The PolyClean Story

PolyClean USA has been in business for a few years now and we are growing with a number of new associates coming on board. Therefore, I would like to take this opportunity to share with you some of my thoughts on the PolyClean story and hopefully give you some insight into how we came into existence. More importantly for you, however, I want to also talk about our future, and some key components of making that future great for all of us.

A Simple Business Proposition

The concept behind PolyClean and what we offer our customers is pretty simple. We optically sort plastic resins that have been damaged or contaminated. The technology we employ is somewhat sophisticated but the idea is a pretty simple. Essentially, we pass each plastic resin under a camera. Using different colored lights and backgrounds, we attempt to make the “good” resin disappear while making the “bad” resin or the contamination stand out. When the camera “sees” something it doesn’t like, it shoots it out of the product stream with a blast of air.

What makes PolyClean’s value offering unique and important to our clients is that we operate as a mobile service. We bring our technology and expertise to our clients facility. By doing this, we save our clients time, money and hassle associated with shipping their product to a toll processor to be cleaned. More importantly, since we perform our service at the clients facility under their watchful eyes, we give them complete control of the process. This value proposition is both simple and important for our clients and is one of the secrets to our success.

A Brief History

The Richards Group was founded in August of 1990 to produce liners for transporting hazardous waste for a local company called Fennel Container. I was working for my fathers tugboat company (we sunk old ships offshore to build artificial reefs for the states of South Carolina, Georgia, and North Carolina) when we acquired some oil boom, used to contain and oil spill in the water.

Fennel container had the contract with the states ports authority to clean up any oil spills in the harbor. Since we had extra oil boom, I contacted Fennel container to let them know it was available for rent in case of a spill. Sometime later, I developed some heavy garbage bags to haul sludge out of the bilges of the ships we were going to sink. I thought they would make good hazardous waste bags so I called Fennel container to see if they were interested in buying these special bags from me. They expressed interest and invited me to their office to show my wares.

When I arrived at Fennel on that hot August morning, I was told the person I was to see was unavailable and was invited to meet another person of the Fennel team. I had “rolled up” and neatly packaged the “special bag” I was to show to Fennel Container. When I mentioned to the person who met me that I was trying to sell them a hazardous waste bag, the guy I was meeting assumed I was talking about a different product and informed me that he was already buying what I was trying to sell. At this point, I decided that if I could not sell on innovation, then I would try and sell on price.

The Fennel guy told me he was paying $27 per bag. Now I was thinking of charging $2 so I quickly asked to see what Fennel was paying $27 for. It turns out the Fennel guy thought I was trying to sell him a liner for a “roll off” style waste container. The industry term for the roll off liner is a “baggy” so when I said “bag”, he thought I was talking about the same thing.

I asked him to show me a roll off container and I measured one. I went back to my apartment and made a liner to the measurements and took it to Fennel the next day to install it. The Fennel guy said it fit better than the competition and that he would start buying them from me for $25 each. The Richards Group was born.

By this point, you have to be asking yourself what this has to do with PolyClean. Other than being the beginning of our being in business at all, it would seem “not much”. However, the key to the story is that I went to Fennel with the intention of selling them one thing, but ended up selling them something completely different and launching a whole other business than what I intended. If you follow the history of our company, you will find this theme played out time and time again. Our business is not about what we want, it’s about what our customers want from us.

After The Richards Group got started we branched into other businesses that made sense and met the needs of our customers. Today we build liners for shipping hides and other noxious materials (ProTech) as well as make packaging for shipping plastic resins and other valuable commodities in sea containers (TransBulk). Both of these companies are the result of us attempting to sell one thing to a customer and them asking us for something different.

In fact, this is how PolyClean got started as well. Several years ago I received a call from a guy working for a company named Trex. I had known this person when he worked for a local governmental program placing reformed drug abusers into jobs. We had tried a couple of the people in the program with some success. Anyhow, he was currently working as a buyer for Trex trying to locate and purchase scrap plastic. His company was in an initiative to purchase scrap plastic from Spain and they needed some help with the unloading a bulk container (TransBulk).

Trex manufactures plastic decking material to replace wood on backyard decks. The decking is made from ground up milk jugs, grocery bags and wood flour. At the time, Trex was the only company doing plastic wood decking in a big way and they could not keep up with demand. I was intrigued by the business model, offered to help, and got to know the Trex people pretty well.

