Davey Tree Flipbooks

157 156 Growth Rings Chapter 10 new and shifting contracts. Overall, most service lines within the utility segment performed well and kept Davey Tree on track in terms of revenue goals. Weather continued to play an adverse role in 2016, this time in Canada, where conditions made it impossible for crews to perform work in some parts of the country. "ough we had a slower growth year in 2016, we remain on track to achieve $1 billion in profitable revenue by 2020," management explained in the 2016 annual report. "We plan on making the key capital investments required every year to achieve this goal and we continue to manage the business segments to ensure the company receives a positive return on these investments. We are enthusiastic about 2017 and the company is focused on sustaining the high-performance standards that our share- holders and clients have come to expect." e past several years of succession preparation left few surprised when Warnke announced to employees his plans to retire in July 2017 at the age of 65. Pat Covey, who was promoted to president and chief operating officer in 2016, would assume the role of CEO as part of the company's executive succession plan. Warnke continued as chairman of the Davey board of directors. "It truly has been a privilege to have served as president and then chief executive officer for the past 18 years," Warnke said. "A well-seasoned management team with considerable depth and capabilities is in place and will ensure a new era of continued stability and steady advancement of the Davey Company." Warnke's retirement came at a time of sustained growth and prosperity for North America's oldest tree care firm. Under Warnke's leadership, total annual revenue grew from $308 million in 1999 to $916 million in 2017. During that same period, over 3,200 new employees were hired, reaching a peak of 9,000 employees in 2017. Davey's Vision 20/20 strategic plan remained the focal point of Davey's operational strategy and placed the company on a projected path to reach $1 billion in annual revenue by 2019. Aside from the growth and expansion of Davey – the company made 68 acqui- sitions since Warnke became president in 1999 – succession planning, new brand initiatives and implementation of a formal strategic plan were all important achieve- ments during that time period as well. In May 2017, during Warnke's last Davey Company Annual Shareholders' Meeting as CEO, he expressed his faith in the next era of management to successfully execute and continue building on those legacy components. "Transitions don't just happen," Warnke told shareholders. "ey take a lot of work, and a lot of preparation. And that's exactly what we've been doing, arguably for the last 10 years. We take the prospect of this level of transition very seriously. I refer to it often as bringing in the new era of leadership. People say it's a new generation of leaders. And I say, no, it's a new era. Here's why. A generation indicates a group of people defined by their birth date within a determined number of years. en, someone gives this generation a name, such as the baby boomers, and proceeds to categorize them by specific characteristics. Some believe this generation becomes the company's leadership. at's not what we do here at Davey. We combine generations and all the knowledge, creativity, discipline and other strengths into a new era. e term 'generation' does not correctly define our leadership team, as 'era' more accu- rately describes who we are. We span around four generations with our management team, with each making vital contributions. And that's the way it should be, because it works." During Warnke's tenure, Davey developed state-of-the-art employee development Ken Joehlin was promoted to vice president and general manager of environmental consulting and business development in 2016. ea Sears was promoted to controller in 2016. "Leadership Transitions"). Key promotions included Pat Covey to president and chief operating officer of e Davey Tree Expert Company; Joe Paul to executive vice president, chief financial officer and secretary; and Larry Abernathy to corporate officer of the Davey Company; among many others. Significant retirements at this time included Nicholas R. Sucic retiring as senior vice president, accounting and finance; and Steve Marshall, who retired in 2017 as executive vice president and assistant to the president. In 2016 Warnke introduced Davey's Executive Excellence Program. It was conceived with the assistance of Rex Houze, an outside consultant for Davey in the area of developing personnel at various levels. e training sessions consisted of outside speakers, workshops, special assignments, business visitations, oral presenta- tions, one-on-one training, progress reports, essay-style exams, exposure to business case scenarios and some of Davey's most sensitive legal and contractual challenges. e four-to-six-week program addressed challenging topics, promoted self-awareness and provided practical information and resources to access long after the training finished. e four chosen participants in the program were: Scott Carlin, vice pres- ident, asset management services, DRG; Jim Houston, vice president and general manager, eastern operations, U.S. R/C; Mike Mittiga, vice president, operations, Atlantic, U.S. Utility; and Kevin Peters, vice president, operations, the Davey Tree Surgery Company. 2016 and 2017 Operationally, sales were up in 2015 and 2016. Utility services enjoyed increased revenue in 2014 and 2015, bolstered by additional work with current customers in line clearing operations with continued solid growth in several utility services offered by Davey Resource Group. Residential operations posted strong revenue growth as well, attributed in part to expanding existing territories, continued market- ing programs and acquisitions in 2015. In 2016, the residential operations drove revenue growth with a 6.4 percent increase over the previous year, whereas utility services in the east were relatively flat compared to 2015 as management contended with under-performing contracts, customer budget constraints, and inefficiencies on Select management in Davey's Executive Excellence Program in 2017 are, from left: Jim Houston, Scott Carlin, Kevin Peters and Mike Mittiga. Nicholas Sucic retired in 2016 as senior vice president, accounting and finance.

• Cover