The Silicon Review
“We gave every employee a discretionary bonus as a reward to say thank you for how well they handled the pandemic through Q2 and changes in the business we’d made the year before.”
Opportunity: That’s what smart investors seek, and it’s what Mark Adamson, a CEO and private-equity firm director, found in Pioneer Landscape Centers.
Adamson understands companies like Pioneer that manufacture materials used in construction because he’s been CEO at four of them. Before stepping into the private equity world, Adamson ran Fletcher Building Limited, a $9 billion conglomerate based in
Auckland, New Zealand. Fletcher’s 16,000 employees produce a wide array of products to support the building industry, including raw materials, concrete, wallboard, insulation, and laminate under the company’s subsidiary, Formica.
At Pioneer, Adamson has taken the helm of a regional leader in quarry operations and retail for hardscape materials, which are the features of landscape architecture that augment the vegetation, such as pathways, walls, and rock beds. Although Pioneer had suffered some setbacks in years past, Adamson could see its potential.
“The hypothesis behind why we bought Pioneer is still a very valid hypothesis,” Adamson said. “People in the future are going to be spending more and more of their disposable income on outdoor spaces. That, combined with the changing climate and increasing water shortages, will mean that those outdoor spaces are going to incorporate more hard landscape versus green landscape than they did in the past.”
Today, Pioneer is well-positioned to leverage these trends. Established in 1968, the company is a leading distributor of landscaping and hardscaping materials in the western United States. With 35 retail distribution facilities and 20 company-owned and operated quarries and production facilities in Colorado and Arizona, Pioneer is uniquely positioned to serve industrial, commercial, wholesale, and residential customers.
In dialogue with the CEO of Pioneer Landscape Centers, Mark Adamson
Q. What was the most important change you implemented when you first came to Pioneer?
It wasn’t as much a change as it was the focus. This is my fourth CEO gig and I’ve operated across four continents. I specialize in helping businesses that have taken a wrong turn to get back on the right track. To do that, you need to reinforce the importance of engagement throughout the business.
Most businesses turn a profit of some kind, but maximizing that profit relies on your ability to motivate that extra, discretionary effort an employee can give. What do I mean by that? Suppose you show up at a store and you need to buy something right as that store is about to close. But, the sales associate says, “It’s OK. Take your time. I’ll stay open.”
She wasn’t told to do that. She did it because she believed in the business, her team, the leadership, and the direction that her company was taking. The customer will remember it and come back. In a business like Pioneer’s, discretionary effort matters because there are so many employees who have touchpoints with the customer. Getting those employees motivated and having faith in leadership turns the dial on that extra-effort attitude.
Q. What did you do to encourage employee engagement?
I often say that our employees out in the field know more about the business than we do in the boardroom. In many ways, that’s the case, so we focus on two-way communication--up and down the corporate ladder.
This is because engagement requires a virtuous circle of communication. It’s not a matter of me deciding what will happen in the Pioneer world and telling everyone about it. It’s me trying to find out what employees think should happen, running that through the filter or investment priorities, and then circling back to employees to say, “We listened to you. We didn’t take up every change, but we’ve taken a lot of it, this is what we’re going to do, and this is your role in it.”
Engagement also means training people to be successful in their jobs and then rewarding them when they are. We came through the first round of COVID-19 with revenue gains and improved margins, and we couldn’t have done that if we didn’t have a great group of folks.
This past summer, we gave every employee a discretionary bonus as a reward to say thank you for how well they handled the pandemic through Q2 and changes in the business we’d made the year before. Store associates, quarry workers, truck drivers, management – everyone received the same discretionary bonus on top of any other bonus that employees were eligible to earn.
Q. You said you’ve had revenue gains in your business. How did you achieve that?
Again, it had to do with focus. For one thing, previous leadership had steered Pioneer toward do-it-yourself shoppers, but we realized that even if homeowners come to the store, it’s often their contractors who make the purchases.
We redesigned our stores and processes to help those key customers – small and medium-sized contractors – make the most of their time. For instance, we implemented Curbside Service, a system where contractors could select a product and pay for it without ever entering the store because we know time is money for these people. If they’re in the store, they can’t be on a job site.
Curbside Service allowed customers to pay for products at a stationary outdoor terminal. When COVID-19 hit, we accelerated the development of systems that enabled us to serve the customer from any place in one of our yards. With Honk-For-Service, we now can come to the customer and complete the transaction on a tablet. Contractors tell us they can get a full extra visit into our stores each day. That enables them to spend time serving their customers and making money in their businesses.
Q. What about the improved margins you mentioned. How do you achieve those?
We’ve focused on leveraging our assets, such as our quarry operations. We own and operate our quarries for several reasons. It allows us to maximize the profit we can get from the decorative rock we sell and deliver better service to our customers because we control the supply chain. We can bring products to the market quicker than competitors and ensure customers have the product selection they want.
People look for decorative rocks with various shades of pinks, browns, grays, etc. In the process of quarrying, you often come across less attractive rocks that can’t be used in landscapes, but this rock can be used as the base course for road construction as well as in the manufacture of concrete aggregate. I knew this because of my time as CEO of Fletcher Building Limited, where the company controlled the entire concrete value chain from quarry to customers. I replicated part of that value chain, and Pioneer now has an industrial division that sells our less-decorative material to concrete manufacturers and road builders.
Q. Did you implement any innovations at Pioneer?
We did. One area we’ve worked on is increasing the turns or trips to and from our quarries and yards that our trucks make. The more turns they make, the more money we make. In fact, each additional turn can add millions to our bottom line. When I took office, our trucks averaged two turns per day. Now they average 3.3 turns.
We did this by pulling together a team that has rich data on truck movements, popular routes, alternative routes, and traffic patterns. We also factored in inventory data at the stores, and then we used data analysis to direct truck traffic. But this was done with existing systems, which made it a heavy lift by people with spreadsheets.
For our next phase of improvement, we’ve expanded our information technology department and we have programmers building a system to make these decisions via analytics software. If the team does what they’ve shown in mock-ups, there will be nobody else in this industry with anything anywhere close to this.
Q. What else is ahead for Pioneer?
This is a business that has been doing many things well for 50 years, and now we’re doing even better. We’ve built a formidable bench of talent to keep this business strong and growing. We’ve built a process-improvement engine and mindset to help us maximize our assets while giving customers new products and valuable services.
We’ve invested in our employees, making sure our people are trained to give expert, customer-responsive assistance and have the tools to deliver solid performance. And, through our commitment to our employees, we’ve driven strong engagement, which is the fuel that will propel us forward. This is a growing industry. Our company – the Pioneer team – is ready to grow with it.