By Ray Penner
Bryan Leverick was having a good day at the office. Then his biggest customer phoned to say they wanted an additional hundred of his workers on the site – within the next two weeks.
That would be a challenge for the head of any company. But for Leverick and Alliance Energy, it wasn’t as if they needed a hundred people to plant trees. Leverick had to find a hundred additional certified electricians to work at the multi-billion-dollar expansion of Agrium’s Vanscoy potash mine, scheduled for completion in the spring of 2016. It was the biggest project in Alliance’s history, worth approximately $350 million. If Agrium said Alliance needed to provide a hundred more workers, Leverick wasn’t going to argue. Using up to seven in-house human resources professionals, Alliance began recruiting from across Canada and overseas, even holding a job fair in Ireland that had a line-up 10 blocks long. Over the three years of the project, Alliance’s workforce ballooned from its normal 350 workers to 1,400.
At a major industrial operation, faulty electrical work can cause millions of dollars in delayed production. Much worse, shoddy workmanship can cause fires, injuries, and fatalities. The stakes are that much higher in a mine, where workers are 1.6 kilometres underground, working in tunnels stretching many more kilometres in all directions. Alliance was responsible for several infrastructure improvements and expansions underground, as well as work on major surface facilities. Despite the difficult conditions and complexities, there could be no excuses. Every aspect of Alliance’s work had to be done correctly, efficiently, and safely.
The electrical trade, including instructors in trade schools, deserves credit for maintaining strict standards for certification. Thanks to the trade, people don’t even think about, much less fret about, codes and regulations when they turn on their television or plug in their cell phone charger. A certified journeyman electrician, regardless of where they are, will have met nationally accepted standards. Those skills, however, can be easily compromised by something that is far harder to measure, to control, to instill: the culture of the organization in which they work.
Acknowledged experts note that a company’s culture is strongly influenced by leadership, which shapes the behaviour and values of others. Over time, the people in the organization tend to share the same basic assumptions about the rules they will live by to succeed as a team.
If I were someone in charge of a large project today, I would be looking at hiring a team of contractors, rather than selecting an electrical contractor based solely on price.
The cornerstone of Alliance Energy’s culture is responsibility. New hires quickly understand that they will be given responsibility, which means they must take responsibility. Alliance’s ability to consistently instill that culture in such a rapidly growing workforce is not only impressive, it was also essential to the successful completion of the Agrium expansion. Leverick will tell you that the underlying assumption of individual responsibility has been woven into the company’s ethos for more than a century, and has been carefully cultivated by Leverick and partner, Paul McLellan.
In 1913, the Young family from Regina formed Sun Electric, which grew successfully with rapid electrification throughout Saskatchewan. Years later, two of Sun’s key employees were Leverick’s father, Tom, and McLellan’s father, Bud. Tom later moved to open the Saskatoon office. The company was still run by Marshal Young who, on the advice of his doctor, moved to Victoria. Both Tom, Bud and a few key managers soon realized that absentee ownership was hurting the company, and bought out the Youngs. “Based on that experience,” notes Leverick, “the new owners stipulated in their shareholder agreement that if you owned shares in the company you had to be working full-time in the company.several senior managers who are shareholders, including Leverick’s son, Chad, who is vice-president of the Saskatoon operations, and McLellan’s son, Dave, who is the CFO. McLellan retires in March of this year, and Leverick becomes CEO and president. As per the shareholder agreement, Leverick will retire when he reaches age 65.
Thus, ownership at Alliance is directly linked to responsibility for generating profit, beginning at the very top. Each of the senior managers is expected to seek and bid on contracts of all sizes, with the understanding that if they win a contract, they then become responsible for the project from start to finish. “Our leaders do not hand off projects; this minimizes mistakes and maximizes accountability,” Leverick explains. “As far as we’re concerned, if you’re the one who bid on the project, you’re the one who best understands it and knows the customer. It’s up to you as the project manager to ensure you protect our reputation by living up to your promises, as well as generating a profit.”
Sometimes people will try to trip you up, but 99.9% of the time you can trust your employees, your suppliers, and your customers. If I shake a hand, I keep my word.
That is why Leverick was the lead for the Agrium project. He had been pursuing the contract for several months. “In various meetings, I presented the case that, although we were just a provincial company, we had the capacity and the capability, along with decades of proven reliability, to do the work.” He was understandably disappointed when Agrium’s contractors decided to go with a larger national firm. However, a few months later circumstances changed in Alliance’s favour, and Leverick was invited to Edmonton to negotiate a deal.
