It’s been two years since industry veteran Mike Bogan took over as CEO of LandCare. In that time, he’s fought an uphill battle to rebrand, restaff and resurrect a company that had foundered for years.
ServiceMaster bought LandCare USA in 1999, and rebranded it TruGreen LandCare as it rolled up dozens of other companies and posted revenue of $900 million.
But it suffered in recent years: It had a parade of executives, and many of its best employees – including the founders of the companies in the roll-up – had left. In 2011, ServiceMaster sold its landscape division to the private equity firm Aurora Resurgence. Revenue continued to drop and hit $205 million in 2014.
Aurora brought Bogan in that year, adding an element of stability and celebrity to the leadership team. He’s closed branches in under-performing markets – the company now has 50 instead of 60. He stopped subcontracting in markets where the company doesn’t already have a branch. And he’s the first CEO in years to actually come from the landscape industry – he spent 23 years with Brickman, retiring as executive vice president.
Now, with Aurora’s multi-million-dollar backing, Bogan, who also put his own money into the company, has rebranded the company as LandCare, and focused on rebuilding the company from the ground up. Here, he talks about finally turning a profit, how he builds a culture and what LandCare means for the industry.
CHUCK BOWEN: What made you want to come back into the landscape industry?
MIKE BOGAN: When I left Brickman, I was 48 years old. I enjoyed the break of not having to travel for business and the time to reconnect with my immediate family and my broader family. But when I finally got ready to go back to work I found what I really missed was the landscape business. It was not the business as a whole – it was the special people that are attracted to this industry, that find it more than a paycheck. It’s really a passion, an avocation, something that they deeply want to do and appreciate. Those are the kind of people I wanted to be around.
CB: How did you get connected with the team at Aurora and LandCare?
MB: I was involved in looking at LandCare back in 2011 when ServiceMaster sold the business and separated it out from the rest of the company.
Years later, when I had started to do some consulting work, Aurora sought me out. I was able to give them some observations about the business and give them some insight. I told them that if they were trying to really turn the business around and build something that would last, that they weren’t doing the right things.
CB: They were trying to implement your advice and said, “Mike, why don’t you just come work for us?”
MB: Yeah. It started with hesitation on my part. The idea of getting back into being part of a national company, getting on a plane every week, being as deeply engaged in something that was struggling as significantly as that company was and frankly tying my name to a brand that had suffered for a long period of time gave me pause for thought.
CB: So what made you decide to take on that challenge?
MB: The changes that were going on in the industry really pulled me back in. Both Brickman and Valley Crest had been purchased by KKR. Both companies had seen an exit of the families that had started and created the cultures there, and the new leadership was taking them in a dramatically different direction. That was creating a significant amount of turmoil in those companies. That, to me, showed that there was an opportunity to bring talent into this organization.
Most importantly, I felt that there was a void from a standpoint of places to work in the landscape industry. I had been able to enjoy a long career with a very consistent and culture focused on creating a great place to work for people that really want to do important and meaningful landscape work. I felt like that really had left. It had left the focus of those two organizations from the top down. I think it left when the families left. But it wasn’t just the families: There was a significant and still is a significant exodus of leadership from that combined organization.
CB: In the last two years since you’ve taken over as CEO, what would you say has been the biggest challenge that you’ve faced?
MB: Probably the single biggest challenge was the weakened brand, the cachet that the name TruGreen LandCare carried in the marketplace, whether it was vendors, customers or talent. It just was not an appealing brand. It has suffered significant fatigue over the last 15 years. That was tough on the business and, frankly, it was tough for me.
My experience had been walking into the ring every time as a defending champion. And now I feel like we walk into the ring as the challenger. But there’s a lot of energy that comes from that position, too. We’ve really embraced that and it’s fun to go to market that way.
I would tell you that that’s been the biggest challenge but in the same vein it’s probably been the biggest surprise how well the changes have been embraced by the marketplace. I mean the customer base. I mean the talent base. I mean our competitors. Everyone has been really quick to watch what’s going on, to give us a little bit of help and support and a kind word.
It feels like people are rooting for us to succeed, and that feels really good.
CB: Are your competitors giving you that kind of support?
