Best Employers 2016: How they get every employee to innovate

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(Darren Calabrese)

Last year, EllisDon president and CEO Geoff Smith went on a listening tour, visiting each of the construction company’s 11 offices to meet with every employee in small groups. The business had grown both in size—to 2,500 employees, from around a thousand just five years earlier—and in its ability to chase bigger, further-flung and more complex contracts. Thankfully, Smith had laid out a set of values for EllisDon (trust, openness and mutual accountability) that created an environment in which employees felt empowered to solve problems and try new things without endless meetings and paperwork. But that same culture sometimes left workers feeling like they were off on their own, doing their own thing. In his face-to-face meetings, Smith was surprised to hear what they needed to feel more connected and do their jobs better.

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Employees didn’t want mentoring or traditional types of training. Instead, they told Smith that when a situation arose, they want to be in touch immediately with the best person in the company to helped them solve that problem. And they didn’t want to look it up in a book. “They want access—up, down, sideways—and they want it immediately,” says Smith, who joined the company, founded by his father, in 1982 after a short stint in law.

He’s run it since 1996. In that time, Smith has applied a softer and more nuanced and approachable sensibility to a sector known for its muddy boots and rough edges. Sure, the company has an employee share-purchase plan, which grants a stake to workers. But likely more important is Smith’s charismatic leadership style, which keeps staff engaged, inspired and on their toes. His approach comes down to a few basic principles: Offer support, rather than guidelines and rules. Be yourself, but also be a leader. Bring out the leadership in your fellow employees. And above all, practise transparency and communication.

“Geoff’s strong personal style and enthusiasm is infectious,” says Neil Crawford, partner and leader of the Aon Best Employers program. “But more importantly, Geoff and his team are truly committed to help those around them be successful.”

Smith is not shy about declaring that all of this is designed to ensure “great careers” for employees. “We disagree with most companies, who either put their shareholders or clients first,” says Smith. “What we’ve come to realize from a moral point of view, as well as from a very pragmatic business point of view, is if you put your employees first…then the clients get great experiences and the shareholders get great returns. You don’t even need to think about it. It just happens.”

The company’s low voluntary turnover rate—about 4%, compared with the national average of 7.3% in 2013—is certainly a strong indicator of employee satisfaction. But the statistic can be unpacked in interesting ways. Low turnover means longtime employees who laboured in hard hats back in the old days now work alongside newer white-collar hires, creating some generational tensions. On the other side of the statistic, the few people who do leave the company tend to depart soon after starting, perhaps unable to adapt to the freedom they are given.

The late Don Smith founded the company with his brother David Ellis Smith in 1951. As CEO, Don Smith had a reputation for his fiery temper, firing someone one day in the heat of the moment and hiring them back the next. Though Geoff Smith is certainly outspoken—on his blog, he defends nepotism and argues against “rah-rah” corporate team building—he’s committed to building a workforce that’s as outspoken as he is.

“He’s a contrarian thinker who challenges the status quo a lot and makes his employees challenge the status quo in order to be more innovative,” says Brendan Calder, a professor at University of Toronto’s Rotman School of Management. A member of EllisDon’s board of directors, Calder has known Smith for a couple of decades. He says the commitment to transparency is evident throughout the organization. “There are no secrets. You can find out anything you want. If you’re building something in Vancouver, you can call a guy in Halifax and say, ‘What did you do in this case?’ There are no fiefdoms.”

The company could have easily been carved into silos as it moved from one that digs holes and pours concrete to providing what Calder calls “cradle-to-grave” services: financing, design, building, property management and maintenance. The expansion has boosted annual revenue to $3.5 billion, up from $3.1 billion in 2013. Pleasing fussy customers like health-care and research facilities has been crucial to that success, as has its participation in public-private partnerships (PPP), which are joint projects between government and private interests. EllisDon won the $5.3-billion contract to build Toronto’s Eglinton Crosstown light rail transit line, the largest PPP project in Canadian history, working alongside ACS Infrastructure Canada, Aecon and SNC-Lavalin as part of the Crosslinx Transit Solutions consortium (the project is scheduled to be completed in 2021). Working with another consortium this summer, EllisDon delivered seven mid-rise buildings for the Pan Am Games’ $514-million Athletes’ Village, a project that will eventually become a Toronto neighbourhood filled with condos, affordable housing, student housing, retail and other community amenities.

“The Athletes’ Village is close to my heart because I worked on both the bid and the closing, and I helped the team when I was working in the legal department with a lot of the contracts,” says Rosemarie Lipman, senior vice-president of people and culture. She joined EllisDon’s legal department four and a half years ago, following a career in tax law. But when the previous HR head left, she “raised her hand” to take on and reinvent the position. “That project was a great demonstration of how we collaborate with other stakeholders. There were stakeholders on that project we didn’t have a contractual relationship with,” she says. The company worked with the TTC, for example, to best accommodate transit in the new neighbourhood. “But we had to get them invested and on board in order to get the project delivered on time.”

To increase information flow and provide employees with the fast answers they want, EllisDon started groups on the Google+ Communities platform for them to share information, ask questions and socialize online. “We’re really trying to get managers to focus on how they coach and how they transfer knowledge,” says Lipman. “We have this huge gap, with a lot of boomers who are going to be retiring soon, and it’s really about getting them to step back and think about how they teach.”

Smith takes finding the right people seriously. Companies talk about hiring people with the right values rather than just the best skills. But values can be hard to put your finger on. So the EllisDon hiring process might involve several interviews with staff from various departments. A recent hire went through six. “You challenge people around their values to make sure they’re aligned. You want to make sure they’re smart; you want to hire people with a bent to learning and with an ambition and just heart. If you hire those people, you can train them to do whatever you want,” says Smith. “We don’t do psychological testing, because I haven’t seen a psychological test that works. I think you’ve just got to talk to people and see what makes them tick.”

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Although there are Ping-Pong tables at HQ, Smith doesn’t put much stock in those Silicon Valley–style perks or heavy-handed team-building exercises. The company tried organizing after-work drinks, but many employees would skip them to keep working or go home to their familes. “[Those activities] are good. Good companies do them, but I don’t place it high on the list of what makes a good company,” says Smith.

Strong leadership drives a business, but the leaders themselves have to be, in the long run, replaceable. As Smith approaches retirement age, the culture he’s built during his tenure needs to replicable when he’s gone. Successful family companies are usually founded by visionary risk takers, like the Smiths, and then refined by a conscientious second generation. The next transition can be the toughest, especially for a company that’s been built to thrive on constant change.

“Now that I’m 60, one of the biggest challenges I have is to make sure we have a culture that’s not just a mile wide and an inch deep but, hopefully, a mile wide and a mile deep. I do think that not just the next CEO but also the management team we leave behind have to be completely determined to make sure that culture gets stronger and stronger,” says Smith. “If you bring in the wrong leader, it’ll be gone in a heartbeat.”

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