Ten years ago Pat Ross threw caution to the wind, walking away from 15 years of toil and an unharmonious partnership in Edmonton-based Fasco Rentals.
That life-changing decision has proven to be the catalyst in jump-starting a management career that has blossomed in recent years.
A year after departing from Fasco, the Edmonton native hooked up with Medicine Hat garbage truck manufacturer Wittke Inc., where he engineered a dramatic turnaround story that culminated with the sale of Wittke in 2002 to Federal Signal for $100 million.
Now, Ross is back in his hometown trying to work some of the same magic for shareholders of Steeplejack Industrial Group, a scaffolding company he joined as chief executive last October.
The 45-year-old University of Alberta alumnus may have only taken the job four months ago, but he has already put his stamp on his new company.
1. Who was your mentor or role model during your youth?
"I would say my father (Walter, who owned a life insurance brokerage) was my mentor. He's 81 years old now and is one of the founding fathers of the Community Chest Foundation, which became the United Way. He was a big-time community booster and retired colonel in the militia. I was on a zillion fund-raising boards. His big mantra to me was that you can sell your integrity for a dime and you can never buy it back for all the money in the world - you've got nothing if you don't have integrity."
2. Did you have any aspirations to follow his footsteps into the life insurance business?
"No. Dad was pretty good about telling me that getting into that was kind of like applying to med school nowadays. You know, 1,000 people interview for the job, 900 get it, 100 stick around for a year, 10 stick around for three years and two stick around for a lifetime. So it was a pretty aggressive business. My first job was as a salesman for a company called Fasco Rentals, an industrial small-equipment rental house. I was raised in a time where you got a job and stuck to it, so I had 15 years at Fasco. I went from being a salesman at 21 to becoming a president at 27 to owning almost half of the company by the time I was 35."
3. So what were the circumstances behind your parting ways with Fasco?
"I became a partner when I was 26 years old and I didn't have the wherewithal to negotiate a shotgun clause. I tried to buy my partner out or have him buy me out and neither one was a viable solution, so I resigned after 15 years. I walked away with nothing. It was on my 15th wedding anniversary."
4. Why did you do that?
"I remember vividly saying to my partner (Jim Fitzgerald), 'Well, if you won't sell to me and you won't buy me out, then I only have one option and that's to leave.' (Jim Fitzgerald) said, 'You can't afford to leave.' He was using money as the reason why I couldn't afford to leave. I was more concerned about integrity and health. He was right - financially I couldn't afford to leave. It was a seminal moment in my life. I said, 'I can't afford not to leave.' I got up and took my wife out for lunch for our wedding anniversary. It was a tough thing - she didn't work and we had four daughters - but she was absolutely supportive of me. It was a great event. It was a time to realize that I had a little bit of backbone and that money wasn't everything, that lots of other things play into what makes a person happy. It was tough for a year but subsequent to that things turned out great."
5. Was there a lesson in that experience?
"Partnerships are tough ships to sail in. Be very careful how you pick your partners. Being a minority shareholder in a closely held, privately owned corporation is a very tricky program."
6. You moved to Wittke after that. What do you remember about that move?
"It's funny. I got married on Sept. 27, I left Fasco on Sept. 27, 1995, and on Sept. 27, 1996, I joined Wittke. They were a company that had been around since 1932 building garbage trucks and the metal garbage bins that you see around Calgary and Edmonton apartment buildings. They were building thousands of bins and about 25 trucks every year. I went there initially for a six-month period to try to stabilize the business and get it ready for resale. Ultimately, I became the president within a year of that division and then eventually the CEO of the corporation. We moved Wittke from producing 100 trucks a year and losing money to being the second-largest refuse truck-builder in North America. My last month there, we produced 140 trucks in the month."
7. What was the key to turning around Wittke?
"One of the things that I am proud of is that I didn't bring an entourage with me. I commuted every week down there (from Edmonton to Medicine Hat) and spent all of my waking hours with the people. Ultimately, I got rid of the consultants and tried to simplify the operation. So what we did was an analysis of the people. We did a bit of training, lots of mentoring. The big thing was the concept of 'no, we can't do that.' When you're a small business and you're losing money, your likelihood of saying yes to every request really increases. We had to be disciplined enough to do what we could do as best as we could and then grow once we got our basic systems in place. We put a customer focus on the business and started talking to the users and found out what they really needed. In the end, we sold the company to Federal Signal Corp. in 2002 for $103 million dollars (the market cap was about $3 million when Ross joined the company). It was trading for around 50 cents when I arrived. We sold it for $12.50 a share."