Although the liner/bulk shipment business had some opportunity for TransBulk, I also saw a bigger opportunity in solving Trex’s real problem. They could not find enough raw material to satisfy their demand. Their criteria for scrap plastic was pretty rigid (had to be clean with no water). As a result, they were rejecting a lot of sources for raw materials. I proposed to the people at Trex to build a wash and grind facility to clean up and reprocess any material they acquired that was unusable.

After negotiating for some time, Trex agreed to buy 20 million pounds a year of material from us at $.12 to .15 per pound. However, after we priced the cost of setting up a plant, we determined it was a money loser. We asked Trex to chip in some bucks to help us build a plant to help make it a profitable venture for us but they passed on the offer and we went our separate ways.

I know you are still asking what this has to do with PolyClean… I promise I am getting to that.

One of the pieces of equipment we had uncovered during our Trex project was an optical plastics sorter built in Japan and marketed under the name Satake. The guy who introduced us to the machine told me that he would often get calls from petrochemical companies looking to rent the machine or looking for someone to sort material for them that already owned a machine. As a result, he thought there might be a business opportunity to build a facility to fix plastic problems for other companies.

After I found out how big the machine was, I asked him what would prevent us from putting the machine in a truck or trailer and driving it to the customer. He said nothing should prevent us from doing that and the idea for PolyClean was born. PolyClean would perform the sorts on site and the customer would save money on shipping costs and maintain control of his product. A simple but effective and marketable value proposition.

PolyClean is Born

All this Trex stuff occurred during September of 1999. By October of 1999 I had met Bill Hussey at a beach party (Bill was then dating the daughter of a friend of my wife, Susanne). Bill had just graduated from college with a degree in marketing. He was looking for something to do and I offered him a temporary job to do market research on this new project. Bill was to call different companies and find out if there was any interest in what we were doing.

Within a month or so. Bill had determined that there was some interest in the concept. Although we had nothing definitive in terms of committed customers, we moved forward on the project and ordered the Satake Colormaster 501. It was now time to design and build the first truck.

The first “truck” didn’t start out as a truck at all. It was going to be a big trailer pulled behind a big pickup truck. We quickly abandoned this idea (not before buying a big pickup truck though) because we were concerned about pulling a trailer long distances and because we needed more room under the trailer to dump the pellets. Also, the original idea was to have rollers on the floor to actually roll the boxes of plastic into the truck, dump the box into a hopper, then refill the box with clean sorted pellets and send the box out the truck. Can you imagine how difficult this would be? We also purchased a screw auger to get material into the machine but quickly abandoned this idea as a well.

After many iterations, we finally ended up with a design similar to what we use today. We don’t consider this design the perfect solution and will always seek input on ways to improve the system to increase productivity and give the customers a better service.

PolyClean Today and Tomorrow

Today PolyClean operates two trucks, each featuring different sorting technology designed to handle the different problems we run across. Our objective is to build the worlds largest and best mobile polymer sorting service with trucks in the USA and Canada, as well as in Europe, Asia and South America. Wherever plastic pellets are made, we want to be there. And to accomplish this objective, we need your help.

Over the next couple of years, I would like for PolyClean to build 3 more trucks for North America and Canada. I believe over the next few years we will probably become more regionally based with trucks operating out of Texas, Kentucky, South Carolina and Ontario, Canada. Each location will handle sort operations within its defined territory. I even envision us having a rapid response truck designed to go do emergency jobs while the other trucks are busy on scheduled runs.

From our associate’s point of view, I would like for our technicians to feel secure in their jobs, without worry of layoffs. I also want our people to be some of the highest paid people in the industry. Combined with a program of 4 weeks on tour with 2 weeks vacation, I would like to make PolyClean a great place to work, where our technicians work together to solve real problems for our customers.

In order to reach this vision, several things need to be achieved. First, as the owner and CEO, I must clearly describe our objective. Secondly, I must clearly state what our values are and ensure that every person on our team, from top to bottom, lives, breaths and eats these values. And finally, I must ensure that we grow in a manner that is sustainable long term.

Our Objective and Purpose

Many people believe that it is the objective of a business to make money. A business by definition is an organization designed to exchange goods or services for money greater than the costs to provide those goods and services. Hence profit. However, I think profit is the result of our doing a great job of fulfilling our objective and purpose. Profit in and of itself is not the objective or purpose of PolyClean. I believe it will be the result of us adhering to our purpose and moving toward our objective.

So what’s the difference between Objective and Purpose? Our objective is where we want to be in a few years. It is our goal. Our purpose is our reason for doing what we do, and the vehicle for getting us to our objective.

