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Business Person of the Year 2015: PCL’s Paul Douglas

It took some great mentors – and a major change of style – to make Paul Douglas the leader he is today

Dec 1, 2015

by Elizabeth Hames

In 1980, a 26-year-old Paul Douglas stared out at the river snaking through a sprawling London, Ontario estate. It belonged to his boss, Don Smith, who built construction empire EllisDon through drive and hard work. Smith must have seen those same qualities in Douglas, who had risen from labourer to district vice-president in just six years – all the while completing a degree in engineering at the University of Toronto. That he not only managed to remain on the EllisDon payroll as long as he did but also to climb through the organization so quickly says a lot about Douglas. Other employees told stories of Smith that portrayed him as a workplace tyrant, known to walk onto a job site and fire everyone within yelling distance if he felt the job wasn’t going well. And if he wasn’t doing that he was often reprimanding them with profanity-laden diatribes. But Smith also had a reputation for making employees feel like members of a family, and now, it appeared, he was about to tap Douglas as the future patriarch.

Geoff Smith fired Douglas’ best superintendent and his best project manager. That was the last straw. Douglas handed over the keys to his office and left. Then he called Stollery.

HE HAD INVITED DOUGLAS TO HIS HOUSE AFTER a lunch of martinis and steak sandwiches at the exclusive London Club. As Smith toured his protégé past the tennis courts and winding river, he said, “Paul, all of this can be yours.” Smith had seven children, but none showed any interest in running the family company. “I need someone like you to be able to take over this business one day,” Smith said. Douglas was awestruck. Here he was, fresh out of school, and he had a shot at running the largest contractor in Ontario. It exceeded his wildest dreams. But earning a place at Don Smith’s table would come at a great personal price – one that would follow him into his career with PCL Construction and from which it would take immense effort to recover.

  • Standing in front of Poole’s rules, which were written by PCL’s founder, Ernie Poole Standing in front of Poole’s rules, which were written by PCL’s founder, Ernie Poole
  • Douglas presenting the Bob Tarr Safety Award to Chris Gower, Rob Otway and Garth Tomlinson Douglas presenting the Bob Tarr Safety Award to Chris Gower, Rob Otway and Garth Tomlinson
  • Douglas and family attend a PCL skating party in Ottawa in 1996 Douglas and family attend a PCL skating party in Ottawa in 1996
  • He met his wife Cathy in 1988 He met his wife Cathy in 1988
  • Douglas, Bob Stollery, Chris Gower and Paul Schmalz present the Bob Stollery Leadership Award to Chris Gower in 2000 Douglas, Bob Stollery, Chris Gower and Paul Schmalz present the Bob Stollery Leadership Award to Chris Gower in 2000
  • Douglas took over as CEO from Ross Grieve in 2009 Douglas took over as CEO from Ross Grieve in 2009
  • Douglas, PCL’s Peter Stalenhoef and Peter Beaupre, former Edmonton Oilers exec Patrick Laforge, then-PCL CEO Ross Grieve and former Oilers ownership group member Cal Nichols Douglas, PCL’s Peter Stalenhoef and Peter Beaupre, former Edmonton Oilers exec Patrick Laforge, then-PCL CEO Ross Grieve and former Oilers ownership group member Cal Nichols
  • Douglas celebrates PCL’s 100th anniversary in Hawaii in 2006 Douglas celebrates PCL’s 100th anniversary in Hawaii in 2006
  • Under Douglas’s leadership, PCL has donated millions to charity Under Douglas’s leadership, PCL has donated millions to charity
  • Douglas meets the former prime minister of Australia, Tony Abbott, and former Prime Minister Stephen Harper Douglas meets the former prime minister of Australia, Tony Abbott, and former Prime Minister Stephen Harper
  • Douglas attends a cooking class in Italy in 2009 Douglas attends a cooking class in Italy in 2009
  • Douglas meets former U.S. President Bill Clinton during a Canadian Council of Chief Executives meeting in 2012 Douglas meets former U.S. President Bill Clinton during a Canadian Council of Chief Executives meeting in 2012
     
Photographs John Gaucher

I MEET DOUGLAS IN HIS EXPANSIVE OFFICE IN PCL’S global headquarters in modest south Edmonton. The 180-degree view shows off PCL’s many triumphs: the Edmonton Kaye Clinic, Manulife Place, and the $660-million arena going up downtown, to name but a few. Douglas lifts his hand from his pocket to shake my hand and shoots me a smile that extends all the way up to his steel-blue eyes. We sit down and he begins to tell me how he came to be CEO of the largest contractor in Canada, and one of the largest in North America. I ask him to take me back to the beginning.

