CEO Interview |Dina Dwyer-Owens
The Dwyer Group
The Dwyer Group
- Please give us a brief overview of the Dwyer Group
The Dwyer Group of companies was founded in 1981, by my late father, Don Dwyer. His first business was Rainbow International, a carpet dying and cleaning company. His vision was to have a collection of synergistic franchise businesses serving the same customer base, and to be able to use the same infrastructure, achieving economies of scale. Since 1981, we’ve owned and started up a lot of businesses. Today, we basically have seven (7) franchise brands: Rainbow International, which is now a full-service restoration and cleaning business, Mr. Rooter (plumbing and drain cleaning), Aire-Serv (heating and air conditioning), Mr. Electric, Mr. Appliance, Glass Doctor, and The Grounds Guys (lawn care and maintenance company), our newest brand.
Today we have approximately 1600 franchisees, who collectively employ approximately 9,000 people. We’ve grown dramatically. Just before my father passed away, he’d taken the company public in 1993; we teased that going public killed him, because it took some of the control away. He’d laugh about that today, because he was a bit of a control freak—and happy to admit it! We have since gone private, and have a wonderful private equity partner, The TZP Group, out of New York.
- You were featured on the TV show Undercover Boss recently; how did that come about?
It’s a fun story to tell. I became CEO in 1999; we were still publicly traded when I was invited to be the acting President/CEO. I was only 35. Our outside public board wasn’t so sure how the share holders might receive this 35 year-old “girl,” coming into a position of this male-dominated organization. I had a vision of actually getting an RV—I had two young kids at the time, and my husband was working in the business—and taking a summer trip, making stops across the country and spending time out on the truck with franchisees and their front-line team members. The goal was to really understand the jobs they do and get their ideas for how we could make these experiences even better for the customer. Because I am the customer. You and I, Margaret, are the ones answering the door. Unfortunately, life got very busy as the CEO, and that summer trip never happened. So when Undercover Boss came out, I thought, well maybe Undercover Boss would consider The Dwyer Group. The timing was great too as we were coming up on our 30th anniversary. What better time to find out what was really going on out there? We do a lot of satisfaction surveys, but it would be good to know if it reflects what is really going on. Going undercover, without them knowing that it’s the CEO of the business, would be a very different experience. So we proactively approached Undercover Boss. And within 2 weeks, they had a casting director in Waco to interview me. They shared that interview with CBS, and within about 3 weeks, CBS gave what they call the “green light,” and said that they’d absolutely love to have The Dwyer Group featured on Undercover Boss.
- Is the show for real? Many think it is all staged.
It is more real than the viewer could ever imagine. I was really kept out of the process. We went through all of the preliminary stuff to get CBS to approve it. Then they worked directly with my marketing team, and they asked me to stay out of the process, because they wanted it to be a true journey of newfound experiences. They asked for franchise locations around the country. Then they went out and interviewed over 100 team members. They picked the four people that I would work alongside. I really didn’t know, Margaret, from one day to the next, who I was going to see until I was basically getting on an airplane, and they’d say, “Ok, tomorrow you are going to be in Atlanta; you’re going to be meeting with a Mr. Rooter technician at so-and-so’s franchise location.” Every day was a surprise.
- You seemed very genuine on TV.
Yep! It was the real me! And my team—I warned them—I said, “Guys, you know I cry, and I’m goofy, sometimes! That’s just who I am.” They said, ‘We know, Dina. We expected that.’
- You wrote a book about your values called LIVE R.I.C.H. RICH stands for Respect, Integrity, Customer focus and Having fun in the process. What motivated you to write the book?
My father founded the company on a very clear set of values. He coined them his “code of values.” It was a collection of his beliefs that he had gotten from all the books he had studied on leaders, including business leaders, military leaders, and church leaders. When I walk up the stairs to my office everyday I see a picture of my father and the original code of values up on the wall. The one value that just jumps in my face every day is “We must re-earn our position every day in every way.” There were six kids in my family, and we all worked for my Dad. He didn’t care what we did yesterday, he only cared “What are you going to do different today to make a difference in the lives of our franchisees, our associates, and our user/customers.” I hear that every day when I walk up the stairs. But when he died (he died of a sudden heart attack at the age of 60 in 1994), one of our biggest fears as a management team was how do we carry on this special culture? Don Dwyer is a really special person. He created it…he actually created The Dwyer Group. He would communicate what his belief systems were to everyone he touched. Then he would hold us accountable to those. But they were belief systems–not measurable values. You couldn’t say, at the end of the day, was I loyal today? You might say you were loyal, but Don Dwyer may have thought, “No, you really weren’t loyal because you did this. And in my mind, that doesn’t mean loyalty.” So he held us accountable to those. And we knew that the only way to keep the culture special—and we’re very family-oriented—was to create a very operational code of values that each and every one of us could hold ourselves accountable to, and make them measurable.
