Turf Magazine - April, 2012
Employee ownership pays dividends at The Greenery
The Greenery, Inc.
Lee Edwards/ employee-ownedFounded:
Hilton Head, S.C.Markets:
Hilton Head, Bluffton and Beaufort, S.C., and Savannah, Ga., as well as Charleston, S.C. (this branch is not part of the ESOP)Services:
Landscape and lawn care maintenance; landscape design and installation; irrigation; hardscaping; seasonal color displays; site enhancements; and landscape lightingEmployees:
"Can I speak with a manager, please?" "I'd like to talk to the owner." These are reflexive re- sponses whenever you're dealing with a business and want the highest level of customer service. After all, those who are building a career or who have an investment in the business are more likely to care than a employee just punching a time clock.
At The Greenery, Inc., a full service landscape and lawn maintenance company headquartered in Hilton Head, S.C., that philosophy guides everything. The Greenery is an employee-owned company, which it uses to attract and retain good employees. "Every person who is on a job site is an owner of the company," says Lee Edwards, CEO of The Greenery.
The Greenery was founded in 1973 when Lee's parents, Ruthie and Berry Edwards, purchased a small landscape nursery. They started with six employees. Today the company employs more than 400. The Greenery did mostly landscape design/build work during the 1970s and 1980s as Hilton Head grew rapidly. But, as the region built out, Edwards realized the company needed to expand its offerings to include maintenance. "The maintenance side of the business was a natural fit, and that's really grown," he says.
"Every person who is on a job site is an owner of the company," explains Lee Edwards, CEO of The Greenery. He said this fact motivates employees to do a good job, and benefits the company by decreasing turnover and training costs.
PHOTOS COURTESY OF THE GREENERY, INC.
In the mid-1990s, The Greenery began to extend its reach outside Hilton Head, with offices opened in Bluffton and Beaufort, S.C., as well as nearby Savannah, Ga. (A separate branch was also opened in Charleston, S.C. While it's part of the overall company it is not part of the employee ownership.) More recently, at the headquarters at Hilton Head, a retail store, with antiques and home/garden items, was opened, as well. "That's a small part of the business, but it's probably the most visible part," says Edwards. "We have a steady clientele and it feeds the residential part of the business."
All about the employees
The company's growth over the years has been impressive, but Edwards says the primary goal never has been simply to be the biggest. The larger goal is to give employees a chance to grow within the company.
"To keep good employees you have to have opportunities for them or they will leave. If you have a guy who is running a mower and making X-amount, and he can do a lot more than that, but you don't have a position for him, then you're either going to have to overpay him or he's going to go work for someone else or he's going to start his own company. He's going to go where there's opportunity," he says.
The Greenery appreciates its employees and wants to keep them. In most cases it's been very successful at that. All six of the original employees that began with The Greenery, stayed with the company until they retired or died. "And the very first person my father hired still works here today," says Edwards. "We have quite a few employees who have been here over 20 years, and several over 30 years. It's something we're very proud of."
Allowing employees to grow within the company - building a career versus just having a job - has become a trademark at The Greenery. Perhaps the most visible example of that was the transition to employee ownership.
"My parents had worked hard and were getting a little older - though still active in the business - and basically wanted some way to cash out, but didn't want to sell the company to one of the landscape chains," says Edwards. "The employees here were the main reason for the success of the business, and we felt that creating an ESOP [employee stock ownership plan] was a way for mom and dad to cash out a little bit, and still help reward the people who helped fuel the success here. And to retain the company culture."
The process of establishing an ESOP started in 2002 and took several years to complete. "We became 100 percent employee-owned in 2006," says Edwards. There are several methods for creating an ESOP; in the case of The Greenery, a trust was created that borrowed money to buy the shares from the Edwards family. "Then, over time, as the company pays down the debt on that loan, the trust distributes shares to the employees," Edwards explains. "So the employees never pay anything out of pocket. Basically, the profits of the company pay back that loan."
The Greenery provides both landscape installation and maintenance services from four offices in South Carolina and Georgia.
Shares are distributed to employees based on their pay. For example, an employee making $25,000 per year will receive half as many shares as someone making $50,000 per year. There is a four-year service period for employees to become 100 percent vested.
