Still Playing in Peoria

John Ruebush

AN ENTREPRENEURIAL SPIRIT IS alive and well in the waste industry, especially at Peoria, Ill.-based Peoria Disposal Co. (PDC).

“Twenty-seven years ago, I was driving a garbage truck,” says PDC President Royal Coulter. “Today I tell people I've been able to live the American dream.”

This dream reaches an important milestone in October, when PDC celebrates its 75th anniversary.

The company, started by Coulter's grandfather, John, in 1928 with a single truck, has grown to 500 employees and 19 business units, including: several landfills; three transfer stations; one non-hazardous liquid waste treatment plant; four recycling and processing centers; one Resource Conservation and Recovery Act (RCRA) hazardous waste stabilization facility; and one analytical testing laboratory.

Admittedly, growing the business over the years from a one-truck operation has not always been an easy journey. An unexpected death, expansion challenges and increasing pressures from national companies all have threatened to shake PDC's foundation. Yet, Coulter sees PDC as a model of success for entrepreneurial local and regional waste companies.

“My role models in the business have always been the entrepreneurs that are doing it every day,” he says. “The smaller companies are doing everything — handling of routing, billing, customer complaints and employee problems. The energy it takes to achieve excellence at that level is very inspiring.”

Building a Regional Mainstay

PDC has operated as a local waste hauler for several decades — even before Royal was at the helm. John Coulter founded the company and then passed the business to his sons Elmer, Melvin and Reuben, who grew operations locally. In 1965, the company won the city of Peoria's hauling contract, and then a contract with the Caterpillar Tractor Co. a few years later. The Caterpillar win paved the way for PDC's entry into the industrial waste market and provided growth beyond central Illinois.

Then, the company faced its first major hurdle in 1979: PDC's CEO, Royal's father Elmer, passed away suddenly. At age 31, Royal was cast into the role of company leader. He had worked at virtually every level of the business, including route driver. But nothing could prepare Royal for the pressures and day-to-day challenges of running a company.

“All of a sudden, I started to learn more about banking, ownership issues, politics and the true value of family ownership,” Coulter says.

Despite its setback, PDC continued to expand, winning the Peoria city and county landfill contract in 1982. A year later, when Royal's uncle Melvin retired, Royal became the PDC's sole director.

In the mid-1980s, PDC was granted a permit for hazardous waste, opening a new door for growth. The purchase of the Clinton, Ill., Landfill in 1988 signaled further goals for landfill market expansion. Traditional growth and acquisitions of more than 30 companies in the past 15 years also have fueled the company.

Business for Generations

Although PDC has had numerous successes, the millennium signaled the beginning of a new era for the company. The fourth generation of Coulter's family (Royal's sons Chris, Jeff and Matt) now is entrenched in the business. Because Royal was in this position almost 25 years earlier, he is conscious of the issues that generational succession can bring — both within the family and the business. Questions of competency, power struggles and jealousy can threaten the fabric of a company if not managed properly, he explains.

However, PDC is founded on strategy that capitalizes on its successors' strengths. This also includes being aware of weaknesses and adapting the organization to compensate for them.

“There's no shame in having a weakness — the real shame is in ignoring your weaknesses and allowing them to overshadow the strengths,” Royal Coulter says. “There's a unique dynamic in a family business. Knowing where the ‘family’ part ends and the ‘business’ part begins is an important distinction.”

This separation includes a constant reminder that involvement in the business is not a birthright. “Every day, [my sons] wear a logo, and that reminds them they're part of the business, regardless of their last name,” he says. “They might not own the business — yet — but they're part of it and have accepted the responsibility that comes with it.”

Trust also becomes a critical factor, because employees deserve to know where they stand. And, keeping open lines of communication is paramount to establishing this trusting environment.

“We have an open-door policy and try to value other points of view from everyone in the company,” Coulter says. “Getting issues and challenges out on the table is the biggest step to solving them … When you commit yourself to that philosophy of letting people put their strengths to work, it creates value that's more than the sum of its parts.”

It also is important to not underestimate the value of learning the business from the ground up. “Once that knowledge is there, you can't take it away. That's one of the things my father gave me as I was literally scrubbing garbage cans and washing trucks as a kid. Those experiences helped mold my understanding of the business,” Coulter says.

Business knowledge is especially important during growth when management's presence may be stretched and personal contact between management and employees might be less frequent.

“As we've grown, my physical, day-to-day presence has been diminished. I simply can't be everywhere. My sons have done a good job of filling that void,” Coulter says. “Their involvement has created a sense of continuity with our employees, giving them the knowledge that the foundation and ideals of the company that my grandfather forged are still very much alive and well.”

