The 4 P’s of Scaling Forward
by Scaling Up Author, Verne Harnish
Resilience isn’t about “bouncing back” anymore, as Michael Bungay-Stanier, author of The Advice Trap, puts it. It’s about scaling forward and getting to a brand new place where you and your company can evolve with the conditions around you.
Brian Scudamore, founder and CEO of O2E Brands, understands this well. O2E Brands, headquartered in Vancouver, is the parent of 1-800-Got-JUNK and two newer franchises: WOW 1DAY PAINTING and Shack Shine, which does gutter cleaning and other home detailing. 1-800-Got-JUNK, which has been around since 1989, has 153 franchises; WOW 1DAY PAINTING has 52, and Shack Shine has 42.
When the pandemic hit, Scudamore furloughed 100 of his 550 employees, who serve all three brands. Now, with parts of the U.S. and Canadian economy opening up, Scudamore is scaling forward. He’s been applying what I call the 4 Ps of Scaling Forward: People, Pivot, Process and Price. Here is how.
People
When O2E Brands’ employees shifted to working from home during the pandemic, Scudamore quickly realized the company had an opportunity to recruit from a wider talent pool. That has greatly expanded the candidates its recruiters are contacting in its current searches for a CFO and field support staff.
“We can start to pull people from many different parts of the world,” he says. “We don’t have to limit ourselves anymore to Vancouver.”
Right now, O2E Brands’ number one priority is business development, so when it comes to existing employees, Scudamore has focused on that part of his team first.
Scudamore just brought back his 13-person business development team from furlough, along with 20 people at his sales center in response to high levels of interest in buying franchises.
Workers who’ve lost their jobs or are concerned about their job security have been flocking. “We may not have to advertise for months,” he says.
Many are drawn to the staying power of the company’s three brands at a time franchises in other sectors, like restaurants, were hit hard by the pandemic. “Franchise candidates are saying ‘If I’m going to start a business, let me start a business in an industry I know will be there in 10 or 20 years,” says Scudamore.
The influx of franchisees, is, in turn, adding to his extended team’s strength and the company’s overall resilience. “The number one thing we can do to have great operational excellence is to have more franchise partners bringing great ideas,” he says.
Pivot
With WOW 1DAY PAINTING hit harder than the other brands, it has had to pivot the most in response to the pandemic. One way is through a focus on smaller jobs, where the company can limit the number of people in a customer’s house, as a safety precaution. O2E has, since the crisis started, required that customers be out of the home during the paint job, for the same reason.
WOW 1DAY PAINTING has also changed how it does estimates, using inexpensive, easily available technology. “With people cautious about having teams comes into their homes to do estimates, we are getting our potential customers to walk us through the homes to do estimates with Facetime,” he says. ‘They can be done just as accurately. That’s a nice pivot in terms of keeping people safe.”
The 1-800-Got-JUNK brand has also pivoted. To incentivize customers to do more business online, it has offered a $27 discount to any customers who book on the web, rather than by phone.
“We are getting a huge uptick in our online booking channel,” says Scudamore. “It used to be that one-third of customers book online. Now it’s half.”
1-800-Got-JUNK saves a significant amount of money on its operations this way—and finds it easier to adapt to current business conditions. “At a time we have most of our agents working from home, adding more employees working from home and training them is not as scalable as the digitization of our online booking,” says Scudamore.
Process
To improve O2E’s gross margins per employee, Scudamore has tightened up processes at the company, as well. Middle-market firms average around $126,000 in revenue per employee, compared to $475,000 for the Fortune 500. O2E’s profit per employee is about $192,000, so there is room for growth.
To that end, O2E’s head of strategy has focused on putting a process in place to measure profit per employee every month, instead of annually. This allows the leadership team to see the impact specific decisions are having, explains Scudamore.
OE2 has also put into place of process of reviewing the company’s priorities once a month and narrowing them to a maximum of three that drive profit per employee, instead of 15.
“We are getting really serious about the number of priorities,” says Scudamore. “If something is going to get added, something else will have to come off the list.”
The company is, in turn, measuring its progress monthly on those priorities—with positive and measurable results. “Bringing discipline to how the company does things has made it more efficient,” says Scudamore.
Price
With many consumers hesitant to have painters come to their homes during the COVID-19 crisis, WOW 1DAY PAINTING has been hit hard.
To encourage prospects to book paint jobs, one of its franchise partners in Ontario reached out to all of his past customers and offered any who prepaid a certain percentage of a project they wanted to complete once the everything reopened, he would give them a discount—an approach WOW 1DAY PAINTING has encouraged other franchisees to mirror. “He’s raised tens of thousands of dollars in cash to weather this COVID storm,” says Scudamore. “He’s able to use this cash to retain his people, rather than furlough a bunch of them.”
As Scudamore has found, there’s opportunity in any market. By applying the 4Ps of Scaling Forward, leaders can build an exciting post-pandemic future for their companies.
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Learn more about Scaling Up Founder & Author, Verne Harnish, by clicking here.