internal claims, support team members, that can match up with what I'm seeing in the form of data and measurement and numbers. Some of it is financial data in terms of cost of claims, some of it is just risk analytics in the form of number of incidents. But I've got a pretty good handle from a data perspective on what's going on in the business. But to match it with someone who's got a feel for activity level and you know, day to day insights from what's happening, location to location is really powerful. So, I think the ability to do that in combination is really valuable. Each of us alone would only have a partial perspective.

DG: And so, for the business that's listening right now, that isn't the size of Landcare or maybe doesn't have the full team back there on the operations side in finance, if it's a, you know, not an owner operator but an owner that maybe wears the hat of CFO and wears the hat of COO, how might they position themselves to look at information and then use their operations skills to, to better the company? You know, when it all falls onto one person's shoulder, what do you think some things that that type of business could take away from that relationship that you have, not having the team, but maybe more things are falling on their shoulders?

DK: Yeah, it's a great question. And, I think a really good call out because my belief is that no business is too small or lacks the resources to do that effectively, to do what we're doing. And you don't necessarily need two people. What you need is just a starting recognition that both perspectives are important to look at in your business. You should look at what's happening kind of on the ground with your eyes and with your ears, and you should look at, you should look at data, and you should use that data because it's also helping to tell you a story. And I think for businesses that are smaller, leveraging resources. Some of it could be people in your business who are comfortable and attuned to one skill or the other, really tapped in with the teams and kind of see what's happening out in the field every day or are really comfortable with numbers. You can always tap into those skillsets. You can also tap into your partners. I mean, one of the things I have noticed about, and I would give this a lot of props for this is they do a great job providing analytics and explaining analytics to the companies that they work with, and I think any good insurance partner should be doing that for you. So, you don't have to do it all on your own. You can leverage the resources of the partners that you're using and the skills that your team members have to just make sure that you have a data component to understanding your risk management and a feel and a kind of story aspect to what's happening in your business.

DG: That makes total sense. You're really just maximizing current relationships that are in place. I think a lot of people probably, when there's an issue, they're looking for an outside source to help provide a solution when they could maybe look internally and just maximize somebody's potential within the business. Or, like you said, a service provider that's there to support the business. Maybe there's something else there that they could reach for that could be the answer versus, you know, trying to go out and find the answer. And it's going to be at cost to the business or there's going to be a learning curve involved into it. Hey, w also talked about, you know, I think when people think of Landcare and you go, wow, you know, big footprint, national provider of this service. You would imagine that you're involved in a lot of different service offerings. But, what I found interesting, as I've learned more about Landcare is the niche approach to customer, the niche approach to the services that you offer. And I can relate to this being on the insurance side, only focusing on the green industry, that allows me to kind of just put the blinders on and continue to improve that certain product of understanding risk for landscape or lawn care companies and constantly trying to improve that product. And if I was insuring all types of businesses, it might be more of a challenge to really hone that one skill. How is Landcare using that primary service expertise to continue to develop a better product and what does that look like for you guys?

DK: Yeah, we've decided that our business runs safest and then after that, most effectively in terms of service and customer satisfaction, if we stick to what we're really good at and what we're built to do everywhere. And when we first began leading the business, you know, as a leadership team, when this group came here back in the beginning of 2015, what we saw was kind of a scattering of locations that had wandered into services that we weren't necessarily skilled at as a company, robustly, and that we knew we weren't going to have consistency to be safe enough and well-trained enough across our entire business. And probably the best example of that was trying to perform arbor work directly in-house, you know, not the small trimming and, you know, two or three feet off the ground. I'm talking about, you know, up in a boom or with a climber and doing dangerous work with heavy duty tools. And we just realized, you know, the safety risk in doing that, as well as the capital intensity of trying to keep up with a business that we weren't necessarily thinking about all day, every day wasn't the best move. There are other people in the marketplace who will be focused on providing those services every day. And we were better off finding really good partners that we aligned with from a service, commitment and culture to sub that work out to them. And so, we got out of the business of doing arbor work in the three or four locations where we were performing and like I said, that's three or four of the time out of probably 50. So, it really wasn't a core business. It's a little bit of, you know, initial conversation around do we really want to walk away from the revenue? But, it wasn't painful and we replaced it with growth by focusing on what we do best. You know, the other thing that we do from a safety standpoint I think is really important, even in our core business, is we minimize the use of really dangerous machines. So, we don't like having wood chippers in our business, not because they're not really effective at doing what they're designed to do, but because if you're not completely trained and completely cautious every single day, you have a risk of fatality if those machines are misused. Even large zero turn mowers like a 72/0 turn. You know, unfortunately, we all read stories every single year. There's, you know, a couple of fatalities, usually, year in and year out in our industry from the risk of using those on a slope combined with a pond or some other situation where they're just more dangerous than you realize. And we look really, really carefully at what are we experts in day in, day out, and where can we, even if we be slightly more efficient, using a more dangerous machine, get away from the most dangerous types of machinery? The most important thing to us is that our team members go home just as healthy as they came to work each day. So, that's our core philosophy.