Weathering the Times

Another key to success as competition heats up and margins tighten is putting customers first. “This company got its start during the Great Depression,” Coulter says. “It's survived and thrived because we've done a good job of providing value to our customers.”

Knowing customers is critical. It is important to offer a fair price and prove your worth, especially when times are tough, Coulter says. “Punctuality, professionalism and fair pricing all play a part in that value proposition, because if customers know they can depend on you, they'll be less likely to switch.” Business is lost when customers ask for help and have a need that's unfulfilled, he says. Empathy also can help.

“If the economic climate is tough for us, it's probably also tough for our customers,” Coulter explains. “If a customer tells you that he is having a hard year and doesn't think you should raise his price, give him the benefit of the doubt. Then come back in a year and look at it again. I've found if we're fair to people, they'll be fair with us.”

Coulter recommends companies emphasize their core competencies and foster strong communication between departments. When the “left hand doesn't know what the right hand is doing,” customer confidence erodes, creating an opportunity for competitors to lure those customers away, he says. “Be sure that there's strong communication between your sales and operational sides. They need to help each other in meeting your customers' demands, and at the same time, ensure that you're compensated fairly for your services.”

Strong Diversification Plans

PDC has two important criteria when diversifying: Know when to get into a business and know when to get out.

This philosophy was put to the test when the company entered the construction business (Coulter Construction Co.) three years ago. Working from a strong business plan, the construction business was given three years to see returns. The latter two years didn't meet the financial objectives, so PDC sold the company. This saved millions in potential losses, Coulter estimates.

“We had a well-defined exit strategy, and that allowed us to look at the situation objectively and make a smart decision. If nothing else, it was a valuable learning experience for us.”

One of PDC's more successful ventures was its expansion into environmental testing and laboratory services. Just as the foray into construction proved, a good business plan was a necessary measuring stick for success.

“We could tell very early in the process that these ventures were going to be successful because they met and surpassed the objectives set forth in our plan,” Coulter says.

The laboratory business complemented PDC's core operations because landfills require groundwater analysis and permit packages. PDC simply took a service that was already being used in-house and turned it into a profit center by expanding that service to municipalities and industrial customers. Now, the PDC laboratory is one of the largest labs of its kind in the country, analyzing more than 6,000 samples per month.

Changes Bring Challenges

In the past 25 years, technology has helped PDC to increase efficiency in ways Royal's grandfather never could have imagined. “Today I am working harder but smarter than five years ago, and certainly compared to the beginning of my career. E-mail, fax machines, mobile phones … have made everybody work more productively and efficiently. That's especially been positive in customer interaction. It allows you to respond faster to their demands,” Coulter says.

But companies still have to be willing to work hard even if equipment makes their jobs easier, he adds.

The other major change that PDC has seen over the years is the rise of the large national companies in the industry.

“Every day, I wake up facing the reality that the No. 1 and No. 2 companies in the industry are doing business in our backyard, so that keeps us on our toes,” Coulter says.

The way to compete is to understand the local marketplace and find customers who are being overlooked or under-served, Coulter says. “The big companies want the big pieces of the pie, but that leaves a whole lot of crumbs, so to speak, and local and regional operators are coming in to serve those markets. That's why I stress the importance of serving our customers.”

To Sell, or Not To Sell

Of course, with success, come questions of acquisition. But passion for the business and the Coulter family connection has instilled a sense of tradition and pride of ownership that has kept PDC immune from buyouts. “My goal has always been to be independent,” he says. “I couldn't imagine not doing this for a living. This business is my life.”

Nevertheless, Coulter also understands the appeal of selling. Deciding whether to sell is a personal decision, but “ask yourself how much you enjoy your work versus how much you'll enjoy the financial reward of selling,” Coulter suggests. “It's not a decision to be taken lightly, because once it's done, it's done.”

If companies want to sell, owners will need to get operational data and compliance records in order. The most important factor, however, is a customer base, according to Coulter.

A good image also is an asset because it strengthens a company's perceived value in the marketplace, he adds.

For example, putting new logos on garbage containers is a “non-issue” to a lot of people, Coulter says. “But when your customers see you as a company that takes care of those types of things, it builds confidence.” This image-consciousness rubs off on employees, who are responsible for the majority of interaction between the company and its customers, he says.

Customer Service at its Best

After 75 years, PDC believes success in the industry still comes down to good customer service. “At the end of the day, it's not who has the most trucks or cubic yards of landfill — it's who has the most satisfied customers. If you have a good customer base, that's by far your most important asset, because [it] will make or break your business,” Coulter says.

So the better PDC performs for its customers, the better it will be for everybody. “Treating our customers with honesty and integrity is what's kept us successful for 75 years,” Coulter says, “and that will never change.”

Writer John Ruebush is based in Peoria, Ill.

