EDGE Cleaning bricks with a hatchet: Emerson Russell's rise to power

EDGE Cleaning bricks with a hatchet: Emerson Russell's rise to power

December 1st, 2015 by Ellis Smith in EDGE

Emerson Russell talks inside of a home in a Ringgold, Ga., subdivision Monday, October 19, 2015.

Photo by Angela Lewis Foster /Times Free Press.

Gallery: Cleaning bricks with a hatchet: Emerson Russell's rise to power

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A timeline of Emerson Russell’s career:

* Main Street Paint & Body Shop — 1966 to 1971

* Chattanooga Police Department — 1969 to 1977

* Russell Security — 1975 to 1986,

* Swan Services Inc. — 1986 to 1991

* ISS — 1991 to 1993

* ERMC — 1998 to present

Source: ERMC

A country preacher and a little boy go into a church. The preacher takes a quarter out of his pocket and drops it into the offering box in the back of the sanctuary, then walks up to the middle aisle, takes the pulpit and preaches his heart out.

The congregation sings the last song and the service ends. On his way out, the country preacher unlocks the the offering box, opens it up, looks inside and takes back his quarter.

The boy looks up at him and says, "Dad, if you'd have put a little more in, you'd have got a little more out."

This is a story that Emerson Russell has told more than a few times. There's a reason for that.

In the intervening years between hearing the tale for the first time from his father, a Church of God minister, and recounting it again in 2015, Russell has founded 30 companies and hired more than 5,000 workers in 32 states. If he emphasizes anything at all when discussing businesses, it's the value of putting everything into his work.

Russell is now directing the significant resources of his company, dubbed ERMC after his initials, into health care and government contracting, where he hopes to grow a profitable toehold into a big part of his business. It's hard to describe his business is in a single breath, but he essentially offers to do all the jobs that other companies don't want to do.

If you run a mall, for instance, Russell will take care of the janitorial, security, maintenance and landscaping services, greatly simplifying life for the owner of the mall.

If you run an airline, Russell's team takes care of the plane, maintains the baggage system and cleans the airport, letting the airline worry about flying the planes rather than fixing conveyor belts.

Russell's company will clean up a construction site, polish concrete, monitor your security systems, and even make sure your food is served in a sanitary way.

On the side, Russell buys land and builds neighborhoods, and is one of the major players in Chattanooga's real estate landscape.

Russell grew up without much money, living in East Lake and Highland Park. In a way, growing up poor was good because it taught him to do all the jobs that no one else wanted to do. For instance, he got his start in business at age eight cleaning bricks — with a hatchet.

To clean bricks with a hatchet, one must grip the brick tightly with the left hand while using the right to knock dirt and mortar off, all without slicing off any fingers and while avoiding blisters.

It's a job that, even if all goes well, leaves a person with aching palms and a face full of brick dust. It's not a job that kids dream about doing when they grow up or that people go to college for.

Though Russell wasn't old enough to drive a car, that didn't stop him from chopping the mortar off those bricks for a penny apiece for the then-owner of Mosteller's Garage in Chattanooga. The mindless drudgery paid off. By age 12, Russell was promoted to a better job driving a wrecker. And after a while, to hear him tell it, he was running the place. By the time he turned 18, he had saved enough money to open his own paint and body shop. That was in 1966.

He joined the Chattanooga Police Department in 1969, starting a security company on the side that evolved over the years into the ERMC behemoth that he oversees today.

His first contract was at a warehouse. He was doing polygraph tests on a group of employees at the owner's request, which revealed evidence that the workers were stealing from the warehouse. So the owner, Bill Hudlow, asked Russell to take over security. Eventually, Russell agreed.

Success, a concept that for many is as elusive as it is seductive, has grown over the years into little more than a simple mathematical equation for Russell: start the day at 4:30 a.m. and don't go home until 8 p.m. or so. Find new ways to help people in exchange for money. Do your job so well that people tell others how great you are.

That's it, he says. That's all there is to it. Work hard doing the little things and you'll be trusted with the bigger things. But the slow cadence of Russell's drawl can't obscure his hard-minded entrepreneurial brain. He's an idea man. He likes doing big deals. And he's got references.

Charles Lebovitz, the man who oversees and empire of malls under the banner of publicly traded CBL & Associates Properties, once said Russell is "one of the most entrepreneurial minded executives I've had the pleasure of doing business with over the years."

"I see ERMC as our go-to people," Levovitz says.

Russell's third contract was with the precursor to CBL & Associates, a company called Arlen Realty and Development Corp., headed by Lebovitz. His second contract was with Northgate Mall.

Tom Edd Wilson, former president and CEO of the Chattanooga Area Chamber of Commerce, has called Russell "an outstanding example of the kind of entrepreneurial spirit that has built the businesses that are the backbone of our local economy."

Russell says the chairman of Southwest Airlines, when asked at a panel by another CEO what made the airline so successful, said that "ERMC walks on water." Not bad.

In reality, Russell is just bringing a bit of country common sense to industries that often receive little attention. He has a couple of rules in business. Bid lower than everybody else, and if you do a good job, the money will follow.

