Varsity Facility Services: Like Father, Like Son

Some of Eric Luke’s first memories were of tagging along with his father while he was on the job at a fledgling contract cleaning company called Varsity Contractors. He vividly recalls his dad, Arlo Luke, cleaning the top half of glass telephone booths and leaving the bottom half for his son.

Luke may have been about 5 years old, but to him, “it was my very first job with Varsity and we made a pretty good team!”

With memories like that, it makes perfect sense that Luke would, in 2011, go on to become president and CEO of the cleaning company his father helped start with Don Aslett in Pocatello, Idaho, back in 1957.

The company has since grown from a small start-up employing college kids to clean homes and businesses to a huge building service contractor specializing in regional and national facility portfolios across the United States and in Canada.

As CEO, Luke’s goals are to build upon what he calls one of the best foundations in the industry, while opening the company up to change and growth.

“Priorities for me are to have a focus on innovation and to set a mood or atmosphere, and to really be the person who makes decisions on talent so I make sure they fit in our company culture,” Luke says. “And to return an appropriate investment to the owners.”

Joining the Varsity family

Luke officially began working for Varsity when he was 12, in the landscaping arm of the company.

“I remember being scared to death that someone would report to my dad that I wasn’t hustling,” he says. “The older guys would be riding tractors and riding lawn mowers and I’d be running, I mean, I ran, behind those mowers, so nobody could ever say I didn’t hustle.”

At age 16, he leased landscaping equipment and started his own lawn-mowing business separate from Varsity, showing some entrepreneurial spirit and a drive to succeed.

After getting a college degree in accounting, he returned to Varsity and worked as a supervisor over a janitorial crew and as a painter but left to pursue careers with IBM, then Arthur Andersen LLC, as a CPA and consultant.

“I had no intent on coming back,” he says. “[Janitorial] is hard work, and it’s not sexy!”

But after a few years in San Francisco at Arthur Andersen — at the time, one of the largest accounting firms in the world, and the one brought down by the Enron scandal in 2002 — Luke felt something was missing: inspiration. He realized he needed to be led by people he admires.

“I’d been around Don Aslett and my father and they had something that attracts people, whether it’s their values or their personalities or the vision,” Luke says.

So when he was offered a job as district manager for Varsity in Denver, he not only knew he had to take it, but he knew that if he came back to the company he had been tied to for so much of his life, he would make it a long-term career objective to someday be the company leader.

“I had no idea it would take until I was 48,” he says, laughing.

He did so well there that he was promoted to regional manager in one national account’s facility management division, then to general manager of a facility management company owned jointly by Varsity and Omaha, Neb.-based FBG Services.

In 1998, Luke became an executive vice president in Varsity’s corporate accounts division. And in January of 2011, he was hired as CEO, succeeding Mark Browning, who had taken over for Arlo the year before.

The first year was tough and humbling, but successful in terms of meeting goals, Luke says.

“It was harder than I thought it would be. I thought I had so much experience. It’s so much easier to critique when the buck doesn’t stop with you, so I think I’ve become more respectful,” he says.

The time away from Varsity was extremely valuable, because it gave him perspective — of other employers as well as of their customers. Luke was able to learn about the cultures and values of a myriad of client companies of Arthur Andersen’s. And he wasn’t so impressed with the competitive corporate Wall Street culture he was immersed in.

“That’s what I liked about the leaders of Varsity, and that’s worn off on me a little bit, not only about winning accounts but also about being a difference-maker in your family life, for the people who work with you and for you, and for your customers, too,” he says. “It’s a pretty good field. You make a difference.”

Varsity’s culture of emphasizing and reinforcing values — including family, the individual, character, success and belief in a higher purpose — has existed from the start, and will continue, Luke says.

Leading the company to more growth

One thing that Varsity has always prided itself on is its track record of organic growth — and Luke intends to continue it. In order to achieve his “relatively aggressive but not outlandish” goal of doubling the company’s business in the next five years, however, he intends to add acquisitions and diversification to the mix.

“I guess you can have a company that wants to stay where it’s at and not grow but that’s not very exciting to me,” he says. “So in the next five years, we want to double in size. I’m looking at maybe 20 to 30 percent of our growth over the next five years to be through some certain strategic acquisitions, but most of it is going to be organic and we really want to push adding on a little more exterior and handyman services.”

He describes his leadership style as integrated — high on task orientation as well as on relationships, but still decisive.

“Being a person who really thrives on relationships, I’ve found it important to gather information and see how people think and feel and then make the decision,” he says.

Customer relationships are also important to him, and despite some tough years recently when the recession made loyalty take a back seat to the bottom line, Luke is optimistic looking forward.

“I think as the economy improves, in the next few years, there will be more interest and relationships will matter more,” he says.

However, it can be tougher to nurture those customer relationships when a company is so large. That’s one negative about having such a huge footprint, he says; another is having less knowledge of the vertical geographic locations the company is in. Local and regional companies tend to have better connections in their communities, so one of Varsity’s goals is to strengthen vertically in the markets they already serve.

Having a national footprint has positives and negatives, Luke says. One of the positive trends on the janitorial side of the facility services business is that there is an uptick in activity with property management companies. Having relationships with these companies positions Varsity to take big pieces of business in different markets. Another is that the company is able to attract talented employees who are interested in the opportunities associated with a larger company.

Changes during the past year have been small but important — from a reorganizing of the company’s growth goals to a modernized logo and changing the name from Varsity Contractors to Varsity Facility Services.

Keeping the company culture fun and educational while adding more discipline is also something Luke will strive for.

“One of the aspects of our culture is that we believe the cleaning industry is important,” he says. “That’s key. And to do that, we do fun things, have fun contests, janitor rodeos and competitions, but I would like a corporate culture of discipline despite the fun family culture that’s made Varsity unique.”

Click here to read the CleanLink exclusive profile on Arlo Luke.