The First Rule of our Evergreen Business: “Do the Right Thing”
In 1946, Kenneth Savage returned home to Utah from serving in World War II and purchased a KB-5 International stake body truck, the first investment in C.A. Savage & Son. Together with his brothers, Neal and Luke, who joined the company shortly after its founding, Kenneth would drive 75 miles outside of Salt Lake, load the truck with seven tons of coal—by hand—and drive it back to Salt Lake City, where the brothers would deliver the critical fuel to their Customers’ stores and homes.
From that humble beginning, the Savage Family of Companies, which provides service offerings for truck, rail, and marine transportation and logistics, materials handling, and other industrial services, has grown to employ 5,000 Team Members across 220 locations around the world. The driving factor in the success of our Evergreen® company’s Paced Growth for over 70 years has been a deep, abiding commitment, first by the Savage brothers, and now by those of us who are stewards of the business, to their founding principles.
In 1999, Kenneth, Neal, and Luke, drafted a Vision & Legacy document, which serves as our cultural constitution. It lays out the Founders’ expectations regarding how we act with one another and with our stakeholders, and it serves as the bedrock of the Company. As many times as our mission and our strategic direction might change, the Vision & Legacy remains immovable. We lead according to that legacy, and we’re all expected to live it.
The document outlines the Founders’ vision for continued growth through future generations, their sense of stewardship, their commitment to integrity, their desire for Team Members to find fulfillment in their work, and their relentless commitment to continuous improvement. The language is rich and expressive, reflecting the passion and perseverance that formed our Company and how it continues to thrive to this day.
As leaders of the Company today, we recognize that if we want all of our Team Members, across job functions and geographies, to live and lead according to the Vision & Legacy, we need to ensure that the principles and values continue to resonate and are accessible and easy to understand. So, we've spent some time distilling it down to three actionable, clear principles: First, “Do the right thing;” second, “Find a better way;” and, third, “Make a difference.”
The power of presenting the Vision & Legacy in this way is that those three phrases actually also connect to the personalities of our three Founders. “Do the right thing,” very much reflects Kenneth Savage, the oldest brother. His handshake was a contract. Anybody who knew him, knew that if he gave you his word, it was the law. “Find a better way” is Neil, the middle brother, who simply expected that he, and everyone he worked with, would never get comfortable with the way things have been done, and “Make a difference” was Luke, who was always pushing for meaningful value for Customers. Making those personal connections brings the Vision & Legacy to life for our Team Members.
Also significant, especially from the Evergreen perspective, is that the Vision & Legacy reflects the fact that the Founders didn’t just want to preserve what they’d grown; they wanted to perpetuate it. They wanted the Company to continue to grow and thrive for generations to come. That's really the elegance of what they expressed—the desire for continual improvement and for Team Members to continue to embody these principles through that ongoing evolution.
Specific parts of the Vision & Legacy are demonstrated by Team Members every day. Our culture is a reflection of how the document has been operationalized and is continually reinforced. Recently, I met with executives from a large oil and gas corporation that we’re working with on a large project. When I asked their team about any concerns or issues they may have about the project, they said, “We love your culture so much, and our only concern is that we want to make sure that any new people you bring into the project are properly assimilated – we want to make sure they’ve been ‘Savage-ized’." They clearly understood the power of the culture as a driver of our team and the success of the project.
The directive to “make a difference” is also clear and present today through our philanthropic efforts. We involve Team Members in service projects because we understand that we have an obligation to give back and to be stewards not only of our company but of the communities where we work and live.
We also try to create fulfilling work and provide opportunities for Team Members, as our Founders articulated in the Vision & Legacy when they committed to help people “do things that they never dreamed possible.” For that to happen, we have to be seriously interested in finding out for each Team Member, "What do you aspire to do?" Then, whether the answer is to be the best driver in our Company or to be a CFO, we have an obligation to help each person understand the steps that will get them there and then help them chart a course to operationalize this unique part of the Vision & Legacy.
To see the impact of our commitment to Team Members’ growth and development is incredibly fulfilling. We make a point, when we discuss the Vision & Legacy at company events, to ask, "Are you doing something today that you never dreamed possible?" To see the number of hands that shoot up is amazing. And while it’s exciting for me to see, I think it’s even more powerful for more recently hired Team Members who might be wondering whether the principles of the Vision & Legacy are the “real deal.” When they see these other Team Members’ hands go up—a mechanic who’s now a Business Unit Leader or a woman who began in an entry-level role who now leads our IT organization — they see real, live examples of how we live these principles.
There’s no question that there’s challenge in maintaining the power of the Vision & Legacy as we grow. But that document will remain the foundation, our cultural constitution, because it’s so important to us, and people “get” the value of it. We teach it all the time. We reinforce it all the time. We showcase it all the time. We use it when we talk to Customers. We use it when we talk to current Team Members and to future Team Members. We use it when we do exit interviews because we want to make sure we haven't damaged it. It’s embedded, and that’s how it will live on. Our Vision & Legacy is a living, breathing part of our Company, and to keep it alive, we’ll need to continue to nourish it as it sustains our Evergreen Company.
Kirk Aubry is President and CEO of Savage.
The Most Successful, Yet Little Known, Recycling Program Since the 1950s Has Evergreen Roots
Sustainability has been the driving force behind our Evergreen® company, East Penn Manufacturing, since DeLight Breidegam, Jr. and his father, DeLight Sr., founded the company in 1946.
When DeLight Jr. returned home to rural Pennsylvania after serving in the Air Force in WWII, he and his father noticed the shortage of materials available to manufacture batteries and began collecting and rebuilding old batteries to meet the post-war demand. For DeLight Jr., who was raised during the depression, recycling in this way was common sense.
That sense of pragmatism and what he would have called “common sense” forged the foundation of many of the practices that DeLight Jr. went on to implement as he grew the company to become a global leader in battery manufacturing. He always had a long-term view, and, for him, that meant building a company that would look after the environment, employees’ well-being, and the community.
I was lucky enough to work with DeLight Jr. when he was still actively leading the company, and he used to say to me, “Pruitt, they’re not making any more land, so we’ve got to take care of it.” That pragmatic expression of environmental stewardship is at the core of East Penn’s steadfast commitment to sustainable practices, and it propels our recycling efforts, which are a pillar of our environmental protection plan.