The purpose of PolyClean, our reason for being, is to save our clients time, money, and frustration by recovering plastic resins at their facility, while giving them control of the process. This is what we do. In fact, this is so important, that every decision we make as a company and as individual team members within PolyClean, should be made with our purpose in mind. The purpose is who we are. PolyClean is nothing more than a group of people (you and I and few others), some equipment, and a reason for doing what we do… our purpose.

Our objective on the other hand, is where we want to go with our purpose. Our objective is to become the world’s biggest and best mobile polymer sorting company. This HUGE goal is sometimes referred to as a BHAG (pronounced ‘Be-hag’). This stands for a Big Hairy Audacious Goal. It’s something we can all sink our teeth into. It’s a point on the horizon we can head toward. And you are an important part of our objective.

Values

Something that is often overlooked in organizations (businesses), but which I feel is vitally important to long term success, is the idea of values. Values are those things we believe in with all of our heart. They rarely if ever change. They are immutable. Objectives can and do change over time. When we reach our objective and are the worlds biggest and best, with trucks all over the world, we will have to change our objective to something equally big and audacious. And even our purpose could change, although it shouldn’t for many years. However, if we discovered a better model for solving our customers’ problems than with a mobile sorting system, then our purpose might change. However, our values… what we believe in, rarely if ever change.

Where do our values come from and what are they?

As individuals, each of us have different values. These are the things we believe in fundamentally. They are the product of our environment and how we are raised. Even if we do not take the time to articulate them, we still have them. They are made visible through our actions and how we respond to different circumstances.

The values of PolyClean are my values. As the owner of the company and the leader setting the direction, it is my duty as well as my privilege to set the values of our organization.

Here are PolyClean’s values:

1. We interact with others honestly – PolyClean is to be a place where we always deal with others in a truthful manner, regardless of the consequences. This also means we deal with facts as facts, and not engage in wishful thinking or hope. We tell our customers the truth, our vendors the truth and each other the truth. This doesn’t imply that we tell all of our secrets to anyone that asks. Some of our information is for our eyes only. For instance, we should not talk to customers about other customers. We should not disclose our customer list to potential competitors. However, within our ranks, we should deal honestly and open with each other so that we can quickly and effectively deal with problems and take advantage of opportunities.
2. We treat others with respect and dignity - PolyClean is place where we respect each other and the people we deal with. Respect means we treat each other with dignity and with compassion. It does not mean we allow undesirable behavior to go unchecked. If someone is behaving in a manner that does not demonstrate respect for us or others or acts in a manner that does not deserve respect, we will ask them to modify their behavior. If that person does modify their behavior then we remove ourselves from their presence and discontinue our relationship with them. This is our choice.
3. We get better and better every day. Although perfection is impossible and therefore the lowest standard we can strive for, we are always faced with opportunities to improve ourselves and our environment. PolyClean is a place where we continuously look for ways to do things better, faster, safer, and with more enjoyment and fulfillment than the day before. Although we have the PolyClean way of doing things, this does not mean we never change for the better. As a group of individuals trying to serve our purpose in serving our customers in a unique way, we are all responsible for ensuring that PolyClean best practices for getting the job done are always the best. New technologies, new ideas are all around us. Our technicians are doing work in some of the most sophisticated plants in the world. Can you see any ideas for doing what we do better? Let’s try them out, and if they are better than what we are doing, let’s get them implemented throughout PolyClean.
4. We take responsibility for getting the job done right…now! There is no time like the present to get something done. In trying to reach our objective by fulfilling our promise and living our purpose, only you can make the decision to do what needs to be done and to do it to the best of your abilities. The company cannot motivate you. Either you are action oriented or you are not. Either our purpose and values touch your heart and encourage you to serve our clients with excellence and passion, or they don’t. However, we at PolyClean value men and women of action, a desire for excellence and passion. Are you one?

So how do we use these values? At PolyClean, I want these values to help guide us in our decisions and actions. Are we doing the right things in terms of honesty? Are we treating this individual or company with respect and dignity? Is this the best way to do this or is there a better way that helps us achieve our purpose? This is how we use values. With respect to our associates, we can look at our people in one of four ways.

