Nikos Phelps began his career in landscaping in 1997 with his parents dropping him off and picking him up from job sites. After all, he was only in high school.
But the business grew steadily and kept Phelps busy on summer breaks, weekends and evenings. After four years of working through high school, Phelps decided to make it official and enter a landscape contracting program at Penn State University. Amazingly, he kept the business going – and growing – by driving back and forth from college (100 miles each way) and hiring employees to fill in when he was away. That was when Phelps got hit with one of his first hard lessons in business.
“One of the biggest challenges I’ve faced in my career goes back to when I was hiring the wrong people,” says Phelps, owner of Utopian Landscapes LLC based out of Harrisburg, Pennsylvania. “I was 21 years old and didn’t know what to look for in employees. I found it difficult to find people who took the same pride in the business as I did. Those bad hires early on set some problems in motion.”
Equipment and man-hours “walking out the door” were two of his biggest concerns. Not only were physical items being “lost” or “broken,” but Phelps also struggled with managing employees from afar.
“Hours were walking out the door because employees would decide they could lie about clocking in and out since I wasn’t there to oversee it,” Phelps says. “I was doing everything I could to manage the business by taking client phone calls in between classes and driving back and forth on days off from my Monday, Wednesday, Friday class schedule, but the wrong hires were dragging me down.”
The effect of lost man-hours was killing his bottom line. Phelps says at one point the company was employing nine guys and the number of clients was growing steadily. But when he sat down to look at the numbers, he was “losing money hand-over-fist.”
“It came down to dishonesty about hours,” Phelps says. “That was the catalyst for taking a hard look at our operation and making some changes.”
Phelps reached a moment in business when he had to figure out which employees were valuable and which were not. He kept employees who were open to change and saw potential in the company. He let go of anyone who was “only there for the paycheck.”
In weeding out employees who weren’t committed, only one person ultimately transferred over to the “new” Utopian. New employees were hired and Phelps continued to seek out people who were not only motivated, hard workers, but who were also good people.
In order to ensure he hires the right people, Phelps interviews candidates more carefully. Potential hires first send in their resume, then go through a phone interview, and if they make it through that, they are invited to come in for what Phelps calls a “working interview,” where they go out and actually work in the yard. (His headquarters sits on 8 acres.)
“I actually have the employees run those working interviews because they learn from it,” Phelps says. “Plus, it allows the candidates to be more relaxed since it’s not the owner sitting over and watching them.”
It was also important to Phelps that he change the mindset of his employees. He wanted them to think of themselves more as “professionals” than landscape crews. One of the ways he began to change that mindset was by implementing a uniform policy. The uniform is now required when Utopian workers are on the job. Phelps also began looking at benefits packages that would make the job feel more like a career. The company already offered health insurance, but Phelps wanted to include retirement benefits as well.
“I’m not looking for the employee who wants to come in and make $12 an hour but not be committed to this company,” Phelps says. “I want employees to view this as a career. I want to know, ‘What are your bills? What do you need to make a living so that this can be your career?’ Our people are paid in the 90th percentile for the landscape industry in this area.”
Phelps says he has also tried to get away from titles and implement a linear leadership system. “I want everyone to feel valued,” he explains. “Just because you’re a technician or laborer doesn’t mean your opinion doesn’t matter. We want to hear everyone’s ideas about the company, and we’ve worked hard to create an environment where people not only feel comfortable but are encouraged to speak up.”
Success story in the making
Making some of these changes and breeding a new culture has really paid off. Phelps says the turning point in the company – when he had to take a hard look and make major changes – was in 2010. Five years later, the company is operating leaner but more efficiently. Last year, Utopian grew 20 percent over the company’s previous highest-earning year and did it on less payroll. Having generated $600,000 in revenue last year, Phelps is determined to build on that momentum.
“It wasn’t necessarily that we worked more hours,” Phelps says. “We actually had fewer clients last year, but were making more money with them because we got smarter about the work we did. We looked at ways we could be more efficient and save time and money. It paid off. At the end of the year we were able to give out bonuses that were 10 percent of the annual salary.”
The implementation of the “two-second improvement” has been one way that Utopian Landscapes has found key areas where they could be more efficient. Each morning during a quick meeting, Phelps asks employees to share a “two-second improvement” that they implemented the day before. He says at first they didn’t come up with much. But, soon, they got into it and enjoyed coming up with and sharing ideas.
“It could be as simple as how a trailer was organized,” Phelps explains. “Maybe the most common tool being used that day was at the back of the trailer so the improvement was to move it to the front. If it was a tool they needed 20 times a day and they could save a few seconds each time they went to get it, they just improved their efficiency. Obviously, some ideas are better than others, but the goal is to get everyone thinking about improving their efficiency and, ultimately, their productivity.”
Phelps says making many small improvements over time results in big improvements in a company’s operation.
“I think companies often look for that silver bullet that is going to fix everything,” he says. “It doesn’t exist. Small goals and small changes are more achievable. And, in time, they really add up to something big.”