The FirstService Way
For many years, we have adopted "The FirstService Way" operating philosophy which has guided our growth and helped us attract strong management teams with visions for the future success of their businesses. We have a long-established track record of operating all of our businesses with an approach that aligns all of management and employees in driving towards the common objectives of delivering best-in-class service to our clients and profitably growing our businesses. The following are seven key principles of "The FirstService Way", which underpin our culture of measuring, monitoring and rewarding all of our key stakeholders for their success:
We believe equity ownership by management teams is essential. Our partners enjoy a decentralized organizational structure with autonomy over front-line operating decisions, while equity ownership allows direct participation in the financial outcomes of their decisions. With significant equity or equity-like interests in the businesses they operate, management's interests are aligned with its shareholders in building long-term value. These interests are in the form of non-transferable direct minority equity ownership, stock options or equity-like notional value appreciation plans.
Successful management teams running our businesses are well-compensated for driving growth. We believe in aligning key operating managers with shareholders through generous performance-based compensation programs as an incentive for management to deliver internal growth and consistent, high-quality service in a cost-effective manner.
People Development Process
We have a keen focus on operational excellence. Retaining and promoting key operating managers is one of our most important practices. Training of front-line employees who deal with our clients on a day-to-day basis is critical for ensuring they meet our high standards of customer service. We provide our management and employees to ensure best practices and professionalize our businesses.
Customer Service and Satisfaction
We have a long-standing dedicated focus on client service excellence within all of our businesses and have adopted the Net Promoter System ("NPS"), developed by Bain and Company, to enable us to measure our progress in the area of customer satisfaction. The founder of NPS, Frederick F. Reichheld, is one of our directors. NPS provides a richer, more complete evaluation of customer loyalty than typical client surveys. We have adopted NPS as an integral part of our operating philosophy, providing a valuable feedback tool which guides us as we continuously focus on enhancing our customer experience. Across all of our businesses, customer satisfaction results exhibit a positive correlation with each of customer retention, repeat business and referral opportunities. Our service excellence commitment also reinforces our industry-defining brands that clients trust and value.
Focus on Growth
Since inception, we have achieved a strong track record of managing our businesses with a dedicated focus on sustainable growth, balanced with both internal, organic strategic initiatives and augmented with a disciplined, value-added acquisition strategy. We establish high benchmarks in terms of internal growth targets and acquisition rate of return hurdles in pursuing our growth objectives. Our performance-based compensation arrangements are structured to reward our management teams and employees for successful growth.
Rigorous Review Processes
We have a rigorous process of oversight and operational review to maximize cash flows, increase margins, manage operational risk and monitor performance indicators. Sharing of best practices is proactively incorporated into our management and review process to ensure that each business benefits from the experience of others. We utilize a consistent strategic planning process to determine any major issues facing our operating units. Short-term and long-term goals are reviewed and agreed upon, barriers are discussed and solutions are developed. Progress in achieving goals is monitored to ensure that we successfully execute our strategy and adapt to changes in our markets.
Leverage Scale to Drive Client Value and Reinforce Our Competitive Advantages
We have methodically and incrementally built, one step at a time, an enduring and market-leading group of businesses. Our significant size advantage and penetration in key markets across North America facilitate our ability to provide better, value-added services to our clients. We believe that our clients prefer to work with service providers who have the scale, resources and financial strength to consistently meet their diverse needs across multiple property types and geographies, and that our market-leading positions will continue to serve as barriers to entry to potential competitors.