For instance, it costs something like $90,000 to buy a sweeper truck to clean a mall parking lot, an expense that has to be passed by ERMC onto their customer, the mall. Instead, Russell buys $22,000 pull-behind sweepers that his security guards can use during the night shift, allowing them to patrol the mall and clean the parking lot at the same time.

Instead of stationing cleaners at every airport he services, he keeps everyone stationed in central hubs. Then when a job needs to be done they simply hop into an empty seat on the next plane out, do their job and fly back.

Instead of installing closed circuit TV cameras at every mall and running the wires to a central room where someone is paid to watch them 24 hours a day, Russell operates a centralized security room at his Chattanooga headquarters where he monitors security at dozens of locations across the U.S. in real-time. If there's an incident, one of his Chattanooga-based security experts picks up the phone and contacts local security. So he's an innovator.

But innovation is only one part of operating a successful business. Another big part is getting employees to do their jobs, even when the manager isn't around.

Part of getting employees to represent the company properly is training, and Russell has created a standardized set of lessons and tests for every job in the company that every employee must pass in order to do a job, Russell says. In addition to the how-to part, the training emphasizes how important their job is, even if it's cleaning toilets.

"If you go into a location and the bathroom is dirty, your opinion of that location is, it's dirty," Russell says. "They've got to understand how what they're doing affects the general public's perception of that business, for better or for worse."

The other key to running a giant, sprawling company is finding and cultivating good supervisors. Russell likens his approach to the old management metaphor about getting employees into the right seat on the bus. Only his philosophy is a bit different, because there's no bus big enough for the thousands of workers he employs, and he doesn't want to be the only driver.

"I've got 55 buses, and I need 55 people who can get us down the road," he says.

And perhaps the most important way he motivates employees is to get his hands dirty. He's swept floors, patrolled buildings, cleaned up construction sites, cleaned out dirty drains, you name it.

"There's no job in the company I haven't done except run a computer," Russell says. "If an employee says 'that's not my job,' I'm looking for a new employee. The customer doesn't care whose job it is."

He has a standing rule to drive this point home. If one of his employees is standing near a door, and someone walks up to the door, that employee is expected to open the door for them.

"They become a door person," he says.

The same goes for his family members, many of whom have worked or currently work at the company. There are no free rides, everyone has to do the job they're hired to do, he says. If they don't, he's no charity. He terminated a brother-in-law, he says, though the two remain good friends.

"I feel like I'm tougher on my family members than employees," Russell says. "All of my children have done just about every job in the company."

Some of them have even done well, and are poised to take over the reins if Russell ever gets bored.

"You've always got to be prepared for when you're not going to be here," he says.

His son Eddie Russell is the president of ERMC, and "continues trying to kick me out the door, but I'm not ready to go yet," Russell says.

Yet sometimes, despite Russell's best efforts, something goes wrong. A job isn't done right or there's some sort of dispute. In this type of situation, there's a great temptation for an executive to keep a grab bag of excuses handy, or to put language in a contract that holds the company blameless in case of a big screw-up. But Russell says that's all wrong.

"If the customer has got to pull the contract out to see if you're doing your job, then you're not doing your job," Russell says. "The most important thing to do with clients is to be honest with them."

Still, there are some customers that it's better not to do business with, he says. If a customer wants to haggle about paying a bill, it may be better to let them go under good terms, and leave the door open to doing business again later.

"If they don't pay you, they're either a very cheap customer and you don't need that customer, or you're not doing a good job," he says.

Russell credits some of his success to picking the right customers. He and CBL form a sort of mutual admiration society, with Russell praising the mall magnates time and time again, and Charles Lebovitz appearing in a promotional video for Russell that was played recently at an awards banquet honoring Russell's achievements.

"Pick the right people around you and pick the right customers," Russell says. "I've been working with Charles Lebovitz and the Van Heusen shirt factory since 1972, and they're a big reason I'm here."

The profits from those customers and others have certainly helped, but the word of mouth from satisfied customers has also been a big driver behind Russell's ability to sign up new customers. That's part of the secret family recipe that he's hoping to replicate as he moves into the government and health care sectors, he says.

Already, the company has signed up a couple major accounts, Russell says. That's the first step. The next step is to make those accounts really, really happy. And finally, the hope is that when he uses them as references, they'll talk to their friends, leading to more contracts.

Those pieces of business are especially important because they're growing, while the footprint of many retailers and mall owners is stalled or is actively shrinking as shopping habits change.

"Once you get an account and you do an outstanding job, just getting into that business is something that will make you successful and make you grow," he says.

As he nears 70 years old, Russell recognizes that he's not going to be doing this forever. He still loves doing the big deals, sitting around the table, making friends and making money. But he also recognizes that at some point he'll have to leave behind the company he founded in 1972.

He's mixing business with pleasure now, going to the occasional car show and knocking out a couple meetings while he's away. He has one car, a '32 Ford, that won 4th place in a Ripley's car show. His favorite car to drive around is a '55 Chevrolet Convertible with a 350 engine under the hood.

"I would just like for them to remember the good times and make sure they carry on what we put together, no matter who is in charge," he says. "Hopefully, this philosophy has been pushed far enough into the trenches that everyone will continue to grow the company: run as fast as you can."