Service with a Smile

Service with a Smile

August, 2003

We’re probably getting ahead of ourselves a bit, but for Mark Fukunaga, chairman of the board and chief executive officer of Servco Pacific Inc., the news was just too good to sit on. In fiscal year 2003, which just ended for Servco on June 30, the company broke the $500 million mark in sales. It’s an all-time sales record for the company, which was founded by Fukunaga’s grandfather, Peter, in 1919. This year’s revenue numbers are a more than 10 percent increase over the $467 million it earned in 2002.

According to Fukunaga, Servco’s recent success is partly the result of a long-term and wide-ranging effort to refocus its business operations. This has entailed everything from paring down its products and services to beefing up efforts to enhance customer service and employee satisfaction.

“Servco has been transformed from a very diversified company to one that is much more focused,” says Fukunaga. “In the pre-1990s, you could compete well in a variety of areas. We were relatively free of national and global competitors, but the market has changed. We had to get out of areas in which we weren’t market leaders.”

That meant that Servco concentrated on its automotive, insurance and consumer products divisions, and cut loose its financial service and office products companies. Simultaneously, the company instituted a “Team Servco” values program, a rank-and-file effort to identify, communicate and perpetuate key guiding principles for the company. Today, there is a “values champion” on Servco’s executive staff and 30 percent of each manager’s compensation is based on employee satisfaction scores. According to Fukunaga, Servco’s employees scored an 85 percent on a nationwide “commitment index” last year, a measure of worker satisfaction. The average score for companies is somewhere in the 60s.

“I used to believe that values were a private matter,” says Fukunaga. “But I’ve come to the conclusion that what a company stands for matters a great deal to its employees. The company should be very explicit about what it stands for and then it should operate accordingly.”

The modest, soft-spoken Fukunaga says that he can’t take credit for some grand plan to re-tool the company. He said that he and his managers just looked at each of the company’s problem areas and figured out what to do. Increasing efficiency was inexorably linked to the company’s efforts to be more responsive to its customers’ and workers’ needs.

“Reaching the half billion dollar mark is great,” says Fukunaga. “However, our biggest accomplishment is that 85 percent of our people are committed and are proud to work at Servco. That tells you where the company is today, and where it is headed in the future.”

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David K. Choo