Foundations of Leadership

Corporate Culture History

Good evening, it is a privilege to be in Colorado and indeed a privilege to be here tonight. My intent is to add some value to the Foundation of Leadership Course—the reality remains to be seen.

A very wise man once said, “The five minute speech will win over the longer variety. Few points are made, or souls saved, after the first five minutes of monologue.” Well, Jim, (addressing Jim Howland) as you know there are exceptions to every rule and tonight is one of those, but for a change, I will be relatively brief.

The agenda topic is “The Cultural Foundations of CH2M HILL and a View of the Future.” So I am going to tell a few stories, based on my nearly fifty year career with this amazing organization. Then I will finish with a view of the future, which at my age is becoming shorter and shorter.

Perhaps my perspective of the cultural foundations may be different since I started my career with Clair Hill in 1952 and then became a CH2M HILL employee in 1971. So, the experience I have covers both sides of the street. This experience included mentoring from two distinctively different leadership styles, two different (but yet markedly similar in many respects) cultures, and then the enjoyment of seeing these differing styles and cultures become one.

1952 was a good year. I graduated from the University of Nevada with a Civil Engineering degree and was given gainful employment by Clair A. Hill, Civil Engineer, Redding, CA. Boy, did I ever need a job. My GI Bill had run out, I was in debt and had a wife and three kids. Clair Hill had a total staff of about 25 and I was the fifth engineer. In those days, we were not a multidiscipline firm; rather each individual was expected to multidiscipline. As part of that skill set I became a surveyor.

One of my first projects was to locate a property line along which a retaining wall was to be constructed. I labored mightily to be certain of the accuracy of the line. Unfortunately, my labors were for naught. The wall was constructed on the wrong property. Once this tragedy was discovered, I thought for sure I was unemployed and my wife and kids would starve. Clair had the offending wall removed, a new wall was constructed (at his expense), satisfied the client and all he said to me was “Are you certain you checked your work?” I learned several lessons from that experience.

Later that year my wife and I welcomed another addition to our family. With four children under six years my wife was understandably busy. Then, as Christmas approached, she became ill with the flu and I was trying to help at home and still work. Clair sensed I was in difficulty and asked me what was wrong. I told him, and he sent me home on full pay and told me to stay there until Betty was on her feet. Then on Christmas Day, the phone rang. Joan, Clair’s wife, asked me what I was doing for Christmas dinner. I told her, “Beans.” She said, “Come over!” I did and she sent me home with a complete, lovely dinner for the family. I learned several lessons from that experience.

My first years went fast. On my anniversary, Clair called me in, said I did good work and gave me a $10 per week raise. I put that lesson in my book, which by now had three chapters:

– Do good work.
– Take care of your people.
– Make money.

1955-56 were new experiences. We were doing water studies and sewerage planning for Redding. Multidisciplined as I was, Clair believed some specialized experienced help would be beneficial. He went north of the border for help from CH2M.

Archie Rice and Ralph Roderick were the R2 of CH2M R2. Both men had great vision and great technical expertise. These men were the first from CH2M to work with me. Was I ever impressed!

Shortly after this experience, we got lucky and snagged a really, really big project at Beale AFB. Again, we went north of the border and CH2M responded. I met and worked with Burke Hayes, Joe Purviance, Dick Nichols and Wayne Phillips. These people did all the electrical and mechanical design on the huge Beale Project. Once again I was impressed with the technical skills, honesty and commitment of these men.

After these favorable experiences, in 1960 we got lucky again. Clair A. Hill and Associates was selected to be the engineers for the South Tahoe Public Utility District. At first this was a sewer design project, for which we did not need help, but it quickly became an opportunity to create an entirely new form of sewage treatment, and once again I went north of the border. This time a new group from CH2M was involved. Gene Suhr, Russell Culp and others worked with me to develop, design and then operate an Advanced Waste Treatment Plant that was unique in the history of waste treatment.

This one project I believe more than anything else led to the merger of CH2M and Clair Hill. During this time frame, I met Jim Howland for the first time. As part of the AWT proposal we had to agree to fund some research pilot plant work. A Public Health Service grant was available but the District had no funds for its share. So we were asked to fund the work, and I had to ask Jim Howland to share. Those of you who know Jim know he is a cautious man with a buck. But after hearing the story and the potential worth if we were to succeed, Jim readily agreed this would be a worthwhile investment.

Now I was ready to add some more chapters to my book:

– Seek out people who know more than you. (In my case that was not difficult.)
– Technical excellence is critical.
– Invest in innovations.

By the time the first Tahoe project was completed, Clair A. Hill and Associates had gone north of the border, and CH2M had come south of the border, so many times we were becoming integrated. Some of the people, on both sides, began to think that integration was a good thing. And in 1971 we made it permanent, CH2M acquired CAHA, actually I believe we had a merger more than an acquisition. Call it what you will, it worked.

In 1968 several of the long-term CAHA employees had been given the opportunity to purchase a share of CAHA. So when the merger took place, I and four others had a 10 percent ownership interest in CAHA. Upon completion of the merger, I had something less than 10 percent of CH2M HILL. And that something less turned out to be the best investment I have ever made.

No marriage exists without some friction. The same is true of corporate mergers, but in the case of CH2M and CAHA, the friction was very slight and had more to do with leadership style than with differing cultures. Clair Hill was a remarkable man, a fine engineer and a good business man, but until 1968 he owned the whole enchilada. He really worked hard at participative management, but there was no question who had the final say. On the other hand, CH2M started as a partnership and as it grew the number of partners grew as well. CH2M had a much more participative, collaborative decision making process than CAHA. This is not to say that the process was better, just different. Clair and I served on the CH2M HILL Board of Directors the first 5 years following the merger. During this time significant organizational changes were made, including, in 1971, the introduction of a matrix management system called the Discipline System. I was the first major project manager to utilize the discipline matrix when in 1971 I went east to manage the UOSA project in Reston, VA. It turned out to be a successful project (in fact, we may still have UOSA as a client) but working with a new organizational structure was educational and exciting.

