The ServiceMaster Story, written by faith and business expert Albert M. Erisman, examines how the first five leaders of ServiceMaster managed to develop and give deeper purpose to their employees, while also growing into a financially successful organization. From 1929 to 2001, ServiceMaster grew from a few people making their living in Chicago to a publicly traded company with revenues of $6 billion, in 40 countries–with 5 different CEO’s. Each leader built on the work of the previous leader, focusing on helping workers to develop as people. Their number one goal was to honor God in all we do.
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The Deeper Purpose Of Work With Al Erisman
We’re here with Al Erisman. We’re excited to talk about a book he’s written called The ServiceMaster Story. It examines how the first five leaders of ServiceMaster managed to develop and give deeper purpose to their employees while also growing a financially successful organization. ServiceMaster went from a few people making a living for themselves in Chicago to a $6 billion enterprise.
It is the star of the service industry, according to Forbes Magazine. In 40 countries with 5 different CEOs, each leader built on the work of the previous leader, like shingles on a roof, as we like to say in ServiceMaster. We focus on helping workers develop as people. I can say we because I was there for twenty years as one of the leaders. The book that Al has written, The ServiceMaster Story, explores how these leaders collaborated and complemented each other. Let’s take a peek behind the curtains of ServiceMaster. Al, welcome to the show.
Thank you. It’s nice to be here.
You have led for 30 years, if I remember correctly, the R&D group at the Boeing Company. You led Business and Technology at Seattle Pacific. You’re part of the Theology of Work Project. Some people know it as the TOW Project. Are you the co-chair of the board, still?
I am.
You co-founded Ethics Magazine and are the author of a number of other books. For those of you who don’t know about Convene, we’re a comprehensive leadership organization that helps people run their business on a biblically sound basis. You can find out more about us at ConveneNow.com. Al, thanks for joining us.
Thank you. It’s great to be here.
Was it a three-year journey to write the book?
That’s correct.
Did you guess at the beginning that it would be three years?
I had no idea. I told Bill that I was very grateful at the end that I had done this project, but I would probably never have taken it on if I had known what it was.
You’ve got to find out some of the secrets of ServiceMaster success, I imagine.
I looked in every corner I could. I read books, annual reports, speeches, and interviews from people all over the world. It was a real detective story.
I remember our lunch in Seattle at the pier. You asked me questions for a long time. Hopefully, I was able to be a little bit helpful.
You were. It was terrific. It was great to hear from real people who were there rather than just reading the books.
I introduced Bill Pollard, the president that you refer to in the book. I introduced him one time at an event. He got up and said, “That made me tear up.” I looked at him and said, “You’ve made me cry a few times, too, for different reasons, like not being in the budget.” What did you find to be some of the secrets of ServiceMaster’s success?
Purpose In All Work & Cracking The Service Industry Code
There were many, but I would start with this idea that there is purpose and meaning in all work. The Harvard professor, Heskett, commented that ServiceMaster had cracked the code on the service industry. The service industry was characterized by a 500% turnover. People would come in, they get a job, and they’d find a better job, or they would quit. ServiceMaster helped people see that what they were doing had value. It changed the nature of the workers, and therefore, it changed the nature of the work. That was central.
Another thing that was central was a profound commitment to ethics and values. The idea of holding those together was a very important part of the story. The idea of servant leadership is that the leader is not the king, but the leader is there to serve. It’s a very hard thing to do, and yet the leaders tried to do this. I’ve studied the literature on servant leadership, and I’ve found that what happened with ServiceMaster was different than what the leadership talks about.
Most of the leadership talks about all the aspects of serving as a leader, but they don’t include the fact that the leader himself or herself is broken. If that’s the case, then a servant leader must ask forgiveness. This characterized a kind of servant leadership that recognized that neither the leader nor the follower was perfect, and only a system that recognizes reality can work. Another thing that I found that was profound to me was walking a very thin line between driving profitable performance and valuing people. Hence, the subtitle of the book, Navigating Tension Between People and Profit.
Only a system that recognizes reality can truly work. Share on XKen Hansen, the second CEO, I loved his illustration of this. He said it’s like stretching an exercise band as you hold on to two different values that are in tension, helping people develop and grow profitably. He said, “The tighter you stretch this, the more creativity it can drive in finding a solution that will do both. One thing you learn is that you better not let go of either end, or it will hit you in the face.” This idea of holding on to the tension of these two things was essential to what ServiceMaster did.
I remember Ken doing that talk many times. He would stretch out his arms. He had the bow tie on. Here’s this smallish man with perfectly clothed hair, a little bow tie, and a white button-down shirt holding this thing out here, saying, “You can’t let either end let go, or it’ll snap and hit you in the face.” It’s like you talked about.
