News

After years of ranking and profiling Canada's best employers, we're marking the ninth anniversary of our survey by taking an in-depth look at this year's No. 1 company: EllisDon, the international construction firm founded and still run by the Smith family of London, Ontario.

Why? Because, in our survey of employees and leaders, conducted again this year by our research partner, Hewitt Associates, a leading global human resources outsourcing and consulting firm, EllisDon posted top-level marks in just about every category. And the company has come out on top while wrestling with many of the most challenging issues in today's demanding labour markets, including attracting and inspiring Generation Y/Millennial workers, and keeping projects on track in Western Canada's red-hot economy.

It hasn't been easy for the company. Founded in 1951 by brothers Don Smith and David Ellis Smith, EllisDon earns revenues of close to $2 billion a year, and it helped build landmarks ranging from Toronto's SkyDome (now the Rogers Centre) to the Athlete's Medical Clinic for the 2004 Olympics in Athens. Yet the company almost went bankrupt in the late 1990s. As current CEO Geoff Smith (son of Don) reveals in a candid interview (page 48), that crisis caused a lot of soul-searching, and a fundamental change in ownership: Employees now own close to half of EllisDon.

The transformation has been dramatic. In this year's Hewitt study, 94% of EllisDon employees surveyed said they'd highly recommend the firm to their friends, and 91% rated their future prospects with the company as good—15 percentage points higher than the average for the top 10 employers.

"I think the reason they're here—and I'm here—is the people," one EllisDon employee who's had a long career in construction said in a focus group. "I've never come across a large group of diverse people who are all committed to the same thing, and who all have relatively the same outlook on their profession and how they treat people. And senior management believe it themselves."

"EllisDon has created and nurtured a culture that is right for them," says Neil Crawford, who heads the Hewitt study. "Light on processes and structure, but heavy on entrepreneurship and throwing people into the deep end to learn by doing," although he cautions that what works for EllisDon isn't necessarily transferable to any other organization.

Hewitt's survey was a huge undertaking again this year, involving more than 100,000 employees and 2,000 leaders at almost 200 organizations.

To be eligible to participate, companies must have at least 400 permanent employees in Canada, and have operated here for at least three years. They must complete three surveys: an employee opinion questionnaire, filled out by at least 400 workers (more for large organizations, the total depending on their size); a survey of senior leaders that measures how closely their goals and fundamental values are aligned with those of their staff; and a detailed set of questions for the human resources department on HR policies and practices.

The employee survey results account for the lion's share of an employer's ranking. Each set of responses is carefully vetted to ensure companies follow required guidelines.

For more information, including instructions on how to join the next Best Employers survey, visit www.hewitt.com/bestemployerscanada.

HOW TO...GET OUT OF THE WAY
Geoff Smith, 52, is president and CEO of EllisDon, son of co-founder Don Smith, and one of three family members of his generation who occupy corner offices at the firm's operations headquarters in Mississauga. The others are senior vice-president Bob Smith and Michael Smith, VP of business development. Geoff Smith first worked at the family firm in 1981, left briefly in 1995, and returned to the then troubled company as CEO in '96. He's steered EllisDon back to health through several crises and a recession in the early and mid-1990s that hit the construction industry particularly hard. He met with Report on Business magazine's Steve Brearton to explain how an employees-first philosophy propelled a dramatic turnaround.

The history
My dad co-founded the company, and for the first 50 years, it was about his style. That style was very entrepreneurial. He was terrific at giving people opportunity and responsibility fast, but he'd throw them off the dock. If you wanted a place to get opportunity, they'd say, "Go to EllisDon."

The human factor
About 10 years ago, we had a young woman in the marketing department [who suddenly] left. "What happened to her?" I asked. They said, "She didn't like it. It was loud and she was offended by the swearing." I said, "That's ridiculous—we can't be losing good people because of swearing at the company. We have to stop that." They said, "It was your swearing." I said, "Then, well, tough for her."

The crisis
The early to mid-'90s were extremely difficult years. We'd lost way too many employees and our clients didn't like us any more. We also had no cash. We were looking at not surviving as a company. But we decided there were terrific strengths. We didn't throw our [old] culture out the window; we decided we had to go back to that culture.

The turnaround
I came back in late 1996. For two years, we did nothing but put out fires. Fortunately, we hadn't lost any of our key people. It occurred to me that the family leadership had been less than inspiring, so I went to five senior people and said, "If you don't mind me asking, why did you stay?" I talked with our operations guy. He could have said, "Geoff, you're such a great guy," but he didn't. He said, "It's a good company and, as a team, we could save it." It changed everything I thought about how to manage and my role here at the company.

The formula
It's about hiring on character and about hiring on qualities that are extremely hard to measure—like determination, resilience, character, integrity. But people always trip and fall initially when you give them responsibility. The key is not to kill them, but to support them and see how they shake out. It's a terrific self-discovery process for the employee and the company. You ask them to do their best, and you give them all the information they need, when they need it, and you say, "Let's go."

The leader
In most companies, the CEO gets up and says, "We are here to maximize shareholder value." We tell our employees, right from employee orientation, "Forget shareholder value. I never want to hear the words 'shareholder value.'" No one gets out of bed in the morning and says, "Hey, honey, I'm going out there today to maximize shareholder value." When you look at people on the first day on the job and see how happy they are, try not to screw that up. That's what I want the leaders to do. Most people think that, as leaders, you're supposed to lead. [I'm saying], "Get out of the way and help the other person become a leader."

