TDIndustries CEO Harlod
MacDowell says servant leadership, employee ownership and business
diversification have increased company growth, even during the recent
recession. Photo credit: TDIndustries.
In the late 1960s, TDIndustries founderJack Lowe Sr.discovered an essay titled “The Servant as Leader” byRobert Greenleaf. That 37-page essay changed the way Lowe saw himself. As he began sharing the principles of the essay with his leadership team, it began to change his company, too.
“Jack saw the essay as a model for how he and his team could grow the business,” explainsHarold MacDowell, CEO of Dallas-based TDIndustries. “They began studying it and using it as a teaching tool.”
In 1972, TD was the first business to adopt the concept of servant leadership into its company mission. To be a servant leader, you must make sure those you work with have what they need in order to be successful in their roles - clear expectations of their duties, constructive feedback, and all the tools and equipment they need to do their jobs well.
“Are they getting the training that they need?” MacDowell asks. “Are they getting the development feedback that they need? Are they growing as individuals and meeting their own career aspirations? This is what has really fueled the growth of the company - a lot of capable servant leaders focused on developing people.”
Servant leadership is only one aspect of the culture at TDIndustries. Employee ownership is another.
In 1952, just six years after the company was founded, it offered employees (called Partners) the opportunity to buy stock in the company through a payroll deduction. At first it was just a stock savings plan, MacDowell says, but eventually was converted to a tax-advantaged Employee Stock Ownership Plan. Today TD employees can set aside up to 10 percent of their earnings to buy TDIndustries stock; the company matches those amounts. TD also has a 401(k) plan.
The company encourages employees to be a part of both plans so their investments will be diversified, MacDowell explains. Today, 90 percent of TD Partners own about 80 percent of the company; senior management owns only 20 percent of the outstanding shares.
“That’s part of what makes this such a unique place to work,” he says. “Most of our competitors are sole proprietorships or small partnerships, so they’re focused on generating wealth for a very small group of people. Our company philosophy is more about widespread wealth generation.
“When you have nine out of 10 people on a jobsite or in a department who own the company, it makes for a real focused culture. They pay attention to cost, they pay attention to waste, because they know that it benefits everyone. It’s not just about making Harold fabulously rich! It comes back to ownership and participation.”
He adds that some people, believing all companies have the same culture, leave for other job opportunities. Many are disappointed and return to TD.
Culture also comes up during the acquisition process. Early last fall, TD purchased JBS Mechanical of Phoenix for $2.2 million. MacDowell says he is still looking for companies to buy, but they must have the following criteria:
- Right culture fit with TD;
- Motivated seller with a fair valuation; and
- Seller concerned with leaving employees with a good company.
“We don’t want to do business with anyone who is out to maximize the sales price and doesn’t care about where the employees end up,” he says.
TDIndustries researched about 50 companies before coming up with a dozen contenders. MacDowell learned two lessons from that process: Don’t fall in love with any deal because it could fall apart at any time; and be patient because some deals can take a long time to come to fruition.
“Our
corporate mission is all about being a great place to work,” says CEO Harold
MacDowell, a 26-year TDIndusties veteran.
Great place to work
TDIndustries is a “full-service, design-build-operate-and-maintain entity,” MacDowell states. However, it began in 1946 as a wholesale distributor of G.E. air-conditioning equipment. From there, the company moved into the service side and eventually construction, dropping the distribution business.MacDowell began his TDIndustries career in 1985 as an assistant project manager. He’s worked in almost every department, finally assuming the role of CEO in 2005. He is only the third CEO in the company’s 65-year history; the second wasJack Lowe Jr.
As a 26-year veteran, MacDowell understands why TD has been on Fortune magazine’s “100 Best Companies to Work For” list (one of only 13 companies that has appeared on the list every year since it was first published in 1998). He uses it as a recruiting and retention tool.
“Our corporate mission is all about being a great place to work,” MacDowell explains. “We want people to come here and work here for decades. That means they’re going to grow and have different opportunities like I did. If the whole organization is focused on being a great place to work, that outside recognition is just an affirmation that we’re doing a good job at that.”
