Good Jobs at Managed by Q
In 2014, Dan Teran and co-founder Saman Rahmanian wanted to create an operating service for offices. They sought to challenge the fundamental assumptions of the $51 billion janitorial services market by creating an exceptional customer experience and empowering frontline workers. The tech-based model that many companies were pursuing was built on contract workers who were paid low wages. However, after initial attempts to follow this model, they found that quality suffered. They needed to pursue a different path, one that put people at the center of operational excellence.
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Investing in People as a Strategy
Their business model focused on creating a platform for companies to solve problems and relied on knowledgeable front-line employees to solve those problems. To keep and motivate the type of employees that would make this business model work, Managed by Q had to challenge the assumptions in the industry that frontline jobs had to be bad jobs and pay low wages.
After looking for options, a friend recommended that Dan read the Good Jobs Strategy. He decided to embrace the approach and felt that building a company around empowered full-time employees was going to be central to their success. The model of investing in people persuaded him to build an operating model dependent on full-time employees (instead of part-time) and to give them benefits and support them with a culture that celebrates frontline operations. As this model continued to pay dividends, the company has created a stock-ownership plan that gives 5% of the company’s equity to operators.
The commitment to employees and customers requires a long-term vision, but has paid off. As shared with New York Times in 2016, “Only around 10 percent of clients leave each year, and only 5 percent of employees leave” - this is compared to industry rates that are much higher. In addition, they have found that their model resonates with customers. Teran finds that customers are “excited to work with a company that cares about its workforce.”
In October 2017, the company announced that following the Good Jobs Strategy had paid off and that the company was profitable.