When people hear about the scale of our recycling programs, they’re often surprised. We manufacture lead batteries—the type in most cars, trucks, and other vehicles today—and many people aren’t aware that 99 percent of lead batteries in the United States are recycled. (In comparison, only 40 percent of aluminum cans are recycled.) This is perhaps the biggest recycling success story that never makes the headlines.
At East Penn, following DeLight Jr.’s early lead, we’ve been recycling since the 1950s, when these practices were not as widespread, to say the least. Why? It comes back, again, to our founder’s common-sense approach to growing a company for the long term. It absolutely makes economic sense to create a sustainable product with a circular life cycle, but it also aligns with our commitment to environmental stewardship because if the batteries were not recycled over and over, they'd be considered hazardous waste.
Instead, we receive spent batteries back at our facility, where we process approximately 30,000 batteries per day, safely recycling all of the components—lead, plastic, and acid—and creating new batteries with about 80 percent recycled materials. We also recycle all of the corrugated cardboard and shrink-wrapping materials we use to package the batteries for distribution via an external recycling entity.
Our investment in the facilities and technology to recycle has been considerable over the years. We built our smelter in 1947 and the battery industry’s first acid reclamation plant in 1992. In 1996, we built a $14 million industrial wastewater treatment zero-discharge facility. We have seven or eight miles of pipe laid underground here at East Penn, and no wastewater leaves our premise. None. It's all processed, cleaned, and reused. The only water that leaves our premises is the sanitary waste, which goes to the local waste municipality. These long-term, common-sense investments keep the company sustainable and reduce our impact on the environment. We never second-guess those financial commitments.
Looking ahead, we continue to innovate in our environmental stewardship efforts. We use a great deal of energy charging the batteries we produce, so we just embarked on an Energy Efficiency Program to work toward reducing our energy use by more than 10 percent over the next ten years. It's a collaborative program with the federal government, and it’s one more way we are hoping to improve our impact.
Conclusion
All of the choices we’ve made over the years to limit our impact on the environment and create a truly sustainable product speak to our bigger commitment to building a long-term, sustainable business. But for us, sustainability means more than environmental stewardship. It means reinvestment back into the business. It means proper health and safety procedures to protect our employees. It means providing health insurance for our employees and their families. It means continual innovation. It means taking reasonable risks to grow the business. It means building a strong culture that upholds towards our employees, our customers, and our community.
All of these steps toward sustainability continue to reflect our founder’s common-sense approach. DeLight used to say to me all the time, “Pruitt, it's not one big thing. It's a million little things that make a business tick every day, and it's those million little things that are important because they add up to the big thing of sustainability. That's our why.”
Chris Pruitt is CEO and President of East Penn Manufacturing
Evergreen Perspective On 2020
Dear Evergreen Journal Readers,
The start of a new year traditionally offers both opportunity for reflection and anticipation, and—despite all the ways in which 2020 was unprecedented—this year is no different. At Tugboat Institute, as we look ahead to 2021, we’re ready to embrace the hope that the prospect of a COVID-19 vaccine brings and move forward to continue to support Evergreen® leaders, and we’re also incredibly grateful to reflect on the lessons and perspective of our community.
The experience of Tugboat Institute member-companies in 2020 has varied widely, reflecting the broad range of industries and geographies in our CEO tribe. In spite of the pandemic, some Evergreen businesses had an incredibly successful year; in other cases, leaders faced stunningly fast and steep revenue drops and heartbreaking layoffs in response.
Almost all members pushed through exhaustion and decision fatigue at some point, managing personal and family challenges at the same time. Across these experiences, the Evergreen 7Ps™ principles have continued to serve as a through line—guiding lights for Tugboat Institute members and companies. The myriad inspiring stories of perseverance, adaption, and care in this unprecedented year could fill a book, but there are a few that stand out as I reflect on our community.
Like so many Evergreen leaders, Scott Evans, CEO of Kenmore Envelope, saw the opportunity to make a difference and serve his community through the pandemic. Having been deemed an essential business as a result of the company’s relationship with the US Postal service, Kenmore continued to operate as many other businesses faced shutdown last spring. With a deep sense of responsibility to use the company’s capabilities and team for good, Scott determined the business could use existing equipment to produce PPE for frontline workers. In mid-April, Kenmore began distributing face shields to community hospitals and healthcare providers in the Richmond, Virginia area. Kenmore is one company among many Evergreen businesses that has displayed People First principles and a commitment to community in 2020.
The events industry has been among the hardest hit by the pandemic, with in-person gatherings almost completely shut down immediately last March. And yet, at Hello! Destination Management President Paul Mears saw opportunity to adapt and step into a new arena in this time. For several years, Paul had been tracking a struggling company with significant outside funding, which, in his view, had developed a wonderful capability that was mispositioned in the market. As COVID-19 shut down his core business, he quietly did his homework by testing a different value proposition with his existing customers—and found significant interest. Based upon those insights, he acquired the company, extending Hello! DMC’s service offerings into the virtual and local domains and giving the team an exciting new growth vector.
Grossman Company Properties, a second-generation real estate investment and management company, with a primary focus on hospitality, owns and operates nine hotels. John Grossman, President of the Evergreen business, saw revenues in the hospitality drop by 85 percent across the board last spring, as the floor fell out of the industry in a matter of days. The company initiated furloughs as they saw occupancy rates fall across their properties, which was incredibly difficult given their commitment to People First. However, Private ownership and management allowed for flexibility and creativity in reorganizing staffing to manage the properties. In addition, as John shared in The Evergreen Experience 2020™, the company’s long-term, conservative approach to debt—another characteristic of Evergreen companies—was essential in weathering the storm.
Choosing just three examples here was not easy. So many Evergreen leaders have shown extraordinary grit, compassion, and character in 2020, continually making decisions to align their companies’ actions with their core values and to care for their teams while confronting extraordinary challenges.
Looking ahead, Evergreen businesses will need to continue to adapt and plan for what remains an uncertain future in many ways. But these leaders and their teams have a competitive advantage in this time: they are committed to delivering on their Purpose for the long term. With new innovations and stronger teams forged in this moment, I know these companies will continue to grow, thrive, and make a difference in the world.