DG: It goes in everything that you guys do in it. And that's, you know, what I've really noticed with you and your leadership team is how genuine everybody is and to be to be the size that you are and the leader that you are in the industry, you're always so open to any conversation that might help the business get better. And I think that's a position every business needs to be in. You need to be confident in what you're doing and knowing that the product that you're providing is solid, but you always need to be in a position to want to learn and to want to get better. And I think you're a prime example of that and a good example for the companies that are looking to grow and that want to be best in class. You've got to take that same mentality. And if you take that mentality of whatever we're doing is the best, I'm sure there's nothing else out there that could help us. It’s going to definitely put you at a disadvantage though. We always appreciate the level of information that either you provide or Mike provides, you know, just through content or your leadership. So, the thoughts are well-taken. And kind of, you know, wrapping things up, I think for everybody, the key takeaways for me with Dan is, you know, merging the financial side with the operations side and taking the numbers and then making something happen out in the field. And if you don't have the group or the team to fully administer that, it is something that falls on your shoulder solely, look within the organization. There's someone that has the aptitude to handle the numbers and then hand that information off to somebody who's more on the operations side and it not only helps alleviate some work off of or some information that's on your desk, but it's going to start to provide some leadership roles within your company. So, that could be a great way for advancement. And then that second piece is really just honing in on what you do well. And, you know, obviously that's going to minimize risk. Like you said, Dan, with the training aspect behind the more severe or labor intensive operations that come with the green industry and then the equipment that's associated with it, if you really just focus in on a primary service offering, it’s going to limit a lot of risk, but you're ultimately going to become more efficient and better to service your customer with respect to what you're trying to get done. Anything you want to add?

DK: I can't believe I forgot to mention this earlier. There's one more, great source of support for every business. Ask your peers in the industry. Get out there and talk to other people, either in your market or outside your market. If you're not involved in some industry forum, whether it's NALP or something else, a peer group, leverage that group. It’s remarkable in this industry how helpful operators are with each other. I think because we all want to see each other succeed. And you know, the collective wisdom is smarter than any one of us are going to be individually. And I just I can't believe I forgot to mention that earlier, but that's the other place I'd look. If your business is feeling under resourced, go talk to other people. They probably figured out some of this already and you can borrow their ideas and insights.

DG: Yeah, and I know that you put that into practice because I've definitely had conversations with businesses across the country, maybe in a remote spot in somehow Landcare comes up and their name dropping you and I'm thinking, here's Dan, you know, making a connection, you know, traveling out to somebody's business to provide some, some insight. But yeah, that's super important. Rely on your peers to, you know, bounce ideas off in NALP, in other industry events, are great ways to do that. All right, Dan, real quick, let's kind of get to know who you are, you know, outside of the CFO, and running this really large company. It'd be great to connect with you on a more personal level. So, I got three questions in the way I'm going to kind of pose these is- Rancho Mesa, our big tagline is one of one. We want everyone to, you know, not be a carbon copy of somebody else. What you bring to the table is unique and everyone has a unique skill set. We don't think you're one of ten, one of 12. You always should strive to be who you are and then maximize your potential. So, we actually trademarked the term one of one years ago. And so these are three questions here that I feel like help pose who you are and what makes you one of one. And the first question- and this could be, you know, it's today, this is how you fee or lifelong, this has always been something that you've stuck to- but currently what amazes you?

DK: The ingenuity of human beings. And I think if you take a moment and you look around this world, you see people coming up with amazing solutions and creative ideas every single day. And one of the great things about having kids at home, especially if you've got young kids- mine are a little older, yours are in kind of the sweet spot for this group- they're just amazing at coming up with creative ideas for working around daily obstacles. And my kids recently they got a pair of all white tennis shoes and they want to paint them and I don't know anything about that. So, we've been online a bit recently looking at how do you go about painting a pair of white tennis shoes. It is amazing the artistry and the cool things that people are doing right now with a pair of plain white shoes and turning them into just their own creative- it's a one of one example, right? You can create a pair of shoes that no one else has. And it's, you know, there's examples of ideas like that everywhere. And, you know, that's what amazes me, how creative, how much ingenuity people have.

