Through hard work and perseverance, Cardinal Waste Services has carved out an effective and reliable reputation, while continuing to grow and improve all parts of the business.
Founded in 2005 as a residential service provider, Cardinal Waste Services (CWS) (Lively, VA) started with a truck, dump trailer and one residential customer. In 2006, the company expanded into roll-off service, front-end services in 2007 and residential recycling in 2008. Selling its commercial assets in 2011, CWS decided to refocus exclusively on semi-automated residential and small business waste and recycling. Operating with three trucks, they were the first company in the Middle Peninsula and Northern Neck to offer recycling services, picking up all recyclables, including plastics, paper, and periodicals, cardboard and metal. Refuse customers also receive metal and car battery recycling complementary as part of their services. In 2015, the company added a coaching and consulting division for waste organizations, as well as other private sector businesses.
CWS uses semi-automated real load services for waste and recycling. Given the rural characteristics of their service territory, and the numerous to-your-door requests from customers, a semi-automated operations approach is more effective than a fully automated one, though CWS has considered switching to the latter on several occasions. CWS offers many service intervals, including weekly, bi-weekly, semi-weekly, monthly, and ‘snowbird’ services for customers who maintain summer homes in the area and do not require year-round pickup.
The company currently services the rural counties and towns located on the Middle Peninsula in Virginia, including the counties of Gloucester, Mathews, Middlesex, King and Queen, as well as the Northern Neck, including the counties of Lancaster, Northumberland, and Richmond in the eastern part of the state.
Strategic Moves
The economy has been steady for CWS over the past few years, albeit at lower growth rates that have not recovered fully since the Great Recession of 2007 to 2008. When the recession hit, CWS was completely overleveraged, struggling to simply maintain interest payments alone on their fleet. In February 2009, Brian Thacker, General Manager, was having his biweekly lunch with his mentor, Rudy Fleming, a long-time local small business owner, who urged Thacker to reconsider his business model in order to significantly reduce debt. CWS’ original strategy involved rapid expansion across all sectors and unfettered spending in order to achieve maximum growth. The proposed new strategy minimized spending and concentrating on those activities that generated maximum profit. The message had a powerful impact on Thacker and the next morning, the decision was made to immediately close CWS’ offsite office and reduce clerical staff. “While the staff overhead cuts helped in the short-term, the long-term outlook remained bleak with entirely too much debt remaining on the books. In 2010, the decision was made to go to a cash basis, eschewing debt in all forms. This strategy negatively impacted current operations with our roll-off and commercial front-end services, and we began earnest discussions with several potential suitors to divest of our commercial routes. The sales of both commercial systems finalized in 2011,” says Thacker.
The effect of the sale on CWS’ remaining residential and small business customers was positive, as the company was able to re-focus their efforts exclusively on them. The impact on former commercial customers was likely positive as well, since CWS was somewhat compromised in their ability to fully service them once the strategic decision was made to shun debt. Thacker points out, “We still field requests from former and potential commercial customers for roll-off and front-end services, directing them to other providers in the region and thanking them for continuing to consider our services. Currently, we pay cash for capital purchases—commercial trucks, 95-gallon carts, etc. We do not use credit, nor do we offer it to our customers, who pay in advance for our services. All assets, including rolling stock, have been paid for with retained earnings.” This strategy has helped CWS reduce their liabilities and financial exposure and has allowed them to better focus on recruiting and servicing customers, placing them first and negating the need to service sizable debt levels.
Internal Practices and Reaching Out
All of CWS’ employees are trained and coached to deal with both company and customer relations standards. Every employee is expected to know the basics of how each particular job functions within the organization and they are also taught how to positively interact with customers, including handling disputes, demonstrating courteous behaviors, and simply smiling and being gracious with customers and non-customers at all times.
Not only does CWS volunteer their services to several local non-profits, such as area churches, Habitat for Humanity, playhouses and organizations focused on care for the elderly, the company also strongly believes in reciprocity: using, advocating and advertising for local businesses that employ their services. “When we advertise, we exclusively use the media outlets locally that use our services. My dentist and family doctor are both faithful commercial customers, as is my insurance agent. My family and I frequent the restaurants that use our services. We both put food on each other’s tables!” laughs Thacker.