Dave Whorton is the Founder and CEO of Tugboat Institute.
Competitive Wages, Employee Lounge with a View, Free Food, Community Spirit: How This Grocery Store Built a Winning Team
As an independent, locally owned grocery store, our Purpose at Jackson Whole Grocer is to bring community together through food. Our alignment with Evergreen® principles sets us apart in our industry, and we’re proud of the programs and practices that keep that Purpose front and center in our business, our town, and our region.
I didn’t start out in the grocery business. I spent my early career in sales and then founded and acquired several businesses before purchasing an existing family-owned grocery store in Jackson Hole, Wyoming. I had been seeking a new business opportunity that would keep me close to my family after years of work that required a pretty relentless pattern of planes, trains, and automobiles. I wanted to do something in my community—and for my community.
Beyond a love for food—my wife and I are passionate natural foodies—I knew nothing about the grocery industry when I learned the business was for sale. But I saw the opportunity to dig into something that had enough size and scale to be interesting, with close ties to the community we loved.
Ten years later, the number of employees and revenue have doubled, and the business has become a community hub. As we grow, we keep the focus on People First front and center. We are committed to impacting our employees and our community members in a positive way.
Here are some of the Evergreen approaches to meeting that goal that set us apart:
Compensation that Works Toward Bridging the Gap
One of our core values is to provide our people a great place to work. To me, at a basic level, that means providing competitive compensation and benefits. Last year, we raised wages 16 percent, which is big in any business and it's certainly big in ours. But we recognize that to support individuals and families facing the high cost of living in our community, that investment, while extending our ROI timeline, is essential and the right thing to do.
One of the key drivers in this decision was the extraordinary dynamic going on in terms of affordable housing our area. The average cost of a single-family home in Jackson is $2.6 million. We have an extreme housing shortage problem. It’s not uncommon for some of our employees to be paying 50 to 70 percent of their pay in housing costs. Working through this challenge will require a multi-faceted approach, but raising wages is a first and important step we can take in taking care of our people. We can’t close the gap, but we are doing what we can to help build a bridge.
Room with a View
In many big box grocery stores, the employee break room is in the basement or a windowless back storeroom—it’s an afterthought. We took a different approach. Visitors come to our area from all over the world to enjoy the natural beauty of this landscape. We think our employees should be enjoying it too. We designed the break room to be on the second floor, next to my office, featuring huge windows with a view of the Snake River Mountain Range, lots of natural light, comfortable furniture, and a kitchen. I want our people to come in, sit down, relax, and enjoy their break. It may be a small thing, but it can make a big difference in the quality of a person’s work life.
Feeding Our Work Family First
In that same break room, we installed shelving and a large refrigerator to offer our people “culls,” food that we can’t sell because it might be just past an expiration date or bruised in some way (think a browning banana or a dented can of beans). It’s a mini market of sorts, where everything is free. These foods are still perfectly edible, but they can’t be sold. Many grocery stores don’t offer culls to their employees for fear that it promotes theft. Instead, they donate it all to local food banks or nonprofits, or worse, it gets sent to the landfill.
We take a different view. We know the cost of living is high in our community, and we feel a responsibility to feed our work family first, then donate the rest our community food rescue program. Our employees leave work with bags of free food, and we’re grateful to be able to provide that benefit.
Community Giving
Like many grocery stores, as you might imagine, we receive a lot of requests for donations—from trays of cookies or bananas for a fun run to much larger asks. We have over 250 nonprofits operating in our community, and everyone has a cause.
About three years ago, after giving for years to a wide variety of organizations, I recognized that in our affluent resort community, much of the support for nonprofits was being directed to environmental and wildlife organizations. I’m a huge supporter of many of these groups and always will be, but I felt that there was an opportunity to focus on “people”, which is more aligned with our purpose.
I decided to turn my focus to helping people, and I partnered with a local organization called System of Care, which coordinates giving to about 35 health and human services organizations in our community, ranging from a community counseling center, to youth and family services, to addiction, domestic violence and wellness programs. We created several in-house programs to generate donations for System of Care, from a “round-up” option that provides customers the opportunity to donate at the time of their purchase, to selling donated artwork on the walls of our café.
This effort has allowed us to become a conduit for the community to give back. It's not just Jackson Whole Grocer writing checks, it's us as a community working together to help one another. It’s incredibly fulfilling to give back and support a lot of these organizations that provide vital services and support to our neighbors and care for our entire community. You'll never go wrong with the focus on people.
At the end of the day, the grocery business is about people—feeding people, providing good jobs for our employees, and serving as a gathering place for our community. We intend to keep working to put People First, in our store and in our community.
Jeff Rice is CEO of Jackson Whole Grocer.
The Road Home: An Air Force Vet Builds Left Hand Brewing and a Colorado Community
[A note from Tugboat Institute: Please note the postscript at the end of this article, in which the author comments on the connection of this topic to the impact of the COVID-19 pandemic.]
When I retired from the Air Force in 1992, I had no idea I would be the owner of a brewery one year later. And yet, in September, 1993, there I was: proud founder, with my business partner Dick Doore, of Left Hand Brewing in Longmont, Colorado.
The founding of our Evergreen® business in Longmont represented the welcome culmination of a largely nomadic early life. For all of my 32 years up until then, I had been moving pretty consistently every few years—first as the son of an Air Force Officer and then as an Air Force Officer myself. By the time my wife and I arrived in Longmont, I had lived, in this order, in: Tennessee, Ohio, Texas, Germany, Ohio (again), Florida, Japan, Colorado, Germany (again), Nevada, Colorado (again, at the Air Force Academy), Mississippi, Italy, Turkey, and Italy (again).
When I left the Air Force, after a brief time working with my wife’s family in Italy, we flew back to the states, picked up a car in New Orleans, and drove across the country, all the way to the Kenai Peninsula in Alaska. Along the way, as we visited family and friends and many of these new, small microbreweries. We were searching for a hometown. After so many years of constant motion, I was ready to settle, put down roots, and raise our family.
When we landed in Longmont, an evolving, former agricultural town about 20 minutes northeast of Boulder, it felt right. It was close enough to the mountains but not too remote for us with a baby on the way; it offered great quality of life; opportunities for outdoor recreation were abundant and easy to access; and, it had a pretty vibrant and welcoming business community. And Colorado was an early hotbed of craft brewers. We were living between Boulder and Longmont in Niwot. We found a location for a brewery in Longmont. We had found our hometown.
