November 28, 2007

Building Success

EllisDon’s strength comes through innovation

DON PROCTER

Keeping a construction empire at the top of the heap is no small feat. Strong, progressive leadership is one of the markers of success.

At EllisDon, the job of running the show is in the hands of 52-year-old Geoff Smith. The president and CEO since 1996, he has helped steer the mammoth-sized builder to some banner years recently.

This year, for example, the target is $1.750 billion worth of construction business in Canada and around the world; next year: $2.2 billion. That’s a long way from 1951 when Donald Smith and his brother David founded the company in London, Ont.

While the hot market “makes everybody look good,” Smith believes trusting employees at all of its branches to make key decisions is a cornerstone to the company’s success. “The idea is to keep things very transparent and very entrepreneurial.”

For many growing construction giants, the addition of more policies and systems is essential to keeping a tightly-running ship. Blanketing policies are often set at head office.

Not so at EllisDon.

By giving employees autonomy, Smith says “you offer your clients immediate custom-made service; and, hopefully, you attract better people (employees) because they get more freedom and authority.”

Judging by a recent Globe & Mail report that ranks EllisDon as one of the 50 best companies to work for in Canada, the company’s approach is working.

A lawyer by training, Smith says he is not opposed to broad-reaching systems and policies to prevent employees from “reinventing the wheel,” but blanket edicts can create unwieldy bureaucracies, and they don’t address individual clients’ needs.

Smith adds Canadian-owned EllisDon’s willingness to innovate – even when it is not part of the builder’s core business – is key to its success. A case in point is the recently completed $500 million William Osler Health Centre in Brampton, the first Public Private Partnership (PPP) hospital project, organized through the province’s former SuperBuild Growth Fund.

Calling it the most interesting project of his career, he says the challenges were dealing with “huge, huge financial risks; a very tight building schedule.”

Beyond all things building-related, the constructor’s role was to help finance the project. It also holds a minority interest in the servicing of the hospital over the next 30 years. “From that experience, we learned how lenders think and how we can help them to lower their risk profile.”

EllisDon recently completed the William Osler Health Centre in Brampton, ON.

“We also learned about life-cycles and how to plan a hospital for building when you know you have to operate it for the next 30 years,” says Smith.

Since then, EllisDon’s portfolio of PPP projects – now called Alternative Financing and Procurement (AFP) – has grown to more than $1 billion in hospital work in Ontario being administered through Infrastructure Ontario.

Smith says the building industry is witnessing a shift to bigger projects. The bread and butter jobs ($50-$60 million) of five years ago have been squeezed out by $200-$300 million projects today.

While that’s good news on one front, the bigger jobs are attracting more international attention and competition, forcing local players to be on their toes.

To stay with the pack, it is vital to be innovative on a construction and engineering level. That is why the construction giant set up an independent construction and engineering entity to act as a free resource to all of its branches. “You could say it fosters innovation and intellectual know-how.”

The engineering department has come in handy on a number of perplexing jobs including the Roy Thomson Hall renovation project in downtown Toronto several years ago. A year’s planning resulted in a building solution that saw the hall close only about eight weeks for construction.

Smith says the most terrifying time of his life was 22 years ago when he was the area manager for the construction of Banker’s Hall, a 45-storey office tower in Calgary. “I remember feeling sick to my stomach I was so terrified by the size of the project and my almost total inexperience.”

On the environmental front, Smith says thinking green is seminal to success of any commercial constructor today because buildings that aren’t green (LEED accredited) are outdated by the time they are completed.

EllisDon’s approach to LEED is simple but comprehensive: it hired a full-time executive trained in LEED to deal with clients and oversee training of many of its employees in the LEED certificate program.

For Smith, time away from the job is often in short supply. He “tries hard to play a bigger role raising his three teenaged sons but I’m not doing such a good job if you ask my wife. You have to be there for them when they need you. I’ll keep trying.”

Words of advice for budding young construction executives: “Don’t be cocky, but don’t be too cautious either. There’s a real balancing act there.”

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