Douglas grew up in the Toronto suburb of North York, a happy child of a working-class family. He was an average student. He still remembers the moment he got an A on a spelling test because, well, it was a rare event. But any academic failings he had, he made up for in sport. He was a natural and enthusiastic athlete, joining every league he could: hockey, soccer, and his favourite, football. In high school, he was named athlete of the year, an event he still remembers with pride. He was a winner on the field, and it was on that field – “smashing each other’s helmets against each other. Pumping everybody up. Kicking people in the ass” – where he first learned to be a leader.

HE CARRIED THAT LESSON INTO HIS CAREER, AND SMITH fostered it in him. Douglas caught Smith’s attention when he was in the final year of his engineering degree at the University of Toronto. Douglas wrote a damning report on EllisDon’s cost control system, arguing that, of the top three contractors in Ontario, EllisDon was the least effective at sticking to a budget despite being the only one with a computerized system. And he outed Smith himself as the source of the problem. Smith would get a copy of the weekly productivity reports for projects that were not on target, “and he would call them up, scream and yell at them on the phone,” Douglas recalls. “So what all the people did is they would fill out the report so they were breaking even every week.” Yeah, Smith would yell at them at the end of the project when it was revealed they were over budget, but “then they’d only get shit once instead of getting it every week.”

It was a bold move to accuse a man with hiring power of such failure in his thesis. But Smith must have been impressed because he hired Douglas a field engineer. “I was surprised that Don Smith called me in and he agreed with the report 100 per cent,” Douglas recalls. “He told me he wanted me to help fix it and come join his company. I think that’s probably one of the reasons why I ended up rocketing through EllisDon’s organization.”

Within six months, Douglas was promoted to assistant superintendent on the Gold Bar wastewater treatment plant project in Edmonton. He quickly rose up to superintendent, then project manager, and before Douglas had even marked two years out of school, Smith summoned him to company headquarters in London to be chief engineer.

“He changed his ways and won over all the people that he worked with. And they became his supporters and best cheerleaders, rather than being competitors.” – Ross Grieve, former CEO of PCL

But Douglas’s meteoric rise left casualties in its wake, and Douglas was often the one to break the bad news. About two years into his career with EllisDon, Douglas was offered the title of vice-president and district manager of southwestern Ontario – if he fired the current district manager himself. “He was probably 55 years old and worked for Don Smith for 30 years,” Douglas says. “And Don said, ‘Go in and tell [him] that you’re taking over, and he’s going to work for you.’ It didn’t feel good. But I did it because I was asked to and I was probably feeling like I was better than I was.”

It wasn’t the only time Douglas would be instructed to demote a man his senior. But Douglas thinks Smith was trying to teach him something about the ruthlessness of the industry – that “people don’t do a good job unless you’re kicking them in the ass.”

Everything Douglas had learned about leadership on the football field was celebrated and encouraged by Smith’s mentorship. “And [so I became] the best kicker-in-the-ass kind of guy out there,” Douglas says about his younger self.

Meanwhile, as he was rising through EllisDon and attending industry functions, Douglas repeatedly ran into a leader of a different breed: Bob Stollery, then CEO of PCL and the future namesake of the Stollery Children’s Hospital Foundation. Although they were competitors, Douglas says he had immediate respect for Stollery. “He was a gentleman who just had this huge presence,” Douglas says. And he wanted Douglas on his team. “He always said to me, ‘When you’re not happy there, come and see me,’ ” Douglas recalls. “He just seemed to know that it would just be a matter of time before I wasn’t happy there.”

001_story_001
Paul Douglas took the helm of Canada’s largest contractor in 2009, in the midst of the financial crisis. Since then, he has grown PCL from a $6-billion company to an $8-billion company. He’s seen here in front of one of the company’s flagship projects, the new hockey arena in Edmonton
Photograph John Gaucher

But life at EllisDon was working out for Douglas. He could barely get one desk chair broken in before being promoted. That is, until Smith’s son, Geoff, walked into Douglas’s office and announced Douglas would be reporting to him from now on. “Don called me and he said, ‘Paul, I know you’re not going to be too happy with this. But I think he’s got the stuff,’ ” Douglas recalls. The new arrangement didn’t last three months, Douglas says. Geoff fired Douglas’s best superintendent and his best project manager. That was the last straw. Douglas handed over the keys to his office and left. Then he called Stollery.

“He told me to come in the next day,” Douglas says. That was October 1, 1985. The move forced Douglas a few steps back in the rungs – he started out as a construction manager – but he maintained the same leadership style he’d learned at EllisDon. He says he was aggressive and always drove for results. “If you’re not going to pull your weight, leave: That would be the attitude I would give them,” Douglas says.