While I hadn’t planned to open a brewery after my Air Force career, I didn’t enter into the industry completely blind. Having traveled widely and spent formative years in Germany, I had been exposed to a whole world of beer that wasn’t even on the radar of most people in the U.S. at that point. I saw the opportunity to introduce both new products and experiences and to connect deeply with the community as a business owner.
My experience living in a small village in Germany, where the local “gasthouses” and the soccer clubhouse all featured “stammtische,” or locals’ tables, as well as my time in Italy, where the locals gathered at the village’s café and bar, had shown me the central role a business like ours could play in creating community. That community-minded, local vision was a driver in our commitment, from our earliest days, to being involved in and giving back to our community. This was our hometown, and we wanted to contribute in meaningful ways.
Early on, we took the obvious steps of joining the Chamber of Commerce and joining various business groups, sinking our roots where there were opportunities. As newcomers to the town we were conscious of the need to connect to raise awareness for our business—we wanted people to try our beer, after all—but also of our desire as residents, parents, and business owners to help shape the community we had so intentionally chosen.
Over the years, we have not wavered in that commitment. We serve on non-profit boards, were involved in founding the original Colorado Brewers’ Guild, and sponsor local events. Left Hand Brewing is a National Bike MS Sponsor, and our Team Left Hand, which has raised over $4.9 million over the last 13 years, rides in events in Colorado and across the country to raise awareness of and research funds for multiple sclerosis. Several years ago, we took over the management of Longmont Oktoberfest, a two-day, community-wide celebration that benefits local nonprofits, including our own Left Hand Brewing Foundation, a 501c3 we founded to support a range of local and regional causes.
Our continual desire to impact our community is an extension of the entrepreneurial spirit that drives our company. I had never really thought of myself as an entrepreneur, but after someone else described me that way early on in the life of our business, I realized that I do actually fit the description. I’m continually looking for a solution, a better way to do things. My team will tell you that’s how I show up in the business, and I think that orientation is reflected in my desire to improve our community, to lean in and address the critical issues that will make a difference for the people who live here.
Our employees absorb this ethos, and they’re involved in these efforts too. Beyond stepping into volunteer opportunities that we make available to them, team members have spun off and developed dozens of businesses in Longmont, fueling our economy and engaging in the community in meaningful ways.
As we head toward three decades in business in our hometown, it’s gratifying to see the impact of our Evergreen® company and our efforts to work with our neighbors to improve the town we love. For years, Longmont had a bit of an inferiority complex, overshadowed by Boulder, just down the road. Today, I receive photos from locals all the time who find Left Hand on offer around the country or overseas and are so proud to tell the bar tender, “Hey, I’m from Longmont and this is our brewery!”
We never had an agenda to be community leaders, but our long-term view of building a great company in the place we had chosen to raise our families meant that we were invested in not just the business but the town from day one. Now, we’re incredibly proud of the role we’ve played—and will continue to play—in lifting our community up and helping to instill pride in the place we call home.
Eric Wallace is President and Co-Founder of Left Hand Brewing.
Postscript 10.26.2020
While socializing in bars and brewery tasting rooms is being severely impacted by the pandemic, we are finding new ways to continue to have an impact and build community. Since we need to physically distance to operate safely, expanding our tasting room into our parking lot made sense. We have also just received approval to build a beer garden next door to the brewery (years in the making).
As the national beer sponsor for Bike MS, we didn’t do much beer pouring at rides around the country since the rides were all virtual, but our fundraising by our eight teams far exceeded our initial expectations. Our 525 team members raised over $525,000 in a year with no actual group rides, providing both emotional support for our team members and continuing financial support for the National MS Society when it’s needed more than ever.
Finally, we helped launch the Longmont Evergreen Opportunity Fund in October. The LEOF is an initiative to impact our community by investing capital into entrepreneurs, ventures, and property development projects within Longmont’s Opportunity Zone. It is an interesting initiative. It’s Evergreen because 10 percent of the management fees will be invested in local founder development and 50 percent of the manager’s carry will be reinvested into the next Evergreen Fund. It’s impactful because we want to build economic vitality and retain companies that are solving problems and creating jobs right here in Longmont.
It is more important than ever to keep our people engaged and support our communities. Staying busy and having a positive impact keeps us inspired and out of trouble!
Want to Build a Truly Successful Team? Find Candidates Who Make You Think.
It won’t be news to anybody when I tell you that the construction industry is largely male and Caucasian. Traditionally, the leading sources of talent for firms like ours have been engineering and construction management programs that predominantly produce graduates who fit this profile. Given that landscape, it can be an uphill battle to develop a diverse team. But our Evergreen® construction company, Lease Crutcher Lewis, is committed to that fight because we know the benefit to our culture and the competitive advantage that diversity brings.
To be clear, when we talk about diversity, our priority is diversity of thought. We are not aiming to fulfill quotas, check boxes, or reach specific percentages of ethnic or gender representation. Instead, our primary objective in recruiting and retaining team members is to create a team comprised of different points of view, educational backgrounds, and personal and professional experiences.
We prioritize diversity of thought because research—and our experience—tells us that it leads to innovation and allows companies to be more nimble and more creative, leading to increased productivity and success. And, for us, seeking out diverse thinkers feels more genuine and authentic than hiring based on numbers and percentages. When we aim for diversity of thought, great diversity of all types follows. We think this approach has been a hallmark of our success in developing a diverse team.
Ten years ago, as I was beginning to really grapple with the topic of diversity, I had the good fortune to receive the resumé of a young international student for an entry level engineer position. Vishnu Jhaveri stood out to me because, among the stack of resumés I had received from recent graduates of engineering and construction programs, he had a degree in architecture. I thought that it would benefit us to bring on somebody who could see things from the design side and offer that perspective to our construction teams. When we interviewed him, we immediately saw that he was also a culture fit in terms of his values and operating style.
We hired Vishnu and put him to work as a young project engineer. The fact that he grew up in India proved to be an unintended benefit to our work. Not only did he provide diversity of thought through his professional expertise, he offered the perspective of growing up outside of the U.S. His thinking and approach to problem solving reflect this experience. He offers a different viewpoint that adds value to our business and richness to our culture. Fast forward 10 years, and Vishnu is one of our high-performing project managers. He's a leader within our business, a vocal recruiter for our company, and a champion in our efforts to continue to seek out diversity of thought.