The commitment
It's really about having the temerity to go to the board of directors and tell them that this is about the employees. If you can also go to your clients and say, "You know what? Our employees—especially in this market—are more important than you, because if I have great employees, you're covered." It's about living your values.

The advice
I would tell organizations to have the courage to let go and let their people do their jobs. It's an extremely hard thing to do. You really have to lead from behind. You have to be more modest.

HOW ELLISDON...HIRES THEM
In hot labour markets like Alberta, EllisDon competes with all kinds of businesses—not just construction—to attract employees. Rivals will also try to poach EllisDon staff by, say, inviting them to a meeting and writing a large number on a notepad on a desk, signifying higher wages. Here's how EllisDon stays ahead of the pack in three critical areas:

Hiring for Western Canada
Half of EllisDon's project backlog is in Alberta. Yet in 2007, fewer job applicants approached the company, and senior positions were going unfilled for long periods. All employers in the province are "deepening the hooks" that hold their current staff, says vice-president of leadership and entrepreneurial development Janine Szczepanowski.

So EllisDon aggressively pursues new prospects not just in Western Canada, but across the country. "When I heard on the radio that 1,100 auto workers are going to be out of a job, the first thing that came into my mind is, 'I wonder if any of them are good for construction,'" says Szczepanowski.

To help expand its reach, the company now uses more external recruiting firms. It also quickly reviews and increases wages if it's falling behind competitors. And there's nothing like positive word of mouth—EllisDon encourages existing staff to tell other workers about opportunities at the company.

Gen Y/Millennial employees
Hewitt Associates defines the Gen Y/Millennial generation as anyone born after 1980. The leading edge are now in their 20s, and they can be bold and ambitious. EllisDon CEO Geoff Smith wants to tap in to that energy. "We'll move them along faster in this company than our competitors, but we say, 'You need to meet us halfway. It's not easy—these are big projects, so you can't be the president tomorrow. Next week.'"

Getting off on the right foot is important, so EllisDon strives to wrap up hiring in a "one and done" interview process. "That process can go as quickly as talking to them today and having them on board tomorrow or the next day," says Szczepanowski.

Dangling some initial carrots also helps. The company shows all prospective employees a full outline of its top-rated benefits package and uses share ownership as a perk. "We want the Gen-Xers"—born from 1965 to 1980—"to stay, and financial security and reward is part of that," says Smith. "I make no apologies that it's a golden-handcuffs strategy."

Building workplace diversity
For Geoff Smith, the business case for diversity is obvious—it enlarges the talent pool. "We need to broaden our perspective to take advantage of the work force that's already here in Canada, but also go outside the country," he says. "They are out there, but I don't think we are trying hard enough to find them."

Part of that effort now involves using more international recruiters to hire foreign workers with the right skills. Once those workers have arrived, EllisDon works to ease them in by helping them with language and other challenges before slotting them into core construction jobs. In many cases, the company does that by pairing visible-minority hires from abroad with established employees from a similar background.

"We allow people stepping stones," says Szczepanowski. "For some who've worked in construction in other countries, eConstruction"—EllisDon's project management software division—"is their way in."

HOW ELLISDON...KEEPS THEM
In past years, we've listed snazzy perks offered by employers, ranging from on-site massages to preferred parking spots. But the best employers know that real excellence is more complex. They keep track of the diverse needs of their entire work force, and create a supportive environment for all employees. This past year, no firm did a better job of that than EllisDon:

Commitment from the top
About five years ago, EllisDon CEO Geoff Smith decided to get serious about how the company nurtured its work force. "I realized that our philosophy and way we treated our people really constituted a sustainable competitive edge," he says. "You never stop talking about it, and you make sure your leadership is following up on it."

Part of Smith's strategy is fairly conventional: communicating with staff directly himself. Smith prepares a quarterly webcast to introduce the company to new staff, goes on a yearly road show to meet all employees, and encourages everyone to e-mail him with questions or ideas.

But another cornerstone will likely be surprising to other CEOs: no explicit company mission statement. "What we talk about is values," says vice-president of leadership and entrepreneurial development Janine Szczepanowski. Those values can't be summed up in a few platitudes. "The values we want to live and breathe by are communicated on a daily basis."

Managers drive the process
Mistakes happen, so learn from them. That's a simple concept that is very hard for many executives to put into practice. Smith says that successful leaders "can step away from the issues, so they don't start doing the jobs of the people they are managing." At EllisDon, that means letting project managers make some mistakes—"even when you know it's a mistake and you know it's going to cost the company money," he says.

This isn't to say that incompetence is encouraged. Managers report quarterly on each employee they supervise—"who's working out really well, who has a high potential, and what are we doing to support that person in their career," says Szczepanowski. Those reports also identify employees who need help.

Even so, annual employee reviews are focused on career development, not mistakes. Szczepanowski says 15 minutes might focus on the past year, "and 45 minutes around what do you want to do, here are your strengths and here are some areas where you need to get better. It's not one strike, you're out."

How share ownership helps
A share ownership plan isn't a panacea for EllisDon or any other employer, but it has its advantages. "If the hook is big enough and the pain of leaving that hook is big enough, does it help us keep employees? Sure," says Szczepanowski.

The company is privately held, but it offers share ownership to all its "committed" employees, including part-timers. After the most recent round of share offerings closes, about 80% of staff will have a stake in EllisDon. It also shares financial information with its work force. "We give all of our employees all of the numbers—the good, the bad, the strategy," says Smith. "I call it up-and-down accountability, and that's what I think really engages people." But not being publicly traded also has its advantages. "We're not quarterly focused, and that enables us to be more employee focused," says Szczepanowski.