We came up with the idea of the operationalized code. Four key areas, as you mentioned, Respect, Integrity, Customer focus, and Having fun in the process. But basically, there are 14 key values—or some people consider them standards—that we developed for our team.
- How do you make sure the entire organization lives that culture?
It starts with leadership; we have to have management (starting with me) who completely embraces the Code of Values and is willing to be called out on them when not living up to them. To introduce the Code of Values to our 125 associates and 6 management team members, we said, “We need to keep this culture special. We think this code is the answer to doing that. As an executive team, we need you all to help us get through this Code of Values before we invite you to follow these operational values.” So we played a game, called the “beep game” for 90 days, which meant that the employees had to get very familiar with those new operational values. Anytime they found an executive team member violating a value, they had to give us a verbal “beep.” Maybe it was kind of silly, but you know, we’re from Waco, Margaret, so we do silly things sometimes in Waco. If you were walking down the hallway, and an executive used profanity, for example—we are in the trades, so that does happen from time to time—all an employee had to do was say “beep.” So there was a lot of beeping that went on during that 90 day period. But when we brought the team back together and asked what they thought, they said they really believed this was the right solution. Then I had to ask them, “Are you committed? Are you willing to live by these? Because just the management team can’t live by them, it has to be every one of us.” Since we’re in franchising, we knew that we had to systemize them. One of the biggest challenges with companies is that they have these wonderful strategic planning programs, and they come up with a vision and a mission and a code of values/ethics, and they’re excited about it—maybe the first 30 days—then they get busy doing what they’ve always done, and those things kind of disappear into the bookshelves or into the drawer. Five years later, they’re back at another strategic planning session, re-inventing what they never took advantage of in the first place. At Dwyer, we said we’re not going to let that happen to us. We agreed that anytime there are 3 or more of our team members in a meeting, we are going to take a few minutes to review our Code of Values.
We went as far as asking associates to memorize them. We call it, “by heart, with heart.” I don’t just want them to memorize them; I want them to internalize them. By having to memorize them, it really forces you to know them. Because some of them are a little long, we came up with “living RICH.” My goal is for everybody here on campus to know them “by heart, with heart.” Today, we probably have maybe 60% that can do that. But 99.9% are able to talk to you about the Code of Values in a significant way.
- How do you drive that all the way through your franchises? On the Undercover Boss, there was a challenge with one particular franchisee.
The goal is to award franchises to people who truly believe that the Code of Values is the right way to run a business. Brock, who was our Mr. Electric franchisee that I spent time with, is really a very good franchisee. In fact, the Code of Values is what attracted him to The Dwyer Group. He has very good customer service skills, but he wasn’t following all 14 steps. There’s a Code of Values and front line steps. So there’s a bit of confusion, maybe, to the consumer, because it’s a lot to cover in a 44-minute episode. While Brock certainly believes in the Code of Values, he had not completely implemented the 14 steps, and had admitted that in front of 10 million-plus viewers. So, in the case of Brock, he was following 12 of the 14 steps. Behind the scenes, Brock actually has very high satisfaction scores. But guess what? When he implements all 14 steps, which he’s doing now, his should go up. We do surveys among our user/customer groups; we do the Net Promoter score, and track that very closely. When a franchise is not living up to those high expectation levels, then we’ve got to coach them and redirect them. We do everything we can to keep them as a franchisee in our organization. But if they don’t want to step up and follow the systems, Margaret, we may have to invite them to leave the system. And that’s our responsibility as a franchisor, because they’re not helping the other franchisees when they’re not living up to the Brand promise.
- What is your current dream for the company?