That experience had a significant influence in how we continue to recruit and build our team. We have developed relationships with universities that enroll a higher percentage of international students, people of color, or female graduates. And, we have increasingly pursued “nontraditional” hires, those who may not have an engineering or construction management degree but have unique skills or a background that would allow us to train and develop them within our organization.
Four years ago, we hired Amy Rutz, a junior high school teacher who was looking for a career change. Amy had real passion for the building process and was a culture fit, but she had no experience in the field. We took a chance on hiring her and put her to work as a project engineer, a position she executed really well for three years. Recently, we transitioned her into a role as our training and development coordinator, in which she now pairs the powerful knowledge gained through years as an engineer with her teaching background to run our training and development curriculum for all of our employees.
In our experience, the success of building a team in which people like Vishnu and Amy thrive relies on a culture that consistently supports diversity of thought. I think you'd be hard pressed to find somebody in our company who hasn't heard the CEO talk about the power of diversity of thought and how important it is to us and how we operate as a company.
This messaging is reinforced by two of our core values—"Trust and Respect" and "Fulfillment"—which similarly support diversity of thought. Unless you trust that your teammates will listen to your point of view, be open to your perspective, ask quality questions to seek understanding, and respect you for sharing your opinion, you’re not likely to share your thoughts. If trust and respect are present, ideas are shared openly and diversity of thought rises to the surface, propelling innovation. And, when you are free to share your thoughts and ideas—to bring your whole self to work each day—you are much more likely to be fulfilled in your job.
I’m proud of our intentional focus on diversity, but I also know that we can do much more. I am looking forward to continuing to help our recruiters gain awareness of unintentional, subconscious biases that may be barriers to hiring. We will offer ongoing coaching to team members involved in hiring to help them understand how their personal background might produce biases when it comes to recruiting, hiring, training, and promoting people.
As a leader, I know that raising awareness of these issues can be uncomfortable and may require removing people from the hiring process who can’t move beyond these biases. That takes bold leadership and decisiveness, but if there are team members who are perpetuating unintentional biases and can’t rewire, we need to seek out someone else to recruit—someone who recognizes the value in diversity of thought. Because for us, continuing to foster diversity and growing our company to reflect the widest possible variety of thought, perspective, and experience is essential. It’s through diversity that we will continue to innovate and thrive for the long-term.
Bart Ricketts is CEO of Lease Crutcher Lewis.
Buckle Up: Evergreen Inspiration Fuels Tugboat Institute @5HQ Road Trip
When Bill Roark, Co-founder of Torch Technologies and CEO of Starfish Holdings, was growing up in Eastern Kentucky, he had a dream: To own an auto parts store. With what he refers to as a “serious car habit,” the teenager spent every minute he wasn’t in school or courting his girlfriend—now his wife of 40 years—working on cars.
Fast forward, and Bill is living a dream he couldn’t have imagined then but has become his life’s work: “Lighting the pathway to freedom.” Bill leads a 100 percent employee-owned defense contracting firm in Huntsville, Alabama, with a mission to, as Bill describes it, “support our soldiers in the best way possible to make sure they have what they need to be successful and come home safe.” Torch Technologies, which generated over $500 million in revenue in 2019, develops, tests, and builds technical contributions for the military.
On October 13, Tugboat Institute members had the opportunity to learn from Bill and from Torch Technologies’ CEO John Watson, during the first stop in a series of Tugboat Institute @5HQ Fall Exemplar Visits to Evergreen® companies. The morning program at Torch began with a Fireside Chat with Bill and Tugboat Institute Founder and CEO Dave Whorton, which shed light on Bill’s personal story and key components of the business. John Watson then offered a deep dive into innovation planning and practices at Torch, and Bill followed with insight into the culture and compensation practices that attract top talent and help fuel sustained growth at the company.
Following the Huntsville visit, the event series continued, with three more stops at Tugboat Institute member-companies across the country. Each visit was attended in person by a small group of Tugboat Institute members, in accordance with local health and safety guidelines, and was live streamed to the wider membership. At each stop, members heard from company executives in the morning, participated in a Q&A session with each speaker, and connected via small-group breakouts (Zoom and in-person) to reflect on the morning’s content. For those who attended in person, the afternoon included a tour, lunch, and a Tugboat Institute Brain Trust.
The second stop was Boise, Idaho, on October 15, where Bret Moffett, CEO of POWER Engineers, along with CAO Jim Haynes and CFO Chuck Kemp, welcomed members and offered insight into the Idaho-grown global engineering firm. Through Bret’s Fireside Chat with Dave Whorton, members learned about the CEO’s upbringing and early affinity for computer science, key mentorship relationships that have led him to his current role, and the mission and values that guide the company. The Fireside Chat was followed by presentations by Jim Haynes and Chuck Kemp highlighting POWER’s culture of ownership and employee engagement.
On October 19, members visited ABC Home & Commercial Services in Austin, Texas, where they were welcomed by the company’s President, Bobby Jenkins. In a Fireside Chat with Dave Whorton, Bobby shared the incredibly close family connections that serve as a foundation for the company, Bobby’s love for the work that allows him to provide services that help his customers live healthier and safer lives, and his commitment to hiring exceptional talent to continue to grow and diversify. His dedication to philanthropic work in the communities he serves was also clear, as he described efforts he and his team have led in Austin, reflecting his philosophy that “Doing good is good business.”
Matt Burns, ABC’s Vice President and CFO, then presented the company’s story of diversification, from pest control to a now-wide array of home and commercial services, a model propelled by leveraging the existing customer base over time. The morning concluded with Bobby’s insight into the unique succession planning on his father’s part that led to his leadership of the Austin business, as well as to the establishment of two entirely separate companies led by his two brothers, and his current efforts toward planning for G2 to G3 succession.