MB: Their feedback has been really, really positive. I think a bad, large company in the industry is not good for anyone. TruGreen LandCare had some corporate practices which would make their pricing in the marketplace irrational and that would drive pricing down. It would devalue the work that we were all competing for and that wasn’t good for anyone. So a better, more rational competitor I think is good for everyone.
CB: Do you have any specific examples about that kind of support from your customers, vendors or competition?
MB: I think the vendor support has been tremendous when the company was struggling to pay its bills on time. It was pretty tough to get their confidence in us, their willingness to extend us normal terms. Almost overnight we flipped that around to getting back to that place of tremendous support from the vendors in the industry. The willingness to provide terms, the willingness to provide us preferred pricing and to recognize us as a growing concern in the business as opposed to a risk.
CB: What do you attribute that change to? I mean obviously some of that’s got to be you coming in with your pedigree and your experience to kind of calm the waters.
“The team knew that we were failing as a business, that we were declining in revenue, that we were burning cash and that we weren’t keeping our best talent around.” Mike Bogan, CEO, LandCare
MB: It’s not just me. It’s some of the best names in the industry in every market have come to our team and that’s huge. It sends a really strong message to customers, vendors and the talent in the marketplace that if those people are willing to buy into the new vision and jump on board then it must be a good place to be.
One of the things that’s been a real rallying point for our business has been the core values that we’ve recently established as a company that we use as guardrails to keep us lined up and travelling in the right direction as an organization.
Those core values came from the teams that were in place really when I was here. My first months on the job I spent visiting every branch and meeting with every team and trying to pull from them what they cared most deeply about and why they got up and came to work every day and what they really aspired to be as a professional and as a professional landscape company. That formed the core values that we’re able to articulate today that guide us as a company.
My first six weeks here at LandCare, I met with the entire leadership group of existing team members. I asked them to articulate just what we stood for: What was our purpose, what was our mission, what were our values? I was not able to get a single, meaningful statement out of anyone. It was just not something that the business was focused on and talking about or using as a foundation for the company.
The rebranding that the public sees is really the outward signs of all those changes. We knew that it had to start from within. Clearly, you can throw a new logo on a truck or paint it a different color but if you’re going out and doing the same things that you always did before that caused you to erode the old brand it’s going to show right through.
CB: When we spoke last fall you mentioned that, at that point, LandCare still wasn’t profitable. Do you see LandCare being profitable this year?
MB: We had positive adjusted EBITDA in 2015. In 2016, we’re budgeted to have a true operating profit and significantly strongly EBITDA, and that’s putting us in a much stronger financial position and will also move us into a place where we’re generating enough cash flow to look at other possible means of expansion, including acquisitions.
CB: What’s your plan in the next 12, 24 months in terms of acquisitions for LandCare?
MB: Since I’ve been here, the focus was on creating a strong, healthy core business and being really good at the work that we’re currently doing before we try to bring anything else into the fold. I felt strongly that we have a really strong culture, and as we bring businesses in they will look and feel like us as opposed to kind of changing the company to be something different.
Our objective all along has been by third quarter of 2016 to be in a position to look at expansion into new markets and ... adding other organizations to ours. I expect it will be on that schedule. We have no mandate to grow by that means and will only do so if it’s going to make us a stronger, better company.
CB: So when you think back to your time at Brickman, what did you bring from your time there and what did you leave behind?
MB: I think the lessons around treating your people right and they will treat your customers right and just focus on doing great work because that is the best strategy to own the market. This idea that, "It doesn’t really matter how big you are. It matters how good you are," was a very strong message that will always stick with me.
CB: So when you look at your five-year window, what’s your ultimate goal? How do you define a win for the new LandCare?
MB: The short term is to really just be a relevant company. We want to be in the conversation for the best projects in every market that we serve and we want to retain and attract the industry’s best talent. Obviously, we want to be financially successful so that we can create value for all of our stakeholders.
For me, personally, a win is going to be to develop a strong culture that is part of a growing company, that allows people to meet all of their professional aspirations here without having to leave to go somewhere else to achieve that and, ultimately, one that creates its own place in the marketplace where we can have constancy of purpose that doesn’t change with the next either leadership change or ownership change.