Oh boy! I have all kinds of dreams. My father’s original dream was to have 10,000 franchisees doing a billion in system-wide sales. What we learned is that it doesn’t take 10,000 franchisees to do a billion in system-wide sales. We’re at 1600, and knocking on the billion-dollar mark already. It’s not just about the dollars, although we are in business to make money and we have investors who are in business to get a nice return on their investments. On the financial end of things, I want to be the premier provider of trades services in the world. So when you think of a premier provider of services, whether it’s plumbing or appliance repair or electrical or grounds care, or any of the new business sector we might go into—I want you to think about our companies and our brands top of the mind. When you think, “I want somebody qualified and trustworthy in my home, I’m going to call one of The Dwyer Group brands to do that.” So that’s my vision for the future, and that should be a company that’s multiple billions of dollars in system-wide sales.
- Do you see the portfolio of The Dwyer Group expanding?
Absolutely! That’s one of my key responsibilities of The Dwyer Group. Culture is #1, that’s my highest responsibility. But the next is strategic acquisitions and taking the company to a new level through organically growing the business that we have.
- Terrific! Talk a little bit about how leadership in a franchise organization is different than being a leader of an integrated organization.
There are many benefits of our operation; one of the biggest benefits is that we don’t have a bunch of company-owned operations out there. I think sometimes it is hard when you’ve got a management team responsible for a branch store, but the management doesn’t have any ownership in that store. You don’t always get the quality of service that you would hope for. With a franchisee, they are vested. They have a vested interest that is their business. They are independent business operators. They just happen to be licensed to use our brands and our systems. And they are part of something special, because one of the greatest values of a franchise organization is the sharing amongst the franchisees. They are not in competition with one another. They are there to help build equity in each other’s businesses. So they share best practices—and really, friendships—and building a franchising organization that lasts forever. I think the beauty of it is, not only do we as franchisors work hard to hold the franchisees accountable to the systems of the brand promise, but the franchisees in that system are also doing the same thing. If we collectively are not living up to the brand promise that we’re putting out to the consumer, we won’t grow more equity in the business. So when it comes time to sell their business, it may not be what they expected–they’ve got a real stake in the business.
- You have tools that help you hold the franchisee accountable between the codes and surveys. Do you feel that you try to manage through motivation and influence rather than authority?
Oh yeah!! We have to want to be on the same team. That’s why it really starts during the diligence phase. We look for great franchisees who believe in our Code of Values. Thirty years into our history, we can be very selective who we award a franchise to. In the early days, frankly, in 1981—if you had a heartbeat, and you had something to exchange for the down payment on a franchise fee—we pretty much gave you the chance to be a franchisee. My father believed in people who had the desire. But today, it’s really about selecting the franchisees and awarding the opportunity to be part of our business. So it starts right there, and then managing it very carefully…it’s really a marriage of sorts, lots of communication.
One of the things I got out of Undercover Boss was a reminder about the importance of communication…just when you think you’ve communicated enough is when you need to communicate again. So, whether it’s communication about the importance of the Code of Values being lived at the front line, the importance of training, and how you can never train enough, either. And that’s really the core competency of a franchisor, is to continually sharpen our skills, and then take that training to the franchisees.
- Communication is such an essential component, and one that is often overlooked by every executive because we all get SO busy!
I use a term, and I’m sure I didn’t make this up, but I like the way it sounds—it’s “hyper-communication.” We should always be hyper-communicating and hyper-training. Because you really cannot do enough of that either.
- Since you have been in the leadership role, is there something you have learned or use as a trusted solution, in good times or bad, when making a tough decision?
Well, I would say the Code of Values, because—for us—that truly is the foundation for our success. When it comes to making difficult decisions, Margaret, we just have to look at the values. We have to be really honest with ourselves about listening to feedback from a franchisee or from a customer, where maybe we failed in living up to our Code of Values. If we’ve made mistakes, we’ve got to own those mistakes. Yes, if we don’t believe we made those mistakes, we’ve got to do a good job helping the other party understand why we don’t believe we’re at fault in that situation. One of our values is operating in a responsible manner above the line, which really just means being accountable. Every party needs to be accountable, and own whatever it is.
- Besides your father, are there books you have read, people who have mentored you or even historical figures that you admire that have shaped your leadership style?