The final stop of the Tugboat Institute @5HQ series, on October 21, was hosted by Chrissy Nardini, President of American Metals Supply Co. (AMS), a family-owned sheet metal distribution company headquartered in St. Louis, Missouri. Founded by Chrissy’s father in 1962, AMS has grown through his and her own leadership from one location in Springfield, Illinois to eight locations in six states. In a Fireside Chat with Dave Whorton, Chrissy shared the story of her entry into the family business, the unique, focused distribution model and laser focus on customer service that drive the company’s success, and the personal true north she has found in parenting her two adopted sons.
Following the Fireside Chat, Shelly Liley, Head of Employee Engagement at AMS, detailed the expansive employee benefits and People First orientation that drive recruitment and retention efforts at the company. COO Chuck Hitchcock then offered insight into the HVAC industry to provide context for the unique product niche AMS occupies in an otherwise commodity market. He described how this product focus, tied with high service levels and customer intimacy, drive customer loyalty and their above-industry profits.
There’s no question that Tugboat Institute events in 2020 have looked and felt different, and Tugboat Institute @5HQ was certainly a new take on the organization’s Fall Exemplar Visit experience. What remained consistent in this event series, as in all Tugboat gatherings, was the curiosity, generosity, and wisdom shared among these leaders, who, bound by their commitment to the Evergreen 7Ps™ principles, came together to learn from and support their peers.
Diana Price is Content Director at Tugboat Institute.
My Business Grows 300 Percent Every Fall. Here’s What that Has Taught Me.
[A note from Tugboat Institute: Please note the postscript at the end of this article, in which the author comments on the connection of this topic to the impact of the COVID-19 pandemic.]
As a manufacturer of industrial heating and cooling technology, our business, Cambridge Air Solutions, surges 300-400 percent each fall. Everyone generally wants to have those systems installed in new construction before winter, and if you’re replacing your system, you typically do so in the last few months of the year. To meet that cyclical demand, we hire a large number of seasonal employees.
Hiring, training, and integrating a seasonal workforce can present challenges, but we have developed an approach that is guided by our Purpose, which is to enrich every life we touch. We don’t want to simply hire temporary workers without considering the long-term. We want to enrich their lives and behave toward them as we do toward all of our employees, customers, and suppliers: with unconditional love and high expectations.
This approach toward our seasonal employees led to the creation of Cambridge Unleashed, a 4-6-month seasonal work program developed by our Vice President of Human Resources, Meg Brown. The goal was to provide opportunities for seasonal employees to develop hands-on lean manufacturing skills and experience that will help them either progress into a full-time position at Cambridge Air Solutions or, if we don’t have a position for them, launch a career at another firm.
A central pillar of the Cambridge Unleashed program is a video series that we developed to showcase our seasonal employees’ experiences and expertise as they grow and develop in their role—and specifically their innovations related to the principles of lean manufacturing.
Every seasonal (and long-term) employee is required to read Paul Aker’s book 2 Second Lean: How to Grow People and Build a Fun Lean Culture. This book lays the foundational understanding of lean and describes the simple, “fix what bugs you” approach to waste reduction. Alongside the skills training they undergo, this education in lean allows seasonal employees (who we refer to as “unleashers”) to step into the rhythm of our operation and their specific roles ready for success—and primed to offer insight into continuous improvement.
Our daily schedule includes a 15-minute morning meeting, which all unleashers attend, which includes a review of revenue and other milestones and highlights process improvements. After the morning meeting, we dedicate 30 minutes to non-production time, during which we don't want employees producing a product or jumping into their functional roles. Instead, we ask them to focus on how they can make their job easier, better, safer, cleaner, or a help somebody else solve a problem—and make a video sharing their improvement.
Each day, we highlight the improvements and innovations that our employees, including the unleashers, develop during this period in our daily Morning Meeting. Each video shares an employee’s lean innovation, showcasing employees’ creativity and skills.
The videos ultimately provide several important benefits to the employees and to Cambridge Air Solutions. First, if we do not have a position for the seasonal employee after their temporary position ends, their improvement videos are compiled in a playlist they can use to promote their skill sets and innovations to prospective employers. In addition to helping unleashers share their skills and innovations, the daily habits and continuous improvement mindset that these videos reflect, and which are central to our culture, serve to attract unprecedented numbers of candidates when we have open positions. This past year, we were seeking to hire 20 unleashers to fill seasonal roles, and we had 574 applications. And that was with a four percent unemployment rate.
Beyond the video series, the broader Cambridge Unleashed program provides seasonal employees opportunities to fully engage in our culture, take on short-term leadership roles, and connect with long-term employees. The additional focus on training and engagement for these employees has resulted in tremendous improvements to our safety record and production capacity and throughput. And, we've seen the morale of the plant grow across the board as unleashers and full-time employees connect and increasingly recognize that we’re all pushing toward the same common goals. Now, we train together, we innovate together, and we celebrate together.
Personally, watching the Cambridge Unleashed program develop and seeing the benefit to the individuals and to our Evergreen company has been extremely rewarding. When we help people tap into their creativity to solve problems at work, it not only benefits our process and productivity, it enriches and enhances lives beyond our plant. Whether they are working with us for six months or for many years, we want our people to go home at the end of the day knowing they have created valuable solutions because when they do, they bring the confidence and fulfillment of that experience into their relationships with their families and their engagement in their communities.
John Kramer is the CEO of Cambridge Air Solutions.
Postscript 09.11.2020
In the wake of the COVID-19 pandemic, our company shifted all of our daily rhythms to a virtual format, which was an early practical step to ensure safety. In a broader sense, we have seen a significant impact to our ability to attract applicants, resulting in a lower volume in our Unleashed recruiting pipelines than prior years. However, we are able to close the candidates who do apply and get them onto the team, which I believe points to our ability to demonstrate safe work practices even during COVID. In addition, the “Protect This House” rallying cry, which we embraced in the early days of the pandemic, has been a key step toward preparing for the busy season. Our team members are motivated to bring in Q1 of FY21 and willing to do what it takes to keep themselves safe while also continuing to make product for our customers.
From Venture to Growth Company
[A note from Tugboat Institute: Please note the postscript at the end of this article, in which the author comments on the connection of this topic to the impact of the COVID-19 pandemic.]
Kenny Rosenblatt and I started Arkadium in 2001 out of our apartment. Like many bootstrapped start-ups, we initially had no titles or processes—we just did what we had to do to make great games. But as our company grew, so did our scale of distribution and our number of employees.