8. How did you get involved with Steeplejack?
"When I left Wittke I joined Polar Capital Corp., which was a private equity firm that owned about 45 per cent of Wittke - so it was a spectacular win for them. They asked me to get involved with them in doing due diligence on future investments in their private equity pool. Steeplejack was one of those companies and became a board designate. I wasn't planning on becoming the CEO at that time. I discovered that the CEO had been there 20 years."
9. How is the situation at Steeplejack different from Wittke when you joined that company?
"It's a phenomenally different set of circumstances. Wittke was in dire straits, had no customers, had bad debt, had losses mounting and their fiscal situation and management was in complete disarray. Steeplejack has had a history of financial troubles. It was originally brought out of receivership in 1985 and then got very close to going back into receivership by 1992. Through very stern cost-control management by my predecessor (Jim Ross), who was an ex-banker, it was sharpened to a position two years ago where it was able to take on a couple of major projects. The culmination of that is that Steeplejack's market cap has quadrupled in the last year and a half, it has cash in the bank, it doesn't have any short-term debt and its long-term debt is minimal relative to its assets. I believe I'm a sales-oriented guy and as much as I am a cheapskate - as my friends at Polar Capital will tell me - I let our CFO (David Dawyd) manage the bottom line while I work on getting our troops to work on the top line. This company has been very bottom-line oriented and now it's the opportune time to go out and tell the customers what this company is capable of doing in getting our fair market share."
10. What else do you plan to do to put your stamp on Steeplejack?
"What Wittke taught me was that as the CEO of the company, you don't really do an awful lot. You're a cheerleader: You go out and get people enthused, and show them what they are capable of doing. I get a lot of satisfaction out of pushing people to go beyond the things that they bill for themselves so they can see what they are capable of doing. This is a traditional company in structure so I got rid of the no-jeans policy. I removed my personalized parking stall nameplate. I park down the street like anybody else and my old stall is for customer parking. I don't have a big huge banker's desk in my office. I put a big whiteboard on the wall instead of certificates from university. I took the door off the hinges in trying to create an open-door policy, to start talking to people and disarming them with interest. I want to create an atmosphere where people are proud to have had the opportunity to come and work with our people."
11. What's been the response to those change?
"I am shocked with the enthusiasm level here. You kind of wonder whether it's too good to be true. Everyone seems to be very happy, very supportive, almost giddy. I'm planning to start knocking down some walls and really start to open up this place. A change is better than a rest and a new set of eyes often sees things that other people haven't seen."
12. Do you view Steeplejack as a ripe takeover target or a candidate to be restructured into an income trust?
"Income trust is the fad of the times. Certainly, there is a lot of recurrent revenue with that and that's a big part of our operation. But the other big part of this company over the last two years has been one-time new construction projects. The first thing to do is change one-time new construction opportunities into an ongoing business flow where the market comes to us looking for new construction. Takeover target? We're a publicly traded company. It's not my company, it's our shareholders' company.We'll do whatever it takes to maximize our shareholders' best interests."
13. Where do you see opportunities for growth?
"It's really easy to focus on Fort McMurray as the 'big apple' and that's great - we certainly want to take advantage of the upwards of $90 million worth of work there over the next few years. But by the same token we have a real commitment to take a Wal-Mart attitude to our smaller communities. There are needs out there and we want to maintain our focus on those areas as well and not forget what got us to the party in the first place."
14. What do you think your strength is as a business leader?
"Communication. I think I'm a good communicator. And at the end of the day I believe my job is really professional salesmanship all the way through the organization. I have to communicate our vision to our customers, to our shareholders, to our investors and potential investors, to our bankers and to our employees. I think I'm good at that and I think I'm good at empowering people."
15. Did you have to 'go to school' on being positive and motivated, or do you think it's just part of your makeup?
"My father was a great example of a guy who had lots of drama in his life. He and my mother divorced when I was 11 years old. My dad took custody of all seven kids, ranging from three to 19 - I think that made case-law history. He could have bemoaned what happened to him, but he taught us early that your glass is either half full or half empty, and it's your choice."
