VOL. 9 | NO. 23 | Saturday, June 4, 2016
ServiceMaster Disrupting Its Culture With Move Downtown
By Madeline Faber
ServiceMaster is converting Peabody Place into a corporate headquarters that would rival a Silicon Valley tech outfit.
On Friday, June 3, ServiceMaster laid to rest months of speculation about whether the company would relocate to a larger city like Atlanta or Dallas. Memphis’ available Class A office space can’t currently accommodate ServiceMaster’s needs, so it looked to the retail sector for its new home.
ServiceMaster CEO Robert Gillette said that ServiceMaster is in a state of transformation. (Daily News/Andrew J. Breig)
The 328,000-square-foot enclosed mall will be revived as One ServiceMaster Center.
An illustrious group of Memphis business and government leaders, including Tennessee Gov. Bill Haslam, came together in the atrium of the Peabody Place building to announce that ServiceMaster was moving Downtown with 1,200 of its 2,200 local employees.
“This is the most significant headquarters announcement Downtown in a generation,” said Memphis Mayor Jim Strickland.
The mall has been closed to the public since 2012 after a string of tenant vacancies and dwindling redevelopment options in the wake of the Great Recession. The mall’s developer, Belz Enterprises, still owns the building and will take on infrastructure improvements, including turning brick façade into a glass enclosure, in preparation for the building’s reinvention.
Reinvention defines ServiceMaster’s future as a company, the future of the Peabody Place building and the future of Downtown itself, which has suffered from an exodus of major banks and law firms in recent years.
“We have to focus on technology. We don’t have another option,” said Jamie Smith, vice president and chief information officer at ServiceMaster.
Since Robert Gillette took over as CEO of ServiceMaster in 2013, he has emphasized a “tech-first” strategy that makes ServiceMaster’s family of brands, which includes American Home Shield, Amerispec, Furniture Medic, Merry Maids, ServiceMaster Clean and Terminix, more accessible and integrated with technology.
ServiceMaster now has to face off against tech-first giants like Amazon Home Services, Google ThumbTack and Angie’s List.
The building will be unlike anything else in the Memphis area. Cubicles will be scrapped in favor of “neighborhoods” that cluster employees around subjects across the building’s four floors.
The most unique aspect of One ServiceMaster Center will be the innovation center. The 20,000-square-foot annex, which originally housed Tower Records, could be open as early as next April, Smith said.
People working in the innovation center will be racing to figure out the next big tech disruption to the home services market.
A third of the center will be allocated for rentable co-working space that is open to people who are not employed by ServiceMaster. Smith said these start-ups could receive a small amount of seed money from ServiceMaster, which will have the first right of refusal on what is developed.
Another third of the center will be set aside for flexible event space for a future hackathon or a coding boot camp. The other 40 percent will be ServiceMaster employees working on “moonshot” opportunities.
"If an employee has an idea, they will be taken out of their normal day-to-day,” Smith said. “The idea goes through a committee and we give them the space and freedom to run with it.
“And it might not even look like something ServiceMaster does. For us, we want to disrupt internally. We don't want to wait for the billions of dollars of venture capital already out there to disrupt a sleepy 87-year-old company like us. We want to do it first and capitalize on it.”
Gillette said the company looked at many different sites.
“I was amazed at what people will do to try to attract investment,” Gillette said. “Really, for us it came down to the uniqueness of this building, the investment necessary from our perspective, the continuity of employment.”
That investment amount was not revealed, and the company will be seeking local and state incentives in conjunction with the move.
Work on the building has already begun, said Mary Kay Wegner, senior vice president of service and operations for Terminix, ServiceMaster's largest brand.
She anticipates that all of ServiceMaster's corporate employees will be moved into the building by the end of 2017. Approximately 1,000 call center employees will remain stationed across the city.
Belz will work on installing windows, heating and air conditioning and updating lighting systems. ServiceMaster will handle the tenant build-out, which is estimated to cost tens of millions of dollars.
"The mall is a perfect example of that disruption that happened, and Tower Records again, another one,” Smith said. “The music industry got left behind. We need to be on the edge of innovation in home services."