Over the course of 15 years, we became great at building an inclusive, exciting culture alongside standout products. In 2016, we were recognized as Inc. Magazine’s “Best place to Work” in the U.S. By 2018, we had over 100 employees distributed between offices in New York and Russia. Our business was humming in many ways, but there was one thing that wasn’t quite right.
Kenny and I were so busy with our business strategy over the years that we didn’t put much thought into our organizational strategy. Our organizational structure just evolved over time. We knew that it wasn’t optimal. As we had grown, the “machine” driving our success started to show signs of strain. Kenny and I recognized that our organizational structure was becoming a constraint to further growth.
Specific Problems
To validate our concerns and expand our understanding of the issues, we surveyed our leadership team. And we got an “earful” of problems, the root cause of which was our organizational structure!
Authorities and accountabilities: One common theme was a lack of clear authorities and accountabilities. Key initiatives, like an update to our game platform, had no “owners.” Within multi-departmental project teams, it wasn’t understood who was in charge. This confusion sometimes led to finger pointing, despite our tightly knit culture. And it often fell to Kenny and me to resolve problems, make technical decisions, and coordinate the teams.
Misaligned priorities: Another common concern was misaligned priorities. Engineering teams independently decided the balance between R&D, new development, and maintenance of current products. Even though they were often interdependent, their priorities differed. So, when they went to look for help from others, their needs often fell to the bottom of others’ “to do” lists.
Silos: These difficulties with the team caused people to avoid teamwork, and instead work as independent “silos.” Some kinds of expertise were replicated in each silo, and there was no standardization across departments, which further impeded sharing and synergies.
Disempowerment: It wasn’t clear who had the authority to make decisions. Everyone had a say in everything, and the multiple voices often drowned out the advice of the real experts. No one was empowered with all the authorities and accountabilities to run each internal line of business.
Gaps: Some critical functions were just plain missing. For example, there was no reliable channel of communication from customers back to developers. No one was focused on understanding our customers’ industries. No one was responsible for planning (other than Kenny and me).
Lack of focus: Staff cried out for clear boundaries: “owners” of every initiative; bosses who understood their disciplines; elimination of the obstacles to teamwork; more empowerment; and viable career paths.
No Bureaucracy!
All these problems added up to a clear message: Organizational issues were getting in the way of team performance and the company’s growth. The time had come to address our organizational structure, but Kenny and I didn’t want to create a rigid bureaucracy. Our entrepreneurial culture was (and is) essential to our success.
This seemed to us to be a conundrum: How do we mature as a company and define accountabilities and authorities (clear boundaries) while maintaining our culture, engendering cross-boundary teamwork, and empowering our talented staff?
We also knew we needed a scalable organization—a structure that would not just grow as the company grew, but one that would drive that growth. We had no interest in restructuring every few years as the company grew.
We had one more concern: Our culture is collegial. We wanted to engage our leadership team in any structural change process. But how could we avoid endless debates over opinions or a political free-for-all?
Picking the Right Approach
I knew it would be a bad idea for Kenny and me to simply sketch a new organization chart, or to gather our leadership team to make something up. There had to be other companies that had dealt with these growth challenges. There had to be some sort of science of organizational design.
I began reading up on organizational theories. Most of what I found was unsatisfying. Finally, I came across a book that resonated with me: N. Dean Meyer’s Principle-Based Organizational Structure. Meyer described an organization where every group was defined as a business-within-a-business—just the sort of entrepreneurial culture we intended to cultivate. His framework of lines of business within organizations provided a map for identifying what goes where, what’s missing, and how the different functions work together.
He laid out clear design principles, modeling an engineering approach to structure that I knew my team would appreciate. These principles, Meyer said, provided a basis for a fact-based, participative process.
Beyond just the organization chart, Meyer also defined a method of forming cross-boundary teams with clear individual accountabilities and a clear chain of command within each team. I was never a fan of rigid “business process engineering.” We needed to be flexible and dynamic in combining our various skills on teams. So, his teamwork method really made sense for us.
And like the icing on a cake, he described a step-by-step design and implementation process that was well thought out and tested. It looked like a lot of work; but every step made sense and was necessary. It was almost a cookbook.
I contacted Meyer and spent a day with him, studying his approach and brainstorming how it could apply to Arkadium. The more I understood Meyer’s approach, the more convinced I became that this was just what Kenny and I were looking for.
The Change Process
Under Meyer’s guidance, we engaged our entire leadership team throughout the change process.
The first step was his “Rainbow Workshop” wherein the leadership team studied Meyer’s definitions of the lines of business that exist within organizations and how those definitions applied to us. Then we color-coded our existing organization chart to indicate which lines of business were under each leader.
The chart ended up being a little too colorful and revealing. The causes of our concerns quickly became evident. Teams were pursuing multiple, and often conflicting, lines of business. Accountabilities for many lines of business were scattered all over. And a number of lines of business were missing.
Then, Meyer led the team through a collaborative process of designing a new organization chart. In addition to the firm principles and clear language, our leaders really liked the notion that every group is an empowered entrepreneurship, chartered to serve customers elsewhere in the company or externally (or both). And the open, participative approach was really motivational, and fit well within our culture.
Of course, putting names into the resulting boxes was up to Kenny and me. But even there, Meyer encouraged team participation. Everybody had a chance to discuss their careers with us and tell us their preferences. Having some say in their destiny added to the team’s commitment and enthusiasm.
Meyer’s process doesn’t stop with a new organization chart. As he points out, if our processes of teamwork are not working really well, we’d just revert back into independent silos of generalists rather than teams of just the right specialists. And if accountabilities for results within teams aren’t clear, teamwork will just create more confusion and tension.
So, the next phase of the process focused on what Meyer calls “walk-throughs.” We looked at example after example of our projects and services. And for each, we used Meyer’s principles to decide which group was the “prime contractor” accountable for the entire result, and which other groups would serve as “sub-contractors” delivering components or supporting services to the prime.
This businesslike approach to teamwork further reinforced our entrepreneurial culture. And as a method of team formation, it allows us to be very clear about individual accountabilities and the chain of command within every team.
Meyer encouraged us to openly communicate with all our staff at each phase of the process. This, too, fit well with our collaborative, respectful culture. And it really helped with change management.