About a year in, Ross Grieve, who would later become CEO of PCL, called Douglas into a meeting with other senior managers. Once again, he was being tapped for a future executive role – only this time, there was a catch. “You know, I think we see some really good things,” Douglas recalls Grieve saying, “but we see some things that are broken and we don’t know exactly what they are.” So the executives asked him to see an industrial psychologist to identify his strengths and weaknesses. The report revealed that he was weak in the areas of empathy, listening skills, and effective delegation. “I was devastated. It painted me as a person that I really didn’t want to be,” he says. “I’d sort of become this guy that was aggressive, offensive and actually showed no caring about people. I didn’t like it. And I was hurt. I was bound, determined, I was going to change that around.”

He went on a rigorous professional development program where he learned about different leadership styles and how to be assertive without being aggressive. When he wasn’t in class, he devoured Gordon Thomas’s book Leader Effectiveness Training, and picked up tapes on effective delegation and powerful listening. Every moment was a revelation. He learned to delegate and share power instead of doing all the work himself. And he learned how to bring out the best in his team.

“He changed his ways and won over all the people that he worked with. And they became his supporters and best cheerleaders, rather than being a competitor,” says Grieve. “He was a wonderful example of how people who listen to that kind of advice and coaching can actually use that to their advantage.”

The executive team was impressed by Douglas’s progress, and pretty soon they tapped him to set up a new branch in Ottawa, a notoriously saturated and challenging market. “He had demonstrated he was the high-potential person we hoped him to be,” Grieve says. “We were getting tremendous feedback that he was on board and everyone enjoyed working with him and for him.”

Douglas was tasked with drafting a business plan and assembling a core team to go with him. “We did that and set up shop and went out to conquer the world,” Douglas says. But it was tough: in the 1990s, the economy slumped, so everything he had laid out in his business plan as market opportunities had to be shelved. Credit was tight and they often had to pay in cash. Most of the suppliers had non-compete agreements with other contractors, so PCL had to find independent suppliers. But they caught a break when they landed the contract to build an arena for the Ottawa Senators, which had recently been awarded a franchise by the NHL. They worked with the designers to put together a construction schedule and budget, and then went down to West Palm Beach in December 1990 to make the pitch to the NHL. “I’ll never forget it. It was so exciting,” Douglas says. “Ottawa was fantastic. The mayor was there. We had a fireman marching band there.” The Senators won the bid that year, but construction on the arena didn’t start for another three years, in part because of what Douglas says was an unfriendly business environment created by the then-new Bob Rae NDP government. “It just made it hell for the sports franchise and business in general,” Douglas says. “But we hung in there with them.”

By the time Douglas was finished in Ottawa, PCL had gone from an unknown entity to the dominant player in the marketplace, despite the economic downturn. He spent the next few years moving up through the ranks at PCL, this time at a slower, more controlled pace: After Ottawa, he moved to Toronto, responsible for the company’s central and eastern Canadian operations, then he was promoted to president and COO of Canadian buildings, and finally to COO of PCL’s Canadian operations.

In 2009, Douglas took over from Grieve as CEO, right as the company was feeling the effects of the recession that followed the global financial crisis. “Ross announced he was stepping back right after the 2008 downturn,” Douglas says. “ ‘Okay, over to you, Douglas.’ I still joke with him about that.” The numbers slipped slightly after Douglas took over, but he’s grown the company nearly 25 per cent (by revenue) since 2009. In March 2011, the executive team decided to try to grow the company to $10 billion in annual revenue. They reached more than $8 billion in 2014. Douglas says his role as board chair will be to bring the “pompoms and cheer,” a true about-face from the quarterback style of leadership he exhibited when he joined PCL. Today, Douglas is known as a leader who brings out the best in his employees – not the worst – by leading through example, and he has become an expert in effective delegation. “I actually think it’s very hard to let go of power when you’re the CEO. Because you’re ­ultimately responsible for what goes on,” says Mike House, president and CEO of the Stollery Children’s Hospital Foundation, who witnessed Douglas’s ability to “spread the wealth out” to his executive team. “So there’s courage in doing that in such a way so that you empower the people that you’ve hired to do great work and represent the company accordingly.” Douglas has not only helped grow the company, but he’s also known as a leader in the community, helping PCL reach the $10-million mark in donations to the United Way of Alberta Capital Region in 2013.

In November, Douglas announced that he’s stepping down as CEO to take over as chairman of the board. Dave Filipchuk, his new deputy CEO, will take over as CEO in November 2016. Like Grieve before him, Douglas began mentoring PCL’s next CEO almost immediately after he stepped into the role. When I ask what qualities he looked for in PCL’s next leader, Douglas cracks a joking smile: “Aggressive, driven,” he says, laughing.

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