Review: The ServiceMaster Story

the servicemaster story

The ServiceMaster Story, Albert M. Erisman. Peabody, MA: Hendrickson Publishers, 2020.

Summary: A history of ServiceMaster, attributing its success to its ability to hold four ethical principles in tension and to the five leaders, who like overlapping shingles, led the company for over 70 years, including 29 consecutive years of revenue growth.

This book is fundamentally about four principles and five men, and the company that became known as ServiceMaster.

Four principles:

  1. To Honor God in All We Do
  2. To Help People Develop
  3. To Pursue Excellence
  4. To Grow Profitably

At one point, the last three principles were portrayed as arms balanced on the fulcrum of the first, to honor God in all we do. Erisman traces the development of the principles from early versions by founder Marion Wade, to this version, which existed for most of the company’s history and is still referenced by some franchisees. The first two were perceived as the ends, served by the other two, and this, in the author’s mind, was significant to the success of the company. Honoring God by acting with integrity, and valuing developing people as an end, rather than the means to profit led to highly motivated service employees, and management who valued them. It also led to the development of disciplined, highly ethical, and competent leadership.

This was done within a creative tension that valued excellence in products and services that made them an industry leader, and steady, profitable growth up until about the year 2000. The tension was not easy to maintain, and Erisman traces the questioning of investors of the religious commitment at the heart of the company, particularly as the company went public, and as it acquired diverse service lines.

The five men who led the company between its beginnings in 1929 and 2003 served as “overlapping shingles” to each other, developed by and succeeding each earlier leaders who remained in the mix bringing wisdom, continuity, and complementary strengths. The five were:

  1. Marion Wade, the founder who started out in 1929 with a moth-proofing business that expanded into carpet-cleaning and disaster recovery. Wade not only was an innovator who found better products and processes but he laid down the ethical foundations that became the four principles.
  2. Ken Hansen was hired in 1946 after a stint in Christian ministry. He had strengths in finance, sales, and organization that brought discipline to the company while adhering to and refining the ethical foundations. The company incorporated shortly after he came, first adopted the ServiceMaster name under his leadership, moved into hospital services. He oversaw revenue growth from $1 million in his first year as CEO to $100 million the year after Ken Wessner succeeded him and Hansen became Chairman. He played a critical role in developing the “overlapping shingles” ideal of succession, serving under Wade and mentoring and collaborating with Wessner,
  3. Ken Wessner came to ServiceMaster in 1954, worked his way up through the company, leading ServiceMaster Industries, and its hospital services division. Wessner was responsible for finalizing the Four Principles, led the company into international expansion and research. His strength was processes and systems.
  4. Bill Pollard joined the company as an Executive Vice President, leaving a legal career, in 1977. Pollard became CEO in 1983 and led the company into the acquisition of other complementary service companies, beginning with Terminix and Merry Maids. A real focus of Pollard’s work was to ensure the training of service workers in these businesses in the company’s principles and their implementation, particularly the intrinsic value of the person.
  5. Carlos Cantu came into the company with the Terminix acquisition and became CEO in 1994. He continued the pattern of acquisitions developed by Pollard, but stomach cancer forced him to step out of the CEO position in 1999, at which time Pollard re-assumed the reins, as both Chairman and CEO

This began a transition as the company dealt with debt load from acquisitions, a changing marketplace, integrating acquisitions into the company’s culture, and dealing with pressures testing the company’s commitment to the four principles. Erisman deals more briefly with the post-2000 company that began to move away from the four principles under a revolving door of CEOs, spinoffs of parts of the company, including the powerhouse industrial services, acquisition by a private equity firm, and a move from the Chicago area to Memphis. It is a story of fluctuating revenues, transitions in personnel, and more importantly, the Four Principles, in which the first two were downgraded, with a greater focus on profitability.

This is a fascinating case study of whether religious principles could serve as an effective framework for a company, particularly work done to honor God and value the worker. The evidence of the narrative, summarized in a chart of revenue growth from 1957 to 2000 on page 203, argues for a strong “yes.”

This leaves a question. What happened after 2000? Erisman’s account made me wonder about earlier decisions. Until Bill Pollard, people were developed within the company with a vision of succession, the overlapping shingles. By the end of Pollard’s second term as CEO, there were no overlapping shingles, and the company went outside for its next CEO. One wonders if there needed to be an expansion of principle two to the personal development of top leadership. It also seemed that the company became less disciplined in its growth. After early acquisitions that were carefully integrated, the subsequent ones seemed less so, and the flurry of acquisitions incurred significant debt loads, along with the challenge of meshing competing organizational cultures.

All this suggests to me that both principle and people (as well as sound business practice) are crucial to developing and sustaining great companies–whether ServiceMaster or Starbucks. Erisman shows the dangers when profit becomes an end to itself divorced from God-shaped integrity and the intrinsic dignity and value of an organization’s people. Great businesses, such as ServiceMaster from 1957 to 2003, hold these in a creative tension. For those asking whether business may be done Christianly, Erisman offers an extensively researched case study of how this was done in one company at a high level for decades, and the challenges to be faced in sustaining that commitment over the life cycle of a company, and beyond one’s own leadership tenure.

__________________

I received a copy of this book from the author. The views expressed in this review are my own.

One thought on “Review: The ServiceMaster Story

  1. Pingback: The Month in Reviews: May 2020 | Bob on Books

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