It’s all about numbers for Jeff McConaughey, who started his company, Extreme Landscaping, less than 10 years ago.
He acknowledges the company hit the ground running and experienced some rare — but certainly welcome — rapid growth. But managing that growth was tricky at the New Mexico-based company, especially for McConaughey, who had never owned a business before and came from a career in law enforcement. He remembers the early days of the company when he was “extremely inefficient,” using a variety of free software programs to help get his ducks in a row. Once he found a software program worth investing in, McConaughey jumped, and he has since figured it out.
“When it comes to reports, my philosophy is that you’ve got to know what’s in your bag — where you’ve been, where you are and where you’re going,” he says. “P4P came about from there. I just wanted to be more efficient as a company.”
McConaughey is referencing his team’s Pay-for-Performance program, which has helped him better organize his 35 employees across their four divisions. Now, McConaughey even runs a consultation company on the side, helping others use data to drive decisions and even dictate bonuses to employees.
The payment program was born out of consternation. McConaughey noticed several employees were taking unusually long breaks or stopping at the convenience store five times a day. Meanwhile, there were some employees who were far more efficient, but they were going home with the same amount of money as the others. To solve his problem, McConaughey did what he always does and dove into the numbers.
“I started P4P out of frustration,” he says, “but it’s been very good to us.”
Jumping in headfirst.
McConaughey couldn’t have picked a more unique time to implement the program: It started in March 2020, right at the onset of the global COVID-19 pandemic. “So, I was a little bit afraid,” he readily admits now.
He says he first found P4P on a YouTube video he stumbled across organically. The message of the video resonated strongly with him though: the P4P program gets employees to think like the business owners.
“They’re their own business so to speak,” he says. “If they’re making money, I’m making money.”
McConaughey says he pulled aside several leaders at his company and bounced the idea off of them, knowing that he’d get some honest feedback. Then, after some buy-in from them, the company ran a two-week period where in their paycheck, they wrote a dollar amount on a sticky note indicative of the bonus money they could earn through a P4P system. At that time, McConaughey had roughly 28 employees, and he told them that after two weeks, they’d take a vote on whether or not to adopt the program. Majority would win, and if the idea failed, he’d drop it forever — there was no going back.
“I said, ‘Y’all have seen your sticky notes. It’s obviously more than what’s on your paycheck. I’d like to try this,’” he says. “Out of all the employees after two weeks of the trial, every single person but one voted yes.”
The one person who voted no? He was on the higher end of the pay spectrum and has since left the company.
Knowing the score.
Employees at Extreme Landscaping are guaranteed a minimum wage, but any additional pay beyond that is based on efficiency and quality work completed. The company services about 700 customers, and in order to properly run the P4P program, McConaughey had to make some tough choices to increase prices at some spots.
He says he had to ensure allocated times matched what they needed to budget for in terms of bonuses granted, and McConaughey had to determine if some clients needed less time spent on their properties or if they needed to pay more to match that time working on that area. He increased his prices in January 2020 in anticipation of starting the program and didn’t receive much pushback.
“They’re their own business so to speak. If they’re making money, I’m making money.” Jeff McConaughey, owner of Extreme Landscaping
Additionally, McConaughey says he determined how long his crews were on properties by using GPS tracking technology and a clock-in, clock-out software they could use remotely. From that standpoint, he was able to optimize his employees’ daily routines and schedules.
Of course, that also means there are situations where eager employees want more hours to earn more money; however, the program allows McConaughey to present data to his employees as reasons why he’ll reassign work that needs to get done.
“Sometimes the guys question their hours, but with P4P, it’s fluid,” he says. “You can say, ‘Okay, this is how many hours you have for the week, we’re going to take hours from your crew and give them to a crew that has optimized their routines.’”
Additionally, that element of optimization has helped McConaughey calculate how long his crews should be out on jobsites and how to schedule his employees effectively to make sure the work gets done.
“Going from P4P, I knew how much money I was going to make each week,” he says. “Obviously, if I’m selling work by hours, I’m able to determine my revenue. I’m able to figure out my payroll before my week even starts.”
Quality and quantity.
Not all P4P programs are built equally — in fact, McConaughey says there are critical considerations a company must make before deciding how to best implement the program effectively. For instance, Extreme Landscaping operates out in the desert, where most places they service are 500 square-foot properties with minimal grass.
They need to spend more time raking rock, whereas a crew out in Pennsylvania would spend more time on a mower. “Everybody’s got a variable that makes the P4P different for each company,” he says.
Now, McConaughey knows exactly what types of clients are desirable: those with cookie-cutter yards that help him build route density are key. Of course, they’ll embrace larger properties, too, but he says there have to be strict guidelines on how they spend their time at the property. Time is money, and especially in this P4P model, it’s highly valuable, so he’ll charge a higher amount of money if larger properties want Extreme Landscaping out there for work that’ll occupy a lot of time. He recommends being transparent with prospective clients about that up front, but he adds that you can use the data provided by P4P to justify the higher pricepoints and show clients why they’d be paying that high.
The program helps keep employees accountable, McConaughey says. If his employees aren’t hitting their budgeted hours, he’ll generate a detailed report on where they could’ve better optimized their routes.
Additionally, he’s found that the quality on jobsites has actually improved. While he’s heard other companies are worried that employees will simply fly through their work to get it done and earn more pay, what he’s found at Extreme Landscaping is that employees better police themselves.
He’s received less callbacks, and it’s because if he gets a callback, one of two things happens: he’ll send those employees back out to the jobsite, costing them valuable time and money; or he’ll send another crew out there to re-service the property and earn the hours the initial crew would’ve made.
The incentives-based program has resulted in a roughly 24% increase in profit. Additionally, they increased their client count by nearly 200 from when they first started P4P since they recognized they could bring on more work.
“Basically, (P4P) forced us to look at every aspect of our business, about dialing in efficiency,” he says. “Everything from where the guys park in the morning to where they talk to the managers.”