1. Associate ‘a’ shares our values and is a good performer – This is an easy decision and this type of person is a keeper. This is what we should all strive to be and who we should look for in new recruits. An associate who performs well and shares the values of the company is the best we can hope for and a true asset to the company (not to mention the world).
2. Associate ‘b’ shares our values but is not performing his job well – This is tougher, but we will generally work with this person to improve his performance over time. If it does not improve, we will let him go.
3. Associate ‘c’ does not share our values and does not perform- This too is an easy decision and the person will be asked to leave the company.
4. Associate ‘d’ does not share our values but is a great performer- This person presents a dilemma to the organization. However, since our values are immutable and all we really have as a company, this person has to go. PolyClean is not the place for them. This is a tough choice but one that has to be done for the good of our values, our purpose, our objective and our integrity!

These values are how we judge how well we are doing as individuals and as a company in somewhat subjective terms. They are subject to some interpretation and how intensely we feel about them. However, we do need to talk about ways in which we can objectively measure our performance. These are called drivers and they are the measures we use to see how effective we are being as a company.

From a financial standpoint, most companies, including those traded on the New York Stock Exchange, use financial measurements to determine how they are doing. Two important financial statements are considered most important. These are the Balance Sheet and the Profit and Loss Statement (or Income Statement). Both tell a story about a company but in different ways.

Financial Statements and other Lies

The Balance Sheet is a report on how much a company is worth at a specific point in time. To build a balance sheet, you add up all of the company’s assets such as cash, real estate, accounts receivable, inventory, trucks, etc. Then you subtract all the liabilities such as debts, accounts payable, mortgages, etc. If your assets are greater than your liabilities, then you have a positive net worth. If you owe more liabilities that you have assets to cover, then you have a negative net worth. This statement is called a balance sheet because regardless of whether you are positive or negative in terms of net worth, on the balance sheet assets always equal liabilities plus net worth. These two numbers are always equal or “in balance”.

Unlike a Balance Sheet, a Profit and Loss statement is a reflection of how the company is doing financially over a period of time. This period can vary from a time span as short as a day to over year. Most are based on a calendar month, a quarter or a year.

A Profit and Loss statement takes all the revenues for the period chosen (month, quarter, year) and subtracts all the expenses over the same time. Revenue equals sales dollars at PolyClean and expenses include such items as travel expenses, per diem, salaries, repairs and maintenance, etc. If revenues are greater than expenses, then you are profitable and you get to play the game some more. If your expenses are greater than your revenues, then you are not a very efficient company and you go out of business. You might be able to put some more cash into the business to make up the difference but you won’t be able to do this for very long and you won’t do it at all if you think your business model is flawed and you’ll never make a profit.

Some company managers think all they need to do is to watch the numbers on their financial statements and everything is going to be okay. Well, this just rubbish. Because all financial statements look at past performance, I consider them to be history lessons. They tell you what happened last month but they tell you nothing about today… or tomorrow.

There are some serious problems with traditional financial measurements as found on the Balance Sheet and Profit and Loss Statement. For instance, at PolyClean we consider our associates to be the number one assets or our company. However, none of our associates show up on the balance sheet in the asset column (they don’t at any company, which shows the inherent problem with financial statements). I also believe that our productivity is the most important thing we can measure, but productivity is not shown on any financial statement either. In fact, looking at the financials alone tells you very little about a company. And we won’t even talk about how these numbers can be manipulated to deceive others. Enron anyone?

Q: How was your day?

A: My day was productive!

At PolyClean, we believe we need other methods to measure how good we are doing. To keep score if you will. These drivers are our measurement of how we are doing objectively. So what should we use as a measure?

Although our purpose is to serve our clients by saving them time money and hassle in the sorting of their plastic resins, we need a way to measure our results. One way to measure how well we are doing is by productivity.

But what exactly is productivity? It varies from company to company. Productivity for a steel company might be how many tons of steel they produce in a week. An automobile company might measure productivity by how many automobiles were built last month. McDonald’s might measure productivity by how many hamburgers they made and sold. A salesman, like Bill Hussey at PolyClean, might measure his productivity in how many clients he contacted during the week and pitched the PolyClean story to.

For PolyClean, our primary measure of productivity is how many pounds of plastic we process over a period of time. Why do we choose pounds of plastic? Well, we generally charge our clients a fee for every pound of plastic we process in our equipment. In fact, it’s the only thing we charge our clients for. Therefore, the only time we are productive is when we are running plastic pellets through our equipment for a paying client and effectively removing the contamination to their satisfaction.

This is an important point that I want everyone in our organization to understand. PolyClean only makes money when we are effectively sorting plastic pellets for paying customers. This is when we are being productive. This is the only time we are living our purpose. We are not being productive nor are we living our when we are fixing broken equipment, driving from one job to another, cleaning the machine, changing the oil, re-running reject or incorrectly sorted materials, performing maintenance, or setting up the equipment. We are only being productive when we are sorting plastic pellets effectively for paying clients.

