115 114 Growth Rings
New Difficulties Yield New Solutions
For 20 years, the Davey Company had been fundamentally defined by growth and
success. Few obstacles could slow the company's progress. Devoted, loyal employees
bred success through ingenuity, careful management succession, a clear vision for the
future, and even a little luck. Annual revenue had fallen only once between 1979 and
1999. at slight drop of 4 percent came in 1994, and it was due largely to the U.S.
recession of the early 1990s and the loss of some utility contracts in the Southeast
and California.
During the early and mid-1990s, aggressive contract bidding tactics besieged the
utility market. Several mid-sized companies elected to sell out, smaller companies
simply closed their doors, and the entire utility marketplace reached a new low in
terms of business ethics and professionalism. Ironically, this proved to benefit the
Davey Company: it accelerated its capabilities, revamped the sales and marketing
approach, and pushed stability and integrity of service. us, the utility operations
were experiencing growth.
By 1999 Davey Company revenue reached a sales level of five times what it had
been in 1979. e company's stock value was at an all-time high – prompting discus-
sions about taking the company public. e concept was received favorably by an
overwhelming majority of the company's directors and officers. Only a very few,
including a trusted banking associate, opposed the thought of an initial public offering
in favor of maintaining employee-ownership. e main concern of those few was
that Davey's culture was not conducive to the challenges of running a successful public
corporation, including whether the employees could maintain growth and stock
appreciation at a pace that continued to equal or exceed that of the public markets.
Such revenue growth demands of the financial markets would prove to be the least
of their concerns when the company's good fortune finally hit a wall in 2000. In
1998 and early 1999, management planned the implementation of a new computer
software system called SAP designed to manage personnel, client, equipment, and
cost data. Paychecks, invoices, purchase orders and other financial information would
all transition to this new system. e company spent months preparing and training
hundreds of employees to switch to the new system in April 1999. Part of the impetus
for the switch was that the software was "year 2000 compliant," and it would address
the worldwide fears stimulated by the Y2K bug. e new software was also intend-
ed to accommodate the company's rapid growth while improving the efficiency of
numerous corporate functions.
Problems started almost immediately with the new software, which went live on
Easter Sunday. e Davey Company was plagued by issues that carried through 1999
and into 2000. "e implementation process of our new computer system was far
more difficult than we anticipated, took longer than we anticipated, and cost more
than double what we anticipated," the 1999 annual report states.
7
Battling Bugs in Trees
and in Software
(1999–2004)
Chapter 7
