Give managers a vested interest
Jay Hennick opted to take the fast lane to growth, building his diversified services firm, FirstService Corp., largely through acquisition. Over the past two decades, smart shopping has netted Hennick a portfolio of repected brands that includes ChemLawn, College Pro Painters and Intercon Security. But the strategy has had its challenges: how to ensure that managers at the acquired firms, whose energy and drive make the acquisition attractive in the first place, don’t take the money and run.
The solution: give them a good reason to stay. Instead of buying firms outright, FirstService partners with operating managers, giving them equity ownership (typically about 15%), the autonomy to run the business their own way and significant performance-based compensation opportunities.
“If they achieve certain financial and non-financial targets, they know exactly what’s in it for them,” says Hennick. “And there’s no cap.”
It’s win-win, says Hennick: FirstService has no problem retaining management with a mission to grow the business year over year. —CC