Then, in 1974, I succeeded Clair as the Redding Regional Manager and received an even more exciting education in the benefits of the matrix organization. By this time I was ready to add another chapter to my book. This one was titled:

-Any Organization Structure Can Succeed If The People Want It To Succeed.” 

In 1978 I was promoted to my level of incompetence. I became President and CEO. The next 13 years were a very exciting time. I learned a lot about our corporate culture. One of the lessons had to do with acquisitions and the importance of similar corporate cultures if acquisitions are to be successful in a professional services firm.

In 1977 we acquired Black, Crow and Eidsness, a 200-person firm located principally in the Southeast. BC&E was a partnership that had started about at the same time as CH2M and had previously been sold to a publicly held firm. By dint of great effort on the part of the BC&E people and the CH2M HILL people, this acquisition ultimately became a success. But it was not easy. The corporate cultures of the two firms were not that similar and it took many years and a lot of stomach lining before we could really say we were one organization. The lesson here is, generally acquisitions work best when the acquirer and the acquiree have similar cultures.

As the 1980s came to a close, so did my full time career. In 1991 I retired to have some different kind of fun. Ralph (Peterson) succeeded me and had even more fun solving the problems left behind.

The thrust of this story is to summarize our cultural foundations as “Uncommon Values & Uncommon Leadership.” And now, since this meeting is all about leadership, I’m going to give you a 20 year old talk I titled “The Privilege of Being A Leader.”

Foundations of Leadership-Conclusion

I believe each of us is privileged and honored to be a leader of CH2M HILL. Our company is recognized nationally and internationally as one of the best professional services firms in existence. This recognition comes in many forms, for example:

-Awards for technical excellence.
-Awards for management ability.
-Recognition by our peers for innovative solutions to complex problems.
-Ongoing client relationships that started when the firm was first founded.
-A never-ending, always increasing flow of exciting and challenging new projects from both old and new clients.
-The imitation by our competitors of much of what we do well.

There are many other positive, tangible forms of the recognition we earn. But perhaps the more important question we need to ask–and we need to ask this question continually–is why do we achieve this recognition?

The answer, I believe, is composed of many parts. One of the parts, perhaps one of the most important parts is our leadership program. Another is the indisputable fact that we have established a favorable climate for the organization and motivation of all of our people. Some of the attributes of this climate are:

Tolerance: We all, I believe, recognize the need for tolerance and consideration by others with whom we associate. We know, with one or two exceptions perhaps, that we are not perfect, and that in the course of our professional and personal life we are bound to make mistakes. When this happens, we hope our peers and superiors will make allowances for these shortcomings. And that our errors will be corrected through constructive criticism, not through abusive or punitive action.

Permissiveness: An atmosphere of permissiveness is an important motivational factor in a professional firm. Every member of the organization can and will make a worthwhile contribution to our success–if they are given the freedom and the opportunity to do so. To maintain this atmosphere of permissiveness is to establish a potentially limitless source of valuable ideas and enthusiasm.

Challenge: Our people must be–and are–given the challenge to use the full range of their training, talents and capabilities. If they are not given this challenge–or if they have no elbow room for decision making–they will soon become bored and seek that challenge elsewhere.

Equity: We have all heard someone say “the ‘firm’ has always given me a square deal.” The fact is that the “firm” cannot give anyone a square deal. It is the people in the firm–its leaders– who must do that in their day-to-day relations with their associates and fellow employees. We must always weigh every action with a view towards achieving equity and fairness for all–even when this involves some personal sacrifice. Fairness is a morale builder without equal.

These factors: Tolerance, Permissiveness, Challenge and Equity establish a positive, favorable environment and I firmly believe we have always had this environment in CH2M HILL.

We also must satisfy three basic needs of our people:

First is the need to belong. This is perhaps one of the most basic human needs. Every one of us needs to be part of a group, no one wants to live or work in a vacuum. Associations and relationships with other people are important to everyone.

Second is the need to grow. Any one of us who has ambition–and we are poor, indeed, if we lack it–is intensely interested in our own progress, in the firm and in our profession. Desire for personal advancement is one of the strongest forces motivating people.

Third is the need for recognition. This need is very important to everyone. Money alone cannot buy the feeling of having accomplished something worthwhile, and a pat on the back for a job well done speaks more eloquently than words. To do this requires a willingness on the part of all of us to give credit to others when it is due. We must inform our people that they have done a good job and that their contribution was recognized and appreciated. You may say that this is the natural thing to do–the rule and not the exception. Yet, how many times in the last month have you taken the time to do it? Think it over. It’s important! And right now I want to tell all of you what a fine job you have done this past year.

I believe we do a far better-than-average job of satisfying these three basic needs; that is crucial to our success, and that is why I say we are privileged to be leaders. Along with that privilege goes an equal responsibility–the responsibility to do everything we possibly can to preserve and nurture our positive environment and to fulfill the basic needs of the people who are with us today and will join us tomorrow and in the years to come. And, I think that the responsibility and the opportunity we all have to fulfill it was well stated 55 years ago by Jim Howland in a letter to Holly Cornell when Jim said, “A group of enterprising fellows with reasonable intelligence and some technical background can manage all right in most any situation. Particularly if they will stick together.”