Now, at this point, I do not wish to minimize the importance of such tasks as preventive maintenance, cleaning and driving the trucks. These are functions we have to do every day in order to have the ability to live our purpose. I just do not want you to think that you are being productive when you are doing these things. You are not being productive. In fact, as part of our ongoing program to continuously improve our systems and productivity, we should try to do as many of these tasks as possible while sorting pellets or work hard to minimize how long it takes to perform these tasks. The ultimate goal (not attainable, but still the ultimate goal) would be to have the trucks effectively sorting pellets 24 hours a day, seven days a week, 365 days a year. The trucks would then be 100% productive.

Since this “ultimate goal” is impossible and therefore unrealistic, it is not our objective to reach this level of productivity. It is, however, our collective goal and part or our value system to improve on our productivity every day. Therefore, one of our drivers or key measurements will be pounds sorted per month. Divide this by the total number of hours available for sorting during a month and we will have a number we will know as the average pounds per hour. If we track this over time and notice that the average pounds per hour is increasing, then we know we are becoming more productive. If this number goes down, then we are being less productive.

Factors that effect productivity

What are the things we do or don’t do that affect profitability? The fact is there are lots of things that affect productivity and therefore lots of things we can do to improve productivity. For example, we should ensure that a batch of material at a customer’s site can be sorted before we get there. We should not schedule jobs in Texas, then Ohio, then back to Texas if at all possible. This avoids unnecessary traveling which is unproductive. We should ensure we have the ability to run on the weekends. We should ensure we are able to run 24 hours. We should avoid changing materials mid-stream. We should develop a production plan and stick to it to the best of our ability, reducing the productivity loss from changing priorities. We should ensure we have an adequate maintenance program so that we do suffer from productivity reducing breakdowns. We should ensure that our customers are ready for us when we arrive. We should always have the necessary supplies on the truck. We should never run out of diesel for the generator. We should ensure our bills are paid on time so that the credit cards work. All of these, and a lot more affect productivity. Can you think of any others? Can you think of a way we can avoid the productivity sucking thing you just thought of? If so, how quickly can we develop the system and implement it? Can we do it today?

Another item that affects productivity is not having a well documented system for doing something. An example would be cleaning the truck after a job. What are the correct procedures to ensure the truck is contaminant free and that we know we are cleaning the truck as efficiently as possible? If you start cleaning the hoppers under the truck then move up, you will have to re-clean the hoppers of all the pellets you knocked in as you cleaned items above. So at PolyClean, we start cleaning at the top and move down. So well documented systems that we follow can improve productivity.

The act of measuring productivity will improve productivity. Once we all start paying attention to the average pounds per hour, this number will improve. Why? Because it is human nature to be competitive with games, and measuring our productivity is a game.

A Piece of the Pie

Before the end of this year, PolyClean will implement a bonus system for everyone based on team productivity and to a lesser extent on profitability. As an associate, you have a lot of power in helping us to collectively improve productivity. Other issues outside or your direct control affects profitability but that number will affect your bonus as well. My objective is to have everyone’s pay based on a small salary with a bonus that is not capped. The more productive we become as a company, the better we are and the more you should share in the rewards.

But It’s Not All About the Money

As I mentioned in the beginning of this story, a business by definition is supposed to be a profit making endeavor but I do not believe it is its purpose or its soul. Similarly, while you may work at PolyClean to earn money to live, it is probably not your primary motivation. It is my hope that you derive a great deal of satisfaction working for a company doing something truly unique, for customers who appreciate what we do. It is my hope that we continuously improve the working environment so that you can feel that sense of accomplishment more frequently and enjoy contributing your ideas to make PolyClean a better, safer place to spend your time. A place where you are proud to work and tell others what you do for a living. I invite you to join me and your fellow associates on this adventure to make PolyClean the biggest and best mobile polymer sorting company in the world!

Thanks for taking the time to read this story. I hope you found something of interest in these pages and that these words will have some impact on you life. I look forward to having you work with us as an associate in pursuit of a common objective, sharing similar values, and serving a unique purpose. Please contact me at any time you have any questions, comments or concerns, or have an idea to make us a better company. I promise to work hard to help you make PolyClean a great company we can all be proud to be associated with.

Sincerely yours,

Mark W. Richards, CEO