It’s a powerful thing. What I’ve been most excited about in the book is that the history is interesting. The people were interesting. The way they worked together was important. They provide some examples for businesses. I am hopeful that people won’t look at this as a history lesson, but more as an MBA class where they say, “How can I apply some of this to a 21st-century business?” I believe that they have got the keys and the nuance to these keys that is so important.
If I could give one more example. I remember Bill Pollard talking to me about this. People had written about the company, and they said, “When you treat people right and do all these things, look at the profits and the growth of revenue of this company. What a key to growing a profitable company.” He would say, “You do these things because they’re the right thing to do. The results follow often. Don’t think about manipulating people to create profit because the people will see through you. You’ve got to do it because it’s right.” It wasn’t just the practices, but it was the way they thought about the practices that was so essential.
I still have a mug from our ServiceMaster days that says, “The story will be told in the changed lives of people.” I love the vision statement that we had as well to be a vehicle. The company is to be a vehicle for use by God in the lives of people as they serve and contribute to others, not a vehicle for use by God in the lives of people as you try to secure bound profits. The work that people do creates dignity, value, and respect in them. People who are unemployed for whatever reason for long periods of time with no fault of their own or fault of their own, we’re robbing them of the ability to have dignity, value, and respect from God.
That lesson was so important. One of the things that I learned about each of the leaders is that they took time to do the work of the people. Bill Pollard told me about how, when he was hired as Executive Vice President, his first six weeks at ServiceMaster were on the mop at a hospital. He said, “Two things happened to me while doing that work. One is that I began to realize how hard that work was. It made me more appreciative of the people in the organization.
The second thing I realized is that often, service people are treated as invisible. You walk right past them as though they’re a part of the furniture. Living with the invisibility changed me as a leader, as I recognized how I needed to value these people.” Some very real examples of ways to help this leadership develop were essential.
It’s a great point. Bill and I started the same month. He was down on his hands and knees in Chicago while I was down on my hands and knees in California. I found two things to be true. One was that people made jokes at you as they walked by you. Certain people, not everybody. If you’re down scrubbing baseboards, a wall, or whatever, certain people would come by and say, “You missed a spot.”
It’s funny when you’re not on your hands and knees, but when you’re on your hands and knees with your fingers cracking from the chemical, and somebody says, “You missed a spot,” you want to rise up, grab them by the shirt, and say, “Don’t you know that I’m a college graduate?” You don’t. You realize a lot of times, as Bill said, that service workers are invisible, and a lot of times, they’re jeered at. That taught me that it’s good to be down on your hands and knees working, cleaning something. It creates a servant’s heart in you.
Bill told the story about when he was on the mop and a relative of his wife’s was coming down the corridor, and she saw him. She looked at him, came up to him, and said, “Aren’t you Bill Pollard?” He said, “Yes, I am.” She said, “Didn’t you use to be a lawyer?” He said, “I have a new job now.” She looked at him and said, “Is everything all right at home?” It was as though there was something broken about being a part of this. Jim Heskett, this Harvard professor, was right when he said they had cracked the code. If you engage people in their work to see real value, it will change the nature of the work and change them. That’s what they were about.
If you engage people in their work to see real value, it will change the nature of the work and transform them. Share on XYour research took you to all of the ServiceMaster Presidents up to a certain point in time. Marion Wade, the founder, former baseball player, Ken Hansen, a pastor, Ken Westner, Bill Pollard, and Carlos Cantu, who was running Terminix. What did you learn that would be some leadership lessons for us as we are in this pandemic in 2020 worldwide?
It started with Marion Wade, a person with an eighth-grade education. One of the most amazing things that happened was that Marion was a researcher with an eighth-grade education. He invented a new way of doing moth-proofing, which was the early work of ServiceMaster. He found his way into a lab at Northwestern University and worked this out for several months to create this new product. The new product required some heating, and in one of the instances in 1944, it exploded in his face. The thought was that he might be blinded. He said it was his Damascus road experience.
Coming out of this, he said, “Lord, you can do whatever you want with my life.” He felt God telling him not to become a missionary or a pastor, but to turn his business in a different way. He said, “I’d been a Christian in my personal life, but I never thought about applying that to business.” Marion Wade is the genius who had the idea that I could think about my business in a completely different way. He said, “I want my success to be measured by not the usual means, but a testimony to the work of God long after I’m gone.” He said this way back in 1944. It changed the nature of the way the company was built.