I am firmly against the idea of offering a multiple to executives when they retire. Instead, I’ll have my retained earnings and that’s it.
The project quickly grew and became more complex than Leverick expected. “At first, I thought that 150 employees would be sufficient, but then we’d get urgent phone calls asking us to ramp up to keep the project on schedule. We had tradespeople coming to us from all across Canada, as well as 85 Irish workers.” Fortunately, the skilled people could be found. But with hundreds of new workers appearing on site in such a short time, how could the Alliance culture – the sustaining factor in its longevity – prevail? Leverick’s answer: “Responsibility.” It became readily apparent to all that if you didn’t want to stand behind your work, you were gone, and that rule applied all the way down the line.
“Our HR people would do the initial recruiting and screening, but the project managers had the final word. They would then pass the responsibility of supervision and monthly reviews to the foremen, who were responsible for the journeymen electricians, who mentored the apprentices. The foremen could remove anyone who was jeopardizing the work of their team.” Firing someone, however, was a last resort. Alliance provides one of the most comprehensive programs for training and development in the industry.
Developing a culture of responsibility also meant not undermining it. “Every time I’m on site, I’m always looking around and making mental notes,” says Leverick, “but I would never say anything at the time. Rather, I’d wait to talk to the foreman or project manager in private, to point out where I thought changes should be made.” To use a phrase from Asian business cultures, people could take responsibility without the risk of losing face. That went a long way to developing an underlying assumption of trust and respect at every level. As president and CEO of Alliance, Leverick says, “Sometimes people will try to trip you up, but 99.9% of the time you can trust your employees, your suppliers, and your customers. If I shake a hand, I keep my word.”
Four years have now passed since the completion of the Agrium project. The seven HR people, the 85 foremen on the project, and the Irish workers: most are gone, and the company is back to its typical operating size of roughly 350 people. After 45 years in the business, Leverick is now starting to contemplate his own exit from the business.
Looking back, is there anything he’d do differently? “I think that after Paul and I took over we should have brought external people onto our board, not as shareholders, but in an advisory role. We were all too much alike in our thinking, and could have used the perspective of different professionals and business leaders. For example, Paul and I thought about expanding outside our provincial borders, but neither of us wanted to move our families elsewhere, and we were very hesitant about hiring somebody else to run a branch operation, which would make us the absentee owners our fathers wanted to avoid. I think with the right advice, we might have been able to surmount those barriers.”
Leverick is confident the culture of Alliance will endure long after he’s gone. Even his retirement reinforces the idea of being responsible for yourself. There will be no “golden handshake” when he leaves the company. “I am firmly against the idea of offering a multiple to executives when they retire. Instead, I’ll have my retained earnings and that’s it. Every year when there were dividends, we took them and invested them as we wished, to take care of our own retirement. That way, there’s no undue pressure on the new guys coming in to finance a big sale.”
The underlying assumption of individual responsibility has been woven into the company’s ethos for more than a century.
The biggest challenge for Alliance Energy in Leverick’s eyes will be the growing variance in the competency and capacity of more and more competitors in the marketplace. “It used to be there were four or five of us, and we were all reliable. The biggest difference would be the size of the project, and whether or not we could handle it. Thus, if price were the only deciding factor, the customer could still feel confident the work would be done properly. Now, if you decide just on price, you could be comparing apples to oranges. If I were someone in charge of a large project today, I would be looking at hiring a team of contractors, rather than selecting an electrical contractor based solely on price.”
Some of Alliance’s emerging competitors are former employees. When they left Alliance, Leverick would tell them, “You’re a good electrician, but believe me, you don’t know anything about business. If you remember nothing else, remember that.” He points out there’s much more to owning a business than having a truck and a cell phone. “You should count on spending eight hours doing the work, then another four hours doing the paperwork.” He suggests that electricians who are thinking of leaving their employer consider ways to satisfy their entrepreneurial spirit within the company, where they can benefit from, and rely on, the support of their colleagues. That decision can be more rewarding – and significantly less stressful financially and emotionally – than going out on your own.
We should have brought external people onto our board, not as shareholders, but in an advisory role. We were all too much alike in our thinking, and could have used the perspective of different professionals and business leaders.
Leverick is confident that inspired leadership will continue at Alliance, as will the company’s values. Alliance is a major supporter of the community and a platinum member among Canada’s best-managed companies. Such recognition, year after year, requires a vision, a mission, and genuine leadership. It’s a culture that doesn’t just happen at the flick of a switch. Or ultimately, maybe it does.
First published in the March 2020 edition of The Business Advisor.