Johns Lyng Group has maintained its forward momentum and growth for many years. What are the building blocks behind this successful building and restoration business? In this episode from December 2019, we speak to Scott Didier, Managing Director and CEO of Johns Lyng Group.
He shares the importance of building a strong team, how to successfully build a business around a partnership model, finding the right people to bring into the business and the challenges of balancing organic and acquired growth.
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About Johns Lyng Group
Johns Lyng Group is a diversified building company specialising in insurance building for any building emergency, with the capability and experience to respond to disaster recovery. In the aftermath of catastrophic events, the company springs into action to complete the jobs that arise from claims made with the relevant insurance companies. The company is built on a partnership model with the company in partnership with professionals and tradespeople across Australia.
Since buying the business in 2003, the company has gone from $12 million annual turnover to $400 million today. Starting his career as a flooring apprentice and quickly moving into his own entrepreneurial endeavours, Scott has a strong work ethic and drive to succeed. It’s something he looks for in all people he brings into Johns Lyng Group, and something which is a key part of the business’s continued growth and success.
The company floated in 2017. Over the last few years, the company has made three acquisitions and intends to look for and analyse further acquisitions moving forward.
Scott Didier’s entrepreneurial journey
Scott started his career as a flooring apprentice, working with his father. After he left the apprenticeship, he opened flooring shops predominantly servicing the residential market. He eventually sold these businesses and moved into the retail space, providing services to leading Australian retailers that remain clients today. Finding a niche in the market with the repetitious nature of this largescale work along with the late-night hours, which takes drive, energy and determination, Scott continues to work with many of these retailers today.
The core business: insurance building for any building emergency
Johns Lyng Group’s core business is rebuilding and repairing after a building emergency. The Group’s business model extends to situations where an insurance company defines an event as a “catastrophe”. Such events include natural disasters like Cyclone Debbie in 2017 and the Townsville floods in 2019. At these times, a local Johns Lyng Group partner business will dispatch their people to the affected region and begin the process of rebuilding. Quite often, these jobs require the human resources of teams from a range of regions. With 23 offices and 800 people across Australia, there’s always the people resources to restore and repair a place as quickly and smoothly as possible. For Scott, the customer always comes first – “If we look after the customer, everyone else is happy”.
Helping partners achieve financial security
One of Scott’s favourite things about leading Johns Lyng Group is seeing partners grow and achieve financial security, whatever it means to them. Many of the partners coming into the business are taking a leap of faith, and with the structure of the partnership model, these people can start to see financial dividends in six to 18 months. Each partner works hard, especially when rebuilding from large catastrophes, but they are financially rewarded for this hard work and dedication.
Building a “rockstar team”
Scott’s message around people is simple: “Surround yourself with good people”. This has served Scott well as he’s built the business over the last 17 years. The partnership selection process is detailed, and he looks for some very specific qualities. He wants to see people who demonstrate integrity, drive and energy and motivation in all that they do. Throughout the recruitment and selection process, Scott says he asks questions that help him understand the person’s work ethic and character. He believes the skills can be taught, but the right value set cannot. While they don’t always get it right, he says about 90 per cent of the time they find the right people for the business.
A key thing to remember in a business focused on continual growth and a strong work ethic that attracts high achievers is to keep recognising and challenging the people in the business. Scott admits that on a couple of occasions, high performers have hit a plateau in the business and decided to pursue other opportunities. For that reason, Scott now has a bi-annual catch up with his human resources team to review and ensure each person in the business is continually growing and engaged in their work.
How the partnership model works
Johns Lyng Group’s growth has been built on an 80/20 ownership model. The business never owns more than 80 per cent of a business, and the other 20 per cent is usually owned by two managing partners with a 50/50 equity split. In a start-up business, the partners build up their equity from zero, while vendor financing is available for partners entering growing businesses. Due to the fast-paced growth of the company, partners usually begin receiving dividends within six to 18 months. Seeing these tangible results usually spurs the partners further towards new levels of growth.
Maintaining strong growth
For over 15 years, Johns Lyng Group has had 25 per cent year-on-year growth. To keep this momentum, the business has a big focus on growth which is measured every month. Scott says it’s a non-negotiable KPI each partner must meet, but it’s a challenge the high-energy people in the business rise to each month. With each partnership responsible for strategising and achieving their growth targets, it provides people with the autonomy they need to make adjustments and see how it directly influences growth.
Finding creative outlets
Outside the business, Scott enjoys his creative outlets and, more recently, philanthropic endeavours. He enjoys writing and wrote a film called Blinder. Seeing the movie come to life in production after spending 14 years writing was a surreal moment for Scott. He’s since branched out into a second film, Outback and Under, which explores Australia’s unique terrain and wildlife – a key area of fascination in the US, which he discovered when sourcing funds for his first big-screen production.
Scott’s philanthropic endeavour involves his work with New York-based EB Research Partnership. The organisation is completing scientific research to find a cure for children with epidermolysis belosa, a rare and painful condition in which children are born without the necessary proteins in their bodies which causes very fragile skin.
Floating the business
A pivotal moment for the business came when it floated in October 2017. The business’s partners enjoyed considerable financial success from the float, but it’s not slowing them down. Scott and the rest of the business enjoyed the day of the float, and then it was back to continuing to provide exceptional service to customers and growing the business. It’s a testament to the business’s values-based culture and hardworking people that drive Johns Lyng Group’s success.
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