He wasn’t much of a business guy, it turns out, but Ken Hansen came along, and he saw something in Ken, a former pastor. He recruited him very hard to join the company. Ken had no obvious credentials in finance, but Marion saw something in him. He said to Ken, “I want you to make sure that you pay the workers as well as you can. When you get done, pay yourself. If there’s anything left over, pay me.”
Ken had some wonderful insight in terms of financial things. He developed a dashboard based on a telephone and a slide rule, where he could get key numbers and display how the company was doing very early on. He added this business acumen. He’s the one who took the company public. Once a company had gone public, he realized that he didn’t have all the credentials he needed to run a publicly traded company, so he went to the University of Chicago and got an MBA. He was working full-time and going to school part-time.
The Shingles On A Roof (Succession & Collaboration)
They recruited Ken Westner. Ken was a process guy. He became fascinated by this idea of carefully building a process in the way you do your work to be effective and to deliver value. The three of them had this practice where they recognized different gifts in each other. Marion was the chairman of the board, Ken Hansen was the CEO, and Ken Westner was running a major part of this.
The three worked together, and they called it Shingles on a Roof. Ken Hansen used to say, “Marion Wade is a master sales guy. He can stand up and wow people. I’ll let him do the presentations, but he’s horrible at closing, so I’ll close.” They used each other in this way. When they recruited Bill Pollard, Marion had died, but Bill and Ken worked closely together. The Shingles on a Roof continued. That way of doing things was incredible.
Bill came along and said, “Every service person would benefit from this kind of thing. Are there some other services we could reach out to and grow the company to continue to provide opportunities for the development of people, but to grow the company?” He took on this idea of acquisitions. Ken Hansen had tried acquisitions early, and they had failed. Bill said the key to an acquisition is the right kind of orientation. He became a professor. He spent a lot of his time simply talking about the four objectives that ServiceMaster held to and how those worked. He brought in lawn care, pest control, and other kinds of things.
Along came Terminix and Carlos Cantu. Carlos recognized the need for valuing diversity, as he himself is Hispanic. His parents had come from Mexico. He brought in a diversity element. Each one added something to what the previous one had done. Each one built on the foundation of what the other did. Each one continued to value that foundation. It’s an amazing time from 1929 until 2001 as they built on each other and as they honored the past, recognizing the change in the world and the need to adapt and make some changes. That growth was a byproduct.
I love the story of Bill Pollard being interviewed by People when he was being considered for a role. I’m not sure who was there, if it was Westner and Hansen, or Chuck Stair and Westner, but whatever. Senior leaders were interviewing Bill, who was being considered to come on board. He asked what his title would be, and they abruptly got up and ended the interview.
A little bit later, they called Bill and said, “Would you like to know why we abruptly ended the interview?” He said, “Yes, I would.” They were like, “Meet me for breakfast at such and such a time.” They met and said, “It’s because you asked what your title would be. We are here to do whatever is needed to serve each other.” I don’t know exactly what was said, but it was to serve each other, to serve the enterprise, and to serve our people, not to worry about a title.
Bill told me that Ken Hansen said to him, “If you’re here for a title, we don’t want you. If you’re here to serve, there will be a wonderful opportunity for you. What do you want to do?”
If you're here for a title, we don't want you. But if you're here to serve, a wonderful opportunity awaits you. Share on XThere you go. In typical Ken Hansen fashion. The fact that Bill and Ken were very direct is something that spilled over to a lot of us. I can be direct, and it came from being mentored by these guys.
It was in that context that both of them recognized that sometimes, in being direct, they’ve missed a point, and they needed to apologize. Ken Hansen wrote a wonderful little piece in a little booklet he wrote called Reality, where he talked about a painting that he had done that had some black in it, representing the brokenness of every leader. I have not seen much leadership training that focuses on the brokenness of the leader, but Ken Hansen believed this deeply and talked about it. I heard many stories of each one of these leaders needing to say to a person, “I was wrong. You were right, and I apologize.”
That is a good trait for any leader. Let’s take a little detour. You’re not a theologian, and I’m not a theologian, but we’re going to talk about The Soul of the Firm book for a second that Bill Pollard wrote. He espoused the fact that a firm might have a soul. For all of the theologians who want to write to us and be critical, Al or I are not espousing the fact that a corporate entity can have a soul, but it’s an idea. It’s a concept. What did you learn as you wrote the book about this notion of a firm having a soul?
The Soul Of The Firm: Embedding The Four Objectives
Maybe a modern term for that would be that a firm has a culture. The culture has a particularly important role in recognizing, “We don’t do things this way here. This is what’s expected.” The culture was driven by their four objectives, which were to honor God in all we do, to help people develop, to pursue excellence, and to grow profitably. Interestingly, the leaders sought to embed that in everyone who came.
