From The Front Lines: March 1999, Managing Branch Operations at Cagwin & Dorward

NOVATO, Calif. - Branch operations, or satellites as we refer to them at Cagwin & Dorward, are a neccessary part of doing business along the West Coast for a number of reasons.

For starters, we serviced more than 725 maintenance accounts in 1998, and they are located up and down the coast from as far south as Carmel to as far north as Windsor and east to Sacramento. Obviously, it wouldn’t make sense for us to service all of these accounts out of one location. And when you consider the added hassle of the famed California traffic snarl-ups, it’s clear that dividing operations up into satellites is even more crucial in this part of the country than in most others.

As a result, we service customers out of 13 satellites in California, which generate a total of more than $16 million in annual sales.

At first glance, this may appear to be an excessive number of operations based on the dollar volume generated, but we’re big proponents of keeping satellite operations small and centralizing administrative functions in such a way that it doesn’t add excessive overhead.

Most of these satellites serve as little more than a base for employees to operate from and store equipment. Each satellite is equipped with at least a phone, a fax machine and a computer with a modem to stay connected with the main office. The emerging communications technology, particularly with the Internet, are certainly keys to operating satellites successfully as they allow for information to be shared so easily between the satellites and the corporate office. Apart from these communication links, however, the facilities are pretty spartan.

In addition, three of the satellites serve as regional field offices, offering support to three or four satellites each in terms of providing equipment maintenance, field administrative support and so on. All major accounting and administrative functions are then handled at the corporate headquarters in Novato. Handling all of these functions in one location means that our satellite managers don’t have to worry about billing, collections, marketing, etc., so they can concentrate on their customers and their employees.

Communication between the satellites and the corporate office is facillitated through the regional managers who meet with the managers of the satellites they are responsible for on a weekly basis. Each regional manager then meets with someone from the corporate office once every other week. In this respect, a company’s management style is crucial to its ability to successfully operate satellites. Managers who cannot give up some degree of control to the satellite managers will limit the satellite’s ability to grow.

A key to running the satellites is obviously the effectiveness of the site managers in place. Over time, we have had much better success giving this responsibility to employees who have worked their way up through the organization and have been employees of Cagwin & Dorward at least four or five years. These people understand the philosophy of our organization and how we define critical concepts such as customer service better than someone hired from outside the organization can.

This is also a reason for regularly promoting from within so that people are always ready to move into new positions when we expand. We have tried to hire people outside the organization and put them in management positions before they were thoroughly enculturated, and, as a result, mistakes were made. These were good people, but they didn’t understand our culture. We believe it takes someone at least six months to feel comfortable with our team approach.

We believe that an added benefit of keeping the satellites smaller than most companies elect to is the bond that develops in each location with about 25 to 30 employees working there. For those employees, that location is thought of as the entire company, and we believe organizations with 80 or 90 people operating under one roof can lose efficiencies with people all over the place and so much equipment to watch over and manage.

The decision of when to open a new satellite location is always a challenging one. Sometimes we open up a new location to serve a large, new contract in an area that isn’t easily serviced by our existing satellites. Other times, we may have a bunch of smaller jobs in an area and decide to put a satellite there in order to pursue more contracts in that area. Obviously, the company can’t always control its ability to win work in an area where it wants to expand, so the key is being able to rally the troops in a hurry once you get such a job, and make sure you can service that account.

The author, Wayne Richards, is chief operating officer of the maintenance and installation departments.

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