Establishing and managing an ESOP is not a simple affair. "ESOPs can be complex. There is a little added expense: You have to be audited; you have to do a valuation of the company; there's a lot of legal and accounting and paperwork stuff," says Edwards. "It probably doesn't make sense to do an ESOP for a really small company, because there's some expense. But, for us, it's a really great tool to run the company - and it's great for our employees."
From the company's perspective, there are both operational and management advantages to being employee-owned, says Edwards. "Over the years we've really tried to educate the employees more and more about it," says Edwards. "We try to be open with them, share the books and tell them how the company is doing financially." A few years back, when the recession began and The Greenery, like companies everywhere, had to tighten its belt, employees knew exactly what was happening and why. "So nobody was grumbling about not getting a pay raise or about the things we had to cut to get our budgets where they needed to be," he explains.
The prospect of being an employee owner also helps The Greenery find - and keep - good employees. "We absolutely use it as a recruiting tool," says Edwards. Sometimes, though, it takes a few years for them to fully understand and appreciate the ESOP. Someone on a mowing crew making $10 or $15 an hour might consider it a bonus when they receive a certificate at the end of the year for $500 or $1,000 worth of stock.
"That's all it is to them at that point. But after three or four years of receiving stock certificates, and the value of the stock has gone up, someone making $12 an hour all of a sudden has $6,000 or $8,000 worth of stock," Edwards explains. "That's when they start to learn more and pay attention more and realize, 'I really do have a stake here.' Then you have someone who has been here for 10 years - depending on their income level and how the company has done during that time - who might have $20,000 or $30,000 or $40,000 worth of stock. Most of the people get really excited about that."
In addition to its work out in the field, The Greenery also runs a small retail store, which helps promote the company within the residential market.
This excitement helps the company retain good employees, which reduces the costs of continually training new employees because there tends to be less turnover. The excitement also adds to the pride the employees take in their work on a day to day basis, says Edwards. "We believe that employee satisfaction equals customer satisfaction. Happy employees do better work." To help tout this advantage to the public, The Greenery prominently added the words "Employee Owned" to its logo. "We really try to show that off; that's how we distinguish ourselves around here," he says.
The Greenery handles lawn care and landscape maintenance for a number of property owners associations, parks and even upscale resort hotels, where its employees are highly visible. The pride of being an employee owner helps them project a positive image of the company, Edwards feels. "We tell our employees that when they are trimming or mowing or blowing and someone walks by, it's important to smile and wave and say, 'Good morning.' All of that is part of the service we provide, and our employees really get that."
Today, The Greenery's business is split between residential (primarily condominium complexes and homeowners' associations rather than single family) and commercial work. To get the job done, the company operates a fleet of about 200 trucks (almost exclusively Ford) and an even larger inventory of mowers and other equipment. "We started with them a while back and they're good trucks. Plus it's easier to maintain a fleet that's all the same [brand]," says Edwards.
The Greenery uses primarily Exmark and Gravely zero-turn and walk-behind mowers. Traditionally it has relied on John Deere and Jacobsen wide-area mowers for tackling large open spaces, but recently placed an order for two Lastec mowers with 10-foot-wide decks. "It used to be that everybody had belt drives and then everyone moved to hydrostatic drives. But with these Lastec's we're going back to the belt drives, just because they've improved the quality of belt drives and lowered the maintenance. And hydrostatic drives can be so expensive." Regardless of brand, almost all of The Greenery's equipment is purchased rather than leased.
More new equipment may be needed soon as The Greenery recently continued it record of growth by purchasing an existing landscape company. "It was almost more of a merger than an acquisition - it was just a great fit and [the owner] is coming to work with us," Edwards explains. Part of that owner's motivations for selling to The Greenery was the fact that his employees will now become employee-owners. "He said, 'I've got very good employees, but all I can offer them is a job.... With this merger they'll have careers,'" recounts Edwards. "We thought it was just a great fit because that's our attitude, too."
Patrick White is a freelance writer and editor who has covered every aspect of the green industry in the past 15 years. He is based in Middlesex, Vt., and is always on the lookout for unusual stories. You can contact him at email@example.com.