I did these 70 interviews, and I don’t think there was one that I did where the person in the first few minutes didn’t say to me, “Do you know about our four objectives? Let me tell you about them.” A lot of companies have objectives. They might hang on a wall, or they might be in a desk drawer, but these were a very real part of who they were.
The soul of the firm was what was expected, and everyone understood this. It was a part of it. It’s a little bit deeper than just the sum of the souls of the individuals, because when you walked into that office, you knew that these were the things that were expected of you. This was the biggest challenge that Bill Pollard faced when they started doing acquisitions. How do you bring in someone or some company that has a culture different from yours and embed and make sure they understand that this is what is expected?
The big acquisition in ‘86 was Terminix. I remember one of the people I talked with said, “We would come back from those meetings shaking our heads, saying, ‘What is all this philosophy stuff? Let’s get on with making money,’ but Bill was relentless in pounding this in.” Carlos Cantu, as the leader, is the one who got this. He continued this as well.
In some cases, it was harder to deeply penetrate some of the acquired companies, but it was happening over time. That is what represents the soul. It is this deeply understood culture that this is what is expected of us, and this is the way we are to perform and act. Does that square with the way you experienced it?
Yeah. I was in meetings with Terminix people who would use a few choice swear words and say, “I’m not putting those blankety-blank objectives on my wall.” Yet, I was talking to our vice president for people, whose name is escaping me, who would be running around the country doing training sessions on our value set.
It’s not helpful to say to somebody, “You certainly will put our objectives on your wall,” but you would want to say to them, “Let’s talk about why we think our values are worth talking about,” along with the 21 or 27 leadership principles of ServiceMaster that would be dialogued about with all these Terminix people.
Once a Terminix person begins to understand that as they’re spraying the lawn to make it greener and have less weeds, or once a merry maid’s lady sees the franchise owner helping her clean the house, or once a hospital employee realizes we care about them having a great mop, they realize that the value set is not just a series of words on a wall to help people develop. Since we believe that people are created in the image of God, therefore, people have value. Therefore, we should treat people with dignity, value, and respect. It begins to mean something. It begins to not be a plaque on the wall, but it’s worked out in shoe leather.
Out of that are created stories that are told again and again, which help other people get it, not just as a ritual, but as a way of life. One of my favorite stories was when Bill was in London, and they had their business meetings. They were part of the services for the National Health Service in London. At the end of the meeting, he said, “I want to meet some of the real people who are doing the work.”
They went down on the floor, and he was introduced as the Chairman of ServiceMaster. This woman dropped her mop. She came over to him, put her arms around him, and said, “You have changed my life since you took over the housekeeping services here at the National Health Center. I used to put in my time. Now, I’m helping the patient get well. I’m an integral part of these health services. You have changed my life.” It’s stories like that that make it very clear, not just to the leaders, but to the people doing the work, that they understand what their role is, how that works, and why it’s so important.
Let’s flash forward to the last decade. ServiceMaster was the most significant service organization of its day, on the front cover of business magazines, and studied at Harvard, but now, it’s not functioning on the same value set. If you logged on to the website, it would not say, “To honor God in all we do.” What happened, and what can we learn from history?
Let me back up a second. When Bill and I were talking about this, I had an agreement that he couldn’t pay me because I didn’t want it to be biased toward him. I wanted to write it as something that I believed in. Secondly, he needed to open his network. Thirdly, I had editorial control. This is my book, and not his. We had that agreement. He said, “You shouldn’t say anything about what happened after 2001 because it isn’t a pretty picture.” I said, “If I’m going to write this with integrity, everyone wants to know what has happened. I need to do that.”
Writing that chapter post-2001 was the hardest part of the book. I tried to be very fair. What happened is that Carlos took ill, and Bill had to step back in. Ultimately, Carlos died quite young from cancer. Bill stepped in on an interim basis in 1999 and 2000. The board decided to get someone from outside to come in. As nearly as I can tell from everything I’ve read, Jonathan Ward was a very capable leader, but the ownership and the deep understanding of these four objectives were not a part of it.
Early on, he made a very clear statement to the investors that we are, number one, all about shareholder value. It was that statement that made it very clear that it wasn’t going to be the same. They sold off the major part of the company that was dealing with housekeeping at hospitals and in the industry. The goal was to make a lot of money. They struggled throughout his tenure, and he was ultimately terminated in 2006. The company was taken private. It was owned by a private equity firm.
A note for people who are not familiar. When Jonathan sold the healthcare piece, doing biomedical equipment, materials management, patient transportation, and food service, that was 50% of the company’s value. $3 billion or $4 billion was taken off the top-line revenue.