TDIndustries has many employee events throughout the year, including the all-partner events at the different locations (in Austin, Dallas, Fort Worth, Houston, San Antonio, Texas, and in Phoenix) where everyone is brought in from the jobsites, service trucks and facility sites to sit down and go over all the numbers. They celebrate anniversaries - 5, 10, 15, 20 years with the company - and then have a dinner. It’s a way to say thank-you for all the hard work they do.
But plaques and trophies and dinners aren’t enough. Respect amongst peers and supervisors is also important.
“People go to work for a great company, but they’ll quit for a bad supervisor, no matter how great the company is,” MacDowell says. “So we spend a lot of time on in-house leadership training, teaching servant leadership and teaching people how to be good supervisors who are focused on serving those with whom they are responsible for.”
Safety is an industry-wide issue, but the right program implemented in the right way can keep employees motivated - and diligent.
Recently, TDIndustries revamped its safety program to focus on behavioral-based observation. “When we see people behaving safely or behaving unsafely, we’re trying to do a good job of documenting and coaching,” he explains. “That’s not waiting for the accident to happen. That’s about addressing the safe behaviors that we all need in order to prevent accidents.”
The second part of this program is same-day feedback. As a safety director walks through a jobsite, his goal is to get all his observations back to that project superintendant and project manager the same day.
MacDowell says both approaches are making a big difference. The company’s lost-time incident rate is 0.3 and it’s OSHA recordable is 2.8. The company has its own record of each incident that happens, above what OSHA requires. And its Experience Modifier Rate is .57; the company is trying to get its EMR back down to .25.
Energy efficiency for all
The green movement is a growth area and an increasing source of revenue for TD, specifically the energy services segment. “We are doing a fair amount of energy services work for our clients, looking at ways to improve the efficiencies of their older facilities,” MacDowell says. “A lot of Texas building stock is aging.”TDIndustries has more than 50 LEED Accredited Professionals on staff in the project management and engineering ranks. The company is gratified that the U.S. Green Building Council has required building performance measurements for LEED certification.
“Ongoing measurement and verification is a part of our energy services offering,” he says. “Proving that those buildings perform and save energy is something we’ve been doing for years. We’re excited about the LEED performance measurements. It will keep the fly-by-nights out of the business. It really forces you to stand by your numbers and your engineering to prove that you did what you said you were going to do.”
Internally, the company recycleseverything. Paper, plastic and aluminum are recycled. TD Partners have recycle bins at their desks, and bins are placed in strategic areas around the building. The recycling program makes sure electronics such as computers and monitors are kept out of landfills.
Lighting retrofits for all facilities were completed to reduce energy usage. “Because we’re in the building automation business, it’s easy for us to make sure that the air-conditioning systems and the lights go off when no one is there,” MacDowell states. “We’re trying to do everything that we’re asking our customers to do.”
On the jobsites, TD Partners are recycling copper and steel. The company uses a lot of batteries, which are also recycled.
The company has a service fleet of 250 vehicles that cover Texas and Arizona. MacDowell is considering converting the fleet to natural gas vehicles - as soon as more natural gas fueling stations are built. Electric service vans don’t have batteries that are powerful enough to haul the weight that TD trucks carry, he adds. (The Houston office is experimenting with an electric car shared by employees needing to travel to jobsites.)
MacDowell is thankful TDIndustries is located in Texas, more so now with the state of the nation’s economy. There’s a little more work in Texas, he says, but the key reason the company has stayed profitable even during these tough times is diversification - by type of work as well as job size.
The quality of the work comes down to the quality of the people doing the work. TDIndustries has processes in place to ensure that it develops superior leaders to drive company growth.
“When the company first started, it was a small company built around a dynamic leader,” MacDowell says. “Now TDIndustries is a leadership engine, where we’re focused on creating hundreds of servant leaders who are out there keeping the company growing.”