VIEW FROM A FOURTH GENERATION

PDC President Royal Coulter says his sons have done a good job of proving their worth to the organization. “Each has a distinct identity and that diversity will be an asset to the company down the road,” he says. As this fourth generation takes a more active role in the company, here's what they predict.

Chris Coulter, 31, Director, Sales and Business Development

The hazardous waste industry is shrinking, so we will have to expand beyond our territory of the Midwest if we want to maintain and/or expand our disposal volume at our Peoria hazardous waste landfill. This entails the use of rail, which gives us access into those other markets.

We also will look to expand by taking our expertise in areas such as waste treatment and environmental testing to customers' doorsteps. PDC will need to expand its capabilities to process other waste streams that will not be disposed of at PDC, but will end up at a cement kiln or hazardous waste incinerator.

Finally, we can grow through horizontal integration. As an example, we are in discussions with one of the largest recycling companies about setting up a joint venture. This would allow us to get better pricing for recyclable products and to service more of our customers' waste streams.

Jeff Coulter, 28, Operations Coordinator

One of the services I've been recently involved with is growing and developing our compactor business for commercial and industrial customers. We've identified customers whose volumes allow them to benefit from reduced hauling and disposal costs through the installation of compactors. Additionally, we've partnered with customers to evaluate whether the compactors they are currently using are the most efficient for their needs. By identifying these solutions, we've helped our customers save money and simplify waste disposal. We are constantly looking for new ways to serve our customers better and to earn their business.

Matt Coulter, 25, Manager, Solid Waste Sales and Recycling

Growth for our business can be attributed to three target areas. First is the ability to acquire hauling companies to increase volumes at our landfills or simply increase our market share. Next, we have the ability to develop, site and run landfills in any market in the Midwest. Finally, thinking outside of the box on issues, such as rail transportation of garbage from across the United States to our facilities and operating the transfer stations we already have in place, will help us to grow.

The sky is the limit for PDC, but we have to remember at all times how we got to this position. My great-grandfather started the business in 1928 with a pickup truck [and] probably did not think about what PDC would be today, but he did have something in mind … and that was “service to his customers.”

PEORIA DISPOSAL CO. AT-A-GLANCE

Operations & Employees: Headquartered in Peoria, Ill., PDC handles industrial, commercial and residential solid waste collection, disposal and recycling. The company owns 3 solid waste landfills, 1 hazardous waste landfill, 4 transfer stations and 3 recycling facilities. The company has 500 employees.

Services and Service Area: Solid waste collection and disposal in Central Illinois, East Central Missouri. Hazardous waste disposal in Midwestern states and outlying states. The company also has hazardous waste transportation and treatment, wastewater treatment, brokerage services, analytical lab services, engineering and consulting services, and site remediation operations.

Customers: 70,000 residential, 5,500 commercial and 650 industrial.

No. & Types of Trucks: 95 front and rear loaders: Ford, Freightliner, International and Peterbilt trucks with Leach and McNeilus bodies. 55 roll-off trucks by Ford and Mack Trucks. 40 tractors by Sterling and Kenworth.

Containers: 1-yard through 8-yard steel refuse containers (front-end load and rear-end load) by WasteQuip and MAC Corp. 10-40-yard steel roll-off containers by MAC Corp., WasteQuip and Five Star. 64- and 96-gallon plastic roll-out carts by Toter (approximately 2,500) and Ameri-Kart (approximately 4,000).

Disposal Equipment: 1 Case Uniloader, 2 Caterpillar 12F motorgrader, 345B1 excavator, 1 320L excavator, 1 325 excavator, 1 225 excavator, 2 416C backhoe, 1 816 dirt compactor, 1 816F compactor, 1 826 compactor, 826C compactor, 826G compactor, 3 D6RLGP dozer, 1 D7R dozer, 4 D8R dozers, 2 350E articulated trucks, 2 300E articulated truck, 2 400E articulated trucks, 1 435 scraper and 5 627 scrapers.

Local Tipping Fees: $33 per ton at Clinton Landfill; $34.50 at Pike Landfill. PDC#1 rates vary. Indian Creek Landfill will open spring 2004.

Landfill Capacity: Clinton Landfill - 32 mm cubic yards remaining (dispose of 3,600 cu. yds. per day). Pike Landfill - 3 mm cu. yds. remaining (dispose of 1,200 cu. yds. per day). Indian Creek Landfill - 2.5 mm cu. yds. remaining (opening spring 2004). PDC1 - 720,000 cu. yds. (dispose of 575 cu. yds. per day).

Sources of Waste: 40% residential; 50% commercial/industrial; 10% C&D.

Other PDC Operations: PDC Laboratories employs 90 employees and evaluates 6,000 samples per month. PDC Wastewater Treatment Plant employs 4 and processes 15,000 gallons per day.