He did that because he saw that the profit margins for that part of the business were slowing. While Bill was running this after Carlos had taken ill, Bill had a meeting with Warren Buffett. Warren Buffett said to him, “Profit is measured by how rapidly the stream is flowing. If the stream is flowing more slowly, you will get less profit. Accept that,” and Bill did. As a result, they recognized that this was not a big profit engine, but that was not Jonathan Ward’s objective.
The Variable Change: Shifting From Purpose To Profit
After he was terminated and it went private, in 2013, Rob Gillette took over the company and took it public again. He’s the first one. There were about four CEOs over that period, from 2001 to 2013. Rob reached back to Bill. He said, “Bill, you guys had tremendous success. What did you do?” Bill went through the four objectives, and Rob said, “I don’t know that I can do that exactly. Furthermore, I’ve got a board that’s pressing me for short-term profits. I don’t think I can pull that off.” He was fired in 2017 because they weren’t growing rapidly enough.
Another person came in, he was fired, and then another person came in. Not long ago, the company was split. Terminix is all that’s left of the old ServiceMaster company. The ServiceMaster brands, all the ones that were left, Mary Maid, Furniture Medic, and all the franchises, like ServiceMaster Clean and ServiceMaster Restore, were sold to a private equity firm.
I’m a scientist by training. When I think about doing an experiment, I say, “If you can change one variable and look at the results, you can learn a lot about the impact of that variable.” As nearly as I can see in studying this very carefully, the variable that was changed was to move from profit as a means goal, and our primary goal is helping people develop and honoring God with our business. When you shift that to profit is our objective, and you have the same businesses otherwise, everything changes.
Our primary goal is helping people develop while honoring God with our business. Share on XI have to say that, as painful as it was to watch this happen, it is the point that proves the point of how important it was to hold on to these four objectives. One of the interesting things after this is that I went and visited several franchises. A couple of them were holding on because they were franchises. They weren’t supported by corporate anymore, but they were holding on to the four objectives, and they were doing well. I found people like you, Greg, and that was the exciting thing about the interview. They have learned something from ServiceMaster and are carrying this on in other places.
The ServiceMaster vision, even though it isn’t present in ServiceMaster like it was, is being carried on in different places in the world. I even found a leader in Saudi Arabia who used to run the Saudi Arabia portion of ServiceMaster. He told me excitedly that he has three companies that he’s running in Saudi Arabia. He said, “We have four objectives in each of these companies. Do you want to know what they are? To honor God in all we do, to help people develop, to pursue excellence, and to grow profitably.”
The concept lives on. It’s impacting a lot of people. Maybe someday, there will be a revival in ServiceMaster as the private equity firm disposes of this in some way that would rekindle this. It changed the service industry. The service industry is regarded as low-cost labor. If you help people develop and engage people in purpose and meaning, Bill used to say, “When the cause of the firm and the cause of the people in the firm are aligned, look out because you’ll have incredible performance.”
When the cause of the firm and the cause of the people in the firm are aligned, lookout—because you'll see incredible performance. Share on XIt could be said that the story of ServiceMaster is being told by hundreds of leaders who carry those principles in their mind, heart, and soul, and are promoting them in whatever they do. One of those leaders is Andy Beal, who’s a new Convene Chair in Phoenix, Arizona. He is going to influence hundreds of millions of dollars of revenue in the businesses that he helps to be their best, to build their business on a biblical platform, and to do great business, to look people in the eyes and say, “If you don’t have profit, you don’t have a company to honor God,” and yet, to say, “Just because you have profit and you’re not honoring God, you need to honor God.” The story of ServiceMaster will be told in the lives of leaders as they carry forth those principles to their businesses.
Patricia Asp, who was a key part of ServiceMaster during this time, said to me, “These were not just business principles. These are life principles. It has changed everything about my life, my family, and other things.” Now, she is a leadership training coach. She says, “These principles are a part of everything that I’m doing.” A dream is that they will again live on in ServiceMaster, but they are indeed living on in other businesses.
They’re living on here at Convene and all that we do. We’re helping hundreds of businesses to take a look through the leadership content that we do, to take a look at ServiceMaster, and to understand what they could learn and what they could pick up by reading The Soul of the Firm or listening to a Bill Pollard talk. For those of our readers who are interested in hearing more from Bill himself, I interviewed him for twenty minutes. The book is The ServiceMaster Story. I encourage you to buy that wherever you buy books. This was Al Erisman, a former Boeing Executive. I’m very excited that you took time to be with us from your office in Seattle. I wish you God’s best.
Thank you so much, Greg. It was an honor to be with you and an honor to do this book.
Thanks.
God bless.