When the leadership team had practiced enough walk-throughs to really understand how the new organization chart would work, we were ready to “go live.” Meyer guided us through the myriad details necessary to prepare for the big day, including assigning all our staff and vendors to groups (again done collaboratively with the leadership team).
From the first workshop to go-live took us around 10 months. I know this sounds like a long time to be working on a restructuring. But all the planning paid off. Every leader understood his/her new job as running a small business within a business, and they all had a common understanding of how actual work would get done in the new structure.
After go-live, Meyer’s approach included a meticulous migration process which ensured that we moved all accountabilities to the right groups in the new organization, with no “dump and run” or missed commitments.
Results to Date
Since we deployed our new structure, we’re already seeing dramatic benefits: projects are taking less time to complete, employees are reporting a much greater understanding of both their responsibilities and professional growth path, and groups are much more regularly utilizing each other’s strengths
Bottom Line
This restructuring was a big investment for us—mostly consisting of the amount of leadership time we put into the process. But it was truly transformational. Before, everybody had an entrepreneurial mindset, as is appropriate in a venture like ours. Now, everybody really is an entrepreneur running their own small business within our business.
Now, teamwork across structural and geographic boundaries is working great. And Kenny and I rarely have to step in to resolve issues. Also, the design is completely scalable as we continue to grow and diversify. I don’t expect we’ll need another restructuring for a very long time.
For all these reasons, Kenny and I are confident we now have an organization that will drive growth for decades to come.
By the way, I think that Kenny and I have grown as leaders as a result of this process. We’ve always been very conscious of our culture. But now we understand organizational dynamics, and we see our role as creating a great company where everybody (not just us) drives our strategies, our operational excellence, and our growth.
Jessica Rovello is CEO and Co-Founder of Arkadium.
Postscript 09.29.2020
When I hear that a company is “re-orging,” I tend to roll my eyes. So, it was with deep skepticism that we entered into our own company re-organization two years ago. Reflecting back post-COVID, I‘m even more grateful that we took the time and attention to thoughtfully contemplate our organizational structure when we did. Having clear roles, accountability, and alignment company-wide was not only a lifesaver for us as we navigated working from home, but it has proven to be a catalyst for our business. Our teams are working smarter and more efficiently than they ever have before, and we have our restructuring to thank for a lot of that success.
Why My Software Company No Longer Accepts Resumés
My path to becoming owner and CEO of 8th Light, an Evergreen® software development business, did not follow what might be viewed as a traditional trajectory. I didn’t go straight to college to get a degree in computer science or math or engineering. I didn’t actually graduate from a mainstream high school but instead earned my GED and first attended a vocational school.
I always loved to learn, but the standard academic track was never the right place for me. When I was counseled to attend vocational school, because my grades wouldn’t get me into a four-year college, my interest in computers led me to learn programming. I got a lot of joy out of solving the really hard problems it presented. My intellectual curiosity was piqued, and I fell in love with the craft, ultimately earning enough credits to apply to a four-year degree program. That experience revealed to me a path to professional success that was fueled by passion and practical application.
In that same period, my dad introduced me to a local computer programming company in suburban Chicago, and I got a part-time job that evolved to become a five-year apprenticeship. That opportunity provided me access to really smart people, thought leaders and experts in the field, and an individual mentor. I was ultimately offered a full-time position as a consultant with that company at a fairly young age.
That was the genesis of the belief, which I still hold today, that fulfilling technical careers can start in non-traditional ways. I saw firsthand that the company’s investment in me as an apprentice paid off for them when I was able to do top tier work early in my career. When I left that consulting position to launch 8th Light, my co-founder—who had been my mentor—and I decided to develop an apprenticeship program for the company that would allow us to train people to our quality standards and programming philosophy.
In the early years, most of our apprentices had computer science degrees. As the company and the program grew, we increasingly brought in people with less conventional backgrounds—people who were making a mid-life career change, parents returning to the workforce, those who may not have had conventional academic training but had the aptitude and a passion to learn the craft, or those who had excelled in other fields and exhibited potential to thrive.
Today, we have almost entirely phased out computer science degrees from our hires. We don't even accept resumés any longer, so we don't actually know if somebody has a computer science degree or not when they apply. Our hiring process requires an aptitude test and several behavioral interviews. We want to know that a person understands the commitment it takes to master a craft, is committed to learning—and, later, to mentoring—and has the personal characteristics that will make them a good consultant. That process aligns with our three core values, which are humanity, education, and ownership.
Once they have been hired, apprentices spend on average the first six months training with a variety of mentors with a range of experience and seniority throughout the company. After that, over the next year, they begin working on client projects but continue to train and learn from mentors. Throughout, they benefit from the connections and community of their cohort group, which averages around 20-25 apprentices each cycle.
For our company—which now numbers 164 employees, including 19 apprentices, in six locations in the US and London—the apprenticeship program drives a culture of curiosity and education. Learning continues throughout a team member’s career, through unstructured learning opportunities, as well as dedicated learning periods and the opportunity to apply for more extensive education and development programs. This is critical in our field because the path to mastery is one of life-long learning.
It’s rewarding to have experienced the benefits of the apprenticeship path as an apprentice myself, and now to see the positive impact from the angle of an employer. The program has created a skilled, loyal team that is inclusive and rich in diversity of thought and experience.
That said, the model is not without its challenges. There is considerable cost to the organization when senior team members take time to mentor apprentices. In the six months that an apprentice is focused on training, they are not engaged in any billable work, so the up-front investment is significant. In addition, the diversity of the team’s background and experiences can create conflict, and we were forced to address issues of inclusivity earlier in our growth than many companies. But for us, both the cost of the program and the work to support inclusivity have allowed us to develop a team with a very high level of expertise and to foster a culture that is marked by deep connections, both of which serve our company and our clients.
I know that our apprenticeship program will continue to evolve and adapt—it’s an ongoing experiment. As we learn and continue to grow from the talent and energy the program creates for our company, I hope to be able to share what we’ve learned with other businesses that can similarly benefit from the apprenticeship model. As the cost of higher education continues to rise, there is a significant opportunity for companies to provide training and grow talent in non-traditional ways. I’ve certainly seen the value of this approach, and I’m excited to see where it will continue to lead us.
Paul Pagel is CEO of 8th Light.
