While it may sound contradictory, Raleigh, N.C.-based Waste Industries USA embraces change while pursuing a business strategy that hasn't changed much in 40 years.
Lonnie Poole — father of Ven Poole, the firm's current CEO — founded the company in 1970. The first employee to join the firm was Jim Perry, the company's current chairman. Lonnie Poole and Perry developed Waste Industries' strategic principals in the 1970s.
"We sometimes have fits of rapid growth, but we have always believed in steady, managed growth from diverse sources of revenue," says Ven Poole. "We have a balanced mix of services and revenues. Approximately 25 percent of our revenues come from each of three collection categories — residential, commercial and industrial solid waste. Another 15 percent of revenue comes from transfer and landfill services."
The remaining 10 percent of revenue comes from a variety of sources including recycling and a medical waste service that operates in North and South Carolina. A landfill gas-to-energy facility at the firm's Sampson County Landfill in Roseboro, N.C., will soon add to this revenue stream. The facility will produce 6.4 megawatts of electricity at first — power that Waste Industries will sell to Raleigh-based Progress Energy.
"That mix — 25 percent, 25 percent, 25 percent, 15 percent, 10 percent — is a nice blend," Poole says. "Within those categories, we maintain a balanced mix of three- and five-year contracts and long-term contracts with cities and counties. No one market segment provides more than 30 percent of revenue, and no one customer provides more than 5 percent of our revenue. It's a business philosophy that is all about balance."
The philosophy has served the company well. The company's revenues have risen steadily since 1970 to an estimated $400 million this year, and the firm ranked 16th in the most recent Waste Age 100 ranking of the largest waste management companies in North America.
Waste Industries protects itself by diversifying sources of revenue, and the firm aims to boost productivity through the application of a management style known as "continuous improvement." The objective of the management style is to boost productivity through many changes made over time.
"For instance, we are continuously analyzing and upgrading our routes," Poole says. "We want to work more efficiently every day. We also train people constantly and aim at working safer every day."
Poole does not, however, shy away from bigger changes when necessary.
Three years ago, the company embarked upon a series of major technological changes. It converted to a new system for billing, customer service and route management, and the firm upgraded to new fleet management software.
The fleet software analyzes the historical maintenance costs of each truck and enables fleet managers to identify trucks that will be expensive to maintain and to replace them before the costs get out of hand. Likewise, the application makes it possible to identify trucks that can provide an extra year or two of useful, cost-efficient service.
The technological upgrade is continuing. Today, the company is replacing desktop and laptop computers with thin clients and blade servers. Thin clients are stripped-down computers that communicate with centrally located servers or hosts. Since the thin clients do little more than communicate with the servers and rely on the servers to handle functions performed by a typical computer, they cost hundreds of dollars less than desktop and laptop computers. Equally important, thin clients last five to eight or more years, compared to the two- or three-year lifespan of desktop and laptop computers.
"We think these new systems are better suited to the larger company that we have become," Poole says. "They also serve as agents for change that are improving our practices."
Private to Public and Back Again
Perhaps the most dramatic example of Waste Industries' willingness to make big changes was its return to private ownership in 2008 after more than a decade as a publicly traded company.
By the late 1990s, Waste Industries had reached $100 million in revenues. At the time, the waste industry was going through a period of rapid consolidation, with large public companies acquiring others by issuing stock and literally using it as currency to make acquisitions. "That was the thing to do in those years," Poole says. "We went public in 1997 and used the same technique. In a three-year period we bought about 100 companies and expanded our service area from two states to seven states" [the firm is currently in six states].
Over the next 11 years, the company more than tripled in size, and in 2008 generated revenues of $361 million. Then management decided to take the company private again. "During the period of time that we were public, a number of corporate scandals — such as Enron — resulted in additional regulations, which placed a heavy administrative burden on companies with legislation such as the Sarbanes-Oxley Act," Poole recalls. "We decided that we weren't large enough to bear that administrative burden and continue as a publicly traded company."
Poole cites two additional reasons for the company's return to private business: Management felt inhibited from taking on long-range projects because of the unrelenting pressure on public companies to post quarterly profit gains. "Finally, my father and Jim Perry wanted to take some of their investment off the table," he says.
In May 2008, Waste Industries went private. According to the leveraged buyout plan, Lonnie Poole retired from his position as chairman of the board at the end of that year. He was replaced by Jim Perry, who had been CEO since 2002. Ven Poole became CEO at the start of 2009.
It wasn't an auspicious time. By the end of 2008, the economy had collapsed. But as the economy skidded, Poole started acquiring small and regional companies. By the end of 2009, he had bought 22 firms. Partly as a result, the firm's revenues rose from $361 million in 2008 to $369 in 2009.
"We are still in an acquisition mode," he says. "We acquired several companies early in the year, including a nice-sized regional company in Columbia, S.C. We're working to integrate that firm and looking at a couple of additional acquisitions that we might complete before the end of the year."
Over 40 years, Waste Industries has always found a way to grow and change just as the waste industry grows and changes. The firm says that won't change.
- Read the "Waste Industries at a Glance" sidebar to learn more about the company.
- Read the "Keep on Truckin'" sidebar to learn why Waste Industries gave a brand new front-end loader to Johnston Community College.
- Read the "Taking Care Of People" sidebar to learn why Waste Industries received special recognition from the United States Department of Defense.
Michael Fickes is a Westminster, Md.-based contributing writer.
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Sidebar: Waste Industries at a Glance
- Executive Team: CEO — Ven Poole; President and Chief Operating Officer — Harry Habets; Chief Financial Officer — Steve Grissom.
- Service Area: Georgia, Maryland, North Carolina, South Carolina, Tennessee and Virginia.
- Services: Collection of residential, commercial and industrial wastes; recycling; transfer stations; landfills; medical waste collection and disposal.
- Employees: 1,656 full-time; 204 part-time
- Year Founded: 1970
Sidebar: Keep on Truckin'
In April, Waste Industries gave a brand new front-end loader to Johnston Community College (JCC) in Smithfield, N.C. JCC needed the truck to provide hands-on driving experience to students attending the North Carolina Truck Driver Training School, which is located on the JCC campus.
The new truck will complement the school's current fleet of approximately 22 road and range tractors and 35 trailers. More than 22,000 students have graduated from the school, which is co-sponsored by the North Carolina Trucking Association, since 1949. The school is considered the world's oldest truck driver training program.
"Waste Industries is giving JCC the opportunity to expand training, and this piece of equipment will be used to expand their workforce by ensuring continuous training so that Waste Industries, and other companies in the trucking industry, can hire qualified, competent drivers," said Dr. David Johnson, president of JCC, in a prepared statement.
Sidebar: Taking Care Of People
In March, Waste Industries received special recognition from the United States Department of Defense for its commitment to employees serving in the National Guard. "Our policy is that if a member of the Reserves or National Guard who works for us is called up to active duty and sent overseas to a lower paying job, we will maintain their pay and benefits and protect their job," says Ven Poole, CEO of Waste Industries and the son of the company's founder Lonnie Poole.
In addition, members of the armed services continue to accumulate vacation time while on active duty. Coworkers regularly send those on active duty care packages and letters to help keep them connected to their friends while overseas.
"Waste Industries goes above and beyond what is required by law in their support of their employees who serve," said Ken Oppenheim, chairman of the North Carolina Area Employer Support of the Guard and Reserve (ESGR).