Longevity and Consistency
After battling through competing public sector interests for nearly five years, CWS persevered and has found that, currently, personnel has been the biggest challenge. “Finding competent help is and has always been a challenge,” says Thacker. “Showing up is truly half of the battle for employees. Steady training and coaching is a necessity on our part, with our mantra being to simply ‘pick up the trash and ask questions later’. If a dispute arises from an employee, the very first question posed is “Is this a customer/CWS issue or a ‘you’ issue?” Often, the wants of an employee have been placed before the expectations of the customer or the organization, requiring a re-examination of the relationship between the customer, company and employee. “As a private firm, our customers are not required to employ our services and can choose another waste and recycling firm, or simply take their goods to a local transfer station themselves, free of charge as taxpayers. A portion of our business is contracted, but the majority of our customers are non-contracted, necessitating an ongoing analysis of our operations to ensure that our customers are receiving the services they have voluntarily paid for with our firm.” As a result, employees who are consistent and adopt a service-first attitude towards customers have been rewarded handsomely. Thacker explains that an effective reward system must include tangible and intangible recompense. Cash is always an effective means of extrinsically rewarding employees for a job well done, but it is short-term in nature. Intrinsic long-term rewards, such as personal affirmations and commendation and recognition for jobs well done, are frequently more effectual, with praise and admiration being bestowed both publicly and privately upon a valued employee having longer lasting results. “Fulfilled employees reinvest in our firm again and again by continuing to satisfy customers, remain with CWS for a longer period of time, and reduce costs associated with careless errors and turnover.”
Facing Challenges
One of the challenges that CWS faces is finding talented individuals to service customers. After trying a variety of traditional methods, including advertisements in the newspapers, Internet and CDL training facilities (all having various levels of successes and failures), Thacker has found that the best means of recruitment, similar to sales, continues to be word of mouth—a source that they may know personally, internally or externally, of CWS could vouch for a potential new hire looking for an opportunity to leave their current job. “Words mean things,” says Thacker. “We are quick to correct potential new hires that we are not seeking garbage men or women; rather, we are looking to add to our staff of ‘Garbologists’. Anybody can pick up your trash or recyclables, but our team of Garbologists is seeking the most effective means of doing so at the least amount of cost to both the customer and our firm. This alteration of terminology may seem absurd at first, but certainly has had a profound effect on our staff and our customers. We even have the term decaled on the doors of our trucks. In public settings such as a grocery store or county fair, many customers who recognize our staff may not know our given names, but are quick to refer to us as garbologists!”
Thacker points out that leadership is also a huge challenge not only for the waste industry, but also as a whole in business. He explains that managers and executives must exhibit leadership qualities by involving themselves in the day-to-day activities of their employees. “It is important to get out from behind the desk and get to know what your employees are doing on a daily basis. Why would any employee listen to or have respect for a leader who is not willing to do the job themselves?”
CWS is proud of servicing customers on the Middle peninsula and Northern Neck since 2005. In fact, they still service some of their original customers who have been with them since the beginning. CWS’ customers have come to rely on the consistency from the company. The best example of this occurs when a customer calls in at noon looking for a driver who is usually at their home by 9:30 a.m. “They have become so accustomed to the consistency of our drivers that they are alarmed when the slightest interruption occurs,” says Thacker. Similar to the recruiting new employees, CWS has determined that word of mouth is, by far, the best means of marketing to new customers. The company offers existing customer discounts for the recruitment of a paying new customer. Additionally, they run specials throughout the year, offering free services for new customers during promotional periods. “While we are always seeking new customers, it is easy to be distracted by the allure of a potential new customer and, in doing so, negate properly servicing the existing customer base. Potential customers may help add additional revenue: Existing customers do contribute today. We often conclude our sales pitch with prospective customers that there is always room on our trucks for one more customer!”
Looking Ahead
Currently, Cardinal Waste Services is at a crossroads. The company’s residential waste and recycling systems continue to exhibit steady profits; however, their coaching and consulting subdivision is also experiencing exponential growth. Thacker explains that both sectors require an influx of capital to continue their upward trend yet finite resources and the mutual exclusivity of each division make sizable investment in both unlikely. Operational enhancements would require upgrading CWS’ commercial fleet while coaching and consulting advancements would require human resource and technological investments. Thacker believes the monies and efforts involved in these types of improvements would be best invested completely on one division or the other, not split fractionally between the two. “Although prognostications are not our specialty, we will continue to service all of our customers to the best of our abilities for the foreseeable future.”
For more information, call (804) 758-5480 or e-mail [email protected]. Brian Thacker can be reached [email protected].