16. If anyone on earth could be a constant adviser to you when you need sound advice, who would you choose?
"I would say that the people at Polar Capital have been an amazing resource to me - Steve Mulherin, Jerry Jackson, Reid Drury, Tom Sabourin and Paul Sabourin. All are really talented guys in their own right. They are great family guys. They take care of themselves physically, they take care of their employees and they take care of their investors. They engage in aggressive discussions, but everyone has the maturity to recognize everybody else's strengths and nobody is demeaning to anybody. Meeting those people and being able to work with them was a seminal moment in my career. In my first 15 years in business (at Fasco), I was doing the same thing every year. Instead of buying one Bobcat, I was buying 21 Bobcats, but it was still buying a Bobcat. Working with the guys at Polar Capital who have been involved in a ton of different businesses and have a ton of perspective, intellect and insight to a huge network of talented people, it's like the curtains were drawn for me and these guys helped open them up."
17. When things get stressful in business, what is your favourite escape?
"Exercise. My favourite escape is to take my two Labradors, who have been trained for pheasant hunting, out to the country and chase some birds. I don't necessarily shoot them, because it is only hunting season one month a year. I just like to get out, see nature and go for a good brisk walk with my wife (Sherry)."
18. What is your view of the corporate scandals and the unbridled spending of some CEOs?
"It's a shame. It's greed. We've had a couple of colourful business guys like (Peter) Pocklington and (Larry) Ryckman in Alberta and they have done some colourful things in their past, and people think that's what all business people are like. Whether it's (former investment banker) Frank Quattrone or Conrad Black, I don't think that all business people are like that. A couple of guys got to run amok and that happens sometimes. Some of the controls now are a bit heavy-handed to ensure all the honest and dishonest people are honest, but it was much needed. Shame on them."
19. Who is the CEO you most admire?
"I would say I have a high degree of admiration for (Robert) Stollery from PCL Construction and his replacement, Ross Grieve. Those guys just are solid guys. They are good for the community and they work hard. They have prospered in a tough industry and they have done it from little ol' Edmonton."
20. What are your aspirations beyond business?
"I love to travel and I'll probably continue to do a lot of that. On a very personal and selfish level, I'd like to develop my linguistic and artistic skills. I'd like to become a better musician because I'm not even one at all, become a better photographer and improve my French, Spanish and Italian. Also, I want to figure out some way to give back to the community in some form or fashion. Giving in a positive way is something I'll be working toward as time goes on."
IN PROFILE: Pat Ross
* Title: President/CEO, Steeplejack Industrial Group; Polar Capital Investments, principal partner.
* Born/Raised/Age: Edmonton/45.
Family: Wife Sherry, four daughters.
* Education: University of Alberta, economics major; Richard Ivey School of Business, executive program graduate.
* Career: Ross spent 15 years at Fasco Rentals Ltd., where he became president and part-owner before leaving in 1995. Ross joined garbage truck-maker Wittke Inc. in 1996 and was president and CEO when the company was sold in 2002. Ross joined Capital Investments as a principal partner in 2003 and joined Steeplejack as CEO in October, 2004.
* Accolades: Ross was an Ernst & Young Entrepreneur of the Year Award finalist in 2002.
* Pastimes: Pheasant hunting, hiking, brushing up on foreign languages, photography.
THE COMPANY: Steeplejack Industrial Group
* Brass: Pat Ross, president/CEO; David Dawyd, chief financial officer.
* Profile: Predominantly an industrial scaffolding contractor, Steeplejack also offers a wide array of plant maintenance services as well as project planning and management for major plant turnarounds or shutdowns. Steeplejack's 10 branches serve mills, plants and refineries as well as power- generating stations in Saskatchewan and Alberta.
* Recent Stock Price (TSX:SID): $4.20 (52-week range, $2.51-$5.30)
* Website/E-mail: www.steeplejack.ca/ firstname.lastname@example.org
* Head Office: 8925 62 Ave., Edmonton, T6E 5L2.
* Phone/Fax: 780-465-9016/ 466-8584.(Gyle Konotopetz can be reached at email@example.com)