It’s a combination of all those but the thing that really brings me the greatest guidance is my faith. And that, of course, was in the episode, as well. Thank God—to CBS, and Studio Lambert—for allowing me to be who I really am, and for them taking the time to share that with the world. I am very grateful for that, because I say my #1 secret to success is my faith. I don’t know if you can qualify that as a secret to success, per say, but it’s where I draw my strength. And I know that if I’m serving others, Margaret, then that’s the best that I can do. So, my faith is really my #1 guide. Second, would be my team. It is important that I always surround myself with the right people. I’m only good at a few things. I’m just smart enough to be running this business, and the rest of the folks I have around me are so good at the things I’m terrible at, or that I don’t want to spend my energy on. I’ve got so many people I rely on to help me achieve what we’re doing here at The Dwyer Group. And the third thing is systems—so when things are going awry—in my business, or even in my personal life—I always look back to systems. Do I have a system in place to help manage this better? And if I don’t, what am I going to do about it? And so many times, when things aren’t going right, it’s a systems issue, not a people issue.
- What would you say is your biggest mistake and how did you recover from it?
Hmmmm….boy, I’m going to have to be careful about how I say this because I would never purposely hurt anyone or cast doubt on people.
However, there was a team member one time that had a very big responsibility with the company. Unfortunately, that person didn’t live our values. Because of that, there was a lot of havoc created in the organization. Still, this individual was very good at the job. Eventually, the issue came to the board level, and we had many discussions about, “Is this the right person to be on our bus?” From the feedback that I was getting, it was the bull in the china shop, and it was creating havoc in many more ways than anybody could have imagined. And so finally, as much as I liked this individual, because I think there’s a big heart there, this person was not right for our business. The mistake was it took me too long to encourage change at the board level.
- How did the company fair through the recession and what have you had to do differently to recover, if necessary?
One of the nice things about our business is that we’re in (mostly) recession-resistant niches. And, until this last recession, you could never find a recession in our financial statements. What we discovered, as many others did, is that this is/was no normal recession. We had some brands that had double-digit declines. Fortunately, a couple of brands had single-digit/double-digit increases. Because no matter what the economy is doing, if you had a flood in your home or a fire in your home, Rainbow International is going to be needed. Even with Mr. Rooter, for example, that had double-digit decline—we didn’t lose customers. What we lost was the opportunity to do a full-replacement of a plumbing system when there is a lot of damage. What the consumer did, instead, was make some patches. They had us do repairs to their systems– when replacement is what we should have been doing. So our franchises and our company—all of our companies—even those that had double-digit increases—had to say, “Where do we need to be smarter about the way we operate?” We had gotten fat and happy, probably like a lot of other business operators. Those of us, who can take things like the recession and make our company stronger, have survived. We had a foundation with our Code of Values and our systems, and we faired very well. During the recession period, we were pretty much flat for 3 years, as an organization. While some divisions had declines and some divisions had nice growth, overall EBITDA stayed pretty flat. We are now seeing some nice return on our growth, which is wonderful. Our franchisees and The Dwyer Group all got smarter about the way we operate our business.
- What kind of new tools did you put in place that have had a positive impact on performance?
One of the greatest tools that we have been piloting over the last few years is “Service on Your Schedule.” For example, if you are interested in having Mr. Appliance come to your home to fix your Sub-Zero refrigerator, and you really don’t have time to call during the day to set an appointment, you can go online at www.mrappliance.com and you can look at the schedule of the franchisee in your marketplace and schedule your own appointment at your preferred time. It takes communication with the consumer to a whole new level, so not only will you be able to book your own job, but you’ll also be sent (within 24 hours of your appointment with your Mr. Appliance franchisee) a picture of the service professional that you can expect to arrive at your door at 10:00 tomorrow morning, when you’re going to have your Sub-Zero refrigerator fixed. It makes it more convenient for the customer and also eliminates the need to have people at the appointment desk.
- What advice would you give other leaders taking over the reins of an established company at a young age? What do they need to know to avoid mistakes and do a great job?
First of all, they better really love the job. I’ve got 5 brothers and a sister, and they basically said, “I don’t want it.” It wasn’t for them. You’ve got to really want to be in that position, because it’s a huge responsibility. You might recall in Undercover Boss, I got very emotional at the end of my journey. I realized just how huge my responsibility is to so many people. You have to recognize that it’s a huge responsibility. And you have to be willing to take that on and know that it’s going to be even harder to manage—to balance your life, especially as a parent. So I would just say be very clear about if that is something you want to do. In my case, I wasn’t willing to sacrifice more time away from my family. I had to really look at my life and say, “How do I manage this? How do I take on the greater responsibility and still keep this balance with my husband and my two kids?” I did something as simple as hiring a housekeeper to come in to do all those things that I was spending 3 hours a day on, and that was taking me away from spending good quality time with my family. So I think you should be very clear about who you are, what you want to be, and what you need to get out of the way.