DG: No doubt, no doubt. How about what amuses you?

DK: I get amused by things that are fairly mundane and kind of ridiculous. So, I try to not take myself too seriously. And I think even no matter what kind of day you're having, you need to be able to find something to laugh about each day. One of the things that amuses me, and you probably won't get this answer from other people is, what you read sometimes in spam email. We all get way too much of it, but I almost have a little game going with Mike Logan here. We work really closely together. He's the CEO here and we're side by side, 12 hours a day, working hard on the business. But we trade emails back and forth from our inbox of who is receiving the most ridiculous spam introduction. So, sometimes it's the name of the person on the email account, sometimes it's the way they wrote the introduction. Sometimes it's the type of product that they're trying to offer us. But yeah, I don't know why that amuses me, but that's something that amuses me.

DG: I love it. I love it. Hey, on the insurance side, let’s not click on anything that doesn't look good though when it comes in on the spam side, you know, but never click.

DK: It's just, you know, this is just the email itself.

DG: That's funny. All right. And this one I'm most interested in because I think it can be unique for everybody. But, what motivates you?

DK: I think the opportunity to build something with a group of people that are fun to be with, that's bigger than what any one of us could accomplish on our own. I think it's really motivating to be a part of working hard to build something that you feel really proud of as time goes by. That can't be built quickly, but with effort and time and a lot of people providing a lot of hard work together is something that you can stand back at. Whether it's a company, whether it's a house, whether it's whatever it is. Most great things are built not individually, but in teams and in groups and that motivates me the opportunity to get to be a part of something. And, you know, I've played team sports growing up. I played individual sports that I like them both. But there's something about the aspect of working as a team to accomplish something that you can't accomplish on your own that I find very motivating.

DG: I 100% I'm right there with you. And I think what where that transfers over to is you're talking about you've got business, right, working with a group of people to grow a business, but it also goes to family, you know, working as a family to get to where you're trying to do or create the memories that you want or the opportunities for people within that, within the family. And I think that's what I think we all look at gyms and, you know, different sources outside of work and family that people try to create that level of community. And I really think that's what's special about Landcare is what you guys have been able to do at such a large, large scale is still keep this, you know, a small community. It really- you've really created just a pocket of people that are really pursuing and pushing the levers to go in the same direction, which is very hard to do with one location and ten employees, but to be able to do it across the country. And I know it's very challenging and I'm sure you're up for the challenge as you have been, but it's obviously there and you guys are headed in the right direction. And I think when your motivation is, and your goals are geared toward that type of team victory, it keeps you levelheaded and set, you know, set in the right direction when if you to me, if you put if you put that on money or that's the sole outsource or that's the sole outcome you're looking for is to get, you know, to get something somewhere financially, it's really hard to create that team, that team approach to something like that. So, I'm with you. It's about the team win and the journey together, you know, to get to that same spot.

DK: Yeah, you bring up a great point. It's- you want to have good financial results and you can feel good about having good financial results. It's hard to lead and motivate people with financial results as the driver. I think people are much more motivated- you know, we try to look at this, no matter what size we grow to, the equation stays the same, which is for every single employee: is this a place where it feels good to come into work every day and where people are excited and feel supported to be here? And then next, you know, you have to do that first. And then next, if you do that well, is this a place where a customer would want to do business with you? Did they feel that you have the expertise and the trustworthiness to be good at serving their needs? And can you do that easily and efficiently so that it's not a tough experience for them? So, you know, I think no matter what size you are as a business, you can always keep that in mind. What does it feel like to work in our company and what does it feel like to do business with our company? We try to keep those front of mind business principles here. And you know, even though I'm the CFO, I get asked a lot about the numbers and about, you know, financial performance. But that's really a byproduct of doing the more foundational things effectively as a business.

DG: No doubt right there with you. Well, Dan, we appreciate the time. Thank you so much. And hopefully we can do something similar in the future. I know we had some other ideas that we could potentially collaborate on a few other topics here, but this is so, so helpful and we really appreciate the insight. And I'm looking forward to seeing you here in a couple of weeks out in Maui. I'm sure you're going to be wearing some white sneakers with some unique drawings on the side from the kids. Maybe they can make me a pair. I'm a size nine and a half. So, just saying.

DK: We got you covered. Nine and a half coming up.

[Outro Music]

DG: Right on. All right, Dan, hey, we appreciate it. Thanks again. We'll see you soon.

DK: Thanks. See you soon.

Alyssa Burley: This is Alyssa Burley with Rancho Mesa. Thanks for tuning in